3Q YTD Net Sales reflects overall positive global Ag fundamentals
Corteva reported 7 per cent decrease in its net sales in Q3 2023 compared to the same period last year. Organic sales declined 13%.
Volume declined 15% versus the prior-year period driven by strategic product exits and ongoing headwinds in the Crop Protection segment. Lower Seed volumes were driven by the timing of seasonal demand in Latin America and an earlier operational finish to the season in North America versus prior year.
Price increased 2% versus prior year, reflecting continued execution on the Company’s price for value strategy, while managing increased competitive pressure.
GAAP income from continuing operations after income taxes was a loss of $315 million in third quarter 2023 compared to a loss of US$322 million in third quarter 2022. Operating EBITDA for the third quarter was US$18 million, down 81% compared to prior year.
The Company announced a plan to further optimize its Crop Protection network of manufacturing facilities and external partners.
The plan includes the exit of the Company’s production activities at its site in Pittsburg, California, as well as ceasing operations in select manufacturing lines at other locations. As a result, the Company expects to record total pre-tax restructuring and asset related charges of $410 million to $460 million through 2024, with an estimated $90 million to $120 million of cash payments. The company expects to achieve approximately $100 million in run-rate savings by 2025 as a result of these actions.
The global outlook for agriculture remains positive overall in 2023, with high demand for grain and oilseeds. Commodity prices are above historical averages, and farm balance sheets and income levels remain generally healthy, encouraging growers to prioritize technology to maximize return. The Company’s outlook for its operations in Brazil has been revised, influenced by lower-than-expected corn planted area, ongoing headwinds in crop chemicals, delayed farmer purchases on both plantings and crop protection applications, as well as elevated levels of generic products, leading to an update to full-year 2023 net sales and earnings expectations in October 2023.
Corteva expects net sales in the range of $17.0 billion to $17.3 billion, down 2% versus prior year at the mid-point. Operating EBITDA1 is expected to be in the range of $3.25 billion to $3.45 billion, growth of 4% at the mid-point. Operating EPS1 is expected to be in the range of $2.50 to $2.70 per share, down 3% at the mid-point.
The Company is not able to reconcile its forward-looking non-GAAP financial measures to its most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of its control, such as Significant Items, without unreasonable effort.
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