Orica Limited (ORI)



Welcome to InvestSMART

You are currently viewing our site as a guest, which gives you limited access to our site features. By signing up for a free membership, you will receive our Investment Opportunity newsletters and have access to additional features for finding and comparing managed funds and shares. Registration is fast and simple, so please:

Sign Up Today » it's FREE! Already a member? Login now!


General Information
Company Name: Orica Limited
Stock Code: ORI
Website: www.orica.com
GICS Sub-Industry: Diversified Chemicals
Market Cap ($M): 7,679
Equiv. Shares (M): 373

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 20.600 $ 20.100 $ 20.730 $ 20.090 $ 20.000 1,975,630 $ 0.600  3.000 %

Current Broker Consensus Recommendation more
Recommendation: Hold (2.75)
Recommendation Date: 30th Oct 2014
Brokers Surveyed: 4

Company Overview

Business Description:
Orica Limited (ORI) is a manufacturer and supplier of industrial and specialty chemicals, commercial explosives and mining chemicals through over 50 countries. Orica’s products and services include mining services, mining and general chemicals and ground support services. Orica has a portfolio of manufacturing and distribution assets strategically located across Australia, New Zealand, Asia, Latin America and Africa.

Strategy Analysis:
ORI´s main priorities are expansion of its ammonium nitrate (AN) manufacturing capacity in Australia, Indonesia and South America in order to take advantage of strong demand for explosives from the mining sector. Following the 2012 completion of the Bontang, Indonesia plant attention turns to Australia with a feasibility study underway to double capacity at Kooragang Island in NSW. ORI is also participating in a joint venture (45% share) to construct an AN plant in the in the Pilbara mining region in WA. A feasibility study is also underway into the construction of an AN plant in Peru. These expansion plans should result in strong growth over the next few years as demand from the mining industry continues to grow. In Minova, the key strategy is to try to improve returns from this underperforming business through simplifying the business model, optimisation of manufacturing and overhead rationalisation. Orica reported NPAT down 37.3% to $402.8m for the year ended 30 September 2012. Revenues from ordinary activities were $6.67bn, up 8.0% from last year. Diluted EPS was 109.1 cents compared to 169.8 cents last year. Net operating cash flow was $544.1m compared to $758.2m last year. The final dividend declared was 54 cents, taking the full year dividend to 92 cents compared with 90 cents last year.


Financial Summary
Year to Sep NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 664.8 181.6 10.5 11.3 98.0 4.8 45.0
2014  F 601.7 164.3 1.0 12.5 96.0 4.7 45.0
2013  A 592.5 162.7 -8.4 14.2 94.0 4.1 75.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Orica (ORI) $7,455 M -0.2066 -0.0317 0.0606 11.9847 12.3770 11.6700 4.70 4.79 4.95

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
ORI 0.68 12.9 1.97 9.64 1.09
Market 0.94 15.8 1.24 1.88 1.55
Sector 0.73 11.5 0.80 0.99 2.80

Directors
Name Position Start Date
Mr Ian Kingsley Smith Chief Executive Officer,Managing Director 27 February 2012
Mr Craig Elkington Finance Director 12 September 2014
Mr Russell Ronald Caplan Non-Executive Chairman 01 October 2007
Dr Nora Lia Scheinkestel Non-Executive Director 01 August 2006
Mr Gene Thomas Tilbrook Non-Executive Director 14 August 2013
Mr Ian Cockerill Non-Executive Director 12 July 2010
Mr Lim Chee Onn Non-Executive Director 12 July 2010
Ms Maxine Nicole Brenner Non-Executive Director 08 April 2013
Mr Alberto Calderon Non-Executive Director 14 August 2013

Management
Name Position
Nicholas(Nick) Bowen --
Chris Hansen Company Secretary
Gavin Jackman Executive Global Head, Corporate Affairs and Social Responsibility
Eileen Burnett-Kant Executive Global Head, Human Resources
Richard Hoggard Executive Global Head, Manufacturing
Craig Elkington Executive Global Head, Mining Services
Ron Douglas Executive Global Head, Projects and Technology
Andrew Larke Executive Global Head, Strategy, Planning and Mergers and Acquisitions
Tony Edmondstone Executive Global Head, Supply
Sean Winstone Manufacturing Executive, Continuous Plants
Molly Zhang Manufacturing Executive, Mining System

Substantial Shareholders
Holding Name
42,387,401 (11.55%) Harris Associates L P
20,186,322 (5.48%) Perpetual Trustees

Calendar of Events
Date Event
12 May 2015 Report (Interim)
09 December 2014 Report (Annual)
10 November 2014 Report (Prelim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

Advertisement

Trade Shares Online from $19.95^
Free Guides

The SMH Guide to Investing in Fixed Income

An educational booklet with information on how to earn more than bank interest on the cash in your investment portfolio.

More details...

News

Prices slashed - everything must go!

Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 | “If you want to have a better performance than the crowd, you must do things differently from the crowd.” Sir John Templeton.

Aussie share market bulls now have company

Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 | Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.

The Importance of Ignoring the Noise of the Market

Carl Richards, director of investor education at the BAM Alliance 17/10/2014 | “As odd as it may sound, the sooner you start treating your investments like you treat life, the happier you’ll be with the outcome.”

You only dance twice

William H. Gross, Janus Capital Group 16/10/2014 | “Financial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding “minus” 10 basis points.”

The Big Picture - Australia 200 Index

CMC Markets 8/10/2014 | Share market indices around the globe are breaking down. While analysts cast around for reasons, it’s clear that a time factor is in play. Simply put, many investors “feel” a correction is overdue. How low could it go?

Billionaires bankroll Ten's new direction Media Network sees digital future

The Age 19/12/2013 | Ten Network's programming ambitions will be funded by a $200 million loan guaranteed by three of its billionaire owners, as the free-to-air broadcaster declared digital was the future and pointed to early signs that its switch to an older market demographic was working.

More...


Sponsored Links