Glyphosate Pricing ‘Very Competitive in Most Markets’ – Nufarm

Nufarm Americas

Foreign exchange losses and extremely hot and dry weather in Australia eroded Nufarm Limited’s net profit in the first half of the year.

Advertisement

Excluding the impact of material items, the company reported an underlying net profit after taxes for the period of $10.6 million, compared to $23.9 million recorded in the first half of 2012. It recorded $9.2 million in foreign exchange losses, reversing a gain of $14.4 million a year earlier.

While adverse weather sapped demand for crop protection products in Australia, business in Brazil improved significantly, “with high crop prices driving an increase in planted acres and resulting strong demand for crop protection inputs. The North American and European businesses also delivered improved performance in the period.”

Nufarm’s crop protection business accounted for 96% of its group revenues in the first half of 2013 and were up 8% on the previous period ($894 million vs. $831 million).

Top Articles
ADAMA Reports Fourth Quarter and Full Year 2023 Results

Herbicide sales were $588 million, up from $581 million in the year-ago period.

“Glyphosate pricing remained very competitive in most markets; however, strong demand and the successful introduction of a new high load glyphosate formulation lifted margins in Brazil,” Nufarm said.

Nufarm said its phenoxy herbicide portfolio performed strongly, while sales of herbicides directed at the pasture segment in Brazil were down due to dryer than normal weather conditions.

Insecticide sales rose to $113 million compared with $84 million a year earlier, although margins dropped due to higher sales of lower margin products and increased competition in some segments. “Insect pressure in South America was high, helping to offset very low demand for insecticide products in Australia,” it said.

First half fungicide sales were $107 million, up 22% on the previous period, reflecting increased demand for a range of Nufarm fungicide products in Brazil and improved sales opportunities in the US and Europe.

Outlook

Nufarm warned it will post a smaller-than-expected profit for the second half of the year as conditions in Australia remain “extremely challenging, with relatively low demand and associated sales activity continuing into the first two months of the second half period.”

The company is now forecasting an underlying profit of between $80 million and $95 million for the year ending July 31. The company sees earnings before interest and tax down to within a range of $180 million and $200 million. The underlying net profit after tax will be impacted by foreign exchange losses and higher interest costs and is also forecast to be below that of the previous year and within a range of $80 million to $95 million.

 

 

Hide picture