Orica up despite woes in Europe

Orica's chief executive, Ian Smith, remains defiant in the face of a slowing mining cycle, expressing optimism over the longer term performance of the explosives and chemicals group.

Orica's chief executive, Ian Smith, remains defiant in the face of a slowing mining cycle, expressing optimism over the longer term performance of the explosives and chemicals group.

Orica is responding to miners' demands for greater productivity, he said. "We're not just a mining services company at the behest of the markets. What you hear repeatedly is miners talking about cost cutting. What you hear us talking about repeatedly is enabling our main customer base to be more productive."

His comments came as Orica's first-half profits jumped, despite coming under some pressure from a downturn in the US coal industry.

The company reported net profit of $267 million in the six months to March 31, up 5 per cent from the previous corresponding period.

It also said its full-year net profit would be higher than expected, above last year's $650 million.

The profit rise came from Australia's greater demand for mining explosives and New Zealand's demand for farming chemicals, the company said.

Its mining services arm reported a 5 per cent lift in earnings before interest and tax in the Australian and Pacific region.

But outside Australia, weak European and US markets continue to dog the company - particularly its struggling tunneling and engineering arm, Minova.

It has been trying to integrate the business into its mining services unit after incurring $247 million in write-downs last year.

Shrinking demand for Minova's mining equipment products reflected difficult market conditions "across all regions", the company said on Tuesday.

The company reported $3.3 billion in sales revenue.

This was in line with the last corresponding period.

Deutsche Bank analyst Mark Wilson viewed the result as positive, but against a backdrop of "very low expectations".

Orica shares lifted on the result to close 1.6 per cent higher at $22.56. The company declared an interim dividend of 39¢, up 1¢.

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