Melbourne: Orica (ASX: ORI) today announced a Statutory Net Loss After Tax (NLAT) attributable to the shareholders of Orica for the half year ended 31 March 2022 of $85 million; and underlying EBIT of $245 million, up 58 per cent on the prior corresponding period (pcp) (1).
Key Financials
- Statutory NLAT of $85 million (pcp: Statutory Net Profit After Tax of $79 million), including $214 million significant items after tax
- Underlying EBIT(1),(2) of $245 million, up 58 per cent on the pcp, before individually significant items
- Ammonium nitrate (AN) volumes of 2.0 million tonnes up 5 per cent on the pcp
- Underlying earnings per share(1),(3) of 36.1 cents, up 94 per cent on the pcp
- Net debt(4) of $1.6 billion and gearing (5) at 38.3 per cent, within target range
- Unfranked interim dividend of 13.0 cents per ordinary share, representing a payout ratio of 41 per cent
Orica’s 2022 half year results reflect significantly improved performance on the pcp.
Orica Managing Director and CEO Sanjeev Gandhi said: “Our first half result reflects the relentless efforts of our team in improving performance, in line with our refreshed strategy that we outlined in November 2021. Focusing on three value drivers that aligns with Orica’s strengths, the refreshed strategy aims to deliver solutions and technology that drive productivity and innovation for customers and provide enduring value to shareholders and other stakeholders.
“The strength of our global manufacturing and supply network has enabled us to meet our customers’ needs, as we continue to navigate through difficult operating conditions.”
Dividend and Capital Management
The Board has declared an unfranked interim ordinary dividend of 13.0 cents per share, representing a payout ratio of 41 per cent. The dividend is payable to shareholders on 8 July 2022 and shareholders registered as at the close of business on 1 June 2022 will be eligible for the dividend.
Orica’s gearing of 38.3 per cent remains within the target range of 30 to 40 per cent.
Mr Gandhi said: “We maintained a disciplined approach to our balance sheet and capital management which resulted in our gearing ratio remaining within target range, despite the expected increase in trade working capital from rising input costs.”
Outlook
Subject to market conditions, the strengthened performance is expected to continue into the second half of the 2022 financial year.
Commenting on the 2022 full year outlook, Mr Gandhi said: “We expect steady commodity growth, particularly in gold, copper and quarry and construction in the second half which will continue to drive demand for our products and services.
“We expect the momentum in earnings from the underlying businesses to continue, despite the planned exit from our operations in Russia, the supply chain challenges associated with Russia-Ukraine, and the divestment of Minova.”
A focus on balance sheet and cash flow optimisation will be maintained, with gearing expected to be within the target range. Capital expenditure in the 2022 financial year is expected to be between $340 million and
$360 million.
Documents
(1) Restated to reflect application of IFRIC Interpretation Configuration or Customisation Costs in a Cloud Computing Arrangement
(2) Equivalent to profit/(loss) before financing costs and income tax as disclosed in Note 2(b) within Appendix 4D – Half Year Report, before individually significant items
(3) Basic earnings per share before individually significant items as disclosed in Note 3 within Appendix 4D – Half Year Report
(6) March 2022 total interest-bearing liabilities – excluding lease liabilities less cash and cash equivalents, as disclosed in Note 10(a) within Appendix 4D – Preliminary Final Report.
(7) Net debt / (net debt + total equity), where net debt excludes lease liabilities