Novozymes Results Exceed Expectations

12-08-2010 14:50 Shares in Novozymes looked set for a good day after the enzyme company posted a highly positive half year performance and increased full-year 2010 expectations. Higher demand in the enzyme business and cost reductions were the primary cause, the company said, although a difficult first half in 2009 contributed to the positive figures.

The company announced that sales are now expected to grow by 7–9% organically in 2010, while sales growth in Danish kroner is expected to be between 10 and 12 percent. Analysts had previously expected Novozymes to improve sales expectations by around six percent in local currency.

For the first half of 2010, Novozymes’EBIT was DKK 1,109 million, an increase of 38% compared to H1 2009.  EBIT is expected to grow by 20–22%, and the EBIT margin is expected to be in the range of 21–22% over the full year. Net profit is expected to grow by 22–24%, and investments are expected to be in the range of DKK 1,150–1,250 million.

 “The strong sales and earnings growth in the first quarter continued in the second quarter. I’m very pleased with this development," Steen Riisgaard, President & CEO, said in a statement issued today. He continues: "Demand was high in the enzyme business, and all industries actually grew double digit if you look at the second quarter in isolation. Earnings continued to benefit from high productivity improvements, better capacity utilization, and tight cost management”.

“However, it must be remembered that the first half of last year was the easier half from a comparison point of view, and there is still some uncertainty as to how markets will develop in the second half of 2010.” Riisgaard added

After early gains, the company’s share price had slipped back into negative territory on mid afternoon trading