Orica Announces Revised Earnings For 2001

August 8, 2001

Orica Limited today announced a change in earnings forecast for the financial year ending 30 September 2001.

Excluding significant items earnings for the year ended 30 September 2001 are expected to be $60 million.

In addition, the Orica Board decided to take a more conservative view of the carrying values of the North American explosives business goodwill because of near term unfavourable conditions in that region. Directors remain confident of the future of the explosives business and actions are being implemented to improve the performance of this business.

The decision has also been taken to hasten the divestment of AVC and, together with a less favourable short term earnings outlook, is expected to lower its recoverable value.

Losses from these significant items, after tax and minority interests for the financial year, including the abnormal profit of $19.3 million reported at 31 March 2001, are estimated to be $185 million.

Including significant items and after minority interests, the revised earnings forecast is an anticipated $125 million loss.

These negative items of significance are disappointing. Orica is confident of an improved financial performance in its 2002 financial year.

Orica’s executive chairman Don Mercer stated "Orica is committed to keeping our shareholders promptly and accurately informed of the true financial position of the company. The Directors of Orica are focused on ensuring that there is improvement in the operating performance of Orica’s businesses and, in particular, that capital is prudently managed."

Details of the significant items are listed below: