Key Takeaways
- ADAMA expects a revenue decline of 7% to 16% in 2024, driven by price volatility and higher interest rates.
- Adjusted EBITDA is projected to improve, reflecting better gross margins and cost controls.
- The company anticipates an adjusted net loss of USD 151 million to 261 million, compared to USD 236 million in 2023.
- Reported EBITDA and net loss are expected to worsen due to transitory and non-cash items from the “Fight Forward” transformation plan.
- Final results will be released on March 13, 2025, after trading hours.
ADAMA Reports Revenue Decline Amid Market Challenges
ADAMA (Profile) projects revenues for full-year 2024 to decline by 7% to 16% in USD, amounting to $3,934 million to $4,348 million (28 billion to 31 billion RMB). The decline is attributed to:
- Price volatility in the market.
- Just-in-time purchasing patterns driven by high-interest rates.
Despite these challenges, Q4 2024 saw volume growth for the second consecutive quarter, reflecting the company’s strategic shift toward higher-margin products.
ADAMA Expects Growth in Adjusted EBITDA Despite Lower Revenues
ADAMA anticipates an increase in adjusted EBITDA and margin for 2024. The improvements are driven by:
- Reduced costs of new inventory sold.
- A sales mix favoring higher-margin products.
- Continued control of operating expenses through the “Fight Forward” transformation plan.
The company estimates an adjusted net loss of USD 151 million to 261 million for 2024, showing improvement compared to the 2023 loss of USD 236 million.
Adjusted Net Loss: 2023 vs. Estimated 2024
Metric | Estimated Full-Year 2024 | Full-Year 2023 |
---|---|---|
Net Loss (USD millions) | (261) – (151) | (236) |
Earnings per Share (USD) | (0.112) – (0.0648) | (0.1013) |
Net Loss (RMB millions) | (1,860) – (1,073) | (1,691) |
Earnings per Share (RMB) | (0.7982) – (0.4604) | (0.7260) |
Reported EBITDA and Net Loss Expected to Worsen
While adjusted financial metrics show improvement, ADAMA expects reported EBITDA and net loss to worsen due to several factors tied to the “Fight Forward” plan, including:
- Amortization of intangible assets from prior acquisitions.
- Restructuring costs for operational efficiency improvements.
- Provisions for legal claims, soil remediation, and asset impairments.
Reported Net Loss: 2023 vs. Estimated 2024
Metric | Estimated Full-Year 2024 | Full-Year 2023 |
---|---|---|
Net Loss (USD millions) | (470) – (360) | (225) |
Earnings per Share (USD) | (0.2017) – (0.1545) | (0.0964) |
Net Loss (RMB millions) | (3,351) – (2,564) | (1,606) |
Earnings per Share (RMB) | (1.4384) – (1.1006) | (0.6893) |
ADAMA’s “Fight Forward” Plan: Early Results
The “Fight Forward” transformation plan, launched in early 2024, aims to improve profitability and cash flow over three years. Early impacts include:
- Increased gross margins from a shift to higher-margin products.
- Cost savings from operational efficiencies.
- Volume growth in key quarters, despite challenging market conditions.
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