Orica Reports 34% EBIT Growth to $472M, NPAT Pre-SI Up 40%

Strong Financial Momentum

Orica Limited has delivered a commanding first half performance for FY2025, with earnings before interest and tax (EBIT) rising 34% to $472.3 million. The company’s net profit after tax before significant items (NPAT pre-SI) surged 40% to $250.8 million, reflecting robust demand across its core blasting solutions, digital technologies, and specialty mining chemicals segments. This growth was accompanied by a 29% increase in net operating cash flow to $244.9 million, underscoring strong cash generation.

Segment and Regional Highlights

Orica’s Blasting Solutions segment remained the powerhouse, benefiting from increased customer uptake of premium products and advanced blasting technologies, particularly in Australia Pacific and Asia where margin expansion was notable. Digital Solutions continued its upward trajectory, driven by strong adoption of offerings like Terra Insights and new contract wins across multiple regions. Specialty Mining Chemicals also posted solid growth, supported by the integration of the Cyanco acquisition and higher production volumes.

Regionally, Australia Pacific and Asia led earnings growth with a 40% EBIT increase, aided by non-repeat of a major plant turnaround and carbon credit sales. North America showed resilience despite some headwinds from the Carseland turnaround and TNT shortages, while Latin America and EMEA posted steady improvements despite facing restructuring challenges.

Capital Management and Shareholder Returns

Orica announced a $400 million on-market share buy-back program, signaling confidence in its balance sheet and future cash flows. The company also declared an unfranked interim dividend of 25 cents per share, up 32% from the prior corresponding period, with a payout ratio of 49%. Leverage remains well within the target range at 1.45x, and the investment grade credit rating was reaffirmed by S&P Global Ratings.

Sustainability and Safety Milestones

Safety remains Orica’s top priority, with the company achieving its lowest serious injury case rate to date. On the sustainability front, Orica marked a significant milestone by eliminating one million tonnes of greenhouse gas emissions following the deployment of tertiary abatement technology at its Kooragang Island site. The company reiterated its commitment to achieving net zero emissions by 2050, aligning with global climate goals.

Challenges and Outlook

Despite the strong results, Orica recognized significant impairments and restructuring costs totaling $339.8 million after tax, primarily related to Latin America and EMEA segments. These charges reflect ongoing adjustments to the operating model and asset valuations amid evolving market conditions. Looking ahead, Orica expects FY2025 EBIT to grow further, supported by continued demand for premium products and technology solutions, stable capital expenditure, and disciplined cost management. However, the company remains cautious given geopolitical uncertainties and trade risks.