Monsanto has reported falls in profitability and revenues for the first quarter of its financial year, attributed to falling global agricultural commodity values.
The company has posted a net loss of $253 million on total sales of $2.22 billion for the three months to November 30th 2015, compared to a net profit of $243m and $2.87bn in Q1 of the previous year. It says the decline is due to weaker foreign currencies, glyphosate pricing and lower corn volumes in Latin America.
Monsanto’s Seeds and Genomics revenues were $1.40bn in the latest period, down from $1.62bn a year earlier, while agricultural productivity, the agrichemical division, had sales of $820m ($1.25bn).
The company is forecasting 5%-7% profit growth from the core Seeds and Genomics segment over the whole 2016 year, led by new products in its global corn hybrid portfolio, continued growth in the herbicide-resistant Intacta RR2 PRO soybean and additional licensing opportunities. Agricultural Productivity should deliver $900m to $1.1bn “consistent with the strategy to maintain a slight premium over generics”.
“Through focus and discipline, we remain confident in our ability to deliver on the targets and milestones we’ve established for our company in both the near term and through the next decade,” notes Hugh Grant, Monsanto chairman and chief executive officer. “In a challenging agriculture environment, we remain in a position of strength. It's this strength that positions us to be a leading partner in an industry that will continue to change.
“This is an exciting time in agriculture and within our company as we continue to expand the breadth and pace of innovation," said regarding this year’s annual pipeline update.
Dr Robb Fraley, chief technology officer and executive vice president, adds that the company has more than 20 promising products in its R&D pipeline. “We've seen incredible progress across our core pipelines of breeding, biotechnology and chemistry, along with our growth platforms of data science and biologicals. Through a truly integrated approach to delivering solutions, we are uniquely positioned to support farmers in their efforts to improve yields and overall productivity in a sustainable way."
Monsanto expects innovation to drive 80% of the expected $3.5bn in gross profit growth from the end of fiscal year 2016 to fiscal year 2019.