Corteva, one of the multiple spinoffs from Dow Inc. last year, expects to take a slight hit from a flood that struck a mid-Michigan city last week.
The Wilmington, Delaware-based agriculture business, which separated from the chemical giant nearly a year ago, saw its insecticides plant in Midland, Michigan shut down due to a flood caused by the collapse of two nearby dams.
The company is taking the time to assess the impact of what's being called a "500-year flood" on its facilities, CEO Jim Collins told CNBC's Jim Cramer Tuesday.
"Only 1% of our second half revenue is dependent on any of the products that come out of Midland, so as far as 2020 goes, we would expect, you know, a minimal impact," he said in a "Mad Money" interview.
Corteva is expected to produce $5.47 billion in sales, down 1.5% from the year prior, when it reports results for the second quarter in late July. Analysts predict its crop protection business to slip a little further at 3.3%, according to Factset.
About 10,000 people in the city of Midland were ordered to leave home — the second time within a 24-hour period — last Tuesday due to "catastrophic dam failures." Officials warned that rapidly rising water spilling over the dams could leave parts of the city of 42,000 residents under potentially 9 feet of water.
Residents in boats inspect the floodwaters flowing from the Tittabawassee River into the lower part of downtown on May 20, 2020 in Midland, Michigan.
Gregory Shamus | Getty Images
Michigan Gov. Gretchen Whitmer on Tuesday declared a state of emergency for Midland County after multiple days of severe rainfall caused water to breach the levee. Midland is about 130 miles northwest of Detroit.
Dow, which is headquartered in Midland, shut down all of its operating units on Wednesday after floodwaters had reached its premises. The industrial complex includes facilities for Corteva and DuPont, both part of the June 2019 spin-off.
The waters, however, crested at a lower level than feared, Collins explained. He did not say, however, when he expects operations to resume at the plant.
"And my biggest concern right now is for our employees," he said. "We've had over 400 of our Corteva colleagues that were directly affected in their homes in the city of Midland and we're going to work awful hard to make sure they're taken care of as well."
--Reuters contributed to this report.
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Corteva Agriscience expects mid-Michigan floods to have a 'minimal impact' on revenue - CNBC
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