Stock Code: 000553 (200553) Stock abbreviation: ADAMA A (B) Announcement No. 2024-2
ADAMA Ltd.
2023 Full Year Performance Estimation
The Company and all the directors confirm that the information disclosed herein is true,
accurate, complete and contains no false recording, misleading statement or material omission.
I. Performance Estimation
1. Estimation period: January 1, 2023 - December 31, 2023
2. Estimated performance: net loss
Item Current reporting period Same period last year
January to December January to December
2023 2022
Net income (loss) attributable to the
shareholders of the listed company (1,491) - (1,848) 609
(RMB in millions)
Net income (loss) excluding non-
recurring profits and losses (1,702) - (2,059) 507
(RMB in millions)
Basic earnings (loss) per share
(0.6400) - (0.7933) 0.2616
(RMB)
Sales (RMB in millions) 31,139 - 34,417 37,382
Sales after deduction* (RMB in
31,139 - 34,417 37,305
millions)
Note: The ‘non-recurring profits and losses’ referred to above are as defined in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering their Securities to the Public-Non-Recurring Profit and Loss .
* Sales after deduction refers to sales after deducting sales unrelated to the main business and sales without commercial
substance
II. Communication with External Auditor
The estimated results of this period are the preliminary estimation of the Company and have not
been audited nor reviewed by certified accountants. The Company and the external auditor have
preliminarily communicated regarding relevant matters of the performance estimation, and have
no material disagreement.
III. Explanations for Performance Variation
Sales
For the full year of 2023, ADAMA is expecting to report a decline in sales of approximately 8% -
17% in RMB terms (12% - 21% in USD terms), compared to the full year of 2022, reflecting lower
volumes and prices as well as the negative impact of exchange rates. 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 and lower active ingredient pricing.
EBITDA
In the full year of 2023, the Company is expecting to report a decrease in EBITDA and its margin,
in comparison to the full year of 2022. The decrease in EBITDA is due to the decline in sales, as
described above, high-cost inventory, inventory impairment, the negative impact of exchange
rates and despite a decrease in operating expenses and its margin as well as an improvement
in the Company's sales mix of higher margin products. In response to the market conditions the
Company has taken active measures to manage its COGS, procurement and OPEX that have
led to a decrease in the level of inventory held and a decrease in operating expenses.
Net Loss
In the full year of 2023, the Company is expecting to report Net Loss, compared to Net Income
in the full year of 2022. This is due to lower Operating Profit and an increase in financial expenses
in light of higher bank interest expenses due to an increase in interest rates and in short-term
loans. These financial expenses were moderated by the lower Israeli CPI.
The Company’s reported Net Income (loss) in 2023 is expected to reflect net expenses in respect
of certain transitory, non-operational or non-cash items, including mainly:
i. Non-cash, non-recurring provision for asset impairment and income due to revaluation of
put options attributed to minority stake in a subsidiary and holdback release;
ii. Non-cash amortization charges in respect of Transfer assets received from Syngenta
related to the 2017 ChemChina-Syngenta acquisition;
iii. Non-cash amortization net charges related to intangible assets created as part of the
Purchase Price Allocation (PPA) on acquisitions, with no impact on the ongoing
performance of the companies acquired;
iv. Company measures to improve efficiencies;
v. 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.
Excluding the impact of the abovementioned transitory, non-operational or non-cash items, the
Company is expecting to deliver the following:
Adjusted Net Income (loss) attributable to shareholders in the full year is expected to be
between RMB (1,513) - (1,870) million, compared to Adjusted net income of RMB 740 million
in the same period last year.
Adjusted basic earnings (loss) per share are expected to be between RMB (0.6493) -
(0.8026) in the full year, compared to last year's earnings per share of RMB 0.3177 in the
full year.
IV. Other Remarks
The estimated results above are only preliminary calculations performed by the finance team of
the Company based on initial financial data available to the Company and have not been audited
or reviewed by the Company's independent auditors. These estimations may change, inter alia,
as a result of the further processing and analysis of the financial data that the Company will
perform for the preparation of its financial statements for the full year and fourth quarter of 2023.
Please refer to the Report for the full year 2023 to be duly disclosed by the Company on March
27th, 2024 for specific and accurate financial information.
Investors are reminded to exercise caution when making investment decisions.
Media for Information Disclosure of the Company: China Securities Journal, Securities Times and
Cninfo (www.cninfo.com.cn).
By order of the Board
ADAMA Ltd.
January 31, 2024
