July 24 (Bloomberg) -- Syngenta AG fell the most in a year after the world’s largest maker of crop chemicals said first-half profit declined as cold weather and late Northern Hemisphere crop planting weighed on demand for fungicides.
The stock decreased as much as 4.2 percent, the biggest intraday decline since July 2012. Net income fell 5 percent to $1.41 billion, compared with an estimated $1.49 billion, based on the average of six analyst predictions collected by Bloomberg.
Second-quarter sales were “challenging” as cold weather weighed on revenue across Germany and the U.S., Chief Executive Officer Michael Mack said in a phone interview, adding that competitors may have felt similar effects. Croda International Plc, a supplier of ingredients to Syngenta, reported a slowdown in second-quarter sales in that segment, yet it said market trends are now improving.
“The rain didn’t only fall on Syngenta fields, I’m sure of that,” Mack said.
Mack, who became chief of Basel, Switzerland-based Syngenta in 2008, wants to almost double sales to $25 billion by 2020, buoyed by a companywide reorganization along crop lines and purchases of new technologies. Syngenta has stepped up acquisitions in the last year, using spare cash to buy listed hybrid-rice seedmaker Devgen for $523 million, U.S.-based Sunfield Seeds Inc., and most recently announcing the purchase of Zambia-based MRI, a maker of white corn seed.
The shares traded 4 percent lower at 371 Swiss francs as of 9:34 a.m. in Zurich. Prior to today, Syngenta shares had risen 1.3 percent this year, trailing gains at competitors Monsanto Co. and DuPont Co. which have risen 9.8 and 27 percent over the same period.
Sales rose 2 percent to $8.4 billion. Excluding royalties for its 604 corn rootworm trait worth $256 million, booked in the year-earlier period, sales rose 7 percent.
“For the second half of the year we expect an acceleration of underlying sales growth based on the positive outlook for Latin America and Asia Pacific,” Mack said in a statement today.
Syngenta, which had cash and cash equivalents of $785 million on June 30, will continue to look for acquisitions and ruled out a one-time return to shareholders, Chief Financial Officer John Ramsay said.
“We don’t see the need for a special dividend,” he said, adding that the company is increasing its ordinary dividend “very substantially,” he said.
The maker of the Cruiser seed treatment and Dual II Magnum herbicide, formed in 2000 by the merger of Novartis AG and AstraZeneca Plc’s agribusinesses, appointed Michel Demare, the former finance chief of Swiss engineer ABB Ltd., as chairman earlier this year. Demare replaces Martin Taylor.
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