Cheminova First Half 2007 Results

Over the first six months of this year, Cheminova’s sales decreased modestly by 0.9% to reach DKK 2,089 million. The company’s sales were negatively affected by a difficult market situation in Brazil, the USA and India, as well as industrial action at the company. This was slightly offset by stronger sales in several European markets, particularly Spain, the UK and Russia.
Operating profit was DKK 74 million, a 54.6% decrease on the first half 2006 figure of DKK 163 million.

Sales of Cheminova’s cotton insecticides did not meet sales expectations as growers shifted from cotton to maize in the southern states of the USA, resulting in a significantly reduced cotton planted area. Low levels of insect infestation in the USA and a late start to the season also negatively affected organophosphate insecticide sales, with the result that the proportion of total sales attributable to these products declined from 24% of turnover in the first half of 2006 to under 22% in the current period. Sales of new insecticides and pyrethroids increased slightly but not by as much as the company expected.
In Europe, sales of fungicides improved due to the early, warm spring. However, sales of fungicides elsewhere were disappointing, particularly in Brazil where the company’s fungicide flutriafol experienced increased competition from several new products that have been introduced to control Asian soybean rust.
Sales of generic products and third-party products showed steady growth, however the company noted that the timetable for the introduction of new products into the marketplace was being impacted by delays in the regulatory system in the EU.
Cheminova’s parent company, Auriga Industries, announced earlier this year that it was intending to concentrate its future business activities on Cheminova and as a result was looking at opportunities to divest its other businesses, namely Skamol and Hardi. In July this year the company announced the sale of its Skamol subsidiary.