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Nufarm expects 15% EBIT rise for FH13

Pesticide company Nufarm expects earnings to rise 15 per cent in the first half of fiscal 2013 due to a stronger performance in South America and an improvement in Europe.

Chief executive Doug Rathbone told the company's annual general meeting that earnings before interest and tax was expected to be up 15 per cent for the first half of fiscal 2013, compared to the previous corresponding period.

"Looking ahead, our first half results will benefit from the strong performance of our South American operations and an improved outcome in Europe, which will more than offset what is likely to be a weaker first half result in Australia," he said.

The Australian market was currently behind where it was the same time last year due to a late winter and a dry spring, leading to low demand for crop protection for wheat farmers.

He said more rain would also be needed over summer to increase demand for Nufarm products.

"Summer cropping activity, which is concentrated in Queensland and Northern NSW, is now under way and, while water storage levels are adequate to support irrigated crops in those regions, further rainfall is needed to generate stronger demand for industry products, due to the current low levels of insect pressure and fungal disease," he said.

"Rains are also needed to boost demand for summer weed control."

But he said the business had performed very strongly in Brazil where both sales and profit are up significantly, compared to the first half of fiscal 2012.

The European business was also improving with sales up in France, Germany and parts of Eastern Europe as well as more favourable autumn seasonal conditions.

Mr Rathbone said the company had also started restructuring its European business and had improved its product development co-ordination and marketing in the region.

Nufarm chairman Donald McGauchie also told the meeting that the company decided to settle a shareholder class action last month for $46.6 million, without admitting liability, because they wanted to focus on the company's strategic growth plans.

More than 700 shareholders had bought the class action against Nufarm, claiming its 2010 profit forecast was excessively positive and misleading.

"In the end, we decided that settlement of the matter was the best outcome for shareholders and we are pleased to put this matter behind us in order that we can be fully focused on the growth of the business," he said.

Nufarm closed down five cents at $5.62.