ADAMA LTD.
THIRD QUARTER REPORT 2022
ADAMA Ltd. (hereinafter referred to as “the Company”) is a global leader in crop protection,providing solutions to farmers across the world to combat weeds, insects and disease.ADAMA has one of the widest and most diverse portfolios of active ingredients in the world,state-of-the art R&D, manufacturing and formulation facilities, together with a culture thatempowers our people in markets around the world to listen to farmers and ideate from thefield. This uniquely positions ADAMA to offer a vast array of distinctive mixtures, formulationsand high-quality differentiated products, delivering solutions that meet local farmer andcustomer needs in over 100 countries globally.Please see important additional information and further details included in the Annex.
October 2022
Stock Code: 000553(200553) Stock Abbreviation: ADAMA A(B) Announcement No.2022-29The Company and all members of its board of directors hereby confirm that allinformation disclosed herein is true, accurate and complete with no false or misleadingstatement or material omission.
Important NoticeThe Company’s Board of Directors, Board of Supervisors, directors, supervisors andsenior managers confirm that the content of the Report is true, accurate and completeand contains no false statements, misleading presentations or material omissions,and assume joint and several legal liability arising therefrom.Ignacio Dominguez, the person leading the Company (President and Chief ExecutiveOfficer) as well as its legal representative, and Shahar Florentz, the person leadingthe accounting function (Chief Financial Officer), hereby assert and confirm thetruthfulness, accuracy and completeness of the Financial Report.The Third Quarter Report has not been audited.This Report has been prepared in both Chinese and English. Should there be anydiscrepancy between the two versions, the Chinese version shall prevail.
I. Main accounting and financial results
1. Whether the Company performs any retroactive adjustments to, or restatements of, its accounting data of last year dueto change in accounting policies or correction of accounting errors
√ Yes □ No
| July - September 2022 | July - September 2021 | +/- (%) | January - September 2022 | January - September 2021 | +/- (%) | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | After adjustment | |||
| Operating revenues (RMB’000) | 9,281,986 | 7,424,584 | 7,424,584 | 25.02% | 28,077,814 | 22,488,364 | 22,488,364 | 24.85% |
| Net profit attributable to shareholders of the Company (RMB’000) | 36,046 | (370,952) | (370,952) | 109.72% | 768,144 | (3,916) | (3,916) | 19,715.53% |
| Net profit attributable to shareholders of the Company excluding non-recurring profit and loss (RMB’000) | 4,353 | (384,112) | (384,112) | 101.13% | 659,376 | (61,989) | (61,989) | 1,163.70% |
| Net cash flow from operating activities (RMB’000) | (212,839) | 690,694 | 690,694 | -130.82% | (1,558,700) | 2,181,987 | 2,181,987 | -171.43% |
| Basic EPS (RMB/share) | 0.0155 | (0.1592) | (0.1592) | 109.72% | 0.3297 | (0.0017) | (0.0017) | 19,494.25% |
| Diluted EPS (RMB/share) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Weighted average return on net assets | 0.16% | -1.73% | -1.73% | 1.89% | 3.44% | -0.02% | -0.02% | 3.46% |
| End of Reporting Period | End of last year | +/- (%) | ||||||
| Before adjustment | After adjustment | After adjustment | ||||||
| Total assets (RMB’000) | 59,206,445 | 50,235,308 | 50,235,308 | 17.86% | ||||
| Net assets attributable to shareholders (RMB’000) | 23,570,005 | 21,075,083 | 21,075,083 | 11.84% | ||||
Reason for retroactive adjustments: According to ASBE 22 - Financial Instruments Recognition and Measurement,starting from 2022 the Group recorded the gain or loss from the disposal of derivative instruments in the “Gain(loss) fromChanges in Fair Value”. Before 2022, the Group recorded the abovementioned gain of loss in the “Investment income,net”. The Company reclassified the “Gain(loss) from Changes in Fair Value” and the “Investment income, net” in thecorresponding period in 2021. Such change has no impact on the operating results or net assets.
2. Non-Recurring profit/loss
√ Applicable □ Not applicable
Unit: RMB’000
| Item | July - September 2022 | January - September 2022 | Note |
| Gains/losses on the disposal of non-current assets (including the offset part of asset impairment provisions) | 2,490 | 70,460 | |
| Government grants recognized through profit or loss (excluding government grants closely related to business of the Company and given at a fixed quota or amount in accordance with government’s uniform standards) | 5,952 | 30,786 | |
| Recovery or reversal of provision for bad debts which is assessed individually during the years | 24,153 | 41,353 | |
| Other non-operating income and expenses other than the above | 3,958 | (6,282) | |
| Other profit or loss that meets the definition of non-recurring profit or loss | (7) | (5,852) | Mainly provision for early retirement plan of employees at the Company’s Israeli manufacturing facilities. |
| Less: Income tax effects | 4,853 | 21,697 | |
| Total | 31,693 | 108,768 |
Explanation of other profit or loss that meets the definition of non-recurring profit or loss
√ Applicable □ Not applicable
Mainly provisions for early retirement plan of employees at the Company’s Israeli manufacturing facilities as explainedabove in the note.
Explanation of why the Company classified an item as non-recurring profit/loss according to the definition in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering their Securities to the Public. Non-recurring Profitand Loss, and reclassified any non-recurring profit/loss items are given as examples in the said explanatory announcementto recurrent profit/loss
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons forthe changes
√ Applicable □ Not applicable
General Crop Protection Market Environment
Preliminary projections estimate the global crop protection industry to increase by 14.5% in 2022
. High crop pricesincentivized another year of increases in global planted areas, which drove higher crop protection volumes as well as byhigher pricing.Crop prices remain elevated above historic averages despite decreasing somewhat in the last two quarters, after reachinghistorically high levels in Q1 2022. Prices are expected to remain elevated into 2023, supported by key fundamentalsincluding very low stocks, unfavorable weather conditions in the Americas and parts of Europe and continued supplydisruptions exacerbated by the conflict in Ukraine as well as the energy crisis in Europe. However, weaker economicconditions and broad-based monetary tightening could weigh on consumer demand, softening prices further.Farmer profitability continues to face pressures from high production costs, mainly from high fertilizer prices, driven by asurge in energy costs and the application of international economic sanctions to Russia and Belarus (both large fertilizerexporters), as well as supply disruption and tight availability caused by the conflict in Ukraine. Despite this, farming activitiesare nevertheless still very profitable in most regions.Crude oil prices continued to decline in the third quarter of 2022 from the peak levels reached in the first quarter of 2022,mainly due to concerns regarding the global economic outlook. Prices are, however, expected to remain elevated into thefourth quarter of 2022 and beyond, due to low global inventory levels, uncertainty of Russia’s oil exports as well as theOPEC+ decision to further limit oil production.European gas prices and indirectly Asian spot LNG prices reached record highs in the third quarter of 2022 following thesharp decline in Russian gas flows to Europe and a tight energy market. Meanwhile, prices in the United States reachedtheir highest summer levels since 2008.Global container freight rates have dropped significantly in the third quarter of 2022, driven by a further weakening indemand in the light of high inflation and slower-than-expected economic growth, easing port congestion. A large amountof scheduled new deliveries of container vessel capacity, starting from the end of 2022, is expected to further soften portcongestion and put container shipping rates under pressure.Prices for raw materials, intermediates and active ingredients reached peak levels towards the end of 2021; however,since then there has been a general softening of prices in China and an increase in prices of such products in othergeographies. With strong global crop protection demand, and supply shortages driven by the energy crisis in Europe andthe ongoing conflict in Ukraine, as well as the ongoing "Zero COVID" policy in China, overall prices are expected to remainabove levels in recent years. In China, an increase in production capacity and an ease in logistic disruptions led to softeningof prices of many key raw materials, intermediates and active ingredients from China. In other geographies cost inflation,energy prices, supply shortages and logistic challenges are driving procurement prices upward and impacting availabilityof raw materials and intermediates.
Source: AgbioInvestor-Quarterly-Briefing-Service-PLUS_Q3-2022
| January - September 2022 (000’RMB) | Same period last year (000’RMB) | +/-% | January - September 2022 (000’USD) | Same period last year (000’USD) | +/-% |
Operating income(Revenues)
| Operating income (Revenues) | 28,077,814 | 22,488,364 | 24.85% | 4,257,997 | 3,475,992 | 22.50% |
Cost of goods sold
| Cost of goods sold | 20,838,317 | 16,143,819 | 29.08% | 3,159,552 | 2,495,316 | 26.62% |
Sales & Marketing expenses
| Sales & Marketing expenses | 3,231,093 | 3,725,486 | -13.27% | 489,682 | 575,816 | -14.96% |
General & Administrativeexpenses
| General & Administrative expenses | 972,450 | 1,020,945 | -4.75% | 147,192 | 157,812 | -6.73% |
R&D expenses
| R&D expenses | 415,855 | 340,888 | 21.99% | 63,027 | 52,692 | 19.61% |
Financial Expenses
| Financial Expenses | 132,048 | 1,107,975 | -88.08% | 15,496 | 171,273 | -90.95% |
Gain (loss) from Changesin Fair Value
| Gain (loss) from Changes in Fair Value | (1,364,883) | 173,806 | -885.29% | (210,040) | 26,571 | -890.49% |
Total Net Financial Expenses
| Total Net Financial Expenses | 1,496,931 | 934,169 | 60.24% | 225,536 | 144,702 | 55.86% |
Total profits
| Total profits | 901,110 | 244,550 | 268.48% | 138,853 | 37,797 | 267.37% |
Income tax expenses
| Income tax expenses | 132,966 | 246,269 | -46.01% | 20,121 | 38,054 | -47.13% |
Net profit attributable toshareholders of the Company
| Net profit attributable to shareholders of the Company | 768,144 | (3,916) | 19,715.53% | 118,732 | (595) | 20,054.96% |
EBITDA
| EBITDA | 3,983,221 | 2,619,409 | 52.07% | 604,598 | 404,900 | 49.32% |
| Q3 2022 (000’RMB) | Q3 2021 (000’RMB) | +/-% | Q3 2022 (000’USD) | Q3 2021 (000’USD) | +/-% |
Operating income (Revenues)
| Operating income (Revenues) | 9,281,986 | 7,424,584 | 25.02% | 1,359,044 | 1,147,469 | 18.44% |
Cost of goods sold
| Cost of goods sold | 7,015,562 | 5,437,109 | 29.03% | 1,027,235 | 840,308 | 22.25% |
Sales & Marketing expenses
| Sales & Marketing expenses | 1,072,004 | 1,219,050 | -12.06% | 156,961 | 188,399 | -16.69% |
General & Administrativeexpenses
| General & Administrative expenses | 330,137 | 449,138 | -26.50% | 48,309 | 69,421 | -30.41% |
R&D expenses
| R&D expenses | 141,117 | 113,948 | 23.84% | 20,664 | 17,612 | 17.33% |
Financial Expenses
| Financial Expenses | 570,273 | 659,185 | -13.49% | 83,487 | 101,884 | -18.06% |
Gain (loss) from Changes inFair Value
| Gain (loss) from Changes in Fair Value | (23,165) | 312,067 | -107.42% | (3,392) | 48,230 | -107.03% |
Total Net Financial Expenses
| Total Net Financial Expenses | 593,438 | 347,118 | 70.96% | 86,879 | 53,654 | 61.92% |
Total profits
| Total profits | 67,736 | (175,764) | 138.54% | 9,918 | (27,178) | 136.49% |
Income tax expenses
| Income tax expenses | 31,690 | 195,188 | -83.76% | 4,639 | 30,164 | -84.62% |
Net profit attributable toshareholders of the Company
| Net profit attributable to shareholders of the Company | 36,046 | (370,952) | 109.72% | 5,279 | (57,342) | 109.21% |
EBITDA
| EBITDA | 1,211,159 | 666,988 | 81.59% | 177,324 | 103,080 | 72.03% |
Note: Since the functional currency of main overseas subsidiaries is the USD, and the Company’s management review ofthe Company’s performance is based on the USD results, following explanations and analysis are based on USD-denominated numbers as listed above.
Analysis of Financial Highlights
(1) Revenues
Revenues in the third quarter grew by 18% (+25% in RMB terms; +24% in constant exchange rates (CER) terms)to $1,359 million, driven by a significant 18% increase in prices, a trend which started in the third quarter of 2021.The markedly higher prices were complemented by continued volume growth (+6%), and achieved despite supplychallenges in certain markets, and the adverse impact of exchange rate movements in many regions. The Companyachieved growth in sales in constant exchange rates across most regions.The accelerated growth in the quarter brought the first nine months sales to a record-high of $4,258 million, anincrease of 22% (+25% in RMB terms; +26% in CER terms) driven by a 19% increase in prices and an 7% growthin volume.
Regional Sales Performance
Europe: Increase in sales in the third quarter in constant exchange rate terms following distributors securing inventoryfor the autumn season in the UK, Czech Republic, France, Romania, Benelux and Baltics. This growth in constantexchange rate terms was achieved despite drought conditions across European countries such as Spain, France, Italyand Germany impacting demand, as well as supply issues, high channel inventories in some countries and a loss ofsales due to the Ukraine-Russia conflict.North America: In the US Ag market, sales decreased in the third quarter as the Company was negatively impacted bythe record low harvest of cotton as farmers abandoned non-irrigated fields due to extreme drought conditions acrossTexas and other southwest regions. Drought in California continued to impact demand. With the North American marketin the midst of harvest season, renewed demand for crop protection is expected in anticipation of the upcoming Q1 2023planting season.Very strong growth in sales in Canada enabled by the in-house production of cereal herbicide which supported the cerealseason before harvest.The Consumer & Professional business presented slower sales in the quarter. On the professional side, initial marketprice reductions, high levels of inventory in the channel and anticipation of decreases in costs of goods led to a slowdownin the market. On the consumer side, inflationary pressures are softening overall market demand.
| Q3 2022 $m | Q3 2021 $m | Change USD | 9M 2022 $m | 9M 2021 $m | Change USD |
Europe
| Europe | 211 | 220 | -4.0% | 861 | 825 | 4.3% |
North America
| North America | 174 | 183 | -4.7% | 736 | 628 | 17.2% |
Latin America
| Latin America | 548 | 372 | 47.3% | 1,161 | 820 | 41.7% |
Asia Pacific
| Asia Pacific | 238 | 194 | 22.4% | 958 | 677 | 41.4% |
Of which China
| Of which China | 156 | 121 | 28.9% | 605 | 380 | 59.1% |
India, Middle East & Africa
| India, Middle East & Africa | 187 | 178 | 5.3% | 542 | 525 | 3.1% |
Total
| Total | 1,359 | 1,147 | 18.4% | 4,258 | 3,476 | 22.5% |
Latin America: Strong growth in sales in Brazil, driven by prices and volume supporting the anticipated soybean, corn,sugarcane and cotton fourth quarter crop seasons; sales which in 2021 were also included in the fourth quarter.In other LATAM countries the higher sales reflect the strong demand across the region and were achieved despite someadverse weather conditions and inventory in the channel.Asia Pacific: The Company's strong growth in Asia Pacific was led by the sales of raw material, intermediates and finechemicals in China, driven by continued strong demand, in light of the strong global demand for crop protection andachieved despite an ease in fine chemical prices. The sales in China of ADAMA's branded portfolio also continued togrow nicely, despite the strong competition in the market.In the wider APAC region, growth in sales in the quarter was also achieved led by strong sales in Asian countries suchas Thailand, Korea and Indonesia due to favorable seasonal conditions and with the return of face-to-face business post-COVID. In the Pacific region fungicide sales grew nicely following favorable seasonal conditions. This growth wasachieved despite high channel inventories in parts of Asia.India, Middle East and Africa: Sales in the third quarter were led by India and represent the peak season for sales inthis country due to the monsoon season. Despite this, heavy rainfall negatively impacted insecticide and fungicide salesin certain crops and overall sales were also impacted by some supply constraints.
(2) Cost of Goods and Gross Profit
In the reported results, as of Q4 2021, following recent changes in the guidelines in China, the transportations coststo third parties and its marketing subsidiaries and opex idleness have been reclassified from operating expenses tocosts of goods (not impacting the operating results), while these expenses were not recorded in the cost of goodsin the third quarter and first nine months of 2021, but rather in the operating expenses.Additionally, certain extraordinary charges related largely to a temporary disruption of the production of certainproducts were adjusted in the third quarter and first nine months of 2021. These charges have significantly declinedsince Q1 2022, as the relocation and upgrade of the manufacturing Jingzhou site in China has been completed andis now at a high level of operation.Excluding the impact of the abovementioned items, the higher gross profit was mainly driven by the markedly higherprices, complemented by continued volume growth, which offset the higher logistic, procurement and productioncosts, as well as the negative impact of exchange rates.
(3) Operating Expenses:
Operating expenses include Sales and Marketing, General and Administration and R&D.Please refer to the explanation above regarding the reclassification of certain transportation costs and idleness fromoperating expenses to COGs.Additionally, the Company recorded certain non-operational charges within its operating expenses amounting toRMB 20 million ($ 3 million) in Q3 2022 in comparison to RMB 41 million ($ 6 million) in Q3 2021, and RMB 202million ($ 31 million) in 9M 2022 in comparison to RMB 210 million ($ 32 million) in 9M 2021, mainly as follows:
(i) Non-cash amortization charges in respect of Transfer assets received and written-up related to the 2017ChemChina-Syngenta acquisition. The proceeds from the Divestment of crop protection products in connection withthe approval by the EU Commission of the acquisition of Syngenta by ChemChina, net of taxes and transactionexpenses, were paid to Syngenta in return for the transfer of a portfolio of products in Europe of similar nature andeconomic value. Since the products acquired from Syngenta are of the same nature, and with the same neteconomic value as those divested, the Divestment and Transfer transactions had no net impact on the underlyingeconomic performance of the Company. These additional amortization charges will continue until 2032 but at a
reducing rate, yet will still be at a meaningful level until 2028; (ii) Charges related mainly to the non-cash amortizationof intangible assets created as part of the Purchase Price Allocation (PPA) on acquisitions, with no impact on theongoing performance of the companies acquired; and (iii) Incentive plans - share-based compensation.Excluding the impact of the abovementioned non-operational charges, the higher operating expenses in the quarterand first nine months reflect the strong growth of the business, higher transportation and logistics costs driven byboth an increase in freight costs and volumes transported, an increase in expenses attributed to company success-based employee compensation, the inclusion of a recent acquisition (in the nine-month period) and moderated bythe positive impact of exchange rates.In addition, in the first quarter of 2022 the Company recorded a doubtful debt provision for trade receivables inUkraine.
(4) Financial Expenses
“Financial Expenses” alone mainly reflect interest payments on corporate bonds and bank loans as well as foreignexchange gains/losses on the bonds and other monetary assets and liabilities before the Company carries out anyhedging.The impact of Financial Expenses (before hedging) is an expense of RMB 132 million ($15 million) for the ninemonths of 2022 compared with an expense of RMB 1,108 million ($171 million) for the corresponding period in2021.Given the global nature of its operational activities and the composition of its assets and liabilities, the Company, inthe ordinary course of its business, uses foreign currency derivatives (forwards and options) to hedge the cash flowrisks associated with existing monetary assets and liabilities that may be affected by exchange rate fluctuations.The impact of the hedging transactions which is recorded in “Gains/Losses from Changes in Fair Value” is a netloss of RMB 1,365 million ($210 million) in the nine months of 2022 compared with a net gain of RMB 174 million($27 million) in the corresponding period in 2021.The aggregate of Financial Expenses and Gains/Losses from Changes in Fair Value (hereinafter as “Total NetFinancial Expenses”), which more comprehensively reflects the financial expenses of the Company in supportingits main business and protecting its monetary assets/liabilities, amounts to RMB 1,497 million ($226 million) in thenine months of 2022 compared with RMB 934 million ($145 million) in the corresponding period in 2021.The higher financial expenses were mainly driven by the net effect of the high Israeli CPI on the ILS-denominated,CPI-linked bonds and higher hedging costs on exchange rates. In the nine-month period in 2022, these expensesalso included the valuation of put options attributed to minority stakes of a subsidiary fully consolidated from Q32021.
(5) Income Tax Expenses
In 2022, the Company recognized a higher deferred tax asset, related to inter-group sales, that led to a decline inthe tax on income.The significantly higher tax expenses in the third quarter of 2021 reflected the high growth in end-market sales,which incur higher tax rates, as well as the impact of a significantly weaker BRL on non-monetary tax assets.
Changes in main assets and liabilities
Unit: RMB’000
| Assets and liabilities | End of Reporting Period | End of last year | +/- (%) | Explanation |
| Cash at bank and on hand | 3,719,929 | 5,818,835 | -36.07% | Increasing payments for procurement and investments in CIP projects |
| Other receivables | 985,358 | 691,939 | 42.41% | Mainly increase in receivables in respect of securitization transaction |
| Inventories | 17,381,277 | 11,750,162 | 47.92% | Higher inventory levels mainly to support expected future sales, in light of anticipated supply shortages, logistic challenges and inventory costs increases. |
| Construction in progress | 2,956,191 | 2,143,400 | 37.92% | Changes are mainly due to investments as part of upgrade projects |
| Deferred tax assets | 1,313,913 | 723,075 | 81.71% | Mainly due to increase in inter-group sales |
| Short-term loans | 3,139,729 | 874,755 | 258.93% | Additional short-term financing |
| Bills payable | 1,131,105 | 493,376 | 129.26% | Due to higher level of procurement |
| Derivative financial assets | 356,162 | 243,316 | 46.38% | Changes due to revaluation of derivatives |
| Derivative financial liabilities | 803,087 | 176,206 | 355.77% | Changes due to revaluation of derivatives |
| Other payables | 1,975,130 | 1,342,188 | 47.16% | Mainly increase in accrued expenses for logistics and bond interests, and liabilities in respect of securitization transaction |
II. Information regarding the Shareholders
1. Total number of ordinary shareholders and preference shareholders who had resumed their voting
rights, and shareholdings of top 10 shareholders at the period-end
Unit: share
| Total number of ordinary shareholders at the end of the Reporting Period | 40,410 (the number of ordinary A share shareholders is 27,109; the number of B share shareholders is 13,301) | Total number of preference shareholders who had resumed their voting right at the end of the Reporting Period (if any) | 0 | |||
| Shareholdings of top 10 shareholders | ||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares held | Number of restricted shares held | ||
| Pledged or frozen shares | ||||||
| Status | Number | |||||
| Syngenta Group Co., Ltd. | State-owned legal person | 78.47% | 1,828,137,961 | -- | -- | -- |
| China Cinda Asset Management Co., Ltd. | State-owned legal person | 1.34% | 31,115,916 | -- | -- | -- |
| Portfolio No.503 of National Social Security Fund | Others | 0.60% | 14,000,000 | -- | -- | -- |
CITIC Securities-HuarongRuitong Equity Investment
| CITIC Securities-Huarong Ruitong Equity Investment | Others | 0.55% | 12,885,900 | -- | -- | -- |
| Management Co., Ltd.-CITIC Securities-Changfeng Asset Management Plan for Single Qualified Investor | |||||||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 0.43% | 9,932,401 | -- | -- | -- | |
| Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.2 Collective Asset Management Plan | Others | 0.28% | 6,500,000 | -- | -- | -- | |
| WANG Xiuqin | Domestic natural person | 0.27% | 6,316,461 | ||||
| Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.3 Collective Asset Management Plan | Others | 0.26% | 6,000,000 | -- | -- | -- |
China Merchants Bank –Tianhong CSI 500 ETF
| China Merchants Bank – Tianhong CSI 500 ETF | Others | 0.24% | 5,489,800 | -- | -- | -- | |||
| WU Feng | Domestic natural person | 0.21% | 5,001,015 | -- | -- | -- | |||
| Shareholdings of top 10 non-restricted shareholders | |||||||||
| Name of shareholder | Number of non-restricted shares held at the period-end | Type of shares | |||||||
| Type | Number | ||||||||
| Syngenta Group Co., Ltd. | 1,828,137,961 | RMB ordinary share | 1,828,137,961 | ||||||
| China Cinda Asset Management Co., Ltd. | 31,115,916 | RMB ordinary share | 31,115,916 | ||||||
| Portfolio No.503 of National Social Security Fund | 14,000,000 | RMB ordinary share | 14,000,000 | ||||||
| CITIC Securities-Huarong Ruitong Equity Investment Management Co., Ltd.-CITIC Securities-Changfeng Asset Management Plan for Single Qualified Investor | 12,885,900 | RMB ordinary share | 12,885,900 | ||||||
| Hong Kong Securities Clearing Company Limited | 9,932,401 | RMB ordinary share | 9,932,401 | ||||||
| Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.2 Collective Asset Management Plan | 6,500,000 | RMB ordinary share | 6,500,000 | ||||||
| WANG Xiuqin | 6,316,461 | RMB ordinary share | 6,316,461 | ||||||
| Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.3 Collective Asset Management Plan | 6,000,000 | RMB ordinary share | 6,000,000 | ||||||
| China Merchants Bank – Tianhong CSI 500 ETF | 5,489,800 | RMB ordinary share | 5,489,800 | ||||||
| WU Feng | 5,001,015 | RMB ordinary share | 5,001,015 | ||||||
Related or act-in-concert partiesamong the shareholders above
| Related or act-in-concert parties among the shareholders above | Syngenta Group Co., Ltd. is not a related party or acting-in-concert party as prescribed in the Administrative Methods for Acquisition of Listed Companies to other shareholders. It is unknown to the Company whether shareholders above are related parties or acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. |
| Top 10 ordinary shareholders conducting securities margin trading | Shareholder Wu Feng held 3,591,189 shares of the Company through an ordinary securities trading account and 1,409,826 shares of the Company through a credit collateral securities trading account, the total sum of which is 5,001,015 shares. |
2. Total number of preference shareholders and shareholdings of the top 10 of such at the period-end
□ Applicable √ Not applicable
III. Other Significant Events
□ Applicable √ Not applicable
IV. Financial Statements
i. Financial Statements
1. Consolidated balance sheet
Prepared by ADAMA Ltd.
30 September 2022
Unit: RMB’000
| Item | September 30, 2022 | December 31, 2021 | Item | September 30, 2022 | December 31, 2021 |
| Current assets: | Current liabilities: | ||||
| Cash at bank and on hand | 3,719,929 | 5,818,835 | Short-term loans | 3,139,729 | 874,755 |
| Financial assets held for trading | 1,632 | 1,479 | Derivative financial liabilities | 803,087 | 176,206 |
| Derivative financial assets | 356,162 | 243,316 | Bills payable | 1,131,105 | 493,376 |
| Bills receivable | 118,148 | 81,992 | Accounts payable | 7,191,302 | 6,294,163 |
| Accounts receivable | 10,130,337 | 8,362,493 | Contract liabilities | 1,505,390 | 1,381,311 |
| Receivables financing | 60,526 | 120,157 | Employee benefits payable | 1,157,872 | 1,247,979 |
| Prepayments | 443,550 | 379,788 | Taxes payable | 436,530 | 368,682 |
| Other receivables | 985,358 | 691,939 | Other payables | 1,975,130 | 1,342,188 |
| Inventories | 17,381,277 | 11,750,162 | Non-current liabilities due within one year | 1,857,482 | 1,795,754 |
| Other current assets | 1,145,605 | 938,453 | Other current liabilities | 452,442 | 412,909 |
| Total current assets | 34,342,524 | 28,388,614 | Total current liabilities | 19,650,069 | 14,387,323 |
| Non-current assets: | Non-current liabilities: | ||||
| Long-term receivables | 66,369 | 56,234 | Long-term loans | 4,193,134 | 3,498,912 |
| Long-term equity investments | 24,836 | 15,335 | Debentures payable | 7,951,541 | 7,797,131 |
| Other equity investments | 159,774 | 152,118 | Lease liabilities | 451,940 | 362,086 |
| Investment properties | 3,305 | 3,716 | Long-term accounts payable | 104,716 | 95,699 |
| Fixed assets | 8,872,837 | 8,048,389 | Long-term employee benefits payables | 827,283 | 792,358 |
| Construction in progress | 2,956,191 | 2,143,400 | Provisions | 205,374 | 186,430 |
| Right-of-use assets | 582,470 | 463,915 | Deferred tax liabilities | 378,787 | 380,138 |
| Intangible assets | 5,496,798 | 5,326,288 | Other non-current liabilities | 1,873,596 | 1,660,148 |
| Goodwill | 4,895,961 | 4,409,599 | Total non-current liabilities | 15,986,371 | 14,772,902 |
| Deferred tax assets | 1,313,913 | 723,075 | Total liabilities | 35,636,440 | 29,160,225 |
| Other non-current assets | 491,467 | 504,625 | Shareholders’ equity: | ||
| Total non-current assets | 24,863,921 | 21,846,694 | Share capital | 2,329,812 | 2,329,812 |
| Total assets | 59,206,445 | 50,235,308 | Capital reserves | 12,977,172 | 12,977,171 |
| Other comprehensive income | 1,365,249 | (432,384) | |||
| Special reserves | 17,748 | 19,857 | |||
| Surplus reserves | 240,162 | 240,162 | |||
| Retained earnings | 6,639,862 | 5,940,465 | |||
| Total equity attributed to the shareholders of the company | 23,570,005 | 21,075,083 | |||
| Non-controlling interests | - | - | |||
| Total equity | 23,570,005 | 21,075,083 | |||
| Total liabilities and equity | 59,206,445 | 50,235,308 |
| Ignacio Dominguez Legal representative | Shahar Florentz Chief of the accounting work | Shahar Florentz Chief of the accounting organ |
2. Consolidated income statement for the period from the year-beginning to the end of the Reporting Period
Unit: RMB’000
| Item | January-September, 2022 | January-September, 2021 |
| 1. Total operating Income | 28,077,814 | 22,488,364 |
| Less: Cost of sales | 20,838,317 | 16,143,819 |
| Taxes and surcharges | 80,507 | 82,359 |
| Selling and Distribution expenses | 3,231,093 | 3,725,486 |
| General and Administrative expenses | 972,450 | 1,020,945 |
| Research and Development expenses | 415,855 | 340,888 |
| Financial expenses (income) | 132,048 | 1,107,975 |
| Including: Interest expense | 525,681 | 462,725 |
| Interest income | 111,595 | 45,487 |
| Add: Investment income, net | 10,889 | 4,408 |
| Including: Income from investment in associates and joint ventures | 10,889 | 4,408 |
| Gain (loss) from changes in fair value | (1,364,883) | 173,806 |
| Credit impairment reversal (losses) | (97,785) | 9,685 |
| Asset Impairment reversal (losses) | (132,121) | (39,358) |
| Gain (loss) from disposal of assets | 62,491 | 9,246 |
| 2. Operating profit | 886,135 | 224,679 |
| Add: Non-operating income | 38,257 | 46,564 |
| Less: Non-operating expense | 23,282 | 26,693 |
| 3. Total profit | 901,110 | 244,550 |
| Less: income tax expense | 132,966 | 246,269 |
| 4. Net profit | 768,144 | (1,719) |
| 4.1 Classified by nature of operations | ||
| 4.1.1 Continuing operations | 768,144 | (1,719) |
| 4.2 Classified by ownership | - | - |
| 4.2.1 Shareholders of the Company | 768,144 | (3,916) |
| 4.2.2 Non-controlling interests | - | 2,197 |
| 5. Other comprehensive income net of tax | 1,797,634 | (30,850) |
| Other comprehensive income net of tax attributable to shareholders of the Company | 1,797,634 | (30,850) |
| 5.1 Items that will not be reclassified into profit/loss | 75,796 | (5,474) |
| 5.1.1 Re-measurement of defined benefit plan liability | 75,796 | (5,474) |
| 5.2 Items that were or will be reclassified to profit or loss | 1,721,838 | (25,376) |
| 5.2.1 Effective portion of gains or loss of cash flow hedge | (24,433) | 237,449 |
| 5.2.2 Translation differences of foreign financial statements | 1,746,271 | (262,825) |
| Other comprehensive income net of tax attributable to Non-controlling interests | - | - |
| 6. Total comprehensive income for the period | 2,565,778 | (32,569) |
| Total comprehensive income attributable to shareholders of the Company | 2,565,778 | (34,766) |
| Total comprehensive income attributable to Non-controlling interests | - | 2,197 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share (RMB/ share) | 0.3297 | (0.0017) |
| 7.2 Diluted earnings per share (RMB/ share) | N/A | N/A |
| Ignacio Dominguez Legal representative | Shahar Florentz Chief of the accounting work | Shahar Florentz Chief of the accounting organ |
3. Consolidated cash flow statement for the period from the year-beginning to the end of the Reporting
Period
Unit: RMB’000
| Item | January-September, 2022 | January-September, 2021 |
| 1. Cash flows from operating activities: | ||
| Cash received from sale of goods and rendering of services | 26,141,756 | 21,454,588 |
| Refund of taxes and surcharges | 240,522 | 133,814 |
| Cash received relating to other operating activities | 729,056 | 563,811 |
| Sub-total of cash inflows from operating activities | 27,111,334 | 22,152,213 |
| Cash paid for goods and services | 22,192,149 | 14,368,965 |
| Cash paid to and on behalf of employees | 3,130,092 | 2,789,320 |
| Payments of taxes and surcharges | 771,897 | 344,129 |
| Cash paid relating to other operating activities | 2,575,896 | 2,467,812 |
| Sub-total of cash outflows from operating activities | 28,670,034 | 19,970,226 |
| Net cash flows from operating activities | (1,558,700) | 2,181,987 |
| 2. Cash flows from investing activities: | ||
| Cash receipts from disposal of investments | 5,887 | 3,864 |
| Cash received from investment income | 1,588 | 867 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 71,850 | 19,964 |
| Cash received for other investing activities | 2,325 | 8,562 |
| Sub-total of cash inflows from investing activities | 81,650 | 33,257 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 1,968,585 | 1,803,236 |
| Net cash paid to acquire subsidiaries or other business units | - | 655,039 |
| Cash paid for other investing activities | 89,395 | 86,228 |
| Sub-total of cash outflows from investing activities | 2,057,980 | 2,544,503 |
| Net cash flows from investing activities | (1,976,330) | (2,511,246) |
| 3. Cash flows from financing activities: | ||
| Cash received from borrowings | 3,909,042 | 4,369,565 |
| Cash received relating to other financing activities | 26,750 | 522,649 |
| Sub-total of cash inflows from financing activities | 3,935,792 | 4,892,214 |
| Cash repayment of borrowings | 1,324,163 | 2,655,257 |
| Cash payment for dividends, profit distributions or interest | 571,867 | 490,113 |
| Including: dividends paid to non-controlling interest | 39,074 | 35,904 |
| Cash paid relating to other financing activities | 932,457 | 300,907 |
| Sub-total of cash outflows from financing activities | 2,828,487 | 3,446,277 |
| Net cash flows from financing activities | 1,107,305 | 1,445,937 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 311,082 | (11,381) |
| 5. Net increase (decrease) in cash and cash equivalents | (2,116,643) | 1,105,297 |
| Add: Cash and cash equivalents at the beginning of the period | 5,759,480 | 3,835,071 |
| 6. Cash and cash equivalents at the end of the period | 3,642,837 | 4,940,368 |
ii. Auditor’s report
Is this Report audited?
□ Yes √ NoThis Report is unaudited.
Board of DirectorsADAMA Ltd.October 27, 2022