Adama releases Q2024 XNUMX results

Adama Ltd. today released its financial results for the third quarter and first nine months of 2024, ended September 30, 2024. According to the document, the “Fight Forward” transformation plan is already showing benefits with the improvement of the business quality.

Gaël Hili, Chairman and CEO of Adama, highlighted that the financial results are an indication of the company’s steady recovery. “Once again, we demonstrated marked improvements in our business quality and cash generation. Our decision to disengage from certain commoditized generics, coupled with our continued focus on higher-value differentiated products, led to an improvement in gross margin for the third consecutive quarter and in EBITDA and EBITDA margin for the second consecutive quarter. The fierce competition in the market, particularly in such commoditized generics, validates that this was the right decision for Adama,” he said.

Highlights of the third quarter of 2024

The document indicates that Adama's sales fell 10% to US$929 million (-11% in RMB terms; -6% in CER terms), mainly reflecting a 7% decrease in prices despite a 1% increase in volumes. 

Adjusted gross profit increased 14% to $225 million (24,2% margin) from $198 million (19,2% margin) in the third quarter of 2023. Adjusted gross profit adjusted EBITDA increased 125% to $80 million (8,6% margin) from $35 million (3,4% margin) in the third quarter of 2023. 

While the adjusted net loss was $78 million, and the reported net loss was $133 million. There was a $150 million improvement in free cash flow, with $128 million in Q2024 22 versus -$2023 million in QXNUMX XNUMX.

“With three quarters of progressive improvements under our belt, I am confident that our Fight Forward transformation plan is putting the company on the right path for future success, and I plan to accelerate its implementation. In the coming months, we will implement our evolved operating model with the goal of deploying resources in countries where we can best drive profitable growth, enhancing our commercial operations, functional excellence and customer engagement in key markets, and creating greater cross-company efficiencies,” he said. 

Highlights of the first nine months of 2024

The document indicates a 14% drop in sales during the period, to US$3.028 million (-13% in RMB terms and -12% in CER terms), mainly reflecting a 9% reduction in prices and a 3% reduction in volumes. Adjusted gross profit was US$782 million (25,8% margin), against US$815 million (23,1% margin) in the first nine months of 2023.

Adjusted EBITDA increased 6% to US$332 million (11,0% margin), compared to US$312 million (8,9% margin) in the same period of 2023. Adjusted net loss was US$149 million, while the reported net loss was US$259 million. There was also an improvement of US$339 million in operating cash flow, with US$402 million in the first nine months of 2024, compared to US$63 million in the same period of 2023. 

Regarding free cash flow, an improvement of US$ 455 million was recorded, with US$ 179 million recorded in nine months of 2024, against - US$ 276 million in 2023.

“I also strongly believe that Adama’s portfolio strategy focused on delivering innovative products with attractive ROI to farmers is exactly the right fit for the challenging market conditions we see, especially as farmers’ purchasing power continues to be impacted across the globe,” said the CEO.