This was a statutory net profit after tax and after ?individually material items? for the full year ended 30 September 2013 – up $199 million or 49 per cent compared with the previous corresponding period of $403 million. The results were better than the guided $585m.
Orica’s explosives volumes fell two per cent during the year and global industry demand fell even more. But Orica was able to maintain pricing in most markets while increasing market share.
Orica’s managing director and CEO Ian Smith said the first half results were tough but the second half will be better, led by improving thermal coal activity in the US. Shares in the company rose 11.6 per cent to $21.81 after the announcement, lifting its market value almost $85 million to $8 billion.
Write-down
The profit was up 49 per cent on the previous year when Orica took a $247 million write-down on its mining support business Minova. Without that write down, this year’s result would have been $48 million lower as Orica battled subdued demand.
Smith said the company was beginning to see a pick-up in sentiment in key markets. There were also good signs in China and even ?green shoots? in the long-troubled European market as quarrying and construction showed positive signs.
“You get these three in positive positions and in six months you are in a better place,” Smith remarked.
Orica?s core business in Australia and Asia jumped 20.2 per cent in FY13. Australasia made up almost two thirds of Orica?s earnings and it will be a major factor in the medium term sustainability as it reorientates its explosives business to reflect the lower growth phase in mining as a whole.
Earnings from North America are a real concern – down some 24 per cent.
Sources: Orica, The Australian, The Herald-Sun, IG