COPENHAGEN (Reuters) - Shares in enzymes maker Novozymes slumped more than 8% on Friday after it cut its 2019 sales outlook for the second time in less than two months on the back of weak U.S. ethanol production after floods in the Midwest.
The Danish company had already lowered its outlook on April 24, mainly because of the struggling U.S. ethanol market, though it had hoped for a recovery.
Shares in the company were down 8% by 0720 GMT after it announced late on Thursday that its 2019 organic sales growth outlook had been downgraded to between 1% and 3%, compared with 3-5% previously.
“The recovery of our U.S. Bioenergy business has not progressed as expected and demand in some emerging markets is soft,” it said in a statement.
Novozymes’ enzymes and yeast are used in bioethanol production to break down and ferment sugar in crops such as corn, but massive floods knocked out roughly 13 percent of U.S. ethanol capacity.
The company’s sales for the first five months of 2019 were down 2% because of severe weather in the U.S. Midwest, which it said was hitting grain-processing volumes and the planting season.
It also cut its outlook for this year’s EBIT margin to 29-30% from a previous forecast of 28-29%.
Reporting by Stine Jacobsen; Editing by David Goodman