LUXEMBOURG, Nov. 12, 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 third quarter of 2014. The financial information
contained in this press release is based on unaudited condensed
consolidated interim financial statements presented in U.S. dollars
and prepared in accordance with International Financial Reporting
Standards (IFRS).
Financial & Operational Highlights:
- In 3Q14, Adecoagro recorded Adjusted EBITDA(1) of
$70.3 million, 60.6% higher than in
3Q13. Adjusted EBITDA margin(1) was 35.7% in 3Q14
compared to 25.4% in 3Q13.
- In 9M14, Adjusted EBITDA was $177.8
million, 55.7% higher than in 9M13. Adjusted EBITDA margin
grew to 36.3% from 24.7%.
- Gross Sales in 3Q14 reached $202.8
million and $505.9 million in
9M14, showing a 14.9% and 6.5% increase, respectively.
- In our Farming and Land Transformation businesses, Adjusted
EBITDA in 3Q14 was $22.6 million,
compared to $10.7 million in 3Q13.
Since most of our row crops are harvested during the first and
second quarter, Adjusted EBITDA in the third quarter is primarily
derived from rice and milk sales, and the mark-to-market of grain
inventories and commodity hedges. The 111.4% growth in financial
performance year-over-year is primarily explained by a $16.6 million gain resulting from the
mark-to-market of our soybean and corn derivative hedge positions
related to the new 2014/15 crop.
- On an accumulated basis, 9M14 Adjusted EBITDA totaled
$100.2 million, 97.9% higher than
9M13. Year-over-year growth is mainly explained by: (i) increased
operational and financial performance in the Crops segment,
resulting from higher yields and lower production costs; (ii)
higher margins in the Rice segment, resulting from an increase in
planted area coupled with lower costs driven by the implementation
of efficient production technologies and the devaluation of the
Argentine peso; and (iii) a $25.5
million gain in our land transformation business.
- In the Sugar, Ethanol and Energy business, Adjusted
EBITDA during 3Q14 reached an all-time quarterly record of
$54.7 million, 39.4% higher than
3Q13. Adjusted EBITDA margin reached 49.2%. This improved
performance is primarily explained by: (i) a 3.8% increase in
sugarcane content (TRS) coupled with a 7.0% increase in yields;
(ii) an increase in sugar, ethanol and energy sales volumes driven
by higher year-to-date crushing and production volumes; (iii) a
69.4% and 21.7% increase in energy and ethanol prices,
respectively; and (iv) enhanced production efficiencies and
operational leverage. Operational and financial performance was
partially offset by a commercial strategy to carry ethanol
inventories into the off-season seeking higher prices; and lower
sugar prices.
- Year-to-date, Adjusted EBITDA was $94.1
million, $14.2 million or
17.7% higher than the same period of the prior year.
- Net income in 3Q14 totaled $11.2
million, $17.3 million higher
than in 3Q13. On a cumulative basis, net income for 9M14 was
$15.3 million, $45.7 million higher than the same period of
2013. Net income was enhanced by operational and financial
improvements in the Farming and Sugar & Ethanol
businesses.
Strategy Execution
Independent Farmland Appraisal Report:
- As of September 30, 2014 Cushman
& Wakefield (C&W) updated its independent appraisal of
Adecoagro's farmland. Adecoagro's subsidiaries held 269,923
hectares valued by C&W at $934.4
million. Net of minority interests, Adecoagro's land
portfolio of 257,036 hectares was valued at $884.4 million.(1)
Adjusted by the sale of the San Agustin and San Martin farms in
November 2013 and December 2013, respectively, the appraised value
of our farmland portfolio increased $24.5
million or 2.9%, since September 30,
2013.
We believe this increase is mainly explained by: (i) the
transformation of undermanaged and underdeveloped land into
croppable land; (ii) the ongoing transformation or continuous
productivity enhancements of all our croppable land; 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.
We believe this increase is mainly explained by: (i) the
transformation of undermanaged and underdeveloped land into
croppable land; (ii) the ongoing transformation or continuous
productivity enhancements of all our croppable land; 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.
Sugar, Ethanol & Energy Expansion
Sugar, Ethanol & Energy Expansion:
- The construction of the second phase of the Ivinhema mill,
which will add 3.0 million tons of nominal crushing capacity, is
advancing according to schedule and will be commissioned in
March 2015. As of September 30, 2014, we successfully planted
29,565 hectares of sugarcane, 61.0% higher year-over-year, in order
to supply our new capacity with quality raw material.
Changes to Executive Management Team & Board of
Directors
- Renato Junqueira Santos Pereira
has been promoted to Director of the Sugar, Ethanol & Energy
business and a member of the senior management team. Mr. Junqueira
has been Operations Manager for our Sugar, Ethanol & Energy
business since 2010 and has vast experience in the Brazilian
sugarcane industry. Before joining Adecoagro, he served as the CFO
of Usina Moema until it was acquired by Bunge. Renato is an
Agricultural Engineer from Universidade de Sao Paulo and holds an MBA from the
University of California, Davis.
- Marcelo Vieira has assumed the
role of non-executive member of the Board of Directors of the
Company after retiring from his position as Director of our Sugar,
Ethanol & Energy business. Marcelo
Vieira has been a member of Adecoagro's senior management
since 2005, and has been instrumental in the development
and expansion of the company's operations. As a board member,
Marcelo will continue adding strategic value to the
Company.
- Paulo Vieira has stepped down as
member of the Board of Directors of the Company after almost 10
years of service. Paulo Vieira has
provided invaluable guidance and leadership to the Company. We wish
Paulo Vieira success with his
endeavors and sincerely thank him for his contribution and
service.
Sunflower Processing Plant
- On October 2, 2014 we inaugurated
a state-of-the-art sunflower processing plant located in the city
of Pehuajo, Buenos Aires,
Argentina. The plant was built in a 50/50 joint venture with
CHS Inc., the largest farmer cooperative and one of the largest
grain handlers in the US. The plant processes confectionary and
black oil sunflower into specialty products such as kernel,
in-shell seeds and oil seeds destined to niche markets in
Europe, US, and Middle East. The plant required a total
investment of $35.2 million, of which
50.6% was financed through local debt. This strategic investment
will add synergies and vertical-integration to our sunflower
production, enhancing the margins and returns of our Crops
business.
(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 3Q14 earnings release, please access
www.ir.adecoagro.com. A conference call to discuss 3Q14 results
will be held on November 13, 2014
with live webcast through the internet:
English Conference Call
Nov 13,
2014
11 a.m. (US
EST)
1 p.m. (Buenos Aires)
2 p.m. (Sao
Paulo time)
5 p.m. (Luxembourg time)
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 257
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.