ADAMA Reports Third Quarter and First Nine Months 2024 Results
"Fight Forward" transformation plan already presenting benefits with the quality of business
improving:
Q3 2024 adjusted gross profit 14% above Q3 2023, representing a third consecutive quarter
of improvement in adjusted gross margin. Profitability improvement achieved following strict
management of inventory supporting lower costs, as well as the continued focus on
differentiated products and de-focus from low margin products supporting positive product
sales mix;
Q3 2024 adjusted EBITDA more than doubled over Q3 2023, second consecutive quarter of
improvement in EBITDA and EBITDA margin, with 9M 2024 adjusted EBITDA 6% above 9M
2023, reflecting continued OPEX management measures;
Significant improvement in cash flow despite challenging market conditions; Operating cash
flow of $402 million achieved in 9M 2024 in comparison to $63 million in 9M 2023; Positive
free cash flow of $179 million achieved in 9M 2024 in comparison to a negative cash flow of
$276 million in 9M 2023.
Third Quarter 2024 Highlights:
Sales down 10% to $929 million (-11% in RMB terms; -6% in CER1 terms), mainly reflecting a 7%
decrease in prices despite a 1% increase in volumes
Adjusted gross profit up 14% to $225 million (margin of 24.2%) from $198 million (margin of 19.2%)
in Q3 2023
Adjusted EBITDA up 125% to $80 million (margin of 8.6%) from $35 million (margin of 3.4%) in
Q3 2023
Adjusted net loss of $78 million; Reported net loss of $133 million
Improvement of $77 million in operating cash flow; of $159 million in Q3 2024 vs $82 million in Q3
2023
Improvement of $150 million in free cash flow; $128 million in Q3 2024 vs -$22 million in Q3 2023
First Nine Months 2024 Highlights:
Sales down 14% to $3,028 million (-13% in RMB terms; -12% in CER terms), mainly reflecting a
9% decrease in prices and a 3% decrease in volumes
Adjusted gross profit amounted to $782 million (margin of 25.8%) vs $815m (margin of 23.1%) in
9M 2023
Adjusted EBITDA up 6% to $332 million (margin of 11.0%) from $312 million (margin of 8.9%) in
9M 2023
Adjusted net loss of $149 million; Reported net loss of $259 million
Improvement of $339 million in operating cash flow; $402 million in 9M 2024 vs $63 million in 9M
2023
Improvement of $455 million in free cash flow; $179 million in 9M 2024 vs -$276 million in 9M 2023
1 CER – Constant Exchange Rates
1
BEIJING, CHINA and TEL AVIV, ISRAEL, October 30, 2024 – ADAMA Ltd. (the “Company”) (SZSE
000553), today reported its financial results for the third quarter and first nine months of 2024 that
ended September 30, 2024.
Gal Hili, President and CEO of ADAMA, said, "ADAMA's financial results for the third quarter of
2024 are an indication of the steady turnaround the Company is making. We have again demonstrated
marked improvements in our quality of business and cash generation. Our decision to de-focus from
certain commoditized generics, coupled with our continued focus on higher value, differentiated
products, has led to improvement in the gross margin for the third quarter in a row and in the EBITDA
& EBITDA margin for the second quarter in a row. The fierce competition in the market, mainly in such
commoditized generics, validates this was the right decision for ADAMA.
"With three quarters of progressive improvements under our belt, I am confident that the "Fight
Forward" transformation plan is putting the company on the right path for future success, and I plan
to accelerate its implementation. In the coming months we will implement our evolved operating model
aimed at deploying resources in countries where we can best drive profitable growth, enhancing our
commercial operations, functional excellence, and customer engagement in key markets, creating
greater cross company efficiencies. I also strongly believe that ADAMA's portfolio strategy focused on
delivering innovative products with attractive ROI for farmers is exactly the right one for the challenging
market conditions we see, especially as farmer purchase power continues to be impacted across the
world.
"On a personal note, I am excited to join ADAMA at this transformative time and look forward to
shaping the company, together with our Global Leadership Team, to face and succeed in this
challenging environment."
Table 1. Financial Performance Summary
As Reported Adjustments Adjusted
USD (m) Q3 Q3 Q3 Q3 Q3 Q3 %
% Change
2024 2023 2024 2023 2024 2023 Change
Revenues 929 1,033 (10%) - - 929 1,033 (10%)
Gross profit 188 185 2% 37 12 225 198 14%
% of sales 20.2% 18.0% 24.2% 19.2%
Operating income (loss) (EBIT) (34) (38) 12% 46 7 13 (31) 141%
% of sales (3.6%) (3.7%) 1.4% (3.0%)
Loss before taxes (122) (110) (12%) 51 (3) (72) (113) 36%
% of sales (13.2%) (10.6%) (7.7%) (10.9%)
Net loss (133) (112) (19%) 55 (4) (78) (115) 32%
% of sales (14.3%) (10.8%) (8.4%) (11.2%)
EPS
- USD (0.0569) (0.0479) (0.0335) (0.0496)
- RMB (0.4049) (0.3435) (0.2382) (0.3556)
EBITDA 56 37 49% 24 (2) 80 35 125%
% of sales 6.0% 3.6% 8.6% 3.4%
2
As Reported Adjustments Adjusted
USD (m) 9M 9M 9M 9M 9M 9M %
% Change
2024 2023 2024 2023 2024 2023 Change
Revenues 3,028 3,524 (14%) - - 3,028 3,524 (14%)
Gross profit 672 748 (10%) 110 67 782 815 (4%)
% of sales 22.2% 21.2% 25.8% 23.1%
Operating income (EBIT) 1 94 (99%) 136 24 137 117 17%
% of sales 0.0% 2.7% 4.5% 3.3%
Loss before taxes (203) (155) (31%) 116 13 (87) (142) 39%
% of sales (6.7%) (4.4%) (2.9%) (4.0%)
Net loss (259) (146) (77%) 110 11 (149) (135) (9%)
% of sales (8.5%) (4.1%) (4.9%) (3.8%)
EPS
- USD (0.1110) (0.0626) (0.0638) (0.0580)
- RMB (0.7890) (0.4474) (0.4535) (0.4161)
EBITDA 252 318 (21%) 80 (6) 332 312 6%
% of sales 8.3% 9.0% 11.0% 8.9%
Notes:
“As Reported” denotes the Company’s financial statements according to the Accounting Standards for Business Enterprises and the
implementation guidance, interpretations and other relevant provisions issued or revised subsequently by the Chinese Ministry of
Finance (the “MoF) (collectively referred to as “ASBE”). Note that in the reported financial statements, according to the ASBE guidelines
[IAS 37], certain items (specifically certain transportation costs and certain idleness charges) are classified under COGS. Please see
the appendix to this release for further information.
Relevant income statement items contained in this release are also presented on an “Adjusted” basis, which exclude items that are of
a transitory or non-cash/non-operational nature that do not impact the ongoing performance of the business, and reflect the way the
Company’s management and the Board of Directors view the performance of the Company internally. The Company believes that
excluding the effects of these items from its operating results allows management and investors to effectively compare the true
underlying financial performance of its business from period to period and against its global peers. A detailed summary of these
adjustments appears in the appendix below.
The number of shares used to calculate both basic and diluted earnings per share in both Q3 and 9M 2024 and 2023 is 2,329.8 million
shares.
In this table and all tables in this release numbers may not sum due to rounding.
The General Crop Protection (CP) Market Environment2
During the third quarter of 2024, key commodity crop prices remained subdued, pressuring farmer
income, despite some ease in the prices of inputs.
While channel inventory continues to ease, the high interest rate environment coupled with ample
product supply and active ingredient prices from China remain at historic lows, continue to drive a just-
in-time purchasing approach by the channel.
These dynamics have negatively impacted the pricing in the crop protection market.
2Sources: CCPIA (China Crop Protection Industry Association), BAIINFO, FocusEconomics, China Containerized Freight Index, internal
sources
3
Update on the War Situation in Israel
ADAMA is headquartered in Israel and has three manufacturing sites in the country. The war situation
in Israel, including recent developments, and tensions in the Red Sea and shipping disruptions, have
not had a material impact on the Company's ability to support its markets or on ADAMA’s consolidated
financial results.
"Fight Forward" Transformation Plan
As announced in the ADAMA's full year 2023 financial results report, ADAMA initiated a plan in the
first quarter of 2024 to revalue ADAMA through improving the quality of the business to turnaround
the Company. The Company-wide transformation plan is aimed at gradually delivering profit and cash
targets over a period of 3 years (2024-2026).
Portfolio Development Update
Product Launches, Registrations:
During the third quarter of 2024 ADAMA continued to register and launch multiple new products in
markets across the globe, adding on to its differentiated product portfolio.
Differentiated products address specific grower needs with strong ROI for farmers through innovative
formulation technology and/or novel mixing concepts of Active Ingredients.
Select launches of differentiated products during the third quarter of 2024 include:
Launch of Bazak in India, powered by ADAMA's proprietary formulation technology. Bazak
is an innovative dual mode insecticide controlling brown plant hoppers in rice, based on the
combination of two systemic molecules (Pymetrozine and Dinotefuran). ADAMA's proprietary
effervescent formulation technology, which is patent protected, provides superior and faster
disintegration of granules, once added in to spray water. This technology ensures easy mixing
and ease of use in farm level application.
Launch of Upturn in India, powered by Ayalon formulation technology for enhanced
spreading and penetration. Upturn is a microemulsion formulation herbicide combining the
active ingredients Fomesafen and Propaquizafop, providing control over both broadleaf and
grassy weeds, ensuring enhanced crop protection for Pulses and Soybeans.
Selected registrations of differentiated products during the third quarter of 2024 include:
Registration of Prothioconazole based products in additional countries:
o Soratel in Germany, Italy, Belgium and Bulgaria, powered by ADAMA’s proprietary
Asorbital Formulation Technology
o Maganic in Germany, powered by ADAMA’s proprietary Asorbital Formulation
Technology
o Forapro in Hungary, powered by ADAMA’s proprietary Asorbital Formulation
Technology
o Maxentis in Argentina, Australia, Austria, Belgium, Poland, Slovakia, US
4
Registration of Matos in South Korea, an insecticide powered by Ayalon formulation
technology for enhanced spreading and penetration. Matos is the first worldwide registration
of an ADAMA Spirotetramat based solution.
Registration of Edaptis in Italy, Czech Republic and Greece. Edaptis is an innovative
dual mode action post emergence ready-to-use herbicide that provides broad-spectrum
control of grassy weeds and improved efficacy in combating resistant populations.
Registration of Plethora in Mexico. Plethora is an innovative insecticide that combines two
potent active ingredients, Novaluron and Indoxacarb. Designed for broad-spectrum control of
chewing pests, it offers farmers the advantage of not needing to identify the specific pest
before application.
Registration of Sonavio in Portugal. Sonavio is a selective herbicide based on Bifenox with
high efficacy against broadleaf weeds and is suitable for use on various crops, notably some
vegetables which currently have very few weed control solutions.
Select patents granted during the third quarter of 2024 include:
Patent granted in the USA for a stable liquid formulation of Clethodim and Fluroxypyr
combination, demonstrating ADAMA’s commitment to delivering advanced formulation
technologies to improve ease of use for the farmer.
Patent granted in Ukraine for a mixture of Aminopyralid and Quinmerac, an efficient and
innovative mixture for combating weeds.
Financial Highlights
Revenues in the third quarter declined by approximately 10% (-11% in RMB terms; -6% in CER
terms) to $929 million, presenting a decrease of 7% in prices and an increase of 1% in volumes.
The lower sales reflect lower market prices and de-focus from selected low profit products. High
competition from Chinese and Indians manufactures as well as declining active ingredient prices
have impacted the pricing of the overall crop protection market led by the pricing of commoditized
generic crop protection. Moreover, despite improvement in market inventory levels, the channel is
exercising cautious buying patterns in light of price volatility and a higher interest rate environment.
These results brought the revenues in the first nine months of 2024 to $3,028 million, a decline of
approximately 14% (-13% in RMB terms; -12% in CER terms), reflecting a decrease of 9% in prices
and a decrease of 3% in volumes.
Table 2. Regional Sales Performance
Q3 2024 Q3 2023 Change Change 9M 2024 9M 2023 Change Change
$m $m USD CER $m $m USD CER
Europe, Africa & Middle East 203 235 (14%) (14%) 882 999 (12%) (10%)
North America 158 133 19% 19% 572 568 1% 1%
Latin America 287 350 (18%) (6%) 687 912 (25%) (20%)
Asia Pacific 282 315 (11%) (11%) 887 1,044 (15%) (14%)
Of which China 109 130 (16%) (17%) 384 453 (15%) (14%)
Total 929 1,033 (10%) (6%) 3,028 3,524 (14%) (12%)
5
Notes:
CER: Constant Exchange Rates
Numbers may not sum due to rounding
Europe, Africa & Middle East (EAME):
Sales in EAME decreased in the third quarter and first nine months of 2024, following negative
weather conditions in Eastern, Central and Northen Europe, and strong competition across the
region, which have impacted pricing.
North America: Consumer & Professional Solutions – Sales were higher in the third quarter
and nine-month period supported by good weather, while the Company focused on higher margin
products.
In the US Ag market, sales increased in the third quarter supported by channel restocking against
channel destocking in the corresponding quarter and decreased in the first nine months of 2024,
following pricing pressure in light of competition and lower farmer profitability, just-in-time
purchasing patterns reflecting the high interest rate environment.
ADAMA's sales in Canada in the third quarter were higher and reflected good demand for pre
and post harvest herbicides and fungicides, while the lower sales in the nine month period were
impacted by low insecticide demand due to weather conditions.
Latin America: Brazil – decline in sales in the third quarter and first nine months of 2024,
reflecting the softer pricing following competition from Chinese competitors, “wait and see” famers
behavior postponing CP purchases, negative impact of weather as well as de-focus from non-
selective herbicides. The Company is focusing its sales on higher margin products, with new
product introductions of differentiated products continuing to do well.
In the rest of LATAM sales in the third quarter and the first nine-month period reflected negative
weather conditions which have impacted the seasons across the region, while pricing was
impacted by high competition. Despite this, new product introductions of differentiated products
supported sales.
Asia-Pacific (APAC):
In China, the branded formulations sales in the third quarter were impacted by lower customer
demand due to high channel inventory, market competition and extreme weather events as
typhoon in Southern China. The pricing pressure continued throughout the first nine months. The
Non-Ag business saw a stable demand and improved business quality despite the impact of lower
prices.
In the Pacific region, sales in the third quarter and the first nine months were lower, impacted
by softer pricing and just-in-time purchasing patterns. Sales in the third quarter were supported
by positive weather conditions in Eastern Australia and in New Zealand.
Sales in India were stable in the third quarter and down in the nine-month period, impacted by
erratic weather and softer pricing, particularly in commoditized products.
Sales in the wider APAC region continued to experience pricing pressure following intense
competition from China, particularly in commoditized products, and low demand as customers
focused on lowering stocks and tended to buy products as needed.
Gross Profit reported in the third quarter increased by 2% to $188 million (gross margin of 20.2%)
compared to $185 million (gross margin of 18.0%) in the same quarter last year and in the nine-month
period reached $672 million (gross margin of 22.2%), compared to $748 million (gross margin of
21.2%) last year.
6
Adjustments to reported results: The adjusted gross profit mainly includes reclassification
of all inventory impairment, taxes and surcharge and excludes certain transportation costs
(classified under operating expenses), as well as a provision related to the soil & water
cleanup and remediation regarding the Company's different sites in Israel.
Adjusted gross profit in the third quarter increased by 14% to $225 million (gross margin of 24.2%)
compared to $198 million (gross margin of 19.2%) in the same quarter last year and in the nine-month
period reached $782 million (gross margin of 25.8%) compared to $815 million (gross margin of 23.1%)
last year.
Despite the decline in sales in the third quarter and first nine months of 2024, the Company improved
the gross margin both in the third quarter and nine-month period following the positive impact of new
inventory sold, priced at market levels and following management's focus on the quality of business
which led to an improvement in the sales mix of higher margin products, moderated by the negative
impact of exchange rates. In the third quarter the Company also recorded a slight increase in
quantities sold, which had a positive impact.
Operating expenses reported in the third quarter of 2024 were $222 million (23.9% of sales),
compared to $224 million (21.7% of sales) in the same quarter last year and reached $671 million
(22.2% of sales) in the nine-month period compared to $655 million (18.6% of sales) last year.
Adjustments to reported results: please refer to the explanation regarding adjustments to the gross
profit in respect to certain transportation costs, taxes and surcharges and inventory impairment.
Additionally, the Company recorded certain non-operational items within its reported
operating expenses amounting to $37 million in Q3 2024 in comparison to $7 million in Q3
2023 and $113 in 9M 2024 in comparison to $22 in 9M 2023. These include mainly (i)
provisions, such as legal claims, registration impairment and update of registration
depreciation (ii) measures to improve efficiencies, (iii) non-cash amortization charges in
respect of Transfer Assets received from Syngenta related to the 2017 ChemChina-
Syngenta acquisition, (iv) 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.
Adjusted operating expenses in the third quarter were $212 million (22.8% of sales), compared to
$229 million (22.1% of sales) in the same quarter last year, and reached $645 million (21.3% of sales)
in the nine month period compared to $698 million (19.8% of sales) last year.
The operating expenses were lower in the third quarter and first nine months of 2024, following
undertaking tight OPEX management measures, including the impact of initiatives included in the
Company's transformation plan, lower transportation and logistics costs and the positive impact of
exchange rates.
Operating income reported in the third quarter reached a loss of $34 million )-3.6% of sales)
compared to a loss of $38 million (-3.7% of sales) in the third quarter of 2023 and amounted to $1
million (0.0% of sales) in the nine month period compared to $94 million (2.7% of sales) last year.
Adjusted operating income in the third quarter amounted to $13 million (1.4% of sales) compared
to a loss of $31 million (-3.0% of sales) in the same quarter last year and increased by 17% to $137
million (4.5% of sales) in the nine-month period compared to $117 million (3.3% of sales) last year.
EBITDA reported in the third quarter increased by 49% to $56 million (6.0% of sales) compared to
$37 million (3.6% of sales) in the same quarter last year and amounted to $252 million (8.3% of sales)
in the nine-month period compared to $318 million (9.0% of sales) last year.
7
Adjusted EBITDA in the third quarter increased by 125% to $80 million (8.6% of sales) compared to
$35 million (3.4% of sales) in the same quarter last year and increased by 6% to $332 million (11.0%
of sales) in the nine-month period compared to $312 million (8.9% of sales) last year.
Adjusted financial expenses amounted to $84 million in the third quarter, compared to $82 million
in the corresponding quarter last year and amounted to $224 million in the nine-month period
compared to $259 million last year.
In the third quarter of 2024, the financial expenses were slightly higher due to higher hedging costs
on exchange rates, the net impact of a higher Israeli CPI on the ILS-denominated CPI-linked bonds
moderated by lower interest paid on loans following a decrease in loans in light of the positive cash
flow achieved, better loan mix and improved efficiency of cash management.
In the nine-month period the financial expenses were lower also due to lower interest paid on loans in
light of the positive cash flow achieved, better loan mix and improved efficiency of cash management
as well as the net impact of a lower Israeli CPI on the ILS-denominated CPI-linked bonds.
Adjusted taxes on income in the third quarter amounted to tax expenses of $6 million, compared to
tax expenses of $3 million in the corresponding quarter last year and amounted to expenses of $61
million in the first nine months of the year compared to a tax income of $7 million last year.
Despite reaching losses before tax, the Company recorded tax expenses in the third quarter and first
nine months of the year 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 first nine months 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 nine months of 2023.
In the third quarter of 2024 the company recorded tax income due to the non-cash impact of the
stronger BRL compared with tax expenses due to the weakness of the BRL in the third quarter of
2023.
Net loss reported in the third quarter was $133 million and $259 million in the nine-month period,
compared to a net loss of $112 million and $146 million in the corresponding periods last year,
respectively.
Adjusted net loss in the third quarter was $78 million and $149 million in the nine-month period,
compared to a net loss of $115 million and $135 million in the corresponding periods last year,
respectively.
Trade working capital as of September 30, 2024, was $2,218 million compared to $2,742 million as
of September 30, 2023. Inventory held by the Company continued to decline from the end of 2023,
including inventory of finished goods, and reached $1,740 million as of September 30, 2024, in
comparison to $2,129 million as of September 30, 2023. The decrease in working capital was following
the Company's implementation of selective procurement practices, which already began in 2023, and
which led to a decrease in the level of inventory held by the Company and lower trade payables. The
Company also improved its payable terms following implementation of initiatives part of the
Company's transformation plan. The decrease in receivables reflected the intensive collections as well
as the lower sales.
Cash Flow: Operating cash flow of $159 million and $402 million was generated in the third quarter
and first nine-month period in 2024 respectively, compared to $82 million generated in the third quarter
and $63 million generated in the nine-month period in 2023. The operating cash flow was significantly
improved in the third quarter and first nine months of 2024 due to the company maintaining strict
procurement practices, intensive collections and an improvement in supplier terms, reflecting
implementation of initiatives taken as part of the company's transformation plan.
8
Net cash used in investing activities was $7 million in the third quarter and $122 million in the first
nine-month period in 2024, compared to $69 million and $231 million in the corresponding periods last
year, respectively. The lower cash used in investing activities in the third quarter and first nine months
of 2024 reflected implementation of the Company's transformation plan including the prioritization of
investments in its manufacturing facilities as well as prioritization of investments in intangible assets
relating to ADAMA's global registrations, in line with the optimization of the Company's portfolio. In the
third quarter of 2024, the Company recorded the sale of a real estate asset whereas in the first quarter
of 2023 the company completed the acquisition of AgriNova New Zealand.
Free cash flow of $128 million was generated in the third quarter and $179 million generated in the
nine-month period compared to $22 million consumed in the third quarter and $276 million consumed
in the corresponding periods last year, respectively, reflecting the aforementioned operating and
investing cash flow dynamics.
Table 3. Revenues by operating segment
Sales by segment
Q3 2024 Q3 2023 9M 2024 9M 2023
% % % %
USD (m) USD (m) USD (m) USD (m)
Crop Protection 840 90% 943 91% 2,746 91% 3,233 92%
Intermediates and
89 10% 90 9% 282 9% 291 8%
Ingredients
Total 929 100% 1,033 100% 3,028 100% 3,524 100%
Sales by product category
Q3 2024 Q3 2023 9M 2024 9M 2023
% % % %
USD (m) USD (m) USD (m) USD (m)
Herbicides 345 37% 427 41% 1,213 40% 1,531 43%
Insecticides 302 33% 304 29% 896 30% 989 28%
Fungicides 193 21% 212 20% 638 21% 713 20%
Intermediates and
89 10% 90 9% 282 9% 291 8%
Ingredients
Total 929 100% 1,033 100% 3,028 100% 3,524 100%
Notes:
The sales split by product category is provided for convenience purposes only and is not representative of the way the Company is
managed or in which it makes its operational decisions.
Numbers may not sum due to rounding.
Further Information
All filings of the Company, together with a presentation of the key financial highlights of the period,
can be accessed through the Company website at www.adama.com.
About ADAMA
9
ADAMA Ltd. is a global leader in crop protection, providing practical solutions to farmers across the
world to combat weeds, insects and disease. Our culture empowers ADAMA's people to actively listen
to farmers and ideate from the field. ADAMA's diverse portfolio of existing active ingredients, coupled
with its leading formulation capabilities and proprietary formulation technology platforms, uniquely
position the company to develop high-quality, innovative and sustainable products, to address the
many challenges farmers and customers face today. ADAMA serves customers in dozens of countries
globally, with direct presence in all top 20 markets. For more information, visit us at www.ADAMA.com
and follow us on Twitter at @ADAMAAgri.
Contact
Rivka Neufeld Zhujun Wang
Global Investor Relations China Investor Relations
Email: ir@adama.com Email: irchina@adama.com
10
Abridged Adjusted Consolidated Financial Statements
The following abridged consolidated financial statements and notes have been prepared as described in Note 1 in this
appendix. While prepared based on the principles of Chinese Accounting Standards (ASBE), they do not contain all of the
information which either ASBE or IFRS would require for a complete set of financial statements, and should be read in
conjunction with the consolidated financial statements of both ADAMA Ltd. and Adama Agricultural Solutions Ltd. as filed
with the Shenzhen and Tel Aviv Stock Exchanges, respectively.
Relevant income statement items contained in this release are also presented on an “Adjusted” basis, which exclude items
that are of a one-time or non-cash/non-operational nature that do not impact the ongoing performance of the business, and
reflect the way the Company’s management and the Board of Directors view the performance of the Company internally.
The Company believes that excluding the effects of these items from its operating results allows management and investors
to effectively compare the true underlying financial performance of its business from period to period and against its global
peers.
Abridged Consolidated Income Statement for the Third Quarter of 2024
Q3 2024 Q3 2023 Q3 2024 Q3 2023
Adjusted3
USD (m) USD (m) RMB (m) RMB (m)
Revenues 929 1,033 6,613 7,407
Cost of Sales 702 815 4,994 5,846
Other costs 2 20 20 142
Gross profit 225 198 1,600 1,418
% of revenue 24.2% 19.2% 24.2% 19.2%
Selling & Distribution expenses 162 169 1,151 1,215
General & Administrative expenses 33 36 236 259
Research & Development expenses 14 15 102 110
Other operating expenses (income) 3 8 21 56
Total operating expenses 212 229 1,509 1,640
% of revenue 22.8% 22.1% 22.8% 22.1%
Operating income (EBIT) 13 (31) 90 (222)
% of revenue 1.4% (3.0%) 1.4% (3.0%)
Financial expenses 84 82 600 587
Loss before taxes (72) (113) (510) (809)
Taxes on Income 6 3 45 20
Net loss (78) (115) (555) (829)
% of revenue (8.4%) (11.2%) (8.4%) (11.2%)
Adjustments 55 (4) 388 (28)
Reported Net loss (133) (112) (943) (800)
% of revenue (14.3%) (10.8%) (14.3%) (10.8%)
Adjusted EBITDA 80 35 569 254
% of revenue 8.6% 3.4% 8.6% 3.4%
Adjusted EPS4 – Basic (0.0335) (0.0496) (0.2382) (0.3556)
– Diluted (0.0335) (0.0496) (0.2382) (0.3556)
Reported EPS5 – Basic (0.0569) (0.0479) (0.4049) (0.3435)
– Diluted (0.0569) (0.0479) (0.4049) (0.3435)
3
For an analysis of the differences between the adjusted income statement items and the income statement items as reported in the financial
statements, see below “Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements”.
4
The number of shares used to calculate both basic and diluted earnings per share in both Q3 2024 and 2023 is 2,329.8 million shares.
11
Abridged Consolidated Income Statement for the First Nine Months of 2024
9M 2024 9M 2023 9M 2024 9M 2023
Adjusted5
USD (m) USD (m) RMB (m) RMB (m)
Revenues 3,028 3,524 21,523 24,660
Cost of Sales 2,238 2,667 15,909 18,673
Other costs 8 42 59 299
Gross profit 782 815 5,555 5,688
% of revenue 25.8% 23.1% 25.8% 23.1%
Selling & Distribution expenses 500 540 3,552 3,782
General & Administrative expenses 102 105 723 735
Research & Development expenses 45 53 320 373
Other operating expenses (income) (1) 0 (9) 0
Total operating expenses 645 698 4,585 4,890
% of revenue 21.3% 19.8% 21.3% 19.8%
Operating income (EBIT) 137 117 970 799
% of revenue 4.5% 3.3% 4.5% 3.2%
Financial expenses 224 259 1,590 1,815
Loss before taxes (87) (142) (620) (1,016)
Taxes on Income 61 (7) 436 (47)
Net loss (149) (135) (1,057) (969)
% of revenue (4.9%) (3.8%) (4.9%) (3.9%)
Adjustments 110 11 782 73
Reported Net loss (259) (146) (1,838) (1,042)
% of revenue (8.5%) (4.1%) (8.5%) (4.2%)
Adjusted EBITDA 332 312 2,357 2,168
% of revenue 11.0% 8.9% 11.0% 8.8%
Adjusted EPS6 – Basic (0.0638) (0.0580) (0.4535) (0.4161)
– Diluted (0.0638) (0.0580) (0.4535) (0.4161)
Reported EPS5 – Basic (0.1110) (0.0626) (0.7890) (0.4474)
– Diluted (0.1110) (0.0626) (0.7890) (0.4474)
5
For an analysis of the differences between the adjusted income statement items and the income statement items as reported in the financial
statements, see below “Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements”.
6
The number of shares used to calculate both basic and diluted earnings per share in both 9M 2024 and 2023 is 2,329.8 million shares.
12
Abridged Consolidated Balance Sheet
September 30 September 30 September 30 September 30
2024 2023 2024 2023
USD (m) USD (m) RMB (m) RMB (m)
Assets
Current assets:
Cash at bank and on hand 596 737 4,178 5,294
Bills and accounts receivable 1,219 1,327 8,539 9,529
Inventories 1,740 2,129 12,192 15,284
Other current assets, receivables and
278 266 1,946 1,908
prepaid expenses
Total current assets 3,832 4,459 26,855 32,015
Non-current assets:
Fixed assets, net 1,746 1,759 12,233 12,629
Rights of use assets 79 90 555 646
Intangible assets, net 1,386 1,457 9,714 10,461
Deferred tax assets 208 245 1,460 1,758
Other non-current assets 100 102 702 730
Total non-current assets 3,520 3,653 24,665 26,224
Total assets 7,352 8,112 51,520 58,240
Liabilities
Current liabilities:
Loans and credit from banks and other
938 1,258 6,574 9,032
lenders
Bills and accounts payable 760 724 5,325 5,197
Other current liabilities 836 959 5,859 6,888
Total current liabilities 2,534 2,941 17,758 21,118
Long-term liabilities:
Loans and credit from banks and other
380 423 2,666 3,038
lenders
Debentures 944 1,003 6,613 7,200
Deferred tax liabilities 43 42 304 305
Employee benefits 81 90 570 648
Other long-term liabilities 547 458 3,830 3,290
Total long-term liabilities 1,995 2,017 13,982 14,480
Total liabilities 4,530 4,958 31,741 35,598
Equity
Total equity 2,823 3,154 19,779 22,642
Total liabilities and equity 7,352 8,112 51,520 58,240
Numbers may not sum due to rounding
13
Abridged Consolidated Cash Flow Statement for the Third Quarter of 2024
Q3 2024 Q3 2023 Q3 2024 Q3 2023
USD (m) USD (m) RMB (m) RMB (m)
Cash flow from operating activities:
Cash flow from operating activities 159 82 1,131 591
Cash flow from operating activities 159 82 1,131 591
Investing activities:
Acquisitions of fixed and intangible assets (38) (74) (274) (529)
Net cash received from disposal of fixed assets,
30 1 212 6
intangible assets and others
Other investing activities 1 4 10 30
Cash flow used for investing activities (7) (69) (51) (493)
Financing activities:
Receipt of loans from banks and other lenders 42 49 297 353
Repayment of loans from banks and other lenders (112) (52) (796) (374)
Interest payment and other (28) (46) (202) (331)
Other financing activities (22) 138 (157) 987
Cash flow used for financing activities
(121) 89 (853) 635
Effects of exchange rate movement on cash and cash
1 1 (63) (23)
equivalents
Net change in cash and cash equivalents 32 103 158 710
Cash and cash equivalents at the beginning of the period 557 633 3,971 4,571
Cash and cash equivalents at the end of the period 589 736 4,129 5,281
Free Cash Flow 128 (22) 912 (97)
Numbers may not sum due to rounding
14
Abridged Consolidated Cash Flow Statement for the First Nine Months of 2024
9M 2024 9M 2023 9M 2024 9M 2023
USD (m) USD (m) RMB (m) RMB (m)
Cash flow from operating activities:
Cash flow used for operating activities 402 63 2,862 526
Cash flow from (used for) operating activities 402 63 2,862 526
Investing activities:
Acquisitions of fixed and intangible assets (151) (244) (1,074) (1,707)
Net cash received from disposal of fixed assets,
34 5 242 37
intangible assets and others
Acquisition of subsidiary - (22) - (148)
Other investing activities (5) 29 (35) 205
Cash flow used for investing activities (122) (231) (866) (1,614)
Financing activities:
Receipt of loans from banks and other lenders 235 647 1,666 4,458
Repayment of loans from banks and other lenders (505) (281) (3,589) (1,974)
Interest payments and other (111) (121) (789) (852)
Dividend to shareholders - (9) - (63)
Other financing activities 1 63 8 467
Cash flow from (used for) financing activities (380) 298 (2,703) 2,036
Effects of exchange rate movement on cash and cash
3 (2) (21) 107
equivalents
Net change in cash and cash equivalents (97) 129 (728) 1,056
Cash and cash equivalents at the beginning of the period 686 607 4,857 4,225
Cash and cash equivalents at the end of the period 589 736 4,129 5,281
Free Cash Flow 179 (276) 1,276 (1,849)
Numbers may not sum due to rounding
15
Notes to Abridged Consolidated Financial Statements
Note 1: Basis of preparation
Basis of presentation and accounting policies: The abridged consolidated financial statements for the
quarters ended September 30, 2024 and 2023 incorporate the financial statements of ADAMA Ltd. and of all of
its subsidiaries (the “Company”), including Adama Agricultural Solutions Ltd. (“Solutions”) and its subsidiaries.
The Company has adopted the Accounting Standards for Business Enterprises (ASBE) issued by the Ministry
of Finance (the "MoF") and the implementation guidance, interpretations and other relevant provisions issued
or revised subsequently by the MoF (collectively referred to as “ASBE”).
The abridged consolidated financial statements contained in this release are presented in both Chinese
Renminbi (RMB), as the Company’s shares are traded on the Shenzhen Stock Exchange, as well as in United
States dollars ($) as this is the major currency in which the Company’s business is conducted. For the purposes
of this release, a customary convenience translation has been used for the translation from RMB to US dollars,
with Income Statement and Cash Flow items being translated using the quarterly average exchange rate, and
Balance Sheet items being translated using the exchange rate at the end of the period.
The preparation of financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimated.
Note 2: Abridged Financial Statements
For ease of use, the financial statements shown in this release have been abridged as follows:
Abridged Consolidated Income Statement:
“Gross profit” in this release is revenue less costs of goods sold, taxes and surcharges, inventory
impairment and other idleness charges (in addition to those already included in costs of goods sold);
part of the idleness charges is removed in the Adjusted financial statements
“Other operating expenses” includes impairment losses (not including inventory impairment); gain (loss)
from disposal of assets and non-operating income and expenses
“Operating expenses” in this release differ from those in the formally reported financial statements in
that certain transportation costs have been reclassified from COGS to Operating Expenses.
“Financial expenses” includes net financing expenses and gains/losses from changes in fair value.
Abridged Consolidated Balance Sheet:
“Other current assets, receivables and prepaid expenses” includes financial assets held for trading;
financial assets in respect of derivatives; prepayments; other receivables; and other current assets
“Fixed assets, net” includes fixed assets and construction in progress
“Intangible assets, net” includes intangible assets and goodwill
“Other non-current assets” includes other equity investments; long-term equity investments; long-term
receivables; investment property; and other non-current assets
“Loans and credit from banks and other lenders” includes short-term loans and non-current liabilities
due within one year
“Other current liabilities” includes financial liabilities in respect of derivatives; payables for employee
benefits, taxes, interest, dividends and others; advances from customers and other current liabilities
“Other long-term liabilities” includes long-term payables, provisions, deferred income and other non-
current liabilities
16
Income Statement Adjustments
Q3 2024 Q3 2023 Q3 2024 Q3 2023
USD (m) USD (m) RMB (m) RMB (m)
Reported Net Loss (133) (112) (943) (800)
Adjustments to COGS & Operating Expenses:
1. Amortization of acquisition-related PPA and other acquisition related costs 6 4 42 30
2. Amortization of Transfer assets received and written-up due to 2017
5 5 37 34
ChemChina-Syngenta transaction (non-cash)
3. Accelerated depreciation 1 1 10 6
4. Incentive plans - (2) - (16)
5. ASBEs classifications COGS impact (27) (12) (195) (84)
6. ASBEs classifications OPEX impact 27 12 195 84
7. Measures to improve efficiencies 8 - 59 -
8. Provisions such as legal claims, registration impairment and update of
19 - 139 -
registration depreciation
9. Soil and water cleanup and remediation 6 - 43 -
Total Adjustments to Operating Income (EBIT) 46 7 330 53
Total Adjustments to EBITDA 24 (2) 173 (14)
Adjustments to Financing Expenses:
10. Non-cash adjustment related to put option revaluations 3 (11) 21 (77)
11. Other financing expenses 1 - 10 -
Adjustments to Taxes:
Taxes impact 4 (1) 27 (5)
Total adjustments to Net loss 55 (4) 388 (28)
Adjusted Net Loss (78) (115) (555) (829)
9M 2024 9M 2023 9M 2024 9M 2023
USD (m) USD (m) RMB (m) RMB (m)
Reported Net loss (259) (146) (1,838) (1,042)
Adjustments to COGS & Operating Expenses:
1. Amortization of acquisition-related PPA and other acquisition related costs 14 13 97 88
2. Amortization of Transfer assets received and written-up due to 2017
15 16 109 109
ChemChina-Syngenta transaction (non-cash)
3. Accelerated depreciation 3 2 22 16
4. Incentive plans - (7) - (48)
5. ASBEs classifications COGS impact (87) (65) (617) (452)
6. ASBEs classifications OPEX impact 87 65 617 452
7. Measures to improve efficiencies 23 - 166 -
8. Provisions such as legal claims, registration impairment and update of
63 - 451 -
registration depreciation
9. Soil and water cleanup and remediation 17 - 121 -
Total Adjustments to Operating Income (EBIT) 136 24 965 165
Total Adjustments to EBITDA 80 (6) 567 (41)
Adjustments to Financing Expenses:
10. Non-cash adjustment related to put options revaluation (30) (11) (212) (77)
11. Other financing expenses 10 - 69 -
17
Adjustments to Taxes:
Taxes impact (6) (2) (41) (15)
Total adjustments to Net loss 110 11 782 73
Adjusted Net loss (149) (135) (1,057) (969)
Notes:
1. Amortization of acquisition-related PPA and other acquisition related costs:
a. Amortization of Legacy PPA of 2011 acquisition of Solutions (non-cash): Under ASBE, since the third combined reporting for Q3 2017,
the Company has inherited the historical “legacy” amortization charge that ChemChina previously was incurring in respect of its acquisition
of Solutions in 2011. This amortization is done in a linear manner on a quarterly basis, most of which will have been completed by the end
of 2020.
b. Amortization of acquisition-related PPA (non-cash) and other acquisition-related costs: 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.
2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash): 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,
and since in 2018 the Company adjusted for the one-time gain that it made on the divested products, the additional amortization charge incurred
due to the written-up value of the acquired assets is also adjusted to present a consistent view of Divestment and Transfer transactions, which
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.
3. Accelerated depreciation: These charges relate to accelerated depreciation attributed to the upgrade & relocation programs in China and Israel,
in which production assets located in the old production sites in Huai’An and Beer-Sheva are in relocation process to new sites. Since some older
production assets may not be able to be relocated, or are not operational, these are depreciated over a shorter period.
4. Incentive plans: ADAMA granted certain of its employees, a long-term incentive (LTI) in the form of 'phantom' awards linked to the Company’s
share price. As such, the Company records an expense, or recognizes income, depending on the fluctuation in the Company’s share price,
regardless of award exercises. To neutralize the impact of such share price movements on the measurement of the Company’s performance
and expected employee compensation and to reflect the existing phantom awards, in the Company’s adjusted financial performance, the LTI is
presented on an equity-settled basis in accordance with the value of the existing plan at the grant date.
5. 6. ASBEs classifications COGS impact: according to the ASBE guidelines [IAS 37], certain items (specifically certain transportation costs) are
classified under COGS.
7. Measures to improve efficiencies: ADAMA recorded costs due to certain measures initiated to improve efficiencies mainly personnel changes
8. Provisions such as legal claims, registration impairment and update of registration depreciation.
9. Soil and water cleanup and remediation: a wholly-owned indirect subsidiary of the Company filed with Israel's Ministry of Environmental
Protection a remediation plan regarding its plant in Be'er Sheva in Q2 2024. During Q3 2024 additional expenses were recorded regarding the
Company's sites in Israel.
10. Non-cash, non-recurring items due to revaluation of put options attributed to minority stake in subsidiaries.
11. Other financing expenses: Expenses mainly deriving from tax claims surcharges and inflation.
18
Exchange Rate Data for the Company's Principal Functional Currencies
September 30 Q3 Average 9M Average
2024 2023 Change 2024 2023 Change 2024 2023 Change
EUR/USD 1.119 1.060 5.60% 1.098 1.088 0.97% 1.087 1.083 0.34%
USD/BRL 5.448 5.008 -8.80% 5.545 4.880 -13.63% 5.238 5.009 -4.58%
USD/PLN 3.819 4.370 12.60% 3.899 4.138 5.76% 3.963 4.236 6.45%
USD/ZAR 17.094 18.939 9.74% 17.971 18.66 3.67% 18.481 18.347 -0.73%
AUD/USD 0.692 0.648 6.76% 0.670 0.654 2.39% 0.662 0.669 -0.99%
GBP/USD 1.341 1.223 9.61% 1.300 1.265 2.73% 1.277 1.244 2.65%
USD/ILS 3.710 3.824 2.98% 3.713 3.746 0.89% 3.701 3.643 -1.60%
USD L 3M 4.59% 5.39% -0.8 bp 5.08% 5.39% -0.31 bp 5.24% 3.56% 1.68bp
September 30 Q3 Average 9M Average
2024 2023 Change 2024 2023 Change 2024 2023 Change
USD/RMB 7.007 7.180 -2.40% 7.115 7.173 -0.81% 7.108 7.008 1.44%
EUR/RMB 7.843 7.610 3.06% 7.816 7.803 0.15% 7.725 7.590 1.78%
RMB/BRL 0.777 0.697 -11.47% 0.779 0.680 -14.55% 0.737 0.715 -3.10%
RMB/PLN 0.545 0.609 10.45% 0.548 0.577 4.99% 0.557 0.604 7.77%
RMB/ZAR 2.439 2.638 7.52% 2.526 2.601 2.88% 2.600 2.618 0.69%
AUD/RMB 4.847 4.652 4.20% 4.766 4.693 1.56% 4.707 4.687 0.43%
GBP/RMB 9.396 8.783 6.98% 9.250 9.077 1.90% 9.074 8.714 4.13%
RMB/ILS 0.529 0.533 0.59% 0.522 0.522 0.08% 0.521 0.520 -0.16%
RMB Shibor 3M 1.84% 2.30% -0.46 bp 1.86% 2.11% -0.25bp 2.04% 2.27% -0.23 bp
19
