AgroPages-Weak Latin America performance dragged DowDuPont’s Q3 sales down 4%-Agricultural news

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The DowDuPont’s Agriculture segment reported pro forma net sales of $1,911 million in the third quarter of 2017, down by 4.4% from $1,998 million in the year-ago period. Pro forma volume and pro forma local price declines of 5% and 4%, respectively, more than offset portfolio and currency benefits.

Volume and pricing headwinds were driven by weakness in Latin America as sales channels continue to hold high inventory levels of crop protection products. Additionally, an expected reduction in corn area in Brazil, as well as a delayed start to its summer season, impacted sales in the region. These headwinds were partly offset by continued penetration of new products, including ArylexTM herbicide, Vessarya® fungicide, Leptra® corn hybrids and IsoclastTM insecticide.

Portfolio gains in the quarter reflect the Dow AgroSciences corn seed remedy in Brazil, which is expected to close in the fourth quarter. PerSecurities & Exchange Commission guidelines, the results of the Brazil corn remedy have been removed from pro forma results prior to the merger close date but will remain in reported results from the merger close date until the transaction has closed.

Pro forma operating EBITDA for the segment was a loss of $239 million, versus a loss of $172 million in the year-ago period. Lower product costs, favorable currency, portfolio changes and lower pension/OPEB costs were more than offset by reduced volume and price, particularly due to weakness in Brazil.

Outlook

“Consumer-led demand continues to drive global economic activity, which remains robust across most major economies, including Europe, China and the United States. Our demand outlook is positive for the majority of our key end-markets,” said Andrew Liveris, executive chairman of DowDuPont. “We still see some market headwinds, the most notable for us being in agriculture where we continue to closely monitor the situation in Brazil due to the slow start to the summer season. But we remain confident that we will have a solid year across our newly combined Ag division.

“Looking forward, DowDuPont has all the levers it needs to execute our near-term priorities: delivering earnings and cash flow growth; executing our cost synergy actions and realizing the savings; advancing stand-up activities for the intended growth companies; and unlocking the shareholder value creation envisaged through this historic transaction.”

DowDuPont reiterated its commitment to the $3 billion cost synergy target and updated expectations by division: Agriculture – $1.0 billion; Materials Science – $1.2 billion; Specialty Products – $0.8 billion.

The Company began advancing its playbook to deliver $1 billion in growth synergies. For example, Agriculture will leverage its enhanced multi-brand, multi-channel approach designed to provide customers more value through broader choices and whole-farm solutions.