Nufarm shares slumped more than 20 per cent after the agricultural company said it was suspending its interim dividend following a first-half net loss of $13.58 million.
The chemical supplier said strong sales in North and South America lifted overall revenue for the six months to January 31 by 7.9 per cent to $1.576 billion but that drought conditions in Australia caused local sales to fall 26 per cent as overheads jumped.
"Farmers on the east coast of Australia are facing continued dry conditions and we'll be scaling back manufacturing and running down inventories in anticipation of another difficult season," Nufarm chief executive officer Greg Hunt said.
The local demand for pesticides dropped in winter, Nufarm said, with the total area planted for summer crops estimated to have decreased by 23 per cent to one million hectares.
Nufarm reduced its full-year earning guidance to between $440 million and $470 million, down from a previous range of between $500 million to $530 million.
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Mr Hunt said Nufarm was taking a conservative approach to managing its balance sheet and would therefore suspend its interim dividend, which had been five cents in the previous corresponding period.
The company's shares dropped 23.2 per cent on the news in early afternoon trading before recovering slightly. At 1425 AEDT they were down 17.09 per cent, to $4.61.
