Global enzymes producer Novozymes has raised its expected EBIT for 2014 to between 8%-10% after a strong Q1 performance and alliance with biotech giant Monsanto.
The Danish firm reported a larger-than-expected rise in first-quarter operating profit with a an 11% increase in organic sales compared to the same quarter last year. Earnings before interest and tax (EBIT) rose by 30%, to 923 million DKK (€124m) from DKK 709m (€95m) in Q1 2013.
Sales to the food and beverages industries increased by 5% in DKK and by 8% in local currency compared with 2013 figures, with sales for the production of healthy foods and to the baking industry bringing the most significant growth, said the firm.
"Sales to the starch industry contributed only marginally to sales growth, as Chinese production of corn syrups and other corn-derived products was lower compared with the same period last year," the Danish firm revealed in its Q1 trading statement.
The company added that the rise in first-quarter operating profit was aided by a one-off positive impact from its alliance with U.S. biotech firm Monsanto (known as The BioAg Alliance) plus strong sales of ethanol enzymes.
"Double-digit organic sales growth, good underlying earnings performance and completion of The BioAg Alliance agreement mark a good start to 2014," noted president and CEO Peder Holk Nielsen - adding that reported earnings were 'extraordinarily high' due to the impact of the Monsanto BioAg Alliance agreement.
The firm said food and beverages sales growth is still expected to be driven by further growth in solutions for the production of healthy foods.
"The large application areas of baking and starch conversion are also still expected to contribute to growth," it stated.