* H1 sales up 2 pct to $8.4 bln vs $8.644 bln in poll
* Net profit $1.409 bln vs $1.464 forecast
* Confident about outlook for the rest of the year
* Shares fall 4.2 pct, underperform sector
By Caroline Copley
ZURICH, July 24 Syngenta AG, the
world's largest maker of crop chemicals, said on Wednesday it
expected underlying sales growth to pick up pace in the second
half of the year, after a cold, wet spring hit earnings in the
first six months.
Syngenta said it was confident high commodity prices would
encourage farmers to invest in crops in the second half of the
year, when demand is driven by South American farmers, and help
its 2013 sales surpass last year's record of $14.2 billion.
But its shares fell after first-half sales and profits
missed expectations, hit by the cold, wet weather, particularly
in Germany, and delayed planting in the United States.
By 0820 GMT Shares in Syngenta - which have underperformed
rivals Monsanto and DuPont so far this year -
were down 4.2 percent to trade at 370.0 Swiss francs, compared
to a 0.3 percent weaker European chemicals sector.
The shares trade at 16.1 times estimated earnings over the
next 12 months at a discount to Monsanto's 19.8 times but at a
premium to Bayer's 13.9 times.
"We still see upside to our fair value forecast if the
company executes and delivers on its long term growth plans,"
said Patrick Rafaisz, an analyst at Vontobel, who has a 'hold'
rating on the stock.
"But today's results are a miss vs market expectations and
hence unlikely to provide for a positive sentiment towards the
stock short term."
Syngenta is banking on growing demand for its seeds,
pesticides, fertilisers and support services, as farmers
grappling with erratic weather and a shortage of labour turn to
technology to boost yields.
"For the second half of the year we expect an acceleration
of underlying sales growth, based on the positive outlook for
Latin America and Asia Pacific," Chief Executive Mike Mack said
in a statement.
His comments echo those from rival DuPont, which said
earnings would be "significantly better" in the second half of
2013 than in the same period last year due to agricultural
growth in the Americas.
The group maintained its target for an earnings before
interest tax depreciation and amortisation (EBITDA) margin in
the range of 22 to 24 percent in 2015 and said it was confident
it could achieve its 2020 target of sales of $25 billion for its
top eight crops.
Sales at Syngenta rose 2 percent in the first half to $8.39
billion, falling short of the Reuters analyst consensus of $8.64
Higher seed production costs, lower royalties and increased
marketing costs also took a toll on profitability. Net profit
fell 5 percent to $1.409 billion.
Syngenta said it planned tactical share repurchases
throughout the rest of the year in the range of up to $100
million, but stressed that M&A still remained its priority.