Good morning, ladies and gentlemen, and welcome to Orica's 2018 annual general meeting. My name's Malcolm Broomhead, and I am your Chairman. I'd like to begin by acknowledging the traditional owners and the custodians of the land on which we meet today, the Wurundjeri people of the Kulin nation, and I pay my respects to their elders, past and present, and to any other elders from other communities who may be present here today. We do have a quorum. I declare the meeting open. The notice of meeting was distributed to all of you. With your consent, I will take that document as read. Before we begin the formal proceedings, just for your safety, I draw your attention to the emergency exits, the doors through which you entered at the back. There's some doors over on this side marked exit.
Should an emergency require evacuation, then Park Hyatt staff will be on hand here to assist you. If you haven't done so already, if you wouldn't mind turning your mobile phones off or to silent for the duration of the meeting, please. Let me introduce my fellow Directors and your Company Secretary. Seated on my immediate left is Alberto Calderon, our Managing Director and Chief Executive Officer, who will address the meeting shortly. Next to Alberto is Denise Gibson, next to Denise, Lim Chee Onn, then Maxine Brenner, and on my far left is Gene Tilbrook. On my far right, Karen Moses, then Ian Cockerill, and on my immediate right is Kirsten Gray, your Company Secretary and Group Executive of Corporate Services. We also have other members of our executive committee here today. They're sitting in the front.
They're wearing name badges and will be available after the meeting, should you have any questions that you'd like to ask them. Our auditor, KPMG, is also in attendance, represented by our Audit Partner, Penny Stragialinos. Now, balancing our investment in growth and delivering short-term earnings for shareholders is really central to the role of board and your management team. Equally important is that we strike the right balance between the financial and the non-financial priorities. Our most important priority in that regard, of course, is safety. I can report this year we achieved our goal of zero fatalities. We also made good progress against initiatives that will deliver longer-term growth for the company. However, it's fair to say that the financial outcomes for this year did not meet our expectations, nor those of our shareholders.
EBIT had declined by 3%. Statutory net profit after tax was a loss of AUD 48 million, although that included individually significant items of AUD 372 million. Alberto will speak in more detail about this in his address. We acknowledge the shortfall in financial performance. The board has exercised its discretion to reduce the short-term financial incentives of the CEO and of the executives by 75%. The incentive for the CEO was reduced to 18.34% of the maximum. The average incentive for executives, including the CEO, was reduced to 23.25% of the maximum. This compares to a 60% average for the prior year. We have also decided that no pay increases will be awarded to executives except where there's been a change in role or responsibilities. Directors' fees are frozen for the ninth consecutive year.
In determining returns to shareholders for the current year, we have maintained a dividend payment at AUD 0.515 per share, which is the same as last year and reflects a payout ratio of 60% of the underlying profit. Our job, of course, is to improve returns to shareholders in a sustainable way, and we share your sense of urgency to see an immediate improvement. While a lot of work has been done over the past few years to build a leaner, a more resilient business, we're running fast to absorb the impact of external headwinds, the extent of the transformation has not yet been evident. The manufacturing issues in the first half of the year obscured these benefits.
It's not been really until the second half that we have begun to see a more accurate picture of your company's earnings potential and its trajectory. Our second half earnings, on the other hand, were the highest since 2014, which for us was the tail end of the great China mining boom. The management team has detailed plans to sustain and grow earnings from this baseline. At the board level, we're monitoring that progress and looking to see that the organization embeds the systems and processes it needs to deliver growth reliably and sustainably. We're also monitoring developments with our joint venture partner, Yara, as resolutions of the issues at Burrup, the ammonium nitrate plant there in the Pilbara will significantly add to earnings in the coming years. Although this 12 months that we're currently in will remain challenging from that aspect.
To reflect our ambition and the management team's commitments to lift short-term earnings, we've agreed simplified measures for short-term incentives. In 2019, we'll just focus on two financial measurements for the short-term incentive program, and that is earnings before interest and tax, or EBIT, and one-year return on net assets or RONA. A longer-term improvement in RONA remains the overall objective and is the basis for the long-term incentive program. Our plans for future earnings growth focus heavily on the development and commercialization of new technologies. This plays to our strengths, and we believe that technology is a core differentiator that will generate superior returns and deliver strong free cash flows. In assessing performance against these longer-term goals, we saw good progress this year. Significant milestones were achieved in commercialization of new products and through the acquisition of GroundProbe, which has significantly expanded our digital capability.
The appointment of Denise Gibson to the board in January has brought new insight and experience in relation to the commercialization and management of technology and our portfolio there, and we'll hear more from Denise today. While oversight of financial performance is critical, it is also the role of the board to ensure that we evolve to meet non-financial risks and the changing expectation of global communities. With customers in more than 100 countries and a workforce of more than 11,500 people comprising more than 80 nationalities, we are a truly global company. We operate in a highly regulated industry, and making sure we meet the multitude of regulatory requirements and live up to the expectation of our many host communities can be a complex and challenging exercise. As a board, we oversee this on various fronts.
Our board subcommittees review the health of the organization and the risk culture as well as safety, environment, and community outcomes. There are clear avenues for business conduct issues to be raised. We also engage directly with the workforce and customers through site visits and with financial stakeholders through one-on-one discussions. The safety of our people and our communities remains our most important priority. Over the past two years, we've changed how we focus on safety in the workplace to increase awareness of major hazards and the controls that protect people from these hazards. While our progress is encouraging, there will always be more work to do in this space. It will remain a priority for the board and the management team and every employee at Orica. We're also very mindful of the responsibility we have to ensure that our products are used for their intended purpose.
To this end, the management team has completed a review of the company's product security policies and our controls. Further work has been made to embed the implications of this review over the coming year. As the industry leader, we play an important role in influencing how the broader industry evolves to meet the new security challenges that the world finds itself facing. We will continue to be an advocate for strong controls and work with the regulatory bodies to progress these goals. I've spoken over the last few years about the organizational culture and the changes that we have made to create a more diverse and inclusive workforce. This year, we've built on the foundation of our company's charter and values with the launch of a refreshed code of business conduct.
It clearly articulates the expectations of our employees' personal conduct and is supported by a speak-up service available to employees and to external stakeholders in each of the countries in which we operate. In addition, we have made considerable progress in strengthening our ethics and compliance controls and training our employees. I'd like to make a quick comment on the macroeconomic backdrop of our business. As a company that operates in 54 countries and shipping products around the globe to many others, we're keenly aware of the importance of free trade to an efficient and vibrant world order. It's concerning to see the current instances of protectionism and nationalistic tendencies. I sincerely hope that this is a short-term occurrence and that the rules-based World Trade Organization principles will again become the norm.
In summation, before I invite Alberto to the stage to talk about Orica's 2018 financial performance in more detail, I'd like to reiterate the board's confidence in the outlook for your company. The work that's been done over the past few years has created a stronger foundation to realize the benefits of the increased demand we're seeing for our products and our services in the near term. Our investment in people and technologies will further consolidate our industry position and drive future value for our shareholders. I now welcome your Managing Director and Chief Executive Officer, Alberto Calderon, to address you. Alberto.
Thank you. Thank you, chairman. Thank you, shareholders, for joining us today. As always, I'll start with safety. We achieved our most important objective of zero fatalities in 2018. The work we have done to understand our major hazards and ensure controls are in place continues to touch every part of our organization and is strengthening our safety culture. While our total recordable injury frequency rate increased slightly, the severity of injuries declined. There is never room for complacency when it comes to safety, we are focusing our efforts on further reductions in serious injuries. Aside from the obvious logic of this, we know the underlying causes of serious injuries and fatalities are different to those for less serious injuries. We will also put more work into analyzing high-potential events where there were no injuries or only minor injuries, there was a potential for much greater harm.
This will give us insights to focus attention on the areas of greatest potential harm. There is always more work to do, I am confident we are making Orica a safer place to work, this will remain a priority. In terms of financial performance, it was a difficult year, we were disappointed with the 3% decline in earnings before interest and tax. This was largely the result of unplanned shutdowns at our manufacturing plants in the first half of the year additional sourcing and freight costs associated with the Burrup plant in Western Australia. This plant is operated by our joint venture partner, Yara, we market the product into the Pilbara region. The plant had some successful discrete production runs, it produced good quality ammonium nitrate.
Problems were identified towards the end of the commissioning process, repairs had to be made to the heat exchangers. It was substantially determined these needed to be replaced, additional work to the absorption towers some environmental issues needed to be resolved. Over the past few months, we have invested significant resources at a project management and engineering level to support our joint venture partner and will continue to do so through the coming year. We have also replaced our board representative with manufacturing and technical experts elevated the project to CEO level with the Yara CEO and myself in regular discussions on progress. The remediations work is scheduled to be complete in the first half of the 2020 financial year, we expect to have around 20% of utilization for the current financial year.
We moved quickly to address the shortfall in earnings in the first half of the year. In the second half, we delivered much better manufacturing reliability at our own plants, earnings increased in every regions and business. The result was increase in 46% in earnings, bringing us back to levels of profitability we have not achieved since 2014 when the mining boom was ending where the mining boom was in full bloom for our company. Revenues have returned to growth after some years of decline, reflecting both improvements in the macroeconomic environment and new contract wins. Ammonium nitrate sales volumes were up 5% on last year, with particularly strong demand in Australia and Indonesia, a strong contribution in North America. We also saw strong demand for our newer products with revenues from new technologies as a proportion of total sales up more than 30% last year.
It was also pleasing to see customer satisfaction rates increase again this year. This is an important validation of our new investment in new technology and expertise. As the resources industry embraces big data and automation to lift returns, we are making the most of this opportunity. We believe the market conversion to more modern, less commoditized products and services will improve margins for our customers and for us. We are making significant progress in the commercialization of our technology. At the time of the last year's AGM, we had just completed trials of our Bulkmaster 7 delivery systems, a very modern truck, and wireless blasting systems, WebGen, and we were introducing our digital platform, BlastIQ, to new customers. That was last year. We now have 20 BM7s in the field.
BlastIQ is being used at more than 100 customer sites around the world, and commercial sales of WebGen have commenced. We've just launched the next generation of BlastIQ. We're rolling out at least another 20 BM7s this year, and the next generation of WebGen is in development. For me, WebGen is the most exciting development our industry has seen since the bulk explosives development in the 1960s. It will fundamentally change how our customers think about mine planning. The safety and productivity gains it will deliver for our customers will be significant, and we will have a share in that. The acquisition of GroundProbe early in the calendar year was a significant step in expanding our digital capability and customer offering. GroundProbe is a global market leader in the provision of critical monitoring and measurement technologies for the mining sector. It has integrated well into the business.
It is contributing positively to earnings. We are now focusing on leveraging our global network to accelerate its growth. We are also finding new ways to lift returns to our existing asset base. Our expansion into agricultural markets on the East Coast of Australia and a new joint venture in China are examples of this. Capital efficiency and cost management, however, will continue to be a priority, and we are very focused on maintaining the health of our balance sheet. Gearing at year-end after the acquisition of GroundProbe and an increase in our Burrup shareholding was just below 36%. That's at the lower end point of our target range of 35%-45%. Culture is critical for delivering performance, and the expertise of our people is a real differentiator at Orica. Rebuilding our culture has been an ongoing priority since 2015.
We measure our progress on this through an annual organizational health index survey. The results improved again this year, putting us near the top of the second quartile, up from the third quartile in 2015. We were also able to significantly increase the number of critical roles filled by internal candidates this year. We believe this is a measure of success in rebuilding capability within the organization. We're also progressing our approach to reduce our direct exposure to a future carbon cost. We had some good results from trials of a new catalyst to abate carbon emissions. This will inform our approach into the next decade. Looking ahead, we have firm plans to increase earnings in 2019. The improved performance of the second half of 2018 sets our base for growth.
We expect ammonium nitrate sale volumes to grow at around 3%, an EBIT growth from all regions and businesses except Latin America, where our strategic review is underway. Improved reliability and utilization rates at our operational plants will contribute to that improvement. We expect earnings to be skewed to the second half of the year as a result of the timing of new contracts coming in online in the Australia Pacific Asia region. Beyond 2019, we expect a fully loaded Burrup plant, continuous improvements in manufacturing plant utilization, and increasing volumes to lift earnings. Our evolving productivity solutions in digital automation and field measurement are also expected to contribute to higher returns for shareholders in the coming years. In summary, we have confidence we will lift earnings this year, and we have a clear path to continue this momentum. The outlook and demand for our products and services is strengthening.
We're finding new ways to lift returns from our global asset base. Our new technologies and expertise will drive value and lasting returns to shareholders into the future. Finally, I'd like to take this opportunity to acknowledge the hard work and dedication of our very talented people at Orica, and also thank you, our shareholders, for your continued support.