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.