Welcome!

News Feed Item

Adecoagro recorded Adjusted EBITDA of $72.8 million in 2Q14, marking a 75.6% growth over 2Q13

LUXEMBOURG, Aug. 14, 2014 /PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), one of the leading agricultural companies in South America, announced today its results for the second quarter of 2014.

Important Notice:

  • Under IFRS accounting, the sale of a non-controlling interest in a subsidiary is accounted for as an equity transaction, with no gain or loss recognized in the consolidated statement of income. Any difference between the selling price and the book value is recognized in Shareholder's Equity. This type of transaction had not been contemplated when the Company originally defined its Adjusted EBITDA in 2011. Management believes that the sale of a controlling or non-controlling interest in a subsidiary, whose main underlying asset is farmland, is a key element in its Land Transformation business since in either case it allows the company to monetize the capital gains generated by the transformation of undeveloped or underutilized farmland, thereby enhancing return on invested capital. Accordingly, the Company has decided to include the gains or losses from sales of non-controlling interests in subsidiaries in its Adjusted EBITDA definition.

Financial & Operational Highlights:

  • In 2Q14, Adecoagro recorded an Adjusted EBITDA(1) of $72.8 million, 75.6% higher than 2Q13. Adjusted EBITDA margin was 36.9% in 2Q14 compared to 22.0% in 2Q13. 6M14 Adjusted EBITDA was $107.5 million, 52.6% higher than 6M13.
  • Adjusted EBITDA margin grew to 35.5% in 6M14 from 24.2% in 6M13.
  • Net Sales in 2Q14 reached $197.5 million, while 6M14 net sales were $302.8 million, showing a 5.0% and 4.0% respective increase compared to last year.
  • In our Farming and Land Transformation businesses, Adjusted EBITDA in 2Q14 was $41.8 million, $20.6 million or 96.9% higher than 2Q13. Year-to-date Adjusted EBITDA stands at $77.7 million, marking a 94.3% increase over 6M13. These improvements are explained by increased operational and financial performance in the following segments: (i) in the Crops segment, higher crop yields coupled with lower production costs resulting from operational efficiencies and devaluation of the Argentine peso, increased our margins, resulting in a 42.4% growth in Adjusted EBITDA; (ii) in the Rice segment, an increase in planted area together with lower costs driven by the implementation of efficient production technologies and the devaluation of the Argentine peso expanded Adjusted EBITDA by 232.8%.                                                                                                               Performance was enhanced by the Land Transformation business which generated $25.6 million of Adjusted EBITDA in 2Q14, 269.6% higher quarter-over-quarter, through the sale of a 49% stake in Global Anceo S.L.U. and Global Hisingen S.L.U. (please see transaction details in page 3, Strategy Execution – Land Transformation).
  • In the Sugar, Ethanol and Energy business, our mills crushed 2.1 million tons of sugarcane in 2Q14, 21.1% higher than 2Q13. The increase in cane milling, resulted from (i) the ramp up and consolidation of our cluster in Mato Grosso do Sul, which resulted in higher milling efficiency per hour; (ii) favorable weather conditions during June which allowed us to accelerate the harvesting pace; and (iii) a 17.6% expansion of our sugarcane plantation. As a result, year-over-year sugar, ethanol and energy production volumes grew by 40.6%, 9.8% and 31.3% respectively. In addition, financial performance was enhanced by (i) a 5.5% increase in sugarcane yields coupled with a 0.9% increase in TRS; (ii) operational synergies and efficiencies which reduced our production costs; and (iii) a 79.0% increase in energy revenues resulting from higher cogeneration productivity and higher prices; and partially offset by lower sugar and ethanol prices. As a result of the above, Adjusted EBITDA in 2Q14 reached $35.6 million, 37.8% higher than 2Q13, while Adjusted EBITDA margin expanded to 46.7% from 33.1% in 2Q13.
  • Net income in 2Q14 totaled $1.5 million, $25.3 million higher than 2Q13. Net income in the quarter was enhanced by operational and financial improvements in the Farming and Sugar & Ethanol businesses coupled with (i) a $23.6 million increase in Financial Results primarily explained by the appreciation of the Brazilian Real in 2Q14 compared to a depreciation in 2Q13, and our adoption of Cash Flow Hedge Accounting as of July 1, 2013; and (ii) a $16.3 million increase in long term biological assets primarily explained by an increase in sugarcane yields; and partially offset by (i) a $5.8 million higher D&A charge resulting from the expansion of our asset base; and (ii) an $11.6 million lower tax benefit.

Strategy Execution

  • On June 17, 2014, Adecoagro completed the sale of a 49.0% interest in Global Anceo S.L.U. and Global Hisingen S.L.U, two Spanish subsidiaries, for a total price of $50.6 million, which has been paid in full at closing. The main underlying assets of Global Anceo S.L.U. and Global Hisingen S.L.U are La Guarida and Los Guayacanes, two farms located in the Argentine provinces of Salta and Santiago del Estero, respectively. This transaction generated $25.6 million of Adjusted EBITDA in 2Q14, representing a 28.0% premium over the Cushman & Wakefield independent appraisal dated September 2013.
  • Guayacanes and La Guarida farms have a total area of 26,299 hectares and were acquired by Adecoagro in 2007, for a total of $51.1 million. Following the acquisition, Adecoagro transformed and developed over 10,000 hectares of cattle pastures into crop production. The farm is currently composed of 17,371 hectares of croppable land which are used for growing grains and oilseeds and over 6,000 hectares of cattle grazing pastures. Adecoagro has operated these farms under a sustainable production model focused on no-till farming, crop rotation and other agricultural best practices, which have enhanced productivity and soil quality. After accounting for the purchase price, transformation capital expenditures, operating cash flows and selling price, these investments generated an internal rate of return of 19.1%
  • The construction of the second phase of the Ivinhema mill, which will add 3.0 million tons of nominal crushing capacity and consolidate our 10.0 million ton cluster in Mato Grosso do Sul, is progressing slightly ahead of schedule and on budget regarding capital expenditures. We are currently in the process of assembling the second boiler, the ethanol distillery and the power substation, and are closely monitoring the manufacture and delivery of key equipment parts. We expect phase II to commence crushing activities by the start of the 2015/16 sugarcane harvest.
  • On August, 12, 2014, the Board of Directors approved the extension of the Company's share repurchase program for an additional twelve month period, and therefore ending on September 23, 2015. Under the buyback program, the Company can continue acquiring shares up to 5% of the outstanding share capital. As of the date of this report, the Company has repurchased a total of 2.3 million shares for a total consideration of $18.1 million and an average price of $7.72 dollars per share.

Notes:

(1) Adjusted EBITDA is defined as consolidated profit from operations before financing and taxation, depreciation, amortization and unrealized changes in fair value of long-term biological assets (sugarcane, coffee and cattle) plus the gains or losses from disposals of non-controlling interests in subsidiaries. Adjusted EBIT is defined as consolidated profit from operations before financing and taxation, and unrealized changes in fair value of long-term biological assets (sugarcane, coffee and cattle) plus the gains or losses from disposals of non-controlling interests in subsidiaries. Adjusted EBITDA margin and Adjusted EBIT margin are calculated as a percentage of net sales.

To read the full 2Q14 earnings release, please access www.ir.adecoagro.com. A conference call to discuss 2Q14 results will be held tomorrow with live webcast through the internet:

English Conference Call
August 15, 2014
8 a.m. (US EST)
9 a.m. Buenos Aires & Sao Paulo
2 p.m. Luxembourg

Tel: (877) 317-6776
Participants calling from the US
Tel: +1 (412) 317-6776
Participants calling from other countries
Access Code: Adecoagro

Investor Relations Department
Charlie Boero Hughes
CFO

Hernan Walker
IR Manager
Email: [email protected] 
Tel: +54 (11) 4836-8651

About Adecoagro:
Adecoagro is a leading agricultural company in South America. Adecoagro owns over 269 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1.3 million tons of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.

SOURCE Adecoagro S.A.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"We're developing a software that is based on the cloud environment and we are providing those services to corporations and the general public," explained Seungmin Kim, CEO/CTO of SM Systems Inc., in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"We're focused on how to get some of the attributes that you would expect from an Amazon, Azure, Google, and doing that on-prem. We believe today that you can actually get those types of things done with certain architectures available in the market today," explained Steve Conner, VP of Sales at Cloudistics, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are moving to the cloud faster than most of us in security expected. CIOs are going from 0 to 100 in cloud adoption and leaving security teams in the dust. Once cloud is part of an enterprise stack, it’s unclear who has responsibility for the protection of applications, services, and data. When cloud breaches occur, whether active compromise or a publicly accessible database, the blame must fall on both service providers and users. In his session at 21st Cloud Expo, Ben Johnson, C...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, introduced two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a multip...
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
"The reason Tier 1 companies are coming to us is we're able to narrow the gap where custom applications need to be built. They provide a lot of services, like IBM has Watson, and they provide a lot of hardware but how do you bring it all together? Bringing it all together they have to build custom applications and that's the niche that we are able to help them with," explained Peter Jung, Product Leader at Pulzze Systems Inc., in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2,...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...