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Crop sciences group Nufarm (ASX: NUF) has posted a 28 per cent rise in statutory net profit after tax to $38 million for the half year, with underlying NPAT climbing 35 per cent to $52 million, but Australia emerged as the clear weak spot in an otherwise strong global performance.
Group revenue for the six months to the end of March dipped 5 per cent to $1.71 billion while underlying EBITDA jumped 18 per cent to $243 million, driven by margin expansion across crop protection and a sharp turnaround in the company's seed technologies division.
Free cash flow improved by $193 million year-on-year, helping Nufarm cut net debt 10 per cent to $1.23 billion and pull leverage down to 3.6 times from 4.5 times in the prior corresponding period.
However, the contrast between the Australian performance and the rest of the world is stark.
Nufarm's Asia-Pacific crop protection division delivered underlying EBITDA of $55 million, down 15 per cent, primarily due to dry weather conditions across key Australian cropping regions.
Europe surged 19 per cent to $113 million in underlying EBITDA, while North America grew 11 per cent in local currency terms, making Australia a clear outlier against the group's international momentum.
The seed technologies segment provided the biggest earnings swing, with underlying EBITDA more than doubling to $58 million from $27 million in the prior corresponding period.
The outlook for Australian agricultural conditions remains uncertain with the Bureau of Meteorology's latest ENSO tracker flagging a likely transition to El Niño during winter, a pattern typically associated with below-average rainfall across eastern Australia.
That shift could compound the dry-weather headwinds that already weighed on Nufarm's domestic crop protection volumes in the first half.
In Europe, Nufarm says it benefited from strong demand across its herbicide, insecticide and fungicide portfolios, while North American growth was underpinned by increased penetration of omega-3 canola and continued strength in crop protection volumes.
"We are pleased with first half performance and are well placed to deliver strong growth in underlying earnings and a significant reduction in leverage for the full year, consistent with previous guidance," says Nufarm CEO Greg Hunt.
"We have made clear progress on the priorities we set in November last year, delivering earnings growth, improved cash flow and a reduction in leverage.
"The benefit of our increased strategic focus is visible in the margin improvement in Crop Protection and significant uplift in earnings from our Seed Technologies business.
“Our strategy refresh is focused on higher-value markets and products and capital efficiency, supporting stronger cash generation, lower capital intensity and continued deleveraging.”
Nufarm has reaffirmed its full-year FY26 guidance, targeting underlying EBITDA growth and leverage of about 2.0 times by year-end.
The company also announced an additional $50 million cost savings program in April to further support earnings and cash generation.
No interim dividend has been declared for the latest half-year result.
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