Novozymes net profit up 11 percent in first nine months of 2015

By Anne Bailey | October 26, 2015

Novozymes net profit grew by 11 percent in the first three quarters of 2015, according to a company report. Free cash flow before acquisitions was 2.022 billion Danish krone ($2.9 billion), Novozymes said. 

Sales grew by 4 percent organically and by 14 percent in Danish krone during the January through September period, the report said. Earnings before interest and tax showed growth of 15 percent and the earnings before taxes margin was 27.7 percent.

During quarter three, Novozymes sales grew by 3 percent, organically and by 11 percent in Danish krone compared with the third quarter of 2014.

Looking ahead, sales are expected to increase by 12 percent to 13 percent and the EBIT growth has been adjusted to about 15 percent and net profit growth, to about 12 percent from 15 percent to 17 percent and 11 percent to 13 percent, respectively.

Bioenergy sales of $1.9 billion accounted for 18 percent of Novozyme’s sales during the first nine months of 2015. Bioenergy sales continued to be pressured in the third quarter, the company’s report said. The United States is expected to continue to have a challenging market environment until the year’s end, according to the report.

Novozymes introduced a new product on the market toward the end of the third quarter improve its offering. In September the company introduced Liqozyme LpH, an alpha-amylase effective at low pH that thins mash by breaking down the starch into shorter dextrin chains. A more fluid mash ensures that the operational performance of ethanol producers who run their production at low pH will be more efficient, Novozymes said.

The company expects to bring a newer and broader innovation to market by year’s end, the report said. However, given the challenging market environment, the impact of the products isn’t expected to be enough in 2015 for bioenergy sales to grow organically. Organic sales growth in the fourth quarter also is expected to be negative, Novozymes said.

U.S. ethanol sales, meanwhile, are expected to increase moderately in 2915, compared with 2014.