ADAMA to Post Lower Profit, Sales After Site Disruption
ADAMA Ltd. will report a lower profit and sales in the first quarter from a year ago, due in part to a disruption at its old site, Jingzhou, which incurred about $10 million in costs.
The company expects net income to total between $50 million and $58 million in the quarter, down from $320 million in the same period a year earlier, due to the recognition last year of an approximately $247 million one-time net income from the divestiture of several products in Europe in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina last year, and other related impacts.
Adjusted net income is forecast at between $76 million and $84 million, compared with $84 million in 2018.
It expects to post more than $1 billion in sales, almost matching last year’s level.
The Jingzhou old site is gradually resuming operation, following its connection via pipeline to the state-of-the-art wastewater treatment facility installed at the new and already operational site. As a consequence of the disruption, the company lacked sufficient product to fulfill demand. ADAMA also noted the harsh winter in North America and continued supply constraints globally, as well as softer currencies.
Strong contribution of Latin America, India, Middle East and Africa, as well as China and new joiners Bonide and Anpon, offset weather- and supply-related delays in North America, Europe and Asia-Pacific.
In addition, ADAMA delivered marked price increases across all regions.
Adjusted net income for the quarter, as well as other profit metrics, are expected to be in-line with Q1 2018’s robust levels, which laid the foundation for a very strong year.