By Jesus Calero (Reuters) -Danish biotech company Novonesis stuck to its full-year targets on Wednesday, as strong bioenergy demand in India and Latin America helps offset revenue losses caused by
Novonesis Reports Q2 Profits Falling Short of Market Expectations
Novonesis Q2 Financial Performance
(Corrects to India's bioethanol blending in fuels to be 35%, not 45% in paragraph 3; details of Russia exit in paragraph 9)
By Jesus Calero
(Reuters) -Danish biotech company Novonesis reported second-quarter profits which were below market expectations, sending its shares down 7% on Wednesday.
Impact of Bioethanol Blending in India
Global bioenergy markets are navigating shifting demand and pricing pressures, with some regions hit by inflation and evolving energy policies. In particular, India has emerged as a critical growth driver against this backdrop.
A government push for energy independence has sharply increased India's bioethanol blending in fuels, from 5% a few years ago to 25% today, and with 35% "very close", Chief Executive Officer Ester Baiget said in an interview.
Novonesis is targeting compound annual revenue growth 6% to 9% through 2030, with a core profit margin of 39%. Bioenergy is a key driver to reach these targets.
However, those negative effects were partly offset by local U.S. production,
"We're merging our solutions for bioenergy from corn and from biomass, upgraded into labelling solutions of yeast and an enzyme that our customers convert into biofuels," she said.
"For every single biofuel plant created in India, about 300 jobs are generated upstream and downstream," she added.
Geopolitical Trends in Bioenergy
Beyond job creation, this demand reflects a broader geopolitical shift, with similar trends unfolding in Brazil and Southeast Asia where demand for biodiesel made from waste oil is accelerating, Baiget said.
Exit from Russian Market
Novonesis also exited Russia earlier this year, which had a modest impact on sales growth. The exit was due to the challenges of operating in that market following Russia's invasion of Ukraine, the company said.
"We're growing two times, three times, four times the market that we're present in," Baiget said.
(Reporting by Jesus Calero in Gdansk, editing by Milla Nissi-Prussak)
