SWISS agricultural group Syngenta is set to benefit from soaring food prices as farmers invest in products to boost harvests and buy more weed and bug killers from the world's largest agrochemicals company.
The group lifted its dividend a sixth to SwFr7, above a forecast for 6.14 francs, and said it was launching a $200m share buyback programme.
Net profit at Syngenta slipped one per cent to $1.40bn last year, beating a forecast for $1.28bn.
The group, now integrating its crop protection and seeds businesses to gain total annualised cost savings of around $650m in 2015, is targeting a gross profit margin in the range of 22-24 per cent by 2015.
Syngenta shares, which had gained 12 per cent this year, were up 4.4 per cent yesterday.
“At the current commodity prices, farmers have plenty of opportunity to invest heavily in the crop inputs,” chief executive Mike Mack said. “It is a good place for 2011.”
Spiralling wheat, corn and soybean costs should encourage farmers to buy products from Syngenta and rivals such as DuPont and Monsanto as they seek to boost yields.
City A.M. Reporter