AgroPages-UPL sales up 17% in Q2 FY2016-17-Agricultural news

UPL Ltd has announced the financial results for the second quarter ended September 30, 2016.

Q2 result

Total income of UPL Ltd has increased from Rs. 31,347 million for the second quarter ended September 30, 2015 to Rs. 36,576 million for the quarter ended September 30, 2016, up by 16.7%. Sales of the company’s agrochemical segment in the second quarter rose by 17.2% to Rs. 35,220 million, which accounts for 96.3% of UPL’s total income. The Company has posted a net profit after tax of Rs. 1,988 million, up by 40.5% comparing with the same quarter of last year.

Domestic revenue was Rs. 10,260 million, up by 23% comparing with the same period of last fiscal year. International revenue, accounted for 72% of the company’s total revenue, was improved by 14% to Rs. 26,320 million.

UPL’s regional sales –Q2 FY 2017 & FY 2016
Region	Q2 FY ’17		Q2 FY ‘16		Growth
Region	Sales (Rs. million)	Proportion	Sales (Rs. million)	Proportion	Sales (Rs. million)	Change%
India	10,260	28%	8,360	27%	1,900	23%
Latin America	13,170	36%	9,800	31%	3,370	34%
North America	3,750	10%	3,730	12%	20	1%
Europe	3,410	9%	3,580	11%	(180)	-5%
Rest of World	5,990	16%	5,880	19%	110	2%
Total	36,580	100%	31,350	100%	5,230	17%

Half-year result

For the first half year, UPL posted an 11.9% increase in total income to Rs. 73,016 million. Sales of agrochemical segment were up by 12.1% to Rs. 70,735 million. Net profit after tax of the company was improved by 20% to Rs. 5,590 million.

Domestic revenue rose by 10% to Rs. 22,200 million, while international revenue was increased by 12% to Rs. 50,820 million.

UPL’s regional sales –H1 FY 2017 & FY 2016
Region	H1 FY ’17		H1 FY ‘16		Growth
Region	Sales (Rs. million)	Proportion	Sales (Rs. million)	Proportion	Sales (Rs. million)	Change%
India	22,200	30%	20,100	31%	2,100	10%
Latin America	20,140	28%	15,980	24%	4,160	26%
North America	10,140	14%	9,800	15%	330	3%
Europe	9,020	12%	8,620	13%	410	5%
Rest of World	11,520	16%	10,780	17%	740	7%
Total	73,020	100%	65,280	100%	7,740	12%

Good rains across India drove UPL’s sales increase significantly in India, however, Karnataka, Tamil Nadu, Gujarat regions remained rain deficient. The company’s brand insecticide Ulala and herbicide Iris for pulses and soybean got further expansion. In the second quarter, UPL launched Wuxal as crop nutrient for horticulture crops. For Advanta seeds business, hybrid corn, rice and forage performance better than last year.

Sales in Latin America were boosted by 34% and 26% in the second quarter and the first half-year, respectively. During the quarter, UPL launched 2 new products (Herbicide and Fungicide) used on multiple crops in this region. UPL is also well positioned with excellent fungicide portfolio to manage Asian rust disease. Market price dilution in USD terms due to further Peso devaluation by 21% in Mexico. Change in advance tax payment for imports is affecting import of agrochemicals in Argentina. GM corn sales were higher in Argentina, and lower in Brazil.

Good crop condition resulted in higher yields in corn, wheat and soybean in North America. However commodity prices remains depressed. Agrochemical market growth estimated to be lower than last year. UPL achieved slight sales increase in this region. Growers are conservative for farm input usage specially on field crops due to poor income from farming. Rice plantations have increased, however yields are lower than expected due to reduced performance of hybrids. Non-selective herbicides have been facing price competition, though higher volumes due to resistance issue. Use of insecticides was increased due to insect pressure towards the end of crop cycle. UPL has successfully launch miticide, Banter, in USA during the second quarter. Reduction in planting area caused lower sales of sorghum and forage sorghum.

Although sales in Europe slipped by 5% in the second quarter, there are also some highlights worth mentioning. Fungicides performed well on cereals and high value crops. Extended sugar beet season benefitted and increase of acreage compared to last year supported the company’s range of sugar beet herbicides. Europe benefitted from good rains - vine and potatoe fungicide are increasing by 30% due to mildew and late blight.