Orica Limited’s Shares Spiked Up On ASX After Announcing FY18 Results

  • Nov 02, 2018 AEDT
  • Team Kalkine
Orica Limited’s Shares Spiked Up On ASX After Announcing FY18 Results

Orica Ltd (ASX: ORI), Australia’s largest mining, equipment, technology, and services player, stock rose 6.426% on November 02, 2018 after the company for FY 18 has reported 7% growth in the sales revenue. That is despite the 16% fall in the underlying profit fell by 16 percent to A$324.2 million ($233.55 million), on the back of unplanned maintenance shutdowns as well as operational issues at the Burrup plant for the FY 18.

The revenue grew due to an improved market demand, new contract wins and an increase in higher value-add product sales. Total ammonium nitrate volumes increased by 5% year-on-year, due to higher demand in Indonesia and Australia. However, the volume growth was offset by unfavourable contract pricing. The impact of contract pricing for the FY 18 was lower than previously expected due to the deferral of some contract re-negotiations to the 2019 financial year. Earnings before interest, tax, depreciation, and amortization were down 1% to $885 million. The earnings before interest and taxes were further affected due to unplanned maintenance shutdowns at Yarwun and Kooragang Island operations in Australia. While earnings in the first half were disappointing, the company posted earnings before interest and tax growth of 46% in the second half.  

Further, Burrup technical ammonium nitrate plant, which is the joint venture in Western Australia between Orica and Norwegian partner Yara International, was expected to be operational by the end of the FY2018, with the replacement of some key components expected to delay production until the first half of FY20.

Moreover, ORI has reduced the debt considerably in the second half to bring gearing to 35.7% at year-end, which is well within the company’s targeted range of 35% to 45%. This represents a three-percentage point rise on the prior year, after the acquisition of GroundProbe, the impairment of Minova and an increase in environmental provisions. The company has declared a final dividend of 31.5 Australian cents per share, up from the 28 cents per share a year earlier. For FY 19, ORI expects to post improved earnings due to increase in each of the regional businesses, with the exception of Latin America. For FY 19, Global AN product volume is expected to be higher by approximately 3%. In 2019, the company will incur approximately $25 million negative impacts from previously disclosed negative FY 18 deferred contract renewals. FY 19 CapEx is expected to be approximately $350 million. ORI is looking for new ways to increase the returns on the asset base and expects increased utilization rates at the manufacturing operations for the improvement of the financial performance in the coming year and beyond. The company continues to prioritize capital efficiency and cost management.

Meanwhile ORI stock has fallen 5.29% (source: ASX) in three months as on November 1st, 2018.

In the last six months, the share price of ORI decreased by 15.74 percent as on 1 November 2018. ORI’s shares traded at $17.720 with a market capitalization of circa $6.31 billion as on 2 November 2018 (AEST 4:00 PM).


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.


All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK