Syngenta shrugs off cold weather to post solid sales
ZURICH (Reuters) - Syngenta AG (SYNN.VX), the world's largest maker of crop chemicals, expects farmers to continue to invest in products to boost agricultural output despite a recent drop in commodity prices.
Concerns over global growth and weak demand have pressured commodity prices in recent days, but Syngenta Chief Executive Mike Mack he didn't see prices deterring investment.
"The liquidity for growers is pretty good, they're well capitalized," Mack told Reuters in an interview on Thursday. "Right now these prices across the board continue to be attractive for investing in crops."
Syngenta, which met first-quarter sales expectations, is banking on innovation and a more integrated business that supplies farmers with everything from seeds and pesticides to fertilizers and support services to boost sales to $25 billion by 2020, from $14.2 billion last year.
The Swiss company, which makes products to kill weeds and bugs as well as genetically modified seeds, said sales rose 6 percent in the first quarter to $4.57 billion, helped by a strong end to the Latin American planting season.
Analysts had on average forecast sales of $4.56 billion in a Reuters poll.
Mack said he was confident the company remained on track to achieve its long-term sales growth target of 8 percent per year, despite freezing weather across Europe and North America delaying the start of the planting season this year.
Spiraling prices for wheat, corn and soya bean have encouraged farmers to buy more products from Syngenta and rivals DuPont (DD.N) and Monsanto (MON.N) to help boost yields.
Monsanto raised its guidance earlier this month and said it expects to sell a record amount of corn this year, after posting a 15 percent jump in sales to $5.5 billion in the second quarter.
Syngenta said it expected the impact of currencies and chemical raw materials to be neutral this year and to generate "significant" free cash flow.