The world's largest explosives company Orica (ORI), announced today that trading in the first two months of fiscal 2008 was comfortably ahead of the same period last year and the company is now looking to expand into China.
Orica Managing Director and CEO Graeme Liebelt said at the annual shareholders meeting that the company sees growth in global mining and resource markets continuing for some years.
In the last two years Orica has spent more than $2 billion adding mining-services companies to its portfolio as a Chinese-led demand for commodities boosts the market for explosives and underground beams.
"The many growth opportunities across our businesses augur well for a strong year ahead,'' said Mr Liebelt.
Orica is also aiming to acquire acquisitions in China and expects growth in mining services to continue.
In fiscal 2007 Orica made a net profit after tax of $497.8 million, a rise of 30.9%, while earnings before interest and tax (EBIT) rose 24%to $813 million.
Its mining services division generated $575 million EBIT, a rise of 40% on the previous year.
"With this pleasing result spread across all regions, it is a reflection of firm, though not spectacular, trading conditions in global mining and resource markets," said Mr Liebelt.
The company attributed the positive result to a number of factors, including the expansion of the business through recent investments and acquisitions.
Earlier this year, Orica expanded its mining services division, buying roof support maker Excel Mining Systems from US private equity firm Snow Phipps Group, adding this to the UK mining services business Minova that it bought last year.
As well as looking into acquisitions in China, Orica said it also plans to build an ammonium nitrate plant in the key market of Indonesia, with a decision to be made in 2008.
"We anticipate growth in these markets continuing for some years to come, perhaps even at an accelerated pace in the next few years."
"As we look toward 2008, we will continue to see the benefits of investments we have made in recent years."
The good news did not have a great impact on the market though, as shares in Orica had fallen by 24 cents to $31.94 by 12:30PM AEST.
