Fitch rates Nufarm BB

Fitch Ratings said it assigned Nufarm Ltd. a first-time long-term issuer default rating of BB.

“Nufarm is among the 10 largest crop-protection chemical companies globally, operating in the post-patent segment where product patents have expired. Nufarm also has a small but fast-growing global commercial seeds business. The industry has high barriers to entry and Nufarm's operations provide adequate geographical diversification. Nufarm's rating also factors in its reliance on external suppliers for a large majority of raw material needs and a product portfolio skewed towards herbicides,” Fitch said in a press release.

The agency noted that leverage fell materially in the financial year ended Sept. 30, 2021, driven by higher EBITDA on improved weather conditions, healthy prices and cost reduction.

The sale of Latin American businesses in 2020 for A$1.3 billion also helped lower debt. Fitch said free cash flow also turned positive in FY21, helped by improved working capital management. “We expect Nufarm will maintain leverage in total debt/EBITDA terms at below 3.5x, or near the lower-end of its own target range of 1.5x-2x.”

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.