Nufarm rises on China hopes

Pesticide maker Nufarm has flagged its third profit downgrade for the year but the poor outlook did not dent investor enthusiasm as the shares soared on expectations it was closer to clinching a deal with Chinas Sinochem.

Nufarm revised down its full-year profit by at least 22 per cent to between $135 million and $145 million for the year ended July 31 against estimates just two months ago for a result closer to $185 million, The Australian Financial Review says. In January it had been guiding for full-year profit of $220 million.

Nufarm managing director Doug Rathbone told The Australian Financial Review this was a continuation of what was said in July.

"We said at that time when we had better knowledge of our position we would advise the market," he said, adding, "2009 has been a tough year and we are looking forward to this year being in an improved position."

The Melbourne-based company, which counts Round-Up among its crop protection brands, blamed a big fall in the price of its leading pesticide glyphosate in the US in the past two months as well as weaker sales volume. A major reason for the downgrade was because Nufarm expects to book write-downs of as much as $55 million and expects its glyphosate inventory will make up between $35 million and $40 million of that amount.