Makhteshim Agan Announces Continued Positive Business Momentum,
Improved Operating Profit & EBITDA In Q3 2012
TEL-AVIV, Israel, Nov. 18,
2012 /PRNewswire/ -- The Makhteshim Agan Group ("MAI" or
the "Company"), the world leader in branded off-patent crop
protection solutions, today reported its financial results for the
third quarter and first nine months ended September 30, 2012.
FINANCIAL HIGHLIGHTS
In
millions of US$
|
|
Q3
2012
|
Q3
2011
|
Change
|
|
1-9/2012
|
1-9/2011
|
Change
|
Sales*
|
|
643.5
|
638.5
|
0.8%
|
|
2,255.0
|
2,142.1
|
5.3%
|
Gross
profit
|
|
199.3
|
197.7
|
0.8%
|
|
740.9
|
691.7
|
7.1%
|
Gross
margin
|
|
31.0%
|
31.0%
|
NA
|
|
32.9%
|
32.3%
|
NA
|
Operating profit
|
|
52.8
|
50.1
|
5.3%
|
|
278.6
|
249.3
|
11.7%
|
Profit
before tax
|
|
23.0
|
15.3
|
50.5%
|
|
188.3
|
163.1
|
15.5%
|
Net
income
|
|
13.1
|
10.1
|
30.1%
|
|
144.4
|
147.2
|
(1.9%)
|
EBITDA
|
|
89.6
|
83.3
|
7.6%
|
|
388.7
|
346.0
|
12.4%
|
|
* In
constant currency terms sales grew by 4.2% and 7.2% in the quarter
and the first nine months respectively.
|
Commenting on the results, Mr. Yang Xingqiang,
Makhteshim Agan's Chairman of the Board, said, "We are
pleased to report a strong quarter with double digit sales growth
in the Asia Pacific &
Africa region, as well as
improvement in all our financial indicators for the first nine
months, including EBITDA, operating profit and net income. We
continue to implement the Company's strategic initiatives,
including the integration of MAI with ChemChina's agrochemicals
activities. In parallel, we are executing on our operational work
plan that will allow us to strengthen our ability to create
simplicity in agriculture for farmers around the globe."
Mr. Erez Vigodman,
President and CEO of Makhteshim Agan, commented, "the
continued improvement in our quarterly results proves MAI's ability
to expand and grow while strengthening our operational discipline
and our customer focus over time.
"I am pleased with our ability to significantly grow our
operating profit, EBITDA and net income for both the quarter and
first nine months of the year, despite the quarter's unfavorable FX
environment and challenging weather in the U.S., Russia and Eastern
Europe. We continued to introduce new differentiated
off-patent solutions in many of our territories while compensating
for higher raw material prices. Our strengths in market reach and
product registration allowed us to cement our market positioning
and will continue to play a pivotal role in our strategy going
forward."
FINANCIAL REVIEW
Sales: Revenues for the third quarter of 2012
totaled $643.5 million compared with
$638.5 million in the third quarter
of 2011. The increase derived from higher selling prices and
increased quantities sold in Asia
and Europe, which compensated for
negative exchange rate fluctuations and higher raw material and
active costs as compared to the third quarter of 2011.
For the nine-month period, sales totaled $2,255.0 million, a 5% increase of compared with
$2,142.1 million for the first nine
months of 2011.
On a geographical basis, the sales breakdown was as
follows:
Breakdown of Sales
(Millions of $US)
|
Q3
2012
|
Q3
2011
|
%
Change
|
1-9/2012
|
1-9/2012
|
%
Change
|
Europe
|
211.7
|
207.0
|
2.3%
|
955.8
|
911.8
|
4.8%
|
Latin America
|
188.1
|
192.1
|
(2.1%)
|
432.8
|
420.2
|
3.0%
|
North America
|
88.5
|
95.6
|
(7.5%)
|
389.9
|
373.6
|
4.4%
|
Asia Pacific & Africa
|
130.2
|
117.6
|
10.7%
|
399.0
|
358.3
|
11.4%
|
Israel
|
25.0
|
26.1
|
(3.7%)
|
77.5
|
78.2
|
(1.0%)
|
The quarter's strongest sales growth was delivered by
Asia Pacific & Africa, whose revenues increased by 11% to
$130.2 million compared with
$117.6 million in the third quarter
of 2011. This reflected increased quantities sold and a rise in
selling prices partially offset by the erosion of local currencies,
primarily the Indian rupee.
Sales in Europe increased by 2%
from $207 million to $212 million despite the erosion of European
currency rates and poor weather across the continent. This
reflected increased sales and higher selling prices in the region,
together with the success of currency hedging transactions that
provided partial compensation for the erosion of currency exchange
rates.
Sales in North America
decreased by 7.5% from $96 million to
$89 million, reflecting the decreased
quantities sold in light of the drought experienced in the U.S.
Sales in Latin America decreased
by 2% from $192 million to
$188 million, reflecting reduced
quantities sold as compared with the third quarter of 2011,
countered partially by higher selling prices, mainly in
Brazil.
Gross Profit: Gross profit for the third quarter
totaled $199 million (31.0% of
sales), up 1% compared with $198
million (31.0% of sales) for the same period in 2011.
For the nine-month period, gross profit totaled $741 million (32.9% of sales), up 7% compared
with $692 million (32.4% of sales) in
the first nine months of 2011. The increased gross profit reflected
the higher sales countered by a rise in raw material prices and the
erosion of the value of the dollar, resulting in a slight reduction
of the gross margin.
Operating Expenses: R&D, Selling and General
and Administrative expenses for the quarter totaled $147 million (22.8% of sales), compared with
$148 million (23.1% of sales) for the
third quarter of 2011. For the nine-month period, operating
expenses totaled $462 million (20.5%
of sales), compared with $442 million
(20.7% of sales) for the first nine months of 2011.
Operating Profit: Operating profit for the third
quarter increased by 5.3% to $53
million (8.2% of sales), compared with $50 million (7.8% of sales) for the third quarter
of 2011. For the nine-month period, operating profit increased by
12% to $279 million (12.4% of sales),
compared with $249 million (11.6% of
sales) for the first nine months of 2011.
Financing Expenses: Financing expenses totaled
$28 million for the three months
ended September 30, 2012 compared
with $33 million for the third
quarter of 2011. The decrease reflects the contribution of exchange
rate differences and hedging transactions made by the Company,
countered by an increase in interest expense associated with the
issuance of additional Series B and D debentures in January 2012.
For the nine-month period, financing expenses totaled
$83 million, compared with
$81 million in the first nine months
of 2011.
Income Before Tax: Income before tax for the third
quarter of 2012 increased 51% to $23
million as compared with $15
million for the third quarter of 2011. The increase in
income before tax stemmed from the quarter's improved profitability
and higher sales.
For the nine month period, income before tax increased by 16% to
$188 million compared with
$163 million for the first nine
months of 2011.
Net Income: Net income for the third quarter of
2012 totaled $13 million, or 2.0% of
sales, compared with $10 million, or
3.x% of sales, for the third quarter of 2011.
For the nine-month period, net profit totaled $144 million, or 6.4% of sales, compared with
$147 million, or 6.9% of sales, in
the first nine months of 2011.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization): EBITDA for the third quarter of 2012
increased by 14% to $90 million
(13.9% of sales), compared with $83
million (13.0% of sales) for the third quarter of 2011. For
the nine-month period, EBITDA totaled $389
million (17.2% sales), compared with $346.0 million (16.2% of sales) in the first nine
months of 2011.
Cash Flow: The Company recorded negative cash flow
from operating activities of $86
million during the third quarter of 2012 compared with a
negative cash flow of $36 million in
the third quarter of 2011. For the first nine months, cash flow
totaled $51 million compared with
$253 million in the first nine months
of 2011. The change in cash flow stemmed primarily from an increase
in working capital, inter alia, for the purpose of supporting the
organic growth of the Company.
Free cash flow (excluding short-term investments) for the third
quarter of 2012 was negative at $144.6
million compared to a negative cash flow of $90 million for the corresponding period of
2011. For the first nine months of 2012, negative free cash
flow (excluding short-term investments) was $115 million compared to positive free cash flow
of $58 million in the first nine
months of 2011.
About Makhteshim Agan
Makhteshim Agan Industries Ltd.
is a leading manufacturer and distributor worldwide of
crop-protection solutions and the largest off-patent player in the
industry. The Company supplies efficient solutions to farmers that
assist them in combating disease and increasing yields. In 2011,
the Company's revenues were over $2.69
billion, and it is ranked seventh in the world in the
overall agro-chemicals industry. The Company is characterized by
its know-how, high-level technological-chemical abilities,
expertise in product registration, and observance of strict
standards of environmental protection, stringent quality control
and global marketing and distribution channels. For more
information, visit us at www.ma-industries.com.
Contact:
Rony Patishi-Chillim
SVP of Global Corporate Communications
Email: IR@ma-industries.com
Phone: +972 73
232 1941
SOURCE Makhteshim Agan Industries Ltd.