Orica Annual Net Profit Jumps, Forecasts Higher Earnings for Year Ahead -- Update

By Rhiannon Hoyle

Explosives and chemicals company Orica on Thursday reported a 77% jump in annual profit, reflecting higher earnings from all business units and a profit on the sale of some surplus land.

The Australia-listed company said it expects earnings to rise further in fiscal 2025, despite ongoing headwinds from inflation pressures and higher energy costs, and upgraded its three-year outlook for return on net operating assets.

Orica said it made a net profit of 524.6 million Australian dollars (US$342.8 million) for the 12 months through September, up from A$295.7 million the year prior.

Orica reported a 15% rise in earnings before interest and taxes, or Ebit, to A$805.6 million. Ebit is expected to increase again in fiscal 2025, it said.

The company notched a 13% rise in Ebit from its blasting solutions business, helped by customers buying more technology and premium products. Orica reported a 36% rise in Ebit from specialty mining chemicals, and 29% from digital solutions, as both those arms benefited from recent acquisitions.

Chief Executive Sanjeev Gandhi said the company expects demand for its blasting solutions, specialty mining chemicals and digital solutions will continue to grow.

Orica forecast a three-year average return on net operating assets of between 13% and 15% for fiscal 2025-2027. It previously guided to between 12% and 14% for fiscal 2024-2026.

Its return last fiscal year was 12.8%, up from 12.6% the year prior.

Orica's bottom line benefited from the sale of Deer Park stage one surplus land, as well as excess land at Yarraville. The company recorded a total gain of A$115.2 million from one-off items.

Directors declared a final dividend of 28 Australian cents a share, representing a payout ratio of 59% of underlying earnings, the company said. A year ago, Orica paid a final dividend of 18 Australian cents a share.

Orica's dividend policy is to pay shareholders roughly 40-70% of underlying earnings, with the total dividend paid each fiscal year weighted toward the second half.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

November 13, 2024 17:12 ET (22:12 GMT)

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