Adisseo: Revenue and net profit both achieved double-digit growth in the third quarter

China Securities Network News (Wang Luo) Andisseo (600299) announced the company's 2021 third quarter performance report on the evening of October 28. In the third quarter of 2021, Adisseo's operating income was RMB3.36 billion and gross profit was RMB1.27 billion, up 12% and 10% respectively from the same period last year. Net profit attributable to shareholders was RMB430 million, up 15% year-on-year.

The sustainable growth was primarily attributable to an 11% increase in liquid methionine sales and a 15% increase in sales of specialty products, as well as proactive product price management and continued cost optimization, partially offset by higher raw material costs.

Jean Marc, CEO of Adisseo, said: "In the third quarter of 2021, we continued to maintain our growth momentum and achieved double-digit year-on-year growth in operating income and net profit attributable to shareholders. Forward-looking management and agile market response enable us to ensure business continuity, develop product pricing strategies on a timely basis, overcome supply chain disruptions and raw material shortages, optimize costs, and maintain performance growth. ”

In the methionine business, strong market demand for liquid methionine was driven by strong sales growth in most regions of the world, including Asia, Latin America, Europe, the Middle East and Africa. The firm price of methionine partially offset the negative impact of higher costs of major raw materials.

The Nanjing Liquid Methionine Plant resumed full production in early October by fully mobilizing resources from all parties. The second phase of the Nanjing liquid methionine plant with an annual production capacity of 180,000 tons is progressing smoothly. At present, the civil works and more than 80% of the construction works of the project have been completed, and the project has entered the pre-commissioning stage. The decafloping project of the European methionine plant with an additional capacity of 30,000 tons was completed at the end of September and is now in full production.

Display 4.0 is one of Adisseo's production projects entering Industry 4.0. "Display 4.0 is part of our dedication to digital transformation, which will help Adisseo's production processes be more cost-competitive, more operationally efficient, and help us more accurately predict future production process trends." Display 4.0 was initiated by our European facilities, continuously developed and tested, and the results have been validated, and we are currently rolling it out to China. Jean Marc added.

In the vitamin business, the selling prices of vitamin A and vitamin E remained firm. Sales of the trade vitamin category increased, and the selling price remained at a historically low level in the quarter, but the impact on the company's profitability level was very limited.

In the third quarter of 2021, the Company's Specialty Products business recorded single-quarter sales of RMB770 million, an increase of 15% year-on-year, and gross profit increased by 20% year-on-year to RMB390 million, driven by the FRAmelco acquisition and strong growth in key business areas including ruminant products, digestive performance enhanced products business, nutrition and health promotion business and palatability products business. Specialty gross margin increased by 3 percentage points from 48% in the third quarter of 2020 to 51% in the third quarter of 2021.

Adisseo's new China R&D and Innovation Center (Nanjing) continues to advance as planned and is expected to be operational by the end of 2021. China R&D Innovation Center was awarded the qualification of "Jiangsu Provincial Engineering Technology Research Center".

Adisseo, a joint venture between Adisseo and Kailesi, is steadily advancing the first large-scale production unit project for FeedKind's innovative protein products as planned. At present, the construction of the project has been completed by 70%, the key equipment fermentation reactor has been transported to the construction site and installed, and the preparation for trial operation is proceeding as planned.

Looking ahead, Jean Marc said: "Adisseo will continue to operate on a positive and agile basis and manage product prices, making every effort to achieve growth in all product lines and maintaining a stable profit margin for the full year of 2021. ”