May 6, 2018 / 11:09 PM / 4 months ago

UPDATE 1-Orica H1 underlying profit hit by maintenance shutdowns, tough weather

(Adds background on one-off charges, CEO comment)

May 7 (Reuters) - Australia’s Orica Ltd, the world’s top supplier of commercial explosives, said on Monday its first-half underlying profit fell 37 percent, as unplanned plant shutdowns and bad weather crimped production.

Underlying profit, a measure of earnings that excludes one-off gains and losses, fell to A$123.6 million ($93.1 million) for the six months to March from A$195.2 million a year ago.

Orica flagged in March that its first-half earnings before interest and tax (EBIT) would take a hit from factors including maintenance work at its Yarwun and Kooragang Island plants in Australia, severe winter weather that disrupted mines in North America, and construction issues at its Burrup plant.

Including significant items, the company reported a statutory net loss after tax of A$229.3 million, compared with a profit of A$195.2 million last year.

“We remain positive that the majority of headwinds are behind us and we can capitalise on the improved outlook for volume demand and firmer pricing,” said Chief Executive Alberto Calderon.

In Australia, Pacific and Asia, Orica’s largest region, volumes rose by 10 percent.

However, the company said performance at Burrup remained “uncertain” pending a permanent fix.

Orica declared an interim dividend of 20 Australian cents per share, down from 23.5 cents a year earlier.

The company is set to benefit from two recent contract wins, snatched from its rival Incitec Pivot Ltd, to supply ammonium nitrate to the Roy Hill iron ore mine and BHP Billiton in Western Australia.

Ammonium nitrate volumes rose 3 percent to 1.83 million tonnes. ($1 = 1.3271 Australian dollars) (Reporting by Chris Thomas in Bengaluru; Editing by Peter Cooney and Richard Pullin)

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