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Highlights
- Orica (ORI) expects EBIT to surpass initial projections, driven by growth across all segments.
- Carbon credit sales projected to add up to $15 million, finalizing in March 2025.
- Statutory net profit after tax to be impacted by impairment and restructuring charges.
Orica (ASX:ORI) has delivered a solid start to the financial year, with earnings before interest and tax (EBIT) expected to exceed prior forecasts. The company's three key divisions—Blasting Solutions, Digital Solutions, and Specialty Mining Chemicals—are on track to contribute higher earnings than the previous year, reinforcing the positive business momentum.
Adding to the strong financial outlook, Orica expects to finalize carbon credit sales by March 2025, which could contribute up to $15 million in additional benefits. This initiative aligns with the company’s broader commitment to sustainability and operational efficiency.
Financial Outlook and Key Projections
Depreciation and amortization for the full year are projected to be at the lower end of the $490 million to $510 million range. Meanwhile, net finance costs are expected to remain steady between $190 million and $200 million. Capital expenditure remains consistent with the previous year, with a stronger focus on the second half of the financial year.
However, Orica has flagged some significant items that will impact its statutory net profit after tax. The company expects an impairment charge related to operations in Latin America, along with restructuring costs across Europe, the Middle East, and Africa. These adjustments will result in a reduction of approximately $300 million to $350 million, with $220 million to $245 million being non-cash charges in the first half of 2025.
Optimistic Outlook Despite Market Challenges
Orica’s Managing Director and CEO, Sanjeev Gandhi, expressed confidence in the company’s ongoing performance, emphasizing that the business has maintained the strong momentum carried over from 2024. He noted that the integration of Cyanco and Terra Insights is progressing smoothly and that demand for Orica’s products and services remains robust across all segments.
Additionally, Gandhi highlighted the positive impact of carbon credit sales, which will further strengthen the first-half results. Looking ahead, he remains optimistic that the company’s momentum will continue through the second half of the financial year and beyond, provided external market conditions remain stable.
More insights into Orica’s financial performance and strategic direction will be shared at the company’s Investor Day, scheduled for Wednesday, 12 March 2025, at 9:30 am (AEDT).
