Rising Distributions at Nufarm Finance (NZ): What Risks Lie Ahead?
Nufarm Finance (NZ) Limited reported a modest 1.1% rise in net profit to $20.53 million for the year ended September 2025, alongside increased distributions to security holders and maintained strong liquidity backed by its parent company.
- Net profit increased 1.1% to $20.53 million
- Total distributions on Nufarm Step-up Securities rose to $21.66 million
- Company acts as financing arm for Nufarm Group with no ordinary revenue
- Maintains NZX Foreign Exempt Issuer status and complies with ASX and NZX rules
- Financial statements audited by KPMG with unqualified opinion
Financial Performance Overview
Nufarm Finance (NZ) Limited has released its audited financial results for the year ended 30 September 2025, reporting a net profit attributable to members of $20.53 million. This represents a modest 1.1% increase over the prior year’s $20.30 million, reflecting steady performance within its role as a financing entity for the broader Nufarm Group. Notably, the company does not generate revenue from ordinary activities but earns finance income primarily through loans to related parties within the group.
Distributions and Security Holder Returns
The company paid total distributions of $21.66 million on its Nufarm Step-up Securities (NSS) during the year, up from $20.33 million in 2024. These hybrid securities, which are perpetual and listed on both the ASX and NZX, offer floating-rate distributions tied to Australian bill rates plus a margin. The increase in distributions aligns with the slight rise in profit and reflects management’s commitment to delivering consistent returns to security holders.
Liquidity and Risk Management
Liquidity remains robust, supported by ongoing financial backing from Nufarm Limited, the ultimate parent company. The company’s balance sheet shows related party receivables of approximately $259 million, offset by related party payables of $28 million. The directors have reaffirmed the going concern basis, underpinned by access to credit facilities and strong group cash flows. Risk management policies are integrated within the Nufarm Group’s framework, with no material changes reported in credit, liquidity, or market risk exposures.
Governance and Compliance
Nufarm Finance (NZ) Limited continues to hold NZX Foreign Exempt Issuer status, ensuring compliance with both ASX and NZX listing rules. The company adheres to corporate governance standards consistent with its parent company, Nufarm Limited. The financial statements were audited by KPMG, who issued an unqualified opinion, confirming the integrity and transparency of the reported results.
Regulatory and Environmental Disclosures
The company remains exempt from New Zealand climate-related disclosure requirements until 2028, reflecting the predominance of Australian investors and the evolving regulatory landscape. However, it is monitoring upcoming Australian sustainability reporting standards effective from 2025, which may impact future disclosures.
Bottom Line?
With steady profits and distributions backed by strong parent support, Nufarm Finance (NZ) Limited remains well-positioned but will need to navigate evolving regulatory and market conditions closely.
Questions in the middle?
- How will upcoming Australian climate disclosure standards affect Nufarm Finance’s reporting?
- What is the sustainability outlook for distributions on Nufarm Step-up Securities amid interest rate fluctuations?
- How reliant is Nufarm Finance on ongoing financial support from its parent, and what risks does this pose?
