Makhteshim Agan posted strong Q1 with $828.0 million sales

Makhteshim Agan Industries (MAI) reported sales increasing by 6.1% to $828.0 million in the first quarter of 2012 ended March 31st. The increase stemmed primarily from an improved mix of products and an increase in volumes sold. In addition, a rise in the price of oil and raw materials since 2011triggered a slight increase in selling prices in the crop protection sector which allowed MAI to also raise its prices.

"Our strong business performance during the first quarter, including our record sales, gross profit and EBIDTA, stems from our focused pursuit of our strategic direction. We are also working intensively to realize the joint potential of MAI and ChemChina following the completion of our merger, including investigating business opportunities in China that will enable us to strengthen our presence in China and the Pacific Asian region and foster continued growth and improved profitability over the long term.” commented Mr. Yang Xingqiang, Makhteshim Agan’s Chairman of the Board.

Operating profit for the first quarter of 2012 was $125.0 million (15.1% of sales) compared to operating profit of $112.1 million (approximately 14.4% of sales) for the first quarter of 2011. Earnings before interest, taxes, depreciation and amortization (EBITDA) during Q1 2012 was $163.2 million, equal to 19.7% of sales compared to EBITDA of $143.2 million (18.3% of sales) for the comparable period in 2011, representing a 13.8% growth rate.

Makhteshim Agan’s sales result ($ million)
Q1 ended March 31st	2012	2011	Change%
Sales	828.0	780.5	+6.1
EBITDA	163.2	143.2	+13.9
Operating profit	125.0	112.1	+11.5

Sales by region

On a geographic basis, the strongest sales growth was delivered by the Company’s Asia Pacific & Africa region, which contributed $141.2 million in the first quarter year of 2012, an 11.4% increase from $126.7 million for the first quarter of 2011. This improvement resulted from an increase in quantities sold in Asia and from the positive impact of changes in exchange rates which were partially offset by the Company’s hedging transactions.
 
European sales for the first quarter of 2012 were $423.5 million compared with $388.9 million in the corresponding period of the previous year, an increase of 8.9%. The growth stemmed mainly from increased quantities sold and ability to compensate for some of the increase in raw material costs through moderate price increase. This was countered by the negative effect of changes in exchange rates that were offset, somewhat, by the Company’s hedging transactions.
 
North American sales for Q1 2012 amounted to $131.9 million compared to $126.9 million for the comparable period in 2011, an increase of 3.9%. Sales were characterized by an increase in volumes.

Sales in Latin America for first quarter of 2012 were $107.4 million compared to $113.5 million for the same quarter last year, a reduction of 5.4%.  The slight decrease in sales stemmed from lower quantities sold as a result of draught conditions in Argentina (AgroNews 2012-02-02).  
 

Makhteshim Agan’s sales by region ($ million)
Q1 ended March 31st	2012	2011	Change%
Europe	423.5	388.9	+8.9
Latin America	107.4	113.5	-5.4
North America	131.9	126.9	+3.9
Asia Pacific & Africa	141.2	126.7	+11.4
Israel	24.0	24.5	-1.9

Mr. Erez Vigodman, President and CEO of Makhteshim Agan, commented: “Makhteshim-Agan's first quarter presents a good start to 2012, posting record financial results in most parameters.

These results are yet another reflection of the transformation our business and operations have been undergoing since 2010. Positive environment in global agriculture industry in general, and in the agro-chemical industry in particular, were also influential.

We remain committed to advancing our short and long term agenda as we evolve our business to provide simple, effective, reliable solutions to farmers. We do that by implementing significant improvement measures that effect our operations and global infrastructure. At the same time, we are investing significant resources in our future growth, primarily in the integration of Makhteshim Agan and the agro-chemical activities of ChemChina (AgroNews 2011-10-19), as well as in other major strategic initiatives.”