Nufarm Limited

For FY25, Nufarm reported revenue up 3% year-on-year, gross profit up 7%, and gross margin of 26.1% after a 1 percentage point expansion. Underlying EBITDA was $302 million versus $311 million in the prior year, while EBITDA after material items was a loss of $74 million and statutory loss was $165 million. Net financing costs were $101 million, down 6% year-on-year. Gross margin improved by 80 bps overall, and Crop Protection EBITDA margin improved by 140 bps. Net debt fell by $538 million in the second half to $824 million at year-end, with leverage at 2.7x. For FY26, management guided to EBITDA growth, leverage of 2.0x by year-end, capex below $200 million, D&A of circa $225 million, net interest expense of circa $105 million, and an effective tax rate of circa 30%.

Greg Hunt framed FY25 as a year of delivering on profitability and leverage targets, with Crop Protection performing strongly and Seed Technologies being reset around a reprioritized strategy. He said the review concluded that continued ownership of Seed Technologies under a narrower, lower-capital strategy should create the best value for shareholders, with hybrid seeds, bioenergy with BP, and a reduced-cash omega-3 plan as the focus. His tone was confident and constructive, emphasizing that the company is set up for earnings growth, further deleveraging, and improved cash flow in FY26.

Brendan Ryan highlighted solid top-line growth, with revenue up 3%, gross profit up 7%, and gross margin up to 26.1%. He detailed $142 million of material items, mostly non-cash, including $118.7 million from Seed Technologies asset rationalization and restructuring, plus $13.4 million of Crop Protection restructuring costs and $5.4 million of legal/advisory costs. He also pointed to average net working capital sales improving to 38.2% within the 35% to 40% target range, free cash flow of negative $131 million, net debt of $824 million, leverage of 2.7x, and liquidity of $345 million in undrawn facilities plus $475 million in cash. For FY26, he guided to capex below $200 million, D&A around $225 million, net interest expense around $105 million, tax around 30%, and stronger free cash flow supported by lower omega-3 cash needs and improved working capital.

Analysts focused on the Seed Technologies review, asking why management decided to retain the business and whether there had been third-party interest; Greg said the process had broad market engagement and ultimately showed the best shareholder value comes from a reprioritized strategy rather than a sale. Questions also centered on the $30 million emerging-platform improvement target, with management explaining it is driven by lower cost/capital in omega-3 plus inventory revaluation assumptions based on fish oil prices around $2,600 and potential upside if prices rise. Analysts pressed on omega-3 cash neutrality, bioenergy’s capital-light model, and R&D/IP risk; management said omega-3 is being managed for cash flow neutrality over time, bioenergy remains co-funded with BP, and R&D is being tightened through a more disciplined stage-gate process.