“The outlook for the 2015 financial year is spring and summer rainfall plus initial benefits from the restructuring will drive earnings recovery in Australia”: Doug Rathbone.AGRICULTURAL chemicals and seeds supplier Nufarm is banking on spring rains to help boost its profits.
Rain boosts demand for Nufarm’s crop protection products, which include weed, insect and fungus killers.
Nufarm also expects that a reorganisation of its Australian operations, which began in March and aims to lift profits and cut costs, will produce benefits in 2015.
“The outlook for the 2015 financial year is spring and summer rainfall plus initial benefits from the restructuring will drive earnings recovery in Australia,” Nufarm managing director Doug Rathbone announced yesterday.
Nufarm’s business in Australia in fiscal 2014 generated flat sales and lower underlying earnings due to dry conditions and tough competition.
Mr Rathbone cautioned that in Australia nothing was ever perfect in farming.
In some parts of Australia now, marginal crops were being cut for hay, but other crops looked terrific.
“We need a bit more rain in the north. Most of the crop areas in Australia would like a little bit more rain before December so they can finish the crop off nicely,” he said.
“It’s varied, but we’ve got a better year on our hands now than we’ve had for the last two.”
Nufarm yesterday unveiled a 53 per cent fall in full year profit to $37.7 million for the year to July 31.
The result was weighed down by hefty costs from restructuring its Australian and New Zealand businesses.
But excluding those costs, underlying net profit rose 4 per cent to $86.4 million.
Nufarm said dry conditions in Australia and a long winter in the United States had reduced demand for its products and put pressure on margins.
But Nufarm’s South American business performed well, especially in Brazil and Argentina.