Orica Plunges on Forecast Earnings Will Fall 10%: Sydney Mover
Orica Ltd. (ORI), the world’s largest maker of industrial explosives, fell the most in five years in Sydney trading after saying profit will be 10 percent lower than the previous year amid weaker demand.
The Melbourne-based supplier of chemicals and explosives expects profit before one-time items in the fiscal year to Sept. 30 to be about A$585.2 million ($537 million), compared with A$650.2 million a year ago, amid weak demand and higher costs from the integration of its ground support unit, it said today in a statement.
Orica, one of the worst 10 performers this year among Australia’s 100 biggest companies, said its ground support unit, which makes stabilization and ventilation systems for underground mining and civil tunneling works, was now expected to be break even this fiscal year. The company had previously forecast earnings before interest and tax for the unit of A$17 million to A$25 million, compared with earnings of A$109 million in the previous year.
A slowdown in the mining industry had also led to weaker demand than “previously expected for explosives and sodium cyanide,” Orica said in the statement.
“Specific projects are being implemented to address performance issues in the ground support and European businesses which are expected to deliver benefits in 2014,” the company said. “In addition, a general review of productivity initiatives and cost reduction opportunities is ongoing across all areas of the Orica business.”
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