Orica Ltd ORI

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A$18.40 +0.10 (0.55%)

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As of May 9, 2024 6:10am Delayed Price Closed

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Company Report

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Orica Earnings: Growth in Premium Products and Technology Supports Orica’s Bottom Line

Mark Taylor May 9, 2024

We increase our fair value estimate for no-moat Orica Limited by 3% to AUD 17.00, equivalent to the time value of money. The world’s largest explosives provider posted a 10% increase in underlying first-half fiscal 2024 NPAT to AUD 179 million. Orica anticipated strong fiscal 2024 adoption of blasting and digital technologies but major plant maintenance, inflationary pressures, and heightened geopolitical risks were expected partial offsets.

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Price vs Fair Value

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ORI is trading at a 8% premium.

Price

A$18.40

May 9, 2024

Fair Value

A$37.00

May 9, 2024

Uncertainty

Medium

1-Star Price: A$76.14
5-Star Price: A$45.30
Economic Moat: Btp
Capital Allocation: Pbxmljpbb

Bulls Say, Bears Say

Bulls

Orica is a global leader in explosives and part of a duopoly in Australia. It is leveraged to ongoing regional resources demand driven by the industrialization and urbanization of China and India.

Bears

Orica is primarily exposed to mining, where explosives demand softened as a result of the end of the China boom.

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Trading Information

Previous Close Price: A$18.30
Day Range: A$17.95–18.75
52-Week Range: A$13.81–18.75
Bid/Ask: A$18.40 / A$18.52
Market Cap: A$8.94 Bil
Volume/Avg: 1.4 Mil / 1.2 Mil

Key Statistics

Price/Earnings (Normalized): —
Price/Sales: —
Dividend Yield (Trailing): 2.34%
Dividend Yield (Forward): 2.34%
Total Yield: 2.34%

Company Profile

Orica is a leading global manufacturer and supplier of chemicals and explosives, primarily to the mining industry. It has operations in 50 countries across six continents. Mining services is the lone growth engine now that the chemicals business has been sold. Orica has an approximate 28% share of the global commercial explosives market. It provided resins, steel bolts, and other products for underground mining and tunneling though this business is now sold. It also supplies chemicals such as sodium cyanide to the mining industry.

Sector: Basic Materials
Industry: Specialty Chemicals
Stock Style Box: Mid Core
Total Number of Employees: 13,000
Website: https://www.orica.com

Competitors

Valuation

Metric	ORI	MOS	IPL
Price/Earnings (Normalized)	—	6.43	18.27
Price/Book Value	1.91	0.79	0.86
Price/Sales	—	0.76	1.02
Price/Cash Flow	—	5.56	7.84

Price/Earnings

ORI

MOS

IPL

Financial Strength

Metric	ORI	MOS	IPL
Quick Ratio	1.07	0.49	0.75
Current Ratio	1.69	1.22	3.25
Interest Coverage	—	7.70	2.98

Quick Ratio

ORI

MOS

IPL

Profitability

Metric	ORI	MOS	IPL
Return on Assets (Normalized)	—	3.84%	5.50%
Return on Equity (Normalized)	—	7.25%	9.19%
Return on Invested Capital (Normalized)	—	6.10%	8.58%

Return on Assets

ORI

MOS

IPL

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