Drought takes toll on Nufarm

NUFARM has slumped to a full-year loss as severe drought in parts of Australia takes a toll.

And the agricultural chemicals group is turning to investors for a $303 million funding injection to bolster its balance sheet and support growth plans.

Nufarm reported a net loss of $15.6 million for the year to July, compared with a $114.5 million profit the pre- vious year. Drought-related impairments of $91.5 million and costs to acquire new brands weighed on the bottom line.

Revenue increased 6.3 per cent to $3.31 billion, growing in every region except for Australia and New Zealand.

In Australia, the drought in NSW and Queensland contributed to a 10 per cent fall in sales, to $590.1 million.

Nufarm said the “major driver of the lower profit outcome was the drought here in Australia, with conditions in large and important growing regions in the eastern states being the driest on record for about 100 years”.

Nufarm announced it would raise $303 million in fresh funding by selling new shares to its investors.

Institutional and household investors will be offered shares at $5.85 each – a discount of almost 12 per cent to the closing price on Monday, before the stock was put in a trading halt.