Orica announced statutory net profit after tax (NPAT) attributable to the shareholders of Orica for the six months ended 31 March 2021 of $77 million, down 54 per cent on the prior corresponding period (pcp); and underlying EBIT of $152 million, down 51 per cent on the pcp. The Board has declared an unfranked interim dividend of 7.5 cents per ordinary share, payable on 9 July 2021, representing a 42% payout ratio.

Orica Managing Director and CEO Sanjeev Gandhi said: “Our first half financial results are in line with our February market update and reflect the impact of various market factors. As we detailed in the update, ongoing COVID-19 disruptions, geopolitical issues and unfavourable foreign exchange movements impacted us in the half.

“As we address these challenges, we have maintained our disciplined approach to our balance sheet and capital management, while delivering a step up in cash generation and controlling our levels of debt and gearing.

“Operationally, we continued to focus on what we can control, making good progress on many core strategic fronts, including growing uptake of our high margin digital solutions, the successful integration of Exsa, Burrup operating in line with our plans and further stabilisation of our SAP platform.

“At the same time, we are advancing our strategy to become an even safer, more responsible and more sustainable organisation. Our major decarbonisation projects are progressing to plan and we are on track to meet our industry-leading emissions targets. Most importantly, it was a half with no fatalities and no significant environmental incidents.”

Orica also announced today that it intends to run a sale process for the Minova business, which provides ground control solutions for the mining, civil / tunnelling, geotechnical and construction industries.

Gandhi said: “While Minova has delivered a substantially improved performance in recent times, it has been identified as non-core. Therefore, we will consider selling at an appropriate price.”

Outlook

Commenting on the full year outlook, Gandhi said: “While the factors that impacted us in the first half are expected to largely reverse over time, and the fundamentals of our business remain sound, we remain cautious about the short-term outlook. “It has been encouraging to see volumes start to increase at the end of the half. While we expect a better second half than the first, given uncertainties remain around market factors, we expect the second half EBIT to be lower than the pcp."

“We will continue to focus on what we can control and remain on track to achieve a number of strategic targets including contributions from new technology and realising the financial and synergistic benefits from our Exsa acquisition.

“At the same time, we are reducing overhead and manufacturing costs, accelerating speed to market of our world-leading technology, and continuing to optimise our operating model, our SAP platform and our global initiating systems manufacturing network.

"We have a refreshed management team in place who are energised and focused, and we move forward with a clear set of strategic priorities, well-positioned for recovery as external conditions stabilise."