Nufarm Posts Higher Profit on Bigger Demand in Australia, Brazil
27 March 2012 
Nufarm Limited on Tuesday said its net profit climbed in the most recent half year, as weather drove demand for crop protection products in Australia and Brazil.
At the same time, it warned its European business was tracking “behind budget” and faces challenges for the rest of the year, citing economic pressures on the continent.
Nufarm, which is based in Australia and partly owned by Japanese chemical firm Sumitomo, posted a net profit after tax of $18 million for the half year ended Jan. 31, 2012, compared with $4 million in the year-ago period. Excluding material items, operating profit after tax was $23.9 million, up 5.3% from the corresponding 2011 period.
“Australia is well placed to see large winter cereal crop plantings, given the best subsoil moisture profiles we have seen across many cropping regions in a number of years,” Nufarm Managing Director Doug Rathbone said in a statement. Rathbone added that planting forecasts for the US are “very strong” and it should be helped by the relatively early spring.
The company said its Australian operations benefited from more consistent and widespread rainfalls during the period and from increased efficiencies, including lower input costs due to a relatively high Australian dollar. Its New Zealand business also contributed a stronger sales and profit result for the period.
In Brazil, it benefited from a bigger product offering, strong cropping activity and growth in several market segments following the restructuring of its business there last year, it said. Rathbone said that despite a poor season for fungicide sales, Nufarm generated increased revenues and a higher margin in Brazil, with market share gains in its cotton, sugar cane and pasture segments.
“While the major season is behind us in Brazil, we are seeing continued sales activity in South America which is very encouraging,” Rathbone said.
Nufarm said its European business weakened due to mixed seasonal conditions and the shaky economic environment. “We will step away from business in those markets where we judge those risks to be unacceptable,” it said, adding: “We believe any downside in Europe will be balanced by average or generally positive seasonal and trading conditions in most other regions over the remaining months of our financial year.”
Source: Nufarm Limited; edited by Jaclyn Sindrich, Managing Editor
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