[一季报]安道麦B(200553):2024年第一季度报告（英文版）
ADAMA LTD. FIRST QUARTER REPORT 2024 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 2024 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 and the accounting body (Chief Financial Officer), hereby assert and confirm the truthfulness, accuracy and completeness of the financial information contained in the 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 1 General Crop Protection Market Environment Key commodity crop prices continued to decline in the first months of 2024 and global supply continued to improve. Crop prices remain above average historical levels but the current price level has a negative impact on farmer income compared to previous years. Despite this, farmer demand is expected to remain stable under the current conditions. The channel inventory situation is easing up, but there still remains above average inventories in several geographies, including Brazil. In addition, the high interest rate environment, continue to drive a just-in-time purchasing approach by the channel. Active ingredient prices from China remained low during Q1 with some molecules even experiencing further price declines, on one hand reducing input costs but on the other creating pricing pressure on crop protection products and supporting a "wait and see" approach in the market. Update on the War Situation in Israel th ADAMA is headquartered in Israel and has three manufacturing sites in the country. Following October 7 , 2023, the Company continued the production in its global manufacturing sites and in Israel, with certain non-significant restrictions (which have been lifted in February 2024). This situation did not have a material impact on the Company's ability to support its markets or on ADAMA’s consolidated financial results. th On the 14 of April, Israel was under an attack from Iran, with no consequences to the Company's ongoing activities. Update on Impact of Shipping Obstructions In January 2024 some major shipping lines announced that they will suspend shipping to Israel through Israeli ports and through the Suez Canal due to tensions in the Red Sea. This has led to longer transportation times, with shipping lines being diverted around Africa. As of the date of publication of this report, shipping time and costs have increased significantly, mainly in the Asia-Pacific Israel route in comparison to before January 2024. These cost increases impact only a small portion of the Company's overall shipping costs and ADAMA has been ordering relevant materials ahead of time to ensure timely supply. Currently, the Company does not anticipate this to have a significant impact on its financial results or on the ongoing supply of materials to its production facilities, although this situation might impact the company's ability to respond quickly to changing market demand. 1 Sources: CCPIA (China Crop Protection Industry Association), BAIINFO, FocusEconomics, Peer quarterly financial reports, internal
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 16% (-13% in RMB terms; -14% in CER terms) to $1,057 million, presenting a decrease of 10% in prices and a decrease of 5% in volumes. The lower sales reflect lower market prices and lower demand, attributed to the market dynamics of pricing pressure, high competition and a "wait and see" approach mainly in commoditized products as well as unfavorable weather conditions in some regions and the channel opting to hold lower levels of inventory and purchase closer to the season in light of higher interest rates. Regional Sales Performance
Europe, Africa & Middle East (EAME): Sales in EAME decreased in the first quarter of 2024 led by a contraction in the overall European crop protection market mainly from low demand following channel destocking, erratic spring season causing just-in-time purchasing patterns and lower famer demand in areas impacted by lower grain market prices. This market also experienced pricing pressure, mainly in commoditized products. North America: Consumer & Professional Solutions - Sales were lower as demand from the end-users in both the consumer and professional markets slowly recovered during the first quarter. Declining active ingredient prices from China supported "just-in-time" purchasing patterns. In the US Ag market sales in the first quarter of 2024 were lower reflecting weak pricing, lower demand and strong competition. The overall pricing was lower in the first quarter of 2024 than in the first quarter of 2023, as market prices began to decline only during the second quarter of 2023. While channel inventory levels are steadily declining, demand is being impacted by sales being pushed closer to season application, while the channel is opting to hold lower inventory levels due to high interest rates. ADAMA's sales in Canada declined in the first quarter in light of lower prices, a "wait and see" approach in the market, high fungicide channel inventories, as well as strong competition particularly in commoditized products. Latin America: Brazil – the Company's sales in the first quarter following the overall challenging crop protection market due to unfavorable weather conditions, a "wait and see" approach" in the market and softer pricing impacted by strong competition, particularly in commoditized products. Despite this, the Company's differentiated products continued to be well received in the market. In the rest of LATAM sales in the first quarter reflected the overall challenging crop protection market due to unfavorable weather conditions in Northern LATAM and "wait and see" purchasing patterns combined with softer pricing in commoditized products. Despite this, the Company's differentiated products in key strategic crop segment continued to be well received in the market. Asia Pacific: In China, the branded formulations achieved business growth in constant exchange rates driven by bio- formulation new launches and well-prepared spring campaign while the Company also focused on improving the quality of the business with differentiated products despite that the market is still experiencing high channel inventories and pricing pressure especially in commodities. Market pricing in the non-ag business began normalizing from heights seen in recent years and the tech sales were mainly impacted by a "wait and see" approach in the market. In the Pacific region, sales in the first quarter were impacted by softer pricing following decline of active ingredients prices from China as well as overall high channel inventories. This was despite better weather conditions than anticipated in Australia. Sales in India were impacted by softer pricing, exceptionally dry and hot weather, high channel inventories as well as "wait-and-see" purchasing behaviour in commoditized products. Sales in the wider APAC region continued to experience pricing pressure following intense competition from China, particularly in commoditized products, while dry weather and higher channel inventories impacted demand. (2) Cost of Goods and Gross Profit In the first quarter of 2024, the new inventory sold, priced at market levels, the management focus on the quality of business which led to an improvement in the sales mix of higher margin products and the lower transportation and logistic costs had a positive impact on the cost of goods and gross profit and this is despite the lower sales impacted by the decrease in prices and volumes and the negative impact of the exchange rates. (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 136 million ($19.2 million) in Q1 2024 in comparison to RMB 65 million ($9.5 million) in Q1 2023, mainly as follows: (i) measures to improve efficiencies, (ii) non-cash amortization charges in respect of Transfer Assets received from Syngenta related to the 2017 ChemChina-Syngenta acquisition, (iii) charges related 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,. For further details on these non-operational items, please see the appendix to this release Excluding the impact of the abovementioned non-operational charges, the operating expenses were lower in the first quarter of 2024, following undertaking tight OPEX management measures. (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 367 million ($52 million) for Q1 2024, compared with Financial Expenses, net of RMB 207 million ($30 million) for the corresponding periods in 2023. 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 149 million ($21 million) in Q1 2024, mainly due to hedging transactions, compared with a net loss of RMB 352 million ($51 million) in the corresponding period in 2023. 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 516 million ($73 million) in Q1 2023 compared with RMB 559 million ($82 million) in the corresponding period in 2023. The lower financial expenses in the quarter were mainly due to the net effect of lower Israeli CPI on the ILS- denominated, CPI-linked bonds as well as steps taken by the Company's management to optimize the Company's financing structure. The Company took advantage of the high interest rate environment to increase interest received from weekly bank deposits designated to support working capital, as well as improved financing terms and leveraged group funding possibilities by taking long-term loans in China at attractive rates, which minimized the increase in bank interest expenses paid in the first quarter of 2024. (5) Income Tax Expenses Despite reaching losses before tax, the Company recorded tax expenses in the quarter mainly because the losses were primarily incurred by subsidiaries with relatively lower tax rates, while some of them did not create deferred tax assets on the losses. On the other hand, the subsidiaries that generated profit have a higher tax rate. In the first quarter of 2024 the Company recorded tax expenses due to the non-cash impact of the weakness of the BRL compared with tax income due to stronger BRL in the first quarter of 2023. 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. Involvement of Shareholders holding more than 5% of shares, Top 10 Shareholders and Top 10 Non-restricted Shareholders in Lending of Shares in the Relending Financing of Funds and Securities √ Applicable □ Not applicable Shareholders holding more than 5% of shares, Top 10 Shareholders and Top 10 Non-restricted Shareholders in Lending of Shares in the Relending Financing of Funds and Securities
Bank of China- CSI 500 Exchange Traded Open- 2,476,484 0.11% 702,000 0.03% 5,720,984 0.25% 515,300 0.02% end Index Securities Investment Fund 3. Change from the Previous Reporting Period to the Top 10 Shareholders and Top 10 Non-restricted Shareholders due to the Lending/Returning of Shares in the Relending Financing of Funds and Securities □ Applicable √Not Applicable 4. 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 2024 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 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 Unit: RMB’000
ii. Auditor’s report Is this Report audited? □ Yes √ No This Report is unaudited. ADAMA Ltd. Board of Directors April 26, 2024 中财网
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