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This article is taken from our Agrow platform dated
11/05/20.
Corteva Agriscience's crop protection sales rose by 5% to $1,501
million in the first quarter of 2020.
Corteva Agriscience's crop protection sales rose by 5% to $1,501
million in the first quarter of 2020. On an organic basis, sales
grew by about 10%. Seed sales increased by nearly a quarter
(+24.8%) to $2,455 million, with overall revenues up by 16.5% to
$3,956 million.
A 10% rise in crop protection volumes was partly offset by a 4%
adverse currency effect and a 1% reduction from portfolio actions.
Prices were flat. Volume gains were primarily driven by product
launches such as Enlist (2,4-D choline + glyphosate) and
halauxifen-methyl (trade-marked as Arylex) herbicides and
sulfoxaflor (trade-marked as Isoclast) insecticide. There was also
strong early demand in Latin America and the Europe, Middle East
and Africa (EMEA) region. Unfavourable currency impacts occurred
mainly in Brazil and Europe. The portfolio impact came from
prior-year divestitures in North America and Asia Pacific. Pricing
gains in Latin America were offset by increased grower incentive
discounts in North America.
Herbicide business rose by 6.7% to $823 million and fungicide
sales rose by 4.1% to $229 million. Insecticide revenues were
almost flat (+0.3%) to $378 million. Sales of other products grew
by 16.4% to $71 million.
Sales were higher in all regions except in North America. On an
organic basis, sales grew by 30% in Latin America, 14% in Asia
Pacific, 9% in EMEA and 1% in North America.
Corteva's first-quarter crop protection sales by region
($ million)
Region
2019
% change
2020
Europe, Middle East & Africa
560
+4.6
586
North America
479
-0.8
475
Asia Pacific
203
+9.4
222
Latin America
187
+16.6
218
Total
1,429
+5.0
1,501
Crop protection operating earnings before interest, tax,
depreciation and amortisation (EBITDA) rose by 8.2% to $238
million. Gains from new product sales and cost synergies were
partly offset by higher input costs, and unfavourable currency and
portfolio impacts.
Seeds
Higher seed sales were driven by a 22% rise in volumes and a 5%
price increase. Those gains were partly offset by a 2% adverse
currency effect. Volume gains came from earlier deliveries in North
America due to improved weather conditions and the anticipated
recovery of planted areas. There was also strong early demand in
the EMEA region due to perceived supply concerns from the Covid-19
pandemic. The increase in prices was due to a favourable product
mix in the Americas and changes in the route to market in the EMEA
region. Unfavourable currency impacts occurred in Brazil and
Europe.
Maize seed sales rose by 27% to $1,864 million. Soybean business
grew by 38.2% to $181 million and sales of other oilseeds were up
by 10.2% to $248 million. Other seed sales increased by 13.3% to
$162 million.
There were double-digit sales gains in all regions except Asia
Pacific, which saw reduced sales. On an organic basis, sales grew
by 41% in North America, 30% in Latin America and 13% in EMEA, with
a 2% decline in Asia Pacific.
Corteva's first-quarter seed sales by region ($
million)
Region
2019
% change
2020
North America
913
+41.3
1,290
Europe, Middle East & Africa
804
+9.6
881
Latin America
178
+21.3
216
Asia Pacific
72
-5.6
68
Total
1,967
+24.8
2,455
EBITDA for the seed business soared by 78.8% to $581 million.
Volume gains in North America, favourable product mix, cost
synergies and ongoing productivity improvements more than offset
higher commissions, currency headwinds and higher unit costs due to
unfavourable seed yields, Corteva points out.
Corteva's first-quarter results ($ million)
1st qtr ended March 31st
2019
% change
2020
Sales
3,396
+16.5
3,956
Crop protection
1,429
+5.0
1,501
Seed
1,967
+24.8
2,455
Operating EBITDA1
518
+53.3
794
Crop protection
220
+8.2
238
Seed
325
+78.8
581
1earnings before interest, tax, depreciation and
amortisation.
Corteva has suspended its full-year guidance in view of the
Covid-19 pandemic. This decision acknowledges uncertainty in global
markets, specifically currency and key commodity markets such as
ethanol, which can impact demand for the company's products.