Deer Park land sale finalised, Orica’s business continues to thrive

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The initial phase of the surplus land sale in Deer Park, Victoria, to UniSuper has been finalised for $260 million, meeting all conditions and completing cash settlement, involving about 66 hectares, roughly half of Orica’s total surplus land holdings in the area.

In a media release, the ASX-listed company said the completion of this sale will not disrupt Orica’s ongoing operations or those of its tenants within the industrial precinct.

Instead, it will allow Orica to focus on its core manufacturing and customer operations at Deer Park, driving continued growth and innovation in its primary areas of expertise.

The net profit after tax from this transaction amounts to approximately $173 million, a testament to Orica’s strategic divestment decisions and its commitment to delivering value to shareholders.

The company said this profit will be recognised as an individually significant item in the first half of FY2024.

Sanjeev Gandhi, managing director and CEO of Orica, expressed confidence in the company’s performance, stating, “The positive momentum from the second half of the 2023 financial year has continued, fueled by our strategic focus, strong customer demand, and earnings from new technology offerings. We anticipate this momentum to persist throughout FY2024, despite external challenges.”

Looking ahead, Orica plans to offer the remaining surplus land (stage 2) for sale in the future, pending the completion of necessary remediation activities, regulatory approvals, and favourable market conditions.

This strategic divestment aligns with Orica’s broader corporate strategy while unlocking value from its real estate assets.

In addition to the successful land sale, Orica continues to demonstrate robust performance in FY2024.

The company’s momentum from the previous financial year has carried into the first four months of FY2024, driven by the execution of its strategic initiatives and sustained demand for its products and services across the mining value chain.

Furthermore, Orica remains committed to maintaining safe and reliable manufacturing operations through scheduled turnarounds.

Major turnaround events, such as those at the Kooragang Island and Yarwun plants, are progressing according to plan, ensuring minimal disruption to customer supply while enhancing operational efficiency and safety.

In line with its growth strategy, Orica said it expects to complete the acquisition of Terra Insights by the end of March 2024.

This acquisition will bolster Orica’s digital solutions portfolio, positioning the company as a global leader in geotechnical and structural monitoring solutions for the mining and civil infrastructure sectors.

Gandhi remarked on the acquisition, stating, “We are excited about the long-term opportunities this acquisition presents for Orica, our customers, and our shareholders.”