Novozymes reports a solid first half for 2006
throughout the first half of 2006, with growth in sales and
operating profit of 8 per cent and 10 per cent respectively.
The company said that these figures were in line with expectations.
"We are satisfied," said Novozymes president Steen Riisgaard.
"We have managed to achieve good productivity improvements in the first half, which underpin our earnings level and enable us to maintain our high operating profit margin at the same time as investing more in long-term growth.
"In the light of the results for the first half, we are standing by our outlook for the year within the parameters presented to the market in January 2006."
Sales rose to DKK 3,282 million from DKK 3,037 million in the first half of 2005. Measured in local currencies, sales rose by just over 5 per cent.
Operating profit rose to DKK 657 million from DKK 597 million in 2005.
Sales in Europe in the first half of 2006 were largely on a par with the same period of 2005, though some sectors performed better than others. Sales of food enzymes rose by 5 per cent in DKK in the first half of 2006, and by just above 2 per cent in local currencies.
The company said that this trend should be seen in the light of a challenging basis of comparison for the first half of 2005, where some of the growth related to stockbuilding at the distributor level.
Growth in North America on the other hand remained high, with sales rising by just below 19 per cent, including a positive exchange rate effect of approximately 6 per cent. The most positive trend was recorded in sales of enzymes for fuel ethanol and for the starch and baking industries.
These results should provide a good basis for future expansion. Novozymes has been quick to develop viable alternatives for food makers, and the establishment of new market segments has ensured that the enzymes market, despite modest general growth, remains lucrative.
As a result, the full-year outlook for earnings remains unchanged, while the outlook for free cash flow has been increased to DKK 850-950 million.
Growth in sales for the year is expected to remain at 7 to 9 per cent in DKK and 6 to 8 per cent in local currencies. Operating profit is expected to grow at 7 to 9 per cent, while growth in net profit is expected to be 5 to 7 per cent.