The Orica Ltd (ASX: ORI) share price closed 3.4% higher at $21.82 per share yesterday but not before hitting a new 52-week high after a strong investor presentation release.
What were the highlights from Orica's presentation?
Orica reported steadily rising mining volumes despite mining becoming increasingly difficult, with near-volcanic conditions in Indonesia and high altitudes in Kyrgyzstan among the challenges cited by the company.
In terms of global material moved, thermal coal is expected to see a 0.6 billion tonne increase between 2018 and 2023 to 17.9 billion tonnes, while copper production is expected to rise by 1.4 billion tonnes to 9.1 billion over the same period.
Orica said its blast management remains at the core of its future strategy, with blast automation and digitally-enabled blasting two of the main focuses for the group going forward.
Both of these areas have allowed Orica to reduce drill costs, improve productivity and boost margin growth in a positive move for the Aussie mining explosives group.
Some of Orica's core initiatives for delivering future growth include its strong pipeline of customer adoption for WebGen, achieving economies of scale through both its WebGen and BlastIQ services and improving margins through the rapid adoption of new technologies.
Orica also provided an update on its continuous plant operations, with focus areas including more than 80% overall equipment effectiveness (OEE) in all of its plants across its continuous network.
In terms of its numbers, Orica said its Burrup TAN plant was essentially loaded from FY20 with current contracts despite limited utilisation in FY19 and marginal earnings before interest and tax (EBIT) contribution for the group.
The company's revenue in Asia-Pacific remains well-diversified, with thermal coal contributing 36%, gold contributing 17% and iron ore making up 10% of total revenue for Orica.
Orica's primary source of revenue by product offering in the region remains Bulk/PE with 37%, while its ammonium nitrate (AN) operations remain second with 22% of earnings.
According to the results, AN demand is outstripping commodity growth in the region with Chinese demand and Latin American supply big factors in an increase in volumes.
How did the Orica share price react?
The Orica share price surged on the broadly positive presentation, climbing to a new 52-week high of $21.99 before closing 3.4% higher at $21.82.
Overall, the presentation bodes well for Orica's upcoming August results and investors were clearly bullish on the news, sending the share price higher before tapering off later in the day.
The Orica share price has rocketed 29.1% so far this year as the S&P/ASX 200 (INDEXASX: XJO) index has enjoyed its best start to the year since 1991, with much of that due to strong performance from the big mining companies.
