July 23 (Bloomberg) -- Syngenta AG, the world’s largest maker of crop chemicals, said it’s budgeting for an acceleration in sales growth in the second half with demand from Latin American farmers compensating for a weakened U.S. market at the start of the year.
The launch of the Elatus fungicide is seeing “strong momentum,” the Basel, Switzerland-based company said today. First-half sales were held back by adverse weather conditions in North America, along with a reduction in corn acreage.
Chief Executive Officer Mike Mack, who grouped Syngenta’s operations along crop lines, said his reorganization of the company is now “moving the needle” in terms of share of emerging markets, with gains in countries such as Turkey and Russia. Next year will see the introduction of the herbicide Acuron in North America which Syngenta hopes will redress lost market share to Bayer in recent years.
“Syngenta, with its leadership in emerging markets, looks structurally well placed for the long term,” Citi analyst Andrew Benson said in a note. “But the potential for further loss of share in fungicides and seeds and near-term pressure on market volumes create headwinds that will more than offset the long-term potential in the coming quarters.”
Shares of the Swiss company, the target of a failed takeover approach by Monsanto Co. earlier this year, climbed 0.2 percent to 329.4 francs as of 9:02 a.m. in Zurich.
Mack is overseeing an uptick in innovation that’s helping regain lost ground in specific areas such as so-called SDHI fungicides in Latin America.
“We were two seasons delayed but we’re back in it already,” Mack said in an interview.
Earnings before interest, taxes, depreciation and amortization fell 3 percent to $2.1 billion in the first half, held back by the cost of foreign exchange moves. Analysts had predicted $2.19 billion.
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