Orica profit slumps on Minerva charge
Chemicals manufacturer Orica’s annual profit has fallen by 37 per cent, but it expects an improvement in its underlying performance the year ahead.
Orica’s net profit in the 12 months to September 30 was $402.8 million, down from $642 million in the previous corresponding period.
The result included a $247 million impairment on its specialty bolts and chemicals business Minova, which Orica announced to the market on Friday.
The company's shares dropped 68 cents, or 2.7 per cent, to $24.32 in early trade.
Net profit for the year to September excluding one-off items was $650 million, up one per cent from the previous year.
The company has forecast a higher net profit excluding one-off items in the 2012-13 fiscal year.
The Minova writedown was made because of challenging market conditions in the United States and continued margin pressure in China.
Orica said on today that global conditions are expected to remain difficult.
‘‘Work continues on cost rationalisation and asset optimisation, which, together with a simplified business model, should see Minova returns improve in the medium term,’’ the company said.
Orica declared a final dividend of 54 cents per share, of which 24 cents was franked.
The final dividend was one cent higher than at the same time last year.