Syngenta announced the return of its share buyback programme as unveiled earnings narrowly ahead of investors' expectations and flagged a "more positive outlook" for trading in 2010.
The seeds and sprays giant said that, "in the light of continuing strong free cash flow generation", it would return $750m to investors this year, including a dividend held at SFr6 ($5.58) per share for 2009.
The resumption of the buyback, which will amount to about $220m on Agrimoney.com calculations, comes a year after Syngenta, amid the global economic slump, suspended buybacks, on which it spent $2bn between 2004 and 2008.
The Swiss-based group also said last year it would be interested in buying Dow Chemical's agriculture business, worth roughly $5bn-7bn, over which a for sale sign was briefly placed last summer.
The buyback will add some 1-2% to earnings per share for 2010, analysts at Icap said, noting that Syngenta could comfortably afford it, with earnings covering interest payments 15 times.
'More positive outlook'
Syngenta made the call as it unveiled earnings of $1.37bn for 2009, down 1.0% year on year but ahead of analysts' forecasts of a $1.32bn result.
But it forecast a return to earnings growth, on a per share basis, in 2010, helped by a pick-up in sales volumes from the second quarter of the year.
"Improved conditions in emerging markets are contributing to a more positive outlook for 2010," chief executive Mike Mack said.
The group's crop protection division, which sells herbicides, insecticides and seed care products, while facing a "more competitive environment", would "build on… strong market positions".
The business, while suffering a 8.0% slide to $8.49bn in sales last year, saw some pick-up in the last three months, when fungicide sales were boosted by bumper soybean plantings in South America during what was, in many areas, a wet period.
Corn sales soar
The seeds unit would "enjoy further expansion of sales and profitability" in 2010, Mr Mack said, after a year in which sales jumped by 5.0% to $2.56bn, led by a 69% spurt in the last three months.
In North America, seed sales doubled in the fourth quarter, as farmers snapped up genetically-modified corn, which accounted for 25% of the division's sales of the year, compared with 11% in 2008.
"The proportion is expected to exceed 50% in 2010," Syngenta said,
Group sales fell 5% to $11.0bn.
'Steady performer'
The results were described by Credit Suisse analysts as in line with market forecasts, "although in the context of misses from Monsanto and a slide in commodity prices, this should not disappoint".
Syngenta shares should prove a "steady performer", the bank added.
Deutsche Bank, restating a "buy" rating on the stock, said that Syngenta's "higher quality portfolio deserves higher value."
The shares closed 0.3% higher at SFr273.30.
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