Syngenta First-Half Profit Takes Hit

Syngenta earnings in the first half of 2015 fell 12% on the impact of currency exchange rates and lower commodity prices.

Earnings in the first half were $1.2 billion, compared with $1.4 billion a year ago. Sales in the period totaled $7.6 billion, up 3% on a constant exchange rate basis. That takes into account a 6% rise in prices and a 3% decline in volumes. Excluding glyphosate, sales rose 6% in the first half. Reported sales fell 10% in the first half, as most currencies depreciated against the U.S. dollar.

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Chairman and Chief Executive Mike Mack said, “In 2015 our industry has experienced continuing softness in crop prices and low farm incomes. Despite these challenges, and our decision to reduce sales of glyphosate, we achieved sales growth at constant exchange rates of 3% in the first half.”

Mack said the company has been able to largely offset currency depreciation in emerging markets through price increases and this, together with its hedging program, mitigated the impact of currencies on EBITDA. Its accelerating operational leverage program saved it $104 million and “contributed to substantial margin improvement, demonstrating that we are on track to deliver a sustainable improvement in profitability.”

“In the first half we saw continuing momentum from our new fungicide Elatus and the successful launch in the USA of the new corn herbicide Acuron,” Mack said.

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In its largest region by sales, Europe, Africa and Middle East, sales rose 13% on a constant currency basis and fell 14% on a reported basis to $3.3 billion. After a strong start to the year growth continued in the second quarter, supported by further significant price increases in the CIS, which more than offset the impact of currency depreciation.
Volumes increased in most territories with exceptions in France, which saw early purchasing at the end of 2014, and
the CIS, where the price increases caused volume erosion in seeds.
In North America, excluding glyphosate, sales for the first half were 4% lower. In the USA, corn seed sales increased

significantly in the second quarter owing to higher trait income.
In Latin America, sales were affected by the deliberate reduction of glyphosate sales and an increase due to a change in contractual sales terms for crop protection products in Brazil. Adjusted for these two factors sales were 2% lower, reflecting low disease and insect pressure, lower corn seed sales and credit constraints.

Source: Syngenta

 

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