Orica (ASX:ORI) announced a positive start to the 2026 financial year, projecting first-half EBIT to slightly exceed the prior corresponding period.
The company’s Digital Solutions and Specialty Mining Chemicals divisions are the primary catalysts for this upward trend.
Digital Solutions expects a 20% EBIT increase, bolstered by strong gold and copper market fundamentals.
Simultaneously, Specialty Mining Chemicals anticipates a 15% rise in earnings, following successful infrastructure upgrades at its Winnemucca plant and sustained demand for sodium cyanide.
While the core Blasting Solutions business remains fundamentally strong, its reported EBIT is expected to be slightly lower than the previous year due to the appreciation of the Australian dollar and reduced coal production quotas in Indonesia.
To ensure long-term profitability, Orica has commenced an organisation-wide cost-out program.
The initiative aims to deliver at least $100 million in annualised savings over the next three years.
However, net operating cash flow for the full year is expected to be lower than in 2025, impacted by foreign exchange movements, US-based litigation costs, and a plant outage in North America.
Looking ahead, the company maintains a stable fiscal outlook, with depreciation and amortisation expected at the lower end of the $520 million to $540 million range.
The effective tax rate is also projected to remain slightly below 2025 levels based on the current regional earnings mix.