Orica earns $602m profit for 2013 FY

Orica has announced a net profit of $602 million for the 2013 FY, a jump of nearly 49% year on year.

The net profit after tax and individually material items is up $199 million compared to the same time last year, when it earned $403 million.

However, before individually material items the explosives manufacturer and mining services company was down compared to the previous corresponding period, when it recorded an NPAT of $650 million.

Its overall EBIT was also down 4% on last year, generating $985 million, although EBITDA remained steady at $1.269 billion.

Orica’s full year sales revenue grew year on year by 3% to $6.9 billion while its net operating cash flow nearly doubled from $544 million to $1.059 billion.

It stated that the “strategy of promoting product and service differentiation has led to an increased contribution from mining services across its explosives markets”.

Globally explosives were down for Orica, due to reduced demand in the US coal markets and Latin America, however this was offset by growth in the Pilbara (67% growth), Australian coal markets (18% growth), and the emerging markets of Africa and Russia.

It also saw strong growth in electronic blasting systems, with an 11% year on year increase.

“Mining chemical products improved on the back of better plant performance.”

However “ground support markets were weaker than expected in the second half of the year which led to an acceleration of the integration of the business into Mining Services. This program was completed by the end of the financial year with the costs included in the 2013 FY.”

The manufacturer is expects “subdued conditions in most explosives markets excluding the Pilbara, CIS and Africa, where growth is expected to continue” in 2014.

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