For those of you doubting the seriousness of the gas supply...

For those of you doubting the seriousness of the gas supply issue here you have it straight from the horse mouth. The effect on business and employment will be catastrophic.

From todays Australian.


Incitec Pivot chief James Fazzino says higher gas prices will close the Gibson Island fertiliser plant in Brisbane, putting up to 2000 direct and indirect jobs at risk, if governments, unions and gas suppliers don’t help provide savings.
The call for assistance to help the plant survive came after Incitec wrote $106m off its value and flagged a potential writedown to zero in a few years once work from a recent maintenance turnaround is depreciated.
“The plant just doesn’t work at the gas prices we are going to roll onto,” Mr Fazzino told analysts today after issuing a market-beating earnings report that sent shares soaring.
In a call reminiscent of BlueScope Steel’s campaign to gain $200 million of annual cost benefits to save the Port Kembla steelworks, Mr Fazzino called on workers, farmers, gas suppliers and governments (who Mr Fazzino said need to look at policies and tax) to band together to support the plant.
The facility has 200 direct employees, but Mr Fazzino said the plant supported about 2000 contractor and local small business jobs.
Earlier, the Melbourne-based explosives and fertiliser maker said it logged a 79 per cent slide in first-half profit on the back of a writedown of the Gibson Island plant and lower prices for its products. But underlying profit was well ahead of expectations, leading shares higher.
In the six months to March 31, Incitec Pivot saw net profit slump 79 per cent to $31.5 million. The result included the $105.6m non-cash impairment at Gibson Island.
Underlying profit slipped 6.4 per cent to $137.1m, while revenue was down 4.4 per cent to $1.524 billion.
Morgan Stanley had forecast first-half underlying profit of $119m, CLSA was expecting $103m, and Credit Suisse had forecast $71m.
At 12.30pm (AEST), Incitec shares were up 30c, or 10.7 per cent, to $3.165. In contrast, explosives maker Orica fell another 2 per cent today after dropping 13 per cent yesterday after it missed profit expectations and slashed its dividend.
Credit Suisse analyst Grant Saligari said the 4 per cent fall in earnings before interest and tax despite an up to 30 per cent fall in sales to coal and metal miners was a strong effort and that the impact of gas supply problems at the Moranbah plant explosives plant in Queensland had not been as bad as feared.
“Fertiliser results appear mainly to reflect timing which resulted in a higher than expected average price achieved through the period,” Mr Saligari said.
Incitec’s Mr Fazzino said it was a “sound result” in a challenging environment.
He said underlying earnings before interest and tax were flat despite the derailment of a train on the Townsville to Phosphate Hill line in December.
“Our first half results underscore the resilience of the business, particularly given the pronounced
resources sector downturn and decline in global fertiliser prices,” he said.
“Our performance validates decisions taken over the past several years to position the company to respond to market conditions.”
Meanwhile, the company said the outlook for the second half would remain “challenging”, citing pressure on US and Australian coal markets and ongoing fertiliser price weakness.
The company said its full-year results were “likely to reflect these challenges”.
Incitec Pivot — which also supplies explosives chemicals to the mining industry — will pay an interim dividend of 4.1c, fully franked and in line with expectations. The payout compares to an unfranked 4.4c dividend last year.
The dividend will be payable on July 1 to shareholders on the register at May 24.