Syngenta has reported a 7% fall in global revenues for the first quarter of 2016, with lower crop protection and seed sales. But excluding currency effects, it says European sales are 6% higher. The ChemChina takeover is on course to complete in Q4.
The Syngenta Group has reported Q1 revenues of $3.74 billion, compared to $4.02bn in Q1 2015. Crop Protection sales were 6.8% down at $2.60bn ($2.84bn) and seeds $0.98bn ($1.02bn). Overall volumes were 2% lower, but prices 2% up. However, at constant currencies, the company says that sales in the Europe, Africa and Middle East region were 6% higher, up from a strong Q1 2015. This growth was achieved despite “subdued grower sentiment”, notably in France, as a result of low crop prices.
Europe’s performance partially offset declines in the other regional markets, with a planned reduction in glyphosate affecting North America; credit problems at farm level in key South American markets, allied to low insect pressure; and weather problems in Asia.
“For the full year, our target of maintaining sales at constant exchange rates is underpinned by the contribution of new products,” states Syngenta chief executive John Ramsay. “We are on track to realize our raised 2016 target of $300 million in incremental savings. Profitability will further benefit from a reduction in raw material costs.
“Over recent months we have reviewed our integrated strategy in the light of our experience over the last five years. There have been many clear successes, notably in the emerging markets, and we will continue to pursue an integrated approach where it clearly adds value. Seeds are central to grower decision making and are indispensable to an integrated offer. We are however, determined to improve the profitability of our Seeds business. We have a competitive and sustainable position in most crops but in certain areas are prepared to consider joint venture, acquisition or divestment options.”
As regards the ChemChina bid, the company notes that the Swiss and US Public Tender Offers commenced on March 23rd, with the transaction expected to conclude by the end of the year.