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.


(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

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
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.
SYS-CON Events announced today that MathFreeOn 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. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
In the next forty months – just over three years – businesses will undergo extraordinary changes. The exponential growth of digitization and machine learning will see a step function change in how businesses create value, satisfy customers, and outperform their competition. In the next forty months companies will take the actions that will see them get to the next level of the game called Capitalism. Or they won’t – game over. The winners of today and tomorrow think differently, follow different...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
"Avere Systems is a hybrid cloud solution provider. We have customers that want to use cloud storage and we have customers that want to take advantage of cloud compute," explained Rebecca Thompson, VP of Marketing at Avere Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Virgil consists of an open-source encryption library, which implements Cryptographic Message Syntax (CMS) and Elliptic Curve Integrated Encryption Scheme (ECIES) (including RSA schema), a Key Management API, and a cloud-based Key Management Service (Virgil Keys). The Virgil Keys Service consists of a public key service and a private key escrow service. 

Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of So...