Victoria, Australia-based farm chemicals group Nufarm Ltd. surpassed market forecasts, partially based on stronger than expected growth in Europe and North America, reports Reuters. Despite the strong showing, Nufarm did not change its full-year profit growth forecast of around 34% to US $149 million — an amount analysts say is probably a conservative estimate. Nufarm’s earnings in previous years have typically been skewed 80% towards the second-half, based on a heavier reliance on sales in Australia. This year, says Managing Director Doug Rathbone, the second-half is likely to make up around 70% of earnings.
Rathbone says North America and Europe will help drive the company’s growth in the second half, bolstered by last year’s acquisitions, new products,
and sales to new sectors such as cotton growers. According to Rathbone, Nufarm is unlikely to pursue acquisitions for the next few months; however, the company may still be looking at a piece of Dow Chemical Co’s agricultural sciences unit, which is estimated to fetch between $5 billion and $7 billion. “We’ll hang around the hoop,” Rathbone said, noting that Dow’s entire ag business was far too big for Nufarm. “We’re always interested in things that are accretive and work well for our business.”
Nufarm also announced that it would be selling its 25% stake in a European joint venture with Bayer CropScience, shutting an herbicides manufacturing plant in France, and instead would buy product directly from Bayer. As negotiations were just starting with French unions, Rathbone declined to put any dollar figures on the deal. However, he says, fewer than 30 jobs would be cut, and savings to Nufarm would start coming through in the next financial year.