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Syngenta's 1H14 Earnings and Revenues Rise Y/Y

Zacks Equity Research

Syngenta AG (SYT) recently reported financial results for the first half of 2014 (ended Jun 30, 2014). Earnings per share, excluding restructuring and impairment charges, came in at $15.60 (or $3.12 per ADR), down 2.0% from $15.92 reported in the first half of 2013.


In the reported half year, sales climbed 1% year over year to $8,508 million year over year. At Constant Exchange Rate (:CER), revenues increased 4% backed by price and volume gains.

EAME (Europe, Africa, Middle East), Latin America and Asia Pacific witnessed a healthy performance with sales growing 7%, 11% and 10% year over year, to $3.3 billion, $1.3 billion and $1.1 billion, respectively, on a CER basis. However, revenues declined 7% in North America to $2.4 billion and remained flat in Lawn and Garden segment at $364 million.


Gross profit margin in the reported period increased 100 basis points (bps) year over year to 49.6%, on a CER basis. Earnings before interest, tax, depreciation and amortization (:EBITDA) margin was 26.6%, up 60 bps year over year, on a CER basis.

Adjusted operating margin in the EAME segment decreased 190 bps year over year to 38.9%, while the same declined 560 bps year over year to 29.2% in the North America segment. Lawn and Garden segment’s adjusted operating income fell 270 bps year over year to 14.7%.

Also, adjusted operating profit in Latin America increased 90 bps year over year to 17.4%. Adjusted operating income for Asia Pacific segment improved 20 bps to 28.0%.

Balance Sheet/Cash Flow

As of Jun 30, 2014, Syngenta had cash and cash equivalents of $865.0 million, against $902.0 million on Dec 31, 2013. Financial debt and other non-current liabilities were $3.0 billion, up from $1.8 billion in the preceding half year.

In the first six months of 2014, Syngenta generated cash flow from operating activities of $195.0 million, compared with $68.0 million cash used in the last-year comparable period. Capital expenditure amounted to $268.0 million, up from $220.0 million incurred in six months ended Jun 30, 2013.

During the reported period, Syngenta paid dividends totaling $1.0 billion, along with share repurchases worth $48.0 million.


In the second half of 2014, management expects sales growth on the back of increased demand in the Latin America segment. On a CER basis, the company expects to witness integrated sales growth of 6% year over year. Free cash flow before acquisitions is expected to reach $1.3 billion in 2014.

Other Stocks to Consider

With a market capitalization of $32.9 billion, Syngenta holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry include Yara International ASA (YARIY), Limoneira Company (LMNR) and Chemical & Mining Co. of Chile Inc. (SQM). While Yara International sports a Zacks Rank #1 (Strong Buy), Limoneira and Chemical & Mining Co. hold a Zacks Rank #2 (Buy) each.

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