[三季报]安道麦B(200553):2023年第三季度报告（英文版）
Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No.2023-35 The Company and all members of its board of directors hereby confirm that all information disclosed herein is true, accurate and complete with no false or misleading statement or material omission. ADAMA LTD. THIRD 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. October 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. Steve Hawkins, 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 (Chief Financial Officer), hereby assert and confirm the truthfulness, accuracy and completeness of the Financial Report. The Third 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 accounting and financial results 1. Whether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year due to change in accounting policies or correction of accounting errors □ Yes √ No
Explanation of other profit or loss that meets the definition of non-recurring profit or loss √ Applicable □ Not applicable Mainly provisions for early retirement plan of employees at the Company’s Israeli manufacturing facilities as explained above in the note. Explanation of why the Company classified an item as non-recurring profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public. Non-recurring Profit and Loss, and reclassified any non-recurring profit/loss items are given as examples in the said explanatory announcement to recurrent profit/loss □ Applicable √ Not applicable No such cases in 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
1 Sources: Rabobank, Agri Commodity Markets Research, Sep 2023; AgbioInvestor-Quarterly-Briefing-Service-PLUS_Q3-2023; 2
the Company’s performance is based on the USD results, following explanations and analysis are based on USD- denominated numbers as listed above. Analysis of Financial Highlights (1) Revenues Revenues in the third quarter declined by approximately 24% (-20% in RMB terms; -25% in CER terms) to $1,033 million, reflecting a decrease of 12% in volumes and a decrease of 13% in prices. The lower sales reflect market dynamics of high channel inventories, last-minute purchasing following channel destocking in light of high interest rates and pressure on crop protection product pricing due to the lower channel demand. These results brought the revenues in the first nine months of 2023 to $3,524 million, a decline of approximately
* 2022 denote proforma sales. As of 2023, the India, Middle East & Africa (IMA) region has been reorganized such that the countries formerly included in this region are now included in the Europe region (renamed EAME) or in the Asia Pacific region. Note: the numbers in this table may not sum due to rounding. Europe, Africa & Middle East (EAME): Sales in EAME decreased in the third quarter and nine-month period following overall crop protection market slow down leading to lower volumes and pressure on prices. In Europe this trend was particularly notable in Northern Europe with high channel inventory and in Central Europe, where cheap grain from Ukraine impacted farmers' investments in crops. The Company succeeded in increasing its sales in France, Italy and Iberia following weak seasons last year and with the company seizing opportunities in the cereal market in France. North America: Consumer & Professional Solutions - Sales in the third quarter and nine-month period were impacted by softening demand both in the consumer and professional solutions markets following a decline in disposable income, an outcome of inflationary pressures and high interest rates, and high channel inventories. Additionally, sales shifted from the third quarter to the fourth quarter to align with season use. In the US Ag market sales in the third quarter and the nine-month period declined reflecting the overall dynamic of the channel lowering inventory levels due to high interest rates with demand focusing on "just-in-time" supply from producers. Sales in Canada were significantly impacted in the third quarter among others due to the negative effect of the weather on fungicide sales and pricing pressure. In the nine-month period the decline in sales was more moderate as the sales were supported by the strong performance in the first half of the year following expansion of the Company's portfolio during 2022 and relatively stable pricing in the market. Latin America: Brazil - CP market contraction, characterized by channel destocking and softening pricing, led to a decline in the company's sales in the third quarter and nine-month period. In the rest of LATAM, sales in the third quarter and nine-month period decreased, following pressure on prices and dryer weather than expected. This is despite the strong performance of the biologicals portfolio and gaining market share in some key countries. Asia-Pacific: In China, the market is experiencing oversupply and pricing pressure impacting both the branded formulation and non-ag sales, partially offset by the increase of AI sales as a result of active efforts to expand the markets and customers along with the Sanonda Jingzhou site reaching high utilization after relocation. Sales in the wider APAC and in India decreased in the third quarter and first nine-month period despite an increase in volumes sold in Asia and Pacific regions. Sales were negatively impacted by pressure on prices, especially in Australia and India with the beginning of El Ni?o and a weak monsoon season. (2) Cost of Goods and Gross Profit The decline in the gross profit in the first nine months was due to the decline in sales, as described above, high- cost inventory and negative exchange rates moderated by lower transportation and logistics costs. In the third quarter, these impacts had a higher adverse effect, though moderated by lower transportation and logistics costs and slightly moderated by the positive impact of exchange rates and the initial effect of new inventory sold, priced at market levels. (3) Operating Expenses: Operating expenses include Sales and Marketing, General and Administration and R&D. The Company recorded certain non-operational charges within its operating expenses amounting to RMB 49 million ($7 million) in Q3 2023 in comparison to RMB 20 million ($3 million) in Q3 2022, and RMB 153 million ($22 million) in 9M 2023 in comparison to RMB 202 million ($31 million) in 9M 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; and (iii) Incentive plans - share-based compensation. Excluding the impact of the abovementioned non-operational items, the lower operating expenses in the third quarter and first nine-month period of 2023 were mainly due to OPEX management measures, an adjustment of a provision for success-based compensation and the positive impact of exchange rates. Additionally, in the first nine months year of 2022 the Company recorded a provision for doubtful debts in Ukraine. (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 (before hedging) is an expense of RMB 687 million ($98 million) for the nine months of 2023 compared with an expense of RMB 132 million ($15 million) for the corresponding period 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. “Gains/Losses from Changes in Fair Value” amounted to a net loss of RMB 1,069 million ($153 million) in the first nine months of 2023, mainly due to hedging transactions, compared with a net loss of RMB 1,365 million ($210 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 1,755 million ($251 million) in the nine months of 2023 compared with RMB 1,497 million ($226 million) in the corresponding period in 2022. The higher Total Net Financial Expenses were mainly due to higher bank interest expenses as stated above partially offset by lower bond interest and CPI. (5) Credit and Asset Impairment Loss During the first nine months of 2023, the Company recorded provisions for asset and credit loss impairments totaling RMB 275 million (approximately $39 million). These provisions are mainly related to impairment of inventories mainly due to the decline in the market price of certain products and other inventory management issues part of the ordinary course of the Company’s business and credit loss impairment of accounts receivables made during the ordinary course of the Company’s business. For details, please refer to Asset Impairment Announcement (Announcement No. 2023-36) disclosed on October 31, 2023 at cninfo.com. (6) Income Tax Expenses Despite reaching losses before tax, the Company recorded tax expenses in the third quarter and recorded a low tax income in the first nine-month period of 2023, mainly because the generation of the losses were primarily by subsidiaries with relatively lower tax rates than the subsidiaries that generated profit. Additionally, in the third quarter the company recorded tax expenses due to the non-cash impact of the weakness of the BRL in the third quarter that effect the value of non-monetary tax assets. In the first nine months of 2022, the company recognized a high deferred tax asset, related to inter-group sales, that led to a decline in the tax on income.
II. Information regarding the Shareholders 1. Total number of ordinary shareholders and preference shareholders who had resumed their voting rights, 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. 30 September 2023 Unit: RMB’000
Steve Hawkins Efrat Nagar Efrat Nagar Legal representative Chief of the accounting work Chief of the accounting organ 2. Consolidated income statement for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
Steve Hawkins Efrat Nagar Efrat Nagar Legal representative Chief of the accounting work Chief of the accounting organ 3. Consolidated cash flow statement for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
ii. Impact of initial application of new accounting standards on the opening balances of current year □ Applicable √ Not applicable iii. Auditor’s report Is this Report audited? □ Yes √ No This Report is unaudited. Board of Directors ADAMA Ltd. October 31, 2023 中财网
 |