Brazil’s Pest Pressures Lift Syngenta Results

Sunflower sales in the CIS and Southeast Europe saw big gains. Photo credit: Syngenta

Sunflower sales in the CIS and Southeast Europe saw big gains.
Photo credit: Syngenta

Syngenta said strong demand for non-selective herbicides and insecticides in Brazil, along with robust seed treatment sales – despite a ban on neonicotinoids in the European Union – drove robust quarterly results.

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Crop protection sales totaled $2.6 billion in the fourth quarter, up 3% from $2.5 billion a year earlier, helped by a 24% jump in non-selective herbicide sales driven by Touchdown. Strong demand and shortage of supply boosted “significant volume and price gains. Brazil was the leading contributor with sales more than doubling,” Syngenta said. Gramoxone herbicide sales were also higher on double-digit growth in Asia Pacific and Brazil.

For the full year, Syngenta’s overall earnings per share fell 12% to $19.30, short of expectations, hurt by higher costs in its seeds business and lower trait royalty revenue.

Selective herbicide sales dropped 1% in the quarter, while fungicide sales – which claimed the largest chunk of its overall crop protection sales – fell 9%, hurt by a delayed registration in Brazil for its new product Elatus, based on the active ingredient Solatenol. Sales of Seguris, a new SDHI fungicide for cereals, almost tripled.

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Insecticide sales rose 16% in the quarter, driven by Asia Pacific and Latin America as high insect pressure in Brazil propelled demand. Low insect pressure in the U.S., by contrast, cut into sales of Actara. Globally, the largest contribution came from its new product Durivo, with sales up more than 40% in all regions.

Despite the ban on neonicotinoids in the European Union – which includes Syngenta’s Cruiser product – seed treatment sales climbed 4%. “Cruiser continued to see strong growth demand in Latin America, more than offsetting a decline in Europe,” the company said.

By region, crop protection sales grew strongest in Europe, Africa and Middle East in the fourth quarter, rising 8% to $351 million. For the year, North America and Latin America each posted 7% sales growth.

For its seed business, corn and soybeans fell 10% for the year. Diverse field crops, led by sunflower in the CIS and Southeast Europe, climbed 17% for the year and 31% for the fourth quarter. Vegetables rose 4% for the year and 12% for the quarter on rapid growth in emerging markets.

“In 2014, we expect integrated sales to grow at a similar rate to 2013. The gross margin will improve with lower seeds costs,” Chief Executive Mike Mack commented on the company’s outlook. Improved gross margins and savings will offset further investments, with R&D spending set at the upper end of its forecast of 9% to 10%, he added.

Looking further ahead, Mack said the company expects to be at the lower end of its target margin range in 2015, but it is on track to deliver $25 billion in sales by 2020.

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