Nufarm Ltd.

The stable outlook reflects our view that Nufarm's region-specific performance improvement initiatives and improving working capital management will help to maintain its S&P Global Ratings-adjusted debt-to-EBITDA ratio comfortably below 4.5x. We also expect Nufarm to generate meaningful positive free operating cash flow from fiscal 2022 and maintain adequate liquidity at all times. We could lower the rating if Nufarm is unable to maintain its adjusted debt-to-EBITDA ratio below 4.5x. Downward rating pressure could also occur if the company sustains negative free operating cash flow or its liquidity deteriorates during the next 12 months. This could result in weakening trading performance and working capital management. We could raise the rating if we expect Nufarm to sustain its adjusted debt-to-EBITDA ratio below

...Improving climatic conditions and stable crop demand in Europe and Australia should underpin Nufarm Ltd.'s earnings growth in the new fiscal year ending Sept. 30, 2021. Favorable climatic conditions across Europe and Australia lifted Nufarm's revenue above fiscals 2019 and 2020 levels for the first half of fiscal 2021. Despite ongoing COVID-related supply chain and currency translation uncertainties, we expect the momentum of improved sales and progress on its performance improvement program (PIP) to deliver overall earnings growth in fiscal 2021. Supply chain issues, elevated raw material costs, and inventory levels are improving as key operating regions transition to a COVID-normal operating environment. Although we anticipate fiscal 2021 EBITDA margins will improve, efficiencies associated with the sale of the South American business are likely to be somewhat offset by COVID-related issues. We believe these issues will be mostly resolved in fiscal 2021, with further margin growth to...

Full Report