Makhteshim Agan Industries Ltd. (TASE: MAIN) has published its financial report for the fourth quarter of 2006 and the year as a whole. 2006 was, from the outset, a difficult year for the company, which underwent changes in both its control structure and management team, and ended the year on a sour note with the disappointing fourth quarter results, which the company predicted in its profit warning back in January.
Given that the results were expected, and as indicated in its announcement this morning, the company is set to focus more on its restructuring and future direction in 2007. It ended 2006 with sales of $1.779 billion, up just 2% on 2005, with the fourth quarter contributing $419 million to the company's underlying revenue. Makhteshim posted a net profit of $83.9 million in 2006, down from $204.8 million for 2005.
One of the causes of this was the company's fourth quarter loss amounting $38.5 million, as indicated by its profit warning back in January. The company said back then that it would make a provision in the amount of $50-55 million for legal actions, an employee retirement program, amortization in the fair value of product patents and a provision for doubtful debts.
At today’s press conference, Makhteshim Agan chairman and CEO Abraham Bigger said, “Makhteshim Agan is the world’s largest generic herbicide player, and we’ll keep our lead.” He did not rule out possible mergers and acquisitions.
Bigger promised to make Makhteshim Agan into a “market leader, and less a production-oriented company.” He estimates, “70% of the agrochemical products are not patented,” and predicts that $4 billion in global sales would come from the expiry of patents over the next four to five years.
Published by Globes [online], Israel business news - www.globes.co.il - on March 13, 2007
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