The Company’s reported net income in Q3 and nine-month period are expected to reflect around $18 Mn and $63 Mn, respectively.
ADAMA Ltd. has announced an estimate regarding its financial performance for the third quarter and first nine months of 2020.
The Company is expecting to deliver record third quarter sales, in both USD and RMB terms, driven by solid volume growth, resulting in higher sales over the nine-month period. While global currencies recovered somewhat against the US Dollar during the third quarter, they generally remained weaker than in the comparative periods in 2019, which continued to restrain sales growth and significantly impact profitability in USD terms in the quarter and nine-month period.
Sales
Sales are expected to grow by 12% in the quarter and by 8% in the nine-month period, in CER terms, compared to the corresponding periods last year, driven by strong, double-digit increase in volumes.
ADAMA is expecting growth in the quarter to have been led by a strong performance in Latin America, driven by robust volume growth across the region, most notably in Brazil, Argentina, Colombia, Mexico and Paraguay, and bolstered by the Company’s acquisition in Peru, and despite widespread COVID-19 related restrictions in the region.
Continued growth was seen in the India, Middle East & Africa region, led by India which benefited from above-average monsoon rains and good cropping conditions. The Company is expecting to deliver strong growth in Asia-Pacific with noteworthy performances in Australia alongside solid growth in New Zealand and Korea.
In China, the Company is expecting to deliver moderate growth, with a strong performance from its branded, formulated sales being partially offset by lower prices received for its raw materials and intermediates due to increased supply generally from Chinese producers.
Crop protection sales in North America are expected to be markedly lower, largely due to disruptive weather conditions in the US which saw windstorms damage corn fields in the mid-west, fires raging in the orchards and vineyards of California and Oregon.
Net Income
Net income in the third quarter and nine-month period is expected to be below that reported in the same periods last year, driven by the lower operating income over both periods, and further impacted by higher financial expenses in the third quarter due to an increase in financing costs on the NIS-denominated, CPI-linked bonds due to a higher CPI in Israel, and the effect on balance sheet positions of the strengthening of the RMB when compared to 2019.
The Company’s reported net income in the third quarter and nine-month period are expected to reflect around $18 million and $63 million, respectively, of net expenses in respect of certain non-operational, mostly non-cash items.
