Novozymes sees lower sales due to weak, flood-hit ethanol market
COPENHAGEN, April 24 (Reuters) - Danish enzymes maker Novozymes lowered its 2019 sales outlook on Wednesday after its bioenergy business was hit by weaker-than-expected U.S. ethanol production following floods in the Midwest.
Novozymes' enzymes and yeast are used in bioethanol production to break down and ferment sugar in crops such as corn, but the massive floods knocked out roughly 13 percent of the United States' ethanol capacity.
"We have lost some bioethanol revenue during the first quarter and we don't think we can win that back during the rest of the year," Chief Executive Peder Holk Nielsen told Reuters.
He said he expected the U.S. ethanol market, which was already struggling with high inventories and sluggish domestic demand growth, to normalise during the remainder of this month and next.
Novozymes' shares were 3.44 percent lower by 0813 GMT after it adjusted its 2019 organic sales growth outlook to 3 to 5 percent compared with 3 to 6 percent previously.
Sales at Novozymes' bioenergy unit fell by 8 percent in the first quarter compared to the 5 percent growth expected by analysts, while total group sales also came in below forecasts.
Sales at Novozymes' largest business, which making enzymes for detergent makers such as Procter & Gamble and Henkel, fell 3 percent in the quarter.
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