Company Interview / Orica's moment amid strongest earnings in 13 years

Key points:

Strongest earnings in 13 years, NPAT up 32% to $541 million Robust demand from mining, critical minerals, and energy transition sectors Digital business growing, with long-term benefits from Terra Insights acquisition Ongoing capital management through increased dividends and share buyback

Orica (ASX:ORI) has reported its strongest earnings in 13 years, with net profit after tax before significant items rising 32% to $541 million for the year. Sanjeev Gandhi attributes this result to strong demand for premium blasting products and digital mining solutions, underpinned by robust industry tailwinds such as decarbonisation, energy transition, and the growing need for critical minerals. Gandhi points to limited investment in new mining capacity and sustained demand across sectors like gold, copper, and iron ore, which is boosting customers’ willingness to pay for premium services that enhance productivity, safety, and environmental compliance.

Gandhi highlights that Orica’s business model is resilient to fluctuations in commodity prices. As long as mining activities persist, demand for services remains stable, regardless of spot prices. Strong gold performance exemplifies this resilience, with Orica benefitting across exploration, blasting, and gold extraction chemicals. Gandhi notes that, despite digital solutions earnings growing over 35% year-on-year, recent integration of the acquired Canadian monitoring company Terra Insights impacted short-term profit but is expected to drive mid-teens growth in coming years.

Shareholders have seen rewards with a $400 million on-market share buyback, recently extended to $500 million, and an increased full-year dividend of $0.57 per share. Gandhi emphasises Orica’s commitment to reinvesting for safety, growth, and value creation, with additional capital allocation for potential acquisitions and ongoing shareholder returns.