Isagro agrochemicals sales down 23% in Q1 2013

Date:05-21-2013

Isagro’s agrochemicals sales dropped by 22.7% to €30.1 million in the first quarter ended Mar 31, 2013. The total sales decreased by 24.2% to € 32.3 million.
This decline of sales in the first quarter of 2013 is the result by and large of the anticipated “carried-over” produced by the drought that affected some key markets of great relevance for Isagro, such as Italy, whose weight is historically limited on yearly sales but significant in the first year-half, as expected by the Company.

The carried-over effect affected mostly the sales of copper fungicides in Italy and Europe, with an impact quantifiable in nearly € 6 million of lower sales in 1st Quarter 2013 versus the first quarter of 2012.

Isagro has a limited presence in direct distribution, operating in such a part of the value chain only in USA, India, Spain and Colombia and acting in the rest of the World as a supplier of national distributors. With regards to that, Isagro did not benefit of the restart of purchases by farmers and retailers from distributors, since the latter ones are limiting their yearly purchases from the suppliers in order to substantially eliminate the 2012 over-stock.

Isagro sales results (€ 000)
Q1 ended Mar. 31	Q1 2013	Q1 2012	Change %
Sales	32,330	42,660	-24.2
-Agrochemicals	30,098	38,954	-22.7
EBITDA*	1,013	3,756	-73
EBIT**(loss)	(1,465)	1,358	n.a
* earnings before interest and tax depreciation and amortisation ** earnings before interest, tax

For the geographic area, Italy’s share of agrochemical business sales declined to 21% in the first quarter of 2013, versus a 32% in the same period of last year. Rest of Europe’s share of business rose from 32% to 39%, while Americas decreased from 18% to 17%, the Asia accounted for 19%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were down by 73% to €1 million, while EBIT declined from almost €1.4 million to a loss of some €1.5 million. R&D costs amounted to € 2.8 million – a level in line with that of the previous year.

Isagro and syngenta entered into the exclusive distribution agreement in the first quarter to distribute Isagro’s biofungicides, Remedier, in Europe, the Middle East and Africa. Isagro sold, through its Isem joint venture with Chemtura, the fungicides, valifenalate and IR 8854, to Belchim Crop Protection.

"carried-over effect  impacted the sales of copper fungicides in the first part of the year and is expected to be substantially absorbed within the first-half of 2013.” commented the company.

In the second half-year, instead, Isagro expects a gradual recovery in revenues also as a result of the expected positive trend in the sales of new registrations in Americas: this leads Isagro to confirm the objective of a turnover at a level of € 140 million at year-end.

Isagro confirms its objective of a progressive sales growth towards a level of € 200 million in the mid-term.