Orica had more than $700 million wiped off its market value after the explosives maker posted a sharp fall in first-half profit, slashed its dividend and warned of tough times ahead.
Chief executive Alberto Calderon said market conditions "deteriorated markedly" across the mining industry throughout January and February, with substantial commodity price volatility affecting mining industry volumes.
"It is expected that the market will remain challenged for the foreseeable future," Mr Calderon warned on Monday.
Orica - whose fortunes are closely tied to the embattled resources industry - reported a 32.9 per cent drop in first-half net profit to $149 million, due in part to a $41 million settlement with the Australian Taxation Office.
Stripping out the ATO charge, profit would still have been down 10 per cent.
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Orica also replaced its progressive dividend policy with a new payout ratio dividend policy to be in the range of 40 to 70 per cent of underlying earnings.
"The new policy will enable greater flexibility and ensure that shareholder returns reflect the company's position and market conditions throughout the cycle," Orica said.
Orica expects that the total dividend paid each year will be weighted towards the final dividend.
The group's interim dividend fell sharply to 20.5 cents a share from 40 cents a share a year earlier.
Orica shares closed $1.90, or 12.31 per cent, lower at $13.53, valuing the company at $5.05 billion, compared to $5.76 billion on Friday.
The stock fell as much as 14.25 per cent to $13.23 during Monday's trading session on the local bourse, which closed higher.
Morgan Stanley analysts Nicholas Robison and Vivienne Lee said Orica's decision to step away from its FY16 guidance and "dramatically cut its dividend is emblematic of a company facing growing structural headwinds".
The pair expect to "continue to see material downside for the stock and expect FY16 consensus estimates will need to fall by around 10 per cent with even larger cuts" made to fiscal 2017 estimates.
Orica said ammonium nitrate and emulsion product volumes were down 8.1 per cent at 1.71 million tonnes in the first half ended March 31 from the same period a year ago.
ORICA'S FIRST-HALF
* Revenue down 9.1pct to $2.55b
* Net profit down 32.9pct to $149.0m vs $222.1m
* Interim dividend 20.5 cents (48.8pct franked) vs 40 cents (35pct franked)
