Appendix 4E Preliminary Final Report
Year ended 30 September 2021
Appendix 4E
Preliminary final report
ORICA LIMITED
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2.
For usepersonal
ABN 24 004 145 868 | ||||||
Details of the reporting period and the previous corresponding period | ||||||
Reporting Period | Year Ended | 30 September 2021 | ||||
Previous Corresponding Period | Year Ended | 30 September 2020 | ||||
Results for announcement to the market | ||||||
Change | ||||||
Consolidated: | $m | $m | ||||
2.1 | Consolidated revenue from operations | up | 70.9 | 1.3% | to | 5,682.2 |
2.2 | Loss after tax attributable to shareholders | down | (256.1) | >100% | to | (173.8) |
2.3 | Net profit for the period attributable to | |||||
shareholders before individually significant items | down | (90.7) | (30.3)% | to | 208.4 | |
From continuing operations: | ||||||
2.1 | Revenue from continuing operations | up | 64.9 | 1.3% | to | 5,207.9 |
2.2 | Loss after tax from continuing operations | |||||
attributable to shareholders | down | (262.9) | >100% | to | (188.6) |
2.3 Net profit for the period from continuing operations attributable to shareholders
before individually material items | down | (95.7) | (33.2)% | to | 192.6 | ||
Franked amount | |||||||
Amount per | per security at | ||||||
Dividends | security | 30% tax | |||||
Current period | |||||||
2.4 | Final dividend | - Ordinary | Cents | 16.5 | - | ||
2.4 | Interim dividend | - Ordinary | Cents | 7.5 | - | ||
Previous corresponding period | |||||||
2.4 | Final dividend | - Ordinary | Cents | 16.5 | - | ||
2.4 | Interim dividend | - Ordinary | Cents | 16.5 | - | ||
2.5 | Record date for determining entitlements to the dividend: | ||||||
Ordinary Shares | 22-Nov-21 | ||||||
Payment date of dividend: | |||||||
Ordinary Shares | 22-Dec-21 | ||||||
For the profit commentary and any other significant information needed by an investor to make an informed assessment of Orica's results please refer to the accompanying Orica Limited Results for the Full Year Ended 30 September 2021.
Orica Limited
Appendix 4E Preliminary Final Report
Year ended 30 September 2021
3. Income Statement - refer attached
only | ||||
4. | Balance Sheet - refer attached | |||
5. | Statement of Cash Flows - refer attached | |||
6. | Reserves and retained earnings - refer attached, Statement of Changes in Equity | |||
7. | Details of individual dividends and payment dates - refer attached, Note 4 Contributed | |||
Equity and Reserves | ||||
8. | Details of dividend reinvestment plan | |||
use | The Company's Dividend Reinvestment Plan (DRP) continues to be available to eligible shareholders. | |||
For the final dividend, shares will be allocated based on the arithmetic average of the daily volume | ||||
weighted average market price of all shares sold through a normal trade on the ASX for a period of | ||||
7 trading days from 25 November to 3 December inclusive. The last date for receipt of election notices for | ||||
participation in the final dividend under the DRP is Tuesday 23 November 2021. Shares issued and/or | ||||
purchased on market pursuant to the DRP will rank equal to all other ordinary shares. No discount | ||||
applies to the DRP. | ||||
9. | Net tangible assets | |||
Previous | ||||
Current period | corresponding | |||
period | ||||
Cents | Cents | |||
Net tangible asset backing per ordinary security | 382.4 | 357.8 | ||
personalFor | ||||
10. | Control relinquished over entities - refer attached, Note 15 Businesses disposed | |||
11. | Details of associates and joint venture entities - refer attached, Note 13 Equity accounted | |||
investees and joint operations | ||||
12. | Significant information - refer press release attached | |||
13. | For foreign entities, which set of accounting standards is used in compiling the report - not | |||
applicable | ||||
14. | Commentary on results for the period - refer press release attached | |||
15. | This report is based on a financial report which has been audited |
Orica Limited
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REVIEW OF OPERATIONS
Safety
Safety remains the top priority at Orica.
The 2021 financial year was a fatality free year, while the serious injury case rate (SICR) increased by 0.03 on the pcp to 0.19 serious injuries per 200,000 hours worked. This was above the target of 0.14, however the average days lost per injury reduced by 25 per cent on the pcp. Focus has been directed towards injury prevention going forward.
The major hazards management (MHM) program empowers team members to immediately stop work if they observe a potentially hazardous situation. This has driven a three-fold increase in the number of MHM stops in the 2021 financial year.
Reporting, investigating and sharing information about high potential incidents (HPI) provides an opportunity to reduce the risk of fatalities and serious injuries. There was a 25 per cent increase in HPIs reported which has allowed proactive action to be taken to prevent incidents.
With ongoing uncertainty from the global pandemic, supporting team members' mental health and wellbeing has been a particular focus during the year.
Sustainability and Environment
Orica's commitment to embedding sustainability in critical business priorities and ways of working has been reinforced by both the commitment to reduce operational scope 1 and 2 greenhouse gas (GHG) emissions by at least 40 per cent on 2019 levels by 2030, and the recently announced ambition to achieve net zero scope 1, 2 and material scope 3 GHG emissions by 2050(8).
In 2021, scope 1 and 2 GHG emissions reduced 13 per cent on the 2019 baseline, in line with plan.
In October 2021, installation of tertiary abatement technology was completed at the Carseland plant in Canada to reduce nitrous oxide emissions. During the year, Orica also announced the Kooragang Island Decarbonisation Project in partnership with the New South Wales (NSW) Government and Clean Energy Finance Corporation in Australia, which seeks to reduce GHG emissions by implementing new low-emissions technology. In April 2021, Orica secured approval to generate Australian Carbon Credit Units (ACCUs) and was awarded an optional Carbon Abatement Contract for the purchase of 3.4 million ACCUs by the Australian Government. This approach helps to de-risk the project.
Excluding the Minova business, which is held for sale and therefore presented as a discontinued operation, thermal coal exposure has decreased from 20 per cent in the 2018 financial year to 17 per cent in the 2021 financial year, following the acquisition of Exsa and diversification across metals sectors such as gold and iron ore.
In 2021, a focus on spill prevention and response has led to a reduction in loss of containment instances, which has lowered the likelihood of Orica operations having harmful impacts on the environment.
Customer
Fulfilling customers' needs during the challenging year remained a top priority. This was enabled by the reliability of Orica's global supply, together with a shared appetite for innovative solutions to maximise customer value and improve safety and sustainability outcomes. The quality of products and services provided to customers was uncompromised during the uncertain times. Product and service quality, and value through technology and innovation were notable areas of Orica's outstanding performance as measured by the Net Promoter Score, which has continued to improve each year since 2017.
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People
Diversity and inclusion are a part of Orica's culture, with a global workforce spanning across 49 countries, representing over 90 nationalities and bringing together a wide range of backgrounds, experiences and skill sets. The diverse team is the backbone of Orica's global operations, a key competitive advantage in often fragmented markets.
Gender diversity is also important to the Orica team. At 30 September 2021, women represented 28 per cent of senior management, with a targeted increase to 35 per cent by 2024.
Strategy
Over the last six months, Orica's strategy has been refreshed, aimed at achieving its goal to sustainably deliver enduring value to shareholders and other stakeholders, delivering solutions and technology that drive productivity for customers across the globe. The strategy is underpinned by three value drivers:
- Smarter solutions;
- Optimised operations; and
- Partnering for progress.
Smarter solutions
Orica's scope and capabilities are being expanded across the value chain. Recent digital acquisitions provide both upstream and downstream solutions, with orebody intelligence from tools such as RHINO™ to ore processing from tools such as Integrated Extraction Simulator (IES). Orica can provide best-in-class products and offer a seamless workflow solution across the value chain. Rapid commercialisation of products and solutions is key to the technology strategy.
Optimised operations
Value will be realised through continuing overhead cost reduction, reduced manufacturing costs and supply chain efficiencies, as well as monetising non-core land assets. The intent to sell Minova has been announced and exits from jurisdictions which are not strategically aligned or could be better serviced through alternative channels have commenced.
Partnering for progress
The strategy is shaped to equip employees with the changing skills and competencies needed to deliver strong performance. Focus will be placed on deeper talent management and supporting the development of capabilities that drive Orica's competitive advantage. Collaboration is key, and work will continue with stakeholders to drive growth and to solve shared challenges. Public-private partnerships will play a significant role in creating value. This year, a significant decarbonisation milestone was achieved through government partnerships in Australia.
This focus on working smarter, more efficiently and collaboratively with partners will allow for profitable organic growth without the need to increase capital expenditure from historical levels. The level of return on Orica's asset base is expected to improve as a result.
The approach will focus on four business verticals:
- Mining;
- Quarry and construction;
- Digital solutions; and
- Mining chemicals.
These verticals will leverage Orica's strengths and create opportunities for growth beyond blasting.
Mining
The largest business vertical, mining, will be centred on growth from future-facing commodities(10) as the world continues to transition to a low carbon economy, and accelerating the adoption of Orica's premium blasting solutions. WebGenTM wireless detonators are an example of this, with increased sales volumes in the 2021 financial year on the pcp, led by increased demand in Canada and following the introduction to the market in Brazil and Peru. Joining forces with innovative partners and collaborating with foundation customers has allowed trials of new flagship technologies, such as the second-generation wireless detonator WebGenTM 200 and semi-automated explosives delivery system AvatelTM to commence.
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Quarry and construction
The quarry and construction business will focus on maximising outcomes from both mature markets such as North America and Northern Europe, and from high-growth developing markets where Orica currently has low presence. Orica will continue to work closely with customers to provide differentiated value propositions and business models in order to effectively serve these different customer segments.
Digital solutions
As the adoption and expansion of Orica's digital solutions increase, the digital business vertical will grow both upstream and downstream, by providing best-in-class products and integrated digital workflow solutions to unlock greater value for customers across all segments, supported by collaborative partnerships. The uptake of digital solutions has been consistently building momentum, including penetration in Asian markets and rollout to Exsa customers, while BlastIQTM adoption almost doubled on the pcp in North America in the 2021 financial year.
Mining chemicals
The mining chemicals business offering will allow Orica to expand an already leading global presence, building on a global supply chain and customer relationships, and unlocking further capacity to broaden and capture growing demand. Long term growth in the mining chemicals vertical is expected to be underpinned by effective partnerships.
Pathway towards profitable growth
Key strategic priorities in the next three years include to:
- Pursue organic growth from the core
- Accelerate adoption of innovative blasting technologies and digital solutions, both upstream and downstream
- Optimise manufacturing and supply chains
- Grow presence in future-facing commodities(10)
- Diversify portfolio by increasing presence in quarry and construction markets and seek opportunities in high growth economies
- Expand in high-growth mining chemicals segments, building on existing global supply chain and customer relationships to unlock further capacity to broaden and capture growing demand
The strategy will be supported by an ongoing commitment to safety and sustainability, pricing discipline and enhanced capabilities from the SAP system.
The success of these strategic priorities is expected to drive the following outcomes:
Safety targets
- Zero fatalities
- Serious Injury Case Rate: < 0.14
3- year targets
- Average 3-year Return on Net Assets: 10 to 12 per cent
- Gearing: 30 to 40 per cent
- Dividend Payout Ratio: 40 to 70 per cent
- Annual Capital Expenditure: $340 million to $360 million annually
Long term greenhouse gas emissions objectives
- Commitment to reduce scope 1 & 2 greenhouse gas emissions by ≥40 per cent by 2030
- Ambition to achieve net zero scope 1, 2 and material scope 3 emissions(8) by 2050
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Orica Ltd. published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2021 21:56:11 UTC.