LUXEMBOURG, Nov. 12, 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 third quarter of 2015.
Main highlights for the period:
Financial & Operational Highlights
- Consolidated Adjusted EBITDA(1) in 3Q15 was
$49.7 million, 29.3% lower than 3Q14.
Adjusted EBITDA margin(1) was 30.1% in 3Q15 compared to
35.7% in 3Q14.
- The Sugar, Ethanol and Energy business continues to deliver
operational performance. Our focus on improving operational
efficiencies and technical enhancements has proved to be a driver
for productivity growth and cost dilution.
Our mills crushed a total of 3.2 million tons of sugarcane in
3Q15, 15.1% higher year-over-year, driven by an increase in nominal
crushing capacity combined with higher milling efficiency.
Sugarcane productivity increased by 10.5% reaching 86.3 tons/ha
while sugar content (TRS) stood at 140.5 kg/ton, resulting in a
14.2% year-over-year growth in TRS per hectare. Our cogeneration
operation has reached a record productivity ratio of 72.2 KWh per
ton of sugarcane crushed. As a result of these productivity
enhancements our sugar, ethanol and energy production increased by
11.7%, 26.9% and 40.2% respectively during the quarter.
Adjusted EBITDA in 3Q15 was $47.1
million, 13.9% lower than 3Q14. Despite higher productivity
metrics and production volumes, financial performance was affected
by a 14.9% decrease in net sales, primarily explained by: (i)
lower prices; and (ii) the implementation of a sugar and ethanol
carry strategy. We are seeking to capture higher prices
towards the end of the year, which has resulted in increased sugar
and ethanol inventories by 82.6% and 24.9% respectively
year-over-year. Adjusted EBITDA margin during the quarter expanded
from 49.2% in 3Q14 to 49.8%, driven by productivity gains and
dilution of fixed costs.
- In the Farming and Land Transformation businesses,
Adjusted EBITDA in 3Q15 was $9.1
million, compared to $22.6
million in 3Q14. This decrease is primarily explained by (i)
lower commodity prices for corn, soybean, wheat, rice and milk;
(ii) higher production costs in our Argentine operations due to the
appreciation of the Argentine peso in real terms; and (iii) a
$4.1 million lower gain from the
mark-to-market of our commodity hedges. These effects were
partially offset by higher productivity in our soybean, corn and
dairy operations.
On a year-to-date basis, Adjusted EBITDA was $34.8 million, $65.4
million or 65.2% lower than 9M14. In addition to the drivers
described above, this gap is explained by the absence of recorded
gains from land transformation sales in 9M15, compared to a
$25.5 million gain realized in
9M14.
- Net income in 3Q15 totaled $2.4
million, compared to $11.2
million in 3Q14. The decrease is primarily explained by the
lower Adjusted EBITDA in the quarter and offset by (i) an
$11.1 million decrease in
depreciation and amortization due to the depreciation of the
Brazilian Real and Argentine peso; and (ii) a $5.5 million income tax benefit.
On a year-to-date basis, net income was $17.5 million, 14.7% higher than 9M14. Despite
lower Adjusted EBITDA, net income was enhanced by (i) a
$15.6 million decrease in
depreciation and amortization, driven by the weaker Brazilian Real
and Argentine peso; and (ii) a $16.8
million increase in the fair value of our sugarcane
biological assets. These effects were partially offset by a
$4.1 million increase in financial
losses as a result of the devaluation of the Brazilian Real.
Strategy Execution
Independent Farmland Appraisal Report
- As of September 30, 2015 Cushman
& Wakefield updated its independent appraisal of Adecoagro's
farmland. Adecoagro's subsidiaries held a total of 269,931 hectares
valued by C&W at $935.4 million.
Net of minority interests, Adecoagro's land portfolio consists of
257,044 hectares valued at $885.7
million.
We believe the increase in the value of our farmland is mainly
explained by: (i) the transformation of undermanaged and
underdeveloped land into croppable land; and (ii) the ongoing
transformation or continuous productivity enhancements of all our
croppable land.
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.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.
Share Repurchase Program
- On August, 12, 2015, the Board of Directors approved the
extension of the Company's share repurchase program for an
additional twelve month period, and ending on September 23, 2016. Under the buyback program,
the Company can continue acquiring shares up to 5% of the
outstanding share capital. Since the inception of the share
repurchase program in August 2013 and
through October 2015, Adecoagro has
repurchased an aggregate of 2.4 million shares for a total
consideration of $18.4 million and an
average price of $7.72 dollars per
share.
(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 3Q15 earnings release, please access
ir.adecoagro.com. A conference call to discuss 3Q15 results will be
held on November 13, 2015 with a live
webcast through the internet:
English Conference Call
November 13, 2015
11 a.m. (US EST)
1 p.m. Buenos Aires
2 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.