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
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.