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North America setbacks slow Syngenta sales growth

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Syngenta managed to outpace rival DuPont in showing a small rise in sales, with strength in Asia, Latin America and Europe offsetting weakness in the North American market.

Swiss-based Syngenta, the world's biggest agrichemicals group, reported sales of $8.51bn for the April-to-June quarter, a rise of 1.4%, or 4% in constant currency terms.

The small increase compared with a flat performance revealed on Tuesday by DuPont, the US conglomerate, for its agriculture division, which includes the Pioneer seeds group.

And on operating profits, Syngenta reported a 3.7% decline, to $1.73m, compared with an 11.2% drop to $836m in operating earnings at DuPont's agriculture arm.

'Adverse weather conditions'

Syngenta acknowledged a dent to its performance from the North American weakness also highlighted by DuPont, which flagged the impact of lower herbicide volumes in the region, besides a switch by farmers to corn from soybean sowings.

Mike Mack, the Syngenta chief executive, said that "the pace of sales growth in the first half was held back by adverse weather conditions in North America".

The cold start to the North American spring, "combined with a reduction in corn acreage, significantly impacted the crop protection market", reducing the need for early herbicide applications, and reducing disease and pest pressures.

In Canada, which had a particularly wet spring, demand was "affected by a reduction in cereals acreage and by flooding", the group said

Regional performances

North American sales fell by 5.9% to $1.21bn, led by a 10.9% drop to $262m in regional seed revenues, although this reflected the sale of Dulcinea, the US fresh produce business, as well as a drop of 4% in regional corn seed sales.

Stripping out the Dulcinea sale, to Pacific Trellis, and adjusting for currency movements Syngenta's group seed sales showed a marginal increase.

Corn and soybean sales in Latin America and Europe were "slightly higher" while Asia Pacific "saw double digit growth with the continuing success of Syngenta hybrids based on tropical germplasm".

In agrichemicals, Latin America proved the strongest market, with sales up 11.9% at $592m, helped by a scramble for insecticides in Brazil to counter the spread of helicoverpa corn earworm caterpillars.

'Acceleration of sales growth'

Mr Mack said that Syngenta was standing by a forecast of full-year sales growth of 6%, at constant exchange rates.

Indeed, the group was expecting an "acceleration of sales growth" in the second half of the year, "driven by Latin America", where it is launching the Elatus fungicide.

"Profitability in the second half of the year will benefit from the non-recurrence of the seeds inventory write-down incurred in the second half of 2013," he added.

Nonetheless, Syngenta shares lost early gains to stand 0.3% lower at SFr327.60 in morning deals.


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