Sharechat Logo

Nufarm beats own first-half forecast

Tuesday 27th March 2012

Text too small?

Nufarm, the agricultural chemicals company, said first-half net profit excluding one-off costs rose 5.3%, beating its December forecast.Net profit for the six months ended Jan. 31, excluding costs, rose 5.3 percent to A$23.9 million.

In December, managing director Doug Rathbone said the first-half result should be “broadly in line” with the previous first half.

Including one-off costs, mostly financing costs, net profit more than quadrupled to A$18 million compared with the year-earlier first-half profit of A$4.4 million.

Rathbone said the latest results demonstrated continued improvement in earnings and discipline around capital management.

“While a global agricultural business will always be subject to seasonal and business swings, we are building a much stronger base from which we can secure profitable growth well into the future,” he said.

Highlights included the strong performance of Nufarm's Australian and Brazilian operations where positive seasonal conditions drove strong demand for crop protection products, he said.

Consistent and widespread rain helped the Australian operations whose input costs were lower because of the relatively high Australian dollar.

The New Zealand operations also contributed higher sales and profit, reflecting generally positive business and seasonal conditions, Rathbone said.

However, the European business was tracking behind budget and faces “some challenges” in the current six months.

“Seasonal conditions in Europe are very mixed and there is increased business risk associated with economic pressures in a number of European countries. We will step away from business in those markets where we judge those risks to be unacceptable,” he said.

But any downside in Europe will be balanced by average or generally positive seasonal and trading conditions in most other regions.

“Australia is well-placed to see large winter cereal crop plantings, given the best subsoil moisture profiles we have seen across many cropping regions in a number of years,” Rathbone said.

Very strong planting forecasts for the US and a relatively early spring should help the business. While the major season in Brazil is over, “we are seeing continued sales activity in South America which is very encouraging.”

Nufarm will pay a fully franked dividend of 3 cents per share, its first dividend payout since the 15 cents per share it paid in November 2009.Nufarm shares closed yesterday at A$5.10 on the ASX, down from their recent high at A$5.24 but well up from A$3.08 in August last year.

Nufarm's NZX listed perpetual, subordinated, unsecured, redeemable exchangeable notes last traded on March 22 at $101 per $100 face value, down from $104.50 late last year.

(BusinessDesk)

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Methven confirms earnings recovery with 21 percent gain in first-half profit
Tenon beefs up credit line with US$70 mln banking facility
Sanford names Volker Kuntzsch as CEO, replacing Barratt
Tenon turns profitable on EBITDA basis as US housing recovers
Wynyard on track to meet prospectus target for FY sales, Richardson says
South Port posts record profit even as smelter cuts production
Sanford faces three charges relating to illegal dumping of oil at sea
UPDATE Contact increases dividend as FY earnings rise; quits wind projects
Contact increases dividend as FY earnings rise in competitive market
Sanford annual profit to miss forecast on lower skipjack tuna, toothfish and mussel harvest

IRG See IRG research reports