Adecoagro S.A.: Adjusted EBITDA in 2024 was $444 million and NCFO $161 million. Crushing volume and sugar production at all-time record. $102 million in shareholder distribution.

Rhea-AI Summary

Adecoagro (NYSE: AGRO) reported its 2024 financial results with an Adjusted EBITDA of $444.3 million, down 6.8% year-over-year, and Net Cash Flow from Operations of $160.9 million, declining 8.5%. The company achieved record results in Rice and Dairy businesses, along with operational records in Sugar, Ethanol & Energy.

Key operational highlights include an all-time crushing record of 12.8 million tons and record sugar production. The company distributed $101.9 million to shareholders in 2024 through a $35 million cash dividend and $66.9 million in share repurchases, representing a 9.4% distribution yield.

On February 14, 2025, Tether Investments submitted an unsolicited non-binding proposal to acquire 51% of Adecoagro's outstanding shares at $12.41 per share. The company has entered into an Exclusivity Letter for further negotiations.

Positive

• Record operational performance with 12.8 million tons crushing volume
• Strong shareholder returns with $101.9 million distribution (9.4% yield)
• Potential acquisition offer at $12.41 per share, premium to market price
• Cash cost reduction of 8.4% year-over-year to 12.7 cts/lb
• Healthy balance sheet with Net Debt/EBITDA at 1.2x

Negative

• Adjusted EBITDA declined 6.8% to $444.3 million
• Net Cash Flow from Operations decreased 8.5% to $160.9 million
• Lower net sales in Q4 due to reduced volumes and lower sugar prices
• Decreased prices for key commodities (soybean, corn, wheat)
• Higher costs in US dollar terms impacting margins

Insights

Financial Analyst

Adecoagro's 2024 financial results reflect solid performance despite challenging market conditions. The company delivered $444.3 million in Adjusted EBITDA (6.8% lower year-over-year) and $160.9 million in NCFO (8.5% decrease), maintaining a healthy balance sheet with net debt at $522.2 million (1.2x Net Debt/EBITDA).

The operational achievements are impressive - all-time records in crushing volume and sugar production demonstrate effective operational execution despite adverse weather conditions. This operational excellence helped mitigate pricing pressures across multiple product categories.

Shareholder returns are particularly notable, with $101.9 million distributed in 2024 (equivalent to a 9.4% yield), exceeding their minimum policy by $31.5 million. This distribution strategy - combining $35 million in dividends with $66.9 million in share repurchases - signals management's confidence in cash flow sustainability.

The unsolicited acquisition proposal from Tether Investments at $12.41 per share (representing a 15.8% premium to current price) introduces a significant strategic dimension. The exclusivity agreement suggests serious consideration, though with appropriate caution regarding completion certainty.

Adecoagro's business diversification (Sugar/Ethanol/Energy, Rice, Dairy, Crops) provides resilience, as demonstrated by record results in Rice and Dairy offsetting challenges elsewhere. The company's strategic inventory management, particularly carrying over 31% of ethanol production to capture future pricing opportunities, reflects thoughtful commercial planning.

Agricultural Commodity Specialist

Adecoagro's operational achievements in 2024 underscore their capabilities in agricultural commodity production despite sector-wide challenges. The crushing record of 12.8 million tons despite dry weather conditions demonstrates effective agronomic management and operational resilience.

The strategic pivot toward sugar production (52% of mix in 2024, up to 55% in Q4) represents intelligent response to market conditions. Simultaneously, their decision to carry over 31% of ethanol production reflects sophisticated inventory management to capitalize on anticipated price improvements.

Cost efficiency remains a competitive advantage, with sugar cash costs decreasing 8.4% year-over-year to 12.7 cents/lb. This cost leadership position - driven by better dilution, tax recovery optimization, and favorable currency movements - supports margins despite commodity price pressures.

The company's strategy of maximizing higher-value products in Rice and Dairy segments demonstrates vertical integration advantages and market responsiveness. Their ability to conduct opportunistic rice sales when global and domestic supply was exemplifies market timing expertise.

The $104.1 million expansion capex investment across operations indicates continued commitment to growth despite short-term headwinds. This ongoing capital deployment, particularly in enhancing production efficiencies while maintaining sustainability commitments, positions Adecoagro to potentially outperform when commodity prices recover.

LUXEMBOURG, March 13, 2025 /PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), a leading sustainable production company in South America, announced today its results for the fourth quarter ended December 31, 2024. The financial information contained in this press release is based on consolidated financial statements presented in US dollars and prepared in accordance with International Financial Reporting Standards (IFRS) except for Non - IFRS measures. Please refer to page 27 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.

Main highlights for the period:

• Adjusted EBITDA amounted to $444.3 million in 2024, 6.8% lower than the previous year. We achieved record results in our Rice and Dairy businesses, and marked operational records in our Sugar, Ethanol & Energy business. However, results were negatively impacted by a year-over-year loss in the mark-to-market of our biological assets in our Sugar, Ethanol & Energy business, coupled with an uneven year-over-year comparison in our Crops business due to farm sales conducted throughout both periods.
• NCFO in 2024 stood at $160.9 million, marking an 8.5% year-over-year decrease, resulting in a minimum of $64.4 million to be distributed in 2025 via dividend and share repurchase. Net debt amounted to $522.2 million, in line with the previous year (Net debt/Adjusted EBITDA at 1.2x), while expansion capex reached $104.1 million as we continued to invest in attractive projects across all our operations.

Full Year Results Overview:

• In 2024, we delivered solid results, in spite of the challenging price scenario for most of our products and the adverse weather conditions that impacted some of our operations. This was possible thanks to the investments we have made throughout the years and our continuous focus on enhancing efficiencies in every stage of the value chain, while focusing on being the lowest cost producer. The commercial strategy in each of our operations enabled us to profit from opportunities that arose in both the export and domestic markets, as well as to leverage our storage capacity to build stocks. For example: (i) we conducted rice sales when both global and domestic supply was limited; (ii) we maximized production of fluid milk for our consumer brand in Argentina given its attractive marginal contribution and our growing presence in the local market; and (iii) we carried over ethanol stocks to profit from better prices in the next quarters.
• Consequently, Adecoagro's Adjusted EBITDA amounted to $444.3 million, whereas Adjusted Free Cash Flow from Operations (NCFO) reached $160.9 million. Shareholder distribution (cash dividend and share repurchase) totaled $101.9 million, $31.5 million above the minimum stated in our policy and marking a 9.4% distribution yield. Expansion capex amounted to $104.1 million as we continued to invest in organic projects with attractive returns across all our operations and to consolidate our assets, while keeping our sustainable and innovative footprint. This was accomplished without compromising our balance sheet structure, as our net debt stood at $522.2 million, reaching 1.2x Net Debt/EBITDA.

Sugar, Ethanol & Energy business:

• Adjusted EBITDA reached $105.3 million during 4Q24, marking a 20.4% year-over-year increase, whereas in 2024 it amounted to $364.2 million, 8.0% lower than the previous year.
  (+/-) Annual crushing record of 12.8 million tons despite dry weather. Quarterly crushing down 12.0% year-over-year on lower yields.
  (+) Record sugar production and mix (55% in 4Q24 / 52% in 2024). Despite a recovery in domestic ethanol prices, we are carrying over 31% of our 2024 production to profit from higher expected prices.
  (+) Cash cost down 8.4% year-over-year to 12.7 cts/lb due to better cost dilution, higher tax recovery on higher ethanol sales and weaker FX, among others.
  (-/+) Lower net sales in 4Q24 on lower volumes sold and lower sugar prices in US dollar terms. Annual sales in line with 2023 on higher selling volumes due to higher production.
  (-) Year-over-year loss in biological assets (harvested cane) due to lower Consecana prices versus 2023.

Farming business:

• Adjusted EBITDA amounted to $3.8 million during 4Q24, representing a 72.4% year-over-year decline, whereas for 2024 it reached $103.0 million, in line with the previous year. Excluding the results of the farm sales conducted during 2024 and 2023, Adjusted EBITDA in 2024 was 19.5% higher year-over-year, totaling $87.9 million, reflecting record results for our Rice and Dairy segments.
  (+) Year-over-year gains in the mark-to-market of our biological asset and agricultural produce for our Rice operations (higher prices and area) and Crops (higher yields and area).
  (+/-) Higher prices for Dairy and Rice's higher value-added products, despite the latter presenting a downward trend by year-end, as expected.
  (+/-) One-off events: Sale of La Pecuaria farm ($15.0 million in Adjusted EBITDA) conducted in 2Q24 and El Meridiano in 3Q23 ($29.8 million in Adjusted EBITDA).
  (-) Lower prices for soybean, corn and wheat.
  (-) Higher costs in US dollar terms.

Remarks

2024 Shareholder Distribution

• During 2024, we distributed a total of $101.9 million, equivalent to 58% of the Adjusted Free Cash Flow from Operations (NCFO) generated in 2023. This represents a distribution yield of 9.4%, and $31.5 million above the annual minimum stated in our policy. This was executed via:
  • Cash dividends: $35 million paid in two installments of $17.5 million each in May and November 2024, representing a dividend per share of approximately $0.34.
  • Share repurchases: 6.5 million shares repurchased (6.2% of the company's equity) at an average price of $10.22 per share, totaling $66.9 million.

2025 Shareholder Distribution

•  In 2024, we generated $160.9 million of NCFO, which implies a minimum distribution of $64.4 million to be distributed via a combination of cash dividends and share buybacks throughout 2025. Cash dividends will amount to $35.0 million, to be paid in two installments of $17.5 million each, in or about May and November 2025. The balance will be distributed via stock buybacks and/or cash dividends, as the case may be.

•  During the first two months of the year, we repurchased 1.1 million shares (1.1% of the company's equity) under our existing share buyback program at an average price of $9.65 per share, totaling $10.2 million.

Unsolicited non-binding proposal from Tether Investments S.A. de C.V.

• On February 18, 2025, the Company announced that its Board of Directors received an unsolicited non-binding proposal from Tether Investments S.A. de C.V. ("Tether") dated February 14, 2025, to acquire outstanding Common Shares of the Company at a price of $12.41 per Common Share through a tender offer that would result in Tether collectively holding 51% of the outstanding Common Shares of the Company. The Company decided to engage legal counsel and a financial advisor to negotiate and further assist the Board in its evaluation of the proposal.
• On February 25, 2025, the Company issued a press release announcing that it is engaging in discussions with Tether on the terms and conditions of the proposal received on February 14th, 2025. The Company has entered into an Exclusivity Letter to facilitate further negotiations with Tether. No assurances can be given that a definitive agreement will be entered into, that any transaction will be consummated, or the timing, terms or conditions of any such transaction.
• For more information, please refer to our 6-K Press Releases available on our Investor Relations' website (www.ir.adecoagro.com).

Non-Gaap Financial Measures: For a full reconciliation of non-gaap financial measures please refer to page 27 of our 4Q24 Earnings Release found on Adecoagro's website (ir.adecoagro.com)

Forward-Looking Statements: This press release contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as "anticipate," "forecast", "believe," "continue," "estimate," "expect," "intend," "is/are likely to," "may," "plan," "should," "would," or other similar expressions.

The forward-looking statements included in this press release relate to, among others: (i) our business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing our business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which we operate, environmental laws and regulations; (iv) the implementation of our business strategy; (v) the correlation between petroleum, ethanol and sugar prices; (vi) our plans relating to acquisitions, joint ventures, strategic alliances or divestitures, and to consolidate our position in different businesses; (vii) the efficiencies, cost savings and competitive advantages resulting from acquisitions; (viii) the implementation of our financing strategy, capital expenditure plan and expected shareholder distributions; (ix) the maintenance of our relationships with customers; (x) the competitive nature of the industries in which we operate; (xi) the cost and availability of financing; (xii) future demand for the commodities we produce; (xiii) international prices for commodities; (xiv) the condition of our land holdings; (xv) the development of the logistics and infrastructure for transportation of our products in the countries where we operate; (xvi) the performance of the South American and world economies; (xvii) the relative value of the Brazilian Reais, the Argentine Peso, and the Uruguayan Peso compared to other currencies; and (xviii) the proposed tender offer by Tether.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this press release might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

No Offer or Solicitation; Additional Information and Where to Find It
The tender offer referenced in this press release has not yet commenced. This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell securities. The solicitation and offer to buy the Company's securities will only be made pursuant to an Offer to Purchase and related tender offer materials. At the time the tender offer is commenced, Tether will be required to file a tender offer statement on Schedule TO and thereafter the Company will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WILL CONTAIN IMPORTANT INFORMATION. THE COMPANY'S STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF THE COMPANY'S SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES. These materials will be made available to the Company's stockholders at no expense to them. The tender offer materials and the Solicitation/Recommendation Statement will be made available for free at the SEC's website at www.sec.gov. Copies of the documents filed by the Company with the SEC by will be available free of charge on the Company's internet website at www.adecoagro.com or by contacting the Company's investor relations department at ir@adecoagro.com.

To read the full 4Q24 earnings release, please access ir.adecoagro.com. A conference call to discuss 4Q24 results will be held on March 14, 2025, with a live webcast through the internet:

Conference Call
March 14, 2025
8 a.m. US EST
9 a.m. Buenos Aires
9 a.m. São Paulo
1 p.m. Luxembourg
To participate, please register at the link

Investor Relations Department
Emilio Gnecco
CFO
Victoria Cabello
IRO
Email: ir@adecoagro.com

About Adecoagro:
Adecoagro is a leading sustainable production company in South America. Adecoagro owns 210.4 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 3.1 million tons of agricultural products and over 1 million MWh of renewable electricity.

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SOURCE Adecoagro S.A.

FAQ

What was Adecoagro's (AGRO) financial performance in 2024?

Adecoagro reported Adjusted EBITDA of $444.3 million (down 6.8%) and NCFO of $160.9 million (down 8.5%) in 2024, with net debt at $522.2 million.

How much did Adecoagro (AGRO) distribute to shareholders in 2024?

AGRO distributed $101.9 million to shareholders in 2024: $35 million in cash dividends ($0.34 per share) and $66.9 million in share repurchases at $10.22 per share average.

What is the Tether Investments offer for Adecoagro (AGRO) shares?

Tether Investments proposed to acquire 51% of AGRO's outstanding shares at $12.41 per share through a tender offer on February 14, 2025.

What operational records did Adecoagro (AGRO) achieve in 2024?

AGRO achieved an all-time crushing record of 12.8 million tons and record sugar production, along with record results in Rice and Dairy businesses.