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Adecoagro Reports Solid First Quarter Performance Amid Rising Sales and Debt Reduction

Argentina 20.05.2024
Source: The DairyNews
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Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), a premier sustainable agriculture company in South America, disclosed its financial outcomes for the first quarter concluding March 31, 2024.
Adecoagro Reports Solid First Quarter Performance Amid Rising Sales and Debt Reduction
The company observed a 2.6% increase in gross sales during the first quarter of 2024, primarily driven by an enhanced sugarcane output which boosted sugar production and enabled robust sales at favorable prices. This was further supported by heightened average selling prices in the Rice division.

The Adjusted EBITDA for the quarter stood at $90.1 million, marking a slight increase of 1.1% over the same period last year. This growth was primarily attributed to strong performance across all three sectors of the Farming division, which effectively counterbalanced a downturn in the Sugar, Ethanol & Energy sector due to a year-on-year dip in the mark-to-market valuation of biological assets based on price forecasts.

However, Adjusted net income for the first quarter amounted to $23.3 million, a decline of 40.1% compared to the prior year.

Net debt reduced by 23.0% year-over-year, totaling $639.2 million, while the net debt to last twelve months (LTM) Adjusted EBITDA ratio improved significantly, down to 1.3x fr om 1.9x in the first quarter of 2023.

Farming Business Performance:

For the quarter, the Farming business generated an Adjusted EBITDA of $44.0 million, a substantial increase of $25.5 million from the first quarter of 2023. This was mainly due to exceptional results in all three segments:
  • The Rice business showcased a year-on-year EBITDA increase of $19.4 million, bolstered by improved area productivity and higher prices, resulting in a $12.7 million gain from the mark-to-market of biological assets. Additionally, the company capitalized on its unique position in both the export and domestic markets, achieving higher sales prices by $433 per ton compared to the previous year, during a period of constrained rice supply.
  • The Crops segment saw a $5.8 million improvement in results, driven by fully recovered yields of main grains.
  • The Dairy segment reported a 5% increase in Adjusted EBITDA, largely due to decreased feed costs as internal production of corn silage and soy pellets returned to previous volumes.
In a notable development, Adecoagro completed the sale of La Pecuaria farm in Durazno Province, Uruguay, in April 2024 for $20.7 million, equivalent to $6,500 per hectare. This transaction is expected to contribute $15.3 million to the Adjusted EBITDA of the Crops segment in the second quarter of 2024.

About Adecoagro:

Adecoagro is a leading sustainable production company in South America. Adecoagro owns 210.4 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, wh ere it produces over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity.
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