LUXEMBOURG, Nov. 13,
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 third quarter ended September 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 26 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 1.6% higher in 3Q23 and 7.5% higher in 9M23
driven by greater productivity indicators in our Sugar, Ethanol
& Energy division, which enabled us to increase our sugar
production and execute sales at solid prices; coupled with an
increase in average selling prices captured for rice and
dairy.
- Adjusted EBITDA presented a year-over-year increase of 27.0% in
3Q23 and 16.4% in 9M23. This was explained by (i) an outperformance
of the Sugar, Ethanol & Energy and Rice divisions, coupled with
(ii) a farm sale conducted in Argentina. This, in turn, fully offset the
decline reported in the Crops division driven by a record drought
and higher costs.
- Adjusted net income in 3Q23 was $88.6
million, 87.6% higher than the previous year, while
year-to-date it stood at $169.9
million, presenting a 60.3% year-over-year increase.
- Net debt/LTM Adjusted EBITDA of 1.5x, down 29.4% compared to
3Q22 on greater cash generation. Liquidity ratio (3) stood at
1.8x
Financial & Operational Highlights:
Sugar, Ethanol & Energy business
- In 3Q23, we crushed 4.5 million tons of sugarcane, 19.6% higher
YoY, and an all-time record for our operations. TRS per hectare
increased 31% as a consequence of enhancing the productivity of our
sugarcane plantation and better weather conditions. We diverted 49%
of TRS to produce sugar, which commanded an average premium of 55%
to hydrous ethanol in Mato Grosso
do Sul. By solving minor bottlenecks in our sugar kitchen, we were
able to operate above nominal capacity and produced a record
quarterly volume of 320 thousand tons of sugar. In terms of
ethanol, we took advantage of our storage capacity to carry over
250 thousand m3 into the following quarters, to profit from higher
expected prices. Results were further positively impacted by lower
unitary cost of production driven by better yields and higher TRS
production.
- All of the above, contributed to our Adjusted EBITDA, which in
3Q23 reached $114.6 million, 3%
higher YoY. Year-to-date, Adjusted EBITDA amounted to $308.2 million, 13% higher YoY, explained by the
same drivers.
- Sugar continues to be supported by strong fundamentals and is
trading, on average, above 27 cts/lb. We are in an excellent
position to profit from this scenario as we remain unhedged in 11%
of our expected 2023 sugar production and in 82% of 2024's
production (hedged volume at 23.5 cts/lb and 23.8 cts/lb,
respectively). In terms of ethanol, we expect prices to recover
towards the end of the harvest season, when the storage pressure is
over and demand is greater. In the meantime, we are profiting from
opportunities in the export market - 25 thousand m3 exported to
Europe post 3Q23. Assuming normal
weather, we maintain our expectation to increase 2023's crushing
volume by 15% compared to 2022. This, in turn, would result in a
further reduction in unitary cash cost, due to better dilution of
fixed costs.
Crops, Rice, Dairy & Land Transformation
- Adjusted EBITDA totaled $46.7
million in 3Q23, marking a $29.6
million increase YoY. This was mainly explained by the sale
of a 6,302 hectare farm in Argentina, which generated an Adjusted EBITDA
of $29.8 million during the period.
Moreover, our Rice business booked an $8.6
million year over-year gain in Adjusted EBITDA driven by
higher average selling prices. As expected, results were partially
offset by our Crops business which broke even. Lower crop output,
in particular corn silage, also drove a year-over-year decline in
Adjusted EBITDA for our Dairy business. However, cow productivity
reached an all-time high, and we leveraged on our flexibility to
shift processing production to fluid milk for domestic consumption,
which continued to offer a higher marginal contribution. During
9M23, Adjusted EBITDA for our segments in Argentina and Uruguay was $89.5
million, 23.3% higher YoY driven by the above mentioned
drivers.
- Planting activities for our 23/24 campaign have concluded for
our winter crops, and are underway for summer crops and rice.
Recent rains registered in all of the productive regions of
Argentina and Uruguay allowed for an improvement in soil
moisture and a recovery of water reservoirs, favoring the outlook
of our Crops and Rice segments. We expect a full recovery in
Adjusted EBITDA generation for 2024, as there is no long term
impact in our earnings potential from the past dry weather.
Remarks
2023 Shareholder Distribution Update
- Share repurchase during the first ten months of the year
amounted to 2.6 million shares (2.4% of the company's equity) at an
average price of $9.45 per share,
totaling $24.3 million.
- On November 24th, we will make
our second cash dividend payment of $17.5
million (approximately $0.1649
per share) to shareholders of the Company of record at close of
business on November 9th. The first
installment was paid on May 24th in
an equal cash amount (approximately $0.1626 per share), resulting in an annual cash
dividend of $35 million.
Farmland Sale at Premium to Independent
Appraisal
- In September 2023, we completed
the sale of El Meridiano farm located in the Province of
Buenos Aires, Argentina, for a
selling price of $48.4 million
($7,681/hectare) fully collected at
the closing date. The selling price represents a 29% premium to
Cushman & Wakefield's independent appraisal dated September 30, 2022. The transaction generated an
Adjusted EBITDA of $29.8
million.
Independent Farmland Appraisal Report
- As of September 30th,
2023, Cushman & Wakefield (C&W) updated its
independent appraisal of Adecoagro's farmland which consists of
213,548 hectares valued at $695.3
million. On a comparable basis, current valuation of our
land portfolio represents a year-over-year increase of 0.8%.
Non-Gaap Financial Measures: For a full
reconciliation of non-gaap financial measures please refer to page
26 of our 3Q23 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 3Q23 earnings release, please access
ir.adecoagro.com. A conference call to discuss 3Q23 results will be
held on November 14, 2023, with a
live webcast through the internet:
Conference Call
November 14,
2023
10 a.m. US
EST
12 p.m. Buenos Aires
12 p.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
213.5 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.
