17 September 2009 21:55 [Source: ICIS news]
MONHEIM, Germany (ICIS news)--Bayer CropScience’s chairman cautioned on Thursday that the company might not achieve its full-year profitability target following a “subdued” start to the third quarter.
“We have to consider our target of retaining a margin forecast of a clean EBITDA [earnings before interest, tax, depreciation and amortisation] of 25% for the full year as ambitious,” Friedrich Berschauer told journalists at Bayer CropScience’s annual press conference.
However, this does not mean the 25% target cannot be achieved, he said.
“Following the good results of the first six months, our performance at the start of the third quarter has been more subdued,” stated Berschauer. Business has been hit by declining prices for wheat and corn and unfavourable weather conditions, particularly in Europe and on the Indian subcontinent, as well as by the relative late start of the season in Argentina and a drop in US demand, he said.
Demand for agrochemicals remained high in the first half of 2009, despite an overall deterioration in market conditions compared with the first half of 2008, Berschauer said. Following a record year in 2008, retailers had only minimal inventories and this boosted sales in the first quarter in particular, he explained.
In 2008, Monheim-headquartered Bayer CropScience recorded a clean EBITDA margin (before special items) of 25.1%. EBITDA before special items grew 21% to €1.6bn in 2008, while sales increased by 14% at constant exchange rates to €6.4bn.
Last year’s growth was driven, Berschauer said, by the strong sales of new active ingredients launched since 2000. These active ingredients contributed €1.8bn in sales.
Bayer CropScience said it plans to bring 10 new active ingredients to market between 2008 and 2012, and has raised the peak sales potential of this group of molecules from €1bn to €1.25bn.
($1 = €0.68)
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