LUXEMBOURG, Nov. 12, 2013 /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 third quarter of 2013. Main highlights for the
period:
Financial & Operational Highlights
- Adecoagro recorded Adjusted EBITDA of $43.8 million, 7.6% higher than in 3Q12. Adjusted
EBITDA margin was 24.8% in 3Q13 compared to 24.4% in 3Q12.
- 9M13, Adjusted EBITDA was $114.2
million, 58.1% higher than in 9M12. Adjusted EBITDA margin
grew to 24.1% from 17.2% in 9M12.
- The Farming and Land Transformation businesses' Adjusted EBITDA
in 3Q13 was $10.7 million, compared
to $0.7 million in 3Q12. Since most
of our crops are harvested during the first and second quarter,
Adjusted EBITDA in the third quarter tends to be the lowest of the
year, and is primarily derived from the mark-to-market of grain
inventories and commodity hedge positions. Financial performance
quarter-over-quarter is primarily explained by: (i) profit
generated by the mark-to-market of our soybean and corn derivative
hedge positions; (ii) increased productivity per cow and higher
milk prices in the dairy business; and (iii) higher industrial
efficiency and prices in the rice business.
We completed the 2012/13 crop year. 9M13 Adjusted EBITDA totaled
$50.7 million, 41% higher than 9M12.
Results from the Crops segment were negatively affected by dry
weather during the growth season, resulting in below average crop
yields. These effects were partially offset by significant
operational and financial improvements in the Dairy and the Rice
segments.
During the fourth quarter, we expect that earnings from the Farming
& Land Transformation businesses will be mainly driven by the
biological growth of the new 2013/14 crop and rice planted area,
productivity of the dairy business, mark-to-market of our hedge
positions for the new crop and the sale of the San Martin farm,
which will generate roughly $6.5
million of operating profit.
- In the Sugar, Ethanol and Energy business, good weather
conditions allowed our mills to crush a record of 2.8 million tons
of sugarcane during 3Q13, 32.6% higher than in 3Q12. Nevertheless,
Adjusted EBITDA during 3Q13 was $39.2
million, 15.5% below that of 3Q12, primarily explained by:
(i) the commercial strategy to carry ethanol seeking higher prices,
resulting in a 72.6% increase in ethanol inventories and a
deferment of sales; (ii) a 4.4% fall in sugarcane TRS (Total
Recoverable Sugar) as a result of the frost that affected the
center south region of Brazil
during mid-July 2013 and the excess
rains that affected the region during June
2013; and (iii) lower sugar and ethanol prices.
Year-to-date, Adjusted EBITDA was $79.9
million, $24.7 million or
44.8% higher than the same period of the prior year. Adjusted
EBITDA margin expanded from 32.2% in 9M12 to 42.1% in 9M13. We
expect to continue crushing sugarcane until mid-December with
financial performance subject to weather conditions and ethanol
prices.
- Net income in 3Q13 totaled a loss of $6.1 million, $3.3
million lower than in 3Q12. The loss for the period is
primarily the result of: (i) a $5.8
million foreign exchange loss, generated by the
mark-to-market effect of non-deliverable currency forwards; and
(ii) a $12.2 million non-cash loss
resulting from the mark-to-market of our sugarcane biological
assets.
Farmland Valuation Report
- As of September 30, 2013 Cushman
& Wakefield updated its independent appraisal of Adecoagro's
farmland. Adecoagro's 278,336 hectares were valued at $919.3 million.(1) Adjusted by the
sale of the Santa Regina farm in December
2012 and the Lagoa do Oeste and Mimoso farms in May 2013, the appraised value of our farmland
portfolio increased by $18.4 million
or 2.0%, since September 30,
2012.
We believe that the increase in the appraised value from
September 30, 2012 to September 30, 2013 was mainly driven by: (i) the
transformation of underutilized or undermanaged land into high
yielding crop and rice land; (ii) the ongoing transformation and
productivity improvement of all our farmland through our
sustainable farming model focused on cutting edge technology and
best practices, such as, no-till farming, crop rotation, balanced
fertilization, integrated pest management, and water efficiency
practices; and (iii) land appreciation.
These gains are not reflected in Adecoagro's financial statements
since the Company does not mark-to-market the value of farmland
assets on its balance sheet. However, land transformation and
appreciation are an important part of Adecoagro's business strategy
and a component of total return on invested capital.
Share Repurchase Program
- On September 23, 2013, Adecoagro
announced that its Board of Directors had authorized the
implementation of a share repurchase program for up to 5% of the
outstanding shares. As of September 30,
2013, Adecoagro repurchased a total of 55,899 shares at an
average price per share of $7.50.
Farm Sales
- On October 3, 2013, Adecoagro
completed the sale of the San Martin farm for a total price of
$8.0 million, equivalent to
$2,294 per hectare, representing a
15% premium over the Cushman & Wakefield independent appraisal
dated September 30, 2013. San Martin
is a 3,502 hectare farm located in the province of Corrientes,
Argentina. The farm is used for
cattle grazing activities and is a subdivision of the Ita Caabo
farm acquired by Adecoagro in 2007. This transaction will generate
approximately $6.5 million of
operating profit in 4Q13.
To read the full 3Q13 earnings release, please access
ir.adecoagro.com. A conference call to discuss 3Q13 results will be
held tomorrow with live webcast through the internet:
English Conference Call
Nov
13, 2013
11 a.m. (US EST)
1 p.m. Buenos Aires
2 p.m. Sao
Paulo
5 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: ir@adecoagro.com
Tel: +54 (11) 4836-8651
About Adecoagro:
Adecoagro is a leading agricultural company in South America. Adecoagro owns over 278
thousand hectares of farmland and several industrial facilities
spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1.2 million
tons of agricultural products including corn, wheat, soybeans,
rice, dairy products, sugar, ethanol and electricity among
others.
SOURCE Adecoagro S.A.