Australian (ASX) Stock Market Forum

ORI - Orica Limited

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Still watching the volume and 667278 shares traded after close which was 100% of the days volume.

Good close and did break $18 so hopefully it continues tomorrow :xyxthumbs

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ORICA published its result.
I however could not understand the boasting by CEO to call it a stellar /strong performance considering the mining companies did very well even during COVID phase and ORICA primarily serves them and IMO, did a poor performance.
But CEO is worried for the bonus and probably market knows something to jack up price today. I hopefully not wrong to judge the sentiment again.

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I don't typically keep many ASX big caps in my mix, but I've been accumulating Orica over the past week - probably now have enough and it will be a medium term hold for me. Should have been smarter and bought more sub 15 dollars, but I missed it. The SP is roughly down by the same earnings % drop YOY.

Sitting on about $900M cash after increased debt and a capital raising earlier in the year, has been hit and is/was presumably at the bottom of the cycle with corona virus - and although maybe earnings in AUD will be lower based on currency exchange rates - I think Orica will have a very good opportunity to go off and make some acquisitions. The exsa acquisition will also have a full year on the books coming up and there should be some interesting results there if you believe Orica can turn up the factory to be 2-3x more efficient. I'm also a big fan of SAP. Orica have transitioned to SAP this past year - which can come with issues for the 12-18 months - but once ironed out it is fantastic.
 
Holding ORI since last week @ $14.81 and enjoyed the +3.5% rise today to put me in the Green.

I entered as I believed that it was oversold on the weekly

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Despite the drop its sitting at 16.6 times last years earnings - looking below it looks like it historically traded at around 12-15 times earnings (assuming the CMC Data is right..). Might be getting close to fair value and worth buying.

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The trifecta for explosives and mining services group Orica on Friday but not a winning one – unfortunately – as the shares slumped 26% at one stage.
The company warned of a $125-million earnings hit for the six months to the end of March thanks to the impact of the china bans on Australian coal imports which have pressured coal prices, as well as the sharp rise in the value of the Australian dollar which is hurting the company’s foreign currency earnings. And the company revealed the departure of chief executive Alberto Calderon.
The shares slumped to a near five-year low of $11.17 at the opening on Friday before closing down a hefty 18% to $12.56.
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Orica said it expected a first-half earnings hit of up to $80 million in its mining division as last year’s trade tension between Australia and China impact explosives demand in the Australian thermal coal sector.
But COVID is having an impact on the company outside of Australia and the US – most notably in key South American markets. “COVID-19 continues to be a significant source of uncertainty for Orica,” the company said in Friday’s announcement. “Activity in Colombia is significantly lower than the pcp due to major customers’ temporary and permanent mine closures. Continuing social unrest in Peru and strikes in Chile have reduced demand for products and services in those countries, and COVID-19 has led to an unfavourable but temporary shift in the product mix of customer demand in Peru. “Mining activity also remains severely disrupted by the pandemic in several other regions, including parts of Europe, Africa and Mexico where the virus has been widespread and its impacts more prolonged than our original expectation. Indonesia has been impacted by lower volumes due to ongoing effects of COVID-19 and adverse weather.”
Orica said the higher Australian dollar would clip foreign earnings by between $20 and $25 million in the half year to March 31 and there is a further $15 million to $20 million or so in other costs.
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The CEO’s departure was announced in a separate statement to the ASX by Orica chair, Malcolm Broomhead who said Mr Calderon will step down from his role as Managing Director and CEO, after almost six years in the role. He was a former senior BHP executive.
Orica’s Group Executive and President of Australia Pacific Asia, Sanjeev Gandhi, has been appointed as the new Managing Director and CEO of Orica.
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- Glenn Dyer
 
i do notice the odd fund manager still has a kind word for ORI though

i have never held this share ( the numbers never crunch a buy signal for me , maybe it is the debt ratio that interferes with the 'green light ')

DYOR
 
Miner said:
Did u notice Australian Super kept on putting money on explosives
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When I looked them up today, after the post on ASF, I noticed the Aus Super adding. Then when you look at the long term price graph, it does make you think, is there some upside with all the exploration and mining activity?
Must look into the debt issue someone mentioned, otherwise may be worth a small flutter, for the long term draw IMO.
I don't hold
 
according to my guesstimations ( and i am NOT very good at them ) we should be in the resource sector consolidation phase ( but somehow it looks like a boom whilst we have supply chain issues )

now if i was 40( ish ) ( but i am 65 ish ) i would be looking at cashed up explorers ( or those with a big player JV cash cow , say EVN , NST , BPT , SVW , or OZL ) and prepared to wait ( or trade ) the next 3 to 5 years

so ask is my guesstimate wrong , or are brownfield projects accelerating , or maybe different resources being mined

i was hoping my mining services/construction services stocks would be busy with infrastructure projects , currently , but those operating with some success are winning mining contracts , rather than civil engineering ones .

so are we in a mining super cycle or is the resource sector all messed up
 
ALSO i think i remember reading somewhere , WES still makes some explosives/fertilizers which might explain why the IPL issues haven't flowed on to a major price spike
 
divs4ever said:
ALSO i think i remember reading somewhere , WES still makes some explosives/fertilizers which might explain why the IPL issues haven't flowed on to a major price spike
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WES makes ammonia..used as nitrate for explosives.
Part of my hydrogen portfolio : ammonia is the ideal .well as far as ideal ammonia can be , carrier for the hydrogen chain supply.
Doing good lately.
WOR (Worley) has knowhow on making these ammonia plants..but not doing so well..surprising but orobably against the narrative vs oil and gas.
I should probably add Orica in that portfolio.a bit stretch but they play in the area.
 
divs4ever said:
according to my guesstimations ( and i am NOT very good at them ) we should be in the resource sector consolidation phase ( but somehow it looks like a boom whilst we have supply chain issues )

now if i was 40( ish ) ( but i am 65 ish ) i would be looking at cashed up explorers ( or those with a big player JV cash cow , say EVN , NST , BPT , SVW , or OZL ) and prepared to wait ( or trade ) the next 3 to 5 years

so ask is my guesstimate wrong , or are brownfield projects accelerating , or maybe different resources being mined

i was hoping my mining services/construction services stocks would be busy with infrastructure projects , currently , but those operating with some success are winning mining contracts , rather than civil engineering ones .

so are we in a mining super cycle or is the resource sector all messed up
Click to expand...
Mining is where it is at.

Mining states know this and close down and ban outsiders at the first whiff of danger.

Mines and associated air hubs and accommodation sites are exquisitely careful.

When baristas and associated hipsters in Melbourne and Sydney are lining up for Vinnies soup and sangers next year the mines will still pump exports out.

Government have only 2 cash cows and it ain’t entertainment and hospitality. One is Mining and the other is Agriculture.

gg
 
Garpal Gumnut said:
Mining is where it is at.

Mining states know this and close down and ban outsiders at the first whiff of danger.

Mines and associated air hubs and accommodation sites are exquisitely careful.

When baristas and associated hipsters in Melbourne and Sydney are lining up for Vinnies soup and sangers next year the mines will still pump exports out.

Government have only 2 cash cows and it ain’t entertainment and hospitality. One is Mining and the other is Agriculture.

gg
Click to expand...
i agree it appears to be where it is at

but i worry about the timing , is it real or have we fallen into a FX trap

most mining is slow and over regulated to get into production , takes years from greenfield to full production

unless some are discreetly gearing up for a major war ( not that i am saying such a war is impossible , just that i HOPE there isn't one )

where is all this mineral production going , we know China has been stock-piling for at least 5 years , but where else

yes i am currently focusing on resource producers ( MAINLY gold , but if something else pops up on the radar , they might not be ignored )

time will tell , but i sense something wrong with all this

DYOR
 
The price is certainly moving this morning but the down volume yesterday and Tuesday was huge.

Elephants about.

Has it been shorted ?

Shorts gone from 4% in early June to 2% in mid July to 3% just past few days.

Then BHP is 3.83% shorted.

gg
 
Just a thought from left field.

With all the kerfuffling recently inside ORI and on Fx could it possibly be a T/O target for a body in the West cash rich.

gg
 
maybe would depend on how they are currently thinking

another offer to API or go after a different target

POSSIBLY ORI are not under enough stress currently , i guess how willing major holders are to exit would be a factor

given their energy and mining relationships SOL might be an outside chance , but they are willing to adjust at board level , so a 20% bite might not excite current shareholders
 

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