REFILE-UPDATE 1-Syngenta sees bigger hit from weak emerging market currencies

Wed Apr 16, 2014 3:58am EDT

(Corrects spelling of CFO's surname throughout)

* Q1 sales up 2 pct $4.7 bln, in line with poll forecast

* Devaluation of Ukraine's hryvnia, Russia's rouble weigh

* Expects weak currencies to knock about $100 mln off FY EBITDA

* Confirms full-year targets

By Caroline Copley

ZURICH, April 16 (Reuters) - Syngenta AG, the world's largest maker of crop chemicals, expects weak emerging markets currencies to have a bigger hit on full-year earnings than previously assumed, it said on Wednesday, as it posted higher first-quarter sales.

Adverse currency moves knocked 3 percent off quarterly sales, which rose 2 percent to $4.7 billion, in line with the average forecast in a Reuters poll.

Excluding exchange rate moves, sales increased 5 percent.

Syngenta now expects weaker currencies to knock around $100 million off full-year earnings before interest, tax, depreciation and amortisation (EBITDA), compared with an earlier forecast for a negative impact of $50 million.

Chief Financial Officer John Ramsay said the main impact had come from the devaluation of Ukraine's hryvnia, as fears of all-out war with Russia and a worsening domestic economy have seen the currency lose a third of its value versus the dollar this year.

"What we've done there is we've put our prices up. For Ukraine, we've recovered probably about two thirds of the currency loss through pricing," Ramsay told Reuters in an interview.

The Swiss company, which makes products to kill weeds and bugs as well as genetically modified seeds, gets about 4-5 percent of its total sales from the Commonwealth of Independent States (CIS), which includes Ukraine.

Despite the crisis in the region, Ramsay said volumes had held up well, growing by a double digit percentage at constant exchange rates in the CIS region, mainly driven by Russia. In Ukraine, volumes are just about at last year's levels, he said.

Elsewhere, Syngenta said unseasonably mild weather in Europe helped the planting season get off to a strong start and sales in its Europe, Africa and Middle East region rose 10 percent.

This helped compensate for a 7 percent fall in sales in North America, where arctic weather conditions have delayed the start of planting. Ramsay said the cold weather would have to persist for some weeks longer before it became a major problem.

For the full year, Syngenta expects integrated sales to grow 6 percent at constant exchange rates. The company confirmed its full-year guidance for growing gross margins and an increase in free cash flow before acquisitions to around $1.5 billion. (Editing by Mark Potter and Erica Billingham)

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