Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2020-37
ADAMA Ltd.
H1 2020 Performance Estimation
The Company and all the directors confirm that the information disclosed herein is true,
accurate, complete and contains no false recording, misleading statement or material
omission.
I. Performance Estimation
1. Estimation period: January 1, 2020 – June 30, 2020
2. Estimated performance: lower compared with the corresponding period last year
Item Current reporting period Same period last year
January to June 2020 January to June 2019
Net income attributable to the 164 – 214
shareholders of the listed 589
company Percentage decrease YoY
(RMB in millions) 63.7% – 72.2%
Basic earnings per share 0.0669 – 0.0873 0.2406
(RMB)
II. Pre-audit of the estimated performance
The estimated results of this period are the preliminary estimation of the Company and have not
been audited nor reviewed by certified accountants.
III. Explanations for Performance Variation
The Company is expecting to deliver record second quarter sales, in both RMB and USD terms,
driven by strong business growth, enabling first half sales to finish in line with those of the same
period last year, crossing the RMB 14 billion mark for the first time and the $2 billion mark for the
third consecutive year.
The solid sales performance in the quarter was achieved in the midst of the ongoing COVID-19
pandemic, which continues to disrupt the global crop protection market, amongst many others.
The pandemic has contributed to the significant weakening of many global currencies against the
US dollar in recent months, most notably the Brazilian Real, Indian Rupee and Turkish Lira, as
well as increased volatility in the Euro and Australian dollar. These currency movements have
negatively impacted the Company’s performance in the first half of the year, as reflected in a
lower sales growth in both USD and RMB terms when compared to the growth in constant
exchange rate (CER) terms, as well as reduced profitability.
Sales
Sales in the second quarter are expected to increase by more than 12% in CER terms, driven by
a strong, double-digit increase in volumes alongside higher prices. In RMB terms, sales are
expected to grow by around 7%, and by a more moderate 3% in USD terms, reflecting the
significant impact of the weaker currencies.
Growth in the second quarter was led by a strong performance in Latin America, driven by Brazil
and Argentina, overcoming the material depreciation of regional currencies as well as robust
growth in the India, Middle East & Africa region, which benefited from favorable weather.
ADAMA continues to grow strongly in China, driven by sales of the Company’s branded,
formulated products, and supporting an almost complete recovery from the first quarter
COVID-19 impact. ADAMA is expecting to deliver robust second-quarter growth also in
Asia-Pacific, led by a strong performance in Australia, benefiting from favorable rainfall in the
country.
Sales in Europe in the second quarter are expected to be in line with those of last year, with
growth in North Europe being offset by a challenging season in South Europe, where a severe
drought over much of the quarter caused a reduction in planted areas in some key crops. Sales
in North America in the second quarter are expected to be lower than those in the same quarter
last year, with challenging weather reducing purchasing from customers in key crops.
Over the first half of 2020, ADAMA generated sales growth of almost 7% in CER terms and is
expecting to report growth of 4% in RMB terms, improving on the sales of the first quarter that
were in line with those of the same period last year, to now exceed RMB 14 billion in sales for
the half year period. This was achieved despite the various impacts of COVID-19, which
continues to pose both numerous challenges to the way the Company is able to do its business,
as well as materially impacting global currencies. In the half year, growth was led by Latin
America, mainly driven by Argentina alongside a pleasing contribution from Peru following an
acquisition there in 2019. The Company grew strongly over the half year also in the India, Africa
and Middle East region, driven by continued robust growth in India and a return to supportive
weather conditions in South Africa, and also saw significant growth in Australia, benefiting from
favorable weather conditions.
Gross Profit
In the second quarter, the Company is expecting to report somewhat lower gross profit
compared to the same period last year, with the material depreciation of global currencies
against the US dollar more than offsetting the strong business growth and moderate price
increases. Similarly, over the half year pe
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