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Strong year-end for FMC
Feb. 17, 2008
Sales gains in Asia and Latin America resulted in an 18% rise in FMC's agrochemical revenues to $229.5 million in the fourth quarter of 2007. Broad growth across the company's Asian business was driven by a "robust" cotton season in Pakistan and more favourable growing conditions in Indonesia, India and Australia, says FMC's chairman, president and CEO, William Walter. In Latin America, sales growth in Brazil was particularly strong due to the "buoyant" agricultural economy, higher crop prices and increased plantings of key crops.
Fourth-quarter pre-tax earnings rose by 44.3% to $31.9 million. The increase was due to higher sales and continued global supply chain productivity improvements, FMC points out.
For the year as a whole, FMC's agrochemical sales were up by 16.2% to $889.7 million. Higher sales were achieved in all regions, but were particularly strong in Brazil due to increased crop areas and higher commodity prices. Sales growth in Europe was driven by increased demand for biofuels, new product introductions and the strength of the euro. In Asia, sales increased due to better growing conditions in several countries.
Pre-tax earnings rose by 38.1% to $207 million in 2007. Higher sales and supply chain improvements more than offset the increase in selling and distribution costs and higher raw material and energy costs, FMC notes. The business incurred restructuring and other charges of $106.3 million in 2007.
outlook
FMC expects to see earnings growth of 10-15% in the first quarter of 2008. The growth should come from continued gains in Brazil and Asia, and further supply chain improvements. However, growth is expected to partially offset by higher raw material costs.
FMC expects to see earnings growth of 10-15% in the first quarter of 2008. The growth should come from continued gains in Brazil and Asia, and further supply chain improvements. However, growth is expected to partially offset by higher raw material costs.
Full-year sales are expected to rise by 5-10% due to a "healthy" global agricultural economy, new product introductions and increased demand for biofuels. Earnings are forecast to grow by 10-15% due to higher sales and productivity improvements, partly offset by increased raw material costs.
The agricultural economy is expected to remain strong in the near term, but may not provide such a boost to sales as seen in the last 18 months. In decreasing order, the most favourable conditions are expected in Brazil, Asia, North America and Europe.
FMC's agricultural product sector results ($ million)
Year ended Dec 31st 2006 % change 2007
Sales 765.9 +16.2 889.7
Pre-tax earnings 149.9 +38.1 207.0
Fourth quarter
Sales 194.5 +18.0 229.5
Pre-tax earnings 22.1 +44.3 31.9
Source: FMC
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