Nufarm shares sink after warning of 'challenging' first half

The news: Shares in agricultural goods company Nufarm dropped after it warned shareholders of a "challenging" first half of FY24, saying this has "proven to be the case" over the first quarter.

The numbers: At its annual general meeting on Wednesday, Nufarm CEO Greg Hunt said the group expects to return to growth in the second half of the financial year. Hunt also confirmed the Melbourne-based company is on track to record $50-70 million of revenue from Omega 3 sales this financial year. Nufarm shares sank more than 7% in early trading following the update.

The context: Hunt told shareholders that the broader industry has continued to deal with an overhang of inventory and higher cost of goods, pressuring the company's margins. However, recent rainfall levels across the East Coast are expected to lead to increasing demand for Nufarm's crop protection products in the second half, with improved prospects for the winter crop season. Meanwhile, the company experienced improved North America sales volumes ahead of the spring cropping season, albeit at lower margins.