StockCode:000553(200553) Stockabbreviation:ADAMAA(B) AnnouncementNo.2019-39
ADAMALtd.
H12019PerformanceEstimation
TheCompanyandallthedirectorsconfirmthattheinformationdisclosedistrue,accurate,completeandwithnofalserecording,misleadingstatementormaterialomission.
I.PerformanceEstimation
1.Estimationperiod:January1,2019–June30,2019
2.Estimatedperformance:lowercomparedwiththecorrespondingperiodlastyear
Item Currentreportingperiod Sameperiodlastyear
JanuarytoJune2019 JanuarytoJune2018
aspreviouslyreported
Netincomeattributabletothe 542–610
shareholdersofthelisted 2,363
company PercentagedecreaseYoY
(RMBinmillions) 74.2%–77.1%
Basicearningspershare 0.2215–0.2494 0.9658
(RMB)
II.Pre-auditoftheestimatedperformance
TheestimatedresultsofthisperiodarethepreliminaryestimationoftheCompanyandhavenotbeenauditednorreviewedbycertifiedaccountants.
III.ExplanationsforPerformanceVariation
(1)TheCompanyisexpectingtodelivermorethan$2billioninsalesinthefirsthalfof2019,
inlinewithlastyearinconstantcurrencyterms,andsomewhatbelowlastyearinUS
dollarterms.Significantsnow,followedbyunprecedentedfloodingsinNorthAmerica,
alongsideextremedryweatherinEuropeandAsia-Pacificdelayedandreduced
applicationofcropprotectionproducts,whilecontinuedtightsupplyconditionsprevented
theCompanyfromfulfillingstrongdemandforcertainkeyproducts.
ContinuedstrongcontributionfromLatinAmerica,IndiaandMiddleEast,aswellasnew
joinersBonideandAnpon,togetherwithfurthersignificantpriceincreasesacrossall
regions,partiallyoffsettheseweather-andsupply-relateddelaysandallowedthe
Companytomaintainastablegrossmargin.InChina,ADAMAcontinuestoseestrong
demandforitsdifferentiated,formulatedandbrandedproducts,asitcontinuestoprioritize
thesesalesthroughitsownchannelsbyshiftingawayfromsalesofunformulated,
technicalactiveingredientstointermediaries.
FollowingresumptionofoperationsattheJingzhouoldsiteinlateMarch,theCompanyis
advancingthegradualramp-upofproduction.Thenewstate-of-the-artwastewater
treatmentfacilityisoperational,andtheupgradedbiological-decompositionsystemsare
beingacclimatedtotheimprovedwastewaterquality.Asthisprogressed,theCompany
wasneverthelessstillimpactedbyconstrainedsupplyincertainkeyproducts
manufacturedatthesiteandrecordedapproximatelyRMB140millionofrelatedidleness
costduringthehalf-year.
Lookingtowardthesecondhalfoftheyear,theCompanyexpectsitsperformanceto
strengthenasthesouthernhemisphereregions,whichareperformingstrongly,moveinto
theirpeakseason,andoutputincreasesfromtheJingzhouoldsite.
(2)Thesignificantlyhigherreportednetincomeinthefirsthalfof2018isduetothe
divestitureofseveralproductsinEuropeinconnectionwiththeapprovalbytheEU
CommissionoftheacquisitionofSyngentabyChemChinalastyear,andotherrelated
impacts,whichinH12018resultedintherecognitionofanapproximatelyRMB1,573
millionone-timenetincome.Theproceedsofthisdivestiture,netoftaxesandtransaction
expenses,werepaidtoSyngentainreturnforthetransferofaportfolioofproductsin
Europeofsimilarnatureandeconomicvalue,whichinturn,resultedintherecordingin
thereportedfinancialsofeachquarterofnon-cashamortizationexpenses,withno
economicimpact,inrespectofthesewritten-upassetsofapproximatelyRMB65million
startingQ22018.
(3)Excludingtheimpactoftheproducts’divestitureandtransfer,netincomeinH12018
wouldhavebeenlowerbyRMB1,508million,whileinH12019netincomewouldhave
beenhigherbyRMB134million.
(4)Excludingalsotheimpactofcertainone-time/non-cashitems,includingmainlythelegacy
amortizationofthe2011PPAfortheacquisitionofAdamaAgriculturalSolutionsLtd.by
ChemChina,andreflectingthelong-termincentiveplanonanequity-settledbasis,results
inthefollowing:
AdjustednetincomeisexpectedtobebetweenRMB835–903million,comparedto
lastyear’sadjustednetincomeofRMB1,000million,adecreaseofonly9.7%-16.5%
YoY.
AdjustedbasicearningspershareisexpectedtobebetweenRMB0.3412–0.3690
comparedtolastyear'sadjustedbasicearningspershareofRMB0.4086.
AdjustedEBITDAinthehalfyearisexpectedtobeRMB21–89millionabovethe
RMB2,412millionrecordedinthesameperiodlastyear.
IV.OtherRemarks
TheestimatedresultsaboveareonlypreliminarycalculationsperformedbythefinanceteamoftheCompanybasedonpreliminaryfinancialdataavailabletotheCompanyandhavenotbeenauditedorreviewedbytheCompany'sindependentauditors.Theseestimationsmaychange,interalia,asaresultoftheprocessingandanalysisofthefinancialdatathattheCompanywillperformforthepreparationofitsH12019financialstatements.PleaserefertotheH12019
Reporttobeduly
