Profits fall for global explosives supplier

Orica reported a $242 million net profit for the half year ended 31 March 2014 ? a $21 million drop from the $263 million of the previous corresponding period (PCP).
Although global explosive volumes were down by two per cent ? which Orica stated in its profit report was largely due to the demand profile of international coal and Latin American metals markets ? Australia?s volumes increased by five per cent. 
This was driven by a 40 per cent increase in explosives volumes in Western Australia?s Pilbara, offset by what the company referred to as ?relatively flat? volumes on Australia?s east coast.
Orica?s total earnings before interest and tax (EBIT) for the period were also down seven per cent on the PCP to $402 million, with its mining services EBIT down two per cent to $419 million. 
Orica stated that the contribution from explosives products was in line with the PCP due to increases in explosives margins being offset by scheduled plant shutdowns and redundancy costs. In the Australia/Pacific region, Orica reported a 10 per cent fall of $28 million on the PCP to an EBIT of $255 million.
Positive outlook for second half
Despite the initial slump for the 2014 financial year, Orica remained positive for the second half of 2014, stating in its profit report that it expected demand conditions to improve in most explosives markets, particularly in the Pilbara region, the Commonwealth of Independent States, Africa, and quarry and construction markets in Europe and the United States. 
However, the company also stated that current pricing pressures were expected to continue with ground support markets to remain challenging.
Orica is a global supplier of commercial explosives and general chemicals. Its mining services include the provision of blasting services, blasting systems ? including bulk, electronic and initiating systems ? as well as of packaged explosives to a number of markets, including the quarrying industry.
Source: Orica

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