Nufarm’s HY25: Revenue +3%, EBIT $120.6M, Net Debt $1.56B
Nufarm Limited reported a solid half-year performance with a 3% revenue increase and a 40% jump in underlying EBIT, driven by strong crop protection sales and cost improvements. However, net debt rose 12%, reflecting investments in omega-3 production and seed technology expansion.
- 3% year-on-year revenue growth led by crop protection volume gains
- Underlying EBIT up 40% to $120.6 million, reflecting improved profitability
- Net debt increased 12% to $1.56 billion, impacted by omega-3 funding and FX
- Capex surged to support seed technologies and growth initiatives
- Company focused on de-leveraging and enhancing free cash flow
Strong Half-Year Growth Amid Market Normalisation
Nufarm Limited, a global player in crop protection and seed technologies, has delivered a robust set of results for the half-year ending March 2025. Revenue rose 3% year-on-year to approximately $1.81 billion, underpinned by strong volume growth in crop protection and a more favourable cost of goods position. This marks a clear recovery as market conditions normalise following recent volatility.
The company’s underlying earnings before interest and tax (EBIT) surged 40% to $120.6 million, signalling improved operational efficiency and profitability. Underlying EBITDA also increased 14% to $218.6 million, reflecting solid margin expansion across key regions including Europe and APAC.
Balance Sheet and Leverage Dynamics
Despite the positive earnings momentum, Nufarm’s net debt rose 12% to $1.56 billion. This increase was primarily driven by funding requirements for its omega-3 production cycle, timing of capital expenditure, and foreign exchange translation effects. The company’s net leverage ratio stands at 4.5 times, though when excluding the impact of omega-3 and currency fluctuations, adjusted leverage is closer to 3.8 times.
Management has outlined clear strategies to improve returns and reduce leverage, including actions to enhance free cash flow and optimise working capital. Notably, net working capital improved by around $100 million year-on-year, and inventory days have been reduced significantly, supporting cash flow generation.
Investment in Growth and Innovation
Capital expenditure increased markedly compared to previous years, reflecting investments in seed technologies, plant health and safety enhancements, and growth opportunities. While this elevated capex is expected to moderate in the second half of FY25 and into FY26, it underscores Nufarm’s commitment to innovation and expanding its product pipeline, including advanced bioenergy feedstock and plant-based omega-3 products.
The company’s diversified portfolio across crop protection and seed technologies positions it well to navigate evolving agricultural demands, though it acknowledges several uncertainties that could impact the second half. These include regulatory risks, market conditions, operational challenges, and geopolitical factors.
Outlook and Strategic Focus
With a century-long heritage and a global footprint, Nufarm is leveraging its agility and innovation capabilities to meet the challenges of sustainable food and fibre production. The HY25 results reflect a company in transition, balancing growth investments with disciplined financial management. Investors will be watching closely how Nufarm executes on its de-leveraging plans and manages the risks ahead.
Bottom Line?
Nufarm’s HY25 performance signals strong operational recovery but rising debt and market uncertainties warrant close investor attention.
Questions in the middle?
- How will Nufarm manage net debt and leverage amid ongoing omega-3 funding needs?
- What impact will regulatory and market uncertainties have on second-half performance?
- Can the company sustain margin improvements while scaling seed technology investments?
