From the AFR:
Explosives maker Orica has shocked the market with a write-down of as much as $1.65 billion and a warning on profits that one analyst described as “downgrading two years’ worth of earnings in one fell swoop.”
Chief executive Alberto Calderon blamed the write-down on “extremely challenging” market conditions, with depressed conditions in the mining sector and a glut of supply in the ammonium nitrate market.
Orica shares slumped 13.5 per cent to a low of $16.29 in early trading on Friday as the market absorbed the news.
Here’s the chart:
And longer term:
Apparently Orica has 5 buy ratings, 6 holds and 5 sells with an average price target of $20.37, according to Bloomberg data.
Why has Orica, an almost pure mining services firm, been trading so high for so long post 2011?
Miners are screwed, yes. But, as I’ve said many times, they will annihilate the mining services firms as they fall.
