Agrochemicals maker Adama Agricultural Solutions Ltd. (formerly Makhteshim Agan) today reported revenue and profit growth in 2013, exceeding the $3 billion sales threshold for the first time. In the wake of reporting the financials, Adama's new CEO Chen Lichtenstein told "Globes," "We want to be traded in a place where investors understand the field and analysts cover the sector, and market makers will trade in our shares and New York is best for that." Lichtenstein did not rule out an IPO for the Chinese-owned company in Hong Kong.
Adama attributes 2013 growth to higher sales and prices, which were partly offset by currency effects.
Former Adama CEO Erez Vigodman NIS 9 million in 2013, before moving to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) earlier this year. His successor, Lichtenstein earned NIS 3.6 million as VP.
Full-year revenue rose 8.5% to $3.08 billion from $2.83 billion in 2012. Net profit rose 3.7% to $127.1 million from $122.6 million. Cash flow from operations quintupled to $362.5 million in 2013 from $58.8 million in 2012, mainly because an improved balance in operating working capital and successful hedges on long-term shekel-denominated debt.
Revenue growth was strongest in Latin America and the Asia-Pacific, although Europe remained the company's biggest market. European sales rose 4% to $1.14 billion in 2013 from $1.09 billion in 2012; Latin American sales rose 18% to $757.5 million from $643 million; Asia-Pacific, Africa, and Middle East sales rose 11% to $553.2 million from $497.3 million, and North American sales rose 3.7% to $516.2 million from $497.5 million. Domestic sales accounted for a 3% of total sales, after rising by 4.6% to $109 million in 2013 from $104.4 million in 2012.
Fourth quarter revenue rose 13% to $655.7 million from $579.5 million for the corresponding quarter of 2012. Net loss widened to $29.1 million for the fourth quarter from $21.9 million for the corresponding quarter.
“We report another year of solid growth in sales and EBITDA despite an unfavorable currency environment especially in our APAC region and Brazil. We achieved growth across all of our regions; higher sales volumes and improved product mix that led to improvement in our financial performance. Our improved working capital management resulted in better cash flow balance for the year. In addition, we delivered continued positive results in Latin America, benefiting from positive market conditions in the region," said Lichtenstein. “In 2013 we continued to execute our strategic plan with specific emphasis on products and marketing, as well as, advancing our activities and operations in China. These core business elements are pivotal for our future competitive positioning and long-term growth.”
Adama added that it was working intensively to maximize the potential of its merger with China National Agrochemical Corporation (CNAC), acquire all or part of its subsidiaries, and build a comprehensive business infrastructure within China. During the fourth quarter, Adama acquired 10.6% of CNAC subsidiary Hubei Sanonda Co. Ltd. (Shenzhen: 553), and it is evaluating other business opportunities in China to create significant research, operational and commercial infrastructure in the country.
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2014
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