Orica''s net profit up 7%

The world''s largest explosives maker, Orica today announced 7% rise in net profit after tax and significant items of $225 million for the half year ended 31 March 2008.

Excluding the loss on individually significant items of $5.3 million, net profit after tax was $230 million, up 13% on 2007. Sales increased 11% to $3 billion.

The board declared 39 cents per ordinary share interim dividend, franked at 14 cents per share, representing an increase of 3 cents or 8% on the 2007 interim dividend.

Earnings per share before significant items increased 16% over the 2007 half-year to 70.1 cents.

The earnings release from the company noted that the underlying earnings rose across all businesses despite some adverse weather conditions, unfavorable exchange rates, delays in resource projects and rising input costs.

Mining Services had a record result, with an 11% increase in profit, which came from modest growth in volumes in Australia and Asia and reasonably favorable conditions in most major mining and resource markets.

The company further added that given the tightening supply in global ammonium nitrate the company is looking for expansion in Indonesia, Latin America and Australia.

Orica managing director Graeme Liebelt “The successful integration of the Dyno businesses continues with synergies being delivered ahead of plan. Annualised synergies delivered to date total $80 million and we are on track to deliver the full $90 million, a year ahead of schedule.”

Orica share fell 3.8%.

IAG lowers insurance margin guidelines

Insurance Australia Group Limited today lowered its insurance margin guidance for the full year ending 30 June 2008 to between 6% and 8% on the impact of high storm costs and widening credit spreads in the second half.

The company said the guidance provided at the interim results in February 2008 was for a full year insurance margin at the low end of between 9% and 11% subject to no catastrophes or large losses outside the Group''s allowances, or any material movements in currency or investment markets in the second half of the year.

However, so far in this half-year these two factors have had a negative impact of 1.6% on the current fiscal year insurance margin. The lower insurance margin guidance also reflects further deterioration of the claims experience in the UK due to market conditions.

The Group said it also lowered its guidance on GWP growth for the full year from the low end of 7% to 9% to 5.5% to 6.5%, a factor that largely reflects reduced premium revenue from Australian Commercial Lines (CGU) as the business has not been able to maintain forecast volumes.

The latest situation has left IAG in a weakened position to convince QBE Insurance Group Ltd. to increase its $8 billion takeover offer. IAG Chairman James Strong however maintains that QBE''s bid was inadequate and added that they were making effort to reverse declining profits.

IAG''s share fell 2.1% while QBE was up 1.2%.

Wesfarmers opens retail offer

Australian conglomerate, Wesfarmers Ltd today concluded part of its $2.5 billion equity raising as it launched its offer to retail shareholders.

Wesfarmers said it plans to use $940 million raised through the institutional rights issue to service its debt from the acquisition of Coles while an additional $1.6 billion was expected from the retail component.