Welcome!

News Feed Item

Adama Business Momentum Continues in Second Quarter and First Half of 2014: Strong Growth in Revenues and Profits

Revenues up 9%, Net Income up 24% for the Quarter

TEL AVIV, Israel, Aug. 10, 2014 /PRNewswire/ -- ADAMA Agricultural Solutions Ltd. (formerly Makhteshim Agan Industries, "Adama" or "the Company"), a leading global provider of crop protection solutions, today reported its financial results for the second quarter and first six months ended June 30, 2014.

ADAMA Agricultural Solutions Ltd. Logo.

Financial Highlights  

In millions of
$USD


Q2
2014

Q2
2013

Change


H1
2014

H1
2013

Change

Revenues*


875.9

803.3

9.0 %


1,785.7

1,688.6

5.7 %

Gross profit


279.7

253.4

10.3%


592.7

548.2

8.1%

Gross margin


31.9%

31.5%

NA


33.2%

32.5%

NA

Operating profit


99.5

93.3

6.7%


230.2

224.4

2.6%

Net Income


59.4

48.1

23.5%


158.3

138.4

14.4%

EBITDA


141.2

132.6

6.5%


312.7

301.0

3.9%

* Excluding currency effects, revenues grew by 10.1% for the second quarter, and 6.9% for the first half of 2014

Commenting on the results, Mr. Yang Xingqiang, Adama's Chairman, said, "Adama continued to grow strongly in the second quarter, led by double digit sales growth in North America, Latin America, and Asia Pacific & Africa, generating continued momentum in our revenues and profits across all our key geographies.

"We continue to make important progress towards the establishment and integration of Adama's commercial and operational platform in China, which we believe will uniquely position Adama as a leading crop protection solutions provider."

Chen Lichtenstein, Adama's President and CEO, commented, "Our results during the first half of the year demonstrate the Company's continued growth in all key territories despite challenging weather conditions in North America and drought in Australia. Additionally, our market reach and comprehensive product portfolio, which spans across the entire value chain, allowed us to deliver strong performance in most markets.

During the quarter, we began rolling out our new brand globally; a process that will contribute to the strengthening of our commercial platform, which is focused on supporting local farmer needs with global expertise and quality solutions. Additionally, we have begun to implement a new organizational structure to focus on the implementation of our growth strategy alongside the continued advancement of our key strategic initiatives in China.

Financial Review

Revenues: Sales in the second quarter of 2014 increased by 9.0% to $875.9 million from $803.3 million in Q2 2013, reflecting an increase in quantities sold in all regions.

On a geographical basis, the revenue breakdown was as follows:

Breakdown of Sales By Geographical Region    
(millions of USD)




Q2 2014

Q2 2013

Change

H1 2014

H1 2013

Change

Europe

336.1

340.6

(1.3)%

803.4

776.6

3.4%








Latin America

169.6

139.8

21.3%

305.9

268.2

14.0%








North America

175.5

150.8

16.4%

313.9

296.6

5.8%








Asia Pacific
& Africa

165.2

144.2

14.5%

307.9

292.3

5.3%








Israel

29.5

27.9

5.7%

54.6

54.9

(0.5%)

Europe: During the second quarter, sales in Europe decreased slightly to $336.1 million from $340.6 million in Q2 2013, reflecting the short winter, which shifted the timing of some sales to the first quarter, followed by unseasonably cold and wet weather during the first half of the second quarter, which decreased demand during that period. However, over the half-year period, sales increased by 3.4% to $803.4 million from $776.6 million in H1 2013, reflecting an increase in sales volumes and the raising of selling prices. The strengthening of the Euro during the period was offset by currency hedging.

Latin America: During the second quarter, sales in Latin America rose 21.3% to $169.6 million from $139.8 million in Q2 2013, reflecting significant volume increases in Brazil and across the region, offset partially by a decrease in selling prices. Over the first half of the year, sales in Latin America increased by 14.0% to $305.9 million from $268.2 million in H1 2013.

North America: During the second quarter, sales in North America rose by 16.4% to $175.5 million from $150.8 million in Q2 2013. The increase reflected higher sales volumes that were achieved despite a number of challenges during the season, including adverse weather conditions, inventories accumulated in the distribution channels and the weakening of the Canadian dollar. Over the first half of the year, sales in North America increased by 5.8% to $313.9 million from $296.6 million in the first half of 2013, reflecting the factors described above.

Asia Pacific and Africa: During the second quarter, sales in Asia Pacific and Africa increased by 14.5% to $165.2 million from $144.2 million in Q2 2013, reflecting an increase in sales volumes, notably in India, despite drought conditions in a number of Asian countries. This was offset partially by the weakening of currencies in certain of the countries in the region. For the first half of the year, sales in the region increased by 5.3% to $307.9 million compared with $292.3 million for H1 2013, with the strong growth in quantities sold in the second quarter compensating for the decrease in quantities sold in the first quarter.

Israel: Sales in Israel during the second quarter increased by 5.7% to $29.5 million. Sales over the first half of 2014 decreased by 0.5% to $54.6 million.

Gross Profit
Gross profit for the second quarter increased by 10.3% to $279.7 million (31.9% of sales) from $253.4 million (31.5% of sales) in Q1 2013, reflecting an improved product mix that partially compensated for rising raw material prices and a lower effective exchange rate. For the first half of 2014, gross profit increased by 8.1% to $592.7 million (33.2% of sales) from $548.2 million (32.5% of sales) in H1 2013, reflecting the abovementioned factors.

Operating Profit and Operating Expenses
Operating profit for the second quarter rose by 6.7% to $99.5 million (11.4% of sales) from $93.3 million (11.6% of sales) in Q2 2013. Operating expenses in Q2 2014 increased by 12.5% to $180.2 million (20.6% of sales) from $160.1 million (19.9% of sales) in Q2 2013, partly as a result of expenses related to the launch of the company's new global brand.

For the first half of 2014, operating profit increased by 2.6% to $230.2 million (12.9% of sales) from $224.4 million (13.3% of sales) in the first half of 2013. Operating expenses in the period increased by 12.0% to $362.6 million (20.3% of sales) from $323.8 million (19.2% of sales) in the first half of 2013, reflecting an increase in marketing expenses to support the increase in sales, as well as expenses related to the global brand launch. General and administrative expenses remained largely flat over the reporting period.

Net Income
For the second quarter, net income rose by 23.5% to $59.4 million (6.8% of sales) from $48.1 million (6.0% of sales) in Q2 2013. For the first half of 2014, net income increased by 14.4% to $158.3 million (8.9% of sales) from $138.4 million (8.2% of sales) in the first half of 2013.

EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the second quarter increased by 6.5% to $141.2 million (16.1% of sales) from $132.6 million (16.5% of sales) in Q2 2013. For the half-year period, EBITDA increased by 3.9% to $312.7 million (17.5% of sales) from $301.0 million (17.8% of sales) in the first half of 2013.

Cash Flow
During the second quarter, the Company generated $161.7 million in cash flow from operating activities compared with $223.7 million in Q2 2013. For the first half of 2014, the Company generated negative cash flow from operating activities of $58.8 million compared with $67.0 positive cash flow in the first half of 2013. The lower cash flow generation in both the second quarter and the first half of the year reflects increased working capital requirements as a result of higher sales in regions characterized by relatively long credit terms, together with changes in the timing of sales during the reporting period.

Organizational Changes

During the second quarter, the Company announced a change in its organizational structure to best implement the Company's strategy. The changes become effective gradually over the course of the second half of the year and will be completed by January 2015.

The changes to be implemented include the division of the Company's sales regions into focused clusters, the addition of, amongst others, cluster managers to the management team, and the establishment of an executive committee from within management to oversee ongoing performance.

China Buildup and Integration

The Company continues to evaluate business opportunities in China with the potential to support the creation of a significant commercial, operational, and R&D infrastructure in the country, in a way that will contribute to the Company's presence in the Chinese market, strengthen its presence in the Asia-Pacific region and enhance its global capabilities.

Adama is proceeding in negotiations with majority shareholder China National Agrochemical Corporation (CNAC) regarding the acquisition of all or part of the shares or assets of several companies, which are directly and indirectly controlled by CNAC.

About ADAMA Agricultural Solutions
ADAMA Agricultural Solutions Ltd., formerly known as Makhteshim Agan Industries, is a leading global manufacturer and distributor of crop-protection solutions, and the leading off-patent provider.  The Company supplies efficient solutions to farmers across the full farming value-chain, including crop-protection products and services and complementary non-crop businesses.  In 2013, the Company's revenues were over $3 billion, and it is ranked seventh in the world in the overall crop protection industry. The Company is characterized by its innovation, farmer-centric approach to product development, and strict standards of environmental protection and quality control. For more information, visit us at www.adama.com.

Contact:
Anna Wood
Global Public Relations Manager
Email: [email protected] 
Phone: +972 73 232 1131

Logo - http://photos.prnewswire.com/prnh/20140402/679073

SOURCE ADAMA Agricultural Solutions Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive ad...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.