TEL-AVIV, Israel, May 12, 2013 /PRNewswire/ --The Makhteshim Agan Group ("MAI" or the "Company"), the world leader in branded off-patent crop protection solutions, today reported strong financial results for the first quarter ended March 31, 2013.
FINANCIAL HIGHLIGHTS
(in USD millions) | Q1 2013 | Q1 2012 | Change |
Sales* | 885.4 | 828.0 | 7% |
Gross profit | 294.8 | 286.9 | 2.7% |
Gross margin | 33.3% | 34.6% | |
Operating profit | 131.1 | 125.0 | 4.9% |
Net income | 90.2 | 89.3 | 1.0% |
EBITDA | 168.5 | 163.2 | 3.3% |
*Sales growth amounted to 8.4% excluding the FX effect
COMMENTS OF MANAGEMENT
Commenting on the results, Mr. Yang Xingqiang, Makhteshim Agan's Chairman of the Board, said: "The first quarter was another period of solid business performance marked by continued improvement in our financial results, including our highest-ever Q1 revenues, an increased gross profit and an improvement in our operating profit. From a strategic point of view, we continue to focus on the building of a business platform that will enable MAI to become a leading player in the rapidly growing crop protection markets in China. Meanwhile, we are very pleased with the progress that MAI continues to make in all areas of its business."
Mr. Erez Vigodman, President and CEO of Makhteshim Agan, commented: "Our first quarter results demonstrate our continued progress especially in the areas of global supply chain, new products development and launch, products portfolio differentiation and global marketing.
"Despite challenging weather conditions in some important markets and unfavorable effective exchange rates compared to last year, we have been able to deliver growth across the globe. At the same time, we remain focused on executing our operational and strategic change plan allowing us to continue and differentiate our product offering, demonstrate better control over costs and increase prices to compensate for increasing raw material costs."
Mr. Vigodman added: "We continue to move forward with our integration process in China with a focus on building our foundation in one of the most important markets in our industry. This platform is designated to support our global competitive position, continued expansion and profitable growth to support farmers all over the globe with simple, high quality and innovative solutions."
DISCUSSION OF FINANCIAL RESULTS
SALES
MAI's revenues for the first quarter of 2013 were $885.4 million, a 7% increase compared with the $828.0 million generated in the first quarter of 2012 and an 8.4% increase when excluding the FX effect. The increase derived primarily from increased quantities sold in most regions (especially in Latin America and Asia), together with rising selling prices in most regions. It should be noted that the effective exchange rates prevailing in Q1 2013 were lower than those that prevailed in Q1 2012.
Following is a breakdown of revenues by region:
Breakdown of Sales (millions of USD) | Q1 2013 | Q1 2012 | Change | Change |
Latin America | 128.3 | 107.4 | 19.5% | 19.4% |
North America | 145.8 | 131.9 | 10.5% | 10.9% |
Asia Pacific, Africa & Middle East | 175.2 | 165.2 | 6.2% | 6.0% |
Europe | 436.0 | 423.5 | 2.9% | 5.8% |
On a geographic basis, sales increases were recorded in all regions, with the strongest growth delivered by the Latin American, North American and APAC regions.
Revenues from Latin America grew 19.5% to $128.3 million from $107.4 million in the first quarter of 2012. The improvement derived primarily from the combination of increased quantities sold and improved selling prices.
Revenues from North America totaled $145.8 million, a 10.5% increase compared the first quarter of 2012. The growth derived from significant increases in quantities sold and a rise in selling prices.
Sales in Asia Pacific, Africa and Israel totaled $175.2 million, a 6.2% increase compared with the first quarter of 2012. The rise reflected increases in both selling prices and quantities sold, despite extremely difficult drought conditions in Australia.
European sales for Q1 2013 totaled $436.0 million, a 2.9% increase (5.8% growth rate when excluding FX effect). The growth derived from both increased selling prices and quantities sold, despite extremely cold and wet weather that prevailed during the quarter, delaying the season.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
EBITDA for the first quarter of 2013 totaled $168.5 million, or 19.0 % of sales. This was a 3.3% increase from the $163.2 million, or 19.7% of sales, recorded in the first quarter of 2012.
GROSS PROFIT & GROSS MARGIN
Gross profit for the quarter totaled $294.8 million, a 2.7% increase compared with the $286.9 million recorded in the first quarter of 2012. The increase reflected higher average selling prices, rising quantities sold and an improved overall mix of products sold, which compensated for rising input costs.
Gross margin for the quarter declined to 33.3% compared with 34.6% for the prior-year period. This was due primarily to the lower effective exchange rates that prevailed in the reporting period relative to those prevailing in the first quarter of 2012.
OPERATING EXPENSES & OPERATING PROFIT
Operating expenses for the quarter totaled $163.7 million (18.5% of sales), a 1.1% increase compared with $161.9 million (19.6% of sales) for Q1 2012.
Operating profit for the first quarter of 2013 totaled $131.1 million, or 14.8% of sales, up 4.9% compared with $125.0 million, or 15.1% of sales, for the first quarter of 2012. The increase derived from the rise in gross profit combined with the strong control over operating expenses.
NET INCOME
Net income for the reporting period totaled $90.2 million, up 1.0% compared with $89.3 million for the first quarter of 2012.
CASH FLOW
The Company's current cash flow in the first quarter of 2013 was negative at USD 156.7 million, compared with a negative current cash flow of USD 124.0 million in the corresponding quarter last year.
The change in cash flow from operating activities stemmed primarily from timing differences in the working capital, which are expected to reverse during the year.
Further Information
All financial filings, together with a presentation of the quarter's key financial highlights, can be accessed through the Company's website at www.ma-industries.com.
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 sector. The Company supplies efficient solutions to farmers that assist them in combating disease and increasing yields. In 2012, the Company's revenues were over $2.83 billion, and it is ranked seventh in the world in the 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:
Anna Wood
Communication Specialist
Email: IR@ma-industries.com
073 232 1131
SOURCE The Makhteshim Agan Group
