Revenue is falling and profit shrinking at Orica as the world’s largest commercial explosives company sees greater than expected volatility in the mining industry.
The group today posted a 29.4% fall in half year after tax profit to $149 million.
A short time ago, its shares were down more than 9% to $14.00.
The result for the six months to March includes a $41 million expense relating to the settlement of a dispute with the Australian Taxation Office (ATO).
Revenue fell 22.1% to $2.553 billion and EBITDA (earnings before interest, tax, depreciation and amortisation) was down 5% to $450 million.
The payout to shareholders was reduced and the company’s progressive dividend policy abandoned to be replaced with a ratio in the range of 40% to 70% of underlying earnings.
A dividend of 20.5 cents a share franked at 49%, down from 40 cents, was declared.
“Market conditions deteriorated more than we anticipated during the half, marked by increased volatility,” says CEO Alberto Calderon.
“It is expected that the market will remain challenged for the foreseeable future. Regardless, our continued focus will be on business improvement initiatives, capital discipline and customer relationships.”