Highlights

  • Jefferies issued a buy rating on Orica with a target price of AUD 28.40.
  • Bell Potter Securities (Institutional) also issued a buy rating with a target of AUD 26.00.
  • Orica delivered its highest earnings in 13 years for the 2025 financial year.

Orica Limited (ASX:ORI) has attracted positive attention from analysts, receiving buy ratings Jefferies issued a buy rating with a target price of AUD 28.40, while Bell Potter Securities (Institutional) also issued a buy rating with a target of AUD 26.00. These ratings might come on the back of the financial results in over a decade.

Record Financial Performance in 2025

Orica delivered its highest earnings in 13 years for the 2025 financial year, reflecting operational performance across all business segments. The company reported a net profit after tax, pre-significant items, of AUD 541 million, a 32 percent increase from the prior corresponding period. Statutory net profit after tax was AUD 162 million, which included AUD 379 million in significant items previously disclosed. Earnings before interest and tax reached AUD 992 million, marking a record for the company in over a decade. Earnings per share, before significant items, rose to 111.8 cents, up 29 percent from the prior year, highlighting Orica’s consistent growth trajectory.

The company’s cash generation remained positive, with net operating cash flow reaching AUD 949 million, up 18 percent compared to AUD 808 million in the previous year. These results were driven by positive demand for premium products, advanced technology solutions, and disciplined commercial execution.

Dividend and Share Buy-Back Program

Orica has also maintained a proactive approach to capital management, delivering value to shareholders through dividends and share buy-backs. The Board declared a final unfranked dividend of 32.0 cents per share, bringing the full-year dividend to 57.0 cents per share, an increase of 21 percent compared to the prior year, with a full-year payout ratio of 50 percent.

The company’s on-market share buy-back program, initially valued at AUD 400 million, has been substantially completed and subsequently increased by an additional AUD 100 million to a total program of AUD 500 million. As of 30 September 2025, Orica had repurchased AUD 399 million of shares, representing 4.1 percent of issued capital.

Strategic Growth Across Segments

Orica’s performance in 2025 was supported by contributions across its core segments. In Blasting Solutions, improved product mix and margin expansion contributed to solid earnings growth, while Digital Solutions benefited from recurring revenue streams and increased adoption of digital offerings. Specialty Mining Chemicals also performed strongly, driven by positive gold market fundamentals and higher output from manufacturing assets. The company achieved a leverage ratio of 1.39x and a return on net assets of 13.8 percent.

Outlook for 2026 and Beyond

Looking ahead, Orica expects continued EBIT growth across all segments in 2026, with a focus on cost management, capital efficiency, and ongoing strategic initiatives. Depreciation and amortization are expected to remain between AUD 520 million and AUD 540 million, while capital expenditure is projected to stay broadly in line with 2025 levels. The expanded share buy-back program of up to AUD 500 million is scheduled for completion by March 2026.

The company also projects long-term growth driven by Blasting Solutions, Digital Solutions, and Specialty Mining Chemicals, aiming to deliver a three-year average return on net assets of 13.5 percent to 15.5 percent and maintain a sustainable dividend policy with a payout ratio of 40 percent to 70 percent.