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Highlights
- Nufarm (NUF) shares drop nearly 24% following a significant profit decline.
- Seed technologies unit under review amid weaker performance and earnings outlook.
- No interim dividend declared, impacting its status among ASX dividend stocks.
Agricultural chemicals company Nufarm (ASX:NUF) experienced a sharp decline in share price, falling nearly 24% to $3.07 in early ASX trading after reporting a significant drop in its first-half profit. The slide came alongside news that the company is reevaluating its seed technologies division due to its recent underperformance.
For the six months ending 31 March 2025, statutory profit fell 39.5% year-over-year to $29.8 million. Even after excluding one-off items, profit still declined 24% to $38.5 million. Meanwhile, revenue saw modest growth of 3%, reaching $1.81 billion. However, underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 15% to $102.7 million.
One notable development was the absence of an interim dividend declaration, a shift from the 4 cents per share distributed a year earlier. This move may influence its attractiveness within the ASX dividend stocks landscape.
The company attributed much of the earnings pressure to the seed technologies segment, where underlying earnings slumped 71%. Contributing factors included a steep drop in licensing revenue, reduced canola seed sales due to dry Australian weather, and declining fish oil prices, which impacted margins in its omega-3 product line. Nufarm is now actively reviewing the future of this division and has brought in external advisers to evaluate all strategic options.
On a more positive note, the crop protection division showed some resilience, with earnings up 34% from the previous year. Strong performance in Europe and the Asia-Pacific region drove these gains, although results in North America were weaker.
Looking ahead, Nufarm forecast that second-half earnings from seed technologies will likely fall $20 million short of the prior year. The company also refrained from offering detailed second-half guidance for its crop protection business, citing macro uncertainties such as fluctuating US tariffs and potential dry conditions in Australia.
These developments place Nufarm under closer investor scrutiny within the broader ASX200 index, especially as markets weigh the impact of agricultural volatility and evolving input costs on earnings reliability.
With strategic reviews underway and market conditions in flux, the company’s direction in the coming months will be closely monitored by those tracking performance within the ASX200.
