SYT Posts Impressive 2012 Results

Syngenta AG (SYT - Analyst Report), an agriculture chemicals producer, reported its financial results for the fourth quarter and year 2012 on Feb 6, 2013. In 2012, earnings per share, excluding restructuring and impairment charges, came in at $22.30, up 15% from $19.36 reported in 2011.

In fourth quarter 2012, sales increased 12% to $3.2 billion as North America and Latin America witnessed healthy performance with sales growing 28% and 17% year over year, respectively. The results were partially offset by a 7% decline in Europe, Africa and the Middle East and 3% in Asia Pacific.

In 2012, sales grew 7% (10% on constant currency rates) to $14.2 billion on the back of higher sales volume and healthy price increases.

Gross profits in 2012 grew 7.6% while margins stood at 49.2% compared with 49.0% in 2011. Operating expenses, including G&A, R&D and marketing and distribution, grew 5.6% in 2012 and represented 31.2% of total revenue. Operating margin was 16.1% compared with 15.5% in 2011.

Exiting 2012, the company’s cash and cash equivalents stood at $1.6 billion, down 4.0% year over year. Financial debt and other non-current liabilities were $2.5 billion compared with $2.4 billion in 2011.

Cash generated from operating activities in 2012 grew 27.4% and came in at $1.4 billion. Capital spending in the year was $508 million, up 6.1% year over year.

The same day, management announced its expansion plans for investing roughly $77 million in its corn seed protection facility in Brazil. The capacity is expected to increase four times to 1.6 million bags by 2015. This investment was particularly planned to tap the expected increase in corn production in Brazil which is expected to double by 2020.

Sygenta AG currently holds a Zacks Rank #1 (Strong Buy). Other stocks to watch out for in the industry are Gruma S.A.B. de CV (GMK - Snapshot Report) and BASF SE (BASFY), each with a Zacks Rank #1 (Strong Buy) and Monsanto Company (MON - Analyst Report), with a Zacks Rank #2 (Buy)