ADAMA Provides Net Income Estimate for Q1 2021
Robust business growth expected to drive higher reported net profit
TEL AVIV, ISRAEL and BEIJING, CHINA, April 14, 2021 – ADAMA Ltd. (the “Company”) (SZSE 000553),
today provided an esti mate regarding its financial performance for the first quarter of 2021.
Sales
ADAMA is expecting to report record-high first quarter sales, with estimated top-line growth of more than 13%
(6% in RMB ter ms), driven by continued robust volume growth in almost all key regions.
The Company is expecting to record strong growth in Asia Pacific, both in China and beyond. In China,
ADAMA saw significant growth in the quarter both from its branded, formulated por tfolio, which was driven by
higher cereal demand due to an increase in field crop planted areas and an early start to the Q2 season, as
well as from its sales of raw materials and intermediates. Sales in the country were further bolstered by the
inclusion of the Company’s recent acquisition of Jiangsu Huifeng’s domestic commercial crop protection
business.
In the rest of APAC, the Company benefited from favorable seasonal condi tions to deliver strong growth,
despite a slower recovery from COVID-19 challenges in Asia.
Continued posi tive weather conditions also supported robust growth in the India, Middle-East & Africa region.
In North America, a strong performance from the Company’s Consumer and Professional business drove
growth in the region, benefiting from the reopening of the economy after COVID-19 related restrictions in
2020, and more than offset a somewhat softer performance in the US crop protection business.
The Company continues its growth trajectory in Latin America, driven by solid volume growth and good
performance from recent product launches in the region, and despite somewhat lower sales in Brazil
following a strong end to the fourth quarter there last year.
Sales in Europe are expected to be somewhat lower in the quarter, with growth in the south, where favorable
market conditions drove good demand, being outweighed by a slow start to the season in the north and east,
especially when compared to Q1 2020 which saw strong orders from distribution in anticipation of the
COVID-related shutdowns that soon followed.
Net Income
Reported Net Income in the quarter is expected to be significantly improved against the loss recorded in the
corresponding period last year. This improvement is dri ven by the strong sales growth, resulting in higher
reported operating income, and is expected to be achieved despite somewhat higher financial expenses
expected in the quar ter.
Reported Net Income Estimated Q1 2021 Q1 2020
Net income attributable to shareholders (USD millions) 22 – 32 -2
Earnings per share (USD) 0.0094 – 0.0137 -0.0010
Net income attributable to shareholders (RMB millions) 143 – 207 -17
Earnings per share (RMB) 0.0612 – 0.0890 -0.0068
The Company’s Reported Net Income in the first quarter of 2021 is expected to reflect around $32 million
(Q1 2020: $44 million) of net expenses in respect of certain non-operational, mostly non-cash items,
including mainly:
i. Approximately $15 million in Q1 2021 (Q1 2020: $15 million) of 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;
ii. Approximately $8 million in Q1 2021 (Q1 2020: $8 million) in non-cash amortization charges in
respect of Transfer assets received from Syngenta related to the 2017 ChemChina-Syngenta
acquisition;
iii. Approximately $3 million in Q1 2021 (Q1 2020: $2 million) in 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 non-operational, mostly non-cash items, the Company is
expecting to deliver the following Adjusted Net Income:
Adjusted Net Income Estimated Q1 2021 Q1 2020
Net income attributable to shareholders (USD millions) 54 – 64 41
Earnings per share (USD) 0.0231 – 0.0274 0.0170
Net income attributable to shareholders (RMB millions) 349 – 414 289
Earnings per share (RMB) 0.1499 – 0.1777 0.1182
Note: The Q1 2020 Adjusted Net Income shown above has been amended from that present
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