Nufarm’s (NUF) full-year net profit fell 36% to $27.5 million on back of restructuring costs and the higher costs of doing business in its South American markets.
That was on a small rise of 2% in the agricultural chemical company’s revenue to $2.79 billion in the 12 months to July 31.
Despite the soft result, Nufarm will pay an unfranked final dividend of 7.0 cents, up from six cents the previous year, making a total of 11 cents a share for the full year, up from 10 cents.
That tells us directors are not too fussed about the result and are optimistic about the outlook.
And nor is the market with the shares jumping more than 13% at one stage on Wednesday before coming back to earth to be up 5.4% at $8.78.
That was because earnings before interest and tax (EBIT) came in at $287 million, some 12% better than market forecasts.
The agricultural chemical company said revenue rose 2.0% to $2.79 billion in the 12 months to July 31.
Also helping was a forecast for higher (unquantified) earnings in 2017 from the company.
The group’s underlying earnings, which omits one-off significant items, eased 7% to $108.9 million, but still topped expectations of $100.5 million.
Nufarm CEO Greg Hunt noted “challenging market conditions” had weighed on the fiscal 2016 result, but tipped higher earnings across the coming year.
“The combination of additional cost savings benefits; margin expansion and revenue growth in a number of the company’s businesses is expected to result in earnings growth in 2017,” he added in the statement.
