Nufarm forecasts 2009 profit jumps on farm chemical demand

Friday 18th July 2008

Nufarm Ltd, the Melbourne-based producer of agricultural chemicals, said profit may surge next year on sales of higher-margin insecticides and fungicides, new products and the impact of acquisitions.

Net income will be between A$220 million and A$230 million in the year ending July 31, 2009, the company said in a statement. It posts this year's results on September 25 and estimates operating profit was NZ$155 million to NZ$160 million. In 2007, net income was about A$149 million.

"Business conditions leading into Nufarm's new financial year are expected to remain very positive and the company will again generate strong profit growth," managing director Doug Rathbone said. Drought in parts of Australia and flooding in the US Midwest won't dampen "very strong earnings growth" in those markets, he said.

Demand for crop protection chemicals has increased with prices of commodities such as wheat, which has gained about 35% the past year. Last month Monsanto Co., the world's biggest seed producer, posted a 42% jump in third-quarter earnings as farmers spent more on its products.

In New Zealand, first half sales rose 20% from a year earlier and were ahead of budget.

The stock has gained 4% on the ASX the past two days and was recently at A$15.69.

By Jonathan Underhill

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