Nufarm (NUF) shares jumped sharply yesterday to levels not seen since 2010 after the agricultural chemicals supplier swung to a first-half profit of $20 million after a 15 per cent increase in revenue.
Nufarm also lifted its interim dividend by 25% to 5 cents a share, and highlighted a reduction in net debt. The shares jumped as much as 6.3% to a seven-year high of $9.96, and ended up 3.5% at $9.70 on the worst day of the year so far with the wider market off 1.6%.
Revenue for the six months to January 31 rose to $1.36 billion, with the bottom line improving from a $91 million loss in the prior corresponding period – when the company booked restructuring costs of $102.9 million.
Underlying earnings — which strip out one-off items — jumped 67% to $19.8 million.
Nufarm said revenue was up in all its regional crop protection businesses except Europe, and that it is on track for full-year earnings growth if normal seasonal conditions prevail in major cropping regions."
“The results demonstrate that changes made to the business over the past 18 months are delivering positive outcomes and helping to build a platform for continued profitable growth,” chief executive Greg Hunt said. Sales in Australia and New Zealand rose 32 per cent, but underlying earnings were lower due to discounting in order to regain lost market share.
While market conditions were tagged “very competitive”, the company noted growth in sales for all its regional crop protection businesses, except Europe.
Nufarm’s business is always weighted to the second-half, with the company carefully eyeing mixed seasonal conditions in Australia.
“We expect the global crop protection market to remain very competitive, with low soft commodity pricing prevailing due to the strong crop harvests in most key cropping regions,” Mr Hunt said.
“But with the benefit of our cost savings and performance improvement program, together with new product launches and improved customer relationships, I’m confident the business will continue to generate profitable growth.”
