Orica (ASX: ORI) – Orica 2026 Half Year Results

Orica Limited has delivered record first-half earnings with EBIT of $512 million, up 5% from $488 million in the prior corresponding period, supported by strong demand across core gold and copper markets and continued adoption of premium blasting products and digital solutions. The company generated underlying net profit of $283 million and earnings per share of 60.7 cents, both ahead of the prior year, while return on net assets expanded to 14.7% from 13.1%, reflecting improved operational efficiency and capital deployment.

Performance was underpinned by disciplined execution across all four segments. Blasting Solutions, the company’s largest division, maintained EBIT of $435 million despite headwinds from lower Indonesian coal production quotas and Australian dollar appreciation. Digital Solutions delivered standout growth with EBIT up 25% to $51 million, driven by elevated exploration activity supporting adoption of the Axis orebody intelligence platform and blast measurement tools. Specialty Mining Chemicals grew EBIT 20% to $57 million, with strong sodium cyanide demand from robust gold fundamentals and the successful completion of safety upgrades at the Winnemucca facility.

The company announced two strategic acquisitions to expand its addressable market. The acquisition of Nelson Brothers’ explosives business in North America provides direct access to the quarries and construction market, a segment management sees as underpenetrated, with estimated EBIT contribution of around $35 million once fully integrated. The purchase of FMC’s Danafloat product range extends Orica’s portfolio into specialist copper and zinc flotation chemistry, complementing the in-house OptiOre range and positioning the company to benefit from electrification and urbanisation demand cycles.

Capital management remained disciplined, with the $500 million on-market share buyback program completed in full. The interim dividend was increased 14% to 28.5 cents per share, with the company maintaining its 40% to 70% payout ratio policy. Net debt increased to $2,159 million, reflecting acquisition funding and foreign exchange headwinds, while leverage moved to 1.53x from 1.39x at the prior balance date, still within the stated target range of 1.25x to 2.0x. The company retained $1,620 million in available liquidity to support growth initiatives.

Management initiated a cost reduction program targeting at least $100 million in annualised savings over the next three years, addressing structural overhead and procurement efficiency without compromising safety or growth priorities. The majority of savings are expected in 2027 and beyond. Management’s outlook calls for full-year EBIT to increase across all segments and regions, contingent on no material external shocks, with net operating cash flow expected lower than 2025 due to foreign exchange movements and significant items.

Investors should monitor execution of the North American acquisitions and progress on the supply diversification process for ammonium nitrate sourcing, which management expects to strengthen long-term supply security. The cost reduction program’s timing and magnitude will also be worth tracking as the company moves toward the 2027-2028 realisation phase.

View the full ASX announcement (PDF)

About Orica Limited (ASX: ORI)

Orica Limited is a leading global manufacturer and supplier of explosives and chemicals, primarily serving the mining industry. The company operates in approximately 50 countries across six continents and holds roughly 28 percent of the global commercial explosives market. Orica provides blasting solutions, mining-related chemicals including sodium cyanide, and related services to mining operations worldwide.

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