Lonza Raises Earnings Guidance for Year Despite Weaker Demand for Agro and Feed Products
Shares in Lonza were up over 5 percent to 178.5 Swiss francs ($181) on the back of the second quarter results.
Overall, first half earnings were up by 20 percent to 312m Swiss francs ($316m), ahead of analyst expectations.
“We are harvesting the fruits of our diligence in implementing productivity programs, as well as the stringent portfolio management activities in Specialty Ingredients and the favorable market environment,” said Richard Ridinger, CEO of Lonza.
“These strong half-year results have pushed us to an intermediate sprint towards our ambitious targets and have made us very confident that we will reach our mid-term goals.”
Its Agro and Feed division, which supplies the big agricultural companies with ingredients, reported a "solid start" to the year.
But it was impacted by weaker demand for its products in the second quarter, due to an oversaturation of the market.
Across its Specialist Ingredients unit, which provides an array of nutritional products, its recent trend of double digit earnings growth was maintained.
Earlier this year, Lonza reported record financials in the first quarter, helped by a restructuring of its business and strong performance across it pharmaceutical and biotech units.
Lonza said: "With this positive first half of 2016 and the good momentum expected to continue into the second half of the year, Lonza is raising its guidance for core EBIT growth and now expects a double-digit improvement in CORE EBIT for the full year of 2016.”
