Danish industrial enzyme maker Novozymes said earnings growth would accelerate this year and next, driven by demand for biofuels, sending its shares to a record high.
The world's largest producer of enzymes used in detergents, bioethanol, food and beer reported fourth-quarter profit in line with analyst forecasts. It said most of its growth in 2014 would be from bioenergy, even though U.S. ethanol production was flat last year.
"We still have lots of technology to implement, so it's still an area which will contribute with high growth," Novozymes Chief Financial Officer Benny Loft told Reuters.
Novozymes, which competes in the biofuel enzymes market with U.S. chemicals group DuPont, posted a 9 percent increase in sales to the Bioenergy industry in 2013.
It expects operating profit growth of 6 to 9 percent this year, up from 6 percent in 2013, and maintained guidance for 10 percent growth in earnings before interest and tax (EBIT) from 2015.
"The 2014 guidance looks strong,especially when we know the management used to give conservative outlooks," analyst Michael Friis Jorgensen from Alm. Brand Markets said.
In December last year, Novozymes and U.S.-based Monsanto Co. formed an alliance for the research and commercialisation of microbial products for agriculture. The deal will have a negative impact on sales growth of up to 1 percentage point this year.
EBIT rose to 703 million Danish crowns ($128 million) in the October to December quarter from a year-earlier 671 million crowns and against an average forecast of 699 million crowns in a Reuters poll of analysts.
Shares in Novozymes were up 2.6 percent at 0803 GMT at 244.60 crowns, a record high. It trades on a forward 12-month price-to-earnings ratio of 30.9, around twice a sector median of 16.5 for peers in Europe, Reuters data showed.
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