Monsanto posts loss as herbicide sales slump

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Publish time: 7th January, 2010      Source: www.cnchemicals.com
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January 7, 2010

   

   

Monsanto posts loss as herbicide sales slump

   

   

   

Biotech seed giant Monsanto reported a net loss of US$19 million for the first quarter ended November 30, compared with a year-ago profit of US$556 million.

   

   

The quarterly loss is against the break-even results Wall Street had expected, as Monsanto registers a sharp decline in herbicide revenue and a slight drop in key corn and soy seed sales.

   

   

Net sales decreased US$952 million or 36% in the quarter, mainly because of decreased sales of its glyphosate-based herbicides, primarily in Brazil and Europe. Roundup and other glyphosate-based herbicide sales were down 63% in the quarter as volume and pricing drop.

   

   

Gross profit totalled US$739 million, down 52%, while the margin dropped 15% to 44%, largely driven by pricing adjustments for Roundup and other glyphosate-based herbicides.

   

   

St. Louis-based Monsantohas been shifting its focus away from the herbicide business, which has been suffering from growing competition and price pressure, to its more profitable seeds and traits business.

   

   

Still, corn seed and traits net sales decreased 9% or US$59 million in the quarter, partly due to a decrease in planted acres in Brazil and Argentina, said Monsanto.

   

   

Soy seed sales were depressed in the first quarter due to delays in harvesting last year''s soy crop, with volume expected to pick up in the second quarter, Monsanto said.

   

   

The company is targeting its new Genuity Roundup Ready 2 Yield soy for plantings on eight million to 10 million acres, and said that sales to date were on pace to meet that target.

   

   

Monsanto chairman Hugh Grant said 2010 would be a critical year to helping the company meet a growth plan set for 2011 and 2012, and that it would get better from this year.

   

   

Monsanto expects a free cash flow in the range of US$900 million to US$1 billion.