COPENHAGEN, Oct 26 (Reuters) – Pressure from low oil and crop prices rose on Novozymes during the third quarter, its chief financial officer said, after the Danish enzyme maker missed profit expectations and trimmed its full-year outlook.
Its shares were down 13 percent at 249 crowns by 0835 GMT.
The firm has been anxiously watching to see what Bayer’s purchase of Monsanto in September will mean for its BioAg Alliance with the U.S. firm.
Speaking to Reuters, chief financial officer Benny Loft gave no indication that he thought the future of the alliance was under threat, saying he expected ethanol manufacturing costs to fall.
Read Also
Canadian crop outlook has improved since January says FCC
Canadian farmers’ overall new crop outlook has improved since the beginning of the year, says Farm Credit Canada.
Novozymes chief executive Peder Holk Nielsen told Reuters last month he expected to have talks with Bayer about the future of the BioAg Alliance before the takeover was completed.
Loft said on Wednesday Novozymes had known at the start of 2016 that its ethanol business would be pressured, “but we didn’t expect it to be as pressured as we see now”.
“Prices on crops have fallen, which makes many farmers not invest in long-term solutions (for their crops) and only buy the grains instead of the technology that we offer,” he said.
Third-quarter operating profit was 973 million Danish crowns (US$142 million), below the 1.03 billion crowns forecast in a Reuters poll.
The firm, spun off from drugmaker Novo Nordisk in 2000, said it now expected full-year sales in Danish crowns to grow 0-1 percent, down from previous guidance of 1-3 percent.
It expected full-year operating profit up 1-2 percent, trimmed from previous guidance of 1-3 percent.
Danish ingredient and enzymes maker Chr. Hansen’s chief financial officer said on Wednesday the company saw signs of improvement in the agricultural segment, but it would be a while before the farming economy recovered.
