Nufarm sees jump in first half profit

Agricultural chemical maker Nufarm says it is well positioned for the financial year following a first-half profit increase of 23 per cent.

AAP reports that the company’s interim net profit for the six months to January 31 was $23.1 million. This lifted the unfranked dividend from three cents to four cents a share.

The result was helped by good weather conditions in Australia. In addition, expected improved weather conditions in the US are also likely to boost the company’s performance.

Nuframs’ sales and earnings tend to increase in the second half of each year because these are when the major crop seasons take place in Australia, North America and Europe.

As The Land reports, the company has been hard hit by draught in Australia over the past two years and it has put a cost-cutting program in place.

It has embarked on a restructuring of its Australian and New Zealand manufacturing operations which will see six production sites reduced to three and are expected to result in savings of $16m.

Manufacturing at the Welshpool site in Western Australia came to an end late last year and the plants at Otahuhu in New Zealand and Lytton in Queensland are expected to shut before the end of the 2016 financial year.

In addition, Nufarm plans to restructure its European manufacturing operations.

The changes, which are estimated to result in annualised cost savings of at least $23m, will take place over the next 18 months. They include the closure of a manufacturing facility in Botlek in the Netherlands which is likely to see about 50 employees lose their jobs.

In addition, the company plans to initiate efficiency programs at its manufacturing facilities in Wyke, England and in Gaillon, France.