Isagro sales up 8% in Q3 2013

Isagro’s sales recorded a 7.9% increase to €24 million in the third quarter ended Sep 30, 2013. The data show a recovery of Isagro sales growth, both as a direct distributor of agrochemical (activity carried-out by Isagro in only four Countries) and as a supplier of third-party distributors (activity representing most of the sales of Isagro).

Isagro sales results (€000)
Q3 ended Sep. 30	Q3 2013	Q3 2012	Change %	Nine-month  2013	Nine -month  2012	Change %
Sales	24,020	22,252	+7.9	84,717	101,605	+16.6
EBITDA*(loss)	（641）	965	-	905	8,760	-89.7
EBIT** (loss)	(2,975)	(1,726)	-	(6,289)	1,038	-
* earnings before interest and tax depreciation and amortisation ** earnings before interest, tax

Third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) dropped from a positive €965,000 to a loss of €641,000. Earnings before interest, tax (EBIT) losses rose by 72.4% to €2,975,000.

For the first nine months, Isagro’s sales increased by 16.6% to around €84.7 million. Third-party distributors strongly reduced their seasonal purchases due to the need of consuming the high level of stocks carried-over from 2012-end, after the severe drought which affected fungicides segments in the United States and in Europe.

EBITDA sharply decreased by 89.7% to €905,000,while EBIT dropped from a positive €1,038,000 to a loss of €6,289,000 in the nine months. The decline was due to the carry over effect of last year's droughts.

During the weeks following the end of Third Quarter, the company finalized three operations. They were: an alliance with Gowan; divestment, by Isem S.r.l., a 50:50 joint-venture between Isagro and Chemtura, of all the rights and assets related to the proprietary herbicide Orthosulfamuron to Nihon Nohyaku Co., Ltd.; and long term agreement with Arysta LifeScience for the sale of a license for the development of mixtures of Tetraconazole and Fluoxastrobine and for the supply of Tetraconazole.

Outlook

In fourth quarter 2013 Isagro estimates revenues substantially in line with those of the like period of 2012, despite the fact that, after the finalization of the Alliance with Gowan and of the relevant distribution agreements between Isagro and Gowan for North America (generating sales from 2014), the current distribution channel in the United States will be discontinued, with absence of the usual year-end purchases by such client in fourth quarter 2013.

On the basis of what above mentioned, Isagro estimates to achieve annual sales not far from the level of €135 million; a net result at break-even due to the Arysta deal. Isagro expects a recovery in 2014, considering the divestment of two molecules (orthosulfamuron and valifenalate) in 2013 , and a more remarkable rise in 2015. Isagro is currently working at the business plan for 2014-2018, which will be released in first quarter 2014.