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Orica Ltd

ORI: XASX (AUS)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
A$46.00TpwpDpkxgdpgr

Fiscal 2023 Cash Flows Impress and Stronger Earnings Expected in Fiscal 2024

Business Strategy and Outlook

Orica has expanded its mining services business around a leading global market share in explosives. Earnings are leveraged to mining volume and commodity prices. The Australian explosives duopoly affords relatively high margins and returns; however, these are coming under pressure as Orica's more lucrative three- to four-year contracts mature and are replaced with longer-duration and lower-margin contracts. Orica benefits from resources development activity in Latin America, South Africa, and Russia. Non-Australian explosives usage also depends on construction demand, which is somewhat less cyclical.

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