ADAMA Provides Net Income Estimate Full Year 2022
TEL AVIV, ISRAEL and BEIJING, CHINA, January 30, 2023 – ADAMA Ltd. (the “Company”) (SZSE 000553),
today provided an estimate regarding its financial performance for full year of 2022.
Sales
For the full year of 2022, ADAMA is expecting to report a growth in sales of approximately 16% in USD terms
(20% in RMB terms), compared to 2021.
The expected strong growth over the full year 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 achieved
despite the negative impact of exchange rates and supply challenges. This growth is a reflection of the robust
demand in the market resulting fromthe elevated global cropprices during 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 in China continued to grow strongly, also due to consolidation
during 2021 of a newly acquired subsidiary.
Adjusted EBITDA
In the full year of 2022, the Company is expecting to report an increase in adjusted EBITDA and a decrease
in its margin, in comparison to 2021. The strong top-line growth more than compensated for the impacts of
higher procurement, production and logistics costs, exchange rates as well as higher operating costs, which
were impacted amongst other factors by higher inflation. However, the higher percentage increase of these
costs and expenses led to a decline in the expected EBITDA margin.
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
In the full year of 2022, the Company is expecting to report an increase in Reported Net Income, compared
to 2021, following achieving higher Operating Profit and despite a significantincrease in financial expenses in
light of the high Israeli CPI, higher hedging costs on exchange rates and an increase in interest rates.
In the fourth quarter of 2022, the Company is expected to record a non-recurring,non-cash provision for asset
impairment in its subsidiaries (please referto Announcement on Assets Impairment (Announcement No. 2023-
3) for details) and income due to revaluation of put options attributed to minority stakes in one of these
subsidiaries.
In the full year of 2022, the Company is expecting to report a decrease in Adjusted Net Income, compared to
2021, despite achieving higher Operating Profit and due to a significant increase in financial expenses in light
of the high Israeli CPI, higher hedging costs on exchange rates and an increase in interest rates.
Adjusted Net Income Estimated FY 2021
FY 2022
Net income attributable to shareholders (USD 123-152 139
millions)
Earnings per share (USD) 0.0528-0.0654 0.0596
Net income attributable to shareholders (RMB 777-984 895
millions)
Earnings per share (RMB) 0.3337-0.4229 0.3843
Adjusted Net Income excludes the impact of transitory, non-operational or non-cash items, mainly including:
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. Manufacturing facilities relocation & upgrade-related costs: certain extraordinary charges related largely
to a temporary disruption of the production of certain products, were adjusted in 2021. These charges
have significantly declined in 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;
iv. 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 the value of the existing plan at the grant date.
v. Non-cash, non-recurring provision for asset impairment and income
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