ADAMA Provides Performance Estimation for the First Half Year of 2023
TEL AVIV, ISRAEL and BEIJING, CHINA, July 14, 2023 – ADAMA Ltd. (the “Company”) (SZSE 000553),
today provided an estimate regarding its financial performance for the first half year of 2023.
Sales
For the first half year of 2023, ADAMA is expecting to report a decline in sales of approximately 14% in USD
terms (8% in RMB 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 H1 2022, in which the Company achieved record sales
reflecting high demand due to supply uncertainty in the market.
Adjusted EBITDA
In the first half year of 2023, the Company is expecting to report a decrease in adjusted EBITDA and its margin,
in comparison to the first half year of 2022. The decrease in adjusted 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 Adjusted & Reported Net Loss, compared
to adjusted & 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.
Adjusted Net Income (Loss) Estimated H1 2022
H1 2023
Net income (loss) attributable to shareholders (27)-(13) 151
(USD millions)
Earnings per share (USD) (0.012)-(0.006) 0.0648
Net income (loss) attributable to shareholders (190)-(92) 978
(RMB millions)
Earnings per share (RMB) (0.082)-(0.039) 0.4197
Adjusted Net Income (loss) 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. 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.
Reported Net Income (Loss) Estimated H1 2022
H1 2023
Net income (loss) attributable to shareholders (41)-(27) 113
(USD millions)
Earnings per share (USD) (0.018)-(0.012) 0.0487
Net income (loss) attributable to shareholders (291)-(193) 732
(RMB millions)
Earnings per share (RMB) (0.125)-(0.083) 0.3142
These estimations are preliminary and have not been audited or reviewed by the Company's auditors. These
estimations may change, inter alia, as a result of the further processing and analysis of the financial data that
the Company will perform for the preparation of its financial statements which will be released after the trading
hours on August 31, 2023.
Investors are reminded to exercise caution when making investment decisions.
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About ADAMA
ADAMA Ltd. (SZSE: 200553) is a global leader in crop protection, providing solutions to farmers across the
world to combat weeds, insects and disease. ADA
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