Novozymes’ shares jump on fourth-quarter profit beat

Source: By Stine Jacobsen, Reuters • Posted: Thursday, January 23, 2020

COPENHAGEN, Jan 23 (Reuters) – Shares in Danish enzymes maker Novozymes jumped almost 8% on Thursday after it reported better than expected quarterly operating profit, lifted by strong strong sales of its products to detergent makers.

Novozymes’ chief executive Peder Holk Nielsen will be replaced by Ester Baiget from Dow next month as the firm looks to boost overall sales growth following three profit warnings last year.

Its fourth-quarter earnings before interest and tax stood at 1.1 billion Danish crowns ($163.33 million), beating a Refintiv consensus of 989.2 million crowns.

Shares in Novozymes rose by 7.3% by 0859 GMT, placing them on track for their best day since October 2015.

Sales at the company’s largest business, which makes enzymes for detergent makers such as Procter & Gamble and Henkel, rose by 5% in the quarter and 1% for the full year.

The Danish firm, which has been struggling with weak U.S. ethanol production after floods in the Midwest this year, said it expects organic sales to grow between 1% and 5% this year compared to a 1% decline in 2019.

“Our business has improved in the third and fourth quarter meaning that we now guide for 1-5% growth,” Nielsen told Reuters.

Sales to emerging markets and new innovative products such as its newest detergent enzymes targeting odours such as sweat in sports clothing would need to succeed to meet the upper end of the range, he said. ($1 = 6.7349 Danish crowns) (Reporting by Stine Jacobsen Editing by Keith Weir)