Nufarm’s Rising Debt and Seed Tech Woes Signal Challenges Ahead

Financial Overview

Nufarm Limited’s FY25 results reveal a challenging year marked by a statutory net loss after tax of $165.3 million, a sharp deterioration from the prior year’s $5.6 million loss. This outcome was heavily influenced by $142.4 million in material non-cash charges related to asset rationalisation and restructuring, predominantly within the Seed Technologies segment.

Despite these headwinds, the company recorded a 3% increase in revenue to $3.443 billion, largely driven by an improved sales mix in its Crop Protection business. Underlying EBITDA declined modestly by 3% to $302.5 million, reflecting an 18% EBITDA increase in Crop Protection that was offset by a 78% decline in Seed Technologies, primarily due to significant losses in the omega-3 platform amid falling fish oil prices.

Segment Performance and Operational Highlights

Crop Protection showed robust momentum across all major regions. APAC delivered a 10% EBITDA increase, supported by higher margins and new product introductions. Europe’s EBITDA rose 22%, benefiting from performance improvement initiatives and favorable agronomic conditions, while North America posted a 19% rise despite tariff uncertainties and product approval delays.

Conversely, Seed Technologies faced substantial challenges. The segment’s EBITDA plummeted due to omega-3 losses and lower license revenues, although hybrid seeds in South America grew strongly. The company undertook a comprehensive review of Seed Technologies, resulting in restructuring actions including asset write-downs and inventory impairments.

Balance Sheet and Capital Management

Nufarm’s net debt rose 30% to $824.2 million, with leverage increasing to 2.7 times underlying EBITDA, reflecting cash outflows from operating and investing activities and foreign exchange impacts. The company refinanced its short-term omega-3 loan facility post-year-end, converting it into a two-year amortising loan secured against tangible assets across multiple countries.

The board maintained a conservative dividend policy, declaring no interim or final dividends for FY25, prioritizing balance sheet strength and capital allocation towards growth and restructuring.

Leadership Transition and Remuneration

In a significant leadership change, CEO Greg Hunt will step down effective 1 January 2026, succeeded by Rico Christensen, who brings nearly 30 years of global agribusiness experience. Hunt will remain in an advisory role for six months to ensure a smooth transition. Christensen’s remuneration package includes a base salary of AUD 1.35 million and a target incentive opportunity of 140% of base salary, with an initial grant of performance rights subject to shareholder approval.

Executive remuneration outcomes reflected the company’s financial performance, with no cash payments under the FY25 Executive Incentive Plan due to unmet profit targets. Instead, awards were granted as performance rights, aligning executive rewards with long-term shareholder value creation.

Outlook and Risks

Looking ahead, Nufarm expects strong underlying EBITDA growth in FY26, assuming normal seasonal conditions, with particular optimism around Crop Protection and hybrid seeds in Seed Technologies. The company targets reduced net debt and leverage below FY25 levels, supported by disciplined capital expenditure below $200 million.

However, the company continues to navigate risks including regulatory uncertainties, commodity price volatility, supply chain challenges, and climate-related impacts. The ongoing Seed Technologies restructuring and market recovery remain key areas to watch.