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Syngenta Full-year Profit Climbs; Hikes Dividend

Syngenta Full-year Profit Climbs; Hikes Dividend
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Swiss agribusiness company Syngenta AG (SYT: Quote) reported Wednesday a 17 percent increase in fiscal 2012 profit benefited by improved sales performance in North America and Latin America, despite adversities in Europe and Asian regions. The company also proposed a 19 percent increase in dividend.

Looking ahead, Chief Executive Officer Mike Mack said, "Our confidence in the coming season is reinforced by the fourth quarter business strength, notably in North and Latin America, as well as robust commodity crop prices. In 2013 we look forward to further business momentum driven by our innovative offers and a commercial organization which is now fully integrated in all territories."

Separately, Syngenta said its Chairman Martin Taylor, and three current directors will retire at the upcoming AGM, and that the Board will propose the election of two new directors, Eleni Gabre-Madhin and Eveline Saupper. The Board will also propose the re-election of Michael Mack and Jacques Vincent.

In another statement, the company said it intends to invest $77 million in the expansion of its corn seed production facility in Formosa, Brazil. Annual capacity is expected to quadrupled to 1.6 million bags by 2015, it added.

For the fiscal year 2012, net income attributable to shareholders of Syngenta increased to $1.87 billion from $1.60 billion last year. Excluding certain restructuring and impairment shares, earnings per share grew 15 percent to $22.30 from prior year's $19.36.

Earnings before interest, tax, depreciation and Amortization or EBITDA, a key earnings measure, rose 8 percent from last year to $3.15 billion. At constant exchange rates, EBITDA increased 17 percent and EBITDA margin improved to 23.2 percent from 21.9 percent last year.

The company attributed the increase in profitability to volume growth, price increases, an additional trait royalty from DuPont Pioneer, as well as cost savings largely from the integrated business model. These more than offset the impact of higher raw material costs and a charge for the settlement of US litigation relating to the herbicide atrazine.

Annual sales grew 7 percent to $14.20 billion from $13.27 billion last year owing to the appreciation of the dollar against most currencies. On constant exchange rates, revenues were up 10 percent. Syngenta said its sales volume increased 7 percent and prices were 3 percent higher.

In its fourth quarter, total sales rose 12 percent year-over-year to $3.24 billion as strong double-digit growth in North America and Latin America helped offset a decline in Europe, Africa & Middle East and Asia Pacific regions.

Mack said, "In 2012, crop prices rose sharply as adverse weather conditions in several regions resulted in significant production shortfalls, once again highlighting the fragility of global supply. The strong growth in Syngenta's sales reflected our flexibility in providing solutions across crops and, increasingly, in addressing agronomic challenges through our integrated offers."

Further, the company said its Board will propose to the AGM on April 23 a dividend of 9.50 Swiss francs per share, representing an increase of 19 percent in Swiss francs and around 21 percent in US dollars.

On the NYSE, Syngenta shares closed Tuesday's trading at $87.08, up $0.40 or 0.46 percent.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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