Agricultural chemicals and seeds supplier Nufarm has lifted its first half underlying earnings guidance, although currency movements and writedowns will curtail profit.
Nufarm, which also announced writedowns after dropping some less profitable products, now expects a rise of eight to 13 per cent in underlying earnings before interest and tax (EBIT) after a strong trading performance in January.
In December, the company said it expected underlying first-half EBIT to be in line with, or ahead of, last year's first six months.
But, it said on Tuesday, after tax underlying profit will be about $15 million lower, mainly because of foreign exchange losses, with currencies in South America having been extremely volatile.
Nufarm said contributions from its operations in Australia and Brazil usually dominate the first-half results.
Despite challenging conditions in both markets, Nufarm overall was lifting its margins and earnings.
It said measures taken under its performance improvement program were also boosting earnings.
For the full year, Nufarm is forecasting underlying earnings growth and expects to deliver at least $20 million of benefits from the performance improvement program.
It hopes to deliver at least $116 million in improvements in full year 2018 after completing a review of its manufacturing facilities and product portfolio.
Focusing on higher-profit products for select crops and key markets, Nufarm has discontinued some lower-margin and non-strategic products and written down their asset values by a total of $80 million to $90 million.
Nufarm also said its half-year accounts would incur $9.5 million in one-off costs related to the closure of its Calgary plant in Canada, $17 million in costs related to manufacturing efficiency initiatives, and $9 million in other restructuring costs.
Nufarm reports its first-half results in March.
It shares were up 32 cents, or 4.67 per cent, at $7.17.