Orica Limited on Monday announced it will split with DuluxGroup businesses after a 75 per cent decrease on its first half net profit.

Orica booked its net profit at $56.1 million in the last six months to March 31, from its $220.4 million in the prior corresponding period.

Revenues went down to 19 per cent to $3.226 billion.

Orica managing director Graeme Liebelt admitted that its first half of the partnership was difficult compared with 2009, resulting in a year-on-year softness in volumes.

"But the work we've done on the fundamentals in terms of controlling our costs, cash and margins - combined with an ongoing focus on strategic growth priorities has us very well placed to capitalise on the market recovery we see ahead, based on our customers plans," Mr. Liebelt said.

The demerger of its DuluxGroup, through a scheme of arrangement, will put the company as a "stand alone" and be listed on the Australian Securities Exchange.

The demerger is expected to take place after in July, after seeking approvals from the shareholders, the court, and agency regulators.

Peter Duncan, chairman of Orica, said that creating two companies is better so that each company can capitalize on its strength's core businesses. He also added that DuluxGroup will do well on its on if it approves for a demerger.

"Equity and debt market conditions have substantially improved in recent months and we believe the time is now right for DuluxGroup to pursue its strategy independent of Orica," Mr. Duncan stressed in the statement.

DuluxGroup's trade names include Dulux, Cabot's, Selleys, and Yates.

The demerger would include Orica shareholders receiving one DuluxGroup share for every Orica shares held and will continue its Orica shares.

Orica said that the business showed signs of recovery in demand and will anticipate an increase of group net profit in 2010 before the demerger occurs.

Orica also reported that its business platforms - Mining Services, Minova, the Chemicals Group, and Duluxgroup - attained "record earnings" despite the low volumes across the globe and the negative impact of the strong Australian dollar.