MAI (ADAMA) agchem sales up 9% in 2013

ChemChina subsidiary Makhteshim-Agan Industries (MAI), rebranding global business as "ADAMA", recorded a 13.9% increase in agrochemical sales to $ 607.7 million in the fourth quarter ended Dec 31, 2013. In constant currency terms, sales for the quarter increased by 14.2% year-over-year.The total sales grew by 13.1% to $579.5 million in this quarter. The growth mainly came from higher quantities sold and selling prices, partially offset by currency effects.

Makhteshim Agan’s sales results ($ million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	% change	Full year 2013	Full year  2012	% change
Sales	655.7	579.5	13.1	3,076.4	2,834.5	8.5
-Agchem	607.7	533.6	+13.9	2,876.2	2,648.7	+8.6
EBITDA1	51.5	41.0	25.5	466.0	429.9	8.4
EBIT2	11.1	3.0	+265.5	309.0	281.6	+6.9
Net income (loss)	(29.1)	(21.9)	32.7	127.2	122.5	3.9
1 earnings before interest, tax, depreciation and amortization; 2 earnings before interest and tax.

For the full year of 2013, agrochemical sales increased by 8.6% to $2876.2 million. The total sales improved by 8.5% to $3,076.4 million. In constant currency terms, annual sales increased by 10.0% compared with 2012.

Gross profit for the quarter advanced by 17.2% to $186 million. Annual profit rose by 7.6% to $968.1 million. The increase reflected higher quantities sold, an improved product mix and a rise in selling prices, offset partially by increased raw material prices, production costs and adverse currency effects.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter rose by 25.5%to $51.5 million. For the full year of 2013, EBITDA achieved a 8.4% rise to $466.0 million.

Operating expenses improved slightly, falling from 26.9% of sales in the final three months of 2012 to 26.7% at $174.9 million in the fourth quarter of last year. For the full year, expenses accounted for 21.4% of sales (21.8% in 2012) at $659.1 million.

Operating Expenses for the quarter totaled $174.9 million (26.7% of sales) compared with $155.7 million (26.9% of sales) for the fourth quarter of 2012. For the full-year period, operating expenses totaled $659.1 million (21.4% of sales) compared with $618.0 million (21.8% of sales) in 2012. The increase reflects the Company’s strategic decision to increase its investments in research, development and branding.

Chen Lichtenstein, ADAMA’s President and CEO, commented, “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. In addition, we delivered continued positive results in Latin America, benefiting from positive market conditions in the region.

Sales by regions

Latin America achieved the strongest sales growth with a 19.8% increase for the fourth quarter and a 17.8% sales increase for the year as a whole. This reflected strong performance mainly in Brazil. In addition, the quarterly sales for Latin America included the contribution of new operations in Chile for the first time.

Makhteshim Agan’s sales results by region ($ million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	% change	Full year 2013	Full year  2012	% change
Europe	136.2	136.6	-0.2%	1,140.1	1,092.4	4.4%
Latin America	251.8	210.1	19.8%	757.5	643.0	17.8%
North America	126.0	107.6	17.1%	516.2	497.5	3.7%
Asia Pacific, Africa & the Middle East	114.2	98.3	16.2%	553.2	497.3	11.2%
Israel	27.5	27.0	2.1%	109.2	104.4	4.6%

Europe annual sales rose by 4.4%, while its fourth quarter sales remained stable. The Company’s European business was characterized by positive business momentum.

North America sales increased by 3.7% for the year and 17.1% for the quarter.

Sales in Asia Pacific, Africa and the Middle East increased by 11.2% for the year and 16.2% for the quarter, reflecting increased quantities sold and selling prices. Regional sales were negatively impacted by the strengthening of local currencies in the region.