January 24, 2019 / 9:04 AM / 9 months ago

Novozymes shares drop as Middle East continues to drag

COPENHAGEN, Jan 24 (Reuters) - Shares in enzymes maker Novozymes fell more than 6 percent on Thursday, as 2018 results showed weak Middle Eastern markets continue to dampen the Danish company’s growth.

Novozymes, whose clients include Procter and Gamble, is a world leader in enzymes that replace chemical agents in detergents and enzymes used in the production of food, animal feed and corn-based bioethanol fuel.

The company achieved underlying revenue growth of 4 percent in 2018, at the bottom of its 4-6 percent guidance range. Sales of detergent enzymes were hit by challenging Middle Eastern markets in the second half of the year.

“There are multiple factors in that, sanctioned countries but also economic turmoil in big economies like Turkey, Saudi Arabia and Egypt,” Chief Financial Officer Prisca Havranek-Kosicek told Reuters in a telephone interview.

“That has put a dampening factor that we also see continuing in Q1 this year,” she said.

For 2019, the company expects underlying - or organic - revenue growth between 3 and 6 percent, widening its 2018 guidance range of 4-6 percent.

“The reason for the wider range is the uncertainties that we see, for example in the Middle East, but also beyond that,” Havranek-Kosicek said.

Novozymes shares were down 3.2 percent at 0900 GMT.

Fourth-quarter growth missed analysts’ expectations and their consensus forecast for 2019 organic growth is already towards in the upper end of the group’s guidance, Credit Suisse said in a note. (Reporting by Teis Jensen; Editing by Mark Potter)

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