Ag segment delivers for DuPont in first half

by World Grain Staff
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WILMINGTON, DELAWARE, U.S. — Two years ago, executives at E.I. du Pont de Nemours recognized challenges with the ag market, spurring the company to take action to enable it to maintain its competitiveness. Strong results in the first half of fiscal 2016 suggest the company’s efforts have paid off.

Operating earnings in the company’s Agriculture segment totaled $1.966 billion in the six months ended June 30, up 3% from $1.910 billion in the same period a year ago. Segment sales, meanwhile, eased 2% during the first half, falling to $7.004 billion from $7.155 billion.

Dupont executive vice president Jim Collins
Jim Collins, executive vice-president of the Agriculture business segment.
“Our sales in the first half were 2% lower, as higher prices and corn volume gains more than offset by currency, lower soybean and crop protection volume and portfolio changes,” Jim Collins, executive vice-president of the Agriculture business segment, said during a July 26 conference call. “In seeds, a stronger mix of Pioneer’s newest corn hybrids resulted in higher net corn price globally, which was led by North America. Additionally, we grew corn seed volume with uplift from Leptra, our newest technology, which has enabled a multiple point share gain in the competitive resilience of premium market.

“Also, a positive for our Pioneer business was our continued penetration in the digital ag space. Interest in our Encirca services remains high, as growers began to plan for the 2017 season. Today, our Encirca offerings were delivered on over 2 million acres, more than doubling last year’s footprint.”

Looking to the second half of the year, Collins said DuPont’s focus will turn to Latin America.

“In seeds, we expect growth in our corn business in Brazil, driven by the summer launch of our Leptra technology, offset by lower soybean volumes,” he said. “Within our business, a portion of our sales will shift from the third quarter to the fourth quarter, as we expand on our direct selling model in Brazil, which is the fine-tuning of our route-to-market.”

While the second half will present some challenges, Collins said DuPont is confident in its ability to deliver on its full-year commitments.

“I continue to evaluate our innovation pipeline, and I’m pleased with the strength of our pipeline, as evidenced by the favorable market reception to our best-in-class Zorvec fungicide, and the fast ramp of Leptra technology in Brazil,” he said. “We expect Leptra to comprise more than one-third of our product portfolio during the summer season, one of the fastest new product introductions in Pioneer history. These two successful new product introductions are evidence that despite the current challenging conditions, farmers continue to recognize the value of our technology.”

Overall, net income at E.I. du Pont de Nemours in the first half of fiscal 2016 was $2.246 billion, equal to $2.56 per share on the common stock, up 14% from $1.971 billion, or $2.17 per share, in the same period a year ago. Sales were $14.466 billion, down from $14.958 billion.
 
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