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Challenges pressure Syngenta first-half results

Company committed to innovation that will help growers deal with changing weather patterns and increasing pest pressure.

The first half of 2019 brought many challenges for agriculture, including historic flooding in the U.S. that resulted in significantly late planting, as well as severe droughts in Australia and Indonesia, Erik Fyrwald, Syngenta chief executive officer, said during the release of the company’s first-half results for 2019.

“Growers continue to face challenges with trade issues,” he said. “Sales for the first half of 2019 were 1% lower at constant exchange rates [CER] than in 2018. Adverse weather conditions were mostly offset by strong volume growth in Latin America.”

Syngenta reported sales of $6.8 billion during the first half, a decline of 2% at CER from the same period last year. Excluding divestments, crop protection sales of $5.2 billion were flat with 2018. Seeds sales of $1.6 billion were 3% lower than adjusted 2018 sales.

Earnings before interest, tax, depreciation and amortization of $1.5 billion were 15% lower than the first half of 2018, down 8% at CER adjusted for the impact of divestments, reflecting the difficult weather conditions in the U.S. and increased raw material costs in China.

Results showed that net income was $798 million, compared to $1.209 billion in the first half of 2018.

“Restructuring in 2018 included gains on mandated divestments, while 2019 charges include higher impairments partly from the closure of a production site,” Syngenta said. “Excluding restructuring, net income was 6% lower, with the reduced operating result and increased interest expense after the 2018 bond issuance partly offset by a one-off deferred tax revaluation gain due to the Swiss tax reform.”

Despite the challenges, Fyrwald said the company remains committed to focusing its innovation on helping growers deal with the impacts of climate change, including changing weather patterns and increasing pest pressure.

New product introductions in the first half included fungicide seed treatment Vayantis for the control of Pythium and Phytophthora diseases, with first registrations expected in the U.S. and Canada in 2020, and the registration of Tavium Plus Vaporgrip technology herbicide in the U.S. and Canada.

Syngenta is also working with local teams to quickly respond to increasing fall armyworm infestation in Asia by providing advice and integrated pest management solutions, including Fortenza Duo, BT traits and biologicals.

TAGS: Business
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