Adjusted EBITDA of $90.1 million. Solid crushing pace and Farming yield normalization. $35 million cash dividend during 2024.

Rhea-AI Summary

Adecoagro S.A. (NYSE: AGRO) announced its Q1 2024 financial results. Key highlights include adjusted EBITDA of $90.1 million, a 1.1% increase from Q1 2023. Gross sales rose by 2.6% due to higher sugar production and increased rice prices. Adjusted net income was $23.3 million, down 40.1% from the previous year. Net debt reduced by 23.0% to $639.2 million, with a net debt to LTM adjusted EBITDA ratio of 1.3x.

The Sugar, Ethanol & Energy segment saw a 47% increase in crushing volumes but a 32% decrease in adjusted EBITDA to $51.9 million due to lower sugar prices and higher freight costs. The Farming business reported a $44.0 million adjusted EBITDA, up $25.5 million YoY, driven by gains in the rice, crops, and dairy segments. The company announced a $35 million cash dividend for 2024 and a $20.7 million farmland sale in Uruguay.

Positive

• Adjusted EBITDA increased by 1.1% to $90.1 million.
• Gross sales rose by 2.6% in Q1 2024.
• Net debt reduced by 23.0% to $639.2 million.
• Net debt to LTM adjusted EBITDA ratio improved to 1.3x.
• Farming business adjusted EBITDA grew by $25.5 million YoY.
• Rice segment showed a $19.4 million YoY increase in adjusted EBITDA.
• Farmland was sold at a premium for $20.7 million, generating $15.3 million in adjusted EBITDA.
• Cash dividend of $35 million approved for 2024.
• Share buyback of 2.6 million shares at an average price of $10.40 per share.

Negative

• Adjusted net income decreased by 40.1% to $23.3 million.
• Adjusted EBITDA for the Sugar, Ethanol & Energy segment fell by 32% to $51.9 million.
• Higher freight costs and lower sugar prices negatively impacted results.
• Mark-to-market loss on biological assets in the Sugar, Ethanol & Energy segment.

LUXEMBOURG, May 16, 2024 /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, 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 22 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.

Main highlights for the period:

• Gross sales were 2.6% higher in 1Q24 due to (i) more sugarcane crushed, which enabled us to increase our sugar production and execute sales at solid prices; coupled with (ii) an increase in average selling prices in the Rice segment.
• Adjusted EBITDA was $90.1 million, 1.1% above 1Q23, driven by an outperformance of all three segments of our Farming business. This, in turn, fully offset the decline reported in the Sugar, Ethanol & Energy business due to a year-over-year loss in the mark-to-market of our biological assets on price outlook.
• Adjusted net income in 1Q24 amounted to $23.3 million, 40.1% lower than the previous year.
• Net debt amounted to $639.2 million, a 23.0% year-over-year reduction, while net debt to LTM Adjusted EBITDA ratio reached 1.3x, 0.6x lower than 1Q23.

Sugar, Ethanol & Energy business:

• Crushing volumes amounted to 2.2 million tons, 47% higher YoY and an all time record for a 1Q milling figure, due to greater sugarcane availability. We diverted as much as 49% to produce sugar, which traded on average 48% above hydrous ethanol in Mato Grosso do Sul. In terms of ethanol, 91% of our production was hydrous ethanol given the active demand for this type of fuel, while we also continued to take advantage of our storage capacity and carried over 194 thousand m3 (69% higher than in 1Q23) into the following quarters, to profit from higher expected prices. Furthermore, our unitary cost of production decreased 9% YoY given the higher volume crushed. Nevertheless, results were negatively impacted by (i) a YoY loss in the mark-to-market of our biological assets due to lower sugar prices (sugar #11 contracts) during 1Q24 compared to 1Q23, coupled with (ii) higher freight costs as we sold more sugar. Consequently, Adjusted EBITDA reached $51.9 million in 1Q24, 32% lower than in 1Q23.

Farming business:

• In 1Q24, Adjusted EBITDA for the Farming business amounted to $44.0 million, $25.5 million higher compared to 1Q23. This was driven by an outperformance in all three segments. Our Rice business presented a YoY increase of $19.4 million, mainly explained by (i) a better campaign in terms of area, productivity and prices, leading to a $12.7 million YoY gain in the mark-to-market of our biological assets; coupled with (ii) our presence in both the export and domestic market which enabled us to conduct sales at attractive prices ($433/ton higher versus 1Q23) as we were the only rice producer with available stocks at a moment when rice supply was limited. In the case of Crops, the full recovery in yields of our main grains was the main reason behind the $5.8 million YoY increase in results. In our Dairy business, Adjusted EBITDA was 5% higher than in 1Q23 mainly due to lower cost of feed (corn silage and soy pellets) as our in-house production recovered the volume lost.

Remarks

2024 Shareholder Distribution

• Our Annual Shareholder Meeting held on April 17th approved a cash dividend distribution of $35 million to be paid in two installments of $17.5 million each. The first installment represents approximately $0.1682 per share and will be paid on May 29th, 2024 to shareholders of the Company with record date May 14th, 2024. The second installment shall be payable in or about November 2024 in an equal cash amount.
• In addition, year-to-date we invested $26.6 million in repurchasing 2.6 million shares (2.4% of the company's equity) under our existing share buyback program, at an average price of $10.40 per share.

Farmland Sale at Premium to Independent Appraisal

• In April 2024, we completed the sale of La Pecuaria farm located in the Province of Durazno, Uruguay, for a selling price of $20.7 million ($6,500/hectare) fully collected at the closing date. The transaction generated an Adjusted EBITDA of $15.3 million, which will be booked in our Crops segment in 2Q24.

Non-Gaap Financial Measures: For a full reconciliation of non-gaap financial measures please refer to page 22 of our 1Q24 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 1Q24 earnings release, please access ir.adecoagro.com. A conference call to discuss 1Q24 results will be held on May 17, 2024, with a live webcast through the internet:

Conference Call

May 17, 2024
11 a.m. US EST
12 p.m. Buenos Aires
12 p.m. Sao Paulo
5 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 2.8 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 adjusted EBITDA for Q1 2024?

Adecoagro's adjusted EBITDA for Q1 2024 was $90.1 million.

How did Adecoagro's gross sales perform in Q1 2024?

Adecoagro's gross sales rose by 2.6% in Q1 2024.

What was Adecoagro's net debt at the end of Q1 2024?

Adecoagro's net debt was $639.2 million at the end of Q1 2024.

How much did Adecoagro's adjusted net income decrease in Q1 2024?

Adecoagro's adjusted net income decreased by 40.1% to $23.3 million.

What was the adjusted EBITDA for Adecoagro's Sugar, Ethanol & Energy segment in Q1 2024?

The adjusted EBITDA for Adecoagro's Sugar, Ethanol & Energy segment was $51.9 million in Q1 2024.

How did Adecoagro's Farming business perform in Q1 2024?

Adecoagro's Farming business reported a $44.0 million adjusted EBITDA in Q1 2024, up $25.5 million YoY.

What is Adecoagro's cash dividend announced for 2024?

Adecoagro announced a $35 million cash dividend for 2024.

How much farmland did Adecoagro sell in Uruguay, and what was the price?

Adecoagro sold farmland in Uruguay for $20.7 million, or $6,500 per hectare.