Adama Ltd. today released its financial results for the first quarter ending March 31, 2024. In these first few months, prices of key agricultural crops continued to decline, and global supply showed signs of improvement. Despite still being above average historical levels, current prices have negatively impacted farmers' income compared to previous years. Farmer demand, however, is expected to remain stable under current conditions.
First quarter revenues decreased approximately 16% to $1,057 billion, featuring a 10% reduction in pricing and a 5% decline in volumes.
Steve Hawkins, president and CEO of Adama, highlighted that "market conditions remain slow in early 2024", which has led the company to focus on implementing a transformation plan that aims to improve the quality of the business.
The company's transformation plan aims to deliver profit and cash flow targets over the next three years (2024-2026). Its main aspects include commercial excellence, operational efficiency and cash generation, with a restructuring of the leadership team and a refocus on the portfolio to win in value innovation.
In Brazil, Adama's first-quarter sales reflected a challenging crop protection market, affected by unfavorable weather conditions and a "wait and see" approach due to strong competition, especially in "commoditized products."
Despite the initial challenges of 2024, Adama expressed confidence that the transformation plan will bring gradual benefits, helping the company to improve its gross margin and continue focusing on cash generation, which showed a significant improvement in the typically negative cash flow in the first quarter due to seasonality.
"While we expect the benefits of this plan to be gradual, we continue to respond to the current market situation," concludes Hawkins, indicating cautious optimism for the company's future on the global stage.
Receive the latest agriculture news by email
