Syngenta reports earnings for first half of 2010

by World Grain Staff
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BASEL, SWITZERLAND — Syngenta AG reported on July 22 a profit decline of 11% for the first-half of 2010.

Net income fell to $1.25 billion, or $13.39 a share, from $1.4 billion, or $14.96 a share, a year earlier. Sales were up 1% to $6.74 billion.

"After a slow first quarter start, demand for our products has increased significantly in 2010, following a 2009 season characterized by low pest pressure and credit constraint. This is evidenced by solid volume growth in the second quarter, leading to a reduction in the high level of channel inventories which resulted in a competitive pricing environment in developed markets, notably North America," said Mike Mack, chief executive officer. "In the emerging markets we saw a strong performance throughout the first half, particularly in Latin America, as growers continued to invest in new technology. Our longstanding focus on operational efficiency is enabling us to confront a challenging short term environment while continuing to expand our platforms for future growth."

A slow start to the northern hemisphere season due to cold weather was followed by significant volume growth in the second quarter for the crop protection segment, Syngenta said. High channel inventories, built up in the course of 2009, were progressively drawn down in the second quarter but resulted in a competitive first half price environment. As a consequence some of the price gains implemented by Syngenta in the first half of 2009 were reversed. Emerging markets saw a generally robust performance with limited impact from price, the company said.

Growth in the seeds segment was broad-based with a noticeable acceleration in the second quarter, Syngenta said.

Looking ahead to the second half of the year, Mack said the company expects the positive volume momentum to continue. As the main growing season approaches in Latin America, the company expects that favorable fundamentals will support further growth in the business there.

"This, coupled with careful control of costs and increasing profitability in seeds, should allow us to achieve full year operating income around last year’s level," Mack said.

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