Orica is currently experiencing pressures on sales and margins from downturns in the coal and resources markets

Orica is currently experiencing pressures on sales and margins from downturns in the coal and resources markets. Its key segment, mining services, generates over 90% of company revenues. The other segment, chemicals, has struggled and the company has resolved to sell or demerge it following a strategic review of operations. Despite challenges in the near term, Orica has a positive long-term outlook underpinned by global growth in energy and resources consumption. It should benefit from its operational improvements when key resources markets recover. Orica is currently trading above our valuation of $18.06 for 2013-14. Read more: (VIEW LINK)