Nufarm hits 52 week low without much effort.

My guess would be due to the headlines about El-Nino being more likely with less rainfall.

I still see Orbis (Allan Gray) and L1 Capital still large holders. Perhaps they still hold faith that Nufarm can still deliver the large revenue target for FY26

Also State Street has increased holding perhaps to hand out stock for short sellers

Given the situation, not going to average down here.

[held]

Firstly Norway is the biggest salmon aquaculture producer in the world

Getting the approval from Norway is significant for Aquaterra as it means big dollars to Nufarm. Unfortunately Nufarm has not communicated clearly on the revenue numbers. So the only way to look at is the most recent investor slides to get a good idea of the market opportunity.

Let us assume that most of the Aquaterra sales are coming from Chile and a minority from North America.

From the 1st chart on Salmon production, there is obviously a large opportunity to capture some meaningful revenue when comparing Chile and North America (USA and Canada) with Norway.

With the drive to replace smaller fish feed (ie: sardines etc.) with something more sustainable and easier to produce, Nufarm could be well placed in generating lots of revenue, particularly in Norway.

Yes it is a recession and Yes people can forgo nutrition for days. But Aquaterra is a new market opportunity that could displace normal sources of fish feed for aquaculture.

And also rains appear to have returned to the American wheatbelt. Maybe Nufarm can start runninig down their inventory in USA

The selling is well overdone. Aquaterra could potentially the peaks and troughs of other areas and give Nufarm some much needed consistency in earnings.

Topped up on the morning dip before the late buying in the afternoon.

[held]

Probably not the update I was looking for on North America but will accept it nonetheless. I have a feeling everyone was looking for an update on the impact of drought in North America like myself..

Norway approves Aquaterra Omega-3 oil for use in aquafeed

[held]

Nufarm has underperformed of late so I went back to the call transcript:

However I think the market begs to differ. Was reading that North America crop regions is still experiencing drought conditions which is bad for corn and soy and would make it hard to clear out inventory.

U.S. Midwest Drought Expands

No update from Nufarm on the above and seems every other broker is silent - but personally I think the brokers know and have already formed their top down thesis for Nufarm without telling anyone judging by the price action.

Not tempted to average down. More of a hold at this point given the above situation which is hard to control and is tax loss selling but also not good that Nufarm has not disclosed anything about the drought. But if they say tomorrow that we have a problem in America then that is a big tick the management is aware. Either way this could mean a delay to Nufarm's long term revenue plan and I still remember the livewire articles touting the massive revenue growth story.

On the other hand, Hostplus Super just became substantial holder and have been big buyers along with Allan Gray.

[held]

Finally have a good news cyclical agricultural story.

Nufarm released results and comfortably beat expectations sending the share price rallying 14%.

EPS came above consensus and dividend up from 4 to 5 cps.

Sales down but still above analyst consensus. Nufarm is reiterating their aim of growing revenue to $4.6B pa by FY26

Working capital and inventory for America would be the only negative but they expect that will be drawn down next period. Also the debt growth is another negative.

The ones who sold yesterday would be having a pretty bad day today.

To be fair to those that sold yesterday, today's trading doesn't make trend.

And probably no one expected anything special given the results from Elders and Incitec Pivot

[held]

Nice to see CEO Greg Hunt buying a fair chunk on market

I guess he is still confident on hitting those ambitious revenue forecasts.

[held]

Similar to ELD, NUF price have also underperformed

Like Elders, estimates on factset are also on the soft side.

[held]

Bit of FOMO happening here although the GICs sector that Nufarm is a part of is rallying quite well.

Apparently Nufarm is a chemical company even though they serve the Ag sector

Anyone brave enough to top up at the lows when Sumitomo Chemical sold out deserves a pat on the back although they were also underperforming too.

The fact debt hasn't reduced much is a bit worrying unless there is massive growth on the horizon (see previous straw)

[held]

Nufarm's results came in at a beat with a positive outlook up to FY26.

Increasing the dividend but not sure if that's a good idea given the debt is 0.8x of EBITDA.

I would have kept dividend flat and pay off the debt unless they are bullish about growth prospects going forward which is hard to see given some of the extreme weather events having a negative impact on agriculture overall.

Still holding considering the previous on market purchase from the CEO during the selldown from Sumitomo where no participated in the bookbuild.

[held]

Sumitomo Chemical sold their 15% stake in Nufarm via bookbuild which they bought at a high of $14 at a loss.

https://www.afr.com/street-talk/sumitomo-calls-time-on-painful-12-year-investment-at-nufarm-20220523-p5anut

Had a look at Sumitomo Chem's share price and that doesn't look so hot either.

Quite unexpected for me but it seems institutions secretly knew about this long back.

At the same time, Director Gregory Hunt bought back some on market.

Held

The most likely reason Nufarm got sold off yesterday was that most of the sales were brought forward for first half of FY22.

So FY22 numbers will be more weighted towards the first half than the second half in contrast to FY21

Obviously this implies lower earnings for the 2nd half of FY22 versus 2nd half FY21.

I probably should have read the announcement more carefully. But at least there is some guidance - unlike many of the others out there not releasing anything.

Long term they are still aiming for 4billion in revenue by FY26.

Nufarm released its results today. Shares however were down 8%.

The only miss I could find is the dividend came under at 4 cents versus 6 cents (bottom row in the picture)

Not sure what to make of this. Hoping someone has thoughts on what the estimates on the other numbers were versus actual as it seems overall it was a beat.

Firetrail investments has ceased to be substantial holder - 17/5 announcement

Allan Gray has been reducing their holding in Nufarm to 9.8% - 4/5 announcement

Probably explains the relentless selling the last couple of weeks.

Held

Ukraine & Russia business update

Nufarm Limited (ASX: NUF, Nufarm) provides the following update regarding Nufarm’s businesses in Ukraine & Russia.

Managing Director and CEO Greg Hunt said, “Nufarm has nascent operations in both Ukraine and Russia and our first priority has been to ensure our people in both countries are safe and supported.

“Secondary to the safety of our people, we are focused on ensuring the security of supply for our customers and continue to monitor developments closely and prepare accordingly. Food security is a fundamental human right and Nufarm plays a part in ensuring growers can access the products they need to support global and local food supply.”

The FY21 contribution to underlying EBITDA from both countries combined was not material.

Nufarm is taking a prudent approach to assessing the recoverability of its inventory and receivables and associated assets held in both Ukraine and Russia. The total maximum exposure in terms of inventory and receivables held in both countries is less than 2% of total Group inventory and receivables.

Given the current uncertain situation in the region, Nufarm expects to raise a provision in the range of $30 million to $40 million, pre-tax. Any provisions raised are expected to be non-recurring and to be reported as a significant item. Hence, any provision would not impact underlying EBITDA. Any provisions raised are subject to external audit procedures as a matter of course.

1H22 earnings update

Nufarm expects to report underlying EBITDA of between $320 - $340 million for the first half of 2022 (1H22).

Mr Hunt said, “Nufarm has seen strong demand and increased revenues for our crop protection and seed products during the first half. This is a result of the soft commodity prices and favourable trading conditions in each of the regions we operate in, our strategic initiatives and the investments we have made in our portfolio. This is consistent with the positive outlook highlighted at our investor day in February.”

Nufarm notes that there continues to be uncertainty and volatility in relation to active ingredient pricing, global supply chain and logistics challenges. This uncertainty has contributed to an increase in forward sales in the first half.

Nufarm, therefore, anticipates that underlying EBITDA in FY22 is likely to be more skewed to the first half of the financial year than was experienced in FY21.

Nufarm will provide further details on the 1H22 result and outlook for FY22 as part of our half year results announcement briefing on 19 May 2022.

Taken from https://nufarm.com/announcements/ukraine-russia-business-and-1h22-earnings-update/