Nufarm Limited

NUF Details
 
Positive progress on omega-3 canola: For H1FY17, Nufarm Limited (ASX: NUF) 15% yoy growth in revenue at $1.36 billion and posted 67% yoy surge in underlying net profit after tax to $19.8 million. The company remains on track to deliver improved earnings growth for the full year if normal seasonal conditions are experienced in the major cropping regions. However, it expects the global crop protection market to remain very competitive, with low soft commodity pricing prevailing due to the strong crop harvests in key regions. Further, Nuseed (wholly owned subsidiary) has completed preparation for regulatory approvals of its innovative long-chain omega-3 canola and filed in Australia, United States and Canada, while pending regulatory approvals, commercialization is expected to commence in 2018 or 2019. Importantly these regulatory milestones in all three countries gives the company both timing and location options as it commercializes canola based long-chain omega-3. Nuseed's proprietary canola will provide long-chain omega-3 oils, similar to those found in fish oil, using a sustainable land-based source. It has been developed through collaboration between Nuseed, the Commonwealth Scientific and Industrial Research Organization (CSIRO) and the Grains Research and Development Corporation (GRDC).

NUF stock moved up 13.9% (as of June 16, 2017) in the last six months, while it was up 36.7% in the last one year, and currently trading close to its 52 week elevated levels.We give an “Expensive” recommendation on the stock at the current price of $ 10.02


NUF Daily chart; (Source: Thomson Reuters) 

Graincorp Ltd

GNC Details
 
Australian grain harvest and better export volumes drove the stock: For H1FY17, Graincorp Ltd (ASX: GNC) reported an EBITDA of $236 million as compared to $134 million in the prior corresponding period (pcp) and consequently drove the underlying NPAT to $100 million from $32 million in H1FY16. The group expects to reach their full year EBITDA estimate of $385-$425 million and underlying NPAT of $130 -$160 million. Importantly, H1FY17 performance was driven by the large Australian grain harvest, better export volumes coupled with the group’s network efficiency efforts and cost management. Further, storage and Logistics segments performed well in response to the significant challenges of the record harvest by developing a modern, efficient network through project regeneration which resulted in average receivals per site rising to 70,000 tons from 40,000 tons last harvest.  Management reported that their malt plant expansion in Pocatello, Idaho would become online in July 2017, which will double the available capacity at the site. GNC is also enhancing their sales mix with a better focus on higher margin products and better canola supply drove oil supply with lower procurement costs.

The company has completed the sale of its investment in Allied Mills Australia Pty Ltd (Allied Mills) to funds advised by Pacific Equity Partners following regulatory approvals. Proceeds from the transaction are expected to be $190 million (pre-tax and transaction costs), with further benefit of $35 million of franking credits. GNC stock moved up 12.4% over the past three months and trading close to its 52 week high levels. We give an “Expensive” recommendation on the stock at the current price of $ 10.08


GNC Daily chart; (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.