Value Microcaps Food, Agriculture and Soft Commodities

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Commodities Send Syngenta Earns Soaring
Thursday February 7, 9:27 am ET
Record Commodity Prices Lead to Big Profits at Agrochemical Company Syngenta

BASEL, Switzerland (AP) -- Agrochemical company Syngenta AG on Thursday posted a 75 percent rise in annual net profits on soaring commodity prices and strong demand.

Chief Executive Mike Mack said 2007 marked a turning point for Syngenta, as record commodity prices encouraged growers to boost investment and maximize yield.

The Swiss company reported profits of $1.11 billion, compared with $634 million in the same period a year earlier.

That beat analyst estimates of around $1 billion.

Syngenta, which reports only half- and full-year results, said sales increased 15 percent last year to $9.24 billion, from $8.05 billion in 2006.

The company announced a dividend of 4.80 Swiss francs per share ($4.37), up from 3.80 francs per share in 2006. The company said it will also continue its share buyback program.

Shares in Syngenta were down 0.8 percent at 2.77 francs ($2.52) in Zurich.

Mack said continued high demand for agricultural commodities would enable Syngenta "to target double digit growth in earnings per share through 2010."

Crop protection, which generates about 75 percent of Syngenta's revenue, increased by 14 percent to $7.3 billion in the last year, compared with $6.4 billion in 2006.

The crop protection business posted its strongest growth in Latin America with a 37 percent increase. Europe, Africa and the Middle East also reported double-digit growth.

Nina Baiker, an analyst with Zuercher Kantonalbank, said Syngenta's performance is very good. The company's crop protection division is well positioned to take advantage of farmers' need to boost yield per acre for food and biofuels, she added.