Nufarm Halves Profit Forecast

Posted by Matt Hopkins|14 July 2010

MELBOURNE, Australia — Nufarm dropped its full-year profit forecast from approximately US$96 million to $114 million down to $48 million to $57 million, reports Reuters. Citing lowered demand due to a late, cold winter in North America and Europe, Nufarm also increased its net debt forecast by about one-third to $394 million for the year ending July 31, 2010.

Glyphosate Repositioning
Nufarm is undertaking a strategic business review, part of which involves reallocating resources away from its key product, glyphosate. Monsanto‘s changes to its US glyphosate business, which included lowering prices, hurt Nufarm’s North American sales. Nufarm has Australian commercialization rights for Roundup; in the US, it sells its own generic glyphosate product.

Shares Drop
Shares for Nufarm, which is one-fifth owned by Japanese firm Sumitomo Chemical, are down more than 50% this year. Sumitomo paid approximately $12.27 per share earlier this year when it purchased its 20% stake in the company; prices are now down to $4.59 per share. Following Nufarm’s third reduction to its profit outlook, Sumitomo has said that it remains committed to its alliance with the Australian company.