Agricultural chemical supplier Nufarm continues to lean on its overseas businesses as the eastern Australia drought dries out local income, but managing director Greg Hunt insists geographic diversification has the company on track for full-year growth.
Mr Hunt told shareholders at the annual general meeting on Thursday the 2018 Australian winter crop is expected to fall 20 per cent below the two-decade average, with eastern states’ forecast alone about 40 per cent lower.
But the company said it has grown revenues and underlying profit in both North America and South America, while its newly acquired product portfolios in Europe were performing well despite also being hampered by dry conditions.
Nufarm shares spiked at Thursday’s open but fell 1.46 per cent to $6.09 at 1305 AEDT, down from an eight-year high of $9.74 before the onset of the east coast drought in April 2017.
‘We are confident the changes and improvements we have made to the business and the growth platforms we have developed will continue to generate increased value for shareholders,’ Mr Hunt said in his speech.
Assuming average seasonal conditions, Mr Hunt said he expects 2019 underlying earnings to be in a range of $500 million to $530 million, well up on the $386 million generated in 2018.
He said broader market conditions will remain challenging, impacted by soft commodity prices and strong competition, but geographical diversification and product range will generate consistent growth for the company.
Shareholders voted overwhelmingly in favour of the company’s remuneration report.