Novozymes will either stagnate or retreat on organic sales growth and profit this year – and Chief Executive Peder Holk Nielsen is not fully satisfied.
"Business is actually going well and more or less as we projected. Aside from – and there are some serious exceptional circumstances – floods in the US and the ethanol and the agricultural in general," Nielsen tells Ritzau Finans in connection with the company's interim report.
The figures weren't very different when Novozymes booked a guidance downgrade on Oct. 9. These issues persist in today's financial report presentation.
There are a whole lot of bright spots in this. But clearly, these are completely overshadowed by the fact that we already downgraded guidance in the spring
The CEO points to factors such as the Detergent unit returning to growth. Third quarter organic growth was 5 percent against 0 percent from Q3 last year.
"There are a whole lot of bright spots in this. But clearly, these are completely overshadowed by the fact that we already downgraded guidance in the spring, which was primarily related to spring floodings in the US that caused Bioenergy and to a certain degree the starch business to completely stagnate," Nielsen says and continues:
"And now once again because bioethanol in the US seriously declined in September, which we foresee will continue in the coming months," he says.
Some of the company's big customers that produce bioenthanol are 15 percent below normal production levels:
"This naturally caused a reduction in our sales to them, and our buffer is inadequate to handle it," the CEO says.
English Edit: Daniel Frank Christensen