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Adama delivers robust volume growth despite difficult market and currency conditions


Tel Aviv, Israel
November 10, 2015

  • Revenues in constant currencies up estimated 9.5% in the third quarter and 6% year-to-date
  •   Strong volume growth in all key geographies: up 6% in the third quarter and 4.8% year-to-date
  •   Market share gains worldwide
  •   Impact of widespread currency depreciation partially offset by stronger volumes and prices, and production and procurement cost savings
  •   Further operating expense savings throughout the year ensured largely stable EBITDA margins
  •   Improvement in inventory levels contributed to a positive cash flow

ADAMA Agricultural Solutions Ltd. today reported its financial results for the third quarter and nine months ended September 30, 2015.

Adama delivered strong growth in both the third quarter and in the year-to-date, with estimated 9.5% and 6.0% growth in constant currency terms, in the respective periods. Continuing unfavorable global agricultural market conditions, along with the weakening of global currencies against the US Dollar, were compounded by the difficult macroeconomic environment in Brazil, impacting the Company's performance in the third quarter and year-to-date.

The growth in constant currencies was driven largely by a robust increase in volumes of 6.0% and 4.8% in the third quarter and the year-to-date, respectively, together with an increase in prices. The Company saw particularly strong performance in the quarter from the Latin America and India, Middle East and Africa clusters where sales grew in constant currencies by an estimated 17.6% and by 18.3%, respectively.

The robust volume growth, as well as an increase in prices in local currencies, were more than offset by the significant depreciation of all currencies against the US Dollar, causing US Dollar denominated sales to record declines of 8.6% in the quarter and 5.2% in the year-to-date, outperforming the market. 

Despite the challenging environment and significant currency headwinds, the volume driven-growth, coupled with tight expense management and production and procurement cost savings, mitigated the impact on profitability, with the Company delivering a stable EBITDA margin in the year-to-date when compared with the same period last year.

Commenting on the results, Yang Xingqiang, Chairman of Adama’s Board of Directors, said, "Our ability to grow our business, in both volume and constant currency terms, despite the difficult market conditions, demonstrates the resilience of our global and diversified business model and the determination of our people to continually deliver a strong performance despite the challenging times. The Company continues to invest in the future growth of the business, and remains well positioned to accelerate its growth trajectory once the market recovers."

Chen Lichtenstein, President and CEO of Adama, commented, “Notwithstanding the tough currency conditions and subdued crop protection market, we have been able to increase our market share globally. Our preparedness and ability to respond quickly to a rapidly evolving environment saw us taking proactive stepstoadjust our costs to the current situation. While remaining focused on addressing the dynamic global market environment, the building of our China sales force is currently in full swing as we intend to launch ourdirect sales in this significant market early in 2016."

General Business Update

Adama continues to make major strides in the differentiation of its portfolio. The Company's innovative nematicide, NIMITZ®, which first launched in the US in the beginning of the year, is continuing to be rolled-out across Adama's global commercial platform, with further launches this quarter in Australia, Israel and Mexico.

Adama continues to execute on its promise to "Bring Simplicity to Agriculture". During the quarter, the Company launched its new global packaging family, with an emphasis on convenience and simplicity for farmers.

The Company has been progressing in its efforts to achieve its commercial and operational objectives in China.  Adama is now well-advanced in establishing its own sales force on the ground in China, with direct sales expected to commence in the 2016 season. Construction of the new state-of-the-art formulation and packaging plant in the city of Huai'an is proceeding and the facility is expected to come on stream next year.

Adama is continuing to work with its shareholders to progress the contemplated reverse merger of the Company with Sanonda, which was announced during the third quarter.

Full release



More news from: Adama Agricultural Solutions Ltd.


Website: http://www.ma-industries.com/

Published: November 10, 2015

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