安道麦A(000553)_公司公告_安道麦B：2023年半年度报告附件(英文版)新浪财经

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安道麦B：2023年半年度报告附件(英文版) （下载公告）

公告日期:2023-08-31

ADAMA Reports Second Quarter and First Half Year 2023 Results

Sales & profit impacted by channel destocking while the Company isexercising inventory management through selective procurement of high

margin productsSecond Quarter 2023 Highlights:

? Sales down 17% to $1,233 million (-12% in RMB terms; -15% in CER

terms), mainly reflecting10% decrease in volume and 5% decrease in prices? Adjusted EBITDA amounted to $112 million vs. $240 million in Q2 2022? Adjusted net loss of $41 million; Reported net loss of $46 millionFirst Half Year 2023 Highlights:

? Sales down 14% to $2,492 million (-8% in RMB terms; -11% in CER terms), mainly reflecting 9%

decrease in volume and 2% decrease in prices

? Adjusted EBITDA amounted to $277 million vs. $441 million in H1 2022? Adjusted net loss of $20 million; Reported net loss of $34 million

BEIJING, CHINA and TEL AVIV, ISRAEL, August 30, 2023 – ADAMA Ltd. (the “Company”) (SZSE000553), today reported its financial results for the second quarter and six-month period ended June30, 2023.Steve Hawkins, President and CEO of ADAMA, said, "Agricultural markets are cyclical in natureand the market we are seeing in 2023 is an adjustment to the market overstocking in 2022, leadingADAMA's performance to be impacted in the quarter both by lower volumes as well as softer pricing.In response the Company has implemented a cross-company turnaround plan to improve cashflowand profit. In the second quarter the Company has already begun to clear out its high-cost inventorywhile being selective regarding new procurement, focusing on high margin products, in line with theCompany's goal to improve the quality of business and its portfolio mix. Additional steps have alsobeen taken to ensure OPEX is well managed. While the consumption of high-cost inventory impactsthe results in the short term, we already see the positive impact of the reduction of procurementreaching positive cashflow in the quarter. We believe these steps will support ADAMA, positioning itbetter to capture opportunities in the current market cycle."

CER – Constant Exchange Rates

Table 1. Financial Performance Summary

USD (m)	As Reported			Adjustments		Adjusted

	Q2 2023	Q2 2022	% Change	Q2 2023	Q2 2022	Q2 2023	Q2 2022	% Change

Revenues

Revenues	1,233	1,479	(17%)	-	-	1,233	1,479	(17%)
Gross profit	253	399	(36%)	24	38	277	437	(37%)
% of sales	20.6%	27.0%				22.5%	29.6%
Operating income (EBIT)	40	143	(72%)	6	27	46	170	(73%)
% of sales	3.3%	9.6%				3.8%	11.5%
Income before taxes	(56)	57		6	31	(50)	88
% of sales	(4.5%)	3.9%				(4.0%)	6.0%
Net income	(46)	46		5	30	(41)	76
% of sales	(3.8%)	3.1%				(3.3%)	5.1%
EPS
- USD	(0.0199)	0.0198				(0.0177)	0.0326
- RMB	(0.1397)	0.1307				(0.1238)	0.2152
EBITDA	115	224	(49%)	(3)	16	112	240	(53%)
% of sales	9.3%	15.1%				9.1%	16.2%

USD (m)	As Reported			Adjustments		Adjusted

	H1 2023	H1 2022	% Change	H1 2023	H1 2022	H1 2023	H1 2022	% Change

Revenues

Revenues	2,492	2,899	(14%)	-	-	2,492	2,899	(14%)
Gross profit	563	767	(27%)	54	85	617	852	(28%)
% of sales	22.6%	26.4%				24.8%	29.4%
Operating income (EBIT)	132	267	(51%)	16	36	148	303	(51%)
% of sales	5.3%	9.2%				5.9%	10.4%
Income before taxes	(45)	129		16	40	(29)	168
% of sales	(1.8%)	4.4%				(1.2%)	5.8%
Net income	(34)	113		15	37	(20)	151
% of sales	(1.4%)	3.9%				(0.8%)	5.2%
EPS
- USD	(0.0147)	0.0487				(0.0084)	0.0648
- RMB	(0.1039)	0.3142				(0.0604)	0.4197
EBITDA	281	427	(34%)	(4)	14	277	441	(37%)
% of sales	11.3%	14.7%				11.1%	15.2%

Notes:

? “As Reported” denotes the Company’s financial statements according to the Accounting Standards for Business Enterprises and the

implementation guidance, interpretations and other relevant provisions issued or revised subsequently by the Chinese Ministry ofFinance (the “MoF) (collectively referred to as “ASBE”). Note that in the reported financial statements, according to the ASBE guidelines[IAS 37], certain items (specifically certain transportation costs and certain idleness charges) are classified under COGS. Please seethe appendix to this release for further information.? Relevant income statement items contained in this release are also presented on an “Adjusted” basis, which exclude items that are ofa transitory or non-cash/non-operational nature that do not impact the ongoing performance of the business, and reflect the way theCompany’s management and the Board of Directors view the performance of the Company internally. The Company believes thatexcluding the effects of these items from its operating results allows management and investors to effectively compare the trueunderlying financial performance of its business from period to period and against its global peers. A detailed summary of theseadjustments appears in the appendix below.? The number of shares used to calculate both basic and diluted earnings per share in both Q2 & H1 2023 and 2022 is 2,329.8 millionshares.? In this table and all tables in this release numbers may not sum due to rounding.

The general crop protection market environment

Over Q2 2023 the price trend of crop commodities was mixed, with corn, wheat and soybean pricescontinuing to decline while sugar and rice prices increased. Overall, crop commodity prices remainabove the 10-yr average and global planted area remains high compared to previous years, supportinghealthy input demand from farmers.Despite relatively healthy farmer consumption, crop protection sales into the distribution channel haveslowed down significantly due to high channel inventory levels, following channel loading in 2022. Inaddition, the distribution channel across all geographies is opting to buy crop inputs on a "just in time"basis and striving to carry minimal inventory given wide high interest rate environment outside Chinaand abundant supply of CP products. This trend, coupled with the ongoing decline in ActiveIngredients prices coming out of China, is putting pressure on crop protection prices.Portfolio Development UpdateProduct Launches, Registrations & Formulation Mastery Update:

During the second quarter of 2023 ADAMA continued to register and launch multiple new products inmarkets across the globe, adding on to its differentiated product portfolio. New Product Introductions(NPI) percentage out of the full year sales of 2022 reached 22%, referring to products launched overthe past 5 years. Differentiated products include products that are based on recently off-patentedactive ingredients (AI's) that have been classified as high commercial potential - "Core Leap" AI's, andproducts that are based on unique proprietary formulations, products with more than one mode ofaction, and biologicals.Select launches of differentiated products during the second quarter of 2023 in select countries include:

? Launch in the USA of Fullscript?, a dual mode herbicide for rice, part of the FullPage

?ricecropping solution, in collaboration with Rice Tech.Fullscript? is the first product to be launched based on Sesgama

ADAMA's proprietaryformulation technology platform for high-load and other challenging formulations, enabling lessuse of co-formulants, transport and packaging materials per acre treated with a resultingimproved product sustainability profile.Select registrations of differentiated products during second quarter of 2023 in select countries include:

? Registration in Poland for Mastercop ACT

, a natural copper-based fungicide, based onADAMA’s proprietary Formulation Mastery technology for low dose products minimizingenvironmental load (enabling over 50% reduction in copper usage per hectare compared toconventional copper fungicides) and while maintaining its efficacy through optimization ofdelivery mechanisms Mastercop ACT

is intended to control a range of fungal and bacterialdiseases on a wide range of crops including grapes, pome fruits, stone fruits, fruitingvegetables and tuber crops. According to EU regulations, once a registration is achieved inone of the countries in a regulatory zone, registration can be expediated in other countrieswithin the same regulatory zone. Poland is part of the Central Zone, which also includesGermany.

Sources: Rabobank, Agri Commodity Markets Research, March 2023; AgbioInvestor-Quarterly-Briefing-Service-PLUS_Q1-2023;

JPM: Agricultural Markets Weekly, March 2023

? In Q2 2023, the Company continued with the roll out of products based on the active ingredient

Prothioconazole and ADAMA’s Asorbital

?formulation mastery technology platform, foroptimized penetration and enhanced long-lasting protection. These include the registration ofAvastel

? in Sweden and Turkey, Soratel

? in Lithuania and registration of Maganic

?in Swedenand Turkey.? Registration in Greece of Timeline

?FX, a unique three-way spring foliar herbicide mixtureproviding cross-spectrum protection for cereals against broadleaf and grass weeds.Select patents granted during second quarter of 2023 in select countries include:

? Patent granted in Australia for Sesgama

.? First patent granted for Soratel

?in Morocco. Soratel

is based on ADAMA’s proprietaryFormulation Mastery technology platform Asorbital

? Patent granted for ADAMA’s proprietary T.O.V. formulation technology in China and Ukraine.

Financial Highlights

Revenues in the second quarter declined by approximately 17% (-12% in RMB terms; -15% in CERterms) to $1,233 million, reflecting a decrease of 10% in volumes and a decrease of 5% in prices. Thelower sales reflect market dynamics of channel destocking in light of high interest rates and a "waitand see" approach, given the market overstocking in 2022 and declining active ingredient and rawmaterial costs impacting the crop protection market pricing. Additionally, sales were also impacted bynegative weather conditions in certain geographies.These results brought the revenues in the first half of 2023 to $2,492 million, a decline of approximately14% (-8% in RMB terms; -11% in CER terms), reflecting a decrease of 9% in volumes and a decreaseof 2% in prices. This is in comparison to the record sales the Company achieved in 2022, whichreflected the high demand due to supply uncertainty in the market.

Table 2. Regional Sales Performance

CER: Constant Exchange Rates

* 2022 denote proforma sales. As of 2023, the India, Middle East & Africa (IMA) region has beenreorganized such that the countries formerly included in this region are now included in the Europeregion (renamed EAME) or in the Asia Pacific region.

Europe, Africa & Middle East (EAME): Sales in EAME in constant exchange rates were lowerin the quarter due to a decrease in volumes exacerbated by negative weather conditions and high

Q2 2023 $m

Q2 2022 $m

Change USD

Change CER

H1 2023 $m

H1 2022 $m

Change USD

Change CER

Europe, Africa & Middle East (EAME)*

334

365

(8.4%)

(5.4%)

765

794

(3.7%)

2.5%

North America

225

278

(19.1%)

(18.6%)

436

562

(22.4%)

(21.9%)

Latin America

329

379

(13.1%)

(14.7%)

562

613

(8.3%)

(10.1%)

Asia Pacific*

345

458

(24.6%)

(20.7%)

729

930

(21.6%)

(16.3%)

Of which China

141

213

(33.6%)

(30.8%)

323

449

(28.1%)

(23.0%)

Total

1,233

1,479

(16.6%)

(15.0%)

2,492

2,899

(14.0%)

(10.9%)

inventory levels in the market, and higher in the half year period, reflecting generally higher pricesin comparison to the same periods in 2022. While prices were higher on a year-to-year basis,market prices are currently presenting a downward trend. The fungicide Soratel

based onADAMA’s Asorbital

formulation mastery technology, continues to be well received in the UK.North America: Consumer & Professional Solutions – Sales were impacted by lower demandfollowing inflationary pressures and high channel inventories.In the US Ag market the channel is lowering inventory levels due to high interest rates withdemand focusing on "just-in-time" supply from producers. Sales were also impacted by droughtin the Mid-West and pressure on prices following channel destocking.Sales in Canada increased as the Company expanded its product portfolio during 2022, whilepricing in the market was more insulated with overall market inventories better controlled.Latin America: Brazil – strong competition and channel destocking put pressure on prices ledto a decline in sales, while the Company is successfully consuming the high-cost inventoryaccumulated.In LATAM, sales are supported by the strong performance of the biologicals portfolio. Lookingforward, El Ni?o is expected to have a positive effect on rainfall in the South of LATAM.Asia-Pacific (APAC):

In China, the market is experiencing oversupply and pricing pressure impacting both the brandedand industrial sales, while the branded portfolio was significantly supported by the sales ofdifferentiated products.Sales in the wider APAC & Pacific region were negatively impacted by strong competition fromChina and by the commencement and negative impact of El Ni?o.In India sales were impacted by the delayed Monsoon season.Gross Profit reported in the second quarter reached $253 million (gross margin of 20.6%) comparedto $399 million (gross margin of 27.0%) in the same quarter last year and reached $563 million (grossmargin of 22.6%) in the half year period compared to $767 million (gross margin of 26.4%) last year.Adjustments to reported results: The adjusted gross profit includes reclassification of allinventory impairment, taxes and surcharge and excludes certain transportation costs(classified under operating expenses).Excluding the impact of the abovementioned adjusted items, adjusted gross profit in the secondquarter reached $277 million (gross margin of 22.5%) compared to $437 million (gross margin of

29.6%) in the same quarter last year and reached $617 million (gross margin of 24.8%) in the halfyear period compared to $852 million (gross margin of 29.4%) last year.The decline in gross profit in the second quarter and half year period was due to the decline in sales,as described above, high-cost inventory and exchange rates. These impacts were slightly moderatedby the improvement in the Company's sales mix of higher margin products.Operating expenses reported in the second quarter and half year period of 2023 were $213 million(17.3% of sales) and $431 million (17.3% of sales), compared to $256 million (17.3% of sales) and$500 million (17.2% of sales) in the corresponding periods last year, respectively.Adjustments to reported results: please refer to the explanation regarding adjustments to the grossprofit in respect to certain transportation costs, taxes and surcharges and inventory impairment.Additionally, the Company recorded certain non-operational items within its reportedoperating expenses amounting to $6 million in Q2 2023 in comparison to $22 million in Q22022 and $15 in H1 2023 in comparison to $28 in H1 2022. These include mainly (i) non-

cash amortization charges in respect of Transfer Assets received from Syngenta relatedto the 2017 ChemChina-Syngenta acquisition, (ii) charges related to the non-cashamortization of intangible assets created as part of the Purchase Price Allocation (PPA)on acquisitions, with no impact on the ongoing performance of the companies acquired,and (iii) incentive plans - share-based compensation. For further details on these non-operational items, please see the appendix to this release.Excluding the impact of the abovementioned non-operational items, adjusted operating expensesin the second quarter and half year period were $231 million (18.7% of sales) and $469 million (18.8%of sales), compared to $268 million (18.1% of sales) and $549 million (18.9% of sales) in thecorresponding periods last year, respectively.The operating expenses were lower in the second quarter and half year period of 2023 mainly due toCompany OPEX management measures, lower transportation and logistics costs, an adjustment of aprovision for success-based compensation, and the positive impact of exchange rates. Additionally,in the first half year of 2023 the company did not increase the doubtful debt provision that was recordedfor trade receivables in Ukraine during the first half year of 2022.Operating income reported in the second quarter amounted to $40 million (3.3% of sales) comparedto $143 million (9.6% of sales) in the same quarter last year and amounted to $132 million (5.3% ofsales) in the half year period compared to $267 million (9.2% of sales) last year.Excluding the impact of the abovementioned non-operational items, adjusted operating income inthe second quarter amounted to $46 million (3.8% of sales) compared to $170 million (11.5% of sales)in the same quarter last year and amounted to $148 million (5.9% of sales) in the half year periodcompared to $303 million (10.4% of sales) in the same period last year.EBITDA reported in the second quarter amounted to $115 million (9.3% of sales) compared to $224million (15.1% of sales) in the same quarter last year and amounted to $281 million (11.3% of sales)in the half year period compared to $427 million (14.7% of sales) last year.Excluding the impact of the abovementioned non-operational items, adjusted EBITDA in the secondquarter amounted to $112 million (9.1% of sales) compared to $240 million (16.2% of sales) in thesame quarter last year and amounted to $277 million (11.1% of sales) in the half year period comparedto $441 million (15.2% of sales) last year.Adjusted Financial expenses amounted to $96 million in the second quarter and $177 million in thehalf year period, compared to $82 million and $134 million in the corresponding periods last year,respectively. The higher financial expenses were mainly driven by higher bank interest expenses dueto the sharp increase in interest rates and an increase in short-term loans as well as higher hedgingcosts on exchange rates. These financial expenses were moderated by the net effect of lower IsraeliCPI on the ILS-denominated, CPI-linked bonds.Adjusted taxes on income in the second quarter amounted to an income of $8 million and an incomeof $10 million in the half year period, compared to tax expenses of $12 million and $18 million in thecorresponding periods last year. The tax income in the second quarter and half year period of 2023was mainly due to losses before tax, in addition to a tax income due to the non-cash impact of thestronger BRL on the value of non-monetary tax assets and the method of calculation of tax assetsrelated to unrealized profits.Net loss attributable to the shareholders of the Company reported in the second quarter was $46million and $34 million in the half-year period, compared to net income of $46 million (3.1% of sales)and $113 million (3.9% of sales) in the corresponding periods last year, respectively.Excluding the impact of the abovementioned extraordinary and non-operational charges, adjustednet loss in the second quarter was $41 million, and $20 million in the half-year period, compared to

net income of $76 million (5.1% of sales), and $151 million (5.2% of sales) in the correspondingperiods last year, respectively.Trade working capital as of June 30, 2023, was $2,844 million compared to $2,664 million as of June2022, and compared to $2,634 million as of December 31, 2022. Following the Company'simplementation of strict procurement practices, inventory held by the Company reached $2,307 millionas of June 30, 2023, in comparison to $2,430 million as of December 31, 2022. The increase in workingcapital compared to the end of 2022 was following the Company's implementation of strictprocurement practices, as mentioned, which led to lower trade payables and a decrease in the levelof inventory held by the company.Cash Flow: Operating cash flow of $405 million was generated in the second quarter and $19 millionconsumed in the half year period in 2023, compared to $71 million generated in the second quarterand $215 million consumed in the half year period in 2022. The higher cash flow generated in thequarter was primarily due to a decrease in the procurement of goods.Net cash used in investing activities was $69 million in the second quarter and $162 million in the firsthalf period in 2023, compared to $107 million and $197 million in the corresponding periods last year,respectively. The cash used in investing activities in the second quarter and first half period of 2023included investments in new production facilities in ADAMA Anpon, investments in manufacturingcapabilities in Israel and investments in intangible assets relating to ADAMA's global registrations aswell as the acquisition of AgriNova New Zealand in Q1 2023.Free cash flow of $288 million was generated in the second quarter and $254 million consumed in thehalf-year period compared to $83 million consumed in the second quarter and $469 million consumedin the corresponding periods last year, respectively, reflecting the aforementioned operating andinvesting cash flow dynamics as well as the prioritization of investments.

Table 3. Revenues by operating segmentSales by segment

Q2 2023 USD (m)

Q2 2022 USD (m)

H1 2023 USD (m)

H1 2022 USD (m)

Crop Protection

1,145

93%

1,327

90%

2,291

92%

2,598

90%

Intermediates andIngredients

Intermediates and Ingredients

152

10%

201

301

10%

Total

1,233

100%

1,479

100%

2,492

100%

2,899

100%

Sales by product category

Q2 2023 USD (m)

Q2 2022 USD (m)

H1 2023 USD (m)

H1 2022 USD (m)

Herbicides

Herbicides	528	43%	702	47%	1,104	44%	1,361	47%
Insecticides	352	29%	393	27%	686	28%	744	26%

Fungicides

Fungicides	264	21%	232	16%	502	20%	493	17%
Intermediates and Ingredients	89	7%	152	10%	201	8%	301	10%

Total

1,233

100%

1,479

100%

2,492

100%

2,899

100%

Note: the sales split by product category is provided for convenience purposes only and is not representative of the way the Company ismanaged or in which it makes its operational decisions. Numbers may not sum due to rounding.

Further InformationAll filings of the Company, together with a presentation of the key financial highlights of the period,can be accessed through the Company website at www.adama.com.

About ADAMAADAMA Ltd. is a global leader in crop protection, providing solutions to farmers across the world tocombat weeds, insects and disease. ADAMA has one of the widest and most diverse portfolios ofactive ingredients in the world, state-of-the art R&D, manufacturing and formulation facilities,together with a culture that empowers our people in markets around the world to listen to farmersand ideate from the field. This uniquely positions ADAMA to offer a vast array of distinctive mixtures,formulations and high-quality differentiated products, delivering solutions that meet local farmer andcustomer needs in over 100 countries globally. For more information, visit us at www.ADAMA.comand follow us on Twitter

at @ADAMAAgri.

ContactRivka Neufeld Zhujun WangGlobal Investor Relations China Investor RelationsEmail: ir@adama.com Email: irchina@adama.com

Abridged Adjusted Consolidated Financial StatementsThe following abridged consolidated financial statements and notes have been prepared as described in Note 1 in thisappendix. While prepared based on the principles of Chinese Accounting Standards (ASBE), they do not contain all of theinformation which either ASBE or IFRS would require for a complete set of financial statements, and should be read inconjunction with the consolidated financial statements of both ADAMA Ltd. and Adama Agricultural Solutions Ltd. as filedwith the Shenzhen and Tel Aviv Stock Exchanges, respectively.Relevant income statement items contained in this release are also presented on an “Adjusted” basis, which exclude itemsthat are of a one-time or non-cash/non-operational nature that do not impact the ongoing performance of the business, andreflect the way the Company’s management and the Board of Directors view the performance of the Company internally.The Company believes that excluding the effects of these items from its operating results allows management and investorsto effectively compare the true underlying financial performance of its business from period to period and against its globalpeers.Abridged Consolidated Income Statement for the Second Quarter

Adjusted3

Q2 2023 USD (m)

Q2 2022 USD (m)

Q2 2023 RMB (m)

Q2 2022 RMB (m)

Revenues

1,233

1,479

8,643

9,780

Cost of Sales

943

1,029

6,609

6,800

Other costs

Gross profit

277

437

1,945

2,893

% of revenue

22.5%

29.6%

22.5%

29.6%

Selling & Distribution expenses

185

209

1,297

1,383

General & Administrative expenses

208

309

Research & Development expenses

128

143

Other operating expenses

(2)

(10)

(13)

(66)

Total operating expenses

Total operating expenses	231	268	1,620	1,770
% of revenue	18.7%	18.1%	18.7%	18.1%

Operating income (EBIT)

170

325

1,123

% of revenue

3.8%

11.5%

3.8%

11.5%

Financial expenses

673

540

Income before taxes

(50)

(348)

583

Taxes on Income

)8(

(59)

Net Income

(41)

(288)

501

% of revenue

(3.3%)

5.1%

(3.3%)

5.1%

Adjustments

197

Reported Net income

(46)

(325)

304

% of revenue

(3.8%)

3.1%

(3.8%)

3.1%

Adjusted EBITDA

112

240

783

1,585

% of revenue

9.1%

16.2%

9.1%

16.2%

Adjusted EPS

– Basic

Adjusted EPS4 – Basic

(0.0177)

0.0326

(0.1238)

0.2152

– Diluted

(0.0177)

0.0326

(0.1238)

0.2152

Reported EPS

– Basic

Reported EPS2 – Basic

(0.0199)

0.0198

(0.1397)

0.1307

– Diluted

(0.0199)

0.0198

(0.1397)

0.1307

For an analysis of the differences between the adjusted income statement items and the income statement items as reported in the financial

statements, see below “Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements”.

The number of shares used to calculate both basic and diluted earnings per share in both Q2 2023 and 2022 is 2,329.8 million shares.

Abridged Consolidated Income Statement for the First Half

Adjusted5

USD (m)

RMB (m)

Revenues

2,492

2,899

17,253

18,796

Cost of Sales

1,852

2,027

12,827

13,138

Other costs

157

135

Gross profit

617

852

4,270

5,522

% of revenue

24.8%

29.4%

24.7%

29.4%

Selling & Distribution expenses

371

408

2,568

2,646

General & Administrative expenses

475

606

Research & Development expenses

263

274

Other operating expenses

(8)

(56)

Total operating expenses

469

549

3,249

3,555

% of revenue

18.8%

18.9%

18.8%

18.9%

Operating income (EBIT)

148

303

1,021

1,967

% of revenue

5.9%

10.4%

5.9%

10.5%

Financial expenses

177

134

1,228

875

Income before taxes

(29)

168

(207)

1,092

Taxes on Income

(10)

(67)

115

Net Income

(20)

151

(141)

978

% of revenue

(0.8%)

5.2%

(0.8%)

5.2%

Adjustments

101

246

Reported Net income

(34)

113

(242)

732

% of revenue

(1.4%)

3.9%

(1.4%)

3.9%

Adjusted EBITDA

277

441

1,914

2,862

% of revenue

11.1%

15.2%

11.1%

15.2%

Adjusted EPS

– Basic

Adjusted EPS6 – Basic

(0.0084)

0.0648

(0.0604)

0.4197

– Diluted

(0.0084)

0.0648

(0.0604)

0.4197

Reported EPS

– Basic

Reported EPS2 – Basic

(0.0147)

0.0487

(0.1039)

0.3142

– Diluted

(0.0147)

0.0487

(0.1039)

0.3142

For an analysis of the differences between the adjusted income statement items and the income statement items as reported in the financial

statements, see below “Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements”.

The number of shares used to calculate both basic and diluted earnings per share in H1 2023 and 2022 is 2,329.8 million shares.

Abridged Consolidated Balance Sheet

June 30 2023 USD (m)

June 30 2022 USD (m)

June 30 2023 RMB (m)

June 30 2022 RMB (m)

Assets

Current assets:

Cash at bank and on hand

637

491

4,605

3,297

Bills and accounts receivable

1,421

1,606

10,264

10,780

Inventories

Inventories	2,307	2,320	16,668	15,569
Other current assets, receivables and prepaid expenses	269	351	1,941	2,358

Total current assets

4,633

4,768

33,478

32,003

Non-current assets:

Fixed assets, net

1,747

1,674

12,624

11,234

Rights of use assets

641

486

Intangible assets, net

1,472

1,488

10,634

9,984

Deferred tax assets

244

160

1,760

1,073

Other non-current assets

106

109

766

730

Total non-current assets

3,657

3,503

26,424

23,507

Total assets

8,290

8,271

59,902

55,510

Liabilities

Current liabilities:

Loans and credit from banks and otherlenders

Loans and credit from banks and other lenders

1,236

488

8,934

3,273

Bills and accounts payable

892

1,271

6,442

8,528

Other current liabilities

948

855

6,853

5,739

Total current liabilities

3,076

2,614

22,228

17,540

Long-term liabilities:

Loans and credit from banks and otherlenders

Loans and credit from banks and other lenders

453

640

3,276

4,292

Debentures

1,029

1,120

7,433

7,517

Deferred tax liabilities

333

392

Employee benefits

106

115

763

769

Other long-term liabilities

308

367

2,224

2,461

Total long-term liabilities

1,942

2,299

14,029

15,433

Total liabilities

5,018

4,913

36,257

32,973

Equity

Total equity

3,272

3,358

23,645

22,537

Total liabilities and equity

8,290

8,271

59,902

55,510

Abridged Consolidated Cash Flow Statement for the Second Quarter

	Q2 2023 USD (m)	Q2 2022 USD (m)	Q2 2023 RMB (m)	Q2 2022 RMB (m)
Cash flow from operating activities:
Cash flow from operating activities	405	71	2,840	468
Cash flow from operating activities	405	71	2,840	468

Investing activities:
Acquisitions of fixed and intangible assets	(85)	(107)	(598)	(707)
Net cash received from disposal of fixed assets, intangible assets and others	1	10	5	67
Acquisition of subsidiaries	0	0	-	-
Other investing activities	16	(10)	112	(65)
Cash flow used for investing activities	(69)	(107)	(482)	(705)

Financing activities:
Receipt of loans from banks and other lenders	73	222	510	1,466
Repayment of loans from banks and other lenders	(200)	(150)	(1,400)	(992)
Interest payment and other	(49)	(53)	(342)	(353)
Dividends to shareholders	(9)	(3)	(63)	(19)
Other financing activities	(22)	(79)	(155)	(523)
Cash flow from (used for) financing activities	(207)	(64)	(1,450)	(421)
Effects of exchange rate movement on cash and cash equivalents	(3)	(4)	183	174
Net change in cash and cash equivalents	126	(103)	1,092	(484)
Cash and cash equivalents at the beginning of the period	506	579	3,479	3,674

Cash and cash equivalents at the end of the period

Cash and cash equivalents at the end of the period	633	475	4,571	3,191

Free Cash Flow	288	(83)	2,021	(551)

Abridged Consolidated Cash Flow Statement for the First Half

	H1 2023 USD (m)	H1 2022 USD (m)	H1 2023 RMB (m)	H1 2022 RMB (m)
Cash flow from operating activities:
Cash flow from operating activities	(19)	(215)	(65)	(1,346)
Cash flow from operating activities	(19)	(215)	(65)	(1,346)

Investing activities:
Acquisitions of fixed and intangible assets	(170)	(199)	(1,178)	(1,292)
Net cash received from disposal of fixed assets, intangible assets and others	4	11	31	70
Acquisition of subsidiaries	(22)	0	(148)	-
Other investing activities	25	(9)	175	(57)
Cash flow used for investing activities	(162)	(197)	(1,121)	(1,279)

Financing activities:
Receipt of loans from banks and other lenders	598	374	4,105	2,435
Repayment of loans from banks and other lenders	(229)	(177)	(1,599)	(1,164)
Interest payment and other	(75)	(63)	(522)	(413)
Dividends to shareholders	(9)	(3)	(63)	(19)
Other financing activities	(75)	(144)	(520)	(934)
Cash flow from (used for) financing activities	210	(12)	1,401	(94)
Effects of exchange rate movement on cash and cash equivalents	(2)	(4)	130	150
Net change in cash and cash equivalents	26	(428)	345	(2,569)
Cash and cash equivalents at the beginning of the period	607	903	4,255	5,759
Cash and cash equivalents at the end of the period	633	475	4,571	3,191

Free Cash Flow	(254)	(469)	(1,689)	(2,999)

Notes to Abridged Consolidated Financial StatementsNote 1: Basis of preparationBasis of presentation and accounting policies: The abridged consolidated financial statements for thequarters ended June 30, 2023 and 2022 incorporate the financial statements of ADAMA Ltd. and of all of itssubsidiaries (the “Company”), including Adama Agricultural Solutions Ltd. (“Solutions”) and its subsidiaries.The Company has adopted the Accounting Standards for Business Enterprises (ASBE) issued by the Ministryof Finance (the "MoF") and the implementation guidance, interpretations and other relevant provisions issuedor revised subsequently by the MoF (collectively referred to as “ASBE”).The abridged consolidated financial statements contained in this release are presented in both ChineseRenminbi (RMB), as the Company’s shares are traded on the Shenzhen Stock Exchange, as well as in UnitedStates dollars ($) as this is the major currency in which the Company’s business is conducted. For the purposesof this release, a customary convenience translation has been used for the translation from RMB to US dollars,with Income Statement and Cash Flow items being translated using the quarterly average exchange rate, andBalance Sheet items being translated using the exchange rate at the end of the period.The preparation of financial statements requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements, and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimated.Note 2: Abridged Financial StatementsFor ease of use, the financial statements shown in this release have been abridged as follows:

Abridged Consolidated Income Statement:

? “Gross profit” in this release is revenue less costs of goods sold, taxes and surcharges, inventory

impairment and other idleness charges (in addition to those already included in costs of goods sold);part of the idleness charges is removed in the Adjusted financial statements? “Other operating expenses” includes impairment losses (not including inventory impairment); gain (loss)from disposal of assets and non-operating income and expenses? “Operating expenses” in this release differ from those in the formally reported financial statements in

that certain transportation costs have been reclassified from COGS to Operating Expenses.? “Financial expenses” includes net financing expenses and gains/losses from changes in fair value.

Abridged Consolidated Balance Sheet:

? “Other current assets, receivables and prepaid expenses” includes financial assets held for trading;

financial assets in respect of derivatives; prepayments; other receivables; and other current assets? “Fixed assets, net” includes fixed assets and construction in progress? “Intangible assets, net” includes intangible assets and goodwill? “Other non-current assets” includes other equity investments; long-term equity investments; long-term

receivables; investment property; and other non-current assets? “Loans and credit from banks and other lenders” includes short-term loans and non-current liabilities

due within one year? “Other current liabilities” includes financial liabilities in respect of derivatives; payables for employee

benefits, taxes, interest, dividends and others; advances from customers and other current liabilities? “Other long-term liabilities” includes long-term payables, provisions, deferred income and other non-

current liabilities

Income Statement Adjustments

Q2 2023 USD (m)

Q2 2022 USD (m)

Q2 2023 RMB (m)

Q2 2022 RMB (m)

Net Income (loss) (Reported)

(46)

(325)

304

Adjustments to COGS & Operating Expenses:

1. Amortization of acquisition-related PPA and other acquisition related costs

2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-

Syngenta transaction (non-cash)

2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash)

3. Upgrade & Relocation related costs

4. Incentive plans

(4)

(25)

5. ASBEs classifications COGS impact

(24)

(33)

(165)

(221)

6. ASBEs classifications OPEX impact

165

221

Total Adjustments to Operating Income (EBIT)

180

Total Adjustments to EBITDA

Total Adjustments to EBITDA	(3)	16	(23)	105
Adjustments to Financing Expenses	-	4	-	24

Adjustments to Taxes

1. Taxes impact

Total adjustments to Net Income

197

Net Income (Adjusted)

(41)

(288)

501

H1 2023 USD (m)

H1 2022 USD (m)

H1 2023 RMB (m)

H1 2022 RMB (m)

Net Income (loss) (Reported))

(34)

113

(242)

732

Adjustments to COGS & Operating Expenses:

1. Amortization of acquisition-related PPA and other acquisition related costs

2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-

Syngenta transaction (non-cash)

2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash)

3. Upgrade & Relocation related costs

4. Incentive plans

(4)

(31)

5. ASBEs classifications COGS impact

(53)

(77)

(368)

(496)

6. ASBEs classifications OPEX impact

368

496

Total Adjustments to Operating Income (EBIT)

111

235

Total Adjustments to EBITDA

(4)

(27)

Adjustments to Financing Expenses

Adjustments to Taxes

1. Taxes impact

Total adjustments to Net Income

101

246

Net Income (Adjusted)

(20)

151

(141)

978

Notes:

1. Amortization of acquisition-related PPA and other acquisition related costs:

a. Amortization of Legacy PPA of 2011 acquisition of Solutions (non-cash): Under ASBE, since the second combined reporting

for Q3 2017, the Company has inherited the historical “legacy” amortization charge that ChemChina previously was incurring inrespect of its acquisition of Solutions in 2011. This amortization is done in a linear manner on a quarterly basis, most of which willhave been completed by the end of 2020.b. Amortization of acquisition-related PPA (non-cash) and other acquisition-related costs: Related mainly to the non-cash

amortization of intangible assets created as part of the Purchase Price Allocation (PPA) on acquisitions, with no impact on theongoing performance of the companies acquired, as well as other M&A-related costs.

2. Amortization of Transfer assets received and written-up due to 2017 ChemChina-Syngenta transaction (non-cash): The proceeds fromthe Divestment of crop protection products in connection with the approval by the EU Commission of the acquisition of Syngenta by ChemChina,

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 andeconomic value. Since the products acquired from Syngenta are of the same nature and with the same net economic value as those divested,and since in 2018 the Company adjusted for the one-time gain that it made on the divested products, the additional amortization charge incurreddue to the written-up value of the acquired assets is also adjusted to present a consistent view of Divestment and Transfer transactions, whichhad no net impact on the underlying economic performance of the Company. These additional amortization charges will continue until 2032 butat a reducing rate, yet will still be at a meaningful level until 2028.

3. Upgrade & manufacturing facilities relocation-related costs: These charges all relate to the multi-year Upgrade & Relocation program in

China. As part of this program, production assets located in the old production sites in Jingzhou and Huai’An were relocated to new sites in 2020,2021 and in the coming years. Since some of the older production assets may not be able to be relocated, some of these assets which are nolonger operational are being written off (or impaired), while for others, their economic life has been shortened and therefore will be depreciatedover a shorter period. Since these are older assets that were built many years ago and will be replaced by newer production facilities at the newsites, and since the ongoing operations of the business will not be impacted thereby, the Company adjusts for the impact of all charges relatedto the China Upgrade & Relocated program, which include mainly: (i) excess procurement costs incurred as the Company continued to fulfilldemand for its products, in order to protect its market position, through replacement sourcing at significantly higher costs from third-party suppliers(ii) elevated idleness charges largely related to suspensions at the facilities being relocated These charges have significantly declined since thesecond quarter of 2022, as the relocation and upgrade of the manufacturing Jingzhou site in China has been completed and is now at a highlevel of operation.

4. Incentive plans: ADAMA granted certain of its employees, a long-term incentive (LTI) in the form of 'phantom' awards linked to the Company’s

share price. As such, the Company records an expense, or recognizes income, depending on the fluctuation in the Company’s share price,regardless of award exercises. To neutralize the impact of such share price movements on the measurement of the Company’s performanceand expected employee compensation and to reflect the existing phantom awards, in the Company’s adjusted financial performance, the LTI ispresented on an equity-settled basis in accordance with the value of the existing plan at the grant date.

5. ASBEs classifications COGS impact – according to the ASBE guidelines [IAS 37], certain items (specifically certain transportation costs) areclassified under COGS.

6. ASBEs classifications OPEX impact – according to the ASBE guidelines [IAS 37], certain items (specifically certain transportation costs) areclassified under COGS.

Exchange Rate Data for the Company's Principal Functional Currencies

	June 30			Q2 Average			H1 Average
	2023	2022	Change	2023	2022	Change	2023	2022	Change
EUR/USD	1.086	1.040	4.48%	1.089	1.07	2.12%	1.081	1.094	(1.18%)
USD/BRL	4.819	5.238	8.00%	4.951	4.92	(0.62%)	5.073	5.077	0.08%
USD/PLN	4.107	4.483	8.39%	4.178	4.36	4.15%	4.285	4.239	(1.07%)
USD/ZAR	18.657	16.103	(15.86%)	18.649	15.57	(19.78%)	18.192	15.409	(18.06%)
AUD/USD	0.663	0.687	(3.59%)	0.669	0.72	(6.53%)	0.676	0.720	(6.01%)
GBP/USD	1.262	1.211	4.27%	1.262	1.21	4.27%	1.233	1.299	(5.06%)
USD/ILS	3.700	3.500	(5.71%)	3.700	3.50	(5.71%)	3.592	3.270	(9.84%)
USD L 3M	3.40%	2.29%	1.11 bp	3.08%	1.53%	1.55 bp	2.65%	1.03%	1.62 bp

	June 30			Q2 Average			H1 Average
	2023	2022	Change	2023	2022	Change	2023	2022	Change
USD/RMB	7.226	6.711	7.66%	7.009	6.611	6.01%	6.925	6.481	6.85%
EUR/RMB	7.848	6.977	12.49%	7.633	7.051	8.25%	7.484	7.088	5.59%
RMB/BRL	0.667	0.780	14.55%	0.706	0.744	5.08%	0.733	0.783	6.49%
RMB/PLN	0.568	0.668	14.91%	0.596	0.659	9.58%	0.619	0.654	5.41%
RMB/ZAR	0.387	0.417	7.07%	0.376	0.425	11.50%	0.381	0.421	9.49%
AUD/RMB	4.788	4.613	3.80%	4.688	4.731	(0.91%)	4.683	4.663	0.43%
GBP/RMB	9.121	8.125	12.26%	8.776	8.318	5.50%	8.538	8.416	1.44%
RMB/ILS	0.512	0.522	1.81%	0.520	0.505	(2.90%)	0.519	0.505	(2.79%)
RMB Shibor 3M	2.168%	2.00%	0.168 bp	2.292%	2.139%	0.153 bp	2.352%	2.276%	0.076 bp

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