Orica posts growth, expects more in 2010
Orica Limited (ORI) reported a net profit of $542 million for the full year to 30 September 2009, despite incurring expenses related to individually material items of $104 million. When not including one-off expenses, the chemical and explosives manufacturer reported a 13% jump in post-tax profit to $646 million.
Looking ahead, Orica said it expects earnings growth to continue in 2010.
”In light of the shape of the economic decline experienced in 2009, we anticipate first half conditions to be more difficult than those of the previous corresponding period,” the company said.
”Subject to the rate of global economic recovery and the extent of further adverse movements in exchange rates, we expect Group net profit after tax (pre individually material items) in 2010 to be higher than that reported in 2009,” the company added.
Looking at the company’s current latest result, Orica also reported sales revenue was up 13% to $7.4 billion.
Managing director Graeme Liebelt said the result was the fruition of a decade long strategic initiatives implemented by the company.
"It is that, combined with a tight control of the business fundamentals – cost, cash and productivity – that is at the core of the profit growth this year,” Mr Liebelt.
"To achieve double digit growth in earnings before interest and tax (EBIT) in this environment is an excellent result.”
Earnings per share, before individually material items, were $1.746c, up 3% on 2008, the eighth consecutive year of EPS growth.
Across the company’s divisions, Orica’s Mining Services sales were up 14% to $4.1 billion.
The chemicals business posted record results with sales up 10% to $1.5 billion and EBIT up 17% to $170 million, attributing the result to stronger demand for cyanide, which it expected to continue in 2010.
The proposed demerger of its Consumer Products, which has been renamed DuluxGroup, has been "indefinitely deferred”, the company added.
The board declared a final dividend of 57c per share.
At the open Monday, Orica shares were up 82c to $23.17.
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