Yesterday Nufarm Finance Limited [ASX:NFN] announced a trading halt, pending the outcome of the institutional component of the accelerated entitlement offer. Normal trading is expected to resume on Monday, 1 October 2018.
In the meantime, Nufarm released its 2017–18 full-year results and preliminary final report, revealing a $15.6 million loss.
The agriculture chemical supplier’s share value has taken a steep downturn in the past three months, falling 29% since 1 June. This is a result of profit warnings issued by the company in previous months.
Why has Nufarm’s profit slumped?
The company reported strong revenue growth for all regions except Australia, although underlying net profit after tax was down 28% from the year prior.
The loss was substantially due to the very dry weather conditions in Australia, dragging sales down by nearly 10% to $590.1 million. Down on last year’s $654.2 million.
Underlying earnings before interest and tax for Australia and New Zealand was $23.7 million, in comparison to the prior year’s $64.9 million.
Nufarm is anticipating that the entitlement offer that investors are waiting for will raise $300 million of much needed funds to balance out this year’s loss.
Nufarm’s 2019 outlook
Nufarm stated that it expects earnings to grow in 2019. With underlying EBITDA to be in the range of $500–$530 million.
Although, the above guidance is subject to the drought easing and conditions returning to normal.
Due to the drought in Australia and maintenance plans to plants in Europe, the EBITDA for the first-half of 2019 is anticipated to be similar to that of the previous year.
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