- Chemical supplier Nufarm (ASX:NUF) has seen its shares plummet today after warning its investors for a dual-set of bad news
- Shares lost a value of 58 cents after the company revealed customer rebates could cost $9 million
- As well, Nufarm warned of difficult trading conditions most prevalent in North America that could show a $20 million deficit in its earnings from the previous period
- These revelations will be reflected in the half-year earnings round up for the 2020 Financial Year
- Shares in the company have dropped 17.4 per cent today, now trading at $5.09
Chemical supplier Nufarm has seen its shares plummet warning investors over a surprise that could affect the financial year’s earnings.
Up to $9 million from the company’s half-year earnings round up for the 2020 Financial Year could be deducted.
This revelation was made after the company conducted checks on potential rebates from German customers.
“This matter was immediately investigated with our external auditors,” an official statement from Nufarm read today.
“While the investigation is ongoing it is not expected to result in a restatement of FY19 financial statements but will result in an adjustment to FY20 half year earnings.”
Shares in the Australian market heavy hitter opened at $5.67 today, and have since lost 58 cents after the announcement was made.
To calm investors, Nufarm management promised to undertake immediate internal reviews in softening financial woes.
Difficult trading conditions
But it wasn’t over for nervous Nufarm investors yet. The company also outlined in its media release that it has grappled with difficult trading conditions.
This will also be reflected in the business period’s half-year round up.
Particularly in the North American market, lowered demands in products could reflect a AU$20 million deficit from the previous period’s earnings.
This will pose a hit for the first quarter’s earnings and is most likely to continue into the next quarter.
The deficit is particularly worrying for Nufarm as it generates most of the half year’s earnings from the second quarter.
Shares in Nufarm opened at $5.67 today, and have since dropped to $5.07 after a 17.8 per cent downgrade.