CRITERION From: The Australian May 07, 2013 12:00AM
Orica (ORI) $22.56
ORICA chief executive Ian Smith at least deserves plaudits for describing mining sector conditions as "arbitrary and variable", a welcome deviation from the stock-standard "challenging" or "volatile"descriptors.
Smith says it takes a brave pundit to guess the state of the market over the next six months, but on the "balance of probabilities" he's happy to affirm full-year profits (to September 2013) should exceed last year's $403m.
Orica reported a 6 per cent half-year increase to $267m, helped along by the absence of $90m in Kooragang Island remediation costs incurred last time around.
This number may be seen as less than explosive, but given the mirror-flat revenue line any earnings increase is admirable.
Smith believes the subdued US coal sector -- a notable drag on earnings -- has stabilised as US domestic gas prices rise, which makes the lumpy carbon fuel more competitive.
More broadly, Smith is re-engineering the clumsy explosives, mining consumables and chemicals house to one presenting a united sales front.
A side serve of cyanide with that gelignite, sir?
He also wants the company to adapt to the straitened times by showing miners how to increase productivity, rather than simply blowing up more rocks.
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