Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you quantify the risks and potential upside or downside for the second half of the year given the strong first half performance? A: Charles Magro, CEO: The first quarter was better than expected, and we anticipate the first half will also exceed our original plan. The second half has been de-risked since our February guidance. We need Crop Protection in Brazil to perform as it did last year. The main risk is Crop Protection pricing, which we expect to be down low single digits for the full year. David Johnson, CFO, added that the original guidance was for 10% EBITDA growth, and the first half is now expected to be in the 4% to 5% range, with a 40% increase over the prior year in the second half.
Q: What are the prospects for Corteva's Seed business in the Americas, and what future growth opportunities do you see? A: Charles Magro, CEO: We are strategically shifting to being an out-licenser of technology, with Enlist as a key example. We see significant growth potential in hybrid wheat, which could be a $1 billion revenue opportunity. Judd O'Connor, EVP of Seed Business Unit, added that North America is expected to have a solid year with strong corn and soybean performance. In Latin America, there is an expansion in summer corn planted area and continued growth in Safrinha corn, driven by favorable local economics and ethanol expansion.
Q: Can you provide more details on the Crop Protection pricing environment and any changes in competitive dynamics? A: Robert King, EVP of Crop Protection Business Unit: Pricing will stabilize as we lap last year, with signs of stabilization coming out of China. The generics pricing has been stable, and we expect the market to return to low single-digit organic growth. Our growth will come from Biologicals and new products, which have higher margins and are in demand by farmers. Charles Magro, CEO, added that the market is competitive but volumes are healthy, and the channel is in a healthy range.
Q: What is the status of Corteva's new growth platforms, specifically hybrid wheat and winter canola for biofuels? A: Charles Magro, CEO: We are on track for a 2027 launch of hybrid red winter wheat, which could be a $1 billion revenue opportunity. The crop is expected to unlock 10% to 20% yield improvements. For winter canola, the pilot program is expanding, and we are collaborating with Bunge and Chevron for biofuels. The crop survived the winter well, and we plan to increase acreage significantly.
Q: How is Corteva positioned for the potential shift in Chinese soybean imports from the US to Brazil, and what is the profitability comparison between US and Brazilian soybean sales? A: Charles Magro, CEO: Farmers are prioritizing corn over soybeans due to economics. While 50% of US soybeans are exported, Brazil and Argentina cannot fill global demand alone, so US production is needed. Judd O'Connor, EVP of Seed Business Unit, noted that a shift from soy to corn typically results in a $10 million to $15 million EBITDA shift for Corteva. The economics are favorable for corn in both North and Latin America.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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