FMC agchem sales flat in 2014

FMC's agrochemical sales recorded a 7.5% decrease to $626.9 million in the fourth quarter ended Dec 31, 2014. For the full year of 2014, agrochemical sales boosted 1.3% to $2,173.8million and operating profit dropped by 7.6% to $497.8 million.

In the quarter, slow demand in Brazil continued to impact the business, particularly due to a reduction of cotton acreage, continued dry conditions impacting sugarcane and higher than normal channel inventories. The impact of this slowdown was partially offset by stronger demand in other parts of Latin America and in North America. In Mexico, demand for herbicides and insecticides for use in fruit and vegetable crops increased, and continued market penetration in Argentina resulted in higher revenue. North America saw higher demand for pre-emergent herbicides that resulted in higher sales and higher prepayments collected during the fourth quarter compared to the fourth quarter 2013. In the quarter, operating margins were slightly up over last year, with improvements from reduced third party product sales offset by currency headwinds and increases in planned development and research investments.

Global crop protection markets are expected to be flat to slightly down in 2015. The macroeconomic environment remains uncertain, mainly in light of current expectations of currency movements, interest rates, agricultural commodity prices and oil prices. FMC expects that earnings contributions from the Cheminova acquisition, the continued spread of weed resistance in North and Latin America, and market share gains in Asia and EMEA will drive full-year segment earnings 15 to 30 percent higher in 2015 than 2014.

FMC’s Agricultural Products sales results ($ million)
Q4 ended Dec. 31	Q4 2013	Q4 2014	Change%	Full Year 2013	Full Year 2014	Change%
Sales	677.7	626.9	-7.5	2,145.7	2,173.8	+1.3
Operating profit	136.8	130.3	-4.8	539.0	497.8	-7.6

Outlook

Pierre Brondeau, FMC president, CEO and chairman, said: "In 2014, the agriculture industry began experiencing a slowdown, particularly in Brazil. Given our leading position in Brazil, this significantly impacted our results. Looking forward to 2015, multiple factors suggest that the crop protection market globally will be, at best, flat to 2014. However, the benefits of Cheminova, especially a more balanced geographic exposure and the ability to realize cost and revenue synergy benefits, will allow FMC to grow segment earnings in Agricultural Solutions between 15 and 30 percent.”