After a heavy loss in 2015 because of major restructuring, crop protection company Nufarm (ASX: NUF) has swung to profit for the six months to December 31.
The Brisbane-based agricultural chemical company booked net profit after tax of $20 million, after a loss of $91 million from the same period in 2015 which was mostly due to more than $100 million in restructuring charges.
The company's underlying earnings rose 67 per cent to $19.8 million as total revenue increased 15 per cent to $1.36 billion.
Nufarm CEO and managing director Greg Hunt said the company was finally benefitting from the structural changes which have been ongoing for the past 18 months.
"With the benefits of our cost savings and performance improvement program, together with new product launches and improved customer relationships I'm confident the business will continue to generate profitable growth," Hunt said.
In releasing its results, Nufarm said a subdued global crop price had put pressure on both demand for and pricing of farming inputs but forecast improved earnings growth for the full year if normal seasonal conditions are experienced in the major cropping regions.
"We expect the global crop protection market to remain very competitive, with low soft commodity pricing prevailing due to the strong crop harvests in most key cropping regions," Hunt said.
Revenue growth was achieved across all of Nufarm's regional crop protection businesses with the exception of Europe.
The company approved a 25 per cent increase in the half year dividend which will be 5 cents per share which is payable on May 5, 2017.
At 2pm AEST, NUF shares were up just over 4 per cent to $9.78 a share, a five-year high.
Business News Australia
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