On Oct. 24, Novozymes released third quarter 2018 financial results, reporting a significant growth in sales for its bioenergy segment. The company said strong growth in demand for enzymes in the conventional biofuel market helped drive the increase.

Overall, Novozymes reported 5 percent organic sales growth for the third quarter, when compared to the same period of last year. For the first nine months of the year, sales grew by 4 percent organically.

“We delivered solid earnings and organic revenue growth of 5 percent in the third quarter and 4 percent after the first nine months,” said Peder Holk Nielsen, president and CEO of Novozymes. “This is overall satisfactory, and we increase the outlook for net profit growth. Despite recent challenging markets in the Middle-East, we maintain our 4-6 percent organic revenue growth guidance, albeit with the likelihood that we will close the year toward the lower part of the range.”

For the first nine months of the year, Novozymes reported flat sales for its household care division. Sales for the food and beverages division grew by 4 percent. Sales in bioenergy were up 14 percent, while sallies in agriculture and feed increased by 5 percent. Sales in the technical and pharma division, however, fell by 7 percent.

Bioenergy accounted for 19 percent of the company’s sales during the first three quarters of 2018, with household care, food and beverage, agriculture and feed, and technical and pharma accounting for 32 percent, 29 percent, 14 percent and 6 percent, respectively.

Within the bioenergy segment, Novozymes reported sales grew by 14 percent during the first three quarters of 2018 and 15 percent during the third quarter. The company attributed the increase to strong growth momentum within enzymes for conventional biofuels.

“Sales of enzymes for conventional biofuels benefit from Novozymes’ strong technology base and innovative product portfolio,” said Tina Sejersgård Fanø, executive vice president of agriculture and bioenergy at Novozymes. “And our recently launched yeast product, Innova Drive, is increasingly contributing to growth. In early October, we launched yet another yeast technology, Innova Lift, and this offering strengthens an already broad product portfolio.”

Sejersgård Fanø said U.S. ethanol production grew by an estimated 2 percent during the third quarter, but noted trends with elevated inventories and tight margins for ethanol producers are unchanged. She also noted that the Latin American market is performing well, with Brazilian producers expanding into corn ethanol production. “A number of plants are operating—with more expected to come onstream over the next few years,” Sejersgård Fanø said.

She also addressed progress with E15 in the U.S. “We are happy to see that E15 in the U.S. now appears more likely to be implemented by the Environmental Protection Agency; there are still some legislative hurdles to be overcome, but longer term this is a good supportive measure for the U.S. ethanol industry, for Novozymes, and for the environment,” Sejersgård Fanø said.

Moving forward, Novozymes indicated that it expects organic sales growth in the bioenergy segment to be driven primarily by new product launches, increased penetration from innovation, and growth from outside the U.S. market. The company said it expects U.S. production for 2018 to be up slightly from 2017.