Australian agricultural chemicals and seeds business Nufarm [ASX:NUF] was rising by more than 13% in the share market.
A share for NUF was worth $5.99 earlier today. Even though it has gained more than 9% in the last week and nearly 4% in the past month, the stock is still nearly 10% down in the year and 15% lower than its sector:
Source: TradingView
Nufarm HY23 highlights, profits and outlook
Today, Nufarm put out some of the key highlights for its progression in the half year, and shareholders were reacting well to what appeared to have been a favourable trading period.
Nufarm, managed a strong HY23 with an underlying net profit (after tax) of $142 million — a 7% increase on the same time last year — and translated to revenue of $2 billion.
Statutory net profit after tax went up 51% by accruing $149 million.
Underlying EBIT (earnings before interest and tax) for the six months also climbed by 3% to $228 million.
However, underlying EBITDA — which includes such restraints as calculations for depreciation and amortisation expenses — had seen a 4% decrease, chalking up to $316 million.
Nufram decided that these results called for an upped interim dividend of 25% of 5 cents a share, yet unfranked.
Nufarm CEO, Greg Hunt said:
‘This is an excellent result, that has been driven by Nufarm’s transformed structure and increasing shift to innovative and differentiated solutions.
‘Our diverse portfolio and geographic footprint provide earnings stability and resilience, while our omega 3 and bioenergy platforms provide significant growth potential.
‘Global conditions remain positive, with agricultural commodity prices at or above five-year averages.
‘We have made excellent progress on our key growth initiatives; we are hitting our key milestones and remain on track to meet or exceed our growth aspirations.’
Nufram’s crop protection business division performed well in Europe, even despite a challenging environment.
The Europe business delivered an underlying EBITDA of €81 million (about AU$132 million), up by 7%. On revenue was slightly up by 1% to €320 million (around AU$522 million), with new product introductions and a favourable product mix contributing to the result.
However, it appeared Europe carried the bulk of the results. Asia Pacific’s underlying EBITDA was down by 28% from a record high in 1H22 with $71 million — on revenue of $546 million. Furthermore, North America also decreased by 16% to US$57 million — on revenue of US$454 million.
The group said there were relatively higher grain prices that resulted in fair demand for seed and crop products in Asia Pacific, and lower volume recorded in North America.
Re-stocking post-COVID supply chain disruptions also increased inventory levels.
It was the seeds business that really came through — having delivered revenue of $231 million, an increase of 25% on the same time last year, and underlying EBITDA up 34% to $62 million.
Mr Hunt said the group expects to deliver modest underlying EBITDA growth in FY23, assuming normal seasonal conditions. He said:
‘Our net debt and leverage have increased driven by net working capital movements reflecting seasonal build and increased inventory, particularly in the North America, however inventory is expected to reduce in the second half as growers take delivery to meet seasonal deadlines and stocks are consumed closer to use periods.
‘Accordingly, leverage is anticipated to return to within or below the targeted range of 1.5 to 2.0 times net debt to underlying EBITDA by 30 September 2023.’
Copper mining stocks 2023
Agriculture, seeds, crops and farmers aside — what about the mining space?
Well, there are certain copper stocks worth watching in 2023, according to our mining expert and resident ex-geologist James Cooper.
He says copper is a metal that’s worth following right now…
If you subscribe to Fat Tail Commodities, you could instantly download James Cooper’s most recent insider report on the subject — all for free.
James will give you instant tips on three of the latest top stock picks for the copper industry, while also talking about the copper supply crisis and how you can position yourself to take advantage.
Find out more and click here today.
Regards,
Fat Tail Commodities
Comments