LUXEMBOURG, May 14, 2015 /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 first quarter of 2015.
Main highlights for the period:
Financial & Operational Highlights
- Adecoagro recorded Adjusted EBITDA(1) of
$35.8 million in 1Q15, representing a
3.1% increase compared to 1Q14.
- Adjusted EBITDA margin(1) during 1Q15 reached 32.8%
in 1Q15, compared to 36.7% in 1Q14.
- The Farming and Land Transformation businesses' Adjusted EBITDA
in 1Q15 was $23.1 million, compared
to $35.9 million in 1Q14. This
decrease is primarily explained by: (i) a $25.1 million decrease in margins generated by
our Crops segment as a result of lower corn, soybean and wheat
prices, which was partially offset by higher crop yields and an
$8.8 million gain ($3.7 million unrealized) from the mark-to-market
of our commodity hedge position, compared to a $12.5 million loss in 1Q14; and (ii) a
$7.8 million reduction in margins
from our Rice segment, resulting from lower rice yields due to
above average rains and cloudy days during the development of the
crop, coupled with an increase in production costs measured in USD
driven by the appreciation of the Argentine peso in real
terms.
- The Sugar, Ethanol and Energy business underwent its annual
inter-harvest maintenance of industrial and agricultural equipment
during the first quarter of 2015. Accordingly, 1Q15 Adjusted EBITDA
primarily reflects the sale of sugar and ethanol inventories as
well as a portion of the ethanolproduced during March, the expenses
incurred in sugarcane harvest, maintenance and treatment, overhead
expenses and derivative hedge results.
Adjusted EBITDA during 1Q15 reached $17.9
million, $14.1 million higher
year-over-year. Financial performance in 1Q15 was enhanced by: (i)
our ethanol carry strategy executed since August 2014, which allowed us to increase ethanol
sales volumes by 37% compared to 1Q14 and capture higher off-season
prices; (ii) a 61.7% increase in TRS per hectare driven by
improvements in agricultural management; (iii) an accelerated start
of the milling season that allowed us to crush 460.1 thousand tons
of sugarcane compared to 45.2 thousand in 1Q14, resulting in 14x
production growth and improved net sales and margins; and (iv) a
$12.3 million gain ($9.7 million unrealized) resulting from the
mark-to-market of our sugar derivative hedge position, contrasted
by a $1.4 million loss in 1Q14.
Despite a 12.6% increase in energy exports, results in the quarter
were partially offset by lower year-over-year energy spot prices as
a result of the new price cap set by the government.
- Net Income in 1Q15 was $13.8
million, $11.2 million higher
than in 1Q14. Net income during the quarter was enhanced by (i) a
$12.3 million unrealized gain from
Changes in Fair Value of our sugarcane plantation driven by the
natural growth experienced by sugarcane plantation during 1Q15,
compared to a $3.4 million loss in
1Q14; and (ii) a $2.3 million
year-over-year decrease in income tax. Net income was negatively
affected by a $13.2 million foreign
exchange loss, compared to a $3.9
million loss in 1Q14, explained by the 20.8% devaluation of
the Brazilian Reais in 1Q15.
Strategy Execution
Commencement of 2014/15 Sugarcane Harvest
- Our sugarcane cluster in Mato
Grosso do Sul had an accelerated start of milling and
harvesting operations as part of a production strategy to extend
the harvest period. The Angelica mill began crushing on
March 11, 15 days ahead of last
season, and the Ivinhema mill began on March
16, 40 days earlier than the previous season.
- In an industry with very high mechanization and high fixed cost
structure, extending the milling season will allow us to increase
sugarcane crushing and production, dilute fixed costs and enhance
operating margins.
- Maintenance of industrial equipment and sugarcane plantations
was successfully performed between January and early March. Our
cluster has a sufficient supply of cane and is expected to crush at
very close to nominal capacity. Our agricultural and industrial
teams have undergone a thorough training process and are set to
enhance operational and productive efficiencies throughout the
year.
Capital Expenditures Slow down
- Consolidated capex spending is expected to slow down
appreciably in 2015, driven by the completion of our sugarcane
cluster in Mato Grosso do Sul.
Capital expenditures are expected to reach between $150 and $170 million during the year, compared
to $324 million the previous year. As
of today, no major growth capex has been committed for 2016
onwards. Therefore, capex will consist primarily on maintenance
related to the Sugar, Ethanol & Energy business, including
sugarcane renewal and off-season maintenance of industrial facility
and agricultural machinery.
- In 1Q15, capex decreased 54.4% year-over-year, from
$137.8 million in 1Q14 to
$62.8 million
(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 1Q15 earnings release, please access
ir.adecoagro.com. A conference call to discuss 1Q15 results will be
held tomorrow with live webcast through the internet:
English Conference Call
May 15, 2015
9 a.m. (US EST)
10 p.m. Buenos Aires
10 p.m. Sao
Paulo
3 p.m. Luxembourg
Tel: +1 (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 1.7 million
tons of agricultural products including corn, wheat, soybeans,
rice, dairy products, sugar, ethanol and electricity among
others.
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SOURCE Adecoagro S.A.