HomeProduct Complimentary download Adama announces solid first quarter results

Adama announces solid first quarter results

Keyword:
Publish time: 18th May, 2015      Source: Tel Avic, Israel
Information collection and data processing:  CCM     For more information, please contact us
Adama announces solid first quarter resultsAdama announces solid first quarter results" title="Share this link on Facebook">Tel Avic, IsraelMay 17, 2015ADAMA Agricultural Solutions Ltd. (“Adama” or “the Company”), the leading global off-patent provider of crop protection solutions, today reported its financial results for the first quarter of 2015.Financial HighlightsAdjusted, in millions of US$Q1 2015Q1 2014ChangeRevenues*866.7909.7(4.7%)Gross profit294.8313.1(5.8%)Gross margin34.0%34.4%Operating profit125.5130.7(3.9%)Net income before taxes115.1105.88.8%Net income94.498.7(4.4%)EBITDA166.8171.5(2.7%)EBITDA margin19.2%18.8%* In constant currency terms, revenues grew by 0.4% in the first quarter of 2015, driven by 2% volume growth.Note: Net income before taxes and Net income have been adjusted for one-time expenses related to revaluation of options on debentures issued by the Company, and to an overseas tax-related provision.Commenting on the results, Yang Xingqiang, Chairman of Adama’s Board of Directors, said, "In this challenging time for the agricultural industry, we have seen both lower crop prices placing pressure on growers to reduce their spending, as well as the impact of significant currency headwinds in all markets. However, the strong joint effort by our entire team across the globe ensured that we were able to adjust to these adverse market conditions, allowing the Company to deliver excellent financial results. We remain well positioned to capitalize on our unique business to drive further growth going forward."Chen Lichtenstein, President and CEO of Adama, commented, “Our resilient performance this quarter, which compares favorably to our sector, demonstrates the robustness of our diversified business and wide product offering focused on addressing farmers' needs across the globe. We generated an overall increase in volumes of over 2% during the first quarter, despite the difficult market conditions. We have also shown that, even in less than optimal times, our focus on thoughtful management of our business with an emphasis on profitability allowed the company to maintain and even improve its adjusted net income, operating profit and EBITDA margins, as well as improve significantly its cash flow. We continue to invest in our integrated platform and further enhance our portfolio of solutions we deliver to farmers worldwide."Financial ReviewRevenues:In constant currency terms, revenues for the first quarter of 2015 increased by 0.4% compared to the same period last year, with a more than 2% increase in quantities being partially offsetby a small decline in prices. Factoring in the effect of the significant decline of the currencies in which the Company sells its products relative to the US Dollar, USDrevenuesfor the period totaled $866.7 million, compared with $909.7 million for the same period last year.The regional breakdown of revenueswas as follows:(Millions of $US)Q1 2015Q1 2014% Changeat CER*% Changein USDEurope456.8467.23.8%(2.2%)North America138.4138.41.6%0.0%Latin America123.9136.2(6.2%)(9.0%)Asia Pacific78.094.3(9.8%)(17.3%)India, Middle East & Africa69.673.61.5%(5.4%)Total866.7909.70.4%(4.7%)* Growth at constant exchange ratesEurope:In constant currency terms, revenues in Europe during the first quarter of 2015 increased by 3.8% compared to the same period last year, reflecting an increase in quantities sold due to conducive weather conditions at the start of the season in Europe. USD revenues in Europe for the first quarter of 2015 totaled $456.8 million, compared with $467.2 million for the same period last year, reflecting the negative effect of foreign exchange rates.North America:In constant currency terms, revenues in North America during the first quarter of 2015 increased by 1.6% compared to the same period last year, largely reflecting an increase in quantities sold. Factoring in the effect of the depreciation of the Canadian dollar, USD revenues in North America for the first quarter of 2015 totaled $138.4 million, flat compared with the same period last year.Latin America:In constant currency terms, revenues in Latin America during the first quarter of 2015 decreased by 6.2% compared to the same period last year, reflecting a decrease in prices which was partially offset by an increase in quantities sold. Incorporating the effect of the decline in local currencies, USD revenues in Latin America for the first quarter of 2015 totaled $123.9 million, compared with $136.2 million for the same period last year.Asia Pacific:In constant currency terms, revenues in Asia Pacific during the first quarter of 2015 decreased by 9.8% compared to the same period last year, largely as a result of lower quantities. USD revenues in Asia Pacific for the first quarter of 2015 totaled $78.0 million, compared with $94.3m for the same period last year, reflecting the effect of the depreciation of the local currencies against the USD.India, Middle East & Africa:In constant currency terms, revenues in India, Middle East & Africa during the first quarter of 2015 increased by 1.5% compared to the same period last year, reflecting an increase in quantities sold. Incorporating the effect of the decline in local currencies, USD revenues in India, Middle East & Africa for the first quarter of 2015 totaled $69.6 million, compared with $73.6m for the same period last year.Gross Profit:Gross profit for the first quarter totaled $294.8 million (34.0% of sales), compared to gross profit of $313.1 million (34.4% of sales) for the same period in 2014, with the decrease due largely tonegative currency effects on revenues, partially offset by volume growth, hedging and the effect of lower prices of oil and oil derivatives on the Company's Cost of Goods.Operating Expenses:Operatingexpenses for the first quarter of 2015 totaled $169.3 million (19.5% of sales) compared with $182.4 million (20.1% of sales) for thesame period in2014.The 7.2% decrease in operating expenses in the period, and the decrease in the expense-to-sales ratio, reflect the Company's focus on expenditure containment and the impact of currencies.Operating Profit:Operating profit for the first quarter of 2015totaled$125.5 million (14.5% of sales), compared to $130.7 million (14.4% of sales) for the same period in2014.Financing Expenses:Adjusted netfinancing expenses for the first quarter of 2015 totaled $11.7 million, compared with $25.0 millionfor the same period in2014, reflecting the impact of the lower CPI to which some of the Company's debentures are linked.Before adjusting for one-time expenses related to the revaluation of options on debentures issued by the Company,netfinancing expenses for the first quarter of 2015 totaled $15.7 million, compared with $25.0 millionfor the same period in2014.Net Income Before Taxes:For the first quarter of 2015, adjusted net income before taxes increased by 8.8% to $115.1 million (13.3% of sales), compared with $105.8 million (11.6% of sales)for the same period in2014. Before adjusting for the one-time expense related to the abovementioned revaluation of options on debentures issued by the Company, net income before taxes for the first quarter of 2015 was $111.1 million (12.8% of sales), compared with $105.8 million (11.6% of sales) for the same period in2014.Net Income:For the first quarter of 2015, the Company recorded adjusted net income of $94.4 million (10.9% of sales), compared with $98.7 million (10.9% of sales) in the same period in 2014. Although there was an improvement in the quarterly pre-tax income as described above, the decrease in adjusted net income reflects an increase in tax expenses during the quarter due to the reduction in the recorded, non-cash value of tax assets of the company resulting from the depreciation of the Brazilian currency. Before adjusting for the one-time expense related to the abovementioned revaluation of options on debentures issued by the Company, and to the abovementioned tax-related provision, net income for the first quarter of 2015 was $85.7 million (9.9% of sales), compared with $98.7 million (10.9% of sales) for the first quarter of 2014.EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization):EBITDA for the first quarter of 2015 amounted to $166.8 million (19.2% of sales), compared with $171.5 million (18.8% of sales) for thesame period in2014.Cash Flow:The Company's free cash flow in the first quarter of 2015 amounted to -$164.4 million, compared with free cash flow of -$282.1 million in the same period in 2014, an improvement of $117.7 million. This improvement in free cash flowduring a quarter which, due to seasonality, is net cash consumptive,reflects mainly a reduction in inventory due to operational efficiencies, and an overall lower working capital level.China Business UpdateIn line with its long-term strategy, the Company is taking measures to position it as a leading global company in the crop protection industry, with a significant presence in China. The Company is working intensively to realize the potential inherent in the 2011 merger with CNAC, the agrochemical arm of ChemChina. In executing this strategy, in October 2014, the Company signed a definitive agreement to acquire control of four Chinese companies belonging to the ChemChina group (the China Business).The combination with these companies will provide Adama with a unique advantage in penetrating the Chinese crop protection market and will ultimately provide Adama with a state-of-the-art operational platform in China that will serve Adama’s global operations.In the latter half of 2014, Adama prepared to execute an initial public offering of its shares on the New York Stock Exchange, with the intention to raise the funds necessary to finance the acquisition of the China Business. However, due to adverse equity market conditions, the Company decided to postpone the public offering.Given the postponement of the offering, the Company and its shareholders are examining various possibilities regarding the execution of the business combination between the Company and the China Business, whether by consummating the acquisition as originally agreed, or in a different manner.The Company is also currently considering its options regarding a future flotation, including both the listing venue and its timing, all in accordance with the advantages of the different markets and the developments in market conditions.More news from: ADAMA Agricultural Solutions Ltd.Website: http://www.cnchemicals.com/: May 18, 2015The news item on this page is copyright by the organization where it originatedFair use notice