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Article: Corteva agchem sales up 5% in Q1

21 May 2020

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.

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