Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2022-22
ADAMA Ltd.
H1 2022 Performance Estimation
The Company and all the directors confirm that the information disclosed herein is true,
accurate, complete and contains no false recording, misleadingstatement or material omission.
I. Performance Estimation
1. Estimation period: January 1, 2022 – June 30, 2022
2. Estimated net profit: higher compared with the corresponding period last year
Item Current reporting period Same period last year
January to June 2022 January to June 2021
Net income attributable to the 643 – 841
shareholders of the listed 367
company Percentage increase YoY
(RMB in millions) 75.2% – 129.2%
Net income excluding non- 566 – 764
recurring profits and losses Percentage increase YoY 322
(RMB in millions) 75.8% – 137.3%
Basic earnings per share 0.276 – 0.361 0.1575
(RMB)
Note: The ‘non-recurring profits and losses’ referred to above are as defined in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering their Securities to the Public-Non-Recurring Profit and Loss.
II. Pre-audit of the estimatedperformance
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 approximately 24% in RMB terms (22% in USD
terms) in the second quarter of 2022 compared to the same quarter last year.
Sales in the first half of 2022 are expected to grow approximately 25% in RMB terms (25% in
USD terms), compared to the same period last year.
The expected strong growth over the quarter and first half period was primarily driven by a
significant, double-digit increase in prices, a trend which started in the third quarter of 2021,
complemented by volume growth and despite the negative impact of exchange rates and supply
challenges. This growth is a reflection of the robust demand in the market resulting from the
elevated global crop prices during the first half of 2022. The Company's performance was
particularly strong in Brazil, where the Company continues to work to strengthen its position within
this growing market, while the Company's sales of raw material and intermediates in China
continued to grow strongly.
EBITDA
In the second quarter and first half period, the Company is expecting to report an increase in
EBITDA and its margin, in comparison to the corresponding periods in 2021. The strong top-line
growth more than compensated for the impacts of higher procurement, production and logistics
costs, exchange rates impacts as well as higher operating costs, which were impacted amongst
other factors by higher inflation.
It should be noted that certain relocation and upgrade charges have significantly declined since
Q1 2022, as the relocation and upgrade of the manufacturing Jingzhou site in China has been
completed and is now at a high level of operation.
Net Income
The Company is expecting to report an increase in Net Income in the second quarter (215-414
million RMB) and first half period (643-841 million RMB), compared to the same periods last year
following achieving higher Operating Profit and despite a significant increase in financial
expenses due to the high Israeli CPI, elevated securitization expenses attributed to increased
exposure to Brazil and higher hedging costs on exchange rates.
The Company’s reported net income in the second quarter and first half is expected to reflect net
expenses in respect of certain transitory or non-operational and non-cash items, including mainly:
i. Non-cash amortization charges in respect of Transfer assets received from Syngenta
related to the 2017 ChemChina-Syngenta acquisition.
ii. Non-cash amortization net charges related to intangible assets created as part of the
Purchase Price Allocation (PPA) on acquisitions, with no impact on the ongoing
performance of the companies acquired.
iii. Incentive plans: ADAMA granted certain of its employees a long-term incentive (LTI) in
the form of 'phantom' awards linked to the Company’s share price. As such, the Company
records an expense, or recognizes income, depending on the fluctuation in the
Company’s share price, regardless of award exercises. To neutralize the impact of such
share price movements on the measurement of the Company’s performance and
expected employee compensation and to reflect the existing phantom awards, in the
Company’s adjusted financial performance, the LTI is presented on an equity-settled
basis in accordance with
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