Isagro sales up 2.8% in 2012

Isagro’s revenues increased by 18.7% to €46.7 million in the fourth quarter of 2012. For the full year of 2012, Isagro’s revenues incresaed by 2.8% to €148.3 million.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) on sales were up by111.1% to €10.4 million in the fourth quarter, while EBIT rose by 302.7% to €6.8 million.

Four the full year of 2012, EBITDA increased by39.8% to €18.8 million, and EBIT rose by 17% to €7.5 million.

Isagro indicated the drought in European,especially in Italy; the most severe drought of the last 50 years in United States; a reduction in cotton culrivated areas in Brazil, these factors affected geographic markets of great importance for Isagro, with a severe impact in particular on the demand of fungicides, a segment that accountd for 65% fo the Group’s sales, compared with a market average of 26%.

Isagro doubled the revenues from new registrations, passed from €14 million to €28 million, due to the obtainment of 40 new registrations. However,it suffered a contraction in the basic-business, especially in relation to the sales of copper fungicides in Italy/ Europe and Tetraconazole fungicides on cotton in Brazil.

The company started to develop independently a new soil- applied biopesticide for the US market, the commercial launch of which is planned in 2014.It signed an agreement with FMC for the co-development of a new SDHI fungicide discovered by Isagro’s Innovative Research, activated during the year and started new projects for the identification of generic products to be developed for mixture with proprietary products- in synergy with the actual product portfolio-and for direct distribution initially in India.

Isagro sales results (€ million)
Q4 ended Dec. 31	Q4 2012	Q4 2011	change%	Full Year 2012	Full Year 2011	change%
Revenues	46,719	39,364	18.7	148,324	144,318	2.8
EBITDA*	10,373	4,913	111.1	18,807	13,456	39.8
EBIT**	6,830	1,696	302.7	7,542	6,447	17.0
* earnings before interest and tax depreciation and amortisation ** earnings before interest, tax

It terminated prematurely the “Joint Discovery Agreement” with Chemtura AgroSolutions, which provided for the co-financing of research activities aiming at the discovery of new cropprotection products, which will now be carried out independently by Isagro.

The company undertaken a critical revision of the various areas of business/products with the aim of implementing an effective policy of optimization of its product portfolio. The acceptance, in early 2013, of a binding offer for the acquisition of a product owned by the joint- venture ISEM S.r.l., is consistent with this revision. ISEM S.r.l., a 50/50 joint-venture with Chemtura AgroSolutions, received and accepted a binding offer for the sale of a proprietary product. More information regarding this operation will be announced after its closing, which is expected to occur in 2Q 2013; it was finalized the merger by incorporation of Isagro Ricerca S.r.l. (a wholly owned subsidiary) into Isagro S.p.A. with the aim of increasing operational efficiency, reducing costs while maintaining the central role of R&D at a group level.
It signed a commercial agreement with Syngenta for the supply and marketing of Isagro’s biological fungicide Remedier ® in Europe, Africa and the Middle East.

Outlook

With reference to 2013, the company expect a “carry-over effect” on sales due to the need of absorbing the stock of copper fungicides in Italy/Europe and of Tetraconazole in U.S. still outstanding along the distribution channels at the end of 2012.It expects consolidated sales to be around € 140 million in 2013. This figure is then expected to reach € 170 million in 2014 and € 200 million in 2015, as the absorption of the effects from the drought, the recovery of basic-business and the growth in the sales of new registrations unfold.

The company will announce a business plan for 2014-17 in the fourth quarter of 2013.