Isagro sales up 16% in Q1 2016

Isagro’s revenues increased by 16% to €51.9 million in the first quarter of 2016. The EBITDA recorded a 38% increase to €7.7 million.

The growth is attributable to higher sales of proprietary formulations based on the fungicide Tetraconazole and, to a more limited extent, to copper products, biostimulants and pyrethroids, mainly in EU and United State - the latter representing a market where in 1Q 2016 continued the scheduled sales of the stocks repurchased at 2014-end from a previous distributor and being re-invoiced at cost value to new distributor. 

The increase also occurred as a result of purchases by national distributors in a market situation that still registers high level of inventory within distribution channels. In fact, in the 1Q of 2016 the same unfavorable conditions to consumption of crop protection products that marked 2015 occurred. Among these, widespread drought phenomenon, not fully positive performance of the main agricultural commodities prices and, in the important Brazilian market, the persistence of adverse economic/financial conditions, in terms of access to credit and of cost of the same.

Outlook

The financials for the whole 2016, the latter to be considered as a year of consolidation of 2015 results, are only partially linked to the good performance of 1Q, the latter being a period not historically representative of the 12-month results, while it shall depend largely by the normalization in the rest of the year of the climatic / external scenario conditions in the important Italian, Brazilian and United States markets, along with the definition of new Licensing agreements.

In the medium term, however, Isagro confirms the target of 200 Euro million revenues at a consolidate level, based on the following Strategic Guidelines:

1. discovery of new molecules alone;
2. development of new molecules mostly through attribution of rights to a “main developer” while
retaining rights for Isagro on selected segments/markets;
3. value extraction from our I.P. and retained rights salso through Licensing;
4. growth in the Biosolutions business, also through acquisitions;
5. opportunistic development of off-patented products;
6. expansion of our global commercial organization.