Jan. 23 (Bloomberg) -- Nufarm Ltd., Australia’s largest supplier of farm chemicals, fell the most in 2 1/2 years in Sydney after saying it will lose BASF AG’s distribution rights and its local unit will miss its profit target.
The stock fell 9.2 percent to A$5.75 at the close of trading, its largest decline since July 16, 2010. The benchmark S&P/ASX 200 Index gained 0.2 percent.
BASF advised this week it will terminate its distribution agreement with Nufarm to sell BASF crop-protection products in Australia starting from March next year, ending a 10-year contract, the Melbourne-based company said today in a statement. Nufarm also said “more challenging” trading conditions in Australia have hurt earnings from the country, although it maintained its global forecast for higher first-half profit.
Its Australia and New Zealand operations are expected to be “well down” in the year to July 31, compared with the previous year, Nufarm said in the statement.
“Business in other parts of the world has performed more strongly than expected, particularly in South America and Europe,” according to the statement.
Annual sales generated by BASF products distributed by Nufarm Australia and unit Crop Care since 2004 are less than 10 percent of total Australian revenues and less than 3 percent of Nufarm’s global sales, it said.
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