Adjusted EBITDA in 1Q23 was $89 million, 3.4% higher year-over- year despite unprecedented drought in Argentina. Adecoagro approved cash dividends of $35 million.

LUXEMBOURG, May 11, 2023 /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 first quarter ended March 31, 2023. 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 22 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.

Main highlights for the period:

• Net sales presented a year-over-year increase of 21.9% in 1Q23 thanks to our commercial strategy in our Sugar, Ethanol & Energy business, as well as in our Rice operations.
• Adjusted EBITDA in 1Q23 amounted to $89.2 million, 3.1% higher year-over-year driven by an outperformance of the Sugar, Ethanol & Energy business which fully offset the decline reported in our Farming division, mainly in Crops, driven by a challenging weather scenario and higher costs.
• Adjusted net income in 1Q23 was $38.9 million, $24.2 million higher than the previous year.
• Net debt amounted to $830 million, whereas our net debt/LTM Adjusted EBITDA ratio reached 1.9x, in line with the same period of last year.

Financial & Operational Highlights:

Sugar, Ethanol & Energy business

• Adjusted EBITDA reached $76.7 million in 1Q23, 33.9% higher compared to the same period of last year. Crushing volume totaled 1.5 million tons of sugarcane, 1.2 million tons higher than in 1Q22, driven by greater cane availability and solid agricultural productivity indicators. We diverted as much as 46% of total TRS to sugar production. Within our ethanol production, 71% was anhydrous ethanol which commanded a premium over hydrous ethanol. Results during 1Q23 were further positively impacted by lower unitary cost of production on higher volume crushed.
• Supported by strong fundamentals, sugar has registered an increase in prices and 2023 contracts are now trading, on average, above 25 cts/lb. We are in an excellent position to profit from this scenario as we have low commitments (50% of sugar hedged at 21.1 cts/lb). In addition, our asset flexibility allows us to achieve an annual production mix of 50% sugar, above Brazil's flexibility. Assuming weather going normal, we expect our crushing volume in 2023 to be around 15% higher than in 2022. This, in turn, would result in a reduction in unitary cash cost, due to better dilution of fixed costs.

Farming & Land Transformation businesses

• Adjusted EBITDA for the Farming & Land Transformation business in 1Q23 was 47.9% lower compared to 1Q22, reaching $18.5 million. Our Rice business presented an outperformance compared to 1Q22, driven by higher selling volumes and higher selling prices. In our Dairy business, Adjusted EBITDA was in line with 1Q22 thanks to an increase in cow productivity. However, results were fully offset by an underperformance of our Crops business, which broke even. As previously explained, the effects of La Niña weather event continued during the beginning of 2023, affecting summer crop production in almost all of the productive regions of Argentina and Uruguay. Thus, we expect a 30%-40% reduction in yields of our main crops compared to the previous campaign. Margins were further pressured by the global inflationary environment which led to an overall increase in costs.
• Crops are planted annually, so there is no long term impact in our earnings potential from the dry weather. In addition, there is a strong likelihood of weather shifting to El Niño in the second semester of 2023, which should allow for an improvement in soil moisture and a recovery of water levels in the reservoirs, favoring the outlook for the 23/24 campaign.

Remarks

Biomethane Production Used as Fuel to Replace Diesel in Vehicles

• We are proud to announce that we became the first player to run its fleet with biomethane produced 100% from vinasse. This marks a new milestone in our sustainability commitment, as it will enable us to replace diesel consumption and reduce cost of fuel, improve our carbon footprint and increase our RenovaBio score.

 2023 Shareholder Distribution Update

• Our Annual Shareholder Meeting held on April 19th approved a cash dividend distribution of $35 million to be paid in two installments of $17.5 million each. The first installment represents approximately $0.1626 per share and will be paid on May 24th, 2023. The second installment shall be payable in or about November 2023 in an equal cash amount.
• In addition, year-to-date we repurchased 1.1 million shares (1% of the company's equity) under our existing share buyback program at an average price of $7.90 per share, totaling $8.7 million.

Non-Gaap Financial Measures: For a full reconciliation of non-gaap financial measures please refer to page 22 of our 1Q23 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. 

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.

To read the full 1Q23 earnings release, please access ir.adecoagro.com. A conference call to discuss 1Q23 results will be held on May 12, 2023, with a live webcast through the internet:

Conference Call

May 12, 2023
12 p.m. US EST
1 p.m. Buenos Aires
1 p.m. Sao Paulo
6 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 219.8 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity.

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SOURCE Adecoagro S.A.