Explosives and mining services provider Orica does not know when there could be a significant turnaround in the mining sector.
Orica chairman Russell Caplan said that because of the uncertainty and volatility in the mining sector, the company can’t forecast its profit for 2015.
“We see no reason to expect a significant turnaround in business climate in the short term,” Mr Caplan told shareholders at Orica’s annual general meeting.
“Therefore we expect the problems being seen by our major customers to continue in the short term.”
Mr Caplan said Orica was trying to make itself resilient to those pressures so that the company could emerge well positioned for anything to come. Mr Caplan said the business cycle would eventually change for the better.
“We don’t know when, we don’t know by how much – we just know it will change,” he said.
Mr Caplan also said that Orica’s improved cash flows, strong balance sheet and the anticipated funds from the sale of the group’s chemicals business had given its board flexibility in 2015 to consider capital management initiatives.
Orica is the world’s largest supplier of explosives and blasting systems to the mining, quarrying and infrastructure sectors. It cut 700 jobs late last year as a downturn in commodity prices forced its miner customers to reduce costs.
Orica made a slightly higher annual net profit of $602.5 million in fiscal 2014.