Profit rises but sales fall at Syngenta
The world's largest maker of crop chemicals - Syngenta - saw net income rise by 12 per cent in the first half, although sales were slightly down.
In a statement from its headquarters in Basel, Syngenta said profit rose to $448 million (SFr677.82 million), up from $400 million compared with same period last year.
Sales of $3.902 billion were down by three per cent on the first half figure of $4.031 billion a year ago.
Syngenta’s share price rose by more than seven per cent at the stock exchange on Wednesday morning to SFr80.55, up from SFr74.90 at the close on Tuesday.
Tough market conditions
“These results represent a strong performance against a background of continuing tough market conditions,” commented Syngenta’s chief executive officer, Michael Pragnell.
He told Reuters new agency that he hoped that the company would achieve at least a 12 per cent earnings growth for the year as a whole.
The company, formed in 2000 from the merger of the agribusinesses of Novartis and AstraZeneca, has undertaken a number of cost-cutting measures to make up for declining demand for products such as weed killers.
These have included the closure of factories and technology centres. The cost savings programme, to be completed in 2005, amounts to $625 million.
2002 – a “difficult” year
Pragnell has already said 2002 will be a “difficult” year and that he doesn’t expect growth in sales.
“We expect the sales trend in the second half to be broadly in line with the first half result,” he commented.
He added that a target margin of 25 per cent for earnings before interest, tax, depreciation and amortisation (EBITDA) would probably be delayed until demand improved in agricultural markets.
The company makes products that control weeds in a markets worth about $14 billion. Its insecticides kill pests in a market valued at $7 billion.
Syngenta, which employs more than 20,000 people in 50 countries, reported a profit of $223 million in 2001 on sales of $6.323 billion.
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