Brazil sales boost profits
SHARES in Creso Pharma have jumped nearly 18 per cent after the cannabis- derived nutraceutical products maker signed an agreement to sell its products in Brazil. Creso and Sin Solution will work on the commercialisation in Brazil of Creso’s various Swiss Vitamin nutraceutical products as well as its cannabinoid- derived nutraceutical products, targeting the privately insured middle class.
Sin Solution operates an extensive commercial network in Brazil and Latin America, with access to more than 350,000 health professionals and 200,000 direct patient contacts in the region.
Creso expects first sales of its products in Brazil in the second half of 2018, followed by sales in other Latin American markets. SHARES in Nufarm have hit a seven- year high after the agricultural chemicals and seeds developer returned to profitability and forecast further growth.
Nufarm made a net profit of $ 20 million in the six months to January 31, compared with a loss of $ 91 million a year earlier when the company booked restructuring costs of $ 103 million.
Underlying net profit rose 67 per cent to $ 19.8 million in the half- year to January, up from $ 11.9 million a year earlier.
Nufarm shares gained 30c, or 3.2 per cent, to $ 9.67, their highest value since January 2010. Revenue rose in all of the company’s regional crop protection businesses, except in Europe, as the company benefited from changes to improve its business over the months.
Chief executive Greg Hunt said Nufarm had also achieved growth in market share and margins despite weak global market conditions and strong competition. Sales in Australia and New Zealand rose 32 per cent, but underlying earnings were lower due to discounting in order to regain lost market share. Nufarm expects the glo- past bal crop protection market to remain highly competitive in 2017, with low soft- commodity pricing prevailing due to strong crop harvests in most key cropping regions.
But with cost savings, performance improvements and product launches, the company expects to continue to generate profit and underlying earnings growth, Mr Hunt said. Improved second- half performances are expected in Australia, North America and Europe if rainfall is adequate.
But the Latin American business is expected to be impacted by negative market conditions in Argentina and the expected later timing of sales in Brazil. RBC Capital Markets analyst Andrew Scott said Nufarm’s half- year result was in line with or slightly ahead of expectations.