The Nufarm Limited (ASX: NUF) share price has been hammered on the ASX this morning. At the time of writing, Nufarm shares are down more than 17% today at just $5.06 per share.
So, why are the company’s shares under pressure and leading the ASX 200 losers today?
Why the Nufarm share price has taken a hit today
The Nufarm share price is under pressure after releasing a half-year earnings announcement this morning.
Nufarm cited difficult trading conditions for FY20 and lowered its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast.
High channel inventories and “substantially lower” demand in North America were big factors behind weak earnings.
Nufarm expects its first half 2020 EBITDA to be “significantly lower” compared to last year. This includes first quarter EBITDA figures down $20 million on 1H 2020 numbers.
The Nufarm share price crashed 13% lower in March 2019 after the company’s half-year 2019 result. Underlying EBITDA was down 1.9% to $120.9 million in March despite 8% revenue growth during the half.
Nufarm is expecting the majority of its first-half earnings to come from the second quarter. It also said first half EBITDA is expected to be “significantly lower” compared to its 1H 2019 numbers, without providing specific guidance.
How has Nufarm performed in 2019?
It’s been a tough year for Nufarm shareholders and this morning’s declines have tipped the Nufarm share price into the red.
Nufarm is trading at $5.06 per share, having started the year 13.53% higher at $5.84 per share.
The company still boasts a market cap of $1.9 billion but trades at a whopping 68.54x price-to-earnings multiple.
This year, the Aussie agribusiness company has faced domestic drought conditions and negative sentiment from the ongoing Monsanto lawsuits overseas.
But it hasn’t all been bad news. The Nufarm share price rocketed 45.74% higher in the space of 2 days back in late September after announcing the sale of its South American crop protection and seed treatment operations.
Nufarm today said that the sale process is continuing, which is subject to shareholder approval on 5 December and relevant regulatory approvals.
The post Why the Nufarm share price has plummeted 18% today appeared first on Motley Fool Australia.
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