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Syngenta's 1H13 Earnings Drop; Revs Up

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Syngenta AG reported its financial results for the first half of 2013, with earnings per share, excluding restructuring and impairment charges, coming in at $15.92, down 6.5% from $17.03 reported in the first half of 2012.


In the reported period, sales increased 2% to $8.4 billion compared with the first half of 2012, due to better performance in few of its segments, offset by a decline in others.

Europe, Africa and Middle East (EAME), Latin America and Asia Pacific witnessed a healthy performance with sales growing 6%, 12% and 8% year over year, respectively, on a constant exchange rate (CER) basis. EAME, Latin America and Asia Pacific segments generated $3.2 billion, $1.2 billion and $1.1 billion in sales, respectively.

However, revenues were hit by a 5% decline in North America and a 14% decline in Lawn and Garden segment. North America generated revenues of $2.6 billion while Lawn and Garden segment recorded revenues of $366.0 million, respectively, on a CER basis.


Gross profit margin in the reported period fell 240 basis points (bps) year over year to 48.6%, on a CER basis. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin in the reported six months was 25.2%, declining 200 bps year over year.

On a CER basis, adjusted operating income in the EAME segment increased 8% year over year to $1.3 billion, while the same increased 1% year over year to $295.0 million in the Asia Pacific segment. Lawn and Garden segment’s adjusted operating income increased 51% year over year to $63.0 million, on a CER basis.

Adjusted operating income for North America and Latin America segments declined 16% and 10% on a CER basis to $915.0 million and $194.0 million, respectively.

Financial Update

On Jun 30, 2013, Syngenta’s cash and cash equivalents stood at $785.0 million, against $1.6 billion on Dec 31, 2012. Financial debt and other non-current liabilities were $1.8 billion compared with $2.5 billion in the preceding half year.

On Apr 30, 2013, Syngenta paid a dividend of $10.01 per share, totaling $921.0 million.


With the rising commodity prices in Latin America, investments in soybeans are expected to increase, which will drive Syngenta’s revenues. The trend is also expected to help the company with respect to sugarcane and corn. Syngenta also expects to witness high growth opportunities in Asia Pacific. In 2013, total capital expenditure is expected in the range of $700 million to $750 million.

Other Stocks to Consider

Monsanto Company (MON - Free Report) released its fiscal third-quarter results on Jun 26, 2013. The company reported earnings per share of $1.66, beating the Zacks Consensus Estimate of $1.60 by 3.8%.

Archer Daniels Midland Company (ADM - Free Report) is expected to release its second-quarter results before the market opens on Aug 6, 2013. The Zacks Consensus Estimate for the quarter is 42 cents.

Bunge Limited (BG - Free Report) is expected to release its second-quarter results before the market opens on Jul 25, 2013. The Zacks Consensus Estimate for the quarter is $1.37.

Syngenta currently carries a Zacks Rank #4 (Sell).

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