Syngenta reaps profit harvest
The world’s largest agrochemicals company, Syngenta, moved back into the black last year, posting a net profit of $268 million (SFr331.81 million) after a loss of $27 million in 2002.
Basel-based Syngenta said its sales were up by six per cent to $6.58 billion, following strong growth in the second half of the year.
Announcing its 2003 results on Wednesday, the company said that earnings before restructuring and impairment charges of $95 million rose 37 per cent, lifted also by cost cuts, lower net financial expenses and a further reduction of the tax rate.
Net profit before the exceptional items rose to $363 million.
It added that the weakness of the dollar throughout the year had had a positive impact of $443 million on sales and of $23 million on earnings before interest, tax, depreciation and amortisation (EBITDA).
“In 2003, Syngenta delivered a strong performance which provides an excellent platform for future growth,” commented chief executive Michael Pragnell.
“The second half of the year was particularly encouraging, with sales growth in both the third and fourth quarters,” he added.
Investors welcomed Pragnell’s upbeat assessment and the solid results. Syngenta’s shares, which have gained more than seven per cent this year, were up a further two per cent during morning trading on Wednesday.
“Business is improving. That’s the news we were hunting for and Syngenta delivered that news,” commented the equity sales team at Aargau Cantonal Bank.
Strong performance
The company said that, in recognition of the growth in earnings and strong cash flow, the board of directors had recommended a doubling of the dividend to SFr1.70 per share to be paid via a par reduction of the stock.
And the board was also planning to return over $800 million to investors over the next three years in dividends and stock buy-backs.
The statement commented that early signs of stabilisation in the crop protection market pointed to a more favourable business environment in 2004.
“We are only one month into the new year and it is always hard to make predictions at this stage, but what we can see are signs of new confidence in the market,” said Pragnell.
“Our confidence is reflected in our target of high teens compound annual growth in earnings per share over the next three years through 2006.”
Since it was formed by the merger of the agrochemicals units of Novartis and AstraZeneca in 2000, Syngenta has used cost cuts to underpin results, shedding 3,600 jobs.
The company announced on Wednesday that it would close its unit in Schweizerhalle near Basel by the end of 2007, with the loss of 127 jobs.
Syngenta said it aimed to save an additional $300 million every year over the next five years, partly by moving into low-cost areas.
swissinfo with agencies
Syngenta has posted a 2003 net profit of $268 million including restructuring and impairment, after a loss if $27 million the previous year.
It said that early signs of stabilisation in the crop protection environment pointed to a more favourable business environment this year.
The board has proposed a doubling of the dividend to SFr1.70.
Syngenta sells seeds as well as crop protection products such as pesticides. It currently has around 21 per cent of the global market.
Syngenta was created in 2000 from the merger of the agrochemicals units of Novartis and AstraZeneca.
It is world leader in crop protection and ranks third in the high-value commercial seeds market.
The company employs more than 19,000 people in over 90 countries.
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