takeover confirmed smh & fin, page-16

Nufarm posts fall in annual profit, expects better
September 28, 2009 - 9:30AM

Agricultural chemicals supplier Nufarm Ltd has posted a drop in full year net profit but says it expects to increase profitability in the current financial year.

Nufarm reported a 42.1 per cent drop in net profit to $79.877 million for the year ended July 31.

The company's net profit excluding material items was down 2.6 per cent at $159.632 million.

The significant material items related to adjustments associated with the company's glyphosate business.

Nufarm said it expected market conditions to improve in the current financial year.

"While market conditions remain challenging in certain areas of the company's business, management expects to see growth in group profitability in the 2010 financial year, with an improved operating environment in Brazil; a more competitive position in glyphosate; and continued revenue and margin expansion across other product positions being the major contributors to that growth," Nufarm said.

Meanwhile, Nufarm said China’s Sinochem Corp was working on an acquisition proposal by which it would acquire all of the issued ordinary shares in Nufarm for $13.00 per share, valuing the company at about $2.8 billion.

Nufarm shares closed on Friday at $11.14.Melbourne-based Nufarm said it would work with Sinochem until December 3 on an exclusive basis to negotiate a transaction implementation agreement.

The company said if an agreement is executed, the Nufarm board intends to unanimously recommend the proposed acquisition.

Nufarm said the results for the financial year just ended reflected a very challenging second half for the company.

Its glyphosate business suffered a sharp decline in profitability due to a range of issues that negatively affected all the world’s leading glyphosate suppliers in the final quarter of Nufarm’s financial year.

Nufarm’s revenue was down seven per cent to $2.68 billion and operating earnings before interest and tax (EBIT) were down 44 per cent to $151 million.

Nufarm declared a final dividend of 15 cents, taking the total dividend for the year to 27 cents, compared to 35 cents a year earlier.

AAP