Orica announce first half results

Orica has announced a statutory net loss after tax (NLAT) attributable to the shareholders of Orica for the half year ended 31 March 2022 of AUS$85 million and underlying EBIT of AUS$245 million, up 58% on the prior corresponding period (pcp).

Key financials

• Statutory NLAT of US$85 million (pcp: statutory NLAT of AUS$79 million), including AUS$214 million significant items after tax.
• Underlying EBIT of AUS$245 million, up 58% on the pcp, before individually significant items.
• Ammonium nitrate (AN) volumes of 2 million t, up 5% on the pcp.
• Underlying earnings per share of 36.1 cents, up 94% on the pcp.
• Net debt of AUS$1.6 billion and gearing at 38.3%, within target range.
• Unfranked interim dividend of 13 cents per ordinary share, representing a payout ratio of 41%.

Orica’s 2022 half year results reflect significantly improved performance on the pcp.

Orica Managing Director and CEO, Sanjeev Gandhi, said: “Our first half result reflects the relentless efforts of our team in improving performance, in line with our refreshed strategy that we outlined in November 2021. Focusing on three value drivers that aligns with Orica’s strengths, the refreshed strategy aims to deliver solutions and technology that drive productivity and innovation for customers and provide enduring value to shareholders and other stakeholders.

“The strength of our global manufacturing and supply network has enabled us to meet our customers’ needs, as we continue to navigate through difficult operating conditions.”

Dividend and capital management

The Board has declared an unfranked interim ordinary dividend of 13 cents per share, representing a payout ratio of 41%. The dividend is payable to shareholders on 8 July 2022 and shareholders registered as at the close of business on 1 June 2022 will be eligible for the dividend.

Orica’s gearing of 38.3% remains within the target range of 30 – 40%.

Gandhi added: “We maintained a disciplined approach to our balance sheet and capital management which resulted in our gearing ratio remaining within target range, despite the expected increase in trade working capital from rising input costs.”

Outlook

Subject to market conditions, the strengthened performance is expected to continue into the second half of the 2022 financial year.

Commenting on the 2022 full year outlook, Gandhi said: “We expect steady commodity growth, particularly in gold, copper and quarry and construction in the second half which will continue to drive demand for our products and services.

“We expect the momentum in earnings from the underlying businesses to continue, despite the planned exit from our operations in Russia, the supply chain challenges associated with Russia-Ukraine, and the divestment of Minova.”

A focus on balance sheet and cash flow optimisation will be maintained, with gearing expected to be within the target range. Capital expenditure in the 2022 financial year is expected to be between AUS$340 million and AUS$360 million.

Read the article online at: https://www.globalminingreview.com/finance-business/13052022/orica-announce-first-half-results/