Nufarm (ASX: NUF) has reported a strong first half of FY26, with underlying net profit after tax up 35% to A$52.1 million and underlying EBITDA up 18% to A$242.7 million.
Crop Protection was up 3% and Seed Technologies also up significantly, while the underlying gross profit margin improved 3.7 percentage points to 33.1%, reflecting a better product mix and disciplined cost management.
Net debt fell 10% to A$1.23 billion as at 31 March 2026, with leverage cut to 3.6x (net debt to underlying EBITDA for the 12 months to 31 March 2026), representing a 20% improvement year-on-year.
Free cash flow improved by A$193 million compared to the prior corresponding period, despite a seasonal outflow in the first half.
Strategy Refresh and Cost Savings
An additional $50 million gross cost savings program was announced in April 2026, targeting its full run-rate by the end of FY27.
Cash implementation costs of around A$15 million are expected, primarily in FY27.
Portfolio rationalisation and site optimisation, including plant closures such as the Wyke Butyrics manufacturing unit and Kwinana site, are currently underway to improve efficiency.
Nufarm maintains its FY26 guidance for underlying EBITDA and leverage, targeting net debt to EBITDA leverage of approximately 2.0x by the end of FY26, a reduction from 2.7x in FY25.
Capital expenditure is forecast to remain below A$200 million for FY26, supporting stronger cash generation.
Segment Performance Drivers
Seed Technologies EBITDA grew substantially to A$58 million (compared to A$27.3 million in the prior period), primarily due to Hybrid Seeds and improved Emerging Platforms, which saw its loss narrow to A$4.0 million.
Europe Crop Protection showed strong growth, with uEBITDA up 19% (or 17% in local currency), driven by a better product mix and lower operating costs from its performance improvement program.
Emerging Platforms, including omega-3 canola and carinata, progressed with regulatory milestones such as Japan consumption deregulation for omega-3.
An expanded strategic offtake agreement with bp for carinata has been extended to 2050.
Nufarm's Path to Profitability and Deleveraging
Nufarm has delivered a robust first-half performance, exceeding expectations with significant profit growth and demonstrable progress in reducing its debt levels.
The company's reaffirmed FY26 outlook, underpinned by a strategic cost-saving program and disciplined capital management, suggests a positive trajectory towards its leverage targets.
