Syngenta expects ChemChina deal to be done this year

Syngenta, the world's largest pesticides maker being taken over by state-owned ChemChina, still expects the deal to close this year despite concerns that U.S. regulators could throw a spanner in the works, it said on Friday.

The Swiss company reported a worse-than-expected drop in first-half profit on Friday.

'We are having constructive discussions with all regulatory authorities which reinforce our confidence in closing the transaction by the end of the year,” new Chief Executive Erik Fyrwald said in Syngenta's results statement.

There are persistent concerns in financial markets that the ChemChina deal could yet be scuppered by the Committee on Foreign Investment in the United States (CFIUS). Syngenta derives about a quarter of its sales from North America.

The pesticides and seeds maker said first-half net profit fell 13 percent, hurt by weak agricultural markets, a rainy summer in Europe that kept farmers from spraying and a continued decline in sales in Latin America.

Syngenta reported group net income declined 13 percent to $1.06 billion in the first half from a year earlier, below a Reuters poll forecast of $1.28 billion.

Sales fell 7 percent to $7.09 billion, lagging the market forecast of $7.22 billion.

In the second half, the group expects a return to growth in Asia Pacific as droughts there ease. Growers in Brazil continued to face economic uncertainty and credit constraints.

The group lowered its margin target for earnings before interest, taxes, depreciation and amortization (EBITDA) over sales to flat, from a previous forecast of a margin improvement on last year.

'Group sales for the year are expected to be slightly below last year at constant exchange rates; reported sales are likely to show a mid-single digit decline due to the continuing strength of the dollar,” Fyrwald said.

Efficiency measures, lower raw material costs and currency hedging should allow Syngenta to keep its full-year EBITDA margin at around last year's level, he said.