ADAMA(SZ:200553)2023-04-24 16:00Financial Performance - In Q1 2023, the company's sales revenue was $1.259 billion, a decrease of 11% year-over-year, with a 4% decline in RMB terms and a 7% decline at constant exchange rates[11]. - Gross profit for Q1 2023 was $310 million, down 16% from $368 million in Q1 2022, resulting in a gross margin of 24.6% compared to 25.9% in the previous year[3]. - EBITDA for Q1 2023 was $166 million, an 18% decrease from $203 million in Q1 2022, with an EBITDA margin of 13.2%[5]. - The net profit for Q1 2023 was $12 million, an 82% decline from $67 million in Q1 2022, leading to a net profit margin of 1.0%[3]. - The company experienced a significant drop in EBIT, reporting $92 million in Q1 2023, down 26% from $124 million in Q1 2022, with an EBIT margin of 7.3%[3]. - Adjusted net profit for Q1 2023 was $22 million, down 70.7% from $75 million in Q1 2022, representing 1.7% of revenue[28]. - Adjusted EBITDA for Q1 2023 was $165 million, a decline of 17.9% from $201 million in Q1 2022, accounting for 13.1% of revenue[28]. - The company's net profit attributable to shareholders for Q1 2023 was $12 million, with a net profit margin of 1.0%, down from $67 million and 4.7% in the previous year[18]. - The company reported a significant increase in the average exchange rate of USD/CNY, which rose by 8.2% to 6.872 in Q1 2023 compared to 6.348 in Q1 2022[38]. - The company incurred financial expenses of $81 million in Q1 2023, up from $53 million in Q1 2022[28]. - The total adjustments to net profit amounted to $9.4 million in Q1 2023, compared to $7.7 million in Q1 2022, reflecting a 22.1% increase[35]. - The EBITDA adjustments totaled $(0.5) million in Q1 2023, compared to $(2.4) million in Q1 2022, indicating an improvement in operational efficiency[35]. - The net profit attributable to shareholders was adjusted to $12.2 million in Q1 2023, down from $67.3 million in Q1 2022, marking a decline of 81.9%[35]. Sales Performance - The company reported a 23% decline in sales in the China market, with revenue of $182 million in Q1 2023 compared to $237 million in Q1 2022[12]. - The North American region saw a 26% decrease in sales, with revenue of $211 million in Q1 2023 compared to $284 million in Q1 2022[12]. - Sales in the crop protection products segment for Q1 2023 were $1.146 billion, accounting for 91.1% of total sales, down from $1.271 billion in Q1 2022[20]. - The company's sales of herbicides in Q1 2023 were $575 million, representing 45.7% of total sales, a decrease from $659 million and 46.4% in the same period last year[22]. - In Q1 2023, the company's sales in Europe, Africa, and the Middle East increased, particularly in the UK and Germany, despite challenges such as high channel inventory and adverse weather conditions[13]. - North American sales decreased year-over-year due to unfavorable weather and inflation impacting consumer demand, with agricultural sales also declining due to high channel inventory[13]. - In Latin America, Brazil saw a slight increase in sales, while other countries like Argentina and Ecuador experienced declines due to adverse weather conditions[13]. Operational Insights - The company launched 16 new differentiated products in Q1 2023, including insecticides and herbicides based on proprietary technologies[9]. - The company anticipates improved product demand as inventory levels are expected to decrease during the busy agricultural season in Latin America and India[3]. - The company is focusing on expanding its product line through its "Formulation Wins" strategy, which includes the development of new proprietary formulation technologies[9]. - The company expects continued improvements in operational performance as the facility upgrades in China are completed, leading to a recovery in production capacity[37]. Cash Flow and Working Capital - As of March 31, 2023, working capital increased to $3.148 billion from $2.695 billion year-over-year, primarily due to higher inventory levels[19]. - The first quarter saw a cash flow consumption of $423 million from operating activities, compared to $286 million in the same period last year, reflecting typical seasonal characteristics[19]. - Cash flow from operating activities for Q1 2023 was $(425) million, worsening from $(286) million in Q1 2022[31]. - Free cash flow for Q1 2023 was $(542) million, compared to $(386) million in Q1 2022[31]. - The company plans to continue investing in new fixed and intangible assets, with cash outflows of $85 million for Q1 2023[31]. Balance Sheet Highlights - Total assets as of March 31, 2023, were $8,588 million, an increase from $8,441 million as of March 31, 2022[29]. - Total liabilities as of March 31, 2023, were $5,249 million, compared to $5,078 million as of March 31, 2022[29]. - The company reported a total equity of $3,339 million as of March 31, 2023, slightly down from $3,364 million as of March 31, 2022[29].