The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Mark Wilson - Deutsche Bank - Analyst
: Ian, it's Mark Wilson from Deutsche. Just wondering whether you could elaborate on what customers are indicating to you at this point
across each of the various regions; are they looking to close minds, cut back production significantly or it all about trying to reduce costs
and also better manage their CapEx plans?
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MAY 06, 2013 / 12:00AM, ORI.AX - Interim 2013 ORICA LIMITED Earnings Presentation
Question: Ben Chan - Bank of America Merrill Lynch - Analyst
: Thanks very much. I'm just actually interested in slide 27, if I could please? Just the slide where it's showing you're shipping Kooragang
Island ammonia to Yarwun. Presumably Yarwun's underpriced back to ammonia, so this would be reducing cost base there by, I don't know,
maybe a couple of hundred bucks a tonne. Are you keeping that full benefit, or are you passing some of that back to your customers?
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MAY 06, 2013 / 12:00AM, ORI.AX - Interim 2013 ORICA LIMITED Earnings Presentation
Question: Ben Chan - Bank of America Merrill Lynch - Analyst
: So I presume most of the Yarwun contracts are priced to ammonia, though?
Question: Ben Chan - Bank of America Merrill Lynch - Analyst
: Right, cool. Could I just ask one more, and sorry for my lack of understanding here, but is Indonesia in Australia Pacific or in other? I'm just
trying to reconcile that comment you made just about Bontang's cutting its cost of capital, with the Asian bit of other which was down 41%
at the EBIT line?
Question: Ben Chan - Bank of America Merrill Lynch - Analyst
: So Indonesia's in other, then?
Question: Matthew McNee - Goldman Sachs - Analyst
: Thanks. Ian, I just want to touch on a point you made about margins going forward and potentially under some scenarios going up 20% and
other scenarios going down 10%. I assume -- there's obviously a lot of different margins you can make, manufacturing margins, distribution
margins, service margins, so the mix effect is really the biggest driver I assume of what your margin outcomes are? And just is it that positive
mix effect getting more services and just looking at slide 31, where you're already pointing to the fact a lot of the business you're winning
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MAY 06, 2013 / 12:00AM, ORI.AX - Interim 2013 ORICA LIMITED Earnings Presentation
is having more margin included or more services, are we going to start seeing that positive margin come through, I mean just on the basis
of what you won on the first half?
Question: Matthew McNee - Goldman Sachs - Analyst
: But your expectations around margin are more about, as you say, the manufacturing improvements and the better mix of revenues, rather
than actual absolute pricing?
Question: Matthew McNee - Goldman Sachs - Analyst
: And the negative scenario you mentioned, was that just about pricing pressure or was that about (inaudible) mix?
Question: Matthew McNee - Goldman Sachs - Analyst
: Yes, no worries. Thanks.
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