Melbourne: Orica (ASX: ORI) today provides an update on the sale of Minova and first half performance.
Proceeds realised following completion of Minova sale
The sale of the Minova business to the Aurelius Group (ETR: AR4) for A$180 million, as announced in December 2021, was successfully completed on 28 February 2022. A$149 million cash was received at completion, after allowing for debt and debt-like items. Any potential adjustments for working capital and debt-like items will be determined based on the final completion accounts.
The expected profit on disposal as well as release of the foreign currency translation reserve will be presented as an individually significant item.
First half performance
As previously announced at the 2021 full year results in November 2021, first half performance in the 2022 financial year is expected to be stronger than the prior corresponding period (pcp). This reflects the positive momentum leading into the year associated with improved global commodity markets, which will result in volume growth in line with global GDP growth.
Pricing discipline in contract negotiations is expected to broadly mitigate rising input costs and pass-through lags.
Security of supply for Orica’s customers remains a priority in a tightening global AN market due to geopolitical issues and supply chain disruptions, which will result in increased trade working capital.
All continuous manufacturing plants have been operating to required available capacity as determined by market demand. Two planned turnarounds have been completed in the half to date:
- The Carseland site-wide turnaround which commenced in September 2021 was completed in October 2021; and
- Yarwun turnarounds for two nitric acid plants, one ammonium nitrate plant and the emulsion manufacturing plant were all successfully completed in November 2021.
The outlook for financial year 2022 remains unchanged, subject to market conditions.
Orica Managing Director and CEO Sanjeev Gandhi said:
“We’ve been able to maintain the positive momentum from the second half last year and remain on track to deliver a stronger first half than the prior corresponding period.
“With our refreshed strategy firmly in place, we are focussed on progressing on our four key business verticals and are well placed to leverage our strengths and seize opportunities in a tightening global market, while continuing to streamline the business.”