ADAMA Ltd. has reported its third quarter and first nine months of 2024 financial results, highlighting substantial improvements in various financial metrics. The company has seen a 14% increase in adjusted gross profit for Q3 2024 over the same period last year, marking the third straight quarter of improvement. This is attributed to strict inventory management and a focus on higher-margin, differentiated products. As a result, the adjusted EBITDA more than doubled in Q3 2024 compared to Q3 2023, continuing the upward trend for two consecutive quarters.
For the first nine months of 2024, adjusted EBITDA saw a 6% increase compared to the same period in 2023, showcasing effective operational expense management. Operating cash flow showed significant improvement, reaching $402 million for the first nine months of 2024, a dramatic rise from $63 million in 2023. The free cash flow also turned positive, at $179 million, contrasting the $276 million outflow from the previous year. However, sales in Q3 2024 were down 10% to $929 million, mainly due to a decrease in prices despite a slight increase in volumes. This reflects challenging market conditions with a decline in prices by 7% even as volumes rose by 1%.
Despite these challenges, the adjusted gross profit increased to $225 million, up 14% from Q3 2023, achieving a 24.2% margin versus 19.2% the previous year. Similarly, adjusted EBITDA soared to $80 million, with the margin improving to 8.6% compared to 3.4% last year. Despite impressive gains in profitability, ADAMA reported an adjusted net loss of $78 million for Q3 2024 and a reported net loss of $133 million. There has been a remarkable improvement in operating cash flow, rising by $77 million to $159 million in Q3 2024 compared to $82 million in the same quarter last year.
Free cash flow also improved by $150 million, achieving $128 million in Q3 2024 compared to a negative $22 million in Q3 2023. For the first nine months of 2024, sales were down 14% to $3,028 million, largely due to price reductions and a slight volume decrease. Nevertheless, adjusted gross profit was $782 million, with a margin improvement from the previous year. The company's transformation strategy, branded "Fight Forward," is credited for these improvements. ADAMA has emphasized reallocating efforts towards high-value products while scaling back on low-margin generic offerings, particularly amid fierce competition in the agrochemical market.
ADAMA's strategic decision to focus on differentiated products is positioning the company well against broader industry dynamics, where lower farmer purchasing power and slow inventory turnover continue to strain market conditions. Geographically, ADAMA's sales reflect varying conditions. In Europe, Africa, and the Middle East, adverse weather and competition affected performance, whereas the North America segment saw higher sales driven by improved weather conditions and a focus on high-margin products. In Latin America and the Asia-Pacific regions, market-specific challenges included competitive pricing and adverse weather, although new product launches did bolster performance to some degree.
The financial performance reflects disciplined operational strategies amid turbulent market conditions, highlighting ADAMA's commitment to achieving sustainable growth and maintaining a strategic focus on innovation and efficiency. ADAMA Ltd., a key player in crop protection, is enhancing its product offerings with various new product launches and registrations across global markets. These efforts emphasize advancements in innovative formulation technologies aimed at meeting farmers' diverse needs while ensuring profitable growth and operational excellence. As ADAMA continues to navigate market challenges, its ongoing adaptive strategies underline a commitment to resilience and long-term success.
