Orica Ltd (ASX:ORI) has recorded a 77% lift in full-year profit to $525 million, bolstered by strong demand for its high-margin digital products and innovative blasting technologies.
The Australian-based multinational, a leading global supplier of commercial explosives, credited the profit increase to its advanced digital solutions, including the cloud-based BlastIQ Underground system.
This digitised, cloud-based technology, designed to enhance control over mining blasts, has become integral to Orica’s expanding non-blasting services.
Acquisitions support strategic shift
In February, Orica paid $US640 million to acquire Cyanco, a Texas-headquartered supplier of sodium cyanide whose clients include gold and silver miners that need extraction chemicals.
The acquisition of Cyanco, which specialises in gold purification and has operations including five production lines and a distribution and support network, doubles the size of Orica’s chemical business to cash in on boom times in the gold sector.
Orica CEO Sanjeev Gandhi said, “We have become the largest provider of specialty mining chemicals for the gold industry in the world, after the acquisitions we made this year.”
The acquisition of Cyanco is part of the company’s strategic shift to expand its chemical business, aiming for a balanced split between earnings from traditional blasting and higher-margin non-blasting operations.
"Our non-blasting products and services have been a big success in the industry. We are the only ones who can provide those new software, sensors and technologies," Gandhi said.
Gandhi added that acquiring a battery chemical company was still on the radar.
Orica’s other acquisitions this year that have strengthened its global footprint in the mining chemicals sector, particularly within the gold industry, include Terra Insights, a Canadian tech firm, for C$505 million.
Despite a slight revenue drop to A$7.66 billion, Orica raised its full-year dividend by 9% to 47 cents per share.
The company has faced recent operational challenges, including a safety incident in India and a significant fine for cobalt dust releases in Newcastle, Australia.
Orica shares are trading slightly lower today at A$17.36 per share, however, they remain strong over the year with a 10% increase for a current market cap of A$8.45 billion.