Syngenta Q3 Sales Rise, Sees Less-than-expected Earnings For Full Year

(RTTNews) - Swiss agribusiness firm Syngenta AG (SYT) Thursday reported growth in the third-quarter sales, supported by a strong start to the season in Latin America. Looking ahead, the company backed its full-year sales outlook, while saying earnings per share are expected to be close to last year's underlying level.

Sales for the third quarter improved 8 percent year-over-year to $2.92 billion from $2.70 billion, reflecting currency movements in a number of emerging markets. On a constant currency basis, sales climbed 11 percent from last year.

Crop Protection sales as well as Seeds sales climbed 8 percent at $2.308 billion and $478 million, respectively.

Product-wise, sales of Selective herbicides were driven by the Americas. CALLISTO for corn and FLEX for soybean grew strongly due to demand for effective weed resistance management. In Non-selective herbicides sales of TOUCHDOWN continued to expand in Brazil.

In seeds, corn and soybean grew strongly with a strong demand for soybean in Brazil. Growth in Diverse field crops was modest after a strong first half.

Lawn and Garden sales increased 9 percent at constant exchange rates and climbed 12 percent when acquisitions and divestments are excluded. Syngenta said the divestment of lower margin activities and the prospects for high value chemistry and genetics put this business on track to achieve the target of a 20 percent EBITDA margin in 2015.

Geographically, Latin America saw a strong start to the season, driving sales growth of 17 percent at constant exchange rates.

The main driver for growth was Brazil, where the soybean seed portfolio outperformed in a strong market. A robust commodity price and the depreciation of the Real are boosting grower profitability in the country and these factors are expected to result in record soybean plantings.

In Asia Pacific, emerging markets registered double digit growth reflecting the adoption of fungicides and modern insecticide chemistry. Performance was particularly strong in South Asia, where good monsoon conditions boosted demand.

Growth in North America was driven by pre-season demand for selective herbicides, enhanced by increasing concern over glyphosate-resistant weeds. Wet conditions in parts of the U.S. contributed to reduced insect pressure but created new opportunities for fungicides.

Sales in the first nine months of the year increased 5 percent at constant exchange rates to $11.3 billion. Underlying integrated sales were up 8 percent.

Looking ahead, the firm said that following a good start to the Latin American season, it remains on track to deliver full year sales growth in line with its longer term target.

Mike Mack, CEO, said, ''"During the quarter it has become clear that US corn seed production yields are significantly ahead of expectations. We will recognize this in 2013 by writing down the value of seeds in excess of estimated sales for the coming season. Full year earnings will also reflect a lower than expected currency benefit.''

Mack added that final results would depend on the progress of the Latin American season, but at this stage earnings per share are expected to be close to last year's underlying level. In July, Syngenta expected to achieve full year growth in underlying earnings.

Looking further ahead, Syngenta said it remains on track to deliver its target of $25 billion in sales of its eight key crops in 2020. The company expects improved profitability in 2014 and maintains its target of an EBITDA margin in the range of 22 to 24 percent in 2015.

The stock closed up 0.5 percent on Wednesday at 354.40 Swiss francs.