Half Year 2025 Dyno Nobel Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Kang - CLSA Australia Pty Ltd - Analyst : Good morning, everyone. Just, two parts -- two points regarding your FY25 guidance if possible. You have 10/90 splits implies a strong second half for particularly Phos Hill. Can you just talk through your assumptions there? And then secondly on DNEL. I realize that you've chosen not to provide a first half, second half split there. But looking at your, the historicals, it's actually quite all over the shop. Last year was lower in the second half. The previous year was basically flat in the first half and the second half in the prior year was higher. So any steer on how we should think about the second half variables, that would be great.

Question: Daniel Kang - CLSA Australia Pty Ltd - Analyst : Thank you, Mauro. If I can just add a follow-up question just on the sale of fertilizer assets, great news there. Just wondering if you can provide some color on the estimated remidian costs -- the remediation costs liability, the duration of this liability, just whether it is a capped estimate?

Question: Daniel Kang - CLSA Australia Pty Ltd - Analyst : Thanks Mauro.

Question: Ramoun Lazar - Jefferies - Analyst : Good morning, Mauro. Good morning, everyone. Just a couple of questions from me. One just on the decision to use the upfront proceeds from the fertilizer separation to repay working capital and debt facilities, I guess just the thinking there against further capital returns and any potential net benefits of repaying those facilities, if you can maybe quantify those.

Question: Ramoun Lazar - Jefferies - Analyst : Okay, great. Now, that's very clear. And then just on the guidance, Damien and Mauro, if you can help us out here on DNA, the contribution from Ag & IC in the first half, was ahead of expectations, I think. Just, I guess, how does that 40-60 split account for any contribution from Ag & IC for the full year? I mean, can you give us some sort of indication of what you're expecting there and then also just I guess tied in with that, with the closure of St. Helens, are you going to continue supplying fertilizers into that market on a go forward basis?

Question: Ramoun Lazar - Jefferies - Analyst : Okay, great. Thank you. That's helpful. I'll leave it there.

Question: Owen Birrell - RBC Capital Markets - Analyst : Yeah, good morning, guys. Just, I guess, another question on the DNEL business. Just noting the earnings essentially went backwards during the period. And I know that there was a cost of establishing, I guess, the growth engine for that business during the period. I'm wondering if you could split out, I guess, what that upfront cost was, and can we expect anything into the second half?

Question: Owen Birrell - RBC Capital Markets - Analyst : And can I just ask, can we reassume a similar $2 million cost of the second half, and similar, I guess, compression of the earnings or is that cycling, I guess, what we saw in the second half '24?

Question: Owen Birrell - RBC Capital Markets - Analyst : Okay. And then just in terms of those boots on the ground, in terms of what you're seeing in those markets, we'd heard from some of your peers around, rising levels of competition, particularly in that Latam market, just wanting to get a sense of what you guys are seeing in the broader market space in Africa and Latam, and whether this is, I guess, changed internally, the opportunity that presents itself to you.

Question: Andrew Scott - Morgan Stanley Australia Ltd. - Analyst : Thank you. Good morning. Mauro, just on the fertilizer divestments, Perdaman was put to us as basically a $45 million EBIT, essentially close to risk free. With that in mind, $145 million- or 3-times EBIT seems relatively light. Can you talk to us about why that's the right number and the op the decision to sell is the right one rather than retaining a pretty valuable earning stream, I would have thought. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 12:00AM, DNL.AX - Half Year 2025 Dyno Nobel Ltd Earnings Call

Question: Brook Campbell-Crawford - Barrenjoey Capital Partners Pty Ltd - Analyst : Yeah, good morning. Thanks for taking my questions. First one, please, just on the transformation program, are you able to provide a sense of where the room rate benefits were, I guess as you exited the first half please?

Question: Brook Campbell-Crawford - Barrenjoey Capital Partners Pty Ltd - Analyst : Great, thanks for that. And just two quick follow-ups. Firstly, on remediation cost or expected cost for Phosphate Hill. I might have missed it, but was there a range there that you can point us to or if I guess the absence of that comment in the release does that suggest it's pretty minimal? And then the last question just with respect to the outlook for coal in the US has obviously been some sort of support and policy announcements made relatively recently. Does that change at all your outlook for the coal and market in the US? Thanks.

Question: John Purtell - Macquarie Securities (Australia) Ltd - Analyst : Good morning, Mauro and Damian, I hope you're both well. Just a few quick ones if I could. Just firstly on DNAP there, Mauro, you sort of mentioned that there's a sort of long a am position in the second half in the Bowen Basin. I mean, is that all weather related, if you could provide some more color there, please? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 12:00AM, DNL.AX - Half Year 2025 Dyno Nobel Ltd Earnings Call

Question: John Purtell - Macquarie Securities (Australia) Ltd - Analyst : Thank you. And just the second one, obviously there's no -- just related to tariffs, there's no, material direct impacts there, but any sort of indirect impacts to call out, it sort of looks like you're sort of expecting flat Q&C volumes for the for the full year, so probably only a modest pickup in the second half.

Question: John Purtell - Macquarie Securities (Australia) Ltd - Analyst : Thank you. And just the last one on Phos Hill gas. Obviously Northern Territory gas has restarted. You've given a sort of gas cost range there. Is there increased confidence in the bottom end of that range, but, the range is still fairly broad, so that sort of reflects uncertainty on what the actual gas flow will be.

Question: Nicole Penny - Rimor Equity Research - Analyst : Good morning. Could we revisit America again, please, where across the three main segments for explosives, volumes were down. Do you believe this is in line with market and could you please provide more color on what you're doing to position Dyno to win market share in the US? And lastly, in the appendix of the presentation, why does DN Asia Pacific have recontracting benefits in the waterfall, but there's no such disclosure in the Americas, please?

Question: Nicole Penny - Rimor Equity Research - Analyst : Thank you very much.

Question: Nathan Reilly - UBS - Analyst : Yeah, thanks. Morning. Would you mind just talking through your share buyback policy for me? So, specifically, I'm just trying to understand how the ongoing (inaudible) manufacturing investment and also that due diligence process will impact your ability to buy back stock, just noting you haven't really been active on that since January, just given what you've been undertaking with the distribution process.

Question: Nathan Reilly - UBS - Analyst : Got it, thank you.

Question: Ramoun Lazar - Jefferies - Analyst : Hi, Mauro. Just another follow-up on DNA if I can. Just with those splits, I think your guidance for the second half of this core explosives business sort of implying year-on-year, the second half will be down, slightly on the PCPs. So just if you could maybe drill down a bit more on sort of your, what you're seeing in that market, specifically from a pricing point of view. You made some comments about the volume backdrop. Are you seeing pricing pressure coming through and recontracting or anything like that? If you could maybe give us a bit more color on that market, and anything specific in your second half that may be impacting your operating performance, that'd be helpful.

Question: Ramoun Lazar - Jefferies - Analyst : Okay, no problem. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 12:00AM, DNL.AX - Half Year 2025 Dyno Nobel Ltd Earnings Call