Brazil Lifts ADAMA Quarterly Sales to New Record
ADAMA expects to deliver record fourth-quarter sales with double-digit growth, and also double-digit growth in sales over the full year.
In the fourth quarter, ADAMA said double-digit revenue growth was driven by a combination of significant business growth as well as higher prices, somewhat offset by adverse currency headwinds. Especially noteworthy performance was delivered in Brazil, driven by the recent launch of its three-way combination CRONNOS® fungicide, as well as in other parts of Latin America, North America and Northern Europe.
It also saw continued improvement in portfolio mix, somewhat offset by the impact of increased procurement costs, leading to double-digit growth in gross profit in the quarter. Tight management of operating expenses ensured that the company delivered a strong increase in adjusted Operating Profit and EBITDA in the quarter, both in absolute terms and as a percentage of sales.
Reported net income in 2018 is forecast at between $372.7 million and $392.7 million, compared with $225.8 million in 2017.
When compared to the reported net profit in 2017, the increase in the estimated reported net profit in 2018 reflects the recognition of a one-time profit in the first quarter of 2018 on the divestiture of several crop protection products in Europe in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina.
The proceeds of this divestiture, net of taxes and transaction expenses, were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature and economic value. Partially offsetting this one-time profit, the company’s reported earnings will be impacted by certain one-time/non-cash items, including the legacy amortization of the 2011 PPA for the acquisition of Adama Agricultural Solutions Ltd. by ChemChina; the amortization of assets transferred from Syngenta, the value of which was written-up, related to the 2017 ChemChina acquisition of Syngenta; Sanonda facility relocation and related non-cash items; and the recording of historical tax expenses, the majority thereof already provisioned, resulting from the finalization of tax assessments relating to periods concluding in 2016.