Nufarm has slumped to a $15.6 million full-year loss on the back of $91.5 million in drought-related impairments, and the cost of acquiring crop protection products from Europe.
The agricultural chemical supplier’s revenue increased 6.3 per cent to $3.31 billion, growing in every region except for Australia and New Zealand.
Australia’s severe drought dragged down sales in the local business nearly 10 per cent to $590.1 million.
“The major driver of the lower profit outcome was the drought here in Australia, with conditions in large and important growing regions in the eastern states being the driest on record for around 100 years,” he said on Wednesday.
WA will deliver close to a record harvest after healthy winter rains, but the drier season in the east has extended into the spring, which Nufarm says severely limited sales of its higher-value weed killer.
Large parts of Queensland and New South Wales have been declared drought affected, with crop production expected to be 30 to 40 per cent down on a year earlier.
European sales increased 19 per cent to $642.6 million, boosted by the acquisition of product portfolios from FMC Corporation, Adama and Syngenta.
The company recorded $22.2 million in acquisition costs.
Nufarm expects 2018/19 underlying earnings of between $500 million and $530 million – up from $385.7 million – but this relies on the drought easing.
“Key drivers will be continued revenue growth both in North and South America, the full-year forecast from our European acquisitions and a partial earnings recovery in Australia on the back of return to more normal seasonal conditions for the winter cropping season,” Mr Hunt said.
The company will pay an unfranked dividend of six cents per share, down from eight cents in 2017.
Nufarm shares last traded at $6.40 before entering a trading halt on Tuesday pending a capital raising.
They were worth $9.52 four months ago.
DROUGHT PUSHES DOWN NUFARM PROFIT
* $15.6m loss v $114.5m profit in pcp
* Revenue up 6.3pct to $3.31b
* Final dividend down two cents to eight cents, unfranked