Makhteshim Agan sales up by 20% in Q2

Date:08-09-2011

Makhteshim Agan’s sales for the second quarter of 2011 totaled $723.1 million, their highest level for a second quarter in MAI’s history, reflecting strong revenue growth for each of the Group’s regions. This is a 20.6% increase compared with $600.9 million recorded in the second quarter of 2010, reflecting a 15% rise in overall sales volumes together with the consolidation, for the first time, of the Group’s activities in Korea and Mexico. In addition, sales were enhanced by the weakening of the US dollar, which increased the value of the Group’s European and Australian sales as expressed in US dollar terms. Sales for the first half of 2011 totaled $1,503.6 million, a 13.6% increase compared with $1,324.1 million for the first half of 2010. “The achievement of strong revenues is a product of the effective measures the Company has taken during the last 18 months, which have culminated in significantly improved profitability and record sales.” MAI’s Chairman of the Board, Mr. Ami Erel commented.

EBITDA for the second quarter of 2011 totaled $119.4 million, or 16.5% of sales, a 68.4% increase compared with $70.9 million, or 11.8% of sales, for the second quarter of 2010. For the first half of 2011, EBITDA totaled $262.7 million compared with $203.6 million for the first half of 2010.

Net income for the second quarter of 2011 increased by 266.9% to $45.4 million (6.3% of sales) from $12.4 million (2.1% of sales) in the second quarter of 2010. For the first half of 2011, net income totaled $137.2 million (9.1% of sales), an increase of 64.7% compared with $83.3 million (6.3% of sales) for the first half of 2010.

Makhteshim Agan’s sales results ($ million)
	Q2 2011	Q2 2010	%change	H1 2011	H1 2010	%change
Sales	723.1	600.9	+20.3	1,503.6	1,324.1	+13.6
Gross profit	238.5	175.1	+36.2	494.0	407.9	+21.1
Net income	45.4	12.4	+266.1	137.2	83.3	+64.7
EBITDA1	119.4	70.9	+68.4	262.7	203.6	+29.0
EBIT2	87.1	44.1	+97.5	199.2	150.6	+32.3
1 earnings before interest, tax, depreciation and amortisation; 2 earnings before interest and tax.

Sales by region

Despite challenging weather conditions, the Group’s North American sales increased by 19.5% to $151.1 million, demonstrating the success of the Group’s strategic initiatives, including its partnership with Monsanto and the launch of fipronil based products in the US.
 
Sales of the Group’s Asia Pacific & Africa region grew by 33.5% $114 million, driven by increased sales volumes in India and Australia, strong momentum in the activities of the newly-integrated JK Korea, and the appreciation of the Australian currency.
 
Sales in European region grew by 20.9% to $315.9 million, driven by significant market share gains, higher volume sales and the strengthening of the Euro as compared to the dollar. This was offset partially by lower selling prices in Eastern Europe.
 
Sales of the Group’s Latin American region grew by 9.1% to $114.6 million, reflecting the integration of the Mexico acquisition, offset partially by the continued implementation of the Group’s restructuring of its Brazilian operations, which led to more selective sales and therefore reduced overall sales quantities. 

Makhteshim Agan’s sales results by region ($ million)
Region	Q2 2011	Q2 2010	% change	H1 2011	H1 2010	% change
Europe	315.9	261.2	+20.9	704.8	633.7	+11.2
Latin America	114.6	105.1	+9.1	228.1	221.7	+2.9
North America	151.1	126.4	+19.5	278.0	246.0	+13.0
Asia Pacific & Africa	114.0	85.4	+33.5	240.7	179.2	+34.3
Israel	27.5	22.9	+20.1	52.0	43.5	+19.5
Total	723.1	600.9	+20.3	1,503.6	1,324.1	+13.6

Mr. Erez Vigodman, President and CEO of Makhteshim Agan, said, "Our top and bottom line results in the second quarter and first six months of 2011 are clear reflection of the progress we have made with our organization-wide streamlining initiative. Our change plan has been transforming MAI, solidifying our competitive position in a growing market place, creating the platform for continued geographical expansion and profitable growth. The potential business combination with ChemChina, which we have been accommodating and progressing, will complement the overall strategic and operational transformation of MAI.
 
Our top line growth was driven by strong performance of each of our regions enabling us to gain market share in key geographies while fully integrating our recent acquisitions in Mexico and Korea.
 
We remain committed to deliver simple, reliable and effective solutions to farmers around the world. During the last six months we continued to expand and differentiate our offering through the acquisition of diuron, the launch of fipronil-based products in the U.S and of over 25 new products across the globe. By coupling solutions with continued focus on our operations we were able to improve our profitability."