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Orica Ltd

ORI: XASX (AUS)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
A$24.00JkypZydtlwcnf

Orica Earnings: Strong Cash Flows and Earnings Improvement Foreshadowed

Our AUD 16.50 fair value estimate for no-moat Orica stands. The world’s largest explosives provider posted a 16% increase in underlying fiscal 2023 net profit after tax to AUD 369 million, about 4% below our AUD 385 million forecast. Net operating cash flow was very strong, up 140% to AUD 859 million, and while boosted by reductions in receivables and inventory—the result of lower ammonia prices and supply chain optimization efforts—was impressive. The market seemed suitably impressed, the shares up 4% intraday of the announcement to around AUD 15.60.

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