* Q3 sales $2.9 bln, matching forecast
* Sees 2013 EPS close to last year's level
* Takes $170 mln writedown on U.S. corn seed inventory
* Shares open 2 percent lower
ZURICH, Oct 17 Syngenta, the world's
largest agrochemicals company, said earnings for the year will
come in lower than it expected due to a writedown on seed stocks
and emerging market currency swings will reduce a benefit from
Earnings per share will no longer beat last year's
underlying level, but instead come in close to that, which was
$19.70 when excluding the effects of restructuring and
impairment, Basel-based Syngenta said on Thursday.
"We've produced more corn seeds than we plan to sell in 2014
so we're being cautious and taking a provision," Chief Financial
Officer John Ramsey told Reuters after the group reported
third-quarter sales in line with expectations.
"But this is something that you'll see through the whole
industry," he said. The group put its provision at $170 million.
Ramsey also said the group had expected currency rates to
boost 2013 earnings by around $100 million, but now the company
was forecasting $50 million. Syngenta makes most of its sales in
"The pressure came from the emerging markets, which make up
50 percent of our sales," Ramsey said. "We saw significant
volatility which settled down through the latter part of
Shares in Syngenta - which have sharply underperformed
rivals so far this year - were down 2 percent in opening trades
compared to a 0.4 percent lower European chemicals sector.
"On the guidance, uncertainty over the full year impact of
exchange rates, progress in Latam, and the above inventory
write-down will likely overhang the shares until early 2014," JP
Morgan analysts wrote in a note.
Analysts at UBS said current consensus for underlying EPS
was at $22.80, and taking $19.50 as the new guidance would
translate to a 14 percent downgrade.
Syngenta said that the planting season in Latin America had
started well, with sales up 17 percent there in the third
quarter, driven by a 25 percent increase in Brazil.
In Latin America, which accounted for 26 percent of sales in
2012, the planting season falls in the second half of the year
and is therefore important for the fourth quarter.
Syngenta trades at 16.1 times forward earnings at a premium
to DuPont's 13.8 times but at a discount to Monsanto's
Earlier this month, Monsanto reported a deeper than expected
loss in its fourth quarter as sales in its key seeds and
genomics business slipped.
For 2013, Syngenta maintained a target for sales to surpass
last year's record of $14.2 billion and also a long-term goal to
boost sales to $25 billion by 2020 as it banks on innovation and
a more integrated business that supplies farmers with everything
from seeds and pesticides to fertilisers and support services.
Syngenta also reiterated its target for a margin on earnings
before interest, tax, depreciation and amortisation (EBITDA) in
the range of 22 to 24 percent in 2015. The company had reported
an EBITDA margin of 23.2 percent at constant exchange rates in
Sales at Syngenta rose 11 percent at constant currency rates
in the third-quarter to $2.9 billion compared with the average
analyst forecast for $2.93 billion in a Reuters poll.