Australasian agricultural company Nufarm has recorded a 28% drop in sales, but is forecasting a $100 million profit for the full year due to a literally sunny outlook.
It made a net loss of $40 million for the six months ending January, with $35.8 million of it attributable to one-off losses, mainly associated with its glyphosate business.
Ebit was down 85% to $19.1 million, while group sales fell from $1.24 million in the same period last year to $890 million.
The company – which was based in New Zealand until 2000 – blamed the revenue drop on the price reduction in glyphosate globally, and adverse climatic conditions in the Northern Hemisphere, but said it had maintained its market share.
The company’s gearing has fallen from 106% at the end of January last year to 69% this year and a previously announced capital raising - which will see Sumitomo Chemical Company become a new cornerstone shareholder - should see it reduced to between 20% and 25% at the end of July.
It will not pay an interim dividend, but was confident that the full year will show a strong recovery in profitability in the second six months.
Nufarm said that after a long, cold winter, temperatures were increasing in the USA and Europe, with the arrival of spring conditions seeing grower purchasing activity increase.
Meanwhile, Australia has experienced “excellent” rainfalls in many important cropping regions, and the outlook for crop plantings in Australia was “extremely positive”.
Because of this, the company has forecast a full year profit – including the impact of material items – of between $80 million and $100 million and an operating result of between $110 million and $130 million.