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Melbourne-based crop protection and seeds company Nufarm (ASX: NUF) has reported a $165.3 million net loss after tax for FY25, mostly due to a strained market for its plant-based omega-3 alternative fish feed Aquaterra as prices fell for the competition - conventional fish oil.
Nufarm's shares plunged by more than 40 per cent in May after revealing a 71 per cent decline in earnings for its Seed Technologies business, prompting a review and expectations that the division - which includes Aquaterra - would see a 20 per cent reduction in EBITDA.
The company achieved its first contract deliveries of canola-based Aquaterra in 2021, presenting a "land-based" alternative to the aquaculture market to replace fish oil as a source of omega-3 in diets of farmed salmon.
Today Nufarm has revealed $142.4 million of predominantly non-cash material items resulting from the review of Seed Technologies and an associated performance improvement plan.
The statutory result for the 12 months to the end of September is in sharp contrast to the loss of $6 million for the previous financial year, although FY25 underlying EBITDA is only down 3 per cent at $302.5 million.
Excluding the impact of Nufarm's omega-3 and bioenergy platforms, underlying EBITDA was up 10 per cent and the group reported a record year for its turf and ornamental business in North America, record profit in Asia, a "material profitability uplift in Europe", and a $50 million run rate in cost savings.
Nufarm has also announced that longstanding CEO and managing director Greg Hunt, who has been in the role since 2015 and with the company since 2012, will step down on 1 January 2026 and be replaced by the group's group executive for portfolio solutions, Rico Christensen.
"Greg Hunt has been an extraordinary leader of Nufarm and is a highly respected and admired leader in the Australian business community and amongst his peers in the global crop protection and seeds industry," says Nufarm chair John Gillam.
"His tenure as CEO and managing director has seen Nufarm grow into a global company with valuable market positions and significant potential."
As he prepares to leave Nufarm, Hunt highlights the positive milestones achieved this year, including good progress on cost and working capital with a "significant reduction in net debt from the first half".
"Our crop protection business performed very well in FY25, with underlying earnings up 18 per cent and growth across all regions including a record performance in Asia and a material turnaround in performance in Europe," he says.
"We have a reprioritised strategy in Seed Technologies, with lower costs and capital requirements, a clear focus on growing hybrid seeds, expanding Bioenergy and reducing cash requirements for Omega-3.
"Net debt is below the level anticipated in our August update, a strong demonstration of our ability to deleverage through internal discipline and efficiency.
"In FY26, we have good momentum in Crop Protection, clear direction and opportunity in Seed Technologies and are well placed to grow earnings, generate cash and reduce leverage."
NUF shares are up 10.75 per cent in early trading at $2.37, although this level is still well below the $4 mark they were trading at prior to the review announcement in May.
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