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Nufarm reaffirmed its guidance for fiscal 2009 earnings in sound financial position
Dec. 5, 2008
Chief executive Doug Rathbone told shareholders at the companys annual general meeting in Melbourne on Thursday that its businesses in Europe and North America are tracking ahead of forecasts.
"We remain on schedule to launch a number of new products into important crop segments in those regions," he said.
"Early discussions with our distribution customers suggest underlying demand will remain strong as we enter the key seasons in the new year, with realistic expectations of strong herbicide applications in the spring."
In Australia, sales activity in the first quarter was relatively subdued but was expected to pick up.
"Harvest is now well underway in most cropping regions, with recent heavy rainfalls delaying some of that activity," Mr Rathbone added.
"That rainfall will generate near ideal conditions for a big summer cropping season in Northern NSW and Queensland and I anticipate strong sales months here in Australia in both December and January.
"Early intentions for next years autumn planting also remain very positive."
But Mr Rathbone said Nufarms Brazil business will see a major season fall as growers there find it harder to secure credit to purchase goods for crop planting due to the global credit crisis.
"Our current assessment is that the first half profit contribution from our business in Brazil will be down on previous forecasts," he said.
Looking further ahead, Nurfarm remains confident about its full year operating earnings guidance.
"I am therefore restating today that the company expects to generate an operating net profit of between $220 million and $230 million for the full year," Mr Rathbone said.
"Underlying demand for crop protection products remains strong and we expect to be able to at least maintain profit margins across our various product positions."
Nufarm made an operating profit of $163.9 million in fiscal 2008, which was up 36 per cent on the prior year.
Mr Rathbone also told shareholders Nufarm had recently refinanced some $300 million of debt and secured additional facilities taking the total now available to it to just under $1.8 billion.
"Importantly, we have extended the maturity profile on a number of those debt facilities, giving us a higher proportion of longer term credit lines," he said.
"I am confident that discussions with the banks involved in the $200 million that remains due for renewal by July next year will also be successfully completed.
"We will continue to monitor conditions in the credit markets and, when appropriate, take further measures to ensure the company has the balance sheet strength to meet the needs of the business."
Source: Sydney Morning Herald
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