Orica half-year net profit slides as mining weakness continues

Orica’s net profit has fallen by nearly a third, partly due to the settlement with the Australian Taxation Office.

The mining explosives company’s underlying profit decreased from $211 million in the March 31 half ending in 2015 to $190 million for corresponding period ending this March 31. The interim dividend of 40 cents a share for the period was cut to 20.5 cents.

Net profit was $149 million after counting the $41 million tax settlement.

“While conditions deteriorated markedly throughout January and February 2016, with substantial commodity price volatility impacting mining industry volumes and flowing through to Orica’s volumes for those months, we delivered a credible result,” The Australian Financial Review reports Orica’s CEO Alberto as saying.

Reuters notes that Calderon predicted in 2015 that that year would be the trough for the mining industry.

The continued weakness includes in Orica’s second-biggest market, the United States, where coal is in a slump due to factors including coal power stations shutting and being replaced by gas power.

“Our continued focus on initiatives to fundamentally improve Orica’s customer focus, business rigour and financial management delivered tangible results,” Calderon added.