Those invested in Nufarm Ltd (ASX: NUF) shares are likely having a good morning after the S&P/ASX 200 Index (ASX: XJO) crop protection and seed technology company upped its final dividend by 50%.
That leaves its financial year 2022 (FY22) full-year dividends 150% higher year-on-year at 10 cents per share.
The stock opened with a 1.2% lift that saw it trading at $5.60 before soaring to a current high of $5.93.
Right now, the Nufarm share price has eased slightly to trade at $5.89, marking an 8.67% increase.
ASX 200 share soars alongside its dividends
Here are the key takeaways from the ASX 200 company's full-year earnings:
- Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 24% year-on-year to $447 million
- Revenue rose 17% to $3.8 billion
- Statutory net profit after tax (NPAT) soared 65% to $107.4 million
- Unfranked final dividend of 6 cents – up 50% on financial year 2021's 4-cent final dividend
Nufarm's final dividend, combined with the 4-cent interim dividend it announced in May – its first interim dividend since 2018 – saw it offering 10 cents per share over FY22.
The company's underlying NPAT also more than doubled last fiscal year – reaching $133.2 million.
It ended FY22 with $346 million of net debt and $863 million of net working capital.
What else happened in FY22?
Let's take a closer look at the results driving the ASX 200 share higher on Wednesday.
Nufarm's APAC segment posted. a 21% increase in underlying EBITDA, coming in at $135 million despite battling supply chain challenges in FY22.
Its North America business did even better. Its underlying EBITDA rose 42% to $148 million amid higher sale prices and strong demand for crop protection products.
Looking to Nufarm's European business, underlying EBITDA remained steady at $171 million as sales improved and regulatory headwinds took their toll.
Finally, the company's Seed Technologies business saw its underlying EBITDA lift 26% to $59 million. That was driven by demand for Nuseed's hybrid canola varieties, sorghum, and sunflower.
What did management say?
Nufarm managing director and CEO Greg Hunt commented on the company's full-year earnings, saying:
This result reflects the hard work we have done over recent years to reset the business, our focus on core products and key geographies together with our increased investment in innovation and sustainability.
Favourable seasonal conditions and attractive soft commodity prices generated strong demand for our seeds and crop protection products. Our seeds business continued to increase earnings as a result of strategic investments in innovative technologies.
We made significant progress on all our strategic growth initiatives across omega-3, bioenergy, seeds and crop protection; and we have a promising pipeline of opportunities.
What's next?
Nufarm didn't provide any solid FY23 earnings guidance today. Though, Hunt did reveal that "assuming normal seasonal conditions", the ASX 200 share expects to post modest underlying EBITDA growth this fiscal year. So far, conditions have remained favourable.
Looking further forward, however, the company is on track to grow its revenue to more than $4.6 billion in FY26. Hunt said:
Our revenue growth aspirations are supported by macro trends including the increasing demand for food from a rising global population, and the demand for sustainable agricultural practices to increase land productivity.
Nufarm share price outperforms ASX 200 in 2022
Today's gain included, the Nufarm share price has lifted 20% year to date. It's also trading for 17% more than it was this time last year.
For comparison, the index has fallen 6% in 2022 and 4% over the last 12 months.
