Shares in explosives and fertiliser maker Orica has fallen sharply after it unveiled a first-half loss of $229.3 million due to operational issues and writedowns.
Orica’s earnings sank 20 per cent to $252 million in the six months to March 31, dragged down by $353 million in significant items, including challenging cyanide market conditions, unplanned maintenance and a non-cash impairment totalling $204 million on its Minova ground support solutions business.
Shares in the company were down six per cent, or $1.23, at $19.06 by 1131 AEST.
Orica said it has made changes to its manufacturing team at Minova, appointed new management and achieved improved trading in the month of March which it expects to continue.
The explosives and fertiliser maker previously flagged a hit to first-half earnings, and on Monday said it was “disappointed” that its first-half results had been impacted despite solid growth particularly in Australia and Indonesia.
“We are working hard to increase manufacturing reliability, operational discipline and excellence,” the company said.
Orica said its second quarter results indicate it is on track to deliver a “substantial” uplift in the third and final quarters of the year and it expects this momentum to continue next year.
“We are on track to deliver full year sales volumes at the upper end of guidance, and improved operational performance across all regions will support a stronger performance in the second half of the financial year,” Orica said.
Excluding the significant items, net profit after tax fell 36.7 per cent to $123.6 million while revenue rose 3.9 per cent to $2.5 billion.
Orica declared an unfranked dividend of 20 cents, down from a partially franked 23.5 cents in the prior corresponding period a year ago.