Explosive maker avoids Middle East impacts, for now
The world’s largest commercial explosives maker has so far escaped the supply problems that have affected other companies due to the Middle East crisis.
Melbourne-based Orica is heading into the second half of its financial year in good shape, driven by strong demand for its products, including blasting systems and chemicals for the mining industry.
Orica made a net profit of $283.1 million, an increase of 8 percent in the first half, excluding significant items.
Underlying pre-tax earnings rose five per cent to $512 million on revenue of $3.9 billion in the six months ending March.
This is the highest baseline result in more than 20 years.
“We delivered record earnings in the first half, driven by strong demand for premium products and high-tech offerings, strong gold and copper markets,” Chief Executive Sanjeev Gandhi said on Thursday.
The company said it had no immediate supply concerns because its supplies “generally” are not transported through the Strait of Hormuz.
The Bosphorus has been closed for weeks as the United States tries to negotiate a peace deal with Iran, which was bombed by America in late February.
Given that the shipping channel is a route through which approximately 20 percent of the world’s crude oil supply passes, the crisis has negatively affected many Australian-listed companies and increased fuel prices.
Orica is also a major consumer of gas used to make explosives.
Orica will pay shareholders an interim dividend of 28.5 cents per share, up 14 percent from the same period last year.
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