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Sales in India declined over the full year period following high channel inventory, creating pressure on pricing in the market.

ADAMA Ltd. reported its financial results for the fourth quarter and full year ended December 31, 2023.  Company reported that 13 per cent drop in sales to $1,136 million (-13 per cent in RMB terms; -14 per cent in CER [1] terms), mainly reflecting a 15 per cent decrease in prices and a 1 per cent increase in volumes. Company’s Adjusted EBITDA amounted to $95 million vs. $129 million in Q4 2022.  Company posted Adjusted net loss of $101 million; Reported net loss of $79 million. Company reported Operating Cash Flow of $293 million in Q4 2023 vs $352 million in Q4 2022 and Free Cash Flow of $130 million vs $204 million in Q4 2022.

Steve Hawkins, President and CEO of ADAMA, said, “The crop protection industry as a whole faced challenging market conditions throughout 2023, resulting from high channel inventory and ongoing destocking at the distributor level. In response, ADAMA took immediate steps that supported a significant improvement ‎in cashflow in ‎‎2023, highlighting our strong execution ability‎. ‎

“In addition to the significant improvement ‎ in cashflow, we improved the ‎sales mix of higher margin products, reduced operating expenses and inventory. These, however, are only the first steps to ensure the Company is ‎fully prepared to take advantage of anticipated market opportunities in 2024 and ‎onwards. To fully respond to the long-term as well as short-term market challenges, we launched an intensive transformation plan aimed at improving the quality of the business and revaluing ADAMA. We will focus on winning in the largest growing segment of the market – the value innovation segment – with our outstanding pipeline of differentiated products powered by our proprietary formulation technologies.”

Asia-Pacific (APAC):

In China, the market is still experiencing high channel inventories and pricing pressure especially in commodities impacting both the branded formulation and non-ag sales. Sales were supported by the branded business, driven by recent and new launches of differentiated products, and ADAMA’s active ingredient business which recovered substantially, benefiting from the Sanonda Jingzhou site reaching high utilization after relocation.

In the Pacific region, sales in the full year and fourth quarter were impacted by high channel inventories and pricing pressure, combined with just in time purchasing patterns. In Australia, dryer weather also impacted sales. Despite this, sales benefited from the launch of the differentiated product Grindstone® and the Company’s biologicals portfolio.

‎Sales in India declined over the full year period following high channel inventory, creating pressure on pricing in the market. Moreover, the erratic weather did not support the consumption of such inventory. Despite this, it is noteworthy that differentiated product TrassidTM was well accepted in the market and along with increased focus on farmer demand generation, the Company’s sales increase in Q4.

Sales in the wider APAC region continued to experience pricing pressure, particularly from commoditized products. Despite this, particularly noteworthy was the performance of the Company’s sales in South Korea resulting in market share gain, supported by positive weather conditions.

Full Year 2023 Highlights:

Sales down 16 per cent to $4,661 million (-12 per cent in RMB terms; -15 per cent in CER terms), mainly reflecting a 8 per cent decrease in prices and a 7 per cent decrease in volumes.

Adjusted EBITDA amounted to $407 million vs. $740 million in the full year of 2022

Adjusted net loss of $236 million; Reported net loss of $225 million

Operating Cash Flow of $356 million vs $106 million in 2022

Free Cash Flow of -$147 million vs -$417 million in 2022

Sales in India declined over the full

Forapro® combines two Active Ingredients with ADAMA’s Asorbital® Formulation Technology for a double boosting effect.

ADAMA Ltd., a leading crop protection company, has announced the European launch of Forapro®, its new T1 broad spectrum multi-crop cereal fungicide that delivers superior control over all major early season diseases in wheat.

Forapro® offers the double boosting effect of two Active Ingredients together with ADAMA’s unique Asorbital® Formulation Technology. It delivers powerful results for both wheat and barley and is effective against early season diseases such as Powdery Mildew, Septoria and Rust.

Due to its unique formulation and dual active ingredients, Forapro® provides excellent control in T1 that keeps disease infestation levels in check until T2 spraying. The power of Prothioconazole together with Fenpropidin and boosted by Asorbital® Formulation Technology ensures increased leaf penetration, faster uptake, and outstanding migration, spreading the impact across the entire plant, while also preventing degradation from sunlight. Extensive trials have shown that Forapro® penetrates the leaf cuticle significantly faster compared to a tank mixture of the two ingredients.

“Farmers are looking for innovative, effective fungicides that address their needs for fast acting crop protection and lower costs, so they can increase yields and bring high quality cereals to the market. With the launch of Forapro®, ADAMA has answered these needs and provided the value innovation that farmers expect from us,” said Alex Mills, Global Head of Fungicides at ADAMA. “Forapro® delivers superior T1 control of Septoria, Yellow Rust, and Powdery Mildew, improving crop yields. Thanks to its highly effective uptake, farmers can manage diseases while meeting both yield and cost goals.”

Forapro® is part of ADAMA’s new European cereal fungicide portfolio. Launches will continue across the continent throughout 2024.

Forapro® combines two Active Ingredients with ADAMA’s

In the Pacific region, sales in the full year and fourth quarter were impacted by high channel inventories and pricing pressure, combined with just in time purchasing patterns.

Israel based ADAMA Ltd. reported its financial results for the fourth quarter and full year ended December 31, 2023.  Steve Hawkins, President and CEO of ADAMA, said, “The crop protection industry as a whole faced challenging market conditions throughout 2023, resulting from high channel inventory and ongoing destocking at the distributor level. In response, ADAMA took immediate steps that supported a significant improvement ‎in cashflow in ‎‎2023, highlighting our strong execution ability‎”.

Fourth Quarter 2023 Highlights:

Sales down 13 per cent to $1,136 million (-13 per cent in RMB terms; -14 per cent in CER [terms), mainly reflecting a 15 per cent decrease in prices and a 1% increase in volumes

Adjusted EBITDA amounted to $95 million vs. $129 million in Q4 2022

Adjusted net loss of $101 million; Reported net loss of $79 million

Operating Cash Flow of $293 million vs $352 million in Q4 2022

Free Cash Flow of $130 million vs $204 million in Q4 2022

Full Year 2023 Highlights:

Sales down 16 per cent to $4,661 million (-12% in RMB terms; -15% in CER terms), mainly reflecting a 8 per cent decrease in prices and a 7 per cent decrease in volumes

Adjusted EBITDA amounted to $407 million vs. $740 million in the full year of 2022

Adjusted net loss of $236 million; Reported net loss of $225 million

Operating Cash Flow of $356 million vs $106 million in 2022

Free Cash Flow of -$147 million vs -$417 million in 2022

In China, the market is still experiencing high channel inventories and pricing pressure especially in commodities impacting both the branded formulation and non-ag sales. Sales were supported by the branded business, driven by recent and new launches of differentiated products, and ADAMA’s active ingredient business which recovered substantially, benefiting from the Sanonda Jingzhou site reaching high utilization after relocation.

In the Pacific region, sales in the full year and fourth quarter were impacted by high channel inventories and pricing pressure, combined with just in time purchasing patterns. In Australia, dryer weather also impacted sales. Despite this, sales benefited from the launch of the differentiated product Grindstone® and the Company’s biologicals portfolio.

‎Sales in India declined over the full year period following high channel inventory, creating pressure on pricing in the market. Moreover, the erratic weather did not support the consumption of such inventory. Despite this, it is noteworthy that differentiated product TrassidTM was well accepted in the market and along with increased focus on farmer demand generation, the Company’s sales increase in Q4.

Steve Hawkins also added that in addition to the significant improvement ‎ in cashflow, we improved the ‎sales mix of higher margin products, reduced operating expenses and inventory. These, however, are only the first steps to ensure the Company is ‎fully prepared to take advantage of anticipated market opportunities in 2024 and ‎onwards. To fully respond to the long-term as well as short-term market challenges, we launched an intensive transformation plan aimed at improving the quality of the business and revaluing ADAMA. We will focus on winning in the largest growing segment of the market – the value innovation segment – with our outstanding pipeline of differentiated products powered by our proprietary formulation technologies.

In the Pacific region, sales in the

Expecting to report a decline in sales that reflect market dynamics of channel destocking.

Israel based ADAMA Ltd., has 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 per cent in USD terms (8 per cent 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.  

Expecting to report a decline in sales

The growth for the whole year which was led by Brazil and China reflected strong market demand for crop protection products.

Israel based agrochemical major ADAMA Ltd. has reported its financial results for the fourth quarter and twelve-month period ended December 31, 2022.In the full year 2022, sales of the Company reached a record high of RMB 37.38 billion (USD 5.57 billion) million, up by 20 per cent in RMB terms and 16 per cent in USD, driven by a 16 per cent increase in prices and a 4 per cent growth in volume. The growth for the whole year which was led by Brazil and China reflected strong market demand for crop protection products.

The Company reported an EBITDA of RMB 4.88 billion (USD 730 million), with a growth rate of 28 per cent in RMB and 23 per cent in U.S. dollars on a year-on-year basis. The significant increase in prices as well as the growth of sales volume for the full year outweighed the negative impact of higher costs for procurement, production and logistics, unfavourable exchange rate fluctuations and escalating operating expenses due to intensifying inflation pressure.

Full Year 2022 Highlights:

Sales up 16 per cent to a record-high of $5,570 million (+20 per cent in RMB terms; +19 per cent in CER terms), driven by 16 per cent higher prices and 4 per cent volume growth

Improvement of Opex/Sales ratio of 19.9 per cent vs. 20.5 per cent in 2021; Adjusted operating income up 8 per cent to $458 million (RMB: +11 per cent)

Adjusted EBITDA up 10 per cent to $740 million (RMB: +14 per cent) vs. $671 million in the full year of 2021.

Adjusted net income amounted to $118 million; Reported net income nearly tripled to $96 million

Fourth Quarter 2022 Highlights:

Sales down 2 per cent to $1,312 million (+9 per cent in RMB terms; +1% in CER terms), 6% higher prices and 6 per cent decrease in volume

Adjusted EBITDA amounted to $129 million vs. $207 million in Q4 2021

Adjusted net loss of $42 million; Reported net loss of $22 million

Ignacio Dominguez, President and CEO of ADAMA, said, “As we enter the year of 2023, we reflect on the remarkable year that was 2022. This was a year in which the crop protection market experienced exceptional growth, both in volumes, and especially in prices largely aimed to offset increases in costs. I am happy to say that ADAMA grew with the market reaching record sales and EBITDA in 2022.

“As 2022 proceeded, crop commodity prices came down from their peak, maintaining historically elevated levels. This has continued into 2023, while fertilizer and energy prices declined at a slower pace, leading to lower but still historically high farmer profitability. With high inventories in the market, we anticipate a gradual return to normalization in the crop protection market towards the second half of 2023.

“We believe that in 2023 farmers will continue to invest in crop protection products that bring them incremental value. In 2022 ADAMA introduced many differentiated products to the market, optimizing its offering to farmers around the globe while maintaining simplicity in doing business, and intends to continue to do so in 2023.”

The growth for the whole year which

Expected strong growth was primarily driven by a significant, double-digit increase in prices

 ADAMA Ltd.  has provided an estimate regarding its financial performance for the second quarter and first half of 2022.ADAMA is expecting to report sales growth of approximately 22 per cent in USD terms (24 per cent in RMB 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 per cent in USD terms (25 per cent in RMB 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.

In the second quarter and first half period, the Company is expecting to report an increase in adjusted 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 rate 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 Adjusted & Reported Net Income in the second quarter and first half period, 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 rate.

Expected strong growth was primarily driven by