Syngenta posts record profit, but sales drop

Syngenta's profit increased by 12 per cent but was below market expectations Keystone

Swiss agrochemicals company Syngenta increased its net profit by 12 per cent last year to a record $872 million (SFr1.08 billion).

The Basel-based company said the result was due to good sales of crop protection products where it is the world leader.

Sales dipped slightly to $8.05 billion last year, the company said on Thursday.

“Syngenta demonstrated resilience in markets that were challenging, notably in the first half of the year,” chief executive Michael Pragnell said in a statement.

He added that sales in the crop protection division had increased again and market leadership was reinforced in the United States, eastern Europe and the Asia Pacific region. Growth was also achieved in Latin America despite difficult conditions in Brazil.

The company said that a cost savings programme, announced in 2004, reached $350 million last year. It will be completed ahead of schedule and is expected to meet its target of $425 million.

Syngenta is planning on further cuts in the costs of goods and operating expenses over the next four years, but gave no details about possible job cuts.

As part of its restructuring efforts it decided in 2004 to close down a factory as well as a research centre near Basel which led to nearly 300 jobs being axed.

Syngenta confirmed its target for double-digit growth in earnings per share.

Protest

Development aid organisations, including the Swiss-based Berne Declaration, have criticised Syngenta over sales of the herbicide paraquat. It said the product was toxic for humans and damaged the health of tens of thousands of farmers and workers on plantations every year.

Syngenta has denied the accusations.

There has been ongoing legal action over Syngenta’s allegedly illegal testing of genetically modified soyas bean and corn in Brazil.

In another development the company agreed in December to give payments to former employees of a factory in Switzerland amid reports of a number of cases of bladder cancer.

The plant in the southwestern town of Monthey used to produce the chemical galecron, an insecticide.

Last month the company lowered the price of crop protection products by 20 per cent in Switzerland following pressure by the federal authorities.

swissinfo with agencies

In brief

Syngenta is the world leader in crop protection and ranks third in the high-value commercial seeds market.

The company makes products that help farmers fight weeds, fungi and pests.

It was formed in 2000 by the merger of the agrochemicals divisions of British-Swedish concern, AstraZeneca, and Novartis.

It employs about 19,000 people in more than 90 countries.

Key facts

Syngenta 2006 results (excluding restructuring):
Net profit: $872 million (+12%)
Sales: $8.05 billion (-1%)
Operating profit: $1.16 billion