It hasn't been a great start to Wednesday's session for Nufarm Ltd (ASX: NUF) shareholders.
The agricultural chemicals company's share price has fallen 8.44% to $2.93 in late morning trade following an update on its FY26 performance.
The stock has traded as low as $2.90 today, compared with Tuesday's closing price of $3.20.
Interestingly, the selling comes despite Nufarm forecasting strong earnings growth and an improvement in its balance sheet.
So, what exactly did the company announce today?
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Earnings are heading higher
According to the release, Nufarm expects FY26 underlying EBITDA to come in between $370 million and $380 million.
At the midpoint, that's around 25% higher than last year, which is a pretty decent result considering the challenges facing the business.
Much of that growth should come from its Seed Technologies division, with Hybrid Seeds and Omega-3 both performing well.
Crop Protection hasn't had quite the same run, with earnings expected to be broadly flat compared with last year.
The company said it has been dealing with currency headwinds, manufacturing disruptions, and softer conditions in North America, which haven't helped.
But there was some good news on the balance sheet.
Nufarm expects leverage to fall to around 2 times by 30 September, compared with 2.7 times a year ago.
So, why are the shares falling?
Well, there is one figure in today's announcement that can help explain the selling.
Nufarm expects to recognise between $90 million and $110 million in material items after tax during FY26.
These costs are primarily non-cash and relate to the company's ongoing restructuring and strategy changes.
They include costs associated with the planned closure of its manufacturing facilities in Kwinana, Western Australia, and Alsip in the United States.
While these charges won't affect underlying EBITDA, they will still weigh on Nufarm's reported statutory profit.
And this isn't the first year shareholders have had to deal with restructuring costs.
In FY25, the company reported a statutory net loss of $165.3 million, which included $142.4 million in predominantly non-cash material items.
What's next for Nufarm shares?
Looking ahead, Nufarm is sticking with its plan to simplify the business and bring costs down.
The company is targeting $50 million in annual cost savings by the end of FY27, with several initiatives already underway.
Management will be hoping these changes help improve profitability over the next couple of years, especially given the costs involved in restructuring the business.
The next big date for shareholders to pencil in is 19 November, when Nufarm is due to release its full FY26 results.
