mid-cap

Orica and Incitec Pivot are plummeting

May 10, 2016 | Team Kalkine

Read Time :5 MINS

Orica Ltd

ORI Details

Weak performance: Orica Ltd (ASX: ORI) plunged over 12.3% on May 09, 2016 as they reported a weak first half of 2016 results. Ammonium nitrate volumes fell by 8% yoy to 1.71 million tonnes and consequently plunged EBITDA by 5% yoy to $450 million. As a result, the earnings per share declined to 51.2 cents before individual material items during the period as compared to 56.9 cents in pcp. The group undertook business improvement initiatives which delivered net benefits of $52 million.
Recommendation: We give an “Expensive” recommendation on the stock at the current price of $13.53

First half results (Source: Company Reports)

Incitec Pivot Ltd

IPL Details

Long term agreements: Incitec Pivot Ltd (ASX: IPL) fell over 3.7% on May 09, 2016. The stock seem to be partly affected by fall in its peer-Orica. Despite this short term fall, the group made a gas supply agreement with Walloons Coal Seam Gas Company Pty Limited (a Shell-owned QGC business) (QGC) for its Phosphate Hill manufacturing plant in North West Queensland. The group also made a gas transportation agreement with the APA Group for its transportation of gas under the QGC agreement.
Recommendation: We maintain our “Buy” recommendation on this dividend yield stock at the current price of $2.86

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