Orica’s Latin America Impairment and Litigation Cast Shadow on Strong Earnings

Financial Highlights and Strategic Growth

Orica Limited has delivered its strongest earnings before interest and tax (EBIT) performance in 13 years, reporting a 23% increase to AUD 992.2 million for the full year ended 30 September 2025. This was achieved on the back of a 6% rise in revenue to AUD 8.14 billion, reflecting robust demand across its diversified portfolio and global footprint.

Despite this operational success, statutory net profit after tax (NPAT) fell sharply by 69% to AUD 162.3 million, primarily due to significant impairment and restructuring charges in Latin America and ongoing litigation costs. These individually significant items, totalling AUD 378.8 million after tax, weighed heavily on reported earnings but were largely non-cash and one-off in nature.

Safety and Sustainability Milestones

Orica’s commitment to safety was underscored by achieving zero fatalities and recording its lowest-ever serious injury case-rate of 0.093. These outcomes reflect a strong safety culture and targeted initiatives such as the Global Mental Health Strategy and the Moonshot Fatality Free aspiration, aiming for a decade without fatalities.

On the sustainability front, Orica reported a 51% reduction in gross Scope 1 and Scope 2 greenhouse gas emissions compared to 2019 levels, ahead of schedule in its decarbonisation journey. The company is advancing renewable energy procurement, including power purchase agreements in Australia and Canada, and exploring emerging technologies like renewable hydrogen and carbon capture. Its Specialty Mining Chemicals segment launched low-carbon emulsifiers that reduce carbon emissions by up to 85%, supporting customers’ sustainability goals.

Business Segments and Innovation

Orica’s three core business segments all contributed to earnings growth – Blasting Solutions EBIT rose 15% to AUD 867.8 million, driven by premium product uptake and technology adoption; Digital Solutions EBIT grew 32% to AUD 92.3 million, benefiting from increased exploration activity and recurring revenues; and Specialty Mining Chemicals EBIT surged 47% to AUD 101.4 million, supported by record gold prices and integration of the Cyanco acquisition.

Innovation remains central, with Orica leveraging AI and digital technologies to enhance safety and productivity. Notable advancements include the WebGen™ wireless initiating system, BlastVision™ drone-based AI blasting analysis, and the RHINO™ sensor for real-time rock strength data. The company’s AI leadership was recognized with a global innovation award in 2025.

Capital Management and Outlook

Orica maintained financial discipline with a leverage ratio of 1.39x EBITDA, within its target range, and completed an on-market share buy-back program expanded to AUD 500 million. The company declared a final unfranked dividend of 32 cents per share, bringing the full-year payout to 57 cents.

Looking ahead to 2026, Orica expects EBIT growth across all segments, supported by improved margins, ongoing digital adoption, and higher manufacturing output. Capital expenditure is forecast to remain broadly in line with 2025, while litigation costs related to intellectual property disputes are anticipated to continue in the range of AUD 50-60 million. The company is also assessing the impact of a force majeure notice from CF Industries on ammonium nitrate supply, leveraging its global manufacturing network to mitigate risks.

Navigating Risks and Opportunities

Orica continues to manage risks from geopolitical volatility, climate change, supply chain disruptions, and evolving regulatory landscapes. Its diversified commodity exposure, strategic acquisitions, and innovation pipeline position it well to capitalize on the growing demand for critical minerals essential to the energy transition.

With a strong balance sheet, clear strategic focus, and a culture prioritizing safety and sustainability, Orica is poised to deliver long-term value for shareholders while advancing its leadership in mining and infrastructure solutions globally.