News & Media
Continued momentum in profitable growth
01 Nov 2019
Melbourne: Orica (ASX: ORI) today announced statutory Net Profit After Tax for the 12 months ended 30 September 2019 of $245 million (FY18 $48 million loss) and NPAT before individually significant items of $372 million, up 15% on the prior corresponding period (pcp). Underlying earnings per share increased by 14% to 97.9 cents per share.
Orica Managing Director 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 is 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.”
Capital Management and Dividends
Orica’s gearing (34.9%) remains comfortably within the company’s revised target range of 30-40%.
The Board has declared a final ordinary dividend of 33.0 cps (5.0 cents franked), bringing the full year dividend to 55.0 cps. The final dividend is payable on 13 December 2019 to shareholders registered at the close of business on 13 November 2019.
The outlook for FY20 and beyond is 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 in to 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.
FY20 capital expenditure is anticipated between $370 million and $390 million (excluding Burrup) with a continued focus on growth capital and plant reliability.
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