ORI 3.09% $15.66 orica limited

net profit up 11pc to $540m for year

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    Sydney - Monday - November 10: (RWE Australian Business News) -
    Orica Ltd (ASX:ORI) lifted net profit 10.6pc to $539.6m in the 12 months
    ended September 30 from $487.7m for the previous year.
    Net profit before individually material items rose 15pc to
    $572.3m from $497.8m.
    Sales revenue rose 18.4pc to $6.54bn from $5.53bn.
    Basic earnings per share were $1.598, up from $1.463, while
    underlying EPS was $1.70, up from $1.495.
    Final dividend has been increased from 53c to 55c, franked to
    20c, payable on December 5 to shareholders registered November 18.
    This brings total dividends for the year to 94c, up from 89c.


    Managing director Mr Graeme Liebelt said the result showed the
    strength across Orica's business platforms despite challenging market
    conditions during 2008, including unfavourable foreign exchange
    movements and rising input costs.
    "The record result marks our seventh consecutive year of profit
    growth. It also highlights the continued strength in Orica's underlying
    earnings with all of our business platforms achieving double-digit
    growth," Mr Liebelt said.
    "Orica's Mining Services business had a record result, with an
    11pc increase in EBIT reflecting earnings growth in all regions from
    increasing volumes, benefits from increased ammonium nitrate prices and
    the successful integration of the former Dyno Nobel businesses. All
    regions within Mining Services achieved record results in 2008.
    "The Dyno integration is now complete and has delivered
    synergies of $92m (against a targeted $90m) a full 12 months ahead of
    schedule. Our successful integration model is now being used to imbed
    the Minova-Excel businesses into Orica and this is on track to achieve
    the expected synergy targets.
    "Minova earnings increased 144pc to $150m as a result of
    underlying business growth, an additional three months' contribution
    from the base Minova business and an Excel contribution in line with
    "Minova's underlying performance in the mining sector improved -
    most notably in emerging markets of Russia, Eastern Europe and China.
    The tunnelling business had a much improved second half with the benefit
    of some major projects in Europe.
    "Consumer Products achieved underlying earnings growth of 10pc
    to a record $123m. Most pleasingly, this business continues to increase
    its market share in Australia across all segments and reap the benefits
    from a strong focus on branding, innovation and customer service despite
    relatively subdued market conditions, particularly in New Zealand.
    "The recently formed Chemicals division, comprising the former
    Chemical Services and Chemnet divisions, delivered underlying EBIT
    growth of 18pc to $146m. The improvement in the Chemicals business is on
    the back of favourable market conditions for sodium cyanide and the
    benefit from our uprated Yarwun sodium cyanide plant.
    "We also saw strong volume growth in most end-markets for
    Watercare's products and services despite continuing drought conditions
    in large areas of Australia. Chemnet's bulk chemicals businesses in
    Australia, New Zealand and Latin America continue to improve and
    collectively are well ahead of our 18pc return on net assets target."
    Mr Liebelt concluded, "Orica's businesses have performed
    strongly and we are confident they will continue to do so. Accordingly,
    group net profit (before significant items) in 2009 is expected to be
    higher than that reported in 2008.
    "This is subject to global economic conditions and particularly
    their impact on demand in developing nations."
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