Nufarm (NUF) H2 2024 earnings summary

Executive summary

• FY24 was challenging for the crop protection industry, with underlying EBITDA of $313 million, down 29% year-over-year, at the midpoint of revised guidance, and a 30% reduction in net working capital, leading to a 25% reduction in net debt to $635 million and net leverage at 2x EBITDA.

• No final dividend declared for FY24; focus remains on cost and working capital reduction, improving return on funds employed, and continued investment in growth platforms, including scaling omega-3 and biofuels, with $50 million omega-3 sales achieved.

• New product introductions contributed over 15% of revenues, with successful launches such as Oxbow herbicide in Canada and expansion in Omega-3 and biofuels platforms.

• Basic EPS (excluding material items) at -6.3cps, down 122% year-over-year.

Financial highlights

• Revenue declined 4% year-over-year to $3,346 million, mainly due to lower selling prices despite strong volume growth; underlying EBITDA fell 29% to $313 million, and underlying EBIT dropped 57% to $107 million.

• Statutory net profit after tax was a $6 million loss, with underlying basic EPS at negative $6.36.

• Net working capital reduced by 30% year-over-year, operating cash flow reached $472 million, and capital expenditure was $254 million.

• Return on funds employed was 4%, down 490 basis points from the prior year.

• Underlying gross profit margin fell to 26.7% from 29.3% year-over-year.

Outlook and guidance

• Management targets $50 million in annualized overhead cost savings and a 25-day reduction in inventory by end of FY25.

• Expectation to double Omega-3 revenues in FY25, with long-term revenue aspirations of $600–700 million from seed technologies and $3.8–3.9 billion from crop protection by FY26, subject to market pricing.

• No specific earnings guidance provided due to market uncertainty, but outlook for crop protection and seeds is more positive with stable active ingredient prices.

• Positioned for growth in crop protection as industry conditions improve; pricing remains competitive.