DuPont reveals turnaround in sliding ag sales

By Lorraine Heller

- Last updated on GMT

Related tags: Dupont

Agricultural firm DuPont said last week that first quarter
performance set the company off to a good start for the year, with
profits rising 16 percent on the back of strong seed sales.

The results come almost two months after DuPont began executing a $100m reinvestment plan, which was designed to increase the firm's innovation and meet growing demand for grain. Total group sales grew 6 percent, or $451m, to $7.8bn in the first quarter ended March 31 2007. This reflected a 2 percent rise in local prices, a 2 percent increase in volume and a 2 percent currency benefit. Net income reached $945m, compared to $817m last year, driven largely by higher seed sales. "We continue to improve our operating margin and return on capital as we deliver on our growth strategies and productivity initiatives,"​ said DuPont chairman and chief executive officer Charles Holliday. The firm's Agriculture and Nutrition division - its largest business segment - saw sales grow 13 percent to $2.5bn, primarily due to a strong performance from its Pioneer seed business. Volumes grew 5 percent and US dollar selling prices increased 8 percent. Global gains in seed corn and cereals herbicides more than offset the impact of lower demand for cotton and soybean products in North America, said the firm. DuPont's latest results come as good news following a tough period for the firm's Agriculture & Nutrition division. In January, DuPont revealed that despite an overall 8 percent increase in fourth quarter 2006 net sales, its Agriculture & Nutrition segment continued on a downward turn, making a loss of $350m in the three months ended December 31 2006. This compared to a loss of $272m in the year ago period. On the back of its strong first quarter results, DuPont reaffirmed its outlook for 2007. "We're right on track. We are well positioned in global industrial and agricultural markets and have an exciting pipeline of new products that customers value. We remain intensely focused on accelerating returns on our innovation and increasing cost and capital productivity,"​ said Holliday. At the end of February, DuPont announced it is to begin executing its $100m reinvestment plan, which includes the addition of more than 400 positions, mainly in research and development in DuPont's subsidiary Pioneer Hi-Bred International. The reinvestment, designed to boost the company's plant genetics and biotechnology platforms, comes after an aggressive reorganization strategy in its nutrition and crop protection businesses. Announced in December 2006, this involved closing or streamlining 10 plants and slashing 1,500 jobs globally. The company said its new investment is the largest year-to-year increase in research in the 81-year history of the Pioneer business, a unit of the DuPont Agriculture & Nutrition platform. The platform aims to increase support for seed and biotechnology research as well as drive a strong DuPont Crop Protection new product pipeline and Solae healthy food ingredients, said the firm.

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