Orica Delivers Highest EBIT in 13 Years, Expands $500M Share Buy-Back
Orica Limited has reported its strongest earnings in over a decade, with a 23% rise in EBIT to $992 million and a 32% jump in net profit before significant items. The company also increased its share buy-back program and declared a higher dividend, signaling confidence in its growth strategy and sustainability commitments.
- Record EBIT of $992 million, up 23% from prior year
- Net profit after tax before significant items rises 32% to $541 million
- On-market share buy-back increased to $500 million
- Full-year dividend up 21% to 57 cents per share, unfranked
- Sustainability progress with 51% reduction in Scope 1 and 2 emissions since 2019
Strong Financial Performance
Orica Limited has announced its highest earnings in 13 years for the fiscal year ended 30 September 2025, reporting a 23% increase in earnings before interest and tax (EBIT) to $992 million. Net profit after tax before significant items rose 32% to $541 million, reflecting robust demand across all business segments and disciplined commercial execution.
The company’s Blasting Solutions segment led growth, benefiting from increased adoption of premium products and advanced technologies, despite some softness in thermal coal markets. Digital Solutions and Specialty Mining Chemicals also posted strong earnings gains, supported by higher exploration activity and record sodium cyanide sales amid favourable gold prices.
Capital Management and Shareholder Returns
Orica’s strong cash generation underpinned an 18% increase in net operating cash flow to $949 million. The company substantially completed a $400 million on-market share buy-back program and has now expanded it by an additional $100 million, bringing the total to $500 million. This move underscores management’s confidence in the company’s outlook and commitment to returning value to shareholders.
The Board declared a final unfranked dividend of 32 cents per share, bringing the full-year dividend to 57 cents, a 21% increase from the prior year. The payout ratio stands at a balanced 50%, consistent with Orica’s dividend policy targeting 40% to 70% of net profit.
Sustainability and Operational Excellence
Orica emphasized its ongoing commitment to safety and sustainability, reporting zero fatalities and the lowest serious injury rate in its history. Environmentally, the company achieved a 51% reduction in gross Scope 1 and 2 emissions compared to 2019 levels, on track to meet its 45% net emissions reduction target by 2030 and its ambition for net zero by 2050.
Investments in renewable hydrogen, low-carbon feedstocks, and carbon capture technologies are advancing, alongside renewable electricity procurement initiatives in Australia and Canada aimed at achieving 60% renewable electricity by 2030 and 100% by 2040.
Outlook and Risks
Looking ahead to 2026, Orica expects EBIT growth across all segments, driven by improved product mix, margin expansion, and increased digital adoption. The company plans to maintain capital expenditure broadly in line with 2025 and continue rigorous cost management. However, it faces challenges including a force majeure notice from CF Industries affecting ammonium nitrate supply and ongoing litigation costs estimated between $50 million and $60 million.
Despite these risks, Orica’s diversified global footprint, strong balance sheet with leverage at the lower end of its target range, and strategic investments position it well to sustain profitable growth and shareholder value creation.
Bottom Line?
Orica’s record earnings and expanded buy-back signal robust momentum, but supply risks and litigation remain watchpoints.
Questions in the middle?
- How will the CF Industries force majeure impact Orica’s ammonium nitrate supply and earnings?
- What is the outlook for ongoing litigation costs and their potential financial impact?
- How will Orica’s sustainability initiatives influence its competitive positioning and cost structure?
