ADAMA (000553) investor relations material

Executive summary

• Achieved stable or slightly increased sales in Q3 and over nine months, with Q3 sales up 2.4% to $853 million and nine-month sales stable at $2,698 million, while global crop protection demand recovered and channel inventories normalized.

• Significant improvements in gross profit and EBITDA margins, driven by operational efficiency, cost controls, and the 'Fight Forward' transformation plan.

• Net loss narrowed substantially year-over-year in Q3 and over nine months, with Q3 net loss down 63.69% and nine-month net loss down 77%.

• Adjusted net income turned positive for the nine months, reflecting improved business quality and lower financial expenses.

• Market demand is recovering, but pricing remains under pressure due to oversupply and low agricultural commodity prices.

Financial highlights

• Q3 sales reached $853 million (up 2.4% YoY) and RMB 6.65 billion (up 0.62% YoY); nine-month sales stable at $2,698 million and RMB 21.68 billion (up 0.72%).

• Q3 gross profit increased 18% to $242 million; Q3 adjusted gross profit rose 14% to $257 million; Q3 EBITDA up 59% to $97 million and RMB 742 million (up 87.42%).

• Q3 adjusted net loss narrowed to $20 million from $78 million; Q3 net loss: RMB 342 million, improved from RMB 943 million.

• Nine-month adjusted net income was $29 million versus a $149 million loss last year; nine-month net loss: RMB 423 million, improved from RMB 1.84 billion.

• Operating cash flow for nine months: RMB 2.37 billion, down 17.06% YoY; free cash flow: $74 million for 9M.

Outlook and guidance

• Management expects continued pricing pressure due to oversupply and high interest rates, but operational improvements and cost controls are expected to support margins.

• The 'Fight Forward' transformation plan is credited with delivering consecutive quarters of EBITDA growth.