PSP Agricultural Solutions sales down 17% in Q2 2015

 

The company’s Agricultural Solutions business recorded a 17.2% decrease in pro forma as adjusted sales from $596 million in the second quarter of 2014 to $494 million. On a constant currency basis, pro forma as adjusted sales grew 1.9%. 

 

Adjusted EBITDA of Agricultural Solutions was $114 million, a decline of 15.5% from $135 million pro forma as adjusted EBITDA in the second quarter of 2014. On a constant currency basis, pro forma as adjusted EBITDA grew 1.5%.

 

"The second quarter of 2015 was an active one for Platform as we announced the highly strategic proposed acquisition of the OM Group businesses and, just after the quarter end, the proposed Alent acquisition," commented Daniel H. Leever, Platform's Chief Executive Officer. "The recently announced agreements are consistent with our 2015 goals to add high-quality, synergistic businesses to the Performance Applications segment and to balance our end market exposure. Despite challenging conditions in the agricultural markets driven by foreign exchange rates and weak crop prices especially in row crops, our Agricultural Solutions business performed well relative to the industry in Q2, illustrating the diverse geography and specialty crop focus of our business. We are pleased to report that our integration remains on track. Our overall margin expansion and synergy realization further demonstrate our goal to not simply buy great businesses but also make them better under Platform's ownership."

 

Frank J. Monteiro, Platform's Chief Financial Officer, added, "Our financial performance this quarter and our constant currency results point to the health of the underlying businesses, which saw healthy volumes and product demand as well as significant cash generation. Given the current foreign exchange rate headwinds, we are revising our 2015 guidance accordingly."

 

Platform's financial results for the first half of 2015 were consistent with the Company's expectations despite a weak overall agricultural environment. Nevertheless, given the continued strength of the U.S. dollar, management is updating its guidance to reflect adverse foreign exchange effects. Platform's previous guidance was based on foreign exchange rates as of the end of February, and the recent depreciation of global currencies, and particularly the Brazilian Reals, against the dollar is expected to result in a reduction to Adjusted EBITDA (particularly given that two-thirds of Platform's Brazilian earnings typically come in the second half of the year). Based on end of July foreign exchange rates and excluding any impact from the announced acquisitions that have not yet closed, Platform expects adjusted EBITDA to be in the range of $620 million to $650 million compared to initial expectations of $660 million to $680 million.