Report of Foreign Issuer (6-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August, 2017

Commission File Number 001-35052

Adecoagro S.A.

(Translation of registrant’s name into English)

13-15 Avenue de la Liberté

L-1931 Luxembourg

R.C.S. Luxembourg B 153 681

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2017

This Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) is being filed by Adecoagro S.A. (“Adecoagro” or the “Company”) with the Securities and Exchange Commission (the “SEC”) and is incorporated by reference into the Company’s Registration Statement on Form F-3 filed with the SEC on December 6, 2013 (File No. 333-191325) and will be deemed to be a part thereof from the date on which this Form 6-K is filed with the SEC, to the extent not superseded by documents or reports subsequently filed or furnished. The Company is filing this report on Form 6-K for the purpose of filing a copy of the Company’s unaudited condensed consolidated interim financial statements as of and for the six month period ended June 30, 2017 (the “Consolidated Financial Statements”) as Exhibit 99.1. The Consolidated Financial Statements are presented in U.S. Dollars and prepared in accordance with International Financial Reporting Standards.

The attachment contains forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in the attachment.

The registrant’s forward-looking statements are based on the registrant’s current expectations, assumptions, estimates and projections about the registrant and its industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.

The forward-looking statements included in the attached relate to, among others: (i) the registrant’s business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing the registrant’s business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which the registrant operate, environmental laws and regulations; (iv) the implementation of the registrant’s business strategy, including its development of the Ivinhema mill and other current projects; (v) the registrant’s plans relating to acquisitions, joint ventures, strategic alliances or divestitures; (vi) the implementation of the registrant’s financing strategy and capital expenditure plan; (vii) the maintenance of the registrant’s relationships with customers; (viii) the competitive nature of the industries in which the registrant operates; (ix) the cost and availability of financing; (x) future demand for the commodities the registrant produces; (xi) international prices for commodities; (xii) the condition of the registrant’s land holdings; (xiii) the development of the logistics and infrastructure for transportation of the registrant’s products in the countries where it operates; (xiv) the performance of the South American and world economies; and (xv) the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan Peso compared to other currencies; as well as other risks included in the registrant’s other filings and submissions with the United States Securities and Exchange Commission.

These forward-looking statements involve various risks and uncertainties. Although the registrant believes that its expectations expressed in these forward-looking statements are reasonable, its expectations may turn out to be incorrect. The registrant’s actual results could be materially different from its expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in the attached might not occur, and the registrant’s future results and its 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 the attached relate only to events or information as of the date on which the statements are made in the attached. The registrant undertakes 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Adecoagro S.A.

	By	/s/ Carlos A. Boero Hughes

	Name:	Carlos A. Boero Hughes

	Title:	Chief Financial Officer and Chief Accounting Officer

Date: August 15, 2017

Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of June 30, 2017 and for the six-month periods ended June 30, 2017 and 2016

Legal information

Denomination: Adecoagro S.A.

Legal address: Vertigo Naos Building, 6, Rue Eugène Ruppert, L-2453, Luxembourg

Company activity: Agricultural and agro-industrial

Date of registration: June 11, 2010

Expiration of company charter: No term defined

Number of register (RCS Luxembourg): B153.681

Capital stock : 122,381,815 common shares (of which 1,577,594 are treasury shares)

F - 2

Adecoagro S.A.

Condensed Consolidated Interim Statements of Income

for the six-month and three-month periods ended June 30, 2017 and 2016

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

		Six-months ended June 30				Three-months ended June 30
	Note	2017		2016		2017		2016
		(unaudited)
Sales of goods and services rendered	4		394,621		290,704		228,530		169,220
Cost of goods sold and services rendered	5		(335,309)		(238,428)		(195,947)		(139,405)
Initial recognition and changes in fair value of biological assets and agricultural produce	14		22,702		83,494		5,337		57,661
Changes in net realizable value of agricultural produce after harvest			3,193		(369)		3,420		(3,028)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses			85,207		135,401		41,340		84,448
General and administrative expenses	6		(28,501)		(21,610)		(14,484)		(11,306)
Selling expenses	6		(37,077)		(27,165)		(21,063)		(16,129)
Other operating income / (loss), net	8		36,138		(34,161)		22,866		(34,219)
Profit from Operations Before Financing and Taxation			55,767		52,465		28,659		22,794
Finance income	9		5,222		5,071		3,110		926
Finance costs	9		(45,410)		(67,918)		(25,968)		(39,205)
Financial results, net	9		(40,188)		(62,847)		(22,858)		(38,279)
Profit / (loss) Before Income Tax			15,579		(10,382)		5,801		(15,485)
Income tax expense	10		(5,811)		(4,616)		(2,000)		(2,265)
Profit / (loss) for the Period			9,768		(14,998)		3,801		(17,750)
Attributable to:
Equity holders of the parent			8,694		(16,385)		3,703		(17,985)
Non-controlling interest			1,074		1,387		98		235

Earnings per share attributable to the equity holders of the parent during the period:
Basic			0.072		(0.135)		0.031		(0.148)
Diluted			0.071		(0.135)		0.030		(0.148)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 3

Adecoagro S.A.

Condensed Consolidated Interim Statements of Comprehensive Income

for the six-month and three-month periods ended June 30, 2017 and 2016

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

	Six-months ended June 30				Three-months ended June 30
	2017		2016		2017		2016
	(unaudited)

Profit / (loss) for the period		9,768		(14,998)		3,801		(17,750)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		(8,474)		47,826		(23,191)		33,270
Cash flow hedge, net of tax (Note 2)		(2,508)		65,971		(13,900)		40,117
Other comprehensive earnings for the period		(10,982)		113,797		(37,091)		73,387
Total comprehensive earnings for the period		(1,214)		98,799		(33,290)		55,637

Attributable to:
Equity holders of the parent		(1,966)		98,441		(32,851)		55,584
Non-controlling interest		752		358		(439)		53

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 4

Adecoagro S.A.

Condensed Consolidated Interim Statements of Financial Position

as of June 30, 2017 and December 31, 2016

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

		June 30,		December 31,
	Note	2017		2016
		(unaudited)
ASSETS
Non-Current Assets
Property, plant and equipment	11		837,360		802,608
Investment property	12		2,547		2,666
Intangible assets	13		16,966		17,252
Biological assets	14		8,951		8,516
Deferred income tax assets	10		37,096		38,586
Trade and other receivables	16		18,002		17,412
Other assets			555		566
Total Non-Current Assets			921,477		887,606
Current Assets
Biological assets	14		93,645		136,888
Inventories	17		151,052		111,754
Trade and other receivables	16		182,376		157,528
Derivative financial instruments	15		3,015		3,398
Other assets			42		24
Cash and cash equivalents	18		219,934		158,568
Total Current Assets			650,064		568,160
TOTAL ASSETS			1,571,541		1,455,766
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital	19		183,573		183,573
Share premium	19		933,961		937,250
Cumulative translation adjustment			(535,516)		(527,364)
Equity-settled compensation			15,142		17,218
Cash flow hedge			(39,807)		(37,299)
Treasury shares			(2,368)		(1,859)
Reserve from the sale of non-controlling interests in subsidiaries			41,574		41,574
Retained earnings			59,692		50,998
Equity attributable to equity holders of the parent			656,251		664,091
Non-controlling interest			6,670		7,582
TOTAL SHAREHOLDERS EQUITY			662,921		671,673
LIABILITIES
Non-Current Liabilities
Trade and other payables	21		892		1,427
Borrowings	22		537,484		430,304
Deferred income tax liabilities	10		14,491		14,689
Payroll and social security liabilities	23		1,070		1,235
Derivatives financial instruments	15		1,439		662
Provisions for other liabilities			3,175		3,299
Total Non-Current Liabilities			558,551		451,616
Current Liabilities
Trade and other payables	21		61,774		92,158
Current income tax liabilities			2,461		1,387
Payroll and social security liabilities	23		28,024		26,844
Borrowings	22		256,795		205,092
Derivative financial instruments	15		372		6,406
Provisions for other liabilities			643		590
Total Current Liabilities			350,069		332,477
TOTAL LIABILITIES			908,620		784,093
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES			1,571,541		1,455,766

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 5

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2017 and 2016 (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

	Attributable to equity holders of the parent
	Share Capital (Note 19)		Share Premium		Cumulative Translation Adjustment		Equity-settled Compensation		Cash flow hedge		Treasury shares		Reserve from the sale of non-controlling interests in subsidiaries		Retained Earnings		Subtotal		Non-Controlling Interest		Total Shareholders’ Equity
Balance at January 1, 2016		183,573		937,674		(568,316)		16,631		(137,911)		(1,936)		41,574		48,795		520,084		7,335		527,419
Loss for the period		-		-		-		-		-		-		-		(16,385)		(16,385)		1,387		(14,998)
Other comprehensive income:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		-		-		48,855		-		-		-		-		-		48,855		(1,029)		47,826
Cash flow hedge (*)		-		-		-		-		65,971		-		-		-		65,971		-		65,971
Other comprehensive income for the period		-				48,855		-		65,971		-		-		-		114,826		(1,029)		113,797
Total comprehensive income for the period		-				48,855		-		65,971		-		-		(16,385)		98,441		358		98,799

Employee share options (Note 20)
- Exercised		-		323		-		(102)		-		55		-		-		276		-		276
- Forfeited		-		-		-		(98)		-		-		-		98		-		-		-
Restricted shares (Note 20):
- Value of employee services		-		-		-		2,545		-		-		-		-		2,545		-		2,545
- Vested		-		3,225		-		(3,905)		-		680		-		-		-		-		-

Balance at June 30, 2016 (unaudited)		183,573		941,222		(519,461)		15,071		(71,940)		(1,201)		41,574		32,508		621,346		7,693		629,039

(*) Net of 34,145 of Income Tax.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 6

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2017 and 2016 (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

	Attributable to equity holders of the parent
	Share Capital (Note 19)		Share Premium		Cumulative Translation Adjustment		Equity-settled Compensation		Cash flow hedge		Treasury shares		Reserve from the sale of non-controlling interests in subsidiaries		Retained Earnings		Subtotal		Non-Controlling Interest		Total Shareholders’ Equity

Balance at January 1, 2017		183,573		937,250		(527,364)		17,218		(37,299)		(1,859)		41,574		50,998		664,091		7,582		671,673
Profit for the period		-		-		-		-		-		-		-		8,694		8,694		1,074		9,768
Other comprehensive loss:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations		-		-		(8,152)		-		-		-		-		-		(8,152)		(322)		(8,474)
Cash flow hedge (*)		-		-		-		-		(2,508)		-		-		-		(2,508)		-		(2,508)
Other comprehensive income for the period		-		-		(8,152)		-		(2,508)		-		-		-		(10,660)		(322)		(10,982)
Total comprehensive income for the period		-		-		(8,152)		-		(2,508)		-		-		8,694		(1,966)		752		(1,214)

Restricted shares (Note 20):
- Value of employee services		-		-		-		2,807		-		-		-		-		2,807		-		2,807
- Vested		-		4,149		-		(4,883)		-		734		-		-		-		-		-
- Purchase of own shares		-		(7,438)		-		-		-		(1,243)		-		-		(8,681)		-		(8,681)
- Dividends		-		-		-		-				-		-		-		-		(1,664)		(1,664)
Balance at June 30, 2017 (unaudited)		183,573		933,961		(535,516)		15,142		(39,807)		(2,368)		41,574		59,692		656,251		6,670		662,921

(*) Net of 1,291 of Income Tax.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 7

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2017 and 2016

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

	Note	June 30, 2017		June 30, 2016
		(unaudited)
Cash flows from operating activities:
Profit for the period			9,768		(14,998)
Adjustments for:
Income tax expense	10		5,811		4,616
Depreciation	11		55,750		41,592
Amortization	13		416		313
Loss / (Gain) from disposal of other property items	8		618		(181)
Equity settled share-based compensation granted	7, 20		2,807		2,545
(Gain) / loss from derivative financial instruments	8, 9		(36,558)		41,121
Interest and other expense, net	9		21,188		18,940
Initial recognition and changes in fair value of non harvested biological assets (unrealized)			2,441		(49,592)
Changes in net realizable value of agricultural produce after harvest (unrealized)			(616)		1,542
Provision and allowances			298		48
Foreign exchange losses, net	9		11,883		12,276
Cash flow hedge – transfer from equity	9		3,320		23,594
Subtotal			77,126		81,816
Changes in operating assets and liabilities:
Increase in trade and other receivables			(29,055)		(43,937)
Increase in inventories			(29,724)		(37,455)
Decrease in biological assets			25,671		15,538
Decrease / (Increase) in other assets			24		(60)
Decrease /(increase) in derivative financial instruments			40,010		(19,623)
(Decrease) / increase in trade and other payables			(32,990)		11,511
Increase in payroll and social security liabilities			1,578		1,243
(Decrease) / Increase in provisions for other liabilities			(88)		1,640
Net cash generated in operating activities before taxes paid			52,552		10,673
Income tax paid			(1,653)		(911)
Net cash generated from operating activities			50,899		9,762

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 8

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2017 and 2016 (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

	Note	June 30, 2017		June 30, 2016
		(unaudited)
Cash flows from investing activities:

Purchases of property, plant and equipment	11		(106,053)		(60,034)
Purchases of cattle			(581)		-
Purchases of intangible assets	13		(576)		(804)
Interest received	9		5,021		4,621
Proceeds from sale of property, plant and equipment			798		754
Net cash used in investing activities			(101,391)		(55,463)

Cash flows from financing activities:

Proceeds from equity settled share-based compensation exercise			-		276
Proceeds from long-term borrowings			189,769		42,701
Payments of long-term borrowings			(103,724)		(69,514)
Proceeds from short-term borrowings			84,595		147,496
Payment of short-term borrowings			(9,531)		(94,929)
Payment of derivatives financial instruments			(9,419)		(1,213)
Interest paid			(22,540)		(20,504)
Purchase of own shares			(8,681)		-
Dividends paid to non-controlling interest	25		(1,506)		-
Net cash generated from financing activities			118,963		4,313
Net decrease in cash and cash equivalents			68,471		(41,388)
Cash and cash equivalents at beginning of period			158,568		198,894
Effect of exchange rate changes on cash and cash equivalents			(7,105)		10,081
Cash and cash equivalents at end of period			219,934		167,587

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 9

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

1.	General information

Adecoagro S.A. (the “Company” or “Adecoagro”) is the Group’s ultimate parent company and is a société anonyme (stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. These activities are carried out through three major lines of business, namely, Farming; Sugar, Ethanol and Energy and Land Transformation. Farming is further comprised of three reportable segments, which are described in detail in Note 3 to these condensed consolidated interim financial statements.

Adecoagro is a public company listed in the New York Stock Exchange as a foreign registered company under the symbol of AGRO.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on August 11, 2017.

2.	Financial risk management

Risk management principles and processes

The Group continues to be exposed to several risks arising from financial instruments including price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and the Group’s approach to the identification, assessment and mitigation of risks is included in Note 2 to the annual financial statements. There have been no changes to the Group’s exposure and risk management principles and processes since December 31, 2016 and refers readers to the annual financial statements for information.

However, the Group considers that the following tables below provide useful information to understand the Group’s interim results for the six month period ended June 30, 2017. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 10

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.	Financial risk management (continued)

Exchange rate risk

The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates at June 30, 2017. All amounts are shown in US dollars.

	June 30, 2017
	(unaudited)
	Functional currency
Net monetary position (Liability)/ Asset	Argentine Peso		Brazilian Reais		Uruguayan Peso		US Dollar		Total
Argentine Peso		12,119		-		-		-		12,119
Brazilian Reais		-		(108,567)		-		-		(108,567)
US Dollar		(96,128)		(415,299)		22,688		69,560		(419,179)
Uruguayan Peso		-		-		(860)		-		(860)
Total		(84,009)		(523,866)		21,828		69,560		(516,487)

The Group’s analysis shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the US dollar. The Group estimated that, other factors being constant, a 10% appreciation of the US dollar against the respective functional currencies for the period ended June 30, 2017 would have increased the Group’s Profit Before Income Tax for the period. A 10% depreciation of the US dollar against the functional currencies would have an equal and opposite effect on the income statement. A portion of this effect would be recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future sales in US dollars (see Hedge Accounting - Cash Flow Hedge below for details).

	June 30, 2017
	(unaudited)
	Functional currency
Net monetary position	Argentine Peso		Brazilian Reais		Uruguayan Peso		US Dollar		Total
US Dollar		(9,613)		(41,530)		2,269		-		(48,874)
(Decrease) or increase in Profit Before Income Tax		(9,613)		(41,530)		2,269		-		(48,874)

Hedge Accounting - Cash Flow Hedge

Effective July 1, 2013, the Group formally documented and designated cash flow hedging relationships to hedge the foreign exchange rate risk of a portion of its highly probable future sales in US dollars using a portion of its borrowings denominated in US dollars, currency forwards and foreign currency floating-to-fixed interest rate swaps.

The Group expects that the cash flows will occur and affect profit or loss between 2017 and 2020.

For the period ended June 30, 2017, a total amount before income tax of US$ 2,508 loss was recognized in other comprehensive income and an amount of US$ 3,320 loss was reclassified from equity to profit or loss within “Financial results, net”.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 11

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.	Financial risk management (continued)

Interest rate risk

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans (excluding finance leases) at June 30, 2017 (all amounts are shown in US dollars):

	June 30, 2017
	(unaudited)
	Functional currency
Rate per currency denomination	Argentine Peso		Brazilian Reais		Uruguayan Peso		Total
Fixed rate:
Argentine Peso		7,747		-		-		7,747
Brazilian Reais		-		127,706		-		127,706
US Dollar		85,486		36,568		27,990		150,044
Subtotal Fixed-rate borrowings		93,233		164,274		27,990		285,497
Variable rate:
Brazilian Reais		-		62,430		-		62,430
US Dollar		49,835		396,393		-		446,228
Subtotal Variable-rate borrowings		49,835		458,823		-		508,658
Total borrowings as per analysis		143,068		623,097		27,990		794,155
Finance leases		124		-		-		124
Total borrowings at June 30, 2017		143,192		623,097		27,990		794,279

At June 30, 2017, if interest rates on floating-rate borrowings had been 1% higher (or lower) with all other variables held constant, Profit Before Income Tax for the period would decrease as follows:

	June 30, 2017
	(unaudited)
	Functional currency
Rate per currency denomination	Argentine Peso		Brazilian Reais		Uruguayan Peso		Total
Variable rate:
Brazilian Reais		-		(624)		-		(624)
US Dollar		(498)		(3,964)		-		(4,462)
Decrease in Profit Before Income Tax		(498)		(4,588)		-		(5,086)

Credit risk

As of June 30, 2017, seven banks accounted for more than 83% of the total cash deposited (Banco do Brasil, Banco Votoratim, Banco Itau, Banco Santander, HSBC, JP Morgan and Galicia).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 12

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Financial risk management (continued)

Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2017:

Futures / Options

	June 30, 2017
Type of derivative contract	Quantities (thousands) (**)		Notional amount		Market Value Asset/ (Liability)		Profit / (Loss) (*)
					(unaudited)		(unaudited)
Futures:
Sale
Corn		120		19,008		(80)		(16)
Soybean		4		(418)		192		(274)
Sugar		147,646		48,357		(3,720)		6,087
Options:
Buy put
Sugar		68,999		(2,896)		8,686		6,312
Sell call
Sugar		876		1,907		(34)		2,058
Sell put
Sugar		32,042		504		(2,704)		(2,287)
Buy call
Soybean		(2)		36		48		12
Sale
Ethanol		1,500		(25,467)		44		44
Total		251,185		41,031		2,432		11,936

(*) Included in line “Gain from commodity derivative financial instruments” Note 8.

(**) All quantities expressed in tons except otherwise indicated.

Commodity future contract fair values are computed with reference to quoted market prices on future exchanges.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 13

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Financial risk management (continued)

Other derivative financial instruments

As of June 30, 2017, the Group has floating-to-fixed interest rate swap, foreign currency fixed-to-floating interest rate swap and foreign currency floating-to fixed interest rate swap agreements, which were also outstanding as of December 31, 2016.

During the period ended June 30, 2016, the Group entered into several currency forward contracts with Brazilian banks in order to hedge the fluctuation of the Brazilian Reais against US Dollar for a total notional amount of US$ 42.5 million. No contract of this kind was entered in 2015. Those contracts entered in 2016 have maturity dates ranging between March 2016 and April 2017. The outstanding contracts resulted in the recognition of a loss of US$ 7 million in 2016.

During the period ended on June 30, 2017 and 2016, the Group entered into several currency forward contracts in order to hedge the fluctuation of the US Dollar against Euro for a total notional amount of US$ 15.37 million and US$ 15.7 million, respectively. The currency forward contracts maturity date are between September 2017, and September 2016, respectively. The outstanding contracts resulted in the recognition of a loss of US$ 0.25 and US$ 0.1 million, respectively.

Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 14

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Segment information

IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM evaluates the business based on the differences in the nature of its operations, products and services. The amount reported for each segment item is the measure reported to the CODM for these purposes.

The Group operates in three major lines of business, namely, Farming; Sugar, Ethanol and Energy; and Land Transformation.

The Group’s ‘Farming’ line of business is further comprised of three reportable segments:

The Group’s ‘Crops’ Segment consists of planting, harvesting and sale of grains, oilseeds and fibers (including wheat, corn, soybeans, cotton and sunflowers, among others), and to a lesser extent the provision of grain warehousing/conditioning, handling and drying services to third parties, and the purchase and sale of crops produced by third parties crops. Each underlying crop in the Crops segment does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several factors, some of them out of the Group´s control. Management is focused on the long-term performance of the productive land, and to that extent, the performance is assessed considering the aggregated combination, if any, of crops planted in the land. A single manager is responsible for the management of operating activity of all crops rather than for each individual crop.

The Group’s ‘Rice’ Segment consists of planting, harvesting, processing and marketing of rice;

The Group’s ‘Dairy’ Segment consists of the production and sale of raw milk;

The Group’s ‘All Other Segments’ column consists of the aggregation of the remaining non-reportable operating segments, which do not meet the quantitative thresholds for disclosure and for which the Group’s management does not consider them to be significance Coffee and Cattle.

The Group’s ‘Sugar, Ethanol and Energy’ Segment consists of cultivating sugarcane which is processed in owned sugar mills, transformed into ethanol, sugar and electricity and marketed;

The Group’s ‘Land Transformation’ Segment comprises the (i) identification and acquisition of underdeveloped and undermanaged farmland businesses; and (ii) realization of value through the strategic disposition of assets (generating profits).

The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the interim financial statements.

Total segment assets and liabilities are measured in a manner consistent with that of the condensed consolidated interim financial statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the asset. The Group’s investment in the joint venture CHS S.A. is allocated to the ‘Crops’ segment.

The following table presents information with respect to the Group’s reportable segments. Certain other activities of a holding function nature not allocable to the segments are disclosed in the column ‘Corporate’ .

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 15

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2017 (unaudited)

	Farming
	Crops		Rice		Dairy		All Other Segments		Farming subtotal		*Sugar,* Ethanol and Energy		Land Transformation		Corporate		Total
Sales of goods and services rendered		84,896		43,278		19,322		438		147,934		246,687		-		-		394,621
Cost of goods sold and services rendered		(84,692)		(37,702)		(18,988)		(175)		(141,557)		(193,752)		-		-		(335,309)
Initial recognition and changes in fair value of biological assets and agricultural produce		17,343		5,796		4,528		163		27,830		(5,128)		-		-		22,702
Changes in net realizable value of agricultural produce after harvest		3,193		-		-		-		3,193		-		-		-		3,193
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		20,740		11,372		4,862		426		37,400		47,807		-		-		85,207
General and administrative expenses		(1,401)		(2,279)		(496)		(88)		(4,264)		(13,984)		-		(10,253)		(28,501)
Selling expenses		(2,946)		(6,401)		(468)		(53)		(9,868)		(27,150)		-		(59)		(37,077)
Other operating (loss)/income, net		3,339		637		422		(161)		4,237		31,919		-		(18)		36,138
Profit / (loss) from Operations Before Financing and Taxation		19,732		3,329		4,320		124		27,505		38,592		-		(10,330)		55,767

Depreciation and amortization		(692)		(1,886)		(494)		(60)		(3,132)		(53,034)		-		-		(56,166)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)		9,880		4,369		508		163		14,920		(17,361)		-		-		(2,441)
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		7,463		1,427		4,020		-		12,910		12,233		-		-		25,143
Changes in net realizable value of agricultural produce after harvest (unrealized)		616		-		-		-		616		-		-		-		616
Changes in net realizable value of agricultural produce after harvest (realized)		2,577		-		-		-		2,577		-		-		-		2,577

Farmlands and farmland improvements, net		64,011		14,543		127		10,325		89,006		26,342		-		-		115,348
Machinery, equipment, building and facilities, and other fixed assets, net		4,231		15,286		7,447		415		27,379		438,276		-		-		465,655
Bearer plants, net		-		-		-		1,832		1,832		225,805		-		-		227,637
Work in progress		1,037		3,739		5,234		-		10,010		18,710		-		-		28,720
Investment property		-		-		-		2,547		2,547		-		-		-		2,547
Goodwill		3,614		1,660		-		1,157		6,431		6,600		-		-		13,031
Biological assets		15,836		4,898		7,479		3,366		31,579		71,017		-		-		102,596
Finished goods		57,805		6,757		-		-		64,562		31,288		-		-		95,850
Raw materials, Stocks held by third parties and others		6,802		29,383		3,365		-		39,550		15,652		-		-		55,202
Total segment assets		153,336		76,266		23,652		19,642		272,896		833,690		-		-		1,106,586
Borrowings		89,729		81,473		852		3,727		175,781		618,498		-		-		794,279
Total segment liabilities		89,729		81,473		852		3,727		175,781		618,498		-		-		794,279

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 16

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2016 (unaudited)

	Farming
	Crops		Rice		Dairy		All Other Segments		Farming subtotal		*Sugar,* Ethanol and Energy		Land Transformation		Corporate		Total
Sales of goods and services rendered		68,097		45,556		12,029		545		126,227		164,477		-		-		290,704
Cost of goods sold and services rendered		(68,009)		(40,673)		(11,995)		(96)		(120,773)		(117,655)		-		-		(238,428)
Initial recognition and changes in fair value of biological assets and agricultural produce		45,657		9,458		1,625		90		56,830		26,664		-		-		83,494
Changes in net realizable value of agricultural produce after harvest		(369)		-		-		-		(369)		-						(369)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		45,376		14,341		1,659		539		61,915		73,486		-		-		135,401
General and administrative expenses		(1,315)		(1,433)		(505)		(141)		(3,394)		(8,541)		-		(9,675)		(21,610)
Selling expenses		(2,440)		(5,260)		(341)		(19)		(8,060)		(19,080)		-		(25)		(27,165)
Other operating (loss)/income, net		(21,941)		193		116		1		(21,631)		(12,593)		-		63		(34,161)
Profit / (loss) from Operations Before Financing and Taxation		19,680		7,841		929		380		28,830		33,272		-		(9,637)		52,465

Depreciation and amortization		(676)		(1,173)		(490)		(110)		(2,449)		(39,456)		-		-		(41,905)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)		24,534		6,752		-		-		31,286		18,306		-		-		49,592
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		21,123		2,706		1,625		90		25,544		8,358		-		-		33,902
Changes in net realizable value of agricultural produce after harvest (unrealized)		(1,542)		-		-		-		(1,542)		-		-		-		(1,542)
Changes in net realizable value of agricultural produce after harvest (realized)		1,173		-		-		-		1,173		-		-		-		1,173

As of December 31, 2016
Farmlands and farmland improvements, net		68,224		18,868		168		5,504		92,764		26,734		-		-		119,498
Machinery, equipment, building and facilities, and other fixed assets, net		3,892		14,949		7,449		467		26,757		418,543		-		-		445,300
Bearer plants, net		-		-		-		1,860		1,860		214,309		-		-		216,169
Work in progress		1,100		3,274		2,727		-		7,101		14,540		-		-		21,641
Investment property		-		-		-		2,666		2,666		-		-		-		2,666
Goodwill		3,782		1,737		-		1,186		6,705		6,700		-		-		13,405
Biological assets		28,189		25,575		6,827		2,433		63,024		82,380		-		-		145,404
Finished goods		13,415		5,474		-		-		18,889		49,302		-		-		68,191
Raw materials, Stocks held by third parties and others		16,147		6,628		2,060		-		24,835		18,728		-		-		43,563
Total segment assets		134,749		76,505		19,231		14,116		244,601		831,236		-		-		1,075,837
Borrowings		43,878		47,156		616		10,449		102,099		533,297		-		-		635,396
Total segment liabilities		43,878		47,156		616		10,449		102,099		533,297		-		-		635,396

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 17

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Sales

	June 30, 2017		June 30, 2016
	(unaudited)
Sales of manufactured products and services rendered:
Ethanol (*)		104,966		69,414
Sugar (*)		121,801		81,517
Rice (*)		42,592		44,353
Energy		19,875		13,503
Powder milk		2,660		380
Operating leases		381		554
Services		735		390
Others		796		703
		293,806		210,814
Sales of agricultural produce and biological assets:
Soybean (*)		40,764		39,358
Cattle for dairy production		1,490		1,305
Corn		31,297		15,816
Pop Corn		215		287
Rice		-		892
Cotton		46		1,118
Milk		14,956		10,183
Wheat		8,996		5,017
Sunflower		438		5,245
Peanut		711		-
Barley		1,527		625
Seeds		87		15
Others (*)		288		29
		100,815		79,890
Total sales		394,621		290,704

(*) Includes sales of soybean, corn, rice, powder milk, sugar, wheat, sunflower and others produced by third parties for an amount of US$ 11.2, US$ 24.1 million; US$ 3.0 million; US$ 2.7 million; US$ 35.1 million; US$ 4.7 million; US$ 0.2 million and US$ 0.1 million respectively.

Commitments to sell commodities at a future date

The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn through sales forward contracts. Those contracts are held for purposes of delivery the non-financial instrument in accordance with the Group’s expected sales. Accordingly, as the own use exception criteria are met, those contracts are not recorded as derivatives.

The notional amount of these contracts is US$ 83.6 million as of June 30, 2017 (June 30, 2016: US$ 137.9 million) comprised primarily of 125,147 tons of sugar (US$ 49.9), 14,414 m³ of ethanol (US$ 2.5 million), 297,803 mhw of energy (U$S 18.5 million) , 15,613 tons of soybean (U$S 2.2 million), 50,610 tons of corn (US$ 7.6 million), and 17,659 tons of wheat (US$ 2.9 million) which expire between July 2017 and December 2017.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 18

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Cost of goods sold and services rendered

As of June 30, 2017:

	June 30, 2017
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total
Finished goods at the beginning of 2017 (Note 17)		13,117		5,473		-		-		49,601		68,191
Cost of production of manufactured products (Note 6)		309		35,331		-		101		144,919		180,660
Purchases		46,258		4,050		2,616		-		41,785		94,709
Agricultural produce		76,921		-		16,372		74		-		93,367
Transfer to raw material		(4,577)		-		-		-		-		(4,577)
Direct agricultural selling expenses		9,900		-		-		-		-		9,900
Tax recoveries (i)		-		-		-		-		(12,023)		(12,023)
Changes in net realizable value of agricultural produce after harvest		3,193		-		-		-		-		3,193
Finished goods at the end of June 30, 2017 (Note 17)		(57,804)		(6,757)		-		-		(31,289)		(95,850)
Exchange differences		(2,625)		(395)		-		-		759		(2,261)
Cost of goods sold and services rendered, and direct agricultural selling expenses		84,692		37,702		18,988		175		193,752		335,309

(i): Correspond to the presumed credit of ICMS over the sale values.

As of June 30, 2016:

	June 30, 2016
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total
Finished goods at the beginning of 2016		16,034		6,904		55		-		24,631		47,624
Cost of production of manufactured products (Note 6)		320		28,207		-		96		112,043		140,666
Purchases		13,221		11,595		459		-		26,457		51,732
Agricultural produce		79,189		-		11,489		-		-		90,678
Transfer to raw material		(3,416)		-		-		-		-		(3,416)
Direct agricultural selling expenses		7,754		-		-		-		-		7,754
Tax recoveries (i)		-		-		-		-		(8,033)		(8,033)
Changes in net realizable value of agricultural produce after harvest		(369)		-		-		-		-		(369)
Finished goods at the end of June 30, 2016		(41,518)		(4,998)		-		-		(42,009)		(88,525)
Exchange differences		(3,206)		(1,035)		(8)		-		4,566		317
Cost of goods sold and services rendered, and direct agricultural selling expenses		68,009		40,673		11,995		96		117,655		238,428

(i): Correspond to the presumed credit of ICMS over the sale values.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 19

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

6.	Expenses by nature

The following table provides the additional disclosure required on the nature of expenses and their relationship to the function within the Group:

Expenses by nature for the year ended June 30, 2017:

	Cost of production of manufactured products (Note 5)												General and Administrative Expenses		Selling Expenses		Total
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total		General and Administrative Expenses		Selling Expenses		Total
Salaries, social security expenses and employee benefits		-		3,962		-		96		20,029		24,087		17,181		3,250		44,518
Raw materials and consumables		306		2,039		-		-		3,350		5,695		-		-		5,695
Depreciation and amortization		-		409		-		5		43,807		44,221		2,970		361		47,552
Fuel, lubricants and others		-		56		-		-		10,754		10,810		248		126		11,184
Maintenance and repairs		-		739		-		-		5,879		6,618		511		275		7,404
Freights		-		3,369		-		-		224		3,593		-		11,187		14,780
Export taxes / selling taxes		-		-		-		-		-		-		-		14,024		14,024
Export expenses		-		-		-		-		-		-		-		1,448		1,448
Contractors and services		-		-		-		-		2,594		2,594		-		-		2,594
Energy transmission		-		-		-		-		-		-		-		1,576		1,576
Energy power		-		782		-		-		754		1,536		91		29		1,656
Professional fees		-		20		-		-		154		174		3,699		784		4,657
Other taxes		-		44		-		-		77		121		433		-		554
Contingencies		-		-		-		-		-		-		947		-		947
Lease expense and similar arrangements		-		121		-		-		-		121		701		32		854
Third parties raw materials		-		4,127		-		-		9,088		13,215		-		-		13,215
Tax recoveries		-		-		-		-		(14)		(14)		-		-		(14)
Others		3		386		-		-		2,557		2,946		1,720		3,985		8,651
Subtotal		309		16,054		-		101		99,253		115,717		28,501		37,077		181,295
Own agricultural produce consumed		-		19,277		-		-		45,666		64,943		-		-		64,943
Total		309		35,331		-		101		144,919		180,660		28,501		37,077		246,238

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 20

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

6.	Expenses by nature (continued)

Expenses by nature for the year ended June 30, 2016:

	Cost of production of manufactured products (Note 5)												General and Administrative Expenses		Selling Expenses		Total
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total		General and Administrative Expenses		Selling Expenses		Total
Salaries, social security expenses and employee benefits		-		2,744		-		81		20,530		23,355		13,096		2,614		39,065
Raw materials and consumables		176		1,366		-		-		2,549		4,091		-		-		4,091
Depreciation and amortization		-		443		-		15		32,111		32,569		2,181		339		35,089
Fuel, lubricants and others		-		40		-		-		9,367		9,407		187		58		9,652
Maintenance and repairs		-		591		-		-		6,726		7,317		425		186		7,928
Freights		9		2,329		-		-		-		2,338		-		8,391		10,729
Export taxes / selling taxes		-		-		-		-		124		124		-		9,501		9,625
Export expenses		-		-		-		-		-		-		-		1,642		1,642
Contractors and services		129		-		-		-		1,447		1,576		-		-		1,576
Energy transmission		-		-		-		-		-		-		-		1,287		1,287
Energy power		-		537		-		-		480		1,017		74		22		1,113
Professional fees		6		42		-		-		145		193		3,123		439		3,755
Other taxes		-		32		-		-		795		827		375		-		1,202
Contingencies		-		-		-		-		-		-		273		-		273
Lease expense and similar arrangements		-		39		-		-		-		39		573		24		636
Third parties raw materials		-		1,604		-		-		5,244		6,848		-		-		6,848
Tax recoveries		-		-		-		-		(4,872)		(4,872)		-		-		(4,872)
Others		-		380		-		-		2,721		3,101		1,303		2,662		7,066
Subtotal		320		10,147		-		96		77,367		87,930		21,610		27,165		136,705
Own agricultural produce consumed		-		18,060		-		-		34,676		52,736		-		-		52,736
Total		320		28,207		-		96		112,043		140,666		21,610		27,165		189,441

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 21

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

7.	Salaries and social security expenses

	June 30, 2017		June 30, 2016
	(unaudited)
Wages and salaries		64,851		52,608
Social security costs		16,824		13,145
Equity-settled share-based compensation		2,807		2,545
		84,482		68,298
Number of employees		8,092		8,229

8.	Other operating income / (loss), net

	June 30, 2017		June 30, 2016
	(unaudited)
Gain/(Loss) from commodity derivative financial instruments		38,753		(33,159)
(Loss) from disposal of other property items		(618)		181
Losses related to energy business		(3,247)		-
Others		1,250		(1,183)
		36,138		(34,161)

9.	Financial results, net

	June 30, 2017		June 30, 2016
	(unaudited)
Finance income:
- Interest income		5,021		4,621
- Other income		201		450
Finance income		5,222		5,071

Finance costs:
- Interest expense		(25,798)		(22,029)
- Cash flow hedge – transfer from equity		(3,320)		(23,594)
- Foreign exchange losses, net		(11,883)		(12,276)
- Taxes		(1,304)		(1,231)
- Loss from interest rate/foreign exchange rate derivative financial		(2,195)		(6,806)
- Other expenses		(910)		(1,982)
Finance costs		(45,410)		(67,918)
Total financial results, net		(40,188)		(62,847)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 22

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.

Taxation

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

	June 30, 2017		June 30, 2016
	(unaudited)
Current income tax		(2,865)		(2,551)
Deferred income tax		(2,946)		(2,065)
Income tax expense		(5,811)		(4,616)

There has been no change in the statutory tax rates in the countries where the Group operates since December 31, 2016.

The gross movement on the deferred income tax account is as follows:

	June 30, 2017		June 30, 2016
	(unaudited)
Beginning of period asset		23,897		53,108
Exchange differences		363		10,868
Tax charge relating to cash flow hedge (i)		1,291		(34,145)
Income tax expense		(2,946)		(2,065)
End of period asset		22,605		27,766

(i)	Relates to the gain or loss before income tax of cash flow hedge recognized in other comprehensive income net of the amount reclassified from equity to profit and loss amounting to U$S 7,119 loss for the six-month period ended June 30, 2017.

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

	June 30, 2017		June 30, 2016
	(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries		(4,929)		2,362
Non-deductible items		(750)		(5,115)
Non-deductible items – Change in estimates or previous year		-		(1,180)
Tax losses where no deferred tax asset was recognized		-		(100)
Others		(132)		(583)
Income tax expense		(5,811)		(4,616)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 23

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.

Property, plant and equipment

Changes in the Group’s property, plant and equipment in the six-month periods ended June 30, 2017 and 2016 were as follows:

	Farmlands		Farmland improvements		Buildings and facilities		Machinery, equipment, furniture and Fittings		Bearer plants		Others		Work in progress		Total
Six-month period ended June 30, 2016
Opening net book amount		114,527		5,141		167,468		226,049		156,671		3,920		23,113		696,889
Exchange differences		(2,149)		(670)		30,126		50,795		36,332		88		(154)		114,368
Additions		-		-		4,771		20,960		27,872		886		8,200		62,689
Transfers		-		3,866		2,287		5,957		-		-		(12,110)		-
Disposals		-		-		-		(961)		-		(24)		-		(985)
Reclassification to non-income tax credits (*)		-		-		(655)		(110)		-		-		(39)		(804)
Reclassification to Investment property (Note 12)		-		-		-		140		-		-		-		140
Depreciation (Note 6)		-		(611)		(4,427)		(24,974)		(10,964)		(616)		-		(41,592)
Closing net book amount		112,378		7,726		199,570		277,856		209,911		4,254		19,010		830,705
At June 30, 2016 (unaudited)
Cost		112,378		18,085		304,002		624,818		399,881		14,494		19,010		1,492,668
Accumulated depreciation		-		(10,359)		(104,432)		(346,962)		(189,970)		(10,240)		-		(661,963)
Net book amount		112,378		7,726		199,570		277,856		209,911		4,254		19,010		830,705
Six-month period ended June 30, 2017
Opening net book amount		109,858		9,640		190,055		251,310		216,169		3,935		21,641		802,608
Exchange differences		(3,176)		(373)		(3,318)		(5,924)		(3,889)		(144)		(796)		(17,620)
Additions		-		-		7,764		47,650		36,828		1,555		16,809		110,606
Transfers		-		429		2,700		5,709		-		-		(8,838)		-
Disposals		-		-		(102)		(1,753)		-		(4)		-		(1,859)
Reclassification to non-income tax credits (*)		-		-		(82)		(447)		-		-		(96)		(625)
Reclassification to Investment property (Note 12)		-		-		-		-		-		-		-		-
Depreciation (Note 6)		-		(1,030)		(6,896)		(25,554)		(21,471)		(799)		-		(55,750)
Closing net book amount		106,682		8,666		190,121		270,991		227,637		4,543		28,720		837,360
At June 30, 2017 (unaudited)
Cost		106,682		20,055		301,449		643,507		439,078		15,582		28,720		1,555,073
Accumulated depreciation		-		(11,389)		(111,328)		(372,516)		(211,441)		(11,039)		-		(717,713)
Net book amount		106,682		8,666		190,121		270,991		227,637		4,543		28,720		837,360

(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of June 30, 2017, ICMS tax credits were reclassified to trade and other receivables.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 24

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.

Property, plant and equipment (continued)

Depreciation charges are included in “Cost of production of Biological Assets”, “Cost of production of manufactures products”, “General and administrative expenses”, “Selling expenses” and capitalized in “Property, plant and equipment” for the period ended June 30, 2017 and 2016, respectively.

As of June 30, 2017, borrowing costs of US$ 1,391 (June 30, 2016: US$ 1,538) were capitalized as components of the cost of acquisition or construction of qualifying assets.

Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 577,397 as of June 30, 2017.

As of June 30, 2017 included within property, plant and equipment balances are US$ 320 related to the net book value of assets under finance leases.

12.

Investment property

Changes in the Group’s investment property in the six-month periods ended June 30, 2017 and 2016 were as follows:

	June 30, 2017		June 30, 2016
	(unaudited)
Beginning of the period		2,666		4,796
Reclassification from Property, plant and equipment		-		-
Exchange differences		(119)		(638)
End of the period		2,547		4,158

Cost		2,547		4,158
Net book amount		2,547		4,158

The following amounts have been recognized in the statement of income in the line “Sales of manufactured products and services rendered”:

	June 30, 2017		June 30, 2016
	(unaudited)
Rental income		370		545

As of June 30, 2017, the fair value of investment property was US$ 45 million.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 25

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

13.

Intangible assets

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2017 and 2016 were as follows:

	Goodwill		Software		Others		Total
Six-month period ended June 30, 2016
Opening net book amount		13,510		2,200		951		16,661
Exchange differences		345		284		(3)		626
Additions		-		785		19		804
Amortization charge (i) (Note 6)		-		(292)		(21)		(313)
Closing net book amount		13,855		2,977		946		17,778
At June 30, 2016 (unaudited)
Cost		13,855		5,113		2,652		21,620
Accumulated amortization				(2,136)		(1,706)		(3,842)
Net book amount		13,855		2,977		946		17,778

Six-month period ended June 30, 2017
Opening net book amount		13,405		2,901		946		17,252
Exchange differences		(374)		(70)		(2)		(446)
Additions		-		561		15		576
Amortization charge (i) (Note 6)		-		(393)		(23)		(416)
Closing net book amount		13,031		2,999		936		16,966
At June 30, 2017 (unaudited)
Cost		13,031		5,898		2,684		21,613
Accumulated amortization		-		(2,899)		(1,748)		(4,647)
Net book amount		13,031		2,999		936		16,966

(i) Amortization charges are included in “General and administrative expenses” and “Selling expenses” for the period ended June 30, 2017 and 2016, respectively.

The Group tests annually whether goodwill has suffered any impairment. The last impairment test of goodwill was performed as of September 30, 2016.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 26

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2017 and 2016 were as follows:

	June 30, 2017
	Crops (i)		Rice (i)		Dairy		All other segments		Sugarcane (i)		Total
Beginning of the year		28,189		25,575		6,827		2,433		82,380		145,404
Increase due to purchases		-		-		-		581		-		581
Initial recognition and changes in fair value of biological assets		17,343		5,796		4,528		163		(5,128)		22,702
Decrease due to harvest / disposals		(76,924)		(43,858)		(1,418)		(75)		(47,650)		(169,925)
Decrease due to sales of agricultural produce		-		-		(14,956)		-		-		(14,956)
Costs incurred during the year		47,704		17,100		12,846		457		42,412		120,519
Exchange differences		(476)		285		(348)		(193)		(997)		(1,729)
End of the period		15,836		4,898		7,479		3,366		71,017		102,596

	June 30, 2016
	Crops (i)		Rice (i)		Dairy		All other segments		Sugarcane (i)		Total
Beginning of the year		22,536		23,131		6,786		288		59,077		111,818
Increase due to purchases		-		-		-		1,132		-		1,132
Initial recognition and changes in fair value of biological assets		45,657		9,458		1,625		90		26,664		83,494
Decrease due to harvest / disposals		(79,303)		(38,548)		(1,306)		-		(35,868)		(155,025)
Decrease due to sales of agricultural produce		-		-		(10,183)		-		-		(10,183)
Costs incurred during the year		31,150		13,165		10,860		388		37,479		93,042
Exchange differences		(1,542)		(2,476)		(949)		(102)		15,357		10,288
End of the period		18,498		4,730		6,833		1,796		102,709		134,566

(i)

Biological assets that are measured at fair value within level 3 of the hierarchy.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 27

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Biological assets (continued)

Cost of production as of June 30, 2017:

	June 30, 2017
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total
Salaries, social security expenses and employee benefits		2,091		4,307		2,440		156		4,884		13,878
Depreciation and amortization		203		-		-		-		1,936		2,139
Fertilizers, agrochemicals and seeds		16,733		970		-		-		15,343		33,046
Fuel, lubricants and others		539		386		355		25		1,322		2,627
Maintenance and repairs		787		1,109		895		91		747		3,629
Freights		74		357		56		17		-		504
Contractors and services		14,861		7,944		-		8		2,298		25,111
Feeding expenses		-		-		4,784		11		-		4,795
Veterinary expenses		-		-		918		58		-		976
Energy power		49		850		390		-		-		1,289
Professional fees		90		37		68		7		43		245
Other taxes		1,019		72		3		72		54		1,220
Lease expense and similar arrangements		9,155		187		-		-		15,291		24,633
Others		2,103		881		196		12		494		3,686
Subtotal		47,704		17,100		10,105		457		42,412		117,778
Own agricultural produce consumed		-		-		2,741		-		-		2,741
Total		47,704		17,100		12,846		457		42,412		120,519

Cost of production as of June 30, 2016:

	June 30, 2016
	Crops		Rice		Dairy		All other segments		Sugar, Ethanol and Energy		Total
Salaries, social security expenses and employee benefits		2,339		3,196		1,779		63		4,977		12,354
Depreciation and amortization		188		-		-		-		2,232		2,420
Fertilizers, agrochemicals and seeds		8,010		117		94		-		10,466		18,687
Fuel, lubricants and others		699		475		384		7		1,308		2,873
Maintenance and repairs		391		1,185		849		34		915		3,374
Freights		578		355		53		5		-		991
Contractors and services		11,261		6,687		-		-		1,344		19,292
Feeding expenses		-		-		3,844		5		-		3,849
Veterinary expenses		-		-		845		21		-		866
Energy power		54		356		243		-		-		653
Professional fees		94		39		70		-		57		260
Other taxes		732		66		5		49		50		902
Lease expense and similar arrangements		5,040		222		3		-		15,666		20,931
Others		1,764		467		214		204		464		3,113
Subtotal		31,150		13,165		8,383		388		37,479		90,565
Own agricultural produce consumed		-		-		2,477		-		-		2,477
Total		31,150		13,165		10,860		388		37,479		93,042

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 28

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Biological assets (continued)

Biological assets as of June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017		December 31, 2016
	(unaudited)
Non-current
Cattle for dairy production		7,061		6,584
Breeding cattle		1,527		1,533
Other cattle		363		399
		8,951		8,516
Current
Breeding cattle		1,476		501
Other cattle		418		243
Sown land – crops		15,836		28,189
Sown land – rice		4,898		25,575
Sown land – sugarcane		71,017		82,380
		93,645		136,888
Total biological assets		102,596		145,404

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 29

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.

Financial instruments

As of June 30, 2017, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial instruments.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. The financial instruments the Group has allocated to this level mainly comprise crop futures and options traded on the stock market. In the case of securities, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.

Derivatives not traded on the stock market allocated to Level 2 are valued using models based on observable market data. For this, the Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The financial instruments the Group has allocated to this level mainly comprise interest-rate swaps and foreign-currency interest-rate swaps.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group does not have financial instruments allocated to this level for any of the periods presented.

The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of June 30, 2017 and their allocation to the fair value hierarchy:

	2017
	Level 1		Level 2		Total
Assets
Derivative financial instruments		2,510		505		3,015
Total assets		2,510		505		3,015
Liabilities
Derivative financial instruments		(122)		(1,689)		(1,811)
Total liabilities		(122)		(1,689)		(1,811)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 30

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.

Financial instruments (continued)

When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for this purpose, details of which may be obtained from the following table:

Class	Pricing Method	Parameters	Pricing Model	Level	Total

Futures	Quoted price	-	-	1		(3,608)

Options	Quoted price	-	-	1		5,996

Foreign-currency interest-rate swaps	Theoretical price	Swap curve	Present value method	2		256

Interest-rate swaps	Theoretical price	Swap curve; Money market interest-rate curve	Present value method	2		(1,440)
						1,204

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 31

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

16.

Trade and other receivables, net

	June 30, 2017		December 31, 2016
	(unaudited)
Non current
Trade receivables		1,759		1,802
Trade receivables – net		1,759		1,802
Advances to suppliers		1,635		1,930
Income tax credits		7,264		7,472
Non-income tax credits (i)		2,457		1,853
Judicial deposits		3,345		3,280
Other receivables		1,542		1,075
Non current portion		18,002		17,412
Current
Trade receivables		68,458		61,546
Receivables from related parties (Note 25)		8,313		8,114
Less: Allowance for trade receivables		(708)		(643)
Trade receivables – net		76,063		69,017
Prepaid expenses		8,821		8,302
Advance to suppliers		41,611		21,451
Income tax credits		5,838		7,116
Non-income tax credits (i)		42,901		43,572
Cash collateral		1,179		3,546
Receivables from related parties (Note 25)		1,228		172
Other receivables		4,735		4,352
Subtotal		106,313		88,511
Current portion		182,376		157,528
Total trade and other receivables, net		200,378		174,940

(i) Includes US$ 625 for the six month period ended June 30, 2017 reclassified from property, plant and equipment (for the year ended December 31, 2016: US$ 1,499).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 32

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

16.

Trade and other receivables, net (continued)

The fair values of current trade and other receivables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other receivables approximate their carrying amount, as the impact of discounting is not significant.

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies (expressed in US dollars):

	June 30, 2017		December 31, 2016
	(unaudited)
Currency
US Dollar		65,267		54,012
Argentine Peso		44,945		45,641
Uruguayan Peso		128		762
Brazilian Reais		90,038		74,525
		200,378		174,940

As of June 30, 2017 trade receivables of US$ 21,055 (December 31, 2016: US$ 14,641) were past due but not impaired. The ageing analysis of these receivables indicates that US$ 4,787 and US$ 5,264 are over 6 months in June 30, 2017 and December 31, 2016, respectively.

The creation and release of allowance for trade receivables have been included in ‘Selling expenses’ in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The other classes within other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.

17.

Inventories

	June 30, 2017		December 31, 2016
	(unaudited)
Raw materials		54,945		42,108
Finished goods		95,850		68,191
Stocks held by third parties		82		1,308
Others		175		147
		151,052		111,754

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 33

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

18.

Cash and cash equivalents

	June 30, 2017		December 31, 2016
	(unaudited)
Cash at bank and on hand		122,325		130,001
Short-term bank deposits		97,609		28,567
		219,934		158,568

19.

Shareholder’s Contributions

	Number of shares (thousands)		Share capital and share premium
At January 1, 2016		122,382		1,121,247
Employee share options exercised (Note 20)		-		323
Restricted share vested		-		3,225
At June 30, 2016		122,382		1,124,795

At January 1, 2017		122,382		1,120,823
Restricted share vested		-		4,149
Purchase of own shares		-		(7,438)
At June 30, 2017		122,382		1,117,534

Share Repurchase Program

On September 24, 2013, the Board of Directors of the Company authorized a share repurchase program for up to 5% of its outstanding shares. The repurchase program has been reauthorized by the Board of Directors following each 12-month period since its inception.

On August 11, 2017, the Board of Directors authorized the extension of the program for an additional twelve-month period ending on September 23, 2018. Repurchases of shares under the program may be made from time to time (i) in open market transactions in compliance with the trading conditions of Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, and applicable rules and regulations thereuner; and (ii) through privately negotiated transactions. The share repurchase program does not require Adecoagro to acquire any specific number or amount of shares and may be modified, suspended, reinstated or terminated at any time in the Company’s discretion and without prior notice. The size and the timing of repurchases will depend upon market conditions, applicable legal requirements and other factors.

As of June 30, 2017, the Company repurchased an aggregate of 3,669,516 shares under the program, of which 2,091,922 have been used to cover the exercise of options under the Company's employee stock option plan and to issue shares pursuant to the Company's restricted stock unit plan.

20.

Equity-settled share-based payments

The Group has set a “2004 Incentive Option Plan” and a “2007/2008 Equity Incentive Plan” (collectively referred to as “Option Schemes”) under which the Group grants equity-settled options to senior managers and selected employees of the Group’s subsidiaries. Additionally, in 2010 the Group has set a “Adecoagro Restricted Share and Restricted Stock Unit Plan” (referred to as “Restricted Share Plan”) under which the Group grants restricted shares, or restricted stock units to senior and medium management and key employees of the Group’s subsidiaries.

(a)

Option Schemes

No expense was accrued for both periods under the Options Schemes.

As of June 30, 2017 nil options (June 30, 2016: 36,768) were exercised, and nil (June 30, 2016: 40,100) were forfeited.

(b)

Restricted Share and Restricted Stock Unit Plan

As of June 30, 2017, the Group recognized compensation expense US$ 2.8 million related to the restricted shares granted under the Restricted Share Plan (June 30, 2016: US$ 2.5 million).

For the six-month period ended June 30, 2017, 484,098 Restricted Stock Units were granted, (June 30, 2016: 464,139), 489,415 vested, (June 30, 2016: 453,001), and 6,140 were forfeited (June 30, 2016: 17,505).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 34

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

21.

Trade and other payables

	June 30, 2017		December 31, 2016
	(unaudited)
Non-current
Payable from acquisition of property, plant and equipment (i)		521		1,042
Other payables		371		385
		892		1,427
Current
Trade payables		51,023		77,325
Advances from customers		7,070		7,758
Amounts due to related parties (Note 25)		230		1,152
Taxes payable		2,642		4,685
Payables from acquisition of property, plant and equipment - Non Current		523		-
Other payables		286		1,238
		61,774		92,158
Total trade and other payables		62,666		93,585

(i)

These trades payable are mainly collateralized by property, plant and equipment.

The fair values of current trade and other payables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other payables approximate their carrying amount, as the impact of discounting is not significant.

22.

Borrowings

	June 30, 2017		December 31, 2016
	(unaudited)
Non-current
Bank borrowings (*)		537,413		430,202
Obligations under finance leases		71		102
		537,484		430,304
Current
Bank overdrafts		7,171		90
Bank borrowings (*)		249,571		204,923
Obligations under finance leases		53		79
		256,795		205,092
Total borrowings		794,279		635,396

(*) The Group was in compliance with the related covenants under the respective loan agreements.

As of June 30, 2017, total bank borrowings include collateralized liabilities of US$ 638,143 (December 31, 2016: US$ 525,663). These loans are mainly collateralized by property, plant and equipment sugarcane plantations, sugar export contracts and shares of certain subsidiaries of the Group.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 35

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

22.

Borrowings (continued)

The maturity of the Group’s borrowings (excluding obligations under finance leases) and the Group’s exposure to fixed and variable interest rates is as follows:

	June 30, 2017		December 31, 2016
	(unaudited)
Fixed rate:
Less than 1 year		154,118		67,682
Between 1 and 2 years		41,525		43,630
Between 2 and 3 years		33,171		40,047
Between 3 and 4 years		22,784		21,857
Between 4 and 5 years		22,477		21,116
More than 5 years		11,422		20,239
		285,497		214,571
Variable rate:
Less than 1 year		102,624		137,331
Between 1 and 2 years		134,795		150,517
Between 2 and 3 years		90,564		81,947
Between 3 and 4 years		92,433		18,457
Between 4 and 5 years		74,953		18,309
More than 5 years		13,289		14,083
		508,658		420,644
		794,155		635,215

The carrying amounts of the Group’s borrowings are denominated in the following currencies (expressed in US dollars):

	June 30, 2017		December 31, 2016
	(unaudited)
Currency
US Dollar		596,272		437,307
Brazilian Reais		190,136		196,903
Argentine Peso		7,871		1,186
		794,279		635,396

The carrying amount of short-term borrowings is approximate its fair value due to the short-term maturity. Long term borrowings subject to variable rate approximate their fair value. The fair value of long-term subject to fix rate do not significant differ from their fair value.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 36

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

23.

Payroll and social security liabilities

	June 30, 2017		December 31, 2016
		(unaudited)
Non-current
Social security payable		1,070		1,235
		1,070		1,235
Current
Salaries payable		10,094		7,351
Social security payable		3,478		3,063
Provision for vacations		11,238		12,109
Provision for bonuses		3,214		4,321
		28,024		26,844
Total payroll and social security liabilities		29,094		28,079

24.

Provisions for other liabilities

The Group is subject to several laws, regulations and business practices of the countries where it operates, In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have been no material changes to claimed amounts and current proceedings since December 31, 2016.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 37

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

25.

Related-party transactions

The following is a summary of the balances and transactions with related parties:

Related party	Relationship	Description of transaction	Income (loss) included in the statement of income				Balance receivable (payable)
Related party	Relationship	Description of transaction	June 30, 2017		June 30, 2016		June 30, 2017		December 31, 2016

				(unaudited)		(unaudited)		(unaudited)
Mario Jorge de Lemos Vieira/ Cia Agropecuaria Monte Alegre/ Alfenas Agricola Ltda/ Marcelo Weyland Barbosa Vieira/ Paulo Albert Weyland Vieira	(i)	Receivables (Note 16)		-		-		1,228		172
		Payables (Note 21)		-		-		(15)		(701)
CHS Agro	Joint venture	Services		48		45		-		-
		Sales of good		-		366		-		-
		Payables (Note 21)		-		-		(215)		(451)
		Interest income		163		163		-		-
		Receivables (Note 16)		-		-		8,313		8,114
Directors and senior management	Employment	Compensation selected employees		(2,046)		(2,352)		(15,279)		(17,355)

(i) Shareholder of the Company.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 38

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

26.

Basis of preparation and presentation

The information presented in the accompanying condensed consolidated interim financial statements (“interim financial statements”) as of June 30, 2017 and for the six-month periods ended June 30, 2017 and 2016 is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as of June 30, 2017, results of operations and cash flows for the six-month periods ended June 30, 2017 and 2016. All such adjustments are of a normal recurring nature. In preparing these accompanying interim financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

These interim financial statements have been prepared in accordance with IAS 34, ‘Interim financial reporting’ and they should be read in conjunction with the annual financial statements for the year ended December 31, 2016, which have been prepared in accordance with IFRSs.

In order to facilitate the understanding of our Consolidated Financial Statements, we have changed the format of the presentation of our income statement. During the fourth quarter of 2016, we aggregate our sales in a single line item titled “Sales of goods and services rendered”. Likewise, the corresponding cost has also been aggregated and presented as a single line item titled “Cost of goods sold and services rendered”. The breakdown of sales is now included in Note 4 to the Consolidated Financial Statements. The comparative figures have been retroactively changed accordingly.

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2016.

A complete list of standards, amendments and interpretations to existing standards published but not yet effective for the Group is described in Note 32.1 to the annual financial statements.

Below is a description of the standards, amendments and interpretations issued by the IASB to existing standards that have been issued and are mandatory for the Group with closer adoption:

In May 2014, the IASB issued IFRS 15, “Revenue from contracts with customers”, which deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2018 and earlier application is permitted.

In July 2014 the IASB published the final version of IFRS 9 Financial Instrument which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement. It includes requirements on the classification and measurement of financial assets and liabilities, as well as an expected credit losses model that replaces the current incurred loss impairment model. The standard is effective for accounting periods beginning on or after January 1, 2018. Early adoption is permitted.

In January 2016, the IASB finished its long-standing project on lease accounting and published IFRS 16, ‘Leases’, which replaces the current guidance in IAS 17. This will require far-reaching changes in accounting by lessees in particular. The standard applies to annual periods beginning on or after 1 January 2019, with earlier application permitted if IFRS 15, ‘Revenue from Contracts with Customers’, is also applied.

We are currently evaluating the impact of our pending adoption of the new standard on our consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 39

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

26.

Basis of preparation and presentation (continued)

Seasonality of operations

The Group’s business activities are inherently seasonal. The Group generally harvest and sell its grains (corn, soybean, rice and sunflower) between February and June, with the exception of wheat, which is harvested from December to January. Coffee and cotton are different in that while both are typically harvested from June to August, they require a conditioning process which takes about two to three months. Sales in other business segments, such as in Dairy business segments, tend to be more stable. However, the sale of milk is generally higher during the fourth quarter, when the weather is warmer and pasture conditions are more favorable. The sugarcane harvesting period typically begins April/May and ends in November/December. This creates fluctuations in sugar and ethanol inventory, usually peaking in December to cover sales between crop harvests (i.e., January through April). As a result of the above factors, there may be significant variations in the results of operations from one quarter to another, as planting activities may be more concentrated in one quarter whereas harvesting activities may be more concentrated in another quarter. In addition, quarterly results may vary as a result of the effects of fluctuations in commodities prices, production yields and costs on the determination of initial recognition and changes in fair value of biological assets and agricultural produce.

27.

Critical accounting estimates and judgments

The Group’s critical accounting policies are also consistent with those of the audited annual financial statements for the year ended December 31, 2016 described in Note 32.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 40

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