Makhteshim Agan sales up 8.4% in Q2 of 2012

Sales of Makhteshim Agan for the second quarter of 2012 ended June 30 totaled $783 million, up 8.4% (11.2% excluding currency effect) compared with $723 million in the second quarter of 2011. The increase reflected a rise in quantities sold, particularly in the Americas and in Asia Pacific together with higher selling prices that compensated for higher costs of raw materials, offset partially by the negative impact of fluctuating exchange rates. For the six-month period, sales totaled $1,612 million; an increase of 7.3% (8.5% excluding currency effect) compared with last year.

Gross profit for the second quarter totaled $254.6 million, up 6.8% compared with $238.5 million for the same period in 2011. The increased gross profit reflected mainly the rise in quantities sold, countered by erosion of some of the dollar exchange rates of currencies in which the Company operates, resulting in a slightly lower gross margin. For the six-month period, gross profit totaled $541.6 million (33.6% of sales), up by 10%.

Operating profit for the second quarter grew by 16% to $100.8 million. For the six-month period, operating profit increased by 13% to $225.8 million. Net income for the second quarter of 2012 was $42.0 million, or 5.4% of sales, compared with $45.5 million for the second quarter of 2011. The reduction reflected the 51% rise in taxes paid during the second quarter of 2012 as compared with the parallel period of 2011, during which the company recorded some tax gains. For the six-month period, net profit totaled $131.3 million, or 8.1% of sales, compared with $137.2 million, or 9.1% of sales, in the first half of 2011. The reduction reflected the more than tripling of the period’s taxes on income as compared with the first half of 2011.

EBITDA for the second quarter of 2012 rose by 14% to $136.1 million. For the six-month period, EBITDA totaled $299.3 million (18.6% of sales), compared with $262.7 million (17.5% of sales) in the first half of 2011.

Makhteshim Agan’s sales results ($ million)
Q2 ended June 30	Q2 2012	Q2 2011	%change	H1 2012	H1 2011	%change
Sales	783.4	723.0	+8.4	1,611.5	1,503.6	+7.3
Gross profit	254.6	238.5	+6.8	541.6	494.0	+9.6
Net income	42.0	45.5	-7.6	131.3	137.2	-4.3
EBITDA1	136.1	119.4	+14.0	299.3	262.7	+13.9
EBIT2	100.8	87.1	+15.7	225.8	199.2	+13.3
1 earnings before interest, tax, depreciation and amortisation; 2 earnings before interest and tax.

Sales by region

The quarter’s strongest sales growth was delivered by Latin America, whose revenues increased by 19.8% to $137.3 million compared with $114.6 million in the second quarter of 2011. This reflected the continued improvement in the Company’s Brazilian operations; this is in spite of draught conditions in Argentina.
 
Sales in North America increased by 12.3% to $169.6 million, reflecting a rise in quantities sold, partially offset by the erosion of selling prices as compared with the previous-year period.

Sales in Asia Pacific and Asia increased by 12.0% to $127.6 million despite the challenging economic environment in India, reflecting the contribution of continuous product introductions and solid business performance in Australia, which offset the erosion in the value of the Indian rupee and other local selling currencies.

Sales in Europe increased slightly by 1.5% to $320.6 million despite the erosion of European currency rates, reflecting increased sales to North European countries.

Makhteshim Agan’s sales results by region ($ million)
Q2 ended June 30	Q2 2012	Q2 2011	%change	H1 2012	H1 2011	%change
Europe	320.6	315.9	+1.5	744.2	704.8	+5.6
Latin America	137.3	114.6	+19.8	244.7	228.1	+7.3
North America	169.6	151.1	+12.3	301.5	278.0	+8.4
Asia Pacific & Africa	127.6	114.0	+12.0	268.8	240.7	+11.7
Israel	28.3	27.5	+2.8	52.3	52.0	+0.6
Total	783.4	723.0	+8.4	1,611.5	1,503.6	+7.3

Mr. Erez Vigodman, President and CEO of Makhteshim Agan concluded, “We have recently announced a number of organizational changes aimed at enhancing our commercial focus, and continue to conduct our ChemChina asset assessment in line with our business integration plan. I am confident that these and other measures that we have been carrying out are positioning us to take the business to the next level in line with the new strategic direction we have set for ourselves and to accomplish our long term objectives.