Hebei Lansheng Biotech Co., Ltd.
Beijing Multigrass Formulation Co., Ltd.

Corteva's revenues down 3% in 2019, reports a lossqrcode

Jan. 31, 2020

Favorites Print
Forward
Jan. 31, 2020
Corteva, Inc. reported financial results for the quarter ended December 31, 2019 and the full year 2019. The Company also provided 2020 guidance.
 
Summary of Fourth Quarter 2019 
 
For the fourth quarter ended December 31, 2019, reported net sales increased 6% versus the same period last year, with organic sales increases of 9%. 
 
Volumes increased 6% versus the prior-year period. Volume gains in both segments were driven primarily by North America as a result of stronger sales in multichannel seed brands; penetration of Enlist™ herbicides in preparation for the 2020 planting season; and sales of new products in Latin America and EMEA. 
 
Local price increased 3% versus the prior-year period, with higher prices in Latin America due to favorable mix from PowerCore Ultra® sales. Currency was a headwind of 3%, primarily from the Brazilian Real. 
 
The Company achieved approximately $50 million in merger-related synergies in the quarter.

 
GAAP loss from continuing operations after income taxes was $(42) million for the fourth quarter. Operating EBITDA1 was $224 million, a $174 million improvement versus the same period last year on a pro forma basis.
 
Crop Protection operating EBITDA improvement reflects merger-related cost synergies, gains on divestitures, and higher sales. Seed Operating EBITDA improvement reflects pricing gains resulting from favorable mix, merger-related cost synergies and continued productivity. 
 
The Company reported a loss of $(0.06) for GAAP EPS from continuing operations and operating EPS1 of $0.07 for the fourth quarter 2019.
 
Crop Protection Summary 
 
Crop Protection net sales were $6.3 billion in 2019, down from $6.4 billion in 2018. The decrease was due to a 3% decline in currency and a 1% impact from portfolio, partially offset by a 1% increase in volume. Local price was flat. 
 
Unfavorable currency impacts were primarily due to the Brazilian Real and the Euro. Volume gains driven by new product launches – including Enlist™ and Arylex™ herbicides, as well as Isoclast™ insecticide – were partially offset by unfavorable weather in North America, which resulted in lost spring applications.

 
Pricing gains from new product launches were offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures in North America and Asia Pacific.
 
Despite sales declines in 2019, Crop Protection pro forma operating EBITDA was $1.1 billion in 2019, essentially flat with 2018. Volume declines in North America, the unfavorable impact of currency and higher input costs more than offset cost synergies, sales from new products and ongoing productivity.
 
Crop protection net sales for the fourth quarter of 2019 were $1.7 billion, up 3% versus the prior-year period. The increase was due to an 8% increase in volume, which was partially offset by a 3% decline in currency, 1% decline in local price and 1% impact from portfolio. 
 
Volume gains were primarily driven by new product launches, including Enlist™ herbicide, coupled with a strong demand for insecticides in Latin America. Unfavorable currency impacts were primarily due to the Brazilian Real.
 
Pricing gains from new product launches were more than offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures in North America and Asia Pacific. 
 
Crop Protection operating EBITDA was $277 million in the fourth quarter, up from $169 million in the same quarter last year. Cost synergies, gains on divestitures, and volume gains more than offset increased selling costs and the impact of portfolio changes.
 
Seed Summary 
 
Seed net sales were approximately $7.6 billion in 2019, down from $7.8 billion in 2018. The decrease was due to a 2% decline in currency and a 1% decline in volume. Local price was flat. 
 
Unfavorable currency impacts were primarily due to the Brazilian Real, Eastern European currencies, and the Euro. Volume gains in corn in EMEA were more than offset by significant weather-related planting delays in North America, leading to a reduction in planted area for soybeans, and multi-channel and multi-brand rationalization impacts in North America.
 
Competitive pricing pressure in soybeans in the U.S. and increased soybean and corn replant in North America were offset by favorable mix and continued penetration of PowerCore Ultra® in Latin America. 

 
Seed pro forma operating EBITDA was $1.0 billion in 2019, down 9% vs. the prior year. Competitive pricing pressure, the unfavorable impact of currency, increased commissions and input costs, and volume declines more than offset cost synergies and ongoing productivity.
 
Seed net sales were $1.2 billion in the fourth quarter of 2019, up from $1.1 billion in the same quarter last year. The increase was due to an 8% increase in local price and a 5% increase in volume, partially offset by a 3% decline in currency. 
 
The increase in local price was primarily driven by favorable mix in Latin America from PowerCore Ultra® and in North America due to pricing gains in corn and licensing incomes. Volume gains were driven by increased deliveries of multi-channel brands in North America. 
 
Unfavorable currency impacts were largely driven by the Brazilian Real. 
 
Seed operating EBITDA was a seasonal loss of $(26) million for the fourth quarter of 2019, as compared to a loss of $(87) million in the same quarter last year. Pricing gains on favorable mix and cost synergies and ongoing productivity were partially offset by higher input costs driven by higher royalties and lower production yields.
 
Outlook 
 
The Company provided guidance5 for full year 2020 net sales of approximately $14.5 billion and expects operating EBITDA of approximately $2.2 billion for the same period. The Company’s operating EPS range is expected to be between $1.45 and $1.55 per share. 
 
Corteva is not able to reconcile its forward-looking nonGAAP financial measures to its most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of its control, such as significant items, without unreasonable effort.

Picture 0/1200

More from AgroNews

Magazine

2020 Biologicals Special 2020 Latin America Focus
2020 Formulation & Adjuvant Technology Annual Review 2019
Chinese issue of Annual Review 2019 2019 CRO & CRAO Manual
I wanna post a press Comment

Subscribe 

Subscribe Email: *
Name:
Mobile Number:  

Comment  

Picture 0/1200

Subscribe to daily email alerts of AgroNews.