In morning trade, the Nufarm Ltd (ASX: NUF) share price is storming higher following the release of its half year results.
At the time of writing, the agricultural chemicals company's shares are up 5% to $5.15.
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How did Nufarm perform in the first half?
For the six months ended 31 March, Nufarm reported revenue of $1.65 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $233.6 million. This represents an increase of 20% and 118%, respectively, over the prior corresponding period.
Things were even better on the bottom line, with the company swinging from a $122 million half year loss in FY 2020 to a $59 million half year profit in FY 2021.
Management advised that the significantly improved result reflects revenue and EBITDA growth in all regions and Seed Technologies, with particularly strong growth in APAC and Europe. In addition to this, the successful execution of its ongoing Performance Improvement Program initiatives is also contributing to its earnings growth.
However, despite the rebound in its performance, the Nufarm board has decided not to declare an interim dividend. Though, a review of capital management principles will be finalised by the end of 2021.
Nufarm's Managing Director and CEO, Greg Hunt, said "Strong early demand and channel restocking in key markets has delivered a very strong first half result. We are realising benefits from the leverage of our APAC business to improved seasonal conditions and the earnings recovery in our European business is on track."
"Our North American and Seed Technologies businesses are delivering good growth, with currency translation impacts somewhat masking the true underlying performance of our North American business. Earnings growth and improved working capital management is driving cash generation and our balance sheet is strong," he added.
Outlook
One thing that could be holding back the Nufarm share price slightly today is management's outlook for the remainder of FY 2021.
It has warned that its FY 2021 earnings will be significantly weighted to the first half. Therefore, investors shouldn't expect its strong growth to be repeated over the next six months.
Mr Hunt explained: "We have delivered a strong first half result and momentum has continued into the second half, however this has not altered our expectations for the full year. We remain very focused on our key objectives of growing volumes and revenue; improving margins; generating more cash; and delivering stronger returns for shareholders."
