Orica Limited has issued its financial results for the half-year period that ended on 31 March, reporting that its Statutory Net Profit After Tax (NPAT) was at $123 million.
In addition, the company recorded underlying profits before interest and tax (EBIT) of $323 million, a 32% increase over the prior corresponding period (pcp).
Orica’s board has declared an interim ordinary dividend of 18 cents per share, unfranked, representing a payout ratio of 50%
The dividend is payable to shareholders on 3 July and shareholders registered at the close of business on 26 May will be eligible for the interim dividend.
Return on net operating assets increased from 11.4% in the prior-year period to 12.4% in the first half of 2023, which was mainly driven by the company’s improved earnings performance and strong market conditions.
According to Orica, it maintained strong earnings performance during the period, which was primarily attributable to embedded commercial discipline, strong customer demand, manufacturing utilisation and increased earnings from advanced technology offerings.
“As we continue to successfully execute our strategy, Orica has delivered another set of improved results. The 32% increase in underlying earnings reflects the embedded commercial discipline across our business and the focus on quality of earnings. Our teams worked hard to bring forward recontracting in the second half of the last financial year, the benefits of which we are seeing flow into these first half results,” Orica Managing Director and CEO Sanjeev Gandhi said.
While challenging, Gandhi stated that the company’s personnel and unrivalled worldwide asset and product range have allowed it to adapt and handle fluctuating external operating conditions. Gandhi noted that sustained high commodity prices have fuelled demand for the company’s products and services, and driven customers to Orica’s specialised products and technology offerings to deliver further productivity gains and support their sustainability goals.
“With the completion of the Axis acquisition and growth in our existing Digital Solutions vertical, we have created a new reporting segment that provides increased transparency. The Digital Solutions segment includes Orebody Intelligence; Blast Design and Execution; and GroundProbe. The Axis integration is progressing well and has opened up new international markets for the business,” he added.
In its full-year 2023 outlook, the company said it expects that its performance will continue through the second half, but added that it remains cautious of external challenges from geopolitics, inflationary pressures, higher energy costs and supply chain dislocations.
Capital expenditure is expected to be within $400 million to $420 million, due to sustainability and sustenance project.
Gandhi said the company expects increased customer activity to continue, as well as increased demand for its products, services and technology services.
“Demand for critical minerals remains strong driven by the global energy transition. We expect increased customer activity to continue, as well as increased demand for our products and services and breakthrough technology solutions. While the ammonia landscape has changed during the half, the security of supply is still a challenge globally, one that Orica will continue to navigate with the strength of our global
manufacturing and supply network,” Gandhi stated.
“As our business works to fulfill Orica’s purpose, to sustainably mobilise the earth’s resources, we strive to continue helping our customers achieve their goals and delivering value for our shareholders and broader stakeholders,” he added.
