Dow AgroSciences sales down 10% in Q2 2016

Dow AgroSciences reported a 9.7% sales decrease of Agricultural Sciences segment to $1,577 million in the second quarter. Sales were impacted by low crop commodity prices, high industry inventories and currency headwinds.
 

Crop Protection volume was lower primarily due to reduced demand for generic herbicides and the AgroFresh divestiture, which more than offset new product innovations, including continued adoption of Spinetoram insecticide and Arylex™ herbicide. Seeds volume declined as double-digit growth in corn was more than offset by soft demand in sunflower and soybeans.
 

EBITDA for the segment declined to $228 million from $255 million in the year-ago period. Operating EBITDA was $232 million, down from $269 million in the year-ago period, primarily reflecting the impact of prior period divestitures. Excluding the impact of these portfolio actions, year-to-date operating EBITDA was modestly lower compared to the first-half of 2015, as benefits from productivity improvements and proactive self-help mostly offset challenging macros. Equity losses for the segment were $11 million in the quarter.
 

First-half sales were dropped by 10.7% to $3,223 million. EBITDA for the segment was declined by 5.0% to $631 million.

 

Outlook

 

Dow expected its self-help productivity measures and continued progress on new product introductions could drive above-market earnings performance despite challenging macros. The overall market expected to be down 5% in 2016, with high yields in North America and low crop prices.
 

Crop protection volume is forecast to be flat in the second half year with pricing pressure from lower demand for insecticides and generic herbicides. Projected acreage of Safrinha crop expected to increase on continued Chinese import demand for protein production.