Orica Federal Court Tax Ruling Has A$192 Million Hit On Profits

Chemical maker Orica Ltd. (ORI.AU) said a court ruling Wednesday against it over a dispute with Australia's tax authorities is likely to have a A$192 million adverse impact on its profits.

In a statement, Orica said that the Federal Court has only "partially allowed" its appeal against an amended tax assessment issued by the Australian Taxation Office in 2004 relating to the sale of its pharmaceutical business to Zeneca BV in 1998.

"The effect of the Federal Court judgement is that the ATO's claim has, for the most part, been upheld," said the company, adding it is considering appealing the decision within the allowed 21 days.

Orica also said that after previously paying around 50% of the amount owing on the amended assessment, a further cash payment of around A$126 million may be required, with an after-tax effect of around A$92 million.

-By Bill Lindsay, Dow Jones Newswires; 61-2-8272-4694; [e-mail]