Orica says its planned C$505 million (US$373 million) acquisition of Canada’s Terra Insights is on track for completion by the end of next month as it pockets an initial circa-A$260 million (US$169m) from the sale of surplus land at its Deer Park manufacturing site in Victoria, Australia.
Net profit after tax of A$173m from the Deer Park sale is expected to be recognised as a significant item in Orica’s FY2024 March 31 half-year accounts. The company has now sold about half its surplus land at the site.
The Terra Insights deal, the largest acquisition announced in the mining technology space in 2023, would strengthen Orica’s digital solutions business, CEO Sanjeev Gandhi said. He said relevant approvals and closing conditions were progressing as planned.
Investment bank Morgan Stanley said the stage-1 sale of land at Deer Park provided a “welcome cash injection” for Orica, which had net debt of A$1.22 billion at net debt-to-EBITDA of 1.1x before the Terra Insights deal was announced last December.
Ghandi meanwhile said the outlook for first-half operating profit for FY2024 had “improved slightly” since the company announced in FY23 results in November last year on the back of “strong demand for products and services across the mining value chain”.
“The positive momentum from the second half of the 2023 financial year has continued as a direct result of our continued focus on executing our strategy, strong customer demand and increased earnings from new technology offerings,” he said.
“These efforts will be reflected in our financial performance for the first half of 2024, and we expect this momentum to continue through this financial year.”
Ghandi said planned major manufacturing plant maintenance programs were running on time and budget with no supply interruptions anticipated.
