Orica's half-year profit down 33pc amid mining downturn

Monday, 9 May 2016 11:52:47 | Thuy Ong And Rebecca Hyam

Chemical giant Orica, logo on sign, generic, Stockton, Newcastle's Kooragang Island (ABC News: Dan Cox)

Explosives manufacturer Orica has posted a 33 per cent slump in its half-year profit, as a downturn in the global mining industry hit its bottom line.

Orica said net profit for the six months to the end of March fell to $149 million, from $222.1 million during the same period a year earlier.

Orica managing director and chief executive Alberto Calderon said the company faced challenging market conditions.

"Conditions deteriorated markedly throughout January and February 2016, with substantial commodity price volatility impacting mining industry volumes and flowing through to Orica's volumes for those months," he said in a statement released to the ASX.

The company also paid a $41 million charge in a settlement to the Australian Tax Office.

In its forecast for the remainder of 2016, Orica said it expects to take a charge of $85 million from price resets and contract renewals.

"Market conditions deteriorated more than we anticipated during the half, marked by increased volatility," Mr Calderon said.

"It is expected that the market will remain challenged for the foreseeable future."

Shares in Orica slumped 10.9 per cent to $13.74 by 12:24pm (AEST), a two-and-a-half month low.

Orica's board has declared an interim dividend of 20.5 cents per share.

AustraliaPlus

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Orica's half-year profit down 33pc amid mining downturn

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