Mining explosives maker Orica has held on to its cautious full year outlook after spending cuts and business improvement initiatives helped it offset higher costs in the first half of the year.
It posted net profit of $195.2 million for the six months to March 31, a 31 per cent increase from the same period a year ago.
However, excluding a one-time $41 million settlement with the Australian Taxation Office during this period last year, net profit rose just three per cent.
The company said there were indications that miners were beginning to return to more normal mine plans, and associated production volumes.
"Our result for the first-half demonstrates a returning predictability to our financial and operational results," chief executive Alberto Calderon said.
"While our turnaround will continue throughout FY17, our underlying EBIT (earnings before interest and tax) reflects a stabilising business performance."
It reported underlying earnings of $314 million, slightly lower than the $317 million a year earlier.
Orica - whose fortunes are closely tied to the embattled resources industry - has benefited somewhat from the partial bounce in prices of key commodities like iron ore, oil and coal.
It said volumes in its largest business - Australia Pacific and Indonesia -grew by 10 per cent.
Business improvement initiatives also delivered benefits of a net $53 million in the half, the company said.
The gains were, however, offset by a five per cent drop in sales revenue and increases in gas and ammonia prices in Australia and North America.
The company also expects to be buffeted by an unfavourable foreign exchange impact of $15 million for the full year.
The contracted increases in gas and ammonia prices reduced margins in the Australian and North American businesses by some $30 million in the first half, it said.
As a result, the company maintained the flat growth outlook for FY17 that it had outlined in November 2016.
"There is a high level of confidence that business improvement initiatives will offset the known headwinds in the current year," Mr Calderon said in a statement.
At 1055 AEST, Orica shares were up 14 cents, or 0.7 per cent, at $19.42.
ORICA POSTS STABLE FIRST HALF RESULT
* Stautory net profit of $195.2m vs $149m
* Revenue down 5pct to $2.44b
* Partly-franked interim dividend of 23.5 cents a share
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