* Syngenta maintains 6 pct sales growth target for 2014
* This despite 7 pct drop in first-half North America sales
* Sees strong sales in Latin America in second half of 2014
By Joshua Franklin
ZURICH, July 23 Syngenta AG, the
world's largest maker of crop chemicals, reaffirmed its
full-year sales target on Wednesday, despite prolonged cold
weather hurting North American sales in the first half.
The Swiss company, which makes products to kill weeds and
insects as well as genetically-modified seeds, said first-half
sales were $8.5 billion. Net profit fell by 1 percent to $1.4
Revenue from North America, which was Syngenta's third most
important market in sales in 2013, dropped 7 percent in the
first six months of the year as cold temperatures delayed the
start of the season until late May. All other regions posted
sales growth of at least 4 percent.
Syngenta Chief Executive Mike Mack said the company still
expected to hit its full-year sales growth target.
"When we came out with our full-year forecast in February,
we called for a growth rate for 6 percent globally and we're on
track to make that," Mack said in an interview.
Syngenta's Chief Financial Officer John Ramsay told Reuters
the company was targeting sales growth of 8-9 percent in the
second half of the year, around half of it from Latin America.
In Latin America, the company plans to launch its new ELATUS
fungicide in Brazil in September after earlier launches in
Paraguay and Bolivia. Ramsay told analysts in a call that ELATUS
sales in Brazil could hit $300 million in the second half of the
CEO Mack told Reuters it might not take long for the product
to hit blockbuster status - sales of more than $500 million.
"If it goes as we think it will, we could be looking at a
blockbuster in two seasons," Mack said.
Earnings before interest, tax, depreciation and amortisation
(EDITDA) came in 3 percent lower than last year at $2.1 billion.
Syngenta said this was down to currency movements.
The company also lowered its guidance for targeted free cash
flow before acquisitions to around $1.3 billion from around $1.5
Group sales rose 2 percent in constant currency terms, but
were flat in real terms at $3.8 billion in the second quarter of
the year, falling short of the Reuters analyst consensus of $3.9
As of Tuesday, Syngenta's shares had lagged those of its
European rivals this year, falling by more than 7 percent versus
a rise of around 1 percent in the European chemicals sector
At 0909 GMT, shares in Syngenta were trading down 0.3
percent, underperforming the European chemicals sector, which
was up 0.6 percent.
Rival Monsanto Co last month announced authorisation
of a $10 billion share repurchase and Main First analyst Ronald
Koehler said there was a growing feeling Syngenta could do the
"Syngenta's balance sheet remains strong, which would allow
it to resume its share buy-back programme," Koehler, who has an
"outperform" rating on the stock, wrote in a note.
"After Monsanto announced a $10 billion share buy-back, we
would assume the pressure on management is increasing to give
back cash to shareholders."
Last month there was a media report that the company had
been in talks about a $40 billion takeover by Monsanto to create
the world's largest agrochemical company.
Syngenta CEO Mack declined to comment on any rumours
Any deal between the two would allow Monsanto to benefit
from lower holding taxes in Switzerland, where Syngenta is
The head of the U.S. Senate Finance Committee said on
Tuesday immediate government action is needed to stop U.S.
corporations from avoiding federal taxes by shifting their tax
domiciles overseas through deals known as inversions.
Analysts are expecting more deals in the sector as larger
players like Monsanto, Bayer and BASF look
to bulk up and broaden their reach in crop protection and seeds.
(Reporting by Joshua Franklin; editing by Jason Neely and Ruth