Orica's Full-Year Profit More Than Doubles After Spinning Off Paints Unit
Orica Ltd., the world’s largest industrial explosives maker, said full-year net income more than doubled after spinning off its DuluxGroup paints business.
Net profit was A$1.32 billion ($1.34 billion) for the 12 months ended Sept. 30, compared with A$541.8 million a year ago, the Melbourne-based company said today in a statement.
Orica this year spun out its DuluxGroup paints and garden products division to focus on the mining services and chemicals businesses. The company, which supplies explosives for coal and copper production, quarrying and construction, forecast higher profit before one-time items for this year.
Demand for Orica’s mine blasting services and chemicals such as cyanide, used in gold extraction, recovered strongest in North and South America, Managing Director Graeme Liebelt said during a conference call with reporters. Market conditions “improved” generally during the second half of the year, and all of Orica’s operating regions should benefit from a global recovery, Liebelt said. Orcia’s balance sheet is in “excellent shape,” allowing the company to look for acquisitions, he said.
Orica was up 2.3 percent at A$26.29 on the Australian stock exchange at 11:22 a.m., taking this year’s advance to 12 percent.
The company made a A$794 million profit on the demerger of DuluxGroup, Orica said in a statement. Profit from operations, excluding the paint unit, was A$619 million, compared with A$557 million a year earlier, the company said.
The group may consider acquisitions to bolster the company’s focus on explosives, chemicals and services, Liebelt said in July.
Orica sold $600 million of bonds to private investors in the U.S. and will use the proceeds to repay bank loans and commercial paper, allowing it to fund “growth opportunities” by re-borrowing through those facilities, the company said in a regulatory filing on Aug. 11.
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