Nufarm shares slump after it suspends dividend; drought affects Australian sales

SYDNEY: Nufarm shares slumped more than 20% after the agricultural company said it was suspending its interim dividend following a firsthalf net loss of $13.58 million ($NZ14.06 million).

The chemical supplier said strong sales in North and South America lifted overall revenue for the six months to January 31 by 7.9% to $1.576 billion but drought conditions in Australia caused local sales to fall 26% as overheads jumped.

‘‘Farmers on the east coast of Australia are facing continued dry conditions and we’ll be scaling back manufacturing and running down inventories in anticipation of another difficult season,’’ Nufarm chief executive officer Greg Hunt said.

The local demand for pesticides dropped in winter, Nufarm said, and the total area planted for summer crops was estimated to have decreased by 23% to 1 million hectares.

Nufarm reduced its fullyear earning guidance to between $440 million and $470 million, down from a previous range of between $500 million and

$530 million.

Mr Hunt said Nufarm was taking a conservative approach to managing its balance sheet and would therefore suspend its interim dividend, which had been 5c in the previous corresponding period.

The company’s shares dropped 23.2% on the news in early afternoon trading before recovering slightly.

However, at the close of trading yesterday, they were down $A1.33 at $A4.23, a drop of 23.92%. — AAP