Mining explosives major Orica has confirmed its digital solutions business segment, now a standalone reporting line, will initially contribute about 2% of its annual revenue and nearly 5% of EBITDA, based on its FY22 financial results.
The business has been established on the back of Orica’s A$205 million acquisition of GroundProbe in 2017 and last year’s $260 million ($350m with earnout payments) purchase of Axis Mining Technology.
Axis underpins the “orebody intelligence” (OBI) part of Orica digital solutions (ODS); GroundProbe injects geotechnical monitoring and interpretation technologies. Blast design and execution is predominantly Orica’s internally developed monitoring and analytical tools.
Retrospectively, ODS contributed about A$147m of revenue and $45.2m of EBITDA in Orica’s FY22 (to the end of September 2022). Group revenue was $7.36 billion and EBITDA c$950m.
The FY21 ODS numbers – when orebody intelligence and blast design/execution were considered “immaterial” – were $114.5m of revenue and $43.6m of EBITDA. Orica is reporting ODS separately to “provide transparency of the growing digital solutions vertical”.
Orica will report its FY23 first-half results in May. It says $13.3m of up to $90m of Axis earnout payments will be included as a significant item, as will a $27.6m net loss from the sale of the group’s Turkey subsidiary.
CFO Kim Kerr says a US$350m refinancing of the company’s US private placement notes, via the issue of new fixed-rate unsecured notes, drew a $2 billion order book.
The refinancing of USPP notes maturing in September this year extended Orica’s drawn debt maturity profile to 6.1 years, Kerr said.
ASX-listed Orica’s share price is down more than 5% in the past month at $15.06, capitalising the company at $6.84 billion.