April 19, 2012
Syngenta''s corn sales up 21%
As it unveiled a "strong start" to the Northern Hemisphere planting season, Syngenta reported a 21% jump in sales of corn seed, and rising demand for related herbicides.
The Swiss-based group, the world''s largest agrichemicals company, reported "strong demand" for its top-of-the-range biotech corn seed in North America in the January-March period, reflecting "an early start" to the planting season.
Indeed, takings grew by an underlying 16% in the US, the top grower of the grain, where plantings overnight were confirmed as proceeding at a near-record pace.
In the broader European region, where hopes for corn plantings are being raised by the level of land left void by high rates of frost damage to winter grains, corn seed sales soared 36%.
In
Ukraine, the top corn growing country outside the Americas, sales of seeds overall doubled to more than US$100 million.
In Brazil - where a rapid, if disappointing, soy harvest has raised hopes for a follow-on crop of corn- Syngenta raised its share of the corn seed market, driving a 40% rise in total seed sales in the country.
And in the Asia Pacific region corn seed sales "more the doubled", the group said flagging "strong growth across the business" in China and countries in the Asean trade bloc.
The rush to plant corn reflects a scramble by farmers to cash in on prices buoyed by a fall in world stocks, which US officials expect to end 2011-12 at 122.7 million tonnes, equivalent to 14.1% of annual consumption, the lowest figure in 38 years.
On the Chicago futures exchange, corn has, unusually, been more expensive than wheat for much of the last year.
And Syngenta revealed a second boost from the trend in rising sales of corn-related agrichemicals, including a jump of more than one-half in takings from the Force anti-corn-rootworm spray.
However, the boost in corn was offset in part by weakness in soy, the main alternative in spring sowings, for which US sales fell "due to acreage shift" and a window in the group''s biotech seed portfolio.
Furthermore, the group flagged a fall in sales of agrichemicals in the Asia Pacific region, reflecting "cold and wet conditions in Australasia", where the tail end of the La Nina brought heavy rains, notably to eastern Australia. Overall group sales for the quarter came in at US$4.30 billion, a rise of 7.1% on the January-March period last year.
Michael Mack, the Syngenta chief executive, restated the group''s expectation of achieving a "further increase" in margins at the earnings before interest, tax, depreciation and amortisation (ebitda) level, with "strong cash generation". Nonetheless, the results received a guarded response from investors, who had already factored in a robust performance, driving Syngenta shares up nearly 18% in 2012, as of last night''s close.
Credit Suisse analysts said: "Syngenta''s positive business momentum continues, supported by high crop prices and farmer profitability. But given the strong share price performance into the result, we anticipate a muted share price reaction on an in-line set of results and reiterated guidance".