Nufarm Limited posted a 35% rise in underlying net profit after tax to $52.1 million for HY26, driven by margin expansion and cost discipline despite a 5% revenue decline to $1.71 billion. The company confirmed its FY26 outlook, targeting strong earnings growth and leverage reduction.
- Underlying net profit after tax rises 35%
- Revenue declines 5% amid portfolio focus
- Margin expansion driven by Europe and Seed Technologies
- Net debt falls 10% to $1.23 billion
- Reaffirms FY26 outlook with $50m cost savings program
Profit Growth Outpaces Revenue Decline
Nufarm Limited (ASX:NUF) delivered a robust half-year performance for the six months ended 31 March 2026, with underlying net profit after tax (uNPAT) climbing 35% to $52.1 million despite a 5% revenue dip to $1.71 billion. This divergence reflects a strategic pivot towards higher-margin products and disciplined cost management, particularly within its Crop Protection and Seed Technologies segments.
The company’s underlying EBITDA (uEBITDA) rose 18% to $243 million, supported by a 370 basis point expansion in underlying gross profit margin to 33.1%. Europe and Seed Technologies were key drivers, with Europe’s uEBITDA up 19% on the prior corresponding period (pcp) and Seed Technologies more than doubling its uEBITDA to $58 million. The latter benefited from growth in Hybrid Seeds and a marked improvement in Emerging Platforms, including omega-3 canola developments.
Segment Performance Highlights and Strategic Partnerships
Crop Protection’s margin expansion was underpinned by a refined product mix and cost discipline. While APAC revenues fell 13% due to dry conditions in Australia and currency headwinds in Asia, North America saw an 11% uEBITDA increase in local currency, driven by Turf & Ornamental and Canadian markets. Regulatory delays tempered new product revenue in the U.S.
Seed Technologies continued to advance its repositioned strategy, with Hybrid Seeds growing uEBITDA by 7% on the back of strong demand for edible oils and renewable fuels, and new IMI-tolerant canola and sorghum varieties launched successfully. Emerging Platforms narrowed losses by $26 million, reflecting progress in omega-3 performance, including the first regulated omega-3 canola trial in Argentina and deregulation in Japan.
Nufarm also expanded its strategic partnership with bp, extending the carinata seed technology agreement to 2050. This milestone-based funding supports the scale-up of the carinata program, complementing bp’s ongoing oil purchase rights from the Nufarm Carinata Production System.
Balance Sheet Strength and Capital Management
Net debt decreased 10% year-on-year to $1.23 billion, reflecting improved earnings, tighter working capital management, and reduced capital expenditure, which fell 56% to $66 million in the half. Leverage (net debt to uEBITDA) improved by 20% to 3.6x, moving closer to the company’s target range.
Average net working capital as a percentage of sales improved 2.1 percentage points to 37.1%, driven by inventory reductions of $162.7 million and trade receivables down $184.9 million. The company’s revolving asset-based lending facility of $800 million remains in place until November 2027, supplemented by standby liquidity and amortising loan facilities.
In line with a new dividend policy emphasizing free cash flow and leverage targets, Nufarm declared no interim dividend for HY26.
Strategy Refresh and Cost Savings Initiatives
Nufarm’s refreshed strategy sharpens focus on capital allocation, cost discipline, and earnings quality. The company is reallocating capital towards higher-return markets within Crop Protection, selectively exiting lower-return assets, and pursuing innovation through external partnerships to reduce capital intensity.
The Seed Technologies business is prioritizing Hybrid Seeds and Emerging Platforms with disciplined investment aligned to returns. The strategy refresh includes a $50 million cost savings program announced in April 2026, targeting asset rationalization, operational efficiencies, and operating model changes. Implementation costs of approximately $15 million are expected mainly in FY27, with full run-rate savings by the end of FY27.
These initiatives contribute to a simpler operating model, improved working capital outcomes, and stronger cash generation, supporting the company’s outlook for FY26 and beyond.
Outlook Reaffirmed Amid Positive Momentum
Nufarm reaffirmed its FY26 guidance, expecting strong uEBITDA growth assuming normal seasonal and market conditions. Positive trading momentum continued into April and May, despite cost pressures from active ingredients, freight, and energy linked to Middle East instability.
The company targets leverage of approximately 2.0x net debt to uEBITDA by FY26 year-end and anticipates positive free cash flow supported by the seasonal unwind of working capital. Capital expenditure is forecast below $200 million.
Crop Protection is expected to continue uEBITDA growth, building on first-half momentum through margin improvements and cost savings. Seed Technologies anticipates strong uEBITDA growth from Hybrid Seeds and a $40 million improvement from Emerging Platforms, up from prior guidance, driven by the expanded bp partnership and omega-3 progress.
This half-year performance and strategic clarity come as Nufarm transitions leadership, with Rico Christensen appointed CEO and Managing Director as of 1 January 2026, succeeding Greg Hunt. Christensen’s operational focus and sector experience align with the company’s sharpened priorities and capital discipline approach, reinforcing investor confidence in Nufarm’s trajectory.
Investors will note the company’s ongoing balance sheet improvements and cost savings progress, building on the $50m strategy refresh announced earlier this year. The leadership transition to Rico Christensen, detailed in the CEO appointment announcement, underscores a new era focused on profitable growth and capital efficiency.
Bottom Line?
Nufarm’s HY26 results highlight a successful pivot to margin and capital discipline, but delivery of full $50 million cost savings and leverage reduction will be key to sustaining momentum.
Questions in the middle?
- How will currency volatility and geopolitical risks impact Nufarm’s FY26 performance?
- Can Emerging Platforms, particularly omega-3, achieve the forecasted uEBITDA turnaround?
- What are the risks and timelines associated with regulatory approvals affecting Crop Protection growth?