Nufarm posted a 17% rise in underlying EBITDA for 1H FY26 and unveiled a fresh $50 million cost saving initiative under new CEO Rico Christensen, aiming to sharpen earnings quality and accelerate debt reduction.
- 1H FY26 underlying EBITDA up 17% to $239-244m
- Net debt reduced by $130m to $1.23 billion
- Net debt to EBITDA ratio improved 20% to 3.6x
- New strategy targets $50m additional cost savings
- Positive trading momentum continues despite inflationary pressures
Strong Earnings Growth in First Half
Nufarm (ASX:NUF) has kicked off FY26 with a robust performance, forecasting underlying EBITDA between $239 million and $244 million for the half year ended March 31, marking a 17% increase at the midpoint compared to the previous year. This uplift reflects improved margins in Crop Protection, growth in Hybrid Seeds, and stronger contributions from its emerging omega-3 and bioenergy platforms.
Net debt fell by $130 million to approximately $1.23 billion, trimming the net debt to EBITDA ratio by 20% to 3.6x over the last twelve months. The company attributes this deleveraging mainly to enhanced cash flow from disciplined working capital management and reduced capital expenditure.
Strategy Refresh Targets Additional $50 Million Savings
Following the appointment of Rico Christensen as CEO in January 2026, Nufarm is sharpening its strategic focus with a new cost savings program aimed at extracting an extra $50 million in annualised savings. These efficiencies will come from optimising asset footprint, manufacturing costs, and selling, general and administrative expenses (SG&A). Implementation costs are estimated at $15 million, primarily in FY27, with savings expected to ramp up progressively to full run-rate by the end of that fiscal year.
This move builds on the $50 million in run-rate savings achieved in FY25, which helped offset inflationary pressures during the first half. Christensen’s leadership, noted for operational rigor and global agricultural expertise, is clearly steering Nufarm towards stronger cash generation and debt reduction, complementing the company’s ongoing focus on financial discipline. His appointment was a significant event earlier in the cycle, marking a new leadership era for Nufarm.
Managing Inflation and Supply Chain Pressures
Despite ongoing challenges from rising costs of active ingredients, freight, and energy; exacerbated by geopolitical tensions in the Middle East; Nufarm reports positive trading momentum continuing into April. The company is managing these inflationary headwinds through disciplined inventory control and pricing strategies. Supply chains remain largely stable, and seasonal activity among growers is proceeding normally, even as they contend with higher fuel and fertiliser costs.
This financial update follows a period of significant transformation for Nufarm, which in FY25 saw strong crop protection growth alongside a strategic pivot in seed technologies and a substantial debt reduction effort. The current strategy refresh and cost savings initiatives appear designed to sustain this momentum and address legacy challenges in the seed segment.
Bottom Line?
Nufarm’s refreshed strategy under new leadership aims to deepen cost efficiencies and accelerate deleveraging, but investors will be watching how the company balances ongoing inflationary pressures with growth ambitions through FY27.
Questions in the middle?
- How effectively will Nufarm implement the $50 million cost savings without disrupting growth platforms?
- What impact will ongoing inflation and supply chain volatility have on margins beyond FY26?
- Will the strategy refresh lead to further portfolio rationalisation or market prioritisation in coming years?