Orica upbeat on profit
ORICA hopes to have its Kooragang Island ammonia plant back up and running by the end of the year after being forced into an extended shutdown after a toxic-gas leak in August.
ORICA hopes to have its Kooragang Island ammonia plant back up and running by the end of the year after being forced into an extended shutdown after a toxic-gas leak in August.The chemical and explosives supplier said the plant's inactivity due to a leak of carcinogenic hexavalent chromium that sparked outrage from residents and environmental groups had cost it $21 million so far.But it did not stop the company from posting a net profit of $642.3 million for the year to September 30, beating consensus forecasts of $621 million."The company is working with authorities and the community to rebuild confidence in its operations and we expect to restart the plant later this calendar year," said chief executive Graeme Liebelt.Orica's profit rose 3.8 per cent on the 2009-10 year, when excluding the effect of the demerger of the DuluxGroup paint business at the start of the financial year. Shares in Orica, the world's largest producer of explosives used in mining and construction, surged $1.11, or 4.6 per cent, to close at $25.41 yesterday.Mr Liebelt said independent toxicology studies had concluded the leak, near Newcastle in New South Wales, posed no threat to human health. Design changes had been made to ensure no repeat of the incident, he said.Orica will need approval from authorities, including an inter-departmental start-up committee, which meets today. A parliamentary inquiry involving NSW state politicians and company management begins next week.Mr Liebelt, who has brought forward his retirement to March next year to accommodate the arrival of former Newcrest Mining boss Ian Smith, was upbeat about the company's prospects of profit growth next year. He said strong explosives demand from miners and volatility in currency markets were expected to settle down."I think we go into 2012 with reasonably good momentum," he said. "The key thing for us is that China continues to show reasonable growth."Orica's performance was held back by a poor showing from its Minova underground mining chemicals business, hit by a price war in North America. Minova's earnings fell 29 per cent on the previous year to $105 million. With AGENCIES