A “positive” outlook for ”2020 and beyond” on Friday from explosives and mining services Group Orica after it revealed a 15% rise in full-year profit for the 12 months to September 30.
The company reported a statutory after-tax result of $245 million (against a 2018 loss of $48 million) and an after-tax profit before individually significant items of $372 million, up 15% 2017-18.
The company announced a final dividend of 33.0 cents a share (of which just 5 cents is franked), bringing the full-year dividend to 55 cents a share, up from 51.5 cents a share paid in 2017-18.
In a statement on Friday Orica CEO, Alberto Calderon said: “Our FY19 financial result provides evidence of the continuing uplift in our operating and financial performance.
“Orica’s manufacturing and cost performance are improving across the board. Volumes are growing and our market-leading technology solutions are gaining traction with customers. Our growth drivers are starting to deliver.
“All of our regions are performing strongly with Europe, Middle East & Africa reporting a particularly pleasing result in FY19 following focused efforts to improve this business. Increased penetration of our technology-based blasting solutions and contract wins have driven sales revenue 9% higher for the period.
“The increase in Australia Pacific & Asia volumes was led by 6% growth in Australia, with market share in the region continuing to increase.
“Consistent with our previous updates, progress on rectification at Burrup continues in line with our plan, and the plant is expected to make a positive contribution to earnings from the second half of FY20.
“We are particularly pleased with the ongoing strong performance of our GroundProbe business which continues to deliver results ahead of expectations. We anticipate this exceptional business will deliver 20% Return on Net Assets (RONA) over the next three years. After several years of management focus the Minova business has also delivered a signficantly improved result in this period.”
He said the company’s outlook for FY20 and beyond was “positive.”
“Orica anticipates higher earnings in FY20 underpinned by increased demand and product mix across all regions and the further take-up of our market-leading technology. Earnings contributions expected from the Burrup plant will feed into higher earnings from the second half. It is expected earnings will be skewed to the second half of the year.
“While there are many external factors that can impact our performance, Orica’s efforts to improve every aspect of operations within our control is starting to deliver results. We are optimistic this early momentum will be maintained and grow in the years ahead,” Mr Calderon said.
He said capital expenditure is anticipated between $370 million and $390 million (excluding the Burrup plant in WA) with a continued focus on growth capital and plant reliability.