ADAMA Ltd.
Q1 2019 Performance Estimation
I. Performance Estimation
1. Estimation period: January 1, 2019 – March 31, 2019
2. Estimated performance: lower compared with the corresponding period last year
The Company and all the directors confirm that the information disclosed is true, accurate,complete and with no false recording, misleading statement or material omission.
Item
| Item | Current reporting period January to March 2019 | Same period last year January to March 2018 as previously reported |
| Net income attributable to the shareholders of the listed company (RMB in millions) | 338 – 391 | 2,032 |
| Percentage decrease YoY 80.7% – 83.4% |
| Basic earnings per share (RMB) | 0.1381 – 0.1602 | 0.8306 |
II. Pre-audit of the estimated performance
The estimated results of this period are the preliminary estimation of the Company and have notbeen audited nor reviewed by certified accountants.
III. Explanations for Performance Variation
The Company is expecting to deliver another first quarter of more than $1 billion in sales, almostmatching last year’s best-ever, overcoming the disruption at the Jingzhou old site which isalready gradually resuming operation, harsh winter in North America and continued supplyconstraints globally, as well as the impact of softer currencies. On a constant currency basis, theCompany’s sales in the first quarter are expected to be above those of last year, driven by priceincreases.
Strong contribution of Latin America, India, Middle East and Africa, as well as China and newjoiners Bonide Products, Inc. and Jiangsu Anpon Electrochemical Co., Ltd., offset weather- andsupply-related delays in North America, Europe and Asia-Pacific.
In addition, the Company delivered marked price increases across all regions.
The Jingzhou old site is gradually resuming operation, following its connection via pipeline to thestate-of-the-art wastewater treatment facility installed at the new and already operational site. As
a consequence of the disruption, the Company lacked sufficient product to fulfill demand, andincurred approximately RMB 70 million of additional idleness c ost .
Adjusted net income for the quarter, as well as other profit metrics, are expected to be in line withQ1 2018’s robust levels, which laid the foundation for a very strong year.
The significantly higher reported net income in Q1 2018 is due to the recognition of anapproximately RMB 1,573 million one-time net income from the divestiture of several products inEurope in connection with the approval by the EU Commission of the acquisition of Syngenta byChemChina last year, and other related impacts. The proceeds of this divestiture, net of taxesand transaction expenses, were paid to Syngenta in return for the transfer of a portfolio ofproducts in Europe of similar nature and economic value. Excluding the impact of the products’divestiture and transfer on the net income of Q1 2018 (capital gain net of taxes) and Q1 2019(amortization of written-up assets), results in net income in Q1 2018 which is lower by RMB 1,573million and Q1 2019 which is higher by RMB 54 million.
Excluding the impact of the products’ divestiture and transfer, as well as the impact of certainone-time/non-cash items, including mainly the legacy amortization of the 2011 PPA for theacquisition of Adama Agricultural Solutions Ltd. by ChemChina, and reflecting the long-termincentive plan on an equity-settled basis, the adjusted net income is expected to be betweenRMB 509 million – RMB 563 million, compared to last year's adjusted net income of 533 million.
IV. Other Remarks
The estimated results above are only preliminary calculations performed by the finance team ofthe Company based on preliminary financial data available to the Company and have not beenaudited or reviewed by the Company's independent auditors. These estimations may change,inter alia, as a result of the processing and analysis of the financial data that the Company willperform for the preparation of its Q1 2019 financial statements. Please refer to the Q1 2019Report to be duly disclosed by the Company on April 29, 2019 for specific and accurate financialinformation.
Media for Information Disclosure of the Company: China Securities Journal, Securities Times, TaKung Pao, and Cninfo (www.cninfo.com.cn). Investors are reminded to exercise caution whenmaking investment decisions.
By order of the BoardADAMA Ltd.April 15th, 2019