22 July 2011 12:43 [Source: ICIS news]
(adds further CEO comment and financial detail throughout)
LONDON (ICIS)--Syngenta's first-half net profit for 2011 grew by 14% year on year to $1.43bn (€1.00bn), with sales posting a similar increase – partly on a better pricing environment for products, the Switzerland-based agribusiness group said on Friday.
Total sales for the January to June period were $7.70bn, compared with sales of $6.74bn in the same period of 2010, the company said in a statement.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of 2011 grew by 12% year on year to $2.15bn, Syngenta said.
Tight grain supply because of unfavourable weather conditions in the northern hemisphere, amid growing demand, helped keep overall crop prices high, added Syngenta CEO Mike Mack.
“Our sales showed sustained volume momentum in all regions and were, in addition, driven by the breadth of our portfolio and our strong emerging market presence. An improved price environment for crop protection was reflected in stable pricing in the second quarter,” Mack said.
At constant exchange rates, crop protection sales in the first six months of 2011 increased by 10% to $5.63bn, compared with the same period a year before, with volume rising by 12% and prices falling by 2%, Syngenta said.
Europe, Africa and the Middle East showed double-digit volume growth in the first half of the year, despite the drought that hit several countries in the second quarter, the company added.
Seeds sales, meanwhile, jumped by 17% to $2.09bn in the same period, with volume rising by 15%. Seeds prices inched up by 2% year on year.
“An improved price environment for [Syngenta's] crop protection [segment] was reflected in stable pricing in the second quarter. In seeds, strong growth across crops and the further enhancement of our US corn portfolio resulted in a substantial improvement in profitability,” Mack added.
Mack said the outlook for pricing for the rest of the year is positive and the company expects stable pricing for the full year.
"For the 2012 season we are currently raising prices across the business, with the aim of achieving an overall increase in the mid-single digits. This will enable us to offset the impact of inflation and to make further investments in the development of our integrated offer," he added.
“We continue to target above-market growth while expanding the size of the market through crop-based innovation. Our proven ability to manage manufacturing costs and to leverage our global presence will contribute to maintaining a high level of profitability," said Mack.
Additional reporting by Pearl Bantillo
($1 = €0.70)
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