Nufarm (ASX:NUF) clocks 35% underlying profit growth as the deleveraging glide path finally takes shape

Net debt down A$135m and Emerging Platforms guidance lifted, making the 2.0x leverage target reachable.

Nufarm (ASX:NUF) delivered its first-half result this morning and the headline numbers landed where the bulls needed them to. Underlying NPAT of A$52 million is up 35% on the prior corresponding period, underlying EBITDA of A$243 million is up 18%, and free cash flow improved by A$193 million.

But the number we keep coming back to is the leverage one. Net debt has fallen to A$1.23 billion, down A$135 million on the same time last year, and net debt to underlying EBITDA has dropped to 3.6x. Management is now targeting roughly 2.0x by the end of FY26.

For a stock that has spent the past 18 months under a balance sheet cloud, that trajectory is the story. The earnings recovery is real, but the deleveraging is what unlocks the re-rating.

What incoming CEO Rico Christensen has done in his first six months is sharpen the focus. The strategy refresh announced in April, including a fresh A$50 million cost savings program, sits on top of A$50 million already banked in FY25. The two programs together are now the engine doing the heavy lifting.

Crop Protection margins are quietly doing the structural work

Crop Protection EBITDA grew just 3% in reported terms, or 6% in constant currency, which on the surface looks pedestrian. The more important point is where the growth came from. Europe delivered 19% EBITDA growth and a material margin expansion, which is exactly what the performance improvement program was designed to do.

North America grew 11% in local currency despite slower regulatory approvals weighing on new product timing. APAC was the soft spot, down 15%, dragged by dry weather in Australia and currency in Asia. We think investors should not get distracted by the APAC drag.

The structural story is that Europe is now a margin engine rather than a cost problem, and the portfolio mix shift toward higher-value products is showing up in gross margin. That is the bit that compounds.

Seed Technologies more than doubled, and Emerging Platforms is no longer a black hole

Seed Technologies EBITDA jumped to A$58 million from A$27 million, a result that quietly reframes the divisional mix. Hybrid Seeds grew 7%, supported by edible oils demand, South American expansion and Australian canola.

The bigger swing factor is Emerging Platforms, where the EBITDA loss narrowed from A$30 million to just A$4 million. That is a A$26 million improvement in a single half, driven mainly by omega-3 progress, including Japanese deregulation and the first Argentinian regulated trial.

Management has now lifted full-year Emerging Platforms guidance to a A$40 million improvement, up from A$30 million previously. The expanded bp carinata offtake agreement, extended to 2050 with milestone-based funding, is what gives them the confidence to raise the number.

The reaffirmed FY26 outlook is more credible than the market is pricing

Nufarm reaffirmed its FY26 guidance for strong underlying EBITDA growth and a leverage target of roughly 2.0x by year end. That is a meaningful step down from 2.7x at the end of FY25 and 3.6x today.

Capital expenditure is now targeted at below A$200 million, and the strategy refresh explicitly tilts the business toward lower capital intensity through external innovation partnerships. The skeptical read is that we have heard cost-out promises from this company before.

Our take is that the difference this time is that the FY25 A$50 million program has actually been delivered and is offsetting input cost inflation today. The new A$50 million program, with A$15 million in cash implementation costs largely in FY27, looks like the more credible second leg.

The Investors Takeaway for Nufarm

Nufarm has done what it said it would do six months ago. Earnings are up, cash flow is up, leverage is down, and the cost program is tracking. For a name that has frustrated long-term holders, that combination is the rebuild investors needed to see.

From here, the question is binary. If Nufarm hits roughly 2.0x leverage by September, this stock screens as a different business than it did 12 months ago, and the re-rating case writes itself. If Middle East-driven input cost pressure or another weather year in APAC derails the second half, the credibility rebuild takes another step back.

We covered the November strategy reset and the bp carinata extension in our earlier work, and readers who want the longer arc can find our previous coverage at stocksdownunder. The next milestone investors should circle is the August FY26 result, where the leverage number lands.