September 1, 2019 / 11:15 PM / 16 days ago

UPDATE 1-Australia's Incitec puts fertiliser business up for review, lowers EBIT guidance

(Adds details, background on gas deal)

Sept 2 (Reuters) - Australia’s Incitec Pivot Ltd, a fertiliser and explosives producer, said on Monday it would review its fertiliser business and lowered its operating profit forecast due to drought and increased costs.

The company, Australia’s top distributor of fertilisers, said it expects earnings before interest and tax (EBIT) of A$285 million to A$295 million ($192 million to $199 million), lower than an earlier range of A$321 million to A$366 million.

The Melbourne-based company said the strategic review of its fertilisers business would assess options including a potential sale, demerger or retention.

It said drought conditions in New South Wales and Queensland states had resulted in lower production and earnings.

Incitec Pivot also cited increased gas costs at the Gibson island fertiliser plant in Queensland for the lower guidance, months after it said it had lined up an affordable gas supply deal to keep the plant running through 2022.

It has hired UBS to advise it on the review, which is expected to progress over the 2020 financial year.

$1 = 1.4806 Australian dollars Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Peter Cooney and Richard Pullin

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