Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2023-23
ADAMA Ltd.
H1 2023 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, 2023 - June 30, 2023
2. Estimated performance: net loss
Item Current reporting period Same period last year
January to June 2023 January to June 2022
Net income (loss) attributable
to the shareholders of the (291) - (193) 732
listed company
(RMB in millions)
Net income (loss) excluding
non-recurring profits and (357) - (259) 655
losses
(RMB in millions)
Basic earnings per share (0.1251) - (0.0830) 0.3142
(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 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
For the first half year of 2023, ADAMA is expecting to report a decline in sales of approximately
8% in RMB terms (14% in USD terms), compared to the first half year of 2022, mainly reflecting
lower volumes, as well as the negative impact of exchange rates and prices. The lower sales
reflect market dynamics of channel destocking in light of high interest rates and a "wait and see"
approach, given the high inventory in the channel and declining active ingredient pricing.
Additionally, sales were also impacted by negative weather conditions in certain geographies.
This is in comparison to the first half year of 2022, in which the Company achieved record sales
reflecting high demand due to supply uncertainty in the market.
EBITDA
In the first half year of 2023, the Company is expecting to report a decrease in EBITDA and its
margin in comparison to the first half year of 2022. The decrease in EBITDA is due to the decline
in sales, as described above, high-cost inventory exchange rates and despite a decrease in
operating expenses and improvement in the Company's sales mix of higher margin products. In
response to the market conditions, the Company has taken certain measures to manage its
COGS and OPEX.
Net Loss
In the first half year of 2023, the Company is expecting to report Reported Net Loss (291 - 193
million RMB), compared to the reported net income in the first half year of 2022. This is due to
lower Operating Profit and an increase in financial expenses in light of higher bank interest
expenses due to an increase in short-term loans as well as the sharp increase in interest rates
which also impacted hedging costs on exchange rates. These financial expenses were
moderated by the lower Israeli CPI. The Company anticipates that once expensive market
inventories have been depleted, the overall market dynamics should stabilize.
The Company’s reported net loss in the first half of 2023 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 the value of the existing plan at the grant date.
Excluding the impact of the abovementioned transitory or non-operational and non-cash items,
the Company is expecting to deliver the following:
？ Adjusted net income (loss) attributable to shareholders in the first half period is expected
to be between RMB (190) - (92) million, compared to Adjusted net income of RMB 978
million in the same per
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