Nufarm Provides Full Year Results Update

Nufarm Limited announced that it expects underlying earnings before interest and tax (EBIT) forthe twelve monthsto 31 July 2018 to be approximately 5% above the previous year(FY17 underlying EBIT: $302.3 million).  This comparesto the guidance of 5 to 10% growth provided at the first halfresultsrelease.    The trading result has been impacted by challenging climatic conditions acrossthe key regions of Australia/New Zealand, Europe and North America.

In Australia, we have seen a continuation ofthe dry conditionsin April, with many parts of the country recording their driest April on record.  Whilst it is not too late for the major cereal growing areas, there has been no break on the eastern seaboard.  This haslimited pre‐plantspray opportunities, with the emphasis switching to the smaller post‐emergentspray opportunity.  The dry conditions have also reduced canola plantings, with many canola seed orders being cancelled in the last two weeks.

The extended winter in both Europe and North America has delayed grower demand for our products.  In the USA, the turf and ornamental business has been impacted with little to no treatments applied during the April month. The delayed start to the season placesstrain on the supply chain and may increase logistics costs, particularly in the USA.

The European Commission memberstates’ decision on April 27 to restrict the use of neonicotinoidsto indoor uses may also impact earnings.  While the use restrictions do not come into effect until after the end ofthe financial year, there may be some adverse impact on salesin the current year.

The majority of Nufarm’ssalesfall into the second half, and Nufarm Managing Director and CEO Greg Hunt said that whilst the challenging climatic conditions have impacted the group’ssalesin majorregions during the key pre‐plant period, the underlying businessremainsstrong and is better positioned to withstand adverse seasonal conditions due to the transformation program the company has undertaken overthe past three years. “We will continue to manage the thingsthat we can control, and remain confident we will deliver growth more than the global crop protection market”, he said.

The delayed season will also have an impact on the phasing of net working capital, and willresult in a higher level of net working capital at 31 July as compared to the previous year.  However, the expectation isfor the average net working capital to salesto remain well controlled in the 37 to 38% range.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s