Orica (ASX:ORI) to sell Minova business as profit falls 54%

Company News

by Melissa Darmawan

Explosives systems company Orica (ASX:ORI) reports a 54 per cent drop in their half-year net profit to $77 million when compared to the same time last year.

Sales revenue dropped by 9 per cent to $2.6 billion impacted by lower volumes and currency exchange rates.

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". “Ongoing COVID-19 disruptions, geopolitical issues and unfavourable foreign exchange movements impacted us in the half".

Orica has also announced that it intends to sell the Minova business which provides ground control solutions for the mining, civil/tunnelling, geotechnical and construction industries.

Mr 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.”

Commenting on the full year outlook, Mr 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”.

The company will pay an interim dividend of 7.5 cents a share on 9 July.

Shares in Orica (ASX:ORI) are trading 1.86 per cent lower at $13.16.