Syngenta Q1 Sales off 3% on Weaker Dollar
Crop Protection sales at $2.5 billion were down 8 percent (CER), due equally to volume and price. The northern hemisphere season started late, although business improved noticeably towards the end of the quarter.
15 Apr 2010 --- Syngenta has reported sales in the first quarter of 2010 were 3 percent lower at $3.5 billion, benefiting from a weaker dollar. At constant exchange rates sales were 8 percent lower compared with a strong first quarter in 2009.
Crop Protection sales at $2.5 billion were down 8 percent (CER), due equally to volume and price. The northern hemisphere season started late, although business improved noticeably towards the end of the quarter. In Europe, the effect of a prolonged winter was compounded in France by the impact of new legislation on credit terms. In NAFTA, high channel inventories resulted in a competitive market, particularly for glyphosate and some selective herbicides. Latin America completed an excellent season with significantly higher sales. Soybean acreage in the region expanded and adequate rainfall increased disease pressure, resulting in greater usage intensity and a reinforcement of Syngenta's market leading position. Growth also continued in the emerging markets of Asia, offsetting a weak start in Japan and Australia.
Selective Herbicides sales were lower compared with an exceptionally strong quarter in 2009, mainly owing to the delayed northern hemisphere season and a change in sales phasing in France and Germany. The decline in Non-selective Herbicides reflected pressures in the glyphosate market which will continue to affect comparisons until mid-2010. Fungicides saw good growth: sales of the leading product AMISTAR were up by more than 40 percent, with a strong performance in Latin America and increased uptake in US corn. In Insecticides, newer products including ACTARA and DURIVO grew strongly, partially offsetting lower sales of older chemistries. In Seed Care double digit growth in Latin America and Asia Pacific was offset by the impact of high treated seed inventories in NAFTA; however, sales of AVICTA expanded significantly with its launch on corn in the USA. Sales of Professional Products increased, with early signs of recovery in consumer-led markets.
Seeds sales were 6 percent lower (CER) at $1 billion, with volume down 6 percent and prices unchanged. After adjusting for advanced NAFTA Corn & Soybean sales in the fourth quarter of 2009, sales were 7 percent higher. Corn & Soybean sales on an adjusted basis were 6 percent higher, with a strong performance in the USA reflecting the expansion of the AGRISURE 3000 GT triple stack offer. Sales of Diverse Field Crops grew strongly reflecting a recovery in Eastern European markets and the consolidation of the sunflower business acquired from Monsanto in September 2009. Vegetables also showed robust growth, notably in the emerging markets.
The northern hemisphere season is now progressing well after a late start, and this is expected to lead to a reduction in the high channel inventories which have contributed to lower crop protection prices. The company expects volume growth beginning in the second quarter and for the full year will benefit from lower raw material costs, favorable currency movements and further margin enhancement in Seeds. These elements will enable growth in operating income which will exceed earnings per share progression owing to higher tax and net financial expense, as indicated in February.
