Syngenta releases half year financial results

By Erin Voegele | July 28, 2015

Syngenta recently released its half-year results, reporting sales of $7.6 billion, up 3 percent at constant exchange rates. Second quarter sales increased 7 percent. EBITDA was $2 billion, up 21 percent at constant exchange rates, and the company reported earnings per share of $14.70.

“In 2015 our industry has experienced continuing softness in crop prices and low farm incomes. Despite these challenges, and our decision to reduce sales of glyphosate, we achieved sales growth at constant exchange rates of three percent in the first half,” said Mike Mack, CEO of Syngenta. “We have been able to largely offset currency depreciation in emerging markets through determined price increases and this, together with our hedging program, has mitigated the impact of currencies on EBITDA. The realization of the first savings from our Accelerating Operational Leverage program has contributed to substantial margin improvement, demonstrating that we are on track to deliver a sustainable improvement in profitability.”

In North America, sales for the first half of the year were $2.23 billion, down 9 percent from $2.44 billion during the same period of 2014. At a constant exchange rate, the drop was 7 percent. During the second quarter alone, sales were $1.21 billion, a 2 percent increase over the same quarter of 2014 at constant exchange rates.

According to Syngenta, growth in North America during the second quarter was achieved despite the ongoing impact of low commodity crop prices and lower sales of glyphosate. Excluding glyphosate, sales for the first half were 4 percent lower. In the U.S., corn seed sales increased significantly in the second quarter owing to higher trait income. Selective herbicide sales were also robust in the quarter, with the first contribution from Acuron following its approval in April. In Canada sales were lower as a result of drought and high channel inventory for Seedcare.

During an investor call, John Ramsay, chief financial officer of Syngenta, briefly addressed the company’s Enogen product, noting the company recognizes the disruptive value of Enogen technology, which enables the company to generate additional seed sales. Enogen corn, designed specifically for use in the ethanol industry, features alpha amylase enzyme directly in the corn grain. In April, Syngenta announced a trial agreement with Pacific Ethanol Inc. to begin using Enogen grain at its 40 MMgy plant in Madera, California, following the 2015 corn harvest. Several other U.S. ethanol plants are also set to begin using Enogen corn, including three plants in Iowa.