Novozymes: Bioenergy sales flat in Q2

By Erin Voegele | August 08, 2019

Novozymes released second quarter 2019 financial results Aug. 8 reporting sales for its bioenergy segment were flat organically for the three months period and down 4 percent organically for the first half of the year.

The company said U.S. ethanol production during the first half of 2019 was negatively impacted by wet weather in the Midwest. “The situation for our customers was challenged in the first quarter, with production normalizing in the second quarter,” Novozymes said in a release. “We estimate our customers’ volumes in the first half of the year to be down slightly more than the general 1-2 percent decline in U.S. ethanol production. At the same time, ethanol producer margins remain under pressure across the industry with increasing corn prices and continued high inventories resulting in a challenging market for customers to operate in.”

Novozymes also discussed the U.S. EPA’s move to allow year-round E15 sales. “While this is a big win for the industry, the impact on Novozymes is expected to be minor in 2019,” the company said.

For the full year, Novozymes expects to deliver low single digit sales growth in its bioenergy segment. This growth is expected to be driven by increased penetration from innovation as well as volume growth outside the U.S. market. The company launched three products for the ethanol industry during the second quarter, including Innova Force, Innova Fit and Fortiva. 

In addition to bioenergy, Novozymes also has business segments dedicated to household care, food and beverages, agriculture and feed, and technical and pharma. Bioenergy accounted for 19 percent of total sales during the first half of 2019.

Overall, Novozymes reported a 3 percent reduction in organic sales for the first half of the year, compared to a 4 percent growth in during the first half of 2018. EBIT margin was 30 percent, up from 28.01 percent. Net profit growth was 1 percent, down from 5 percent for the first half of last year.

Additional information is available on the Novozymes website.