Makhteshim Agan 2010 Q2 sales up 7%

The Makhteshim Agan Group, the world leader in branded off-patent crop protection solutions, reported financial results for the 2010 second quarter and first half, ended June 30, 2010.

Below are key financial metrics for 2Q 10 and 1H10

In millions of US$	Q2 2010	Q2 2009	% Change	H1 2010	H1 2009	% Change
Sales	$600.9	$560.3	7.3%	$1,324.1	1,282.5	3.2%
EBITDA	$70.9	$60.5	17.2%	$203.6	$188.9	7.8%
Gross profit Gross margin	$175.1 29.1%	$154.8 27.6%	13.1%	$407.9 30.8%	$372.2 29.0%	9.6%
Operating profit	$44.1	$37.6	17.3%	$150.6	$143.2	5.2%
Net Income	$12.4	$1.7	NM	$83.3	$79.9	1.5%
Net cash flow from operating activities	$268.2	$222.1	20.7%	$286.0	$159.4	79.4%

Financial Results for Second Quarter and First Six Months of 2010:

Second quarter 2010 gross profit totaled $175.1 million compared with $154.8 million in the same period last year. Gross profit for the first six months of the year was $407.9 million, a 9% increase compared with $372.2 million in the same period of 2009.  The increases in gross profit and profit margin for both 2Q and 1H 2010 stemmed from an increase in sales volume and a decline in raw material prices which led to a decrease in sales costs. Value of Inventory for the quarter declined to $931.7 a 4.4% reduction compared to corresponding quarter last year.
 
Second quarter 2010 sales of $600.9 million were driven by an increase in sales volume of crop protection products in most of the Company’s areas of operations. The increase in sales amounted mostly from volume increase which was partially offset by a decline in selling prices compared with the corresponding quarter last year, as well as the devaluation of the Euro against the USD. Sales for the first six months ended June 30, 2010 were $1.32 billion, a 3.2% increase compared with $1.28 billion in the same period last year. 
 
Below are sales for the 2Q 10 and 1H 10 by geographic region:

Breakdown of Sales Millions of US$	Q2 2010	Q2 2009	% Change	1H 2010	1H 2009	% Change
Europe	$261.2	$265.7	(1.7%)	$633.7	$633.3	0.1%
Latin America	$105.1	$98.8	6.4%	$221.7	$242.7	(8.6%)
North America	$126.4	$120.0	5.3%	$246.0	$244.4	0.7%
Asia Pacific & Africa	$85.4	$52.4	62.9%	$179.2	$118.0	51.8%
Israel	$22.9	$23.3	(1.7%)	$43.5	$44.2	(1.5%)

On a geographic basis, the strongest sales increases were in the Company’s Asia Pacific & Africa region, which contributed $85.4 million in the second quarter of 2010, a 62.9% increase from $52.4 million in the same quarter last year.  For the first six months of 2010, sales in this region amounted to $179.2 million, compared to $118.0 million in the corresponding period of the previous year, an increase of $61.2 million.  For both periods, these improvements were driven by improved weather conditions in Australia and the expansion of operations in India slightly offset by lower selling prices, compared to the corresponding quarter last year. 
 
Sales in Latin America for the second quarter of 2010 amounted to $105.1 million, compared with $98.8 million in the corresponding period of the previous year, an increase of $6.3 million mostly driven by supportive weather conditions in the region. For the first six months of 2010, sales in Latin America amounted to USD 221.7 million compared to USD 242.7 million in the same period of the previous year, an 8.6% decrease. This decrease derived mainly from the decline in prices, particularly of Glyphosate, which was offset, in part, by the increase in sales volume.
 
North American sales for the second quarter of 2010 amounted to $126.4 million, compared with $120.0 million in the same quarter of the previous year, an increase of $6.4 million. During the first six months of 2010, sales in North America amounted to $246.0 million compared to $244.4 million in the corresponding period of the previous year, an increase of $1.6 million. Growth for both periods stemmed mainly from the increase in sales volume of crop protection products, which was offset by the decline in the average sales prices.
 
European sales in the second quarter of 2010 amounted to $261.2 million, compared with the amount of $265.7 million in the corresponding period of the previous year. The decrease stemmed mainly from: (1) devaluation of currencies, partially offset by hedging in Europe, particularly the Euro against the USD; and (2) decline in average sales prices of the Companys products. This was partially offset by an increase in sales volume and the initial incorporation of companies acquired in Eastern Europe during the course of the corresponding quarter last year.  During the first six months of 2010, sales in Europe amounted to $633.7 million compared to $633.3 million in the same period of the previous year.
 
In Israel, the Companys sales in the second quarter of 2010 amounted to $22.9 million, a slight decrease from sales of $23.3 million reported in the same period of the previous year. During the first six months of the year, sales in Israel totaled $43.5 million similar to sales of $44.2 million in the corresponding period of the previous year.