Novozymes reports strong bioenergy and biofuels performance

Danish biotechnology company Novozymes has published its interim financial report for the first half of 2017, revealing better than expected growth from the company, including a strong showing from its Bioenergy division.

Bioinnovator Novozymes specialises in developing enzymes and microorganisms for industrial applications, replacing chemicals to accelerate production processes and reduce waste. Working across a number of sectors, from producing household cleaning products to pharmaceuticals and food and beverage, Novozymes also produces enzymes to convert biomass into biofuels and biogas.

The company reports a good first half to 2017, with 3% organic revenue growth exceeding expectations. Excluding reorganisation costs, Novozymes has declared an EBIT margin (ratio of earnings before interest and taxes to net revenue – earned) of 28.5%, compared to 28% for the same period in 2016.

A net profit growth of 2-5% is reported, and Novozymes is maintaining its outlook of 2-5% organic sales growth for 2017.

Novozymes reports 7% revenue growth in its Bioenergy Division, a significant improvement on the same period in 2016, which experienced growth of -6%. Through the division, the company provides enzymes for starch based and cellulosic ethanol production.

“Bioenergy sales continued the positive development of the first quarter. Sales for US conventional biofuels benefited from continued high production of ethanol and are estimated to have increased by around 4% in the second quarter year-on-year, a similar growth level to the first quarter. Other geographies showed good growth, but represent a smaller part of overall Bioenergy sales,” Novozymes writes in its report for the first half of the year.

“Sales of enzymes for biomass conversion continued to contribute to Bioenergy sales growth in the second quarter, but still make up a small proportion of Bioenergy sales. Novozymes currently supplies five biomass conversion facilities.”

Looking ahead, Novozymes CEO Peder Holk Nielsen said: “We should see growth pick up in the second half of the year, but also acknowledge the risk of agriculture-related markets changing swiftly. Consequently, we maintain our full-year expectation for organic growth, while DKK expectations have been adjusted to reflect weaker currencies.”