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Australian explosives maker Orica predicts "significantly higher" annual earnings

Australian explosives maker Orica predicts "significantly higher" annual earnings

Orica Ltd. said Monday annual earnings will be "significantly higher" as the world's largest maker of explosives benefits from new acquisitions worth 1.7 billion Australian dollars (US$1.4 billion; euro1.0 billion), expanded production and rising demand for its mining services products.
Earlier Monday, the Melbourne-based company posted a 39 percent gain to a record A$203.1 million (US$168.0 million; euro123.1 million) in net profit for the fiscal half-year through March as its sales rose to A$2.7 billion (US$2.2 billion; euro1.6 billion) from A$2.2 billion, boosted by assets bought in the past 18 months.
Orica has been benefiting from rising demand for mining explosives to meet China's growing needs for base metals and energy, increasing production and its range of mining services products.
"Subject to global economic conditions, we expect group net profit before significant items in 2007, to be significantly higher than that reported in 2006," Chief Executive Graeme Liebelt said in a briefing.
"We have always said 2007 would be the year we would see the benefits of many of the investments we've made over the recent few years," he added.
Liebelt declined to give a specific forecast.
Orica, which competes with Sydney-based Dyno Nobel, the second-largest explosives maker, is projected to earn A$501.3 million (US$414.5 million; euro303.9 million) in the year ending Sept. 30, according to a survey of 11 analysts by Thomson Financial.
On April 18, Orica rejected a A$9.95 billion (US$8.3 billion; euro6.13 billion) takeover proposal from a private equity consortium led by Bain Capital Partners, which valued it at A$32 (US$26; euro19) a share, saying the offer undervalued the company.
Liebelt said Orica had not had further talks with the group, which included Blackstone Capital, Pacific Equity Partners and Morgan Stanley's investment arm, and has had no other offers.
Orica's net profit after one-off items for the first half rose 71 percent to A$210 million (US$174 million; euro127 million) from fiscal year 2006, including a A$19 million (US$16 million; euro12 million) gain from the sales of its adhesives and resins business, from A$130.4 million last year.


Updated : 2021-03-08 06:37 GMT+08:00