LUXEMBOURG, Aug. 17,
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 second quarter ended June 30,
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 25 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 6.5% higher in 2Q23 and 11.3% higher in 6M23
driven by our consistent Sugar & Ethanol strategy which gave us
flexibility to shift production to sugar and execute sales at solid
prices; coupled with an increase in average selling prices captured
for rice.
- Adjusted EBITDA presented a year-over-year increase of 15.2% in
2Q23 and 10.1% in 6M23, mainly explained by an outperformance of
the Sugar, Ethanol & Energy business. This fully offset the
decline reported in the Crops division driven by a record drought
and higher costs.
- Adjusted net income in 2Q23 was $42.4
million, 3.7% lower than the previous year, while
year-to-date it stood at $81.3
million, presenting a 38.4% year-over-year increase.
- Net debt/LTM Adjusted EBITDA of 1.9x was in line with the same
period of last year, while liquidity ratio stood at 1.3x.
Financial & Operational Highlights:
Sugar, Ethanol & Energy business
- During 2Q23, we crushed 3.6 million tons of sugarcane, 9.2%
higher YoY. TRS content per hectare increased 35% as a consequence
of our implementation of agricultural techniques such as
pre-sprouted seedling (MPB). We diverted 48% of TRS to produce
sugar, in order to capture solid prices which traded on average 33%
above hydrous ethanol in Mato
Grosso do Sul. Within our ethanol production, 70% was
anhydrous ethanol which commanded a premium. In terms of ethanol
sales, we exported to Europe as
well as conducted 52% of our quarterly sales during a peak of
prices (12% above market). Leveraging on our storage capacity, we
carried into the following quarters over 30% of our expected annual
production of ethanol, to profit from higher future prices. Results
were positively impacted by lower unitary cost of production driven
by higher volume crushed, and lower cost of certain agricultural
inputs.
- All of the above, contributed to our Adjusted EBITDA, which in
2Q23 reached $116.8 million, 12.0%
higher YoY. Year-to-date Adjusted EBITDA amounted to $193.5 million, 19.7% higher YoY, explained by
the same drivers.
- Sugar prices continue to be supported by strong fundamentals,
and are trading, on average, above 24 cts/lb. We are in an
excellent position to profit from this scenario as we remain
unhedged in 26% of our expected 2023 sugar production and 87% of
2024's production (hedged volume at 22.3 cts/lb and 23.0 cts/lb,
respectively). Assuming weather going normal, we expect to increase
2023's crushing volume by 15% compared to 2022. This, in turn,
would result in a reduction in unitary cash cost, due to better
dilution of fixed costs.
Crops, Rice, Dairy & Land Transformation
- Adjusted EBITDA in 2Q23 reached $24.3
million, 21.8% higher YoY. Results were driven by higher
selling volumes and prices in our Rice business; coupled with
higher productivity and commercial flexibility in our Dairy
business. Results were partially offset by an underperformance of
our Crops business caused by the drought. Harvesting activities for
22/23 campaign have almost concluded and presented a 30%-40%
reduction in yields of our main crops. During 6M23, Adjusted EBITDA
for our segments in Argentina and
Uruguay presented a 22.9%
reduction YoY, mainly impacted by the reduction in crops
yields.
- Planting activities for our 23/24 campaign are underway. We
expect a positive outlook as weather is shifting to moderate El
Niño pattern. In addition, there have been positive developments
impacting the price of some of our products. The reduction of rice
exports from key producing countries creates a very attractive
opportunity for South American rice. In the case of rice, soybean,
corn, peanut and sunflower, the Argentine government has passed
resolutions that allow for the use of a preferential FX rate.
Remarks
2023 Shareholder Distribution Update
- Share repurchase during the first seven months of the year
amounted to 1.7 million shares (1.6% of the company's equity) at an
average price of $8.54 per share,
totaling $14.4 million.
- On May 24th, we paid $17.5 million in cash dividends (approximately
0.16$/share). Second installment of $17.5
million to be paid in November
2023, resulting in an annual cash dividend of $35 million.
Non-Gaap Financial Measures: For a full
reconciliation of non-gaap financial measures please refer to page
25 of our 2Q23 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 2Q23 earnings release, please access
ir.adecoagro.com. A conference call to discuss 2Q23 results will be
held on August 18, 2023, with a live
webcast through the internet:
Conference Call
August 18,
2023
10 a.m. US
EST
11 a.m. Buenos Aires
11 a.m. Sao Paulo
4 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.