Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2021-42
ADAMA Ltd.
Q1-Q3 2021 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: First nine months and third quarter of 2021
2. Estimated net profit: decrease or loss compared with the corresponding periods last year
Item Current reporting period Same period last year
January to September 2021 January to September 2020
Net income attributable to the (32) – 32
shareholders of the listed 225
company Percentage decrease YoY
(RMB in millions) (114.22)% – (85.78)%
Basic earnings per share (0.0139) – 0.0139 0.0929
(RMB)
Item Current reporting period Same period last year
July to September 2021 July to September 2020
Net income attributable to the (399) – (335)
shareholders of the listed 20
company Percentage decrease YoY
(RMB in millions) (2,095.00)% – (1,775.00)%
Basic earnings per share (0.1715) – (0.1437) 0.0086
(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
Sales
ADAMA is expecting to report sales growth of more than 10% in RMB terms (17% in USD terms)
in the third quarter compared to the same quarter last year, which should drive top-line growth of
around 8% (16% in USD terms) over the nine-month period, compared to the corresponding
period last year. The strong growth over both the quarter and the nine-month period is being
driven by a combination of continued robust volume growth alongside moderate price increases
in the quarter, with strong demand supported by continued high crop prices, as well as favorable
exchange rates and the contribution of newly acquired companies.
In the third quarter, the Company is expecting to record strong growth in Europe, where the
continued high crop prices, combined with supportive weather later in the quarter, saw a positive
start to the autumn season, especially in oilseed rape, winter cereals and sunflower.
In North America, the Company is expecting to deliver a strong performance driven by a
combination of significant volume growth and higher prices, enjoying robust demand in both the
Agriculture as well as Consumer & Professional arms. ADAMA is expecting to deliver pleasing
growth across Latin America, with the high crop prices driving strong demand as the region
starts to reopen following the improvement of the COVID situation in key markets, translating
into solid volume growth and higher prices.
The Company is growing strongly in Asia Pacific, led by China where the Company continues
to grow sales of its branded, formulated portfolio, supported by new product launches and
bolstered by the acquisition of Huifeng’s domestic commercial arm at the end of 2020. In China,
although industry-wide supply shortages are causing increased procurement costs and posing
challenges for the Company's margins, the Company is also benefiting to some extent from the
generally higher pricing environment, most notably in the sales of its raw materials and
intermediates where it is seeing strong demand. In the rest of APAC, the Company is expecting
to report continued growth, with a noteworthy performance expected to be delivered in the
Pacific region, enjoying positive seasonal conditions and healthy demand.
Sales in the India, Middle-East & Africa region are expected to grow, with a noteworthy
performance being seen in South Africa where the Company is benefiting from favorable
cropping conditions and new product launches. However, growth in India is slowing as farmers
missed some applications due to volatile weather conditions following a previously strong start
to the monsoon season.
Gross Profit, Operating Profit and EBITDA
In the third quarter, the Company is expecting to report higher gross profit, driven by the strong
top-line growth. However, the Company continues to see pressure on its gross margins,
impacted by higher procurement and production costs, as well as the effect of the strong RMB
and ILS, the Company's main production currencies. The recent temporary plant suspensions in
China resulting from the country's Dual Control policy have further challenged supply of raw
materials, intermediates and active ingredients, serving to further exacerbate the impact of
already h
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