ORICA ON TRACK WITH CONTINUED EARNINGS GROWTH

Orica today announced a Net Profit After Tax and Significant Items of $225 million for the half year ended 31 March 2008, a 7% increase on the previous half year.

Excluding the loss on individually significant items of $5.3 million, Net Profit After Tax was $230 million, up 13% on 2007.  Sales revenue increased 11% to $3 billion. 

The Board has declared a 39 cents per ordinary share interim dividend, franked at 14 cents per share, representing an increase of 3 cents or 8% on the 2007 interim dividend.

Earnings per share before significant items increased 16% over the 2007 half year to 70.1 cents.

Orica Managing Director Graeme Liebelt said the result continued Orica’s growth momentum and showed the resilience of its earnings stream in the face of some mixed market conditions and a deteriorating global economy.

“The firm underlying earnings growth across all of our businesses despite some adverse weather conditions, unfavourable exchange rates, delays in resource projects and rising input costs reveals the strength of our business model.

“Mining Services had a record result, with an 11% increase in profit, which came from modest growth in volumes in Australia and Asia and reasonably favourable conditions in most major mining and resource markets.

“Importantly, as the global market leader and with our volume exposure to the resources cycle, we anticipate strong long term earnings as resource companies’ investments move into the production phase and infrastructure constraints are eased.

“Given the tightening in global ammonium nitrate supply, we are actively pursuing expansion opportunities in Indonesia, Latin America and Australia.

“The successful integration of the Dyno businesses continues with synergies being delivered ahead of plan. Annualised synergies delivered to date total $80 million and we are on track to deliver the full $90 million, a year ahead of schedule.

“Consumer Products achieved underlying earnings growth of 14% to a record $60 million. This was primarily driven by increased sales revenue and improved productivity. Most pleasingly, this business continues to increase its market share.
 
“The most recently acquired businesses, Minova and Excel, are delivering to expectations. Minova earnings increased 268% to $64 million with the benefit of an additional three months’ contribution from the base Minova business and a five month contribution from Excel. The integration of these businesses and plans to realise our targeted synergies are on track.

“Chemical Services achieved an impressive underlying earnings growth of 25%, after adjusting for the divestment of Adhesives and Resins in January 2007. This was driven by favourable market conditions for sodium cyanide, which we expect to continue, with the benefits from additional production volumes from our uprated sodium cyanide facility at Yarwun beginning to flow through. We also saw increasing volumes in most end markets for Watercare’s products and services in part due to easing drought conditions in NSW and Queensland.

“Our Chemnet business continues to improve, recording a 13% profit increase to
$36 million. This was due to steady growth in sales and gross margin, the benefits of its recent restructure and ongoing cost control. The turnaround of this business is progressing well. Several important long term customer contracts have been renewed in the period providing a strong foundation for growth.  

“Despite some adverse impacts from rising input costs and foreign exchange, our businesses continue to perform to expectation. Accordingly we see no reason to change our prior outlook statement in that Group net profit (before significant items) in 2008 is expected to be higher than that reported in 2007.

“Our long term strategy of pursuing leadership positions in markets offering higher growth has reduced the volatility of our earnings and, importantly, positions us to benefit from the ‘stronger for longer’ demand in global resources and infrastructure markets,” Mr Liebelt said.

28 April 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