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Makhteshim Agan Announces Continued Positive Business Momentum, Improved Operating Profit & EBITDA In Q3 2012

Strong Business Performance in Europe, Asia Pacific and Africa Region

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.


In millions of US$

Q3 2012

Q3 2011












Gross profit







Gross margin







Operating profit







Profit before tax







Net income














* 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." 


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






% Change








Latin America







North America







Asia Pacific & Africa














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

Rony Patishi-Chillim
SVP of Global Corporate Communications
Email: [email protected]
Phone: +972 73 232 1941

SOURCE Makhteshim Agan Industries Ltd.

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