Syngenta Sales-Gain Calms Concern of Impact of Cold WeatherPatrick Winters
Syngenta AG said it sees a good growing season and reported sales that assuaged concern that a cold spring in Europe and North America had delayed purchases of seeds and agrochemicals. The stock rose the most in 18 months.
Syngenta first-quarter sales rose 6 percent to $4.6 billion, the Basel, Switzerland-based company said in a statement. That met the $4.57 billion average estimate from a Bloomberg survey of analysts.
“We are now into the season with some intensity,” Chief Financial Officer John Ramsay said in a telephone interview today. “We expect, assuming there’s no return to the cold weather, that we are going to have a good season.”
The world’s biggest maker of crop chemicals targets savings of $150 million this year to offset lower licensing income and higher production costs in seeds, Ramsay said. Chief Executive Officer Michael Mack is betting that a companywide reorganization along crop lines will help boost sales to $25 billion by 2020 from $14.2 billion last year.
Shares of the maker of Force and Karate Zeon insecticides climbed 4.3 percent to 394.40 Swiss francs at 1:30 p.m. in Zurich. That gave Syngenta a market value of 36.7 billion francs ($39.3 billion). The intraday gain was the biggest since October 2011.
“Syngenta’s start to the year was solid amid fears that the cold weather would lead to a bumpy quarter,” John Klein, an analyst at Berenberg Bank in London, said in a note to clients. He sees significant upside to the share price if Syngenta continues its first-quarter performance.
Sales in Europe, Africa and the Middle East gained 10 percent even as Italy and the U.K. were particularly affected by cold weather, Ramsay said. Germany had its fourth-coldest March since the start of the 20th century, with an average temperature of 0.1 degree Celsius (32.2 degrees Fahrenheit), 4.2 degrees below the three-decade average through 2010, the country’s weather office reported April 11.
Syngenta is investing in programs to automate production of rice and sugarcane in India and Brazil, which are expected to be fully scaled up by 2015, Ramsay said.
Rival Monsanto Co. on April 3 reported quarterly profit that beat analysts’ estimates on sales of corn seed and Roundup weed killer.