TEL AVIV, Israel and
BEIJING, July 14, 2021 /PRNewswire/ -- ADAMA Ltd. (the
"Company") (SZSE: 000553), today provided an estimate regarding its
financial performance for the first half of 2021.
Sales
ADAMA is expecting to report sales growth of more than 18% in
USD terms (7% in RMB terms) in the second quarter compared to the
same quarter last year, driven by continued robust volume growth in
all key regions. This strong performance should drive sales growth
of 16% (7% in RMB terms) over the half-year period, compared to the
corresponding period last year.
In the second quarter, the Company is expecting to deliver
robust growth in Asia
Pacific, led by a strong performance in China and the Pacific. In
China, the Company is seeing
strong growth, both from sales of its branded, formulated
portfolio, supported by the acquisition of Huifeng's domestic
commercial arm at the end of 2020, as well as from sales of its raw
materials and intermediates, similarly bolstered to some extent by
the recent acquisition of Huifeng's manufacturing assets at the end
of May 2021. In the rest of APAC, the
Company is expecting to record continued growth, with a noteworthy
performance to be delivered in Australia, more than offsetting the
challenging seasonal conditions in South-East Asia, and the lingering effects of
COVID-19 which continues to challenge local farmers throughout the
region.
In North America, the
Company is expecting to record continued robust growth from its
Consumer and Professional business, alongside a solid performance
in the crop protection arm, recovering from first-quarter headwinds
seen there.
ADAMA is expecting to deliver pleasing growth in Latin America, driven by business growth
in Brazil supported by the strong
crop prices, and despite ongoing drought conditions which affected
the corn planting season in the country, as well as growth seen in
other countries across the region.
The Company is expecting to report strong growth in the
India, Middle-East & Africa region, led by India, which enjoyed favorable weather with a
strong start to the monsoon season, enabling good cropping
conditions.
Sales in Europe are
expected to grow, aided by a recent region-wide heatwave, causing
higher disease and insect pressure in most countries, following a
prolonged cold spell. Noteworthy performances are foreseen across
eastern Europe, supported by
favorable conditions in key crops, as well as in Italy and Greece, bolstered by the Company's recent
acquisition there. These are expected to more than compensate for
softer performances in certain countries in the western part of the
continent.
Net Income
Reported Net income in the second quarter is expected to be
somewhat higher than reported in the same quarter last year.
Despite the exceptionally strong increase in sales, the Company is
seeing pressure on gross margins, impacted by higher procurement
and production costs, as well as the strengthening of the RMB and
the ILS. The higher gross profit is expected to be partially offset
by increased operating and financial expenses.
The expected increase in operating expenses will largely reflect
the strong volume-driven growth of the business and acquisitions
made, alongside a significant increase in global logistics and
shipping costs, as well as the weaker US dollar. The expected
increase in financial expenses is driven by the effect of the
increase in the Israeli CPI on the ILS-denominated, CPI-linked
bonds. In contrast, the Company expects to see lower tax expenses
due to tax income resulting from the impact of the stronger BRL on
the value of non-monetary tax assets.
Over the half-year period, ADAMA is expecting to record marked
net income growth when compared to the corresponding period last
year, driven by the strong growth in net income recorded in the
first quarter and further augmented by the increase in the second
quarter net income.
|
Reported Net Income
|
|
Estimated H1
2021
|
|
H1
2020
|
|
Net income
attributable to shareholders (USD millions)
|
|
51 – 61
|
|
29
|
|
Earnings per share
(USD)
|
|
0.0219 –
0.0262
|
|
0.0118
|
|
Net income
attributable to shareholders (RMB millions)
|
|
330 – 394
|
|
205
|
|
Earnings per share
(RMB)
|
|
0.1416 –
0.1693
|
|
0.0836
|
|
|
|
|
|
The Company's reported net income in the second quarter and
first half is expected to reflect around $30
million and $59 million,
respectively, of net expenses in respect of certain transitory or
non-operational and non-cash items, including mainly:
- Approximately $21 million in Q2
2021 (Q2 2020: $8 million) and
$34 million in the first half (H1
2020: $22 million) in net Relocation
& Upgrade-related costs, including mainly (a) higher
procurement costs incurred as the Company continued to fulfill
demand for its products in order to protect its market position,
through replacement sourcing at significantly higher costs from
third-party suppliers; and (b) idleness charges largely related to
suspensions at the facilities being relocated;
- Approximately $7 million in Q2
2021 (Q2 2020: $8 million) and
$15 million in the first half (H1
2020: $15 million), in non-cash
amortization charges in respect of Transfer assets received from
Syngenta related to the 2017 ChemChina-Syngenta acquisition;
- Approximately $3 million in Q2
2021 (Q2 2020: $2 million) and
$6 million in the first half (H1
2020: $4 million), in net charges
related mainly to the non-cash amortization of intangible assets
created as part of the Purchase Price Allocation (PPA) on
acquisitions, with no impact on the ongoing performance of the
companies acquired, as well as other M&A-related costs.
Excluding the impact of the abovementioned transitory or
non-operational and non-cash items, the Company is expecting to
deliver the following Adjusted Net Income:
|
Adjusted Net Income
|
|
Estimated H1
2021
|
|
H1
2020
|
|
Net income
attributable to shareholders (USD millions)
|
|
110 – 120
|
|
95
|
|
Earnings per share
(USD)
|
|
0.0472 –
0.0515
|
|
0.0389
|
|
Net income
attributable to shareholders (RMB millions)
|
|
711 – 775
|
|
670
|
|
Earnings per share
(RMB)
|
|
0.3051 –
0.3328
|
|
0.2740
|
|
|
|
|
|
Note: The H1 2020 Adjusted Net Income shown above has been
amended from that presented at the time to include additional
adjustments in order to consistently reflect largely the treatment
of Relocation & Upgrade Program-related costs amongst other
adjustments that the Company has deemed non-operational and
one-time in nature.
These estimations are preliminary and have not been audited or
reviewed by the Company's auditors. These estimations may change,
inter alia, as a result of the further processing and analysis of
the financial data that the Company will perform for the
preparation of its financial statements which will be released on
August 26, 2021.
Investors are reminded to exercise caution when making
investment decisions.
About ADAMA
ADAMA Ltd. (SZSE: 200553) is a global leader in crop protection,
providing solutions to farmers across the world to combat weeds,
insects and disease. ADAMA has one of the widest and most diverse
portfolios of active ingredients in the world, state-of-the art
R&D, manufacturing and formulation facilities, together with a
culture that empowers our people in markets around the world to
listen to farmers and ideate from the field. This uniquely
positions ADAMA to offer a vast array of distinctive mixtures,
formulations and high-quality differentiated products, delivering
solutions that meet local farmer and customer needs in over 100
countries globally. For more information, visit us at www.ADAMA.com
and follow us on Twitter® at @ADAMAAgri.
Contact
Ben
Cohen
Global Investor
Relations
Email:
ir@adama.com
Zhujun Wang
China Investor Relations
Email: irchina@adama.com
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SOURCE ADAMA Ltd.
