Shares of global crop protection manufacturer Nufarm Limited (ASX: NUF) have jumped almost 5% today following the release of its earnings results for the half-year ended 31 January 2015. Late in the session, the stock was trading at $6.79, representing a gain of 4.8% or 31 cents per share.
So What: Despite 'challenging' conditions in two of its major markets, being Australia and Brazil, Nufarm managed to lift its first-half profits by 41% to $26.5 million, compared to the prior corresponding period, on the back of a 4% rise in revenues to $1.18 billion and a 12% increase in underlying earnings before interest and tax (EBIT) to $63.4 million.
On a statutory basis, net profit after tax (NPAT) rose 23% to $23.1 million, impacted by a $3.3 million expense associated with restructuring and asset rationalisation during the period. Earnings per share rose 64% to 7.7 cents, while the company also managed to increase its interim dividend by 33% to 4 cents per share (unfranked).
Now What: Following on from a disastrous run between 2008 and 2014, shares of Nufarm have bounced strongly since the beginning of the year, and there are reasons to suggest that trend could continue.
As is the case with other food manufacturers such as Bega Cheese Ltd (ASX: BGA) and Bellamy's Australia Ltd (ASX: BAL), Nufarm is well positioned to benefit from a growing global population base (where demand for quality foods will only increase). At the same time, it is also focused on reducing its cost base and working capital. Should it succeed in these initiatives, the next 10 years could be far brighter than those just gone by.
An even better bet than Nurfarm Limited
