EXPECTED ST RONG FOURT H QUART ER CLOSES A ROBUST YEAR
FOR ADAMA
TEL AVIV, ISRAEL and BEIJING, CHINA, January 22, 2020 – ADAMA Ltd. (the “Company”) (SZSE
000553), today provided an estimate regarding its performance in the fourth quarter and full year 2019.
Sales
ADAMA is expecting to reach an all-time fourth quarter record of over $1 billion in sales, growing over 7% in
USD terms and 9% in RMB terms, driving full year sales to touch $4 billion, another all-time record high for
the Company, overcoming the significant headwinds seen during the year.
In the fourth quarter, the expected revenue growth was driven by a combination of robust business growth
alongside certain price i ncreases, which more than offset the impact of missing sales of key products
manufactured at the Jingzhou old site stemming from the site disruption there during the year, as well as
currency headwinds. The Company is expecting to report strong growth in Europe, where it saw an early
start to the 2020 season, as well as in North America and Asia-Paci fic . Noteworthy results are also seen in
Brazil, led by a strong performance from CRONNOS®, and across Latin America, where the Company’s
differentiated product offering continues to grow with the inclusion of ARMERO™, ADAMA’s first self-
produced Prothioconazole-based mixture recently launched in Paraguay, opening up a $1 billion m arket.
Over the full year period, ADAMA is expecting to deliver another year of recor d-hi gh sal es, with growth of
approximately 3% in USD terms and 8% in RMB terms, touchi ng $4 billion, driving continued market share
gains despite the impact of significant supply constraints, in particular the missing sales of Jingzhou old site
products. The Com pany grew strongly in Brazil and the rest of Latin America, while the strong performance
in Europe in the fourth quarter m an age d to mitigate some of the impact of the weather and supply constraints
experienced in the region earlier in the year. ADAMA continues its robust growth in China, where its branded,
formulated sales are expected to record another strong, dou ble -di git increase.
Gro ss Profit
In the fourth quarter, the robust business growth, alongside higher prices and improved portfolio mix are
expected to fully offset the impact of missing sales of the Jingzhou old site products, as well as higher
procu rem ent costs and weaker currencies, resulting in gross profit in line with the same period in 2018.
Over the full year, the solid growth of the Company’s differentiated po rtfoli o, complemented by significantly
higher prices, are expected to largely offset the impact of missing Jingzhou old site product sales, higher
procu rem ent costs and weaker currencies, bringing gross profit slightly below that of 2018.
EBITDA
In the fourth quarter, with ongoi ng tight management of operating expenses, the Com pa ny expects to deliver
a double-digit increase in adjusted EBITDA to an all-time fourth quarter record-high, despite the missing
profit from products of the Jingzhou old site and the recording of related idleness costs.
Over the full year, this is expected to bring the Company’s adjusted EBITDA to be in line with the all-time
record high achieved in 2018, despite the missing profit of the Ji ngzh ou old site products and related
significant idleness costs, as well as the supply and weather-related challenges encountered throughout the
year. In fact, consistently applying the treatment of empl oyee options on an equity-settled basis for both 2019
and 2018, yields a marked increase in adj usted EBITDA in 2019.
Adjusted Net Income
In the fourth quarter, financial expenses are expected to be somewhat higher compared to the same period
in 2018, driven by the effect of the stronger RMB on balance sheet positions . Taxes in the fourth quarter of
2018 were exceptionally low due to the fact that a greater portion of the taxable profit in that quarter was
recognized in lower tax jurisdictions. Taken together, the higher financial and tax expenses are expected to
result in somewhat lower adjusted net income for the quarter.
Over the full year, fi nancial expenses are expected to be higher compared to 2018, driven by the effect on
balance sheet positions of the more moderate weakening of the RMB in 2019 compared to its more marked
weakening during 2018, a higher borrowing base, and the impact of accounting changes related to IFRS 16 /
ASBE 21, offset to some extent by the reduction in financing costs on the NIS-denominated, CPI-linked
bonds due to a lower CPI. This impact was partially offset by lower taxes on the lower pre-tax income in 2019,
while in comparison, 2018 saw higher tax expenses due to the impact of the devaluation of net, non-cash tax
assets as a result of the weakening in 2018 of the Brazilian Real against the US dollar. The net impact of the
higher financial and lower tax expenses is exp
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