Syngenta AG, the world’s largest agrochemicals company, has reported a four per cent fall in first-quarter sales but stayed upbeat about the full year, sending its shares over seven per cent higher.
Syngenta, which makes products to kill weeds and bugs as well as genetically modified seeds, said sales totalled $3.6 billion, a seven per cent increase when stripping out currency effects.
Credit Suisse analysts said crop protection sales were better than expected and seed sales slightly worse.
“A strong set of numbers should go a long way to reassure investors that the agriculture story is not over. Currency effects dampened some of the shine, but this should not impact profits,” they wrote in a note to clients.
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Syngenta benefited last year from rising crop prices and record food costs that spurred farmers to expand planting, but the global economic crisis had dampened demand and prices.
However, the company confirmed a forecast set in February for earnings per share growth in 2009.
“For the full year, despite adverse currency effects and ongoing tight risk management, the company continues to target growth in earnings per share” in 2009, it said.
Analysts polled by Reuters on average predicted sales would be flat at $3.8 billion in the first quarter.
Syngenta shares were up 7.13 per cent at 237.30 Swiss francs at 0840 GMT, outperforming a flat DJ Stoxx European chemicals index.
Syngenta chief executive Mike Mack said the Northern Hemisphere planting season had started well and noted that commodity prices were still higher than five years ago.
“Farmers still have ample incentive to plant,” he told Reuters in an interview, adding he expected some margin improvement from price hikes and was confident to be able to push through increases of four to six per cent this year.
U. S. rival Monsanto Co., the world’s biggest seed company, posted better-than-expected second-quarter profit earlier this month as revenue increased in its key corn and soybean seed businesses and it benefited from a low tax rate.
Syngenta trades at about 10 times forecast 2010 earnings, a big discount to Monsanto’s 15.
