MELBOURNE, Australia--Commercial explosives supplier Orica Ltd. (ORI.AU) said there were signs that resources companies were beginning to return to more normal mining plans, although it faced a headwind from higher natural gas and ammonia prices.
The Australian company on Tuesday reported a 31% jump in net profit to 195.2 million Australian dollars (US$144.7 million) in the six months through March. That compares with a A$149 million profit a year earlier, including a A$41 million expense relating to the settlement of a dispute with the Australian Taxation Office.
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Stripping out one-time items, Orica said its earnings before interest and tax slipped to A$314 million from A$317 million the year before, while sales revenue for the period was 4.5% lower at A$2.44 billion.
Orica--which sells explosives and blasting systems to the mining, quarrying, oil and gas, and construction markets--said it was being hurt by an unfavorable exchange rate in addition to the expected rise in gas and ammonia prices in North America and Australia. Still, the company anticipates a gradual recovery in the mining industry.
Founded in 1874 as a supplier of explosives to the Victorian gold fields, Orica said it would pay an interim dividend of 23.5 cents a share, a 15% increase on last year. The company last year replaced a progressive dividend scheme with a payout ratio to reflect the cyclical nature of its operations, targeting 40%-70% of underlying earnings.
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(END) Dow Jones Newswires
May 15, 2017 19:01 ET (23:01 GMT)