Earnings downgrade: Nufarm Limited’s (ASX: NUF) stock plunged 11.058% on July 23, 2018 after the company downgraded its full year guidance and now expects the FY18 EBIT contribution from the ANZ business to be in the range of $5 million-$10 million (down significantly from last year’s $51.6 million). This is due to the current extended dry weather conditions in Australia, which led to an extremely poor winter crop season, and as a result the Australian crop protection market is down substantially. Further, the weather has led to increased competition and high inventory levels in the channel, resulting in significant margin pressure. These seasonal conditions have also impacted the mix of products sold, and the growers purchasing lower margin foundational products over higher margin differentiated products. Moreover, for FY19, Australian Bureau of Meteorology (BOM) is currently forecasting a dry spring and has issued an El Nino watch alert. The expected low levels of demand, coupled with the current over-supply, is expected to constrain sales and margin into FY19. NUF stock is trading at a P/E of 22.44x.
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.