Explosives maker Orica has flagged improving earnings for this financial year after posting a $1.267 billion full year loss due to a huge asset writedown.
The massive net loss also prompted the company to end its share buyback programme, which it had announced in March.
The full year loss was a sharp turnaround from the $602.5 million profit in 2013/14 and was largely on account of a previously announced $1.692 billion asset writedown.
Chief executive Alberto Calderon said while the year had been difficult for the company, it was largely reflective of the state of the broader market.
"The industry is currently experiencing the most dramatic mining downturn in at least the last two decades," he told analysts in a conference call on Wednesday.
The company said it cut costs by $175 million during the 12 months ended September 30, with most of those savings sustainable in the long term.
Earnings before interest and tax were down 21 per cent to $684.8 million, while underlying profit before the impairment charge stood at $417 million, largely in line with August's downgraded guidance.
Total sales revenue declined one per cent to $5.65 billion due to lower ammonium nitrate volumes in Australia, weaker ground support volumes and lower prices.
Orica has been forced to restructure operations, slash jobs and chang its senior management over the past year to counter the downturn in the mining sector.
It expects things to improve from here.
"If you look at demand and supply, we are at the worst level now, and it can only start getting better," Mr Calderon said.
"While FY 2016 and FY 2017 will still be challenging, we expect EBIT to improve in as earnings stabilise," he added.
The prospect of better times ahead helped push Orica's shares up 36 cents, or 2.3 per cent, to $15.97.
Orica is examining its capital expenditure for the fiscal year, but expects the figure to be largely in-line with 2015.
It has also pledged to change and improve its capital management practices.
On Wednesday, Mr Calderon said Orica had decided to immediately end the share buyback, as strengthening the balance sheet and dividends to shareholders remained the key priority.
Orica spent around $53.5 million under the buyback program, which had originally targeted spending up to $400 million.
ORICA HOPES FOR BETTER TIMES AHEAD
* Net loss $1.267bln vs $602.5mln profit for 2013/14
* Revenue down 1pct to $5.653bln
* Partly franked final dividend unchanged at 56 cents
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