November 10, 2008
MELBOURNE, Nov 10 (Reuters) - Australia's Orica Ltd (ORI.AX: Quote, Profile, Research, Stock Buzz), the world's top maker of explosives used in mines, expects profit to grow in 2009, bolstered by steady demand from coal miners, defying cutbacks in other mining sectors.
The positive outlook and a stronger-than-expected second-half result helped push the group's shares up more than 6 percent, while the broader market added 2 percent.
"They were a little more upbeat about mining than I would have thought," said Ken West, a partner at fund manager Perennial Growth. "It's quite good to have a company that's still got some growth," he added, contrasting Orica with other companies that were likely to report falling profits this year.
Orica's managing director, Graeme Liebelt, said demand from countries like China, where he expects annual economic growth of around 8 percent, would underpin demand for coal used in power stations. The bulk of Orica's explosives go to coal miners.
"We see relatively robust demand coming through. We would not expect much, if any, scaleback in that sector," Liebelt told reporters.
Second-half profit before one-offs rose 16 percent to A$342.5 million, topping analysts' forecasts for around A$306 million, according to Reuters calculations.
Earnings from the Minova business, which it acquired last year and makes explosion trigger systems, grew more than analysts had expected. Continued...
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