Corteva Inc. has reported financial results for the second quarter and six months ended June 30, 2022.
First half 2022 net sales rose 11% versus prior year with gains in both segments. Organic sales increased 14% in the same period with gains in all regions.
Seed net sales grew 3% and organic sales increased 6% year over year, with notable gains in EMEA , partially offset by the reduction of corn acres and canola volumes in North America
Price was up 7% globally, led by continuedexecution on the company’s price for value strategy and recovery of higher input costs.
Crop Protection net sales grew 24% and organic sales increased 28%, led by North America and Latin America. Volume gains were driven by continued penetration of new products, including Enlist and Arylex herbicides and Onmira fungicide, and strong early demand in Latin America. Price gains reflected strong execution across all regions in response to cost inflation.
GAAP income and earnings per share (EPS) from continuing operations were $1.58 billion and $2.16 per share for the first half of 2022, respectively. Operating EBITDA was $2.76 billion, a 17% improvement over prior year on strong price execution and volume gains in all regions and productivity actions, partially offset by inflation and currency headwinds. Operating EPS was $2.61 per share, up 19% compared to prior year.
Management increased full year 2022 net sales and earnings guidance. Net sales is expected to be in the range of $17.2 billion to $17.5 billion and Operating EBITDA is expected to be in the range of $2.95 billion to $3.10 billion. Operating EPS1 is expected to be in the range of $2.45 to $2.60 per share.
The Company announced a ~7% annualized dividend increase effective in the third quarter – reflecting continued focus on returning capital to shareholders.
“Corteva delivered an impressive first half with double-digit sales and Operating EBITDA growth and margin expansion, reflecting strong customer demand and focused execution amidst dynamic market conditions. We also continue to take actions to accelerate performance, including the completion of strategic portfolio reviews aimed at refining our strategy, driving operational execution, and making disciplined investment decisions in innovation and technology to deliver increased value to farmers and contribute to a more sustainable global food system. We believe that we are well-positioned to continue to adapt and execute in a challenging operating environment. Our strong first half momentum and robust market fundamentals have given us confidence to raise our guidance for the year.” said Chuck Magro, Chief Executive Officer, Corteva.
The outlook for agriculture remains robust despite recent commodity price volatility. The Company expects record demand for grain and oilseeds in 2022, which should support commodity prices as ending stocks remain under pressure. Grower balance sheets and income levels remain healthy despite increased input costs for fuel and fertilizer, leading customers to prioritize technology to maximize return.
As a result, the Company updated its previously provided guidance3 for the full year 2022 – increasing sales and earnings expectations for this period. Corteva expects net sales in the range of $17.2 billion to $17.5 billion, which at the mid-point represents expected net sales growth of 11% for the year. Operating EBITDA is expected to be in the range of $2.95 billion to $3.10 billion, which at the mid-point represents expected Operating EBITDA growth of 17% for the year. Operating EPS is expected to be in the range of $2.45 to $2.60 per share. 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.
