Orica Delivers Seventh Consecutive Year Of Profit Growth

Orica today announced a net profit after tax and significant items of $540 million for the full year ended 30 September 2008, an 11% increase on the previous full year.

Excluding the loss on individually significant items of $33 million, net profit after tax was $572 million, up 15% on 2007.  Sales revenue increased 18% to $6.5 billion.  Cash flow from operating activities was up by 41% to $737 million.

The Board has declared a final dividend of 55 cents per ordinary share, bringing the total ordinary dividend for 2008 to 94 cents per share, representing an increase of 5 cents or 6% on the 2007 final dividend. The 2008 dividend is franked at 20 cents per share.

Earnings per share (EPS) before significant items increased 14%, over the 2007 full year, to $1.70. The seventh consecutive year of EPS growth.

Orica Managing Director Graeme Liebelt said the result showed the strength across Orica’s business platforms despite some challenging market conditions during 2008, including unfavourable foreign exchange movements and rising input costs.

“The record result marks our seventh consecutive year of profit growth. It also highlights the continued strength in Orica’s underlying earnings with all of our business platforms achieving double digit growth,” Mr Liebelt said.

“Orica’s Mining Services business had a record result, with an 11% increase in EBIT reflecting earnings growth in all regions from increasing volumes, benefits from increased ammonium nitrate prices and the successful integration of the former Dyno Nobel businesses. All regions within Mining Services achieved record results in 2008.

“The Dyno integration is now complete and has delivered synergies of $92 million (against a targeted $90 million) a full 12 months ahead of schedule.  Our successful integration model is now being used to imbed the Minova-Excel businesses into Orica and this is on track to achieve the expected synergy targets.

“Minova earnings increased 144% to $150 million as a result of underlying business growth, an additional three months’ contribution from the base Minova business and an Excel contribution in line with expectations. Minova’s underlying performance in the mining sector improved – most notably in emerging markets of Russia, Eastern Europe and China. The tunnelling business had a much improved second half with the benefit of some major projects in Europe.

“Consumer Products achieved underlying earnings growth of 10% to a record $123 million.  Most pleasingly, this business continues to increase its market share in Australia across all segments and reap the benefits from a strong focus on branding, innovation and customer service despite relatively subdued market conditions, particularly in New Zealand.

“The recently formed Chemicals division, comprising the former Chemical Services and Chemnet divisions, delivered underlying EBIT growth of 18% to $146 million. The improvement in the Chemicals business is on the back of favourable market conditions for sodium cyanide and the benefit from our uprated Yarwun sodium cyanide plant. We also saw strong volume growth in most end markets for Watercare’s products and services despite continuing drought conditions in large areas of Australia. Chemnet’s bulk chemicals businesses in Australia, New Zealand and Latin America continue to improve and collectively are well ahead of our 18% return on net assets target.

“We saw great improvement in our operating cash flow, particularly in the second half of the year, reflecting not only our ongoing business profit growth but very good discipline across all of our businesses in managing working capital.

“With the successful completion of our $900 million capital raising in August this year, we have a strong balance sheet with gearing at below 20%. Combined with our improved cash flow performance, this positions us well in the context of the uncertainty in global financial markets.

“Orica’s businesses have performed strongly and we are confident they will continue to do so. Accordingly, Group net profit (before significant items) in 2009 is expected to be higher than that reported in 2008. This is subject to global economic conditions and particularly their impact on demand in developing nations.”

10 November 2008

· Contacts:

- Stuart Hutton, Investor Relations Manager: (03) 9665 7844 Mob: 0411 790 164
- Lisa Walters, Communications Manager: (03) 9665 7538 Mob: 0421 585 750

· Web site: www.orica.com