ADAMA (000553) Q2 2026 earnings summary

Executive summary

• Entered a new strategic phase in 2026 focused on profitable growth after restructuring, with discipline leveraged for impact and a shift to growth-oriented strategy.

• Achieved sales growth in Q2 and H1 2026, driven by higher volumes despite significant price pressure and challenging market conditions globally, especially in Latin America and Europe.

• Improved gross margin and net income, supported by a stronger product mix, cost control, and operational discipline, including ongoing headcount reduction.

• Enhanced debt profile and cash management led to lower financial expenses and higher adjusted net income.

• Net profit rebounded to RMB 432.6 million from a loss last year, with strategic reduction in low-margin sales and improved margins.

Financial highlights

• H1 2026 sales were flat year-over-year at $2.1 billion, but excluding the Anpon asset exit, sales increased by 3%; Q2 2026 sales rose 1% YoY to $980 million.

• Gross profit rose by 2% to $632 million, with gross margin above 30% due to a favorable product mix; gross margin was 29.6% in H1 and 29.1% in Q2.

• Adjusted net income increased by 28% YoY, excluding extraordinary items; H1 adjusted net income was $45 million, up from $22 million.

• EBITDA declined 3% YoY to $302 million in H1 and was stable at $118 million in Q2.

• Operating cash flow was $100 million, and free cash flow was $54 million, both lower than last year due to longer collection cycles and inventory buildup.

• Operating revenues for H1 2026 were RMB 14.48 billion, down 3.6% YoY; net profit attributable to shareholders reached RMB 432.6 million.

• Net cash flow from operating activities dropped 61.5% to RMB 669.9 million.

Outlook and guidance

• Management expects continued market challenges through the end of 2026, with persistent overcapacity and price pressure.

• Focus remains on growing the differentiated portfolio, maintaining cost discipline, and improving operational efficiency.

• Resumption of business in Turkey is on track for late 2026, with most impact expected in 2027.

• No cash dividends, bonus shares, or capital reserve conversions planned for the reporting period.