[一季报]安道麦B(200553):2023年第一季度报告（英文版）
ADAMA LTD. FIRST QUARTER REPORT 2023 ADAMA Ltd. (hereinafter referred to as “the Company”) is a global leader in crop protection, providing solutions to farmers across the world to combat weeds, insects and disease. ADAMA has one of the widest and most diverse portfolios of active ingredients in the world, state-of-the art R&D, manufacturing and formulation facilities, together with a culture that empowers our people in markets around the world to listen to farmers and ideate from the field. This uniquely positions ADAMA to offer a vast array of distinctive mixtures, formulations and high-quality differentiated products, delivering solutions that meet local farmer and customer needs in over 100 countries globally. Please see important additional information and further details included in the Annex. April 2023 Important Notice The Company’s Board of Directors, Board of Supervisors, directors, supervisors and senior managers confirm that the content of the Report is true, accurate and complete and contains no false statements, misleading presentations or material omissions, and assume joint and several legal liability arising therefrom. Ignacio Dominguez, the person leading the Company (President and Chief Executive Officer) as well as its legal representative, and Efrat Nagar, the person leading the accounting function and the accounting body (Chief Financial Officer), hereby assert and confirm the truthfulness, accuracy and completeness of the Financial Report. The First Quarter Report has not been audited. This Report has been prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. I. Main Financial Data 1. Main accounting and financial results Whether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year □ Yes √ No
2. Non-Recurring profit/loss √ Applicable □ Not applicable Unit: RMB’000
Explanation of other profit or loss that meets the definition of non-recurring profit or loss □ Applicable √ Not applicable No such cases during the Reporting Period. Explanation of why the Company classified an item as non-recurring profit/loss according to the definition in the First Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public. Non-recurring Profit and Loss, and reclassified any non-recurring profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss □ Applicable √ Not applicable No such cases during the Reporting Period. 3. Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons for the changes √ Applicable □ Not applicable General Crop Protection Market Environment In Q1 2023 commodity crop prices continued to decline as the result of a slowing global economy and better than expected production in some regions. However, crop prices remain elevated above the 10-yr average as crop inventories remain low, supporting positive grower margins. While Q1 2022 was characterized by early purchases as a result of concerns about product availability and supply shortages, in Q1 2023 the channel and farmers were much more cautious regarding input purchases. An improved supply and logistics situation, relatively high channel inventories as well as the deflationary environment of AI prices in China have led customers to adopt a “wait-and-see” approach regarding some crop protection purchases.
Note: Since the functional currency of main overseas subsidiaries is the USD, and the Company’s management review of the Company’s performance is based on the USD results, following explanations and analysis are based on USD- denominated numbers as listed above. In this table and all tables in this report numbers may not sum due to rounding. Analysis of Financial Highlights (1) Revenues Revenues in the first quarter declined by approximately 11% (-4% in RMB terms; -7% in CER terms) to $1,259 million, reflecting an increase of 1% in prices and a decrease of 8% in volumes mainly due to high channel inventory in the market and declining raw material prices supporting a "wait and see" approach across the board that impacted volumes and prices in the first quarter in 2023. Regional Sales Performance
the countries formerly included in this region are now included in the Europe region (renamed EAME) or in the Asia Pacific region. Europe, Africa & Middle East (EAME): The sales in EAME increased in the first quarter in constant exchange rates, most notably in UK and Germany, despite delayed rainfall, high channel inventories and continued drought in Southern Europe. North America: The Consumer & Professional Solutions sales decreased in the first quarter, impacted by weather conditions as well in the channel and expectation for price decreases. Sales in the US Ag market decreased in the first quarter as the market is in a state of "wait and see" due to high channel inventory and in anticipation of the spring season. Sales in Canada increased in the first quarter as the Company expanded its product portfolio during 2022 and while the Company's products' pricing held. This was achieved despite cold weather delaying spring product movement, creating a backing up of inventory in the channel. Latin America: Sales in Brazil increased slightly in the first quarter, reflecting a "wait and see" approach in the market in light of declining selling prices and competition to sell the high, expensive inventory accumulated throughout the channel. In other LATAM countries slightly lower sales were achieved due to the negative impact of the weather in Argentina and Ecuador as well as lower sales in Peru. Asia Pacific: During the first quarter the Company's sales decreased in the Asia Pacific region following a decline in the Company's sales in China of raw material, intermediates and fine chemicals due to softening of demand, strong competition and an overall decline in market prices. The Company's sales of its branded portfolio in China increased in local currency following strong sales of differentiated products and despite the decrease in market selling prices and high channel inventory. Sales in Pacific region in the first quarter were negatively impacted as the positive La Ni?a effect begins to pass, while declining prices of AI from China and India encourage a "wait and see" approach. In India, the sales were impacted by exchange rates and by reduced market demand following high Q4 2022 market sales. In the rest of Asia, Thailand and South Korea presented strong performance in the first quarter. (2) Cost of Goods and Gross Profit The decline in gross profit in the first quarter was due to the decline in sales, as described above, exchange rates and high-cost inventory. These impacts were slightly moderated by the improvement in the Company's sales mix of higher margin products and lower transportation and logistics costs. (3) Operating Expenses Operating expenses include Sales and Marketing, General and Administration and R&D. The Company recorded certain non-operational, mostly non-cash, charges within its reported operating expenses amounting to RMB 65 million ($9.5 million) in Q1 2023 in comparison to RMB 36 million ($5.7 million) in Q1 2022, mainly as follows: (I) Non-cash amortization charges in respect of Transfer assets received and written-up related to the 2017 ChemChina- Syngenta acquisition. The proceeds from the Divestment of crop protection products in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina, net of taxes and transaction expenses, were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature and economic value. Since the products acquired from Syngenta are of the same nature, and with the same net economic value as those divested, the Divestment and Transfer transactions had no net impact on the underlying economic performance of the Company. These additional amortization charges will continue until 2032 but at a reducing rate, yet will still be at a meaningful level until 2028; (ii) Charges related mainly to the non-cash amortization of intangible assets created as part of the Purchase Price Allocation (PPA) on acquisitions, with no impact on the ongoing performance of the companies acquired, as well as other M&A-related costs; (iii) Non-cash, share-based compensation (incentive plans). Excluding the impact of the abovementioned non-operational charges, the operating expenses in the first quarter of 2023 decreased, among others, mainly due to the positive impact of exchange rates. (4) Financial Expenses “Financial Expenses” alone mainly reflect interest payments on corporate bonds and bank loans as well as foreign exchange gains/losses on the bonds and other monetary assets and liabilities before the Company carries out any hedging. The impact of Financial Expenses, net (before hedging) is RMB 207 million ($30 million) for Q1 2023, compared with Financial Income, net of RMB 258 million ($41 million) for the corresponding periods in 2022. Given the global nature of its operational activities and the composition of its assets and liabilities, the Company, in the ordinary course of its business, uses foreign currency derivatives (forwards and options) to hedge the cash flow risks associated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations. The impact of the hedging transactions which is recorded in Gains/Losses from Changes in Fair Value is a net loss of RMB 352 million ($51 million) in Q1 2023, compared with RMB 597 million ($94 million) in the corresponding period in 2022. The aggregate of Financial Expenses and Gains/Losses from Changes in Fair Value (hereinafter as “Total Net Financial Expenses”), which more comprehensively reflects the financial expenses of the Company in supporting its main business and protecting its monetary assets/liabilities, amounts to RMB 559 million ($82 million) in Q1 2023, compared with RMB 339 million ($53 million) in the corresponding period in 2022. The higher financial expenses were mainly driven by (i) higher bank interest expenses due an increase in short-term loans as well as the sharp increase in interest rates, (ii) higher hedging costs on exchange rates mainly due to volatility in the ILS/Dollar exchange rate and (iii) the net effect of the high Israeli CPI on the ILS-denominated, CPI-linked bonds. (5) Income Tax Expenses The tax income in the first quarter of 2023 was mainly due to the non-cash impact of the stronger BRL on the value of non- monetary tax assets, the method of calculation of tax assets related to unrealized profits and low profit before tax. The low effective tax rate in first quarter of 2022 was mainly due to the generation of profits by subsidiaries whose tax rates are lower relative to the Company’s aggregate effective tax rate, as well as to the method of calculation of tax assets related to unrealized profits and a tax income from the strengthening of the BRL. Changes in main assets and liabilities Unit: 000 RMB
II. Information regarding Shareholders 1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right and shareholdings of top 10 shareholders at the period-end Unit: share
2. Total number of preference shareholders and shareholdings of the top 10 of such at the period-end □ Applicable √ Not applicable III. Other Significant Events □ Applicable √ Not applicable IV. Financial Statements i. Financial statements 1. Consolidated balance sheet Prepared by ADAMA Ltd. 31 March 2023 Unit: RMB’000
Ignacio Dominguez Efrat Nagar Efrat Nagar Legal representative Chief of the accounting work Chief of the accounting organ 2. Consolidated income statement Unit: RMB’000
Ignacio Dominguez Efrat Nagar Efrat Nagar Legal representative Chief of the accounting work Chief of the accounting organ 3. Consolidated cash flow statement Unit: RMB’000
ii. Auditor’s report Is this Report audited? □ Yes √ No This Report is unaudited. ADAMA Ltd. Board of Directors April 25, 2023 中财网
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