Founded in 1874 as Jones, Scott and Co, a supplier of explosives during the Victorian gold rush, the company has had a rich history of mergers and acquisitions to coordinate all its Australasian interests via becoming an independent Australasian company rebranded as Orica Limited (ORI).
In 2010, Orica spun off Dulux to focus on the provision of services to the mining, construction and infrastructure industries. In November 2014, its chemicals business was sold to the Blackstone Group. Between 2018 and 2023, Orica acquired GroundProbe, a provider of monitoring and measurement technologies for mining; Essa, a manufacturer and distributor of industrial explosives in Peru; and Terra Insights and Cyanco.
Listing on the ASX in 1961, ORI is an Australian-based multi-national corporation and is one of the world’s largest providers of commercial explosives and blasting systems to the mining, quarrying, oil and gas, and construction markets, a supplier of sodium cyanide for gold extraction, and a specialist provider of ground support services in mining and tunnelling, servicing customers across more than 100 countries.
“This week, we included Orica Limited (ORI) in Morgans Best Ideas list,” Raymond said.
“Following recent acquisitions, ORI is now not only the world’s largest explosives company, but also the global leader in geotechnical and structural monitoring in mining and civil infrastructure and the world’s largest producer of sodium cyanide.
“In our view, ORI is leading the industry with its technology offering.
“Importantly, this area is high growth and high margin work.
“ORI is set to deliver solid earnings growth over coming years, reflecting strong demand, recontracting benefits and solid growth from its Digital Solutions and Specialty Mining Chemicals businesses.
“With a large business in the US, overtime, ORI should be a beneficiary of a Trump presidency.
“ORI’s management team continues to execute well and has demonstrated a track record of under promising and over delivering.
“On 28 February, ORI was removed from the MSCI.
“Leading up to this, its share price was weak and short interest in the stock rose.
We think the stock has been oversold.
“ORI is hosting its Investor Day on 12 March.
At this event, we expect to hear more about ORI’s beyond blasting strategy and hopefully its new capital management framework, given the strength of its balance sheet.
“In FY24, ORI’s gearing (ND/ND+E) was below the lower end of its target range of 30-40% at 26.2%,” Raymond said.
GRAPH OF Orica Limited (ORI)
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