Syngenta Group makes less sales and profit
Published: Thursday, Nov 9th 2023, 08:20
Updated At: Friday, Mar 29th 2024, 14:20
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The Syngenta Group generated lower sales in the 2023 financial year than in the strong record year of 2022. Because lower sales volumes dampened sales prices, operating profit fell even more sharply. The company also abandoned its plans for an IPO in China for the time being.
The crop protection and seed manufacturer generated sales of 32.2 billion US dollars in the reporting year, 4% less than in the previous year. Calculated at constant exchange rates, this resulted in a small decrease of 1 percent.
This was due to the fact that wholesalers and retailers had actively reduced their stocks of crop protection products, Syngenta explained in a press release on Friday. These had been significantly increased in the previous year as a result of the supply chain disruptions.
At the same time, higher interest rates have forced partners to reduce their working capital. Nevertheless, demand for new and innovative crop protection products remained stable in the fourth quarter, explained Syngenta.
Profit falls significantly
At 15.5 billion dollars, crop protection products accounted for almost half of sales. Syngenta put the decline in the Crop Protection division at 5 percent. The Israeli subsidiary Adama (-17%) also achieved lower sales than in the previous year.
In contrast, Syngenta's seeds division (+2%) and the independently reported national company Syngenta Group China (+11%) achieved higher sales. The new "home market" since the purchase by the Chinese state-owned company Chemchina contributed sales of 9.6 billion dollars.
The overall lower sales volumes also had an impact on the sales prices that Syngenta was able to achieve. As a result, operating profit at EBITDA level fell by a significant 18 percent to 4.6 billion dollars. Excluding exchange rates, net income was 14 percent below the previous year.
To mitigate the lower volumes and prices, Syngenta continues to focus on measures to improve operational efficiency and productivity. Nevertheless, the Group's EBITDA margin fell by 2.5 percentage points to 14.2 percent.
IPO in China canceled for the time being
The Syngenta Group is based in Switzerland and is under Chinese ownership. It comprises the business units Syngenta Crop Protection based in Switzerland, Syngenta Seeds based in the USA, Adama based in Israel and Syngenta Group China.
Syngenta AG was acquired by Chemchina in 2015. In recent years, the newly formed group had announced several times that it wanted to return to the stock exchange in China. On Friday, the Group announced that it had withdrawn its application for an IPO on the Shanghai Stock Exchange.
The company intends to concentrate on further consolidating its market share, among other things. As soon as the necessary conditions are in place, the company will seek a resumption of the IPO in China or on another international stock exchange. The company will also examine alternative sources of financing.
©Keystone/SDA
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