![High gas prices are impacting fertiliser businesses such as Incitec Pivot. Photo by Gregor Heard. High gas prices are impacting fertiliser businesses such as Incitec Pivot. Photo by Gregor Heard.](/images/transform/v1/crop/frm/5Q2j7ezUfQBfUJsaqK3gfB/ae3b3a9f-e994-43da-9264-9e87427b3a38.JPG/r0_307_6000_3694_w1200_h678_fmax.jpg)
The leaders of Incitec Pivot (IPL) remain in negotiations with Indonesia business PT Pupuk Kalimantan Timur (PKT) regarding the sale of its fertilisers business.
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The fertiliser side of the business was a significant driver of IPL positing a net loss for the half year of $148 million, compared to a profit of $354 million for the previous corresponding period, although last year's result was inflated with one-off sales.
Uncertainty around gas prices, a key input in fertiliser, has seen IPL write down the value of its fertiliser arm by $498 million to $1.1 billion.
PKT is an Indonesian state-owned enterprise and is one of the largest urea, ammonia and nitrogen, phosphorus and potassium fertiliser producers in Asia, with five ammonia plants and five urea plants producing more than 3.4 million tonnes of fertilisers annually, which supply a range of countries, including Australia.
In its announcement to the Australian Stock Exchange this morning IPL conceded there was no certainty that any agreement will be reached or that any sale transaction will occur.
Talks between the two parties over a potential sale have dragged on for over 10 months now.
Speaking during the results briefing new chief executive Mauro Neves, formerly of BHP, said the company remained committed to divesting the fertiliser business and focusing on its explosives unit.
IPL reported markedly lower earnings before interest and tax (EBIT) of $249m, down from $552m for the same time last year, with the sales of its US assets in Louisiana and the fertiliser manufacturing facility at Gibson Island, Queensland lowering the earnings potential.