LUXEMBOURG, Aug. 13, 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 second quarter of 2015.
Main highlights for the period:
Financial & Operational Highlights
- Adecoagro's Net Income totaled $1.3
million in 2Q15 in line with 2Q14, while in 6M15 reached
15.1 million, 272.9% higher compared to last year.
- Adjusted EBITDA(1) in 2Q15 was $39.5 million,
45.8% lower than 2Q14. Adjusted EBITDA margin(1) was
24.0% in 2Q15 compared to 36.9% in 2Q14.
- Our Sugar, Ethanol and Energy business delivered strong
operational and financial results in the quarter. Our
mills crushed a total of 2.9 million tons of sugarcane, 35.9%
higher year-over-year, driven by an increase in nominal crushing
capacity combined with higher milling efficiency. Our agricultural
operations are reaping the benefits of operational improvements and
technical enhancements performed during the last 3-years. Sugarcane
productivity reached 100 tons/ha while sugar content (TRS) stood at
128.7 kg/ton, resulting in a 34.1% year-over-year increase in TRS
content per hectare. As a result of the increase in productivity,
production and sales volumes were boosted and production costs
diluted. Thus, despite lower sugar and energy prices, adjusted
EBITDA in 2Q15 reached $41.1 million,
15.3% higher than 2Q14, while Adjusted EBITDA margin expanded to
47.7% from 46.2% in 2Q14.
On a year-to-date basis, Adjusted
EBITDA in 6M15 stood at $59.0
million, marking a 49.7% increase over 6M14. In addition to
the main drivers explained above, year-to-date results were also
enhanced by: (i) an early start of the harvest season which will
allow us to extend the season and increase annual milling; and (ii)
a $13.9 million gain, which is mostly
realized, from the mark-to-market of our sugar hedge position,
compared to a $1.9 million gain
generated in 6M14.
- In the Farming and Land Transformation businesses, Adjusted
EBITDA in 2Q15 was $2.6 million,
compared to $41.8 million in 2Q14.
This decrease is primarily explained by (i) absence of gains from
land transformation, compared to a $25.6
million gain realized in 2Q14; and (ii) a $7.9 million unrealized mark-to-market loss
generated by our commodity hedge positions, compared to a
$7.2 million gain generated in
2Q14.
Year-to-date, Adjusted EBITDA was
$25.7 million, $51.9 million or 66.9% lower than 6M14. This
performance is primarily explained by: (i) no land transformation
gains as explained above; (ii) lower margins in the Crops, Rice and
Dairy segments resulting from lower prices of soybean, corn, wheat
and milk, coupled with higher production costs measured in dollars
as a result of the appreciation of the Argentine peso in real
terms. These effects were partially offset by higher productivity
in our soybean, corn and dairy operations.
- Net income in 2Q15 totaled $1.3
million, essentially the same as in 2Q14. Net income in the
quarter was enhanced by: (i) a $4.1
million decrease in interest expense and a $4.1 million decrease in depreciation and
amortization, both driven by the weaker Brazilian Real and
Argentine Peso in 2Q15 compared to 2Q14; (ii) a $5.9 million increase in the fair value of our
sugarcane biological assets resulting from an increase in sugarcane
yields. These effects were partially offset by a $6.6 million increase in income tax expense.
Strategy Execution
Sugar, Ethanol & Energy Ramp Up
- The construction of the second phase of the Ivinhema mill was
formally completed during 2Q15. Our state-of-the-art cluster in
Mato Grosso do Sul has reached
full nominal crushing capacity of 9 million tons.
- In an industry with very high mechanization levels and high
fixed cost structure, the completion of the cluster is an important
driver of economies of scale and operating synergies.
- More importantly, during 2015 our operations have shown strong
signs of operational improvements and efficiency enhancements
related to the training and strengthening of our teams and
processes which have resulted in fixed cost dilution and increase
in operating margins. Some examples that evidence these operational
improvements are: (i) the increase in sugarcane yields and TRS
content; (ii) the constant growth in our cogeneration exports,
which in the current quarter have reached a record of 65 KWh per
ton of sugarcane crushed, which we believe is one of the highest
ratios in the industry; (iii) the increase in sugarcane milling per
hour. Our operational teams and management remain committed towards
reaching operational excellence in each task and process, which
will allow us to continue reducing our cost of production.
- The completion of the cluster in 2Q15 will result in a
significant reduction in capex spending. Consolidated capital
expenditures in 2015 are expected to reach between $140 and $160 million during the year, compared
to $324 million in 2014. Regarding
2016, no major capex has been committed, therefore capex will
consist primarily of maintenance capex related to the Sugar,
Ethanol & Energy.
(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 2Q15 earnings release, please access
ir.adecoagro.com. A conference call to discuss 2Q15 results will be
held tomorrow with live webcast through the internet:
English Conference Call
August 14, 2015
11 a.m. (US EST)
12 p.m. Buenos Aires
12 p.m. Sao
Paulo
5 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.