Agri-chemicals group, Nufarm will again skip paying a dividend to shareholders for 2019-20 after revealing a massive $456 million full-year loss.
That means the company has not paid shareholders a dividend for two years – since the final of 6 cents a share paid for the 2017-18 financial year.
Drought in Australia and problems in offshore operations – especially South America (now sold) and Europe helped deny shareholders a return.
The drought-breaking rains across Australia’s east coast since March may have helped push revenue higher but had no impact on the underlying financials for the year.
The company, which saw profit slide from a narrow $38.3 million profit a year ago, booked $389 million in material items for 2019-20.
These included the previously announced $188 million write-downs of its European assets, as well as legal action in the US to enforce rights in its omega-3 canola patent estate, and costs associated with the sale of its South American unit to a major shareholder, Sumitomo Chemical.
Nufarm’s revenue rose 6.5% to $2.85 billion for the 12 months to July 31 thanks to second-half rains in Australia but CEO, Greg Hunt conceded it still was a poor earnings result.
“Our earnings performance in 2020 was disappointing,” he said on Wednesday.
“I was pleased with the rebound in earnings in ANZ, North America and Asia in the second half of the year and our primary focus is on driving improved performance from of our European business.”
Nufarm said drought-breaking rains on the east coast of Australia generated strong demand for herbicides and were the primary driver of revenue growth for the year.
However, weaker earnings from the North American business in the first half and a decline in European and Seed Technologies earnings resulted in underlying earnings from continuing operations falling 21% to $235.8 million.
Costs also rose as directors explained:
“Underlying operating costs increased on the prior year due the currency impact of a weaker Australian dollar and additional investment in the Seed Technologies segment as it ramped up activity for the commercialisation of omega-3 canola oil and carinata. European cost increases included a full year of supply chain costs to transition the acquired portfolios.”
Nufarm said it is changing balance date from July 31 to September 30, starting this year.
The company said the change was to “better align half-year reporting periods with key sales periods and enable improved comparison with industry peers.”
Results for the two-month period to September 30 will be reported on November 219.
“The group typically generates losses from continuing businesses during this two-month period,” the company pointed out to investors.
“Unaudited trading results for August show that the momentum of the second half has continued, with good revenue and earnings improvement in the continuing operations.
“However, we anticipate the group will report an underlying EBITDA loss for the two month period in line with our normal trading patterns.”
The hinted at improvement is probably why shares the shares jumped4.3% yesterday to $4.34 after being as high as $4.53.
