Adama Profit Jumps on Strong Sales Gains in Latin America, India

Adama Agricultural Solutions, formerly Makhteshim Agan, said its second-quarter profit rose strongly as sales volumes expanded, notably in Latin America, North America and India.

The Tel Aviv, Israel-based company posted net income of $59.4 million, up 23.5% from $48.1 million a year ago. Revenue jumped 9% to $875.9 million from $803.3 million in the year-ago period on higher volume. Excluding currency effects revenue rose 10.1%.

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“Adama continued to grow strongly in the second quarter, led by double-digit sales growth in North America, Latin America, and Asia Pacific & Africa, generating continued momentum in our revenues and profits across all our key geographies,” said Yang Xingqiang, Adama chairman. He added that the company continues to make “important progress towards the establishment and integration of Adama’s commercial and operational platform in China.”

Chen Lichtenstein, Adama president and chief executive, said, ““Our results during the first half of the year demonstrate the company’s continued growth in all key territories despite challenging weather conditions in North America and drought in Australia. Additionally, our market reach and comprehensive product portfolio, which spans across the entire value chain, allowed us to deliver strong performance in most markets.”

Broken down geographically, Latin America saw the biggest sales gain in the quarter with a 21.3% rise to $169.6 million, on volume increases in Brazil and across the region, partially offset by lower selling prices. Europe is Adama’s biggest selling region by far, but it was also where the company recorded its only sales decline. It posted $336.1 million, down 1.3%, reflecting the short winter, which shifted the timing of some sales to the first quarter, followed by unseasonably cold and wet weather during the first half of the second quarter.

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North American sales rose 16.4% to $175.5 million on higher sales volumes. In Asia Pacific and Africa, sales climbed 14.5% to $165.2 million as sales volumes increased particularly in India, despite drought conditions in a number of Asian countries.

During the quarter, Adama began rolling out its new brand globally — a process that is expected to strengthen its commercial platform, which is focused on supporting local farmer needs with global expertise and quality solutions. Additionally, the company has begun to implement a new organizational structure to focus on putting into motion its growth strategy alongside the advancement of its strategic initiatives in China.

The changes include the division of the company’s sales regions into focused clusters, the addition of, among others, cluster managers to the management team, and the establishment of an executive committee from within management to oversee ongoing performance.

Adama also said it continues to “evaluate business opportunities in China” with the potential to support the creation of a significant commercial, operational, and R&D infrastructure in the country, in a way that will contribute to the company’s presence in the Chinese market, strengthen its presence in the Asia-Pacific region and enhance its global capabilities.

 

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