Biotech giant Syngenta bullish despite declining sales
the first nine months of 2006.
Sales were 1 per cent lower (CER) at $6.61bn.
Group sales in the third quarter of 2006 increased by 1 per cent to $1.41bn, though at constant exchange rates (CER), sales were unchanged.
The company said earlier this year that Western European markets were affected by a late start to the season, which reduced cereal fungicide usage and by the progressive implementation of subsidy reform.
But the company, which also reported overall decreased sales for the first half of the year, is confident that growth will come on the back of newly launched products.
For the first nine months, sales of new products rose 20 per cent to $784 million. In the quarter, fungicides sales were higher following an inventory adjustment in the USA in 2005, though lower sales of selective herbicides reflected timing differences between the last two quarters.
Furthermore, the company believes that new crop protection and herbicide products, such as Axial and Avicta, will help drive growth in the final quarter of the year. Axial was launched successfully in the UK and Germany, generating strong grower demand.
Indeed, in crop protection, third quarter sales rose 2 per cent (CER). In the low season in the northern hemisphere, sales in Europe, Africa and the Middle East were also higher with further growth in Eastern Europe.
But growth slowed somewhat in Latin America due to difficult market conditions in Brazil. Broad based growth was achieved in Asia Pacific.
The modest results also reflect Syngenta's strong performance last year. The firm recorded a 9 per cent sales increase for 2005, suggesting that the Swiss biotech giant could be well placed to benefit from a more relaxed regulatory environment towards genetic modification (GM) in the Europe.
"In 2005, Syngenta delivered another year of growth across the business," said Pragnell earlier this year.
"Continuing market share gains and the exciting potential of the pipeline in crop protection, the increasing promise of our biotechnology traits in US corn seeds and the further expansion of professional products, coupled with continued cost discipline, reinforce our confidence in targeting double digit growth in earnings per share through 2008."
Syngenta is the third largest business in the high-value commercial seeds market. Sales in 2005 were approximately $8.1 billion, and the firm employs more than 19,000 people in over 90 countries.