Syngenta Q1 Sales Rise Modestly; Backs Full-year Sales View

(RTTNews) - Swiss crop chemicals firm Syngenta AG (SYT) Wednesday reported a modest growth in sales for the first quarter, despite a delayed start to the U.S. season. The company also maintained its sales growth expectation for the year, but said adverse currency would have a bigger-than-estimated impact.

Group sales grew to $4.682 billion from $4.570 billion in the previous year. Reported sales growth was 2 percent owing to the depreciation of several emerging market currencies. Currency-neutral sales advanced 5 percent.

Integrated sales, which exclude sales from Lawn and Garden, increased 5 percent at constant exchange rates with volumes up 2 percent and prices 3 percent higher.

In Europe, Africa and the Middle East, integrated sales grew 10 percent to $2.095 billion, driven primarily by crop protection, with an early start to the season and high weed, disease and insect pressure. Comparisons are for integrated sales on a currency-neutral basis.

In North America, sales dropped 7 percent to $1.232 billion, amid prolonged cold temperatures that delayed the start to the US season across the corn belt. Further, drought in California reduced demand for insecticides and fungicides.

Sales in Latin America increased 9 percent to $595 million. High caterpillar pressure led to a significant increase in insecticide sales and in Venezuela, business resumed after resolution of a payment delay.

Sales in Asia Pacific climbed 14 percent to $558 million with strong growth across both developed and emerging markets.

By product line, sales of Selective herbicides increased 6 percent despite the delayed season in the U.S. However, in seeds, Corn and soybean sales were unchanged as US growers delayed planting decisions.

Mike Mack, Chief Executive Officer, said: "We have made a solid start to the year despite adverse weather conditions in North America. For the full year we maintain our sales growth expectation for the integrated business of 6 percent at constant exchange rates.''

As previously guided, lower seeds costs in 2014 will result in gross margin improvement. Research and development spend will increase and will be at the upper end of the targeted 9-10 percent of sales range, Syngenta added.

Considering the depreciation of several emerging market currencies in the first quarter, the impact of currencies on full year Earnings Before Interest, Tax, Depreciation and Amortization is likely to be around $100 million compared with an earlier forecast of $50 million.

The company continues to forecast a significant increase in free cash flow before acquisitions to around $1.5 billion.

The stock rose 0.2 percent on Tuesday to close at 336.50 Swiss francs.