LUXEMBOURG, Aug. 15, 2017 /PRNewswire/ -- Adecoagro S.A.
(NYSE: AGRO, Bloomberg: AGRO US,
Reuters: AGRO.K), a leading agricultural company in South America, announced today its results for
the second quarter of 2017.
Main highlights for the period:
- Adecoagro reported Adjusted EBITDA of $67.2 million in 2Q17 and $111.9 million for 6M17, 31.3% and 18.6% higher
year-over-year, respectively
- Gross sales in 2Q17 reached $228.5
million, 35.0% higher year-over-year
- Net income in 2Q17 stands at $3.8
million, $21.6 million higher
than 2Q16
Financial & Operational Highlights
- Adjusted EBITDA for our Farming and Land Transformation
businesses' in 2Q17 was $11.0
million, 116.5% higher than in 2Q16. The increase is
primarily explained by a $22.9
million increase in gains derived from the mark-to-market
effect of our commodity hedge position. This gain was partially
offset by a $17.6 million decrease in
margins, particularly from our Crops segment, resulting from (i)
lower soybean and corn prices; and (ii) higher production costs
measured in USD as a result of the real appreciation of the
Argentine peso.
Year-to-date, Adjusted EBITDA reached $30.6
million compared to $31.3
million the same period last year. Higher productivity
across our Crops, Rice and Dairy operations was offset by lower
soybean and corn prices and the impact of the real appreciation of
the Argentine peso.
- In our Sugar, Ethanol & Energy business, Adjusted EBITDA in
2Q17 reached $61.4 million, marking a
21.2% increase compared to 2Q16. The main factors which contributed
strong financial performance during the quarter were: (i) an
increase in sugar and ethanol selling volumes, 22.5% and 53.5%
higher year-over-year, respectively; (ii) an increase in sugar,
ethanol and energy realized selling prices, respectively
14.6%,16.5% and 49.2%; and (iii) a $21.0
million gain generated from the mark-to-market effect of our
sugar hedge position, compared to a $13.2
million loss recognized during 2Q16. This increase in
financial performance was achieved despite (i) an 8.6% decrease in
sugarcane crushing as a result of above average rainfalls during
April and May; (ii) the appreciation of the Brazilian Reais (BRL)
which resulted in higher productions costs measured in USD; and
(iii) a $7.3 million non-cash loss
generated from the mark-to-market valuation of our unharvested
sugarcane plantation, compared to a $21.4
million gain in 2Q16.
On a cumulative basis, Adjusted EBITDA for 6M17 grew by 26.0%
reaching $91.6 million. Main drivers
and offsetting factors are in line with those explained for the
quarter. Adjusted EBITDA margin reached 39.2%, while Adjusted
EBITDA margin net of third party commercialization was 46.1%,
compared to 55.2% from 6M16. Lower margins are mainly explained by
an increase in production costs as a result of the appreciation of
the BRL coupled with a decrease in total TRS produced.
Net Income in 2Q17 was $3.8 million,
compared to a loss of $17.8 million
in 2Q16. This increase is explained by (i) a $16.0 million increase in Adjusted EBITDA; and
(ii) lower financial losses ($22.9
million compared to $38.3
million in 2Q16). These results were partially offset by a
$10.2 milllion increase in
depreciation expense, mainly explained by the expansion of our
sugarcane plantantion.
Strategy Execution
- Sugar, Ethanol & Energy Expansion Update
Phase I: The industrial expansion of the Angelica mill was
completed during June 2017. We have
installed larger mill rollers which have allowed us to increase
sugarcane crushing per hour by 150 tons/hr or 17%. Annual nominal
crushing capacity has increased 0.9 million tons per year to a
total of 5.7 million tons.
Phase II: We have begun building the foundations to add a new cane
crusher to the Ivinhema mill. Construction is progressing well and
on schedule. Once completed, we will proceed with the expansion of
the juice treatment and sugar factory. These investments will allow
us to increase crushing capacity by 400 tons/hour or 2.1 million
tons per year. Ivinhema is expected to reach a total capacity of
7.3 million
The expansion of our sugarcane plantation to supply the new
capacity is also advancing well. As of the end of July 2017, we have leased 19.3 thousand hectares
of which 6.4 thousand have already been planted. We expect
sugarcane planting to grow at a pace which will allow total milling
to increase by approximately 0.5 million tons per year, reaching a
total of 14.2 million tons by 2023 (13.0 million in the Cluster and
1.2 million at UMA mill).
- Share Repurchase Program
Over the last 12-months and as of the date of this report,
Adecoagro has repurchased a total of 1.5 million shares or 1.2% of
outstanding shares for a total dollar amount of $15.1 million. Since the inception of the program
in August 2013, Adecoagro has
repurchased an aggregate of 3.8 million shares equivalent to 3.1%
of outstanding shares or $33.4
million.
On August 11, 2017, the Board of
Directors approved the extension of the Company's share repurchase
program for an additional twelve-month period ending on
September 23, 2018. Under the buyback
program, the Company can acquire shares up to 5% of the outstanding
share capital or 6.1 million shares.
_______________________________________________________
- Adjusted EBITDA is defined as consolidated profit from
operations before financing and taxation, depreciation,
amortization 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, 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.
Non-Gaap Financial Measures: For a full
reconciliation of non-gaap financial measures please refer to page
22 of our 2Q17 Earnings Release found on Adecoagro's website
(ir.adecoagro.com)
Forward-Looking Statements: This press release
contains forward-looking statements that are based on our current
expectations, assumptions, estimates and projections about us and
our industry. These forward-looking statements can be
identified by words or phrases such as "anticipate," "forecast",
"believe," "continue," "estimate," "expect," "intend," "is/are
likely to," "may," "plan," "should," "would," or other similar
expressions.
These forward-looking statements involve various risks and
uncertainties. Although we believe that our expectations expressed
in these forward-looking statements are reasonable, our
expectations may turn out to be incorrect. Our actual results
could be materially different from our expectations. In light
of the risks and uncertainties described above, the estimates and
forward-looking statements discussed in this press release might
not occur, and our future results and our performance may differ
materially from those expressed in these forward-looking statements
due to, inclusive, but not limited to, the factors mentioned
above. Because of these uncertainties, you should not make
any investment decision based on these estimates and
forward-looking statements.
The forward-looking statements made in this press release
relate only to events or information as of the date on which the
statements are made in this press release. We undertake no
obligation to update any forward-looking statements to reflect
events or circumstances after the date on which the statements are
made or to reflect the occurrence of unanticipated events.
To read the full 2Q17 earnings release, please access
ir.adecoagro.com. A conference call to discuss 2Q17 results will be
held on August 16, 2017 with a live
webcast through the internet:
Conference Call
August 16, 2017
11 a.m. (US EST)
12 p.m. Buenos Aires
12 p.m. Sao
Paulo
5 p.m. Luxembourg
Participants calling from the US: Tel: +1 (844) 836-8746
Participants calling from other countries: Tel: +1 (412)
317-2501
Access Code: Adecoagro
Conference Call Replay
Participants calling from the US: Tel: +1 (877) 344-7529
Participants calling from other countries: Tel: +1 (412)
317-0088
Access Code: 10108574
Investor Relations Department
Charlie Boero Hughes
CFO
Hernan Walker
IRO
Email: ir@adecoagro.com
Tel: +54 (11) 4836-8651
About Adecoagro:
Adecoagro is a leading agricultural
company in South America.
Adecoagro owns over 247 thousand hectares of farmland and several
industrial facilities spread across the most productive regions of
Argentina, Brazil and Uruguay, where it produces over 1.9 million
tons of agricultural products including sugar, ethanol,
bio-electricity, milled rice, corn, wheat, soybean and dairy
products, among others.
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SOURCE Adecoagro S.A.