North America, Corn Sales Drive Syngenta First-Half Results
30 July 2012 Syngenta posted higher first-half results, as the northern hemisphere showed strength despite a cold start in Europe, and corn seed sales shot up 47%.
Chief Executive Mike Mack said in a statement that the Basel, Switzerland-based company would now focus on its business in Latin America, buoyed by record soybean prices.
Net income climbed 5% to $1.5 billion, or $17.17 per share in the period, from $1.4 billion, or $15.60 a year ago.
Sales were $8.3 billion, up 7% from $7.7 billion a year earlier. On a constant exchange rate basis, sales rose 10%. Volumes increased 6% while prices were 4% higher.
Mack said that a robust showing in North America – which at 24%, easily surpassed Syngenta’s performance in any other region – reflected early plantings, and its investments in corn traits resulted in market share gains in Latin America and royalty income from third parties.
“Weather conditions in Europe and more recently North America have resulted in sharp increases in crop prices. This has again brought to the fore the volatility frequently confronting growers,” Mack continued. “The challenge of food production is essentially a global one, but grower responses are driven by a multitude of local influences and considerations.”
In the Europe, Africa and Middle East region, Syngenta said its main areas of growth were the CIS, Central and South East Europe, and France. In the first quarter its portfolio benefited from increased planting of spring crops following winter kill on more than 7 million hectares of cereals. In France, a change in the law on credit terms moved sales from the fourth quarter of 2011 into the first quarter; in addition, there was good underlying growth in Callisto on corn and in fungicides, particularly Amistar and Alto, it said.
“Growth continued in the second quarter although at a slower rate, owing to the fact that spring crops demand less crop protection; in addition, heavy rainfall in many countries inhibited growers’ ability to spray,” the company said. However the CIS, in particular, continued to perform strongly, with the ongoing intensification of agriculture and a “sharp increase in corn herbicide usage in Ukraine.”
Continuing weakness of the economic environment in Europe and the USA hurt Syngenta’s flowers and consumer segments most. Its turf and landscape sales were slightly higher.
“The focus of our business is now Latin America where the outlook is positive given record soybean prices, our leadership position and advances in our integrated portfolio,” Mack said. “Currency headwinds are likely to diminish in the second half and we will realize further cost savings.”
Source: Syngenta, Edited by Jaclyn Sindrich, Managing Editor
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