Nufarm (NUF) H2 2024 earnings summary

Executive summary

• Underlying EBITDA reached $313 million, down 29% year-over-year and at the midpoint of revised guidance, despite challenging market conditions.

• Net working capital reduced by 30% and net debt by 25% to $635 million, with net leverage at 2.0x EBITDA, strengthening the balance sheet.

• No final dividend declared for FY24; focus remains on cost and working capital reduction, improving returns, and continued investment in growth platforms.

• New product introductions, including Oxbow herbicide in Canada, contributed over 15% of revenues; omega-3 sales reached $50 million, with expansion in omega-3 and biofuels platforms.

• Basic EPS (excluding material items) at -6.3cps, down 122% year-over-year; statutory net loss after tax was $6 million.

Financial highlights

• Revenue declined 4% year-over-year to $3,346 million, mainly due to lower selling prices despite strong volume growth.

• Underlying EBITDA fell 29% to $313 million; underlying EBIT dropped 57% to $107 million.

• Statutory net profit after tax was a $6 million loss, with underlying basic EPS at negative $6.36.

• Net working capital reduced by 30% year-over-year, operating cash flow reached $472 million, and capital expenditure was $254 million.

• Return on funds employed was 4%, down 490 basis points from the prior year.

Outlook and guidance

• Management targets $50 million in annualized overhead cost savings and a 25-day reduction in inventory by end of FY25.

• Expectation to double omega-3 revenues in FY25, with long-term revenue aspirations of $600–700 million from seed technologies and $3.8–3.9 billion from crop protection by FY26, subject to market pricing.

• No specific earnings guidance provided due to market uncertainty, but outlook for crop protection and seeds is more positive with stable active ingredient prices and solid end-use demand.

• Targeting growth in canola, sorghum, and sunflower seed sales, supported by favorable crop prices and long-term demand drivers.

• Achieving FY26 revenue aspirations depends on a return to long-term average pricing in crop protection.