Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
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.
If “Yes” is marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
ANNOUNCEMENT OF RESULTS OF OPERATIONS FOR THE
THREE MONTH PERIOD ENDED SEPTEMBER 30, 2017
On November 13, 2017, the registrant issued a
press release pertaining to its results of operations for the three month period ended September 30, 2017 (the “Release”).
Registrant hereby furnishes the attached copy of the Release to the Securities and Exchange Commission. The financial and operational
information contained in the Release is based on audited consolidated financial statements 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 including 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
|
|
|
|
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Title:
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Chief Financial Officer and Chief Accounting Officer
|
Date: November 13, 2017
3Q17
Earnings
Release
Conference Call
English
Conference Call
November
14, 2017
9
a.m. (US EST)
11
a.m. (Buenos Aires time)
12
p.m. (Sao Paulo time)
3
p.m. (Luxembourg time)
Tel:
(844) 836-8746
Participants calling from the US
Tel:
+1 (412) 317-2501
Participants calling from other
countries
Access
Code: Adecoagro
Investor
Relations
Charlie
Boero Hughes
CFO
Hernan
Walker
IR Manager
Email
ir@adecoagro.com
Website
www.adecoagro.com
Adecoagro
reported 9M17 Adjusted EBITDA of $187.2 million and Net Income of $6.8 million, respectively $3.0 and $15.0 million higher year-over-year
Luxembourg,
November 13, 2017
- Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), a
leading agricultural company in South America, announced today its results for the third quarter ended September 30, 2017. The
financial information contained in this press release is based on unaudited condensed consolidated financial statements presented
in US dollars and prepared in accordance with International Financial Reporting Standards (IFRS) except for Non - IFRS measures.
Please refer to page 22 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this report.
Highlights
|
|
Financial
& Operating Performance
|
$
thousands
|
|
3Q17
|
|
|
3Q16
|
|
|
Chg
%
|
|
|
9M17
|
|
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9M16
|
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Chg
%
|
|
Gross
Sales
|
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262,988
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246,443
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6.7%
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657,609
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537,147
|
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22.4%
|
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Net
Sales
(1)
|
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256,673
|
|
|
240,225
|
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6.8%
|
|
|
636,810
|
|
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522,067
|
|
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22.0%
|
|
Adjusted
EBITDA
121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Farming
& Land Transformation
|
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6,942
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16,054
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(56.8%)
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37,579
|
|
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47,333
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(20.6%)
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Sugar,
Ethanol & Energy
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74,341
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80,249
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(7.4%)
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165,967
|
|
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152,977
|
|
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8.5%
|
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Corporate
Expenses
|
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(5,999)
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|
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(6,476)
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(7.4%)
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|
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(16,329)
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|
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(16,113)
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1.3%
|
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Consolidated
Adjusted EBITDA
|
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75,284
|
|
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89,827
|
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(16.2%)
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187,217
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184,197
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1.6%
|
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Adjusted
EBITDA Margin
121
|
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29.3%
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37.4%
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(21.6%)
|
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29.4%
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35.3%
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|
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(16.7%)
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|
Adj.
EBITDA Margin net of 3rd party commerc.
131
|
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34.6%
|
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44.8%
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(22.8%)
|
|
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36.1%
|
|
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41.4%
|
|
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(12.9%)
|
|
Net
Income
|
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(2,958)
|
|
|
6,807
|
|
|
n.a.
|
|
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6,810
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|
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(8,191)
|
|
|
n.a.
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Adjusted
Net Income
|
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11,038
|
|
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38,307
|
|
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(71.2%)
|
|
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36,009
|
|
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59,179
|
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(39.2%)
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|
|
¡
|
Adecoagro
reported Adjusted EBITDA
(2)
of $75.3 million in 3Q17, marking a 16.2% decrease compared to 3Q16. Adjusted EBITDA
year-to-date stands at $187.2 million, 1.6% higher than 9M16.
|
|
¡
|
Gross
sales reached $262.9 million in 3Q17 and $657.6 million in 9M17, 6.7% and 22.4% higher year-over year, respectively.
|
|
¡
|
Net
income in 3Q17 was a loss of $2.9 million, compared to a $6.8 million gain in 3Q16. Year-to-date, Net Income stands at $6.8
million, $15.0 million higher than the previous year.
|
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(1)
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Net
Sales are equal to Gross Sales minus sales taxes related to sugar, ethanol and energy.
|
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(2)
|
Please
see “Reconciliation of Non-IFRS measures” starting on page 21 for a reconciliation of Adjusted EBITDA and Adjusted
EBIT to Profit/Loss. Adjusted EBITDA is defined as consolidated profit from operations before financing and taxation, depreciation,
and 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.
|
|
(3)
|
Adjusted
EBITDA margin excluding third party commercialization activities is defined as the consolidated Adjusted EBITDA net of the
Adjusted EBITDA generated by the commercialization of third party sugar, grains and energy, divided by consolidated gross
sales net of those generated by the commercialization of third party sugar, grains and energy. We net 3rd party commercialization
results to highlight the margin generated by our own production
|
Financial
& Operational Performance Highlights
|
¡
|
Adjusted
EBITDA for the Farming and Land Transformation businesses in 3Q17 was $6.9 million, $9.1 million or 56.8% lower than 3Q16.
These results are primarily explained by (i) an $8.1 million extraordinary gain recorded in 3Q16 corresponding to the settlement
of an arbitration dispute related to the early termination of land leasing contracts; (ii) a $1.1 million decrease in our
Rice segment, driven by the postponement of rice sales volumes to the fourth quarter to capture higher prices; and (iii) partially
offset by a $0.4 million increase in our Dairy segment as a result of higher milk prices. Year-to-date, Adjusted EBITDA reached
$37.6 million, compared to $47.3 million for the same period last year.
|
|
|
|
|
¡
|
In
the Sugar, Ethanol & Energy business, Adjusted EBITDA during 3Q17 was $74.3 million, 7.4% lower than 3Q16. Adjusted EBITDA
was positively affected by: (i) an 8.4% increase in sugarcane crushing coupled with a 1.8% growth in TRS per ton of sugarcane,
which led to an 11.6% increase in total TRS produced; (ii) higher sales volumes for sugar, ethanol and energy, 2.2%, 8.2%
and 32.0% respectively, coupled with a 21.8% increase in energy prices; and, (iii) a $9.6 million higher result from the mark-to-market
effect of our commodity hedge position (a $0.2 million gain in 3Q17 compared to a $10.8 million loss in 3Q16). These positive
effects were offset by a 14.2% increase in production cash costs per ton of TRS produced in BRL terms. Approximately half
of this cost increase is temporary and will be reversed in the fourth quarter. The net increase in cost is explained by lower
sugarcane yields which have increased the amount of hectares harvested, leased and treated and purchases of sugarcane from
suppliers.
|
|
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On
a cumulative basis, Adjusted EBITDA in 9M17 grew by 8.5% reaching $165.9 million. The main drivers for the increase were (i)
a 30.6% increase in net sales, as a result of higher sugar, ethanol and energy sales volumes and realized prices; (ii) the
mark-to-market effect of our sugar hedge position in 9M17 generated a gain of $36.5 million, $59.5 million higher than in
9M16. These positive results were partially offset by (i) a $37.5 million decrease in Changes in Fair Value, generated by
the mark-to-market effect of our unharvested sugarcane plantation, primarily as a result of lower projected sugar prices and
productivity; coupled with (ii) a 15.5% increase in unitary production cash costs as explained previously.
|
|
|
|
|
¡
|
Net
Income in 3Q17 was a $2.9 million loss, compared to a gain of $6.8 million in 3Q16. This decrease is explained by (i) a $14.5
million decrease in Adjusted EBITDA; (ii) a $12.8 million increase in depreciation and amortization charges; and partially
offset by (iii) $16.5 million lower financial losses ($27.7 million in 3Q17 compared to $44.3 million in 3Q16).
|
Strategy
Execution
10-Year
Bond Issuance
|
¡
|
On
September 21, 2017, Adecoagro completed the issuance of a 10-year $500 million bond with a 6.0% coupon. The notes are guaranteed
on a senior unsecured basis by certain of Adecoagro’s subsidiaries.
|
|
|
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The
Company will use the proceeds of the transaction primarily to repay existing debt of our Brazilian subsidiaries, and for general
corporate purposes.
|
This
transaction has enhanced Adecoagro’s ability to manage and allocate capital more efficiently, has strengthened our balance
sheet and improved our long term financial flexibility.
Organic
Growth Update
|
¡
|
Cluster
Expansion: The expansion of the cluster in Mato Grosso do Sul is moving forward according to plan. As previously announced,
investments at the Angelica mill are complete and the mill has reached a nominal crushing capacity of 1,050 tons/hour. We
are currently working on laying the foundations for a new milling roller in the Ivinhema mill. In terms of sugarcane plantation,
we have successfully leased a total 23.9 thousand hectares of farmland or 47% of total expansion land needs. A total of 7.9
thousand hectares have already been planted.
|
|
|
|
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The
expansion of the cluster will generate important efficiency gains and cost dilution. Even at current forward sugar prices,
this project is highly accretive and generates returns well above our cost of capital.
|
|
|
|
|
¡
|
Dairy
Bio-digester: The construction of our first bio-digester was completed during the end of October. The facility generates electricity
by burning biogas extracted from the effluents produced by our seven thousand milking cows. On November 3, 2017, we began
generating and delivering 1.4 MW of electricity to the local power grid. In addition to increasing revenues and securing our
energy requirements, this facility enhances the sustainability of our free stall dairy operation by reducing greenhouse gas
emissions, improving the effluent management and concentrating valuable nutrients which are applied back to the fields.
|
Share
Repurchase Update
|
¡
|
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 $15.7 million, at an average price per share of $10.35.
|
|
|
|
|
¡
|
Since
the inception of the program in August 2013, Adecoagro has repurchased an aggregate of 4.0 million shares equivalent to 3.2%
of outstanding shares or $35.1 million, at an average price per share of $8.79.
|
Independent
Farmland Appraisal Report
|
¡
|
As
of September 30, 2017, Cushman & Wakefield (C&W) updated its independent appraisal of Adecoagro’s farmland.
Adecoagro’s subsidiaries held 266,532 hectares valued by C&W at $900.7 million. Net of minority interests, Adecoagro’s
land portfolio consists of 246,139 hectares valued at $840.7 million. Year-over-year, our farmland value decreased by $30.7
million or 3.5%.
|
|
|
|
|
¡
|
We
believe the decrease in the valuation of our land portfolio is in line with the decrease in land prices in Brazil and Uruguay
following four years of weak row crop prices resulting in deterioration of crop margins.
|
|
|
|
|
|
These
gains or losses are not reflected in Adecoagro’s financial statements since the Company does not mark-to-market the
value of farmland assets on its balance sheet. However, land transformation and appreciation are an important part of Adecoagro’s
business strategy and a component of total return on invested capital.
|
Please
visit www.ir.adecoagro.com for the Cushman & Wakefield 2017 Appraisal Report. The appraisals of our farmland are only intended
to provide an indicative approximation of the market value of our farmland property as of the date of such appraisal based on
current market conditions. Accordingly, these appraisals are subject to change based on a host of variables and market conditions.
Please also refer to page 66 of our Annual Report on Form 20-F for the methodology employed in the appraisals of our farmland
by Cushman & Wakefield.
Market
Overview
|
¡
|
Sugar
prices during 3Q17 were 8% lower quarter-over-quarter and 11% lower year-over-year. Prices recovered from the lows of July,
trading above $15.0 cents/lb, on the back of changes on fuel tax structure in Brazil, a stronger BRL and funds reducing their
net short position. However, strong sales volumes from producers capped prices from rallying further. The technical scenario
weakened and, associated with a turbulent macro scenario and strong crushing pace in Center-South Brazil, resulted in prices
collapsing once again. Funds maintained their net short close to historical highs. In the short-mid term, global supply and
demand is expected to enter into a surplus cycle, resulting from larger expected crops in India, Thailand and the EU. Brazil
still poses a threat to global supply, since in Center-South region the age of sugarcane continues to rise and the crop remains
highly vulnerable to adverse weather events. The production mix in Center-South Brazil and ethanol prices relative to sugar
will be key factors to follow.
|
|
|
|
|
¡
|
Ethanol
prices at the beginning of 3Q17 reached the lowest levels observed in the 17/18 season. However, changes in PIS/COFINS taxes
on fuels announced by the government in late July boosted prices by 15% throughout the quarter. Ethanol demand was also positively
affected, which grew by 14% and sets a more constructive outlook for ethanol prices.
|
|
|
|
|
¡
|
Energy
prices rallied to above BRL 500/MWh during August and September, significantly higher than expectations. Prices were driven
by dry weather in the southeast of Brazil which resulted in extremely low water levels in reservoirs (22.6%).
|
|
|
|
|
¡
|
Soybean
prices increased 0.4% during 3Q17 and was in average 4.7% lower year-over-year, while corn prices decreased 6.0% in the quarter
and were on average 8.4% higher than a year ago. Prices were negatively affected by an increase in soybean and corn inventories,
5.8% and 4.2% respectively, as reported by the USDA. However towards the end of the quarter, prices found support on robust
export demand, especially for soybeans. The US dollar continued to depreciate over the last three months supporting grain
prices and making US exports more competitive on the global market.
|
Farming
& Land Transformation Business
|
Operational
Performance
2016/17
Harvest Year
Farming
Production Data
|
Planting
& Production
|
|
Planted
Area (hectares)
|
|
Production
(tons)
|
|
Yields
(Tons per hectare)
|
|
|
2016/17
|
|
2015/16
|
|
Chg
%
|
|
2016/17
|
|
2015/16
|
|
Chg
%
|
|
2016/17
|
|
2015/16
|
|
Chg
%
|
Soybean
|
|
55,237
|
|
59,474
|
|
(7.1%)
|
|
158,353
|
|
167,627
|
|
(5.5%)
|
|
2.9
|
|
2.8
|
|
1.7%
|
Soybean
2
nd
Crop
|
|
29,197
|
|
28,903
|
|
1.0%
|
|
72,510
|
|
70,055
|
|
3.5%
|
|
2.5
|
|
2.4
|
|
2.5%
|
Corn
(1)
|
|
44,630
|
|
38,663
|
|
15%
|
|
240,268
|
|
232,714
|
|
3.2%
|
|
5.7
|
|
6.0
|
|
(4.9%)
|
Corn
2
nd
Crop
|
|
10,023
|
|
3,994
|
|
151.0%
|
|
45,153
|
|
15,555
|
|
190.3%
|
|
4.5
|
|
3.9
|
|
15.7%
|
Wheat
|2)
|
|
38,009
|
|
32,396
|
|
17.3%
|
|
115,338
|
|
82,167
|
|
40.4%
|
|
3.0
|
|
2.5
|
|
19.6%
|
Sunflower
|
|
5,413
|
|
9,547
|
|
(43.3%)
|
|
10,112
|
|
15,521
|
|
(34.9%)
|
|
1.9
|
|
1.6
|
|
14.9%
|
Cotton
|
|
2,640
|
|
-
|
|
n.a
|
|
198
|
|
-
|
|
n.a
|
|
0.1
|
|
n.a
|
|
n.a
|
Total
Crops
|
|
185,149
|
|
172,976
|
|
7.0%
|
|
641,931
|
|
583,639
|
|
10
.
0
%
|
|
|
|
|
|
|
Rice
|
|
39,728
|
|
37,580
|
|
5.7%
|
|
234,819
|
|
220,758
|
|
6.4%
|
|
5.9
|
|
5.9
|
|
0.6%
|
Total
Farming
|
|
224,877
|
|
210,556
|
|
6
.
8
%
|
|
876,750
|
|
804,397
|
|
9.0%
|
|
|
|
|
|
|
Owned
Croppable Area
|
|
121,412
|
|
120,065
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased
Area
|
|
64,245
|
|
64,486
|
|
(0.4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Crop Area
|
|
39,220
|
|
26,005
|
|
50.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Farming Area
|
|
224,877
|
|
210,556
|
|
6
.
8
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Milking
Cows (Average Heads)
|
|
Milk
Production (MM liters)(1)
|
|
Productivity
(Liters per cow per day)
|
Dairy
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
|
7,094
|
|
7,028
|
|
0.9%
|
|
24.5
|
|
24.6
|
|
(0.2%)
|
|
37.6
|
|
38.0
|
|
(1.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
chia and peanuts
|
(2)
|
Includes
barley.
|
Note
:
Some planted areas may reflect immaterial adjustments compared to previous reports due to a more accurate area measurement, which
occurred during the current period.
As
of the end of October 2017, we harvested 222.2 thousand hectares related to the last crop season 16/17 and produced 876.8 thousand
tons of aggregate grains, 9% higher year-over-year. A total of 2.7 thousand hectares of corn are still pending harvest. The harvest
has been delayed as a result of excess rains, particularly in the west of Buenos Aires and La Pampa provinces. The crop remains
in good shape and quality and we expect to harvest it over the upcoming weeks.
2017/18
Harvest Year
Farming
Production Data
|
Planting
& Production
|
|
Planting
Plan (hectares)
|
|
2017/18
Planting Progress
|
|
|
2017/2018
|
|
2016/2017
|
|
Chg
%
|
|
2017/2018
|
|
Chg
%
|
Soybean
|
|
60,678
|
|
55,237
|
|
9.9%
|
|
1,083
|
|
1.8%
|
Soybean
2
nd
Crop
|
|
27,300
|
|
29,197
|
|
(6.5%)
|
|
-
|
|
0.0%
|
Corn
(1)
|
|
52,899
|
|
44,630
|
|
19%
|
|
13,789
|
|
26.2%
|
Corn
2
nd
Crop
|
|
10,282
|
|
10,023
|
|
2.6%
|
|
-
|
|
0.0%
|
Wheat
(2)
|
|
33,800
|
|
38,009
|
|
(11.1%)
|
|
32,765
|
|
96.9%
|
Sunflower
|
|
3,129
|
|
5,413
|
|
(42.2%)
|
|
1,598
|
|
51.1%
|
Cotton
|
|
3,205
|
|
2,640
|
|
n
.a
|
|
-
|
|
-
|
Total
Crops
|
|
191,293
|
|
185,149
|
|
3.3%
|
|
49,234
|
|
25.7%
|
Rice
|
|
39,600
|
|
39,728
|
|
(0.3%)
|
|
21,896
|
|
55.3%
|
Total
Farming
|
|
230,893
|
|
224,877
|
|
2.7%
|
|
71,130
|
|
30.8%
|
Owned
Croppable Area
|
|
119,200
|
|
121,412
|
|
(1.8%)
|
|
|
|
|
Leased
Area
|
|
73,168
|
|
64,245
|
|
13.9%
|
|
|
|
|
Second
Crop Area
|
|
38,525
|
|
39,220
|
|
(1.8%)
|
|
|
|
|
Total
Farming Area
|
|
230,893
|
|
224,877
|
|
2.7%
|
|
|
|
|
(1)
|
Includes
chia and peanuts. (2) Includes barley.
|
At
the end of 3Q17, Adecoagro began its planting activities for the 2017/18 harvest year. We expect to plant 230,798 hectares, 2.6%
higher than the previous harvest season. This increase is expected to come primarily from a greater leased area, partially offset
by a 1.8% decreased in owned land as a result of excess rains. In terms of crop mix, we have increased our soybean and corn area
and decreased wheat and sunflower area.
As
of the end of October, 2017, a total of 71.1 thousand hectares or 30.8% of the target area has been seeded. We expect to continue
planting rice up until mid-November, and corn and soybean until early January. The wheat crop has developed as expected and we
are preparing for the start of harvest.
Farming
& Land Transformation Financial Performance
Farming
& Land transformation business - Financial highlights
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Gross
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Farming
|
|
84,726
|
|
86,500
|
|
(2.1%)
|
|
232,660
|
|
212,727
|
|
9.4%
|
Total
Sales
|
|
84,726
|
|
86,500
|
|
(
2
.
1
%)
|
|
232,660
|
|
212,727
|
|
9.4%
|
Adjusted
EBITDA
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Farming
|
|
6,942
|
|
16,054
|
|
(56.8%)
|
|
37,579
|
|
47,333
|
|
(20.6%)
|
Total
Adjusted EBITDA
(1)
|
|
6,942
|
|
16,054
|
|
(56.8%)
|
|
37,579
|
|
47,333
|
|
(
20
.
6
%)
|
Adjusted
EBITDA Margin
|
|
8
.
2
%
|
|
18.6%
|
|
(55.9%)
|
|
16.2%
|
|
22.3%
|
|
(27.4%)
|
Adj.
EBITDA Margin net of 3rd party commerc.
(2)
|
|
9.6%
|
|
20
.
6
%
|
|
(53.2%)
|
|
21.9%
|
|
24.7%
|
|
-11.5%
|
Adjusted
EBIT
(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Farming
|
|
5,411
|
|
14,715
|
|
(63.2%)
|
|
32,916
|
|
43,545
|
|
(24.4%)
|
Total
Adjusted EBIT
(1)(2)
|
|
5,411
|
|
14,715
|
|
(63.2%)
|
|
32,916
|
|
43,545
|
|
(24.4%)
|
Adjusted
EBIT Margin
|
|
6.4%
|
|
17.0%
|
|
(62.5%)
|
|
14.1%
|
|
20.5%
|
|
(30.9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
(2)
in the Farming and Land Transformation businesses was $6.9 million in 3Q17, $9.1 million or 56.8% lower than
3Q16. These results were primarily explained by (i) an $8.1 million extraordinary gain recorded in 3Q16 corresponding to the settlement
of an arbitration dispute related to the early termination of land leasing contracts; (ii) a $1.1 million decrease in our Rice
segment, driven by the postponement of rice sales volumes to the fourth quarter to capture higher prices; and (iii) partially
offset by a $0.4 million increase in our Dairy segment as a result of higher milk prices.
Year-to-date,
Adjusted EBITDA totaled $37.6 million, 20.6% or $9.8 million lower than the same period of the prior year. This reduction is mostly
explained by the $8.1 million extraordinary gain in 2016 as explained above, coupled with lower commodity prices and higher production
costs in USD terms as a result of the real appreciation of the Argentine peso.
(1)
|
Please
see “Reconciliation of Non-IFRS measures” starting on page 21 for a reconciliation of Adjusted EBITDA and Adjusted
EBIT to Profit/Loss. Adjusted EBITDA is defined as consolidated profit from operations before financing and taxation, depreciation
and 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.
|
|
|
(2)
|
Adjusted
EBITDA margin excluding third party commercialization activities is defined as the consolidated Adjusted EBITDA net of the
Adjusted EBITDA generated by the commercialization of third party grains, divided by consolidated net sales net of those generated
by the commercialization of third party grains. We net 3rd party commercialization results to highlight the margin generated
by our own production.
|
Crops
Segment
Crops
- Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
metric
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Gross
Sales
|
|
$
thousands
|
|
59,201
|
|
41,551
|
|
42.5%
|
|
144,097
|
|
109,648
|
|
31.4%
|
|
|
thousand
tons
|
|
264.5
|
|
199.5
|
|
32.6%
|
|
667.4
|
|
496.5
|
|
34.4%
|
|
|
$
per ton
|
|
223.8
|
|
208.3
|
|
7.4%
|
|
215.9
|
|
220.8
|
|
(2.2%)
|
Adjusted
EBITDA
|
|
$
thousands
|
|
2,628
|
|
2,548
|
|
3.1%
|
|
23,052
|
|
22,904
|
|
0.6%
|
Adjusted
EBIT
|
|
$
thousands
|
|
2,280
|
|
2,195
|
|
3.9%
|
|
22,012
|
|
21,875
|
|
0.6%
|
Planted
Area
(1)
|
|
hectares
|
|
224,877
|
|
210,556
|
|
6.8%
|
|
224,877
|
|
210,556
|
|
6.8%
|
(1)
Does not include second crop planted area.
Adjusted
EBITDA in our Crops segment was $2.6 million in 3Q17, slightly above the same period of last year. The increase is primarily explained
by a $9.6 million increase in Changes in Fair Value of Biological Assets and Agricultural Produce and Changes in Net Realizable
Value, which reflects the margin recognized throughout the biological growth cycle and harvest of our crops. This result was partially
offset by a $10.4 million lower gain from the mark-to-market effect of our commodity hedge position.
On
a year-to-date basis, Adjusted EBITDA for 9M17 was $23.0 million, essentially in line with 9M16. Higher production costs due to
the appreciation of the Argentine peso and lower average prices have been offset by a $16.0 million higher hedging gain in 9M17
compared to 9M16 (a $7.2 million gain vs a $8.8 loss, respectively).
Crops
- Changes in Fair Value Breakdown
|
|
|
|
|
|
|
|
|
|
|
|
|
9M17
|
|
metric
|
|
Soy
|
|
Soy
2nd
Crop
|
|
Corn
|
|
Corn
2nd
Crop
|
|
Wheat
|
|
Sunflower
|
|
Cotton
|
|
Total
|
2016/17
Harvest Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Harvested Area
|
|
Hectares
|
|
54,768
|
|
30,604
|
|
41,577
|
|
9,982
|
|
39,100
|
|
5,454
|
|
2,640
|
|
184,125
|
Area
harvested in previous periods
|
|
Hectares
|
|
50,637
|
|
28,623
|
|
19,328
|
|
5,617
|
|
39,100
|
|
5,454
|
|
2,387
|
|
151,146
|
Area
harvested in current period
|
|
Hectares
|
|
4,131
|
|
1,981
|
|
22,249
|
|
4,365
|
|
-
|
|
-
|
|
253
|
|
32,979
|
Planted
area with significant biological growth
|
|
Hectares
|
|
-
|
|
-
|
|
2,950
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,950
|
Changes
in Fair Value 9M17 from harvested area
2016/17
(i)
|
|
$
thousands
|
|
7,786
|
|
4,351
|
|
1,215
|
|
236
|
|
(849)
|
|
525
|
|
165
|
|
13,429
|
2017/18
Harvest Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Planted Area
|
|
Hectares
|
|
-
|
|
-
|
|
6,740
|
|
-
|
|
32,388
|
|
1,597
|
|
-
|
|
40,725
|
Area
planted in initial growth stages
|
|
Hectares
|
|
-
|
|
-
|
|
6,740
|
|
-
|
|
3,930
|
|
1,597
|
|
-
|
|
12,267
|
Area
planted with significant biological growth
|
|
Hectares
|
|
-
|
|
-
|
|
-
|
|
-
|
|
28,458
|
|
-
|
|
-
|
|
28,458
|
Changes
in Fair Value 9M17 from planted area 2017/18
(ii)
|
|
$
thousands
|
|
-
|
|
-
|
|
-
|
|
-
|
|
21
|
|
-
|
|
-
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Changes in Fair Value in 9M17 (i+ii)
|
|
$
thousands
|
|
7,786
|
|
4,351
|
|
1,215
|
|
236
|
|
(828)
|
|
525
|
|
165
|
|
13,451
|
The
table above shows the gains or losses from crop production generated during 9M17. A total of 184,125 hectares were planted in
the 2016/17 crop. As of September 30, 2017, total Changes in Fair Value, which reflects the margin of both the crops that have
already been harvested and the expected margin of those that are still on the ground with significant biological growth, was $13.5
million, compared to $42.9 million generated during the same period last year. As explained above, the main drivers for the decrease
in margins are lower commodity prices at harvest, coupled with higher costs of production, measured in USD.
8
The
2017/18 harvest season commenced mid-September 2017. As of the end of September, a total of 40,725 hectares were seeded, of which
28,458 hectares of wheat had attained significant biological growth.
As
shown in the table below, crops sales year-to-date reached $144,097 million, 31.4% above last year, primarily explained by a 34.4%
increase in volumes.
Crops
- Gross Sales Breakdown
|
|
|
Amount
($ '000)
|
|
Volume
(tons)
|
|
$
per unit
|
Crop
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
Soybean
|
|
26,213
|
|
|
16,750
|
|
|
56.5%
|
|
|
86,408
|
|
|
63,066
|
|
|
37.0%
|
|
|
303
|
|
|
266
|
|
|
14.2%
|
|
Corn
(1)
|
|
23,784
|
|
|
19,506
|
|
|
21.9%
|
|
|
158,609
|
|
|
121,804
|
|
|
30.2%
|
|
|
150
|
|
|
160
|
|
|
(6.4%
|
)
|
Wheat
(2)
|
|
555
|
|
|
1,991
|
|
|
(72.1%
|
)
|
|
4,078
|
|
|
13,054
|
|
|
(68.8%
|
)
|
|
136
|
|
|
153
|
|
|
(10.8%
|
)
|
Sunflower
|
|
2,494
|
|
|
1,119
|
|
|
122.9%
|
|
|
7,905
|
|
|
1,416
|
|
|
458.4%
|
|
|
315
|
|
|
790
|
|
|
(60.1%
|
)
|
Cotton
|
|
264
|
|
|
157
|
|
|
68.2%
|
|
|
148
|
|
|
147
|
|
|
0.4%
|
|
|
1,784
|
|
|
1,065
|
|
|
67.5%
|
|
Others
|
|
5,891
|
|
|
2,028
|
|
|
190.5%
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
59,201
|
|
|
41,551
|
|
|
178,262
|
|
|
264,539
|
|
|
199,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
($ '000)
|
|
Volume
(tons)
|
|
$
per unit
|
Crop
|
|
9M17
|
|
9M16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Soybean
|
|
66,977
|
|
|
56,108
|
|
|
19.4%
|
|
|
229,151
|
|
|
212,895
|
|
|
7.6%
|
|
|
292
|
|
|
264
|
|
|
10.9%
|
|
Corn
(1)
|
|
55,296
|
|
|
35,609
|
|
|
55.3%
|
|
|
348,917
|
|
|
215,043
|
|
|
62.3%
|
|
|
158
|
|
|
166
|
|
|
(4.3%
|
)
|
Wheat
(2)
|
|
11,078
|
|
|
7,633
|
|
|
45.1%
|
|
|
72,673
|
|
|
50,096
|
|
|
45.1%
|
|
|
152
|
|
|
152
|
|
|
0.0%
|
|
Sunflower
|
|
2,932
|
|
|
6,364
|
|
|
(53.9%
|
)
|
|
9,109
|
|
|
17,298
|
|
|
(47.3%
|
)
|
|
322
|
|
|
368
|
|
|
(12.5%
|
)
|
Cotton
|
|
310
|
|
|
1,275
|
|
|
(75.7%
|
)
|
|
173
|
|
|
1,196
|
|
|
(85.5%
|
)
|
|
1,792
|
|
|
1,066
|
|
|
68.1%
|
|
Others
|
|
7,504
|
|
|
2,659
|
|
|
182.2%
|
|
|
7,391
|
|
|
-
|
|
|
n.a
|
|
|
n.a
|
|
|
n.a
|
|
|
-
|
|
Total
|
|
144,097
|
|
|
109,648
|
|
|
31.4%
|
|
|
667,414
|
|
|
496,528
|
|
|
34.4%
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes sorghum; (2) Includes barley
Note:
Prices per unit are a result of the averaging of different local market prices such as FAS Rosario (Arg), FOB Nueva Palmira (Uru)
and FOT Luis Eduardo Magalhaes (BR)
Rice
Segment
Rice
- Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
metric
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Gross
Sales
|
|
$
thousands
|
|
16,219
|
|
|
35,333
|
|
|
(54.1%
|
)
|
|
59,497
|
|
|
80,889
|
|
|
(26.4%
|
)
|
|
|
$
thousands
|
|
12,711
|
|
|
32,825
|
|
|
(61.3%
|
)
|
|
49,746
|
|
|
72,778
|
|
|
(31.6%
|
)
|
Sales
of White Rice
|
|
thousand
tons
(1)
|
|
47.4
|
|
|
91.6
|
|
|
(48.2%
|
)
|
|
170.4
|
|
|
255.8
|
|
|
(33.4%
|
)
|
|
|
$
per ton
|
|
268
|
|
|
358
|
|
|
(25.2%
|
)
|
|
292
|
|
|
285
|
|
|
2.6%
|
|
Sales
of By-products
|
|
$
thousands
|
|
3,136
|
|
|
2,508
|
|
|
25.1%
|
|
|
6,112
|
|
|
8,111
|
|
|
(24.6%
|
)
|
Adjusted
EBITDA
|
|
$
thousands
|
|
1,692
|
|
|
2,803
|
|
|
(40%
|
)
|
|
6,907
|
|
|
11,817
|
|
|
(41.6%
|
)
|
Adjusted
EBIT
|
|
$
thousands
|
|
781
|
|
|
2,096
|
|
|
n.a
|
|
|
4,110
|
|
|
9,937
|
|
|
(58.6%
|
)
|
Area
under production
(2)
|
|
hectares
|
|
39,728
|
|
|
37,565
|
|
|
5.8%
|
|
|
39,728
|
|
|
37,565
|
|
|
5.8%
|
|
Rice
Mills
|
Total
Rice Produced
|
|
thousand
tons
(1)
|
|
66.8
|
|
|
76.3
|
|
|
(12.4%
|
)
|
|
187.9
|
|
|
182.8
|
|
|
2.8%
|
|
Ending
stock
|
|
thousand
tons
(1)
|
|
137.2
|
|
|
72.3
|
|
|
89.7%
|
|
|
137.2
|
|
|
72.3
|
|
|
89.7%
|
|
(1)
Of rough rice equivalent.
(2)
Areas under production correspond to the 2014/15 and 2015/16 harvest years
9
Rice
sales during 3Q17 reached $16.2 million, 54.1% lower than 3Q16. This decrease was the result of (i) a commercial strategy to postpone
sales towards the fourth quarter of the year to capture higher prices; coupled with (ii) 19.3% decrease in white rice prices.
White rice prices in the region are expected to increase as a result of production losses in the US due to weather.
Adjusted
EBITDA for our rice segment in 3Q17 was $1.7 million compared to $2.8 million, explained by lower selling volumes coupled with
higher production costs in dollar terms as a result of the appreciation of the Argentine peso in real terms. On a year-to-date
basis, Adjusted EBITDA totaled $6.9 million, 41.6% below the same period last year, primarily explained by the same drivers affecting
the performance of the quarter.
Dairy
Segment
Dairy
- Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
metric
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
|
|
$
thousands
(1)
|
|
8,931
|
|
|
9,384
|
|
|
(4.8%
|
)
|
|
28,253
|
|
|
21,413
|
|
|
31.9%
|
|
Gross
Sales
|
|
million
liters
(2)
|
|
24.1
|
|
|
28.4
|
|
|
(15.2%
|
)
|
|
73.1
|
|
|
72.5
|
|
|
0.9%
|
|
|
|
$
per liter
(3)
|
|
0.34
|
|
|
0.30
|
|
|
15.0%
|
|
|
0.36
|
|
|
0.26
|
|
|
34.5%
|
|
Adjusted
EBITDA
|
|
$
thousands
|
|
2,802
|
|
|
2,378
|
|
|
17.8%
|
|
|
7,616
|
|
|
3,797
|
|
|
100.6%
|
|
Adjusted
EBIT
|
|
$
thousands
|
|
2,559
|
|
|
2,145
|
|
|
19.3%
|
|
|
6,879
|
|
|
3,074
|
|
|
123.8%
|
|
Milking
Cows
|
|
Average
Heads
|
|
7,094
|
|
|
7,028
|
|
|
0.9%
|
|
|
6,901
|
|
|
6,851
|
|
|
0.7%
|
|
Cow
Productivity
|
|
Liter/Cow/Day
|
|
37.6
|
|
|
38.0
|
|
|
(1.2%
|
)
|
|
36.1
|
|
|
36.1
|
|
|
0.2%
|
|
Total
Milk Produced
|
|
million
liters
|
|
24.5
|
|
|
24.6
|
|
|
(0.2%
|
)
|
|
68.1
|
|
|
67.7
|
|
|
0.5%
|
|
(1)
Includes (i) $0.7 million from sales of culled cows in 3Q17 and $0.9 million in 3Q16, and (ii) $1.4 million from sales of powder
milk and butter in 3Q16.
(2)
Selling volumes in 3Q16 include 3.8 million liters of powder milk equivalent and 1.1 million liters of butter equivalent
(3)
Sales price includes the sale of fluid milk and whole milk powder and excludes beef cattle
Our
Dairy operation continues to deliver strong operational and financial performance. Milk production reached 24.5 million liters
in 3Q17, essentially flat year-over-year. A marginal reduction in productivity due to changes in our reproduction technology to
maximize female births was offset by an increase in the size of our dairy cow herd.
Adjusted
EBITDA in the quarter reached $2.8 million, 17.8% higher than 3Q16. This growth is mainly explained by a 15.0% increase in raw
milk prices. These results were partially offset by an increase in production costs measured in USD as a result of the real appreciation
of Argentine peso.
All
Other Segments
All
Other Segments - Highlights
|
|
|
metric
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Gross
Sales
|
|
$
thousands
|
|
375
|
|
232
|
|
|
61.6%
|
|
|
813
|
|
777
|
|
|
4.6%
|
|
Adjusted
EBITDA
|
|
$
thousands
|
|
(180.0)
|
|
8,325
|
|
|
n.a.
|
|
|
4
|
|
8,815
|
|
|
(100.0%
|
)
|
Adjusted
EBIT
|
|
$
thousands
|
|
(209.0)
|
|
8,279
|
|
|
n.a.
|
|
|
(85.0)
|
|
8,659
|
|
|
n.a.
|
|
10
All
Other Segments primarily encompasses our cattle business. Our cattle segment consists of pasture land that is not suitable for
crop production due to soil quality and is leased to third parties for cattle grazing activities. The $8.8 million decrease in
results versus last year is explained by an extraordinary gain recorded in 2016 related to the settlement of an arbitration dispute
with Marfrig Argentina SA, a subsidiary of Marfrig Alimentos SA.
Land
transformation business
There
were no farm sales during 3Q17 and 3Q16. Land transformation is an ongoing process in our farms, which consists of transforming
undervalued and undermanaged land into its highest production capabilities. Adecoagro is currently engaged in the transformation
of several farms, especially in the northeastern region of Argentina, where farms formerly used for cattle grazing are being successfully
transformed into high yielding crop and rice farms.
The
company is continuously seeking to recycle its capital by disposing of a portion of its developed farms. This allows the company
to monetize the capital gains generated by land transformation and allocate its capital to other farms or assets with higher risk-adjusted
returns, thereby enhancing return on invested capital.
11
Sugar,
Ethanol & Energy Business
Operational
Performance
Sugar,
Ethanol & Energy - Selected Information
|
|
|
metric
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Milling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sugarcane
Milled
|
|
tons
|
|
4,116,044
|
|
3,797,200
|
|
8.4%
|
|
8,040,480
|
|
7,998,984
|
|
0.5%
|
Own
Cane
|
|
tons
|
|
3,529,781
|
|
3,365,240
|
|
4.9%
|
|
7,100,094
|
|
7,353,761
|
|
(3.4%)
|
Third
Party Cane
|
|
tons
|
|
586,263
|
|
431,960
|
|
35.7%
|
|
940,386
|
|
645,223
|
|
45.7%
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sugar
|
|
tons
|
|
267,674
|
|
270,686
|
|
(1.1%)
|
|
470,129
|
|
488,135
|
|
(3.7%)
|
Ethanol
|
|
M3
|
|
178,363
|
|
141,085
|
|
26.4%
|
|
327,778
|
|
301,196
|
|
8.8%
|
Hydrous
Ethanol
|
|
M3
|
|
97,773
|
|
80,717
|
|
21.1%
|
|
192,106
|
|
182,233
|
|
5.4%
|
Anhydrous
Ethanol
|
|
M3
|
|
80,590
|
|
60,369
|
|
33.5%
|
|
135,672
|
|
118,962
|
|
14.0%
|
TRS
Equivalent Produced
|
|
tons
|
|
584,646
|
|
523,834
|
|
11.6%
|
|
1,050,732
|
|
1,023,778
|
|
2.6%
|
Sugar
mix in production
|
|
|
|
48%
|
|
54%
|
|
(11.4%)
|
|
47%
|
|
50%
|
|
(6.2%)
|
Ethanol
mix in production
|
|
|
|
52%
|
|
46%
|
|
13.4%
|
|
53%
|
|
50%
|
|
6.1%
|
Energy
Exported (sold to grid)
|
|
MWh
|
|
273,804
|
|
248,184
|
|
10.3%
|
|
543,583
|
|
493,045
|
|
10.3%
|
Cogen
efficiency (KWh sold per ton crushed)
|
|
KWh/ton
|
|
66.5
|
|
65.4
|
|
1.8%
|
|
67.6
|
|
61.6
|
|
9.7%
|
Agricultural
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harvested
area
|
|
Hectares
|
|
44,059
|
|
35,558
|
|
23.9%
|
|
84,249
|
|
72,652
|
|
16.0%
|
Yield
|
|
tons/hectare
|
|
80.1
|
|
105.7
|
|
(24.2%)
|
|
84.3
|
|
101.2
|
|
(16.7%)
|
TRS
content
|
|
kg/ton
|
|
137.7
|
|
135.3
|
|
1.8%
|
|
127.2
|
|
124.5
|
|
2.2%
|
TRS
per hectare
|
|
kg/hectare
|
|
11,030
|
|
14,304
|
|
(22.9%)
|
|
10,722
|
|
12,599
|
|
(14.9%)
|
Mechanized
harvest
|
|
%
|
|
98.2%
|
|
97.9%
|
|
0.3%
|
|
98.3%
|
|
98.3%
|
|
(0.0%)
|
Area
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sugarcane
Plantation
|
|
hectares
|
|
142,133
|
|
133,455
|
|
6.5%
|
|
142,133
|
|
133,455
|
|
6.5%
|
Expansion
& Renewal Area
|
|
hectares
|
|
7,503
|
|
6,223
|
|
20.6%
|
|
17,881
|
|
14,780
|
|
21.0%
|
Adecoagro
crushed a total of 4.1 million tons of sugarcane in 3Q17, 8.4% higher than in 3Q16. Dry weather during the quarter coupled with
an increase in hourly crushing capacity at the cluster allowed us to accelerate the milling pace which more than compensated for
the delay generated in the first semester of the year. Year-to- date, sugarcane milling reached 8.0 million tons, 0.5% higher
than in 9M16.
Production
mix in the quarter and year-to-date has been slanted towards maximizing ethanol production as a result of higher relative prices.
In our cluster in Mato Grosso do Sul, during 3Q17, the price and margin of anhydrous ethanol (including tax rebate) was the most
attractive amongst our products, trading at an average premium to VHP sugar of 15.2%. Hydrous ethanol was priced at a 7.2% premium
to VHP sugar. As a result, ethanol production increased 26.4% year-over-year to 178.4 thousand cubic meters while sugar production
was slightly down by 1.1% to 267.7 thousand tons.
Our
cogeneration operation continues to outperform. The cogen efficiency ratio reached 66.5 KWh/ton in 3Q17 and 67.6 KWh/ton in 9M17,
respectively 1.8% and 9.7% higher than the same periods of 2017. This was explained by higher stability in the cogeneration process
coupled with the fact that we collected and burnt sugarcane straw from the fields in order to increase our cogeneration capacity
and profit from higher energy prices.
12
Sugarcane
yields during 9M17 reached 84.3 tons/ha, significantly above the 5-year average yield for Brazil's center-south region. These
yields were 16.7% below yields in 9M16, mainly explained by: (i) above average rainfalls during November 2015 through February
2016, which were highly beneficial for the 2016 crop compared to below average rains during 4Q16 and 1Q17; (ii) a longer growth
cycle for a greater proportion of the sugarcane harvested in 2016 than the sugarcane harvested in 2017. TRS content per ton of
sugarcane was slightly higher this year reaching 127.2 kg/ton in 9M17.
As
of September 30, 2017, our sugarcane plantation consisted of 142,133 hectares, marking a 6.5% growth year-over-year. Sugarcane
planting continues to be a key strategy to supply our mills with quality raw material at low cost. During 9M17 we planted a total
of 17,881 hectares of sugarcane, 187.4% more than the same period in the previous year. Of this total area, 7,542 hectares correspond
to expansion areas planted to supply our growing milling capacity and 10,339 hectares correspond to areas planted to renew old
plantations with newer and high-yielding sugarcane, thus allowing us to maintain the productivity of our plantation.
Financial
Performance
Sugar,
Ethanol & Energy - Highlights
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Net
Sales
(1)
|
|
170,451
|
|
153,725
|
|
10.9%
|
|
404,150
|
|
309,340
|
|
30.6%
|
Gross
Profit Manufacturing Activities
|
|
54,041
|
|
74,759
|
|
(27.7%)
|
|
101,848
|
|
148,245
|
|
(31.3%)
|
Adjusted
EBITDA
|
|
74,341
|
|
80,249
|
|
(7.4%)
|
|
165,967
|
|
152,977
|
|
8.5%
|
Adjusted
EBITDA Margin
|
|
43.6%
|
|
52.2%
|
|
(16.5%)
|
|
41.1%
|
|
49.5%
|
|
(17.0%)
|
Adjusted
EBITDA Margin (net of third party commercialization)
(2)
|
|
51.2%
|
|
64.6%
|
|
(20.8%)
|
|
48.0%
|
|
60.1%
|
|
(20.1%)
|
(1)
Net Sales are calculated as Gross Sales net of sales taxes.
(2)
Adjusted EBITDA Margin net of third party commercialization is defined as Adjusted EBITDA net of the Adjusted EBITDA generated
by the commercialization of third party sugar divided by net sales excluding sales from third party sugar volumes.
Net
sales in 3Q17 reached $170.5 million, $16.7 million or 10.9% higher than 3Q16. This increase was primarily driven by the combination
of: (i) a 32.0% increase in energy volumes coupled with a 21.8% increase in prices; and (ii) an 18.5% and 8.2% increase in sugar
and ethanol volumes respectively. .
Adjusted
EBITDA during 3Q17 was $74.3 million, 7.4% lower than 3Q16. Adjusted EBITDA was positively affected by: (i) an 8.4% increase in
sugarcane crushing coupled with a 1.8% growth in TRS per ton of sugarcane, which led to an 11.6% increase in total TRS produced;
(ii) higher sales volumes for sugar, ethanol and energy, and higher energy prices as explained above; and (iii) a $13.9 million
higher result from the mark-to-market effect of our commodity hedge position (a $0.2 million gain in 3Q17 compared to a $10.8
million loss in 3Q16). These positive effects were offset by (iv) a 14.2% increase in production cash costs per ton of TRS produced
in BRL terms. Approximately half of this cost increase is temporary and will be reversed in the fourth quarter. The net increase
in cost is explained by lower sugarcane yields which have increased the amount of hectares harvested, leased and treated and purchases
of sugarcane from suppliers; (v) a 9.0% increase in selling and administrative expenses per ton of TRS sold as a result of inflation
coupled with a 7.9% appreciation of the Brazilian Reais.
13
On
a cumulative basis, Adjusted EBITDA in 9M17 grew by 8.5% reaching $165.9 million. The main drivers for the increase were (i) a
30.6% increase in net sales, as a result of higher sugar, ethanol and energy sales volumes and realized prices; and (ii) the mark-to-market
effect of our sugar hedge position in 9M17 that generated a gain of $36.5 million, $59.5 million higher than that of 9M16. These
positive results were partially offset by (i) a $37.5 million decrease in Changes in Fair Value, generated by the mark-to-market
effect of our unharvested sugarcane plantation, primarily a result of lower projected sugar prices and productivity; coupled with
(ii) a 15.5% increase in unitary production cash costs as explained above.
The
table below reflects the breakdown of net sales for the Sugar, Ethanol & Energy business.
Sugar,
Ethanol & Energy - Net Sales Breakdown (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
Units
|
|
($/unit)
|
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
Sugar
(tons)
(2)
|
|
110,552
|
|
104,914
|
|
5.4%
|
|
320,612
|
|
270,480
|
|
18.5%
|
|
345
|
|
388
|
|
(11.1%)
|
Ethanol
(cubic meters)
|
|
36,889
|
|
34,493
|
|
6.9%
|
|
81,123
|
|
75,004
|
|
8.2%
|
|
455
|
|
460
|
|
(
1
.
1
%)
|
Hydrous
Ethanol
|
|
14,007
|
|
15,078
|
|
(7.1%)
|
|
32,964
|
|
34,705
|
|
(5.0%)
|
|
425
|
|
434
|
|
(2.2%)
|
Anhydrous
Ethanol
|
|
22,882
|
|
19,415
|
|
17.9%
|
|
48,159
|
|
40,299
|
|
19.5%
|
|
475
|
|
482
|
|
(1.4%)
|
Energy
(Mwh)
(3)
|
|
23,011
|
|
14,319
|
|
60.7%
|
|
328,887
|
|
249,215
|
|
32.0%
|
|
70
|
|
57
|
|
21.8%
|
TOTAL
|
|
170,451
|
|
153,725
|
|
10.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
Units
|
|
($/unit)
|
|
|
9M17
|
|
9M16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Sugar
(tons)
(2)
|
|
232,149
|
|
186,286
|
|
24.6%
|
|
606,654
|
|
518,016
|
|
17.1%
|
|
383
|
|
360
|
|
6.4%
|
Ethanol
(cubic meters)
|
|
131,623
|
|
97,218
|
|
35.4%
|
|
268,199
|
|
219,020
|
|
22.5%
|
|
491
|
|
444
|
|
10.6%
|
Hydrous
Ethanol
|
|
53,987
|
|
39,026
|
|
38.3%
|
|
118,694
|
|
93,577
|
|
26.8%
|
|
455
|
|
41
|
|
9.1%
|
Anhydrous
Ethanol
|
|
77,636
|
|
58,192
|
|
33.4%
|
|
149,505
|
|
125,443
|
|
19.2%
|
|
519
|
|
464
|
|
11.9%
|
Energy
(Mwh)
(3)
|
|
40,377
|
|
25,835
|
|
56.3%
|
|
647,009
|
|
539,920
|
|
19.8%
|
|
62
|
|
48
|
|
30.4%
|
TOTAL
|
|
404,150
|
|
309,340
|
|
30.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Net Sales are calculated as Gross Sales net of ICMS, PIS, CONFINS, INSS and IPI taxes.
(2)
Sugar sales and volumes includes commercialization of third party sugar: 72.6k tons ($25.9m) in 3M17 and 149.6k tons ($60.5m)
in 9M17
(3)
Energy sales and volumes includes third party commercialization.
Sugar
sales volumes in 3Q17 grew 18.5% year-over-year, reaching 320.6 thousand tons, of which 72.6 thousand correspond to third party
volumes compared to 67.5 thousand tons in 3Q16. Average realized selling prices during the quarter reached $345/ton, 11.1% lower
compared to 3Q16, partially offsetting the volume growth. As a result, net sales reached $110.5 million, 5.4% higher year-over-year.
Ethanol
sales volumes increased 8.2% compared to the same quarter of last year, in line with the growth in production. At the same time,
we have increased our ethanol inventory by 7.7% seeking to capture higher prices towards the off-season. Anhydrous ethanol volumes
increased by 19.5%, since they presented the highest relative price in the quarter, being priced 15.2% higher than VHP sugar.
In average, realized ethanol prices in the quarter were slightly lower than last year, but remain 10.6% higher year-to-date.
In
the case of energy, spot prices rallied in the quarter to above BRL 500/MWh as a result of dry weather and low water levels in
Brazilian reservoirs. As a result, we started collecting sugarcane straw from our fields and building bales to transport to our
mills and burn in the boiler for excess cogeneration. As a result, energy volume delivered to the grid increased by 32.0% compared
to last year. Our average realized price in the quarter increased by 21.8% and reached 70 USD/MWh. The increase in volumes coupled
with higher prices increased energy revenues to $23.0 million, 60.7% year-over-year.
14
1
Sugar, Ethanol & Energy - Total Production Costs
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Industrial
costs
|
|
25,202
|
|
18,085
|
|
39.4%
|
|
52,052
|
|
39,442
|
|
32.0%
|
Agricultural
costs
|
|
116,512
|
|
85,011
|
|
37.1%
|
|
222,347
|
|
171,161
|
|
29.9%
|
Harvest,
Loading & Transport
|
|
40,065
|
|
31,464
|
|
27.3%
|
|
83,520
|
|
76,747
|
|
8.8%
|
Cane
depreciation
|
|
20,947
|
|
15,318
|
|
36.8%
|
|
38,826
|
|
23,393
|
|
66.0%
|
Cane
from 3rd parties
|
|
17,207
|
|
11,307
|
|
52.2%
|
|
26,295
|
|
16,790
|
|
56.6%
|
Leasing
costs
|
|
17,078
|
|
12,668
|
|
34.8%
|
|
32,273
|
|
28,334
|
|
13.9%
|
Crop
Maintenance
|
|
21,214
|
|
14,254
|
|
48.8%
|
|
41,433
|
|
25,897
|
|
60.0%
|
Total
Production Costs (USD)
|
|
141,714
|
|
103,096
|
|
37.5%
|
|
274,399
|
|
210,604
|
|
30.3%
|
Total
Production Costs (in BRL)
|
|
448,376
|
|
346,981
|
|
29.2%
|
|
873,406
|
|
721,010
|
|
21
.1%
|
Depreciation
(excluding SG&A)
|
|
44,707
|
|
32,951
|
|
35.7%
|
|
88,514
|
|
65,062
|
|
36.0%
|
Depreciation
(excluding SG&A) (in BRL)
|
|
142,091
|
|
106,587
|
|
33.3%
|
|
283,855
|
|
223,835
|
|
26.8%
|
Total
Production Cash Costs (USD)
|
|
97,007
|
|
70,145
|
|
38.3%
|
|
185,885
|
|
145,542
|
|
27.7%
|
Total
Production Cash Costs (BRL)
|
|
306,286
|
|
240,394
|
|
27.4%
|
|
589,551
|
|
497,175
|
|
18.6%
|
Total
production cash costs per ton of sugarcane crushed (USD/Ton)
|
|
24
|
|
18
|
|
27.6%
|
|
23
|
|
18
|
|
27.1%
|
Total
producton cash costs per ton of sugarcane crushed (BRL/Ton)
|
|
74
|
|
63
|
|
17.5%
|
|
73
|
|
62
|
|
18.0%
|
Total
production cash costs per ton of TRS produced (USD)
|
|
166
|
|
134
|
|
23.9%
|
|
177
|
|
142
|
|
24.4%
|
Total
production cash costs per ton of TRS produced (BRL)
|
|
524
|
|
459
|
|
14.2%
|
|
561
|
|
486
|
|
15.5%
|
Agricultural
operational costs (harvesting, loading, transport, planting) have decreased over the last year driven by efficiency gains and
operational enhancements. However, as shown in the table above, reported production cash costs as of 9M17 in BRL increased by
18.6% while production cash costs measured per ton of TRS produced increased by 15.5%. Approximately half of this increase is
temporary and will be reversed as the harvest is complete in the fourth quarter (i.e., third party cane purchases, leasing, crop
maintenance). The net increase in costs is mainly explained by lower sugarcane yields, which have increased the amount of hectares
harvested, leased and treated as well as increased sugarcane purchases from suppliers.
1
Sugar, Ethanol & Energy - Changes in Fair Value
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Changes
in FV Harvested Sugarcane (Agricultural Produce)
|
|
1,201
|
|
22,400
|
|
(94.6%)
|
|
13,435
|
|
30,756
|
|
(56.3%)
|
Changes
in FV Unharvested Sugarcane = [(a+b)-(c +d-e)]
|
|
1,292
|
|
3,126
|
|
(58.7%)
|
|
(16,070)
|
|
21,434
|
|
(175.0%)
|
Sugarcane
Valuation Model current period (a)
|
|
68,865
|
|
106,259
|
|
(35.2%)
|
|
68,865
|
|
106,259
|
|
(35.2%)
|
Capitalized
crop maintenance costs LTM as of current period (b)
|
|
(55,268)
|
|
(47,524)
|
|
16.3%
|
|
(55,268)
|
|
(47,524)
|
|
16.3%
|
Sugarcane
Valuation Model previous period (c)
|
|
71,017
|
|
102,708
|
|
(30.9%)
|
|
82,380
|
|
59,077
|
|
39.4%
|
Capitalized
crop maintenance costs LTM as of previous period(d)
|
|
(61,871)
|
|
(45,951)
|
|
34.6%
|
|
(54,757)
|
|
(35,781)
|
|
53.0%
|
Exchange
rate difference (e)
|
|
(3,158)
|
|
1,148
|
|
(375.1%)
|
|
(2,043)
|
|
(14,005)
|
|
(85.4%)
|
Total
Changes in Fair Value
|
|
2,492
|
|
25,526
|
|
(90.2%)
|
|
(2,635)
|
|
52,191
|
|
(105.0%)
|
As
shown in the table above, Changes in Fair Value of Unharvested Sugarcane (to be harvested during next 12- months) as of 3Q17 was
$1.3 million. This gain represents an increase in the fair value of our sugarcane plantation after maintenance costs, compared
to June 30, 2017, and primarily explained by lower capitalized maintenance costs, partially offset by lower future sugar prices.
In 3Q16, Changes in Fair Value of Unharvested Sugarcane marked a gain of $3.1 million, mainly driven by the strong rally in sugar
prices during 2016.
Changes
in Fair Value of Harvested Sugarcane or “Agricultural Produce” reached $1.2 million in 3Q17, compared to $22.4 million
in 3Q16. Agricultural Produce represents the margin generated by growing sugarcane
15
and
selling it at market price to our mills (internal price transfer). The decrease in agricultural produce reflects (i) the decrease
in sugarcane prices (Consecana price index) as a result of lower sugar prices, coupled with lower sugarcane yields.
Corporate
Expenses
Corporate
Expenses
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Corporate
Expenses
|
|
(5,999)
|
|
(6,476)
|
|
(7.4%)
|
|
(16,329)
|
|
(16,113)
|
|
1.3%
|
Adecoagro’s
corporate expenses include items that have not been allocated to a specific business segment, such as executive officers and headquarter
staff, certain professional fees, travel expenses, and office lease expenses, among others. As shown in the table above, corporate
expenses during the nine months of the year reached $16.3 million, essentially in line with the same period of last year.
Other
Operating Income
Other
Operating Income
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Gain
/ (Loss) from commodity derivative financial instruments
|
|
2,080
|
|
1,458
|
|
42.7%
|
|
40,833
|
|
31,701
|
|
28.8%
|
Gain/(Loss)
from forward contracts
|
|
117
|
|
1,141
|
|
-
%
|
|
-
|
|
15
|
|
-
%
|
Gain
from disposal of other property items
|
|
89
|
|
126
|
|
(29.4%)
|
|
(529)
|
|
(79)
|
|
570%
|
Other
|
|
976
|
|
8,090
|
|
-
%
|
|
(904)
|
|
(8,684)
|
|
(89.6%)
|
Total
|
|
3,262
|
|
10,815
|
|
(69.8%)
|
|
39,400
|
|
22,953
|
|
71.7%
|
Other
Operating Income in 3Q17 reported a gain of $3.3 million, $7.5 million lower than 3Q16. The decrease is primarily explained by
an extraordinary $8.3 million gain recorded in 3Q16 related to the successful settlement of an arbitration agreement with Marfrig
Argentina SA.
16
Commodity
Hedging
Adecoagro’s
financial performance is affected by the volatile price environment inherent to agricultural commodities. The company uses forward
and derivative markets to mitigate swings in commodity prices by locking-in margins and stabilizing cash flows.
The
table below shows the average selling price of our hedged production volumes, including volumes that have already been invoiced
and delivered, forward contracts with fixed-price and volumes hedged through derivative instruments.
Commodity
Hedge Position - as of September 30, 2017
|
|
|
Consolidated
Hedge Position
|
Farming
|
|
|
|
Avg.
FAS Price
|
|
CBOT
FOB
|
|
|
|
|
|
|
|
|
|
Volume
(1)
|
|
USD/Ton
|
|
USD/Bu
|
2016/2017
Harvest season
|
Soybeans
|
|
222,989
|
|
246.5
|
|
938.7
|
Corn
|
|
238,498
|
|
168.0
|
|
434.5
|
2017/2018
Harvest season
|
Soybeans
|
|
96,083
|
|
269.4
|
|
1,030.8
|
Corn
|
|
142,700
|
|
166.9
|
|
434.9
|
|
|
Consolidated
Hedge Position
|
Sugar,
Ethanol & Energy
|
|
|
|
Avg.
FOB Price
|
|
ICE
FOB
|
|
|
|
|
|
|
|
|
|
Volume
(1)
|
|
USD/Unit
|
|
Cents/Lb
|
2016/2017
Harvest season
|
|
|
|
|
|
|
Sugar
(tons)
|
|
486,918
|
|
396.8
|
|
18.0
|
Ethanol
(m3)
|
|
200,182
|
|
472.6
|
|
n.a
|
Energy
(MW/h)
(2)
|
|
604,159
|
|
66.9
|
|
n.a
|
2017/2018
Harvest season
|
Sugar
(tons)
|
|
154,737
|
|
407.3
|
|
18.5
|
Ethanol
(m3)
|
|
-
|
|
-
|
|
-
|
Energy
(MW/h)
(2)
|
|
437,885
|
|
70.5
|
|
n.a
|
(1)
|
Includes volumes
delivered/invoiced, forward contracts and derivatives (futures and options).
|
(2)
|
Energy prices were converted
to USD @ an Fx of R/USD 3.20
|
17
Financial
Results
Financial
Results
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Interest
Expenses, net
|
|
(10,730)
|
|
(11,298)
|
|
(5.0%)
|
|
(31,507)
|
|
(28,706)
|
|
(9.8%)
|
Cash
Flow Hedge - Transfer from Equity
|
|
(7,369)
|
|
(28,592)
|
|
74.2%
|
|
(10,689)
|
|
(52,186)
|
|
79.5%
|
FX
Gain/(Loss), net
|
|
(6,627)
|
|
(2,908)
|
|
127.9%
|
|
(18,510)
|
|
(15,184)
|
|
(21.9%)
|
Gain/(Loss)
from derivative financial Instruments
|
|
143
|
|
(33)
|
|
n.a.
|
|
(2,052)
|
|
(6,839)
|
|
70.0%
|
Taxes
|
|
(972)
|
|
(682)
|
|
(42.5%)
|
|
(2,276)
|
|
(1,913)
|
|
(19.0%)
|
Other
Expenses, net
|
|
(2,194)
|
|
(758)
|
|
(189.4%)
|
|
(2,903)
|
|
(2,290)
|
|
(26.8%)
|
Total
Financial Results
|
|
(27,749)
|
|
(44,271)
|
|
37.3%
|
|
(67,937)
|
|
(107,118)
|
|
36.6%
|
Our
financial results in 3Q17 was a loss of $27.7 million, compared to a loss of $44.3 million in 3Q16.
These
results are primarily composed of interest expense and foreign exchange losses, as described below:
(i)
|
Net
interest expense in 3Q17 was $10.7 million, 5.0% below the previous quarter. This difference is mainly explained by an increase
in interest income, resulting mainly from short term cash investments in Argentina.
|
|
|
(ii)
|
Foreign
exchange losses (composed of "Cash Flow Hedge - Transfer from Equity”
(1)
and "Fx Gain/Loss” line items) reflect the impact
of foreign exchange variations on our dollar denominated assets and liabilities. Foreign exchange losses totaled $14.0 million
in 3Q17, $17.5 million lower compared to 3Q16. This is mainly explained by the fact that a substantial portion of our USD
denominated debt was paid in 3Q16 coupled with the continuous appreciation of the Brazilian Real.
|
(1)
|
Effective July 1,2014,
Adecoagro 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 and
foreign currency forward contracts. Cash flow hedge accounting permits that gains and losses arising from the effect of changes
in foreign currency exchange rates on derivative and non-derivative hedging instruments not be immediately recognized in profit
or loss, but be reclassified from equity to profit or loss in the same periods during which the future sales occur, thus allowing
for a more appropriate presentation of the results for the period reflecting Adecoagro's Risk Management Policy.
|
18
Indebtedness
Net
Debt Breakdown
|
$
thousands
|
|
3Q17
|
|
2Q17
|
|
Chg
%
|
|
3Q16
|
|
Chg
%
|
Farming
|
|
165,989
|
|
175,792
|
|
(5.6%)
|
|
108,848
|
|
52.5%
|
Short
term Debt
|
|
115,946
|
|
119,927
|
|
(3.3%)
|
|
95,283
|
|
21.7%
|
Long
term Debt
|
|
50,043
|
|
55,865
|
|
(10.4%)
|
|
13,564
|
|
268.9%
|
Sugar,
Ethanol & Energy
|
|
641,301
|
|
618,487
|
|
3.7%
|
|
667,942
|
|
(4.0%)
|
Short
term Debt
|
|
67,226
|
|
136,875
|
|
(50.9%)
|
|
242,319
|
|
(72.3%)
|
Long
term Debt
|
|
574,075
|
|
481,612
|
|
19.2%
|
|
425,623
|
|
34.9%
|
Bond
Proceeds at Holding
|
|
301,587
|
|
-
|
|
100%
|
|
-
|
|
100.0%
|
Total
Short term Debt
|
|
183,172
|
|
256,802
|
|
(28.7%)
|
|
337,602
|
|
(45.7%)
|
Total
Long term Debt
|
|
925,705
|
|
537,486
|
|
72.2%
|
|
439,188
|
|
110.8%
|
Gross
Debt
|
|
1,108,877
|
|
794,279
|
|
39.6%
|
|
776,790
|
|
42.8%
|
Cash
& Equivalents
|
|
523,175
|
|
219,934
|
|
137.9%
|
|
136,482
|
|
283.3%
|
Net
Debt
|
|
585,702
|
|
574,345
|
|
2.0%
|
|
640,308
|
|
(8.5%)
|
Net
Debt / Adj. EBITDA LTM
|
|
1.95x
|
|
1.82x
|
|
6.9%
|
|
2.42x
|
|
(19.7%)
|
Adecoagro’s
net debt as of September 30, 2017 stands at $585.7 million, 8.5% lower year-over-year and 2.0% higher quarter-over-quarter. Our
net debt ratio (Net Debt / LTM Adj. EBITDA) reached 1.95x, 19.7% lower than a year ago, explained by a combination of lower net
debt and higher LTM Adjusted EBITDA.
On
September 20, 2017, Adecoagro issued a 10-year $500 million bond with an annual coupon of 6.0%. The bond proceeds will be used
primarily to refinance and extend maturity of approximately $450 million of debt from our Brazilian operations. As of September
30, 2017, $302.2 million of bond proceeds remained in our cash balance, explaining the increase in cash & equivalents and
gross debt.
The
charts depicted below show our debt maturity profile on a consolidated basis, which currently stands 77% in the long term and
23% in the short term. Our debt currency breakdown stands 22% in Brazilian Reals and 77% in US dollars.
19
Capital
Expenditures & Investments
Capital
Expenditures & Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Farming
& Land Transformation
|
|
4,575
|
|
5,548
|
|
(17.6%)
|
|
11,935
|
|
9,372
|
|
27.4%
|
Expansion
|
|
3,165
|
|
3,592
|
|
(11.9%)
|
|
7,853
|
|
5,501
|
|
42.8%
|
Maintenance
|
|
1,410
|
|
1,956
|
|
(27.9%)
|
|
4,082
|
|
3,871
|
|
5.5%
|
Sugar,
Ethanol & Energy
|
|
32,168
|
|
27,261
|
|
18.0%
|
|
131,229
|
|
83,140
|
|
57.8%
|
Maintenance
|
|
18,741
|
|
22,284
|
|
(15.9%)
|
|
99,224
|
|
60,007
|
|
65.4%
|
Planting
|
|
16,833
|
|
19,191
|
|
(12.3%)
|
|
40,001
|
|
35,650
|
|
12.2%
|
Industrial
& Agricultural Machinery
|
|
1,908
|
|
3,093
|
|
(38.3%)
|
|
59,223
|
|
24,357
|
|
143.1%
|
Expansion
|
|
13,427
|
|
4,978
|
|
169.8%
|
|
32,005
|
|
23,133
|
|
38.4%
|
Planting
|
|
7,946
|
|
3,889
|
|
104.3%
|
|
21,606
|
|
15,302
|
|
41.2%
|
Industrial
& Agricultural Machinery
|
|
5,481
|
|
1,088
|
|
403.7%
|
|
10,399
|
|
7,831
|
|
32.8%
|
Total
|
|
36,743
|
|
32,810
|
|
12.0%
|
|
143,164
|
|
92,512
|
|
54.8%
|
Adecoagro’s
capital expenditures during 3Q17 totaled $36.7 million, 12.0% higher than in 3Q16.
In
the Sugar, Ethanol and Energy business, capex deployed in 3Q17 totaled $32.2 million, $4.9 million or 18.0% higher year-over-year.
The increase is primarily explained by growth investments related to the expansion of the cluster. Construction works are currently
focused on laying the foundations for the sixth cane crusher at the Ivinhema mill. During the quarter we also planted 2.5 thousand
hectares of new sugarcane areas to supply the growing capacity.
In
the Farming & Land Transformation businesses, total capital expenditures during 3Q17 reached $4.6 million, 17.6% lower year-over-year.
Growth investments consisted of: (i) the completion of the bio-digester for our Dairy business which will allow us to cogenerate
electricity from cow manure; and (ii) land transformation projects to expand our rice planted area and improve the productivity;
and investments in zero-leveling of rice plots to increase productivity and reduce operating costs.
Inventories
End
of Period Inventories
|
|
|
|
|
Volume
|
|
thousand
$
|
Product
|
|
Metric
|
|
3Q17
|
|
3Q16
|
|
%
Chg
|
|
3Q17
|
|
3Q16
|
|
%
Chg
|
Soybean
|
|
tons
|
|
96,735
|
|
50,134
|
|
93.0%
|
|
24,162
|
|
11,642
|
|
107.5%
|
Corn
(1)
|
|
tons
|
|
56,965
|
|
55,454
|
|
2.7%
|
|
7,207
|
|
7,555
|
|
(4.6%)
|
Wheat
(2)
|
|
tons
|
|
15,127
|
|
25,427
|
|
(40.5%)
|
|
2,143
|
|
2,850
|
|
(24.8%)
|
Sunflower
|
|
tons
|
|
16
|
|
-
|
|
n.a
|
|
6
|
|
-
|
|
n.a
|
Cotton
lint
|
|
tons
|
|
-
|
|
217
|
|
n.a
|
|
-
|
|
174
|
|
n.a
|
Rough
Rice
(3)
|
|
tons
|
|
54,287
|
|
87,696
|
|
(38.1%)
|
|
11,633
|
|
13,715
|
|
(15.2%)
|
Sugar
|
|
tons
|
|
66,080
|
|
124,009
|
|
(46.7%)
|
|
17,139
|
|
31,517
|
|
(45.6%)
|
Ethanol
|
|
m3
|
|
135,771
|
|
126,078
|
|
7.7%
|
|
70,469
|
|
56,853
|
|
23.9%
|
Total
|
|
|
|
424,982
|
|
469,015
|
|
(9.4%)
|
|
132,757
|
|
124,306
|
|
6.8%
|
(1) Includes
sorghum. (2) Includes barley. (3) Expressed in rough rice equivalent
20
Variations
in inventory levels between 3Q17 and 3Q16 are attributable to changes in (i) production volumes resulting from changes in planted
area, (ii) production mix between different crops and in yields obtained, (ii) different percentage of area harvested during the
period, and (iii) commercial strategy or selling pace for each product.
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.
The
forward-looking statements included in this press release relate to, among others: (i) our 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 our business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in
which we operate, environmental laws and regulations; (iv) the implementation of our business strategy, including the expansion
of our sugarcane cluster in Mato Grosso do Sul and other current projects; (v) our plans relating to acquisitions, joint ventures,
strategic alliances or divestitures; (vi) the implementation of our financing strategy and capital expenditure plan; (vii) the
maintenance of our relationships with customers; (viii) the competitive nature of the industries in which we operate; (ix) the
cost and availability of financing; (x) future demand for the commodities we produce; (xi) international prices for commodities;
(xii) the condition of our land holdings; (xiii) the development of the logistics and infrastructure for transportation of our
products in the countries where we operate; (xiv) the performance of the South American and world economies; and (xv) the relative
value of the Brazilian Reais, 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 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 related 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.
21
Reconciliation
of Non-IFRS measures
|
To supplement
our consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS
financial measures in this press release:
•
Adjusted EBITDA
•
Adjusted EBIT
•
Adjusted EBITDA margin
•
Net Debt
•
Net Debt to Adjusted EBITDA
In
this section, we provide an explanation and a reconciliation of each of our non-IFRS financial measures to their most directly
comparable IFRS measures. The presentation of these financial measures is not intended to be considered in isolation or as a substitute
for, or superior to, financial information prepared and presented in accordance with IFRS.
We
use non-IFRS measures to internally evaluate and analyze financial results. We believe these non-IFRS financial measures provide
investors with useful supplemental information about the financial performance of our business, enable comparison of financial
results between periods where certain items may vary independent of business performance, and enable comparison of our financial
results with other public companies, many of which present similar non-IFRS financial measures.
There
are limitations associated with the use of non-IFRS financial measures as an analytical tool. In particular, many of the adjustments
to our IFRS financial measures reflect the exclusion of items, such as depreciation and amortization, changes in fair value and
the related income tax effects of the aforementioned exclusions, that are recurring and will be reflected in our financial results
for the foreseeable future. In addition, these measures may be different from non-IFRS financial measures used by other companies,
limiting their usefulness for comparison purposes.
Adjusted
EBITDA, Adjusted EBIT & Adjusted EBITDA margin
We
define Adjusted EBITDA for each of our operating segments as the segment’s share of consolidated profit from operations
before financing and taxation for the year or period, as applicable, before depreciation and amortization and adjusted by profit
or loss from discontinued operations and by gains or losses from disposals of non-controlling interests in subsidiaries whose
main underlying asset is farmland which are reflected in our Shareholders Equity under the line item "Reserve from the sale
of minority interests in subsidiaries.”
We
define Adjusted EBIT for each of our operating segments as the segment’s share of consolidated profit from operations before
financing and taxation for the year or period, as applicable, adjusted by profit from discontinued operations and by gains or
losses from disposals of non-controlling interests in subsidiaries whose main underlying asset is farmland which are reflected
in our Shareholders Equity under "Reserve from the sale of minority interests in subsidiaries.”
We
believe that Adjusted EBITDA and Adjusted EBIT are for the Company and each operating segment, respectively important measures
of operating performance because they allow investors and others to evaluate and compare our consolidated operating results and
to evaluate and compare the operating performance of our
22
segments,
respectively, including our return on capital and operating efficiencies, from period to period by removing the impact of our
capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences (income
taxes), foreign exchange gains or losses and other financial expenses. In addition, by including the gains or losses from disposals
of non-controlling interests in subsidiaries whose main underlying asset is farmland, investors can evaluate the full value and
returns generated by our land transformation activities. Other companies may calculate Adjusted EBITDA and Adjusted EBIT differently,
and therefore Adjusted EBITDA and Adjusted EBIT may not be comparable to similarly titled measures used by other companies. Adjusted
EBITDA and Adjusted EBIT are not measure of financial performance under IFRS, and should not be considered in isolation or as
an alternative to consolidated net profit (loss), cash flows from operating activities, profit from operations before financing
and taxation and other measures determined in accordance with IFRS.
We
define Adjusted EBITDA margin as Adjusted EBITDA to net sales. We consider that the presentation of adjusted EBITDA margin provides
useful information on how successfully we operate our Company and enhances the ability of investors to compare profitability between
segments, periods and with other public companies.
Reconciliation
of both Adjusted EBITDA and Adusted EBIT starts on page 23.
Net
Debt & Net Debt to Adjusted EBITDA
Net
debt is defined as the sum of long- and short-term debt less cash and cash equivalents. This measure is widely used by management
and investment analysts and we believe it shows the financial strength of the Company
Management
is consistently tracking our leverage position and our ability to repay and service our debt obligations over time. We have therefore
set a leverage ratio target that is measured by net debt divided by Adjusted EBITDA.
We
believe that this metric provides useful information to investors because management uses it to manage our debt-equity ratio in
order to promote access to debt financing instruments in the capital markets and our ability to meet scheduled debt service obligations.
Reconciliation
- Net Debt
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
3Q17
|
|
2Q17
|
|
Chg
%
|
|
3Q16
|
|
Chg
%
|
Net
Debt
|
|
585,702
|
|
574,345
|
|
2.0%
|
|
640,308
|
|
(8.5%)
|
Cash
and cash equivalents
|
|
523,175
|
|
219,934
|
|
137.9%
|
|
136,482
|
|
283.3%
|
Total
Borrowings
|
|
1,108,877
|
|
794,279
|
|
39.6%
|
|
776,790
|
|
42.8%
|
23
Adjusted
EBIT & Adjusted EBITDA Reconciliation to Profit/Loss - 3Q17
|
|
|
|
|
|
$
thousands
|
|
Crops
|
|
Rice
|
|
Dairy
|
|
Others
|
|
Farming
|
|
Sugar,
Ethanol &
Energy
|
|
Land
Transformation
|
|
Corporate
|
|
Total
|
Sales
of goods and services rendered
|
|
59,201
|
|
16,219
|
|
8,931
|
|
375
|
|
84,726
|
|
178,262
|
|
-
|
|
-
|
|
262,988
|
Cost
of goods sold and services rendered
|
|
(58,663)
|
|
(12,431)
|
|
(8,933)
|
|
(149)
|
|
(80,176)
|
|
(126,714)
|
|
-
|
|
-
|
|
(206,890)
|
Initial
recog. and changes in FV of BA and agricultural produce
|
|
(3,892)
|
|
432
|
|
2,898
|
|
(407)
|
|
(969)
|
|
2,493
|
|
-
|
|
-
|
|
1,524
|
Gain
from changes in NRV of agricultural produce after harvest
|
|
4,843
|
|
-
|
|
-
|
|
-
|
|
4,843
|
|
|
|
-
|
|
-
|
|
4,843
|
Margin
on Manufacturing and Agricultural Act. Before Opex
|
|
1,489
|
|
4,220
|
|
2,896
|
|
(181)
|
|
8,424
|
|
54,041
|
|
-
|
|
-
|
|
62,465
|
General
and administrative expenses
|
|
(767)
|
|
(1,105)
|
|
(246)
|
|
(42)
|
|
(2,160)
|
|
(7,866)
|
|
-
|
|
(5,956)
|
|
(15,982)
|
Selling
expenses
|
|
(2,304)
|
|
(2,320)
|
|
(199)
|
|
14
|
|
(4,809)
|
|
(22,840)
|
|
-
|
|
(32)
|
|
(27,681)
|
Other
operating income, net
|
|
3,862
|
|
(14)
|
|
108
|
|
-
|
|
3,956
|
|
(683)
|
|
-
|
|
(11)
|
|
3,262
|
Share
of gain/(loss) of joint ventures
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Profit
from Operations Before Financing and Taxation
|
|
2,280
|
|
781
|
|
2,559
|
|
(209)
|
|
5,411
|
|
22,652
|
|
-
|
|
(5,999)
|
|
22,064
|
Reserve
from the sale of minority interests in subsidiaries
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
Adjusted
EBIT
|
|
2,280
|
|
781
|
|
2,559
|
|
(209)
|
|
5,411
|
|
22,652
|
|
-
|
|
(5,999)
|
|
22,064
|
(-)
Depreciation and Amortization
|
|
348
|
|
911
|
|
243
|
|
29
|
|
1,531
|
|
51,689
|
|
-
|
|
-
|
|
53,220
|
Adjusted
EBITDA
|
|
2,628
|
|
1,692
|
|
2,802
|
|
(180)
|
|
6,942
|
|
74,341
|
|
-
|
|
(5,999)
|
|
75,284
|
Reconciliation
to Profit/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,284
|
(+)
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(53,220)
|
(+)
Financial result, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,749)
|
(+)
Income Tax (Charge)/Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,727
|
Profit/(Loss)
for the Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,958)
|
Adjusted
EBIT & Adjusted EBITDA Reconciliation to Profit/Loss - 3Q16
|
|
|
|
|
|
$
thousands
|
|
Crops
|
|
Rice
|
|
Dairy
|
|
Others
|
|
Farming
|
|
Sugar,
Ethanol &
Energy
|
|
Land
Transformation
|
|
Corporate
|
|
Total
|
Sales
of goods and services rendered
|
|
41,551
|
|
35,333
|
|
9,384
|
|
232
|
|
86,500
|
|
159,943
|
|
-
|
|
-
|
|
246,443
|
Cost
of goods sold and services rendered
|
|
(41,259)
|
|
(29,119)
|
|
(9,303)
|
|
(46)
|
|
(79,727)
|
|
(110,710)
|
|
-
|
|
-
|
|
(190,437)
|
Initial
recog. and changes in FV of BA and agricultural produce
|
|
(2,805)
|
|
589
|
|
2,082
|
|
38
|
|
(96)
|
|
25,526
|
|
-
|
|
-
|
|
25,430
|
Gain
from changes in NRV of agricultural produce after harvest
|
|
(5,837)
|
|
-
|
|
-
|
|
-
|
|
(5,837)
|
|
-
|
|
-
|
|
-
|
|
(5,837)
|
Margin
on Manufacturing and Agricultural Act. Before Opex
|
|
(8,350)
|
|
6,803
|
|
2,163
|
|
224
|
|
840
|
|
74,759
|
|
-
|
|
-
|
|
75,599
|
General
and administrative expenses
|
|
(619)
|
|
(850)
|
|
(235)
|
|
(54)
|
|
(1,758)
|
|
(6,628)
|
|
-
|
|
(6,208)
|
|
(14,594)
|
Selling
expenses
|
|
(1,981)
|
|
(3,978)
|
|
(135)
|
|
(27)
|
|
(6,121)
|
|
(16,723)
|
|
-
|
|
(6)
|
|
(22,850)
|
Other
operating income, net
|
|
13,145
|
|
121
|
|
352
|
|
8,136
|
|
21,754
|
|
(10,284)
|
|
-
|
|
(262)
|
|
11,208
|
Share
of gain/(loss) of joint ventures
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Profit
from Operations Before Financing and Taxation
|
|
2,195
|
|
2,096
|
|
2,145
|
|
8,279
|
|
14,715
|
|
41,124
|
|
-
|
|
(6,476)
|
|
49,363
|
Reserve
from the sale of minority interests in subsidiaries
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjusted
EBIT
|
|
2,195
|
|
2,096
|
|
2,145
|
|
8,279
|
|
14,715
|
|
41,124
|
|
-
|
|
(6,476)
|
|
49,363
|
(-)
Depreciation and Amortization
|
|
353
|
|
707
|
|
233
|
|
46
|
|
1,339
|
|
39,125
|
|
-
|
|
-40,464
|
|
|
Adjusted
EBITDA
|
|
2,548
|
|
2,803
|
|
2,378
|
|
8,325
|
|
16,054
|
|
80,249
|
|
-
|
|
(6,476)
|
|
89,827
|
Reconciliation
to Profit/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89,827
|
(+)
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(40,464)
|
(+)
Financial result, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44,271)
|
(+)
Income Tax (Charge)/Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,715
|
Profit/(Loss)
for the Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,808
|
24
Adjusted
EBIT & Adjusted EBITDA Reconciliation to Profit/Loss - 9M17
|
$
thousands
|
|
Crops
|
|
Rice
|
|
Dairy
|
|
Others
|
|
Farming
|
|
Sugar,
Ethanol &
Energy
|
|
Land
Transformatio
n
|
|
Corporate
|
|
Total
|
Sales
of goods and services rendered
|
|
144,097
|
|
59,497
|
|
28,253
|
|
813
|
|
232,660
|
|
424,949
|
|
-
|
|
-
|
|
657,609
|
Cost
of goods sold and services rendered
|
|
(143,355)
|
|
(50,133)
|
|
(27,921)
|
|
(324)
(221,733)
|
|
(320,466)
|
|
-
|
|
-
|
|
(542,199)
|
|
|
Initial
recog. and changes in FV of BA and agricultural produce
|
|
13,451
|
|
6,228
|
|
7,426
|
|
(244)
|
|
26,861
|
|
(2,635)
|
|
-
|
|
-
|
|
24,226
|
Gain
from changes in NRV of agricultural produce after harvest
|
|
8,036
|
|
-
|
|
-
|
|
-
|
|
8,036
|
|
-
|
|
-
|
|
-
|
|
8,036
|
Margin
on Manufacturing and Agricultural Act. Before Opex
|
|
22,229
|
|
15,592
|
|
7,758
|
|
245
|
|
45,824
|
|
101,848
|
|
-
|
|
-
|
|
147,672
|
General
and administrative expenses
|
|
(2,168)
|
|
(3,384)
|
|
(742)
|
|
(130)
|
|
(6,424)
|
|
(21,850)
|
|
-
|
|
(16,209)
|
|
(44,483)
|
Selling
expenses
|
|
(5,250)
|
|
(8,721)
|
|
(667)
|
|
(39)
|
|
(14,677)
|
|
(49,990)
|
|
-
|
|
(91)
|
|
(64,758)
|
Other
operating income, net
|
|
7,201
|
|
623
|
|
530
|
|
(161)
|
|
8,193
|
|
31,236
|
|
-
|
|
(29)
|
|
39,400
|
Share
of gain/(loss) of joint ventures
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Profit
from Operations Before Financing and Taxation
|
|
22,012
|
|
4,110
|
|
6,879
|
|
(85)
|
|
32,916
|
|
61,244
|
|
-
|
|
(16,329)
|
|
77,831
|
Reserve
from the sale of minority interests in subsidiaries
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjusted
EBIT
|
|
22,012
|
|
4,110
|
|
6,879
|
|
(85)
|
|
32,916
|
|
61,244
|
|
-
|
|
(16,329)
|
|
77,831
|
(-)
Depreciation and Amortization
|
|
1,040
|
|
2,797
|
|
737
|
|
89
|
|
4,663
|
|
104,723
|
|
-
|
|
-
|
|
109,386
|
Adjusted
EBITDA
|
|
23,052
|
|
6,907
|
|
7,616
|
|
4
|
|
37,579
|
|
165,967
|
|
-
|
|
(16,329)
|
|
187,217
|
Reconciliation
to Profit/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187,217
|
(+)
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(109,386)
|
(+)
Financial result, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(67,937)
|
(+)
Income Tax (Charge)/Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,084)
|
Profit/(Loss)
for the Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,810
|
Adjusted
EBIT & Adjusted EBITDA Reconciliation to Profit/Loss - 9M16
|
$
thousands
|
|
Crops
|
|
Rice
|
|
Dairy
|
|
Others
|
|
Farming
|
|
Sugar,
Ethanol &
Energy
|
|
Land
Transformation
|
|
Corporate
|
`
|
Total
|
Sales
of goods and services rendered
|
|
109,648
|
|
80,889
|
|
21,413
|
|
777
|
|
212,727
|
|
324,420
|
|
-
|
|
-
|
|
537,147
|
Cost
of goods sold and services rendered
|
|
(109,268)
|
|
(69,792)
|
|
(21,298)
|
|
(142)
|
|
(200,500)
|
|
(228,365)
|
|
-
|
|
-
|
|
(428,865)
|
Initial
recog. and changes in FV of BA and agricultural produce
|
|
42,852
|
|
10,047
|
|
3,707
|
|
128
|
|
56,734
|
|
52,190
|
|
-
|
|
-
|
|
108,924
|
Gain
from changes in NRV of agricultural produce after harvest
|
|
(6,206)
|
|
-
|
|
-
|
|
-
|
|
(6,206)
|
|
-
|
|
-
|
|
-
|
|
(6,206)
|
Margin
on Manufacturing and Agricultural Act. Before Opex
|
|
37,026
|
|
21,144
|
|
3,822
|
|
763
|
|
62,755
|
|
148,245
|
|
-
|
|
-
|
|
211,000
|
General
and administrative expenses
|
|
(1,934)
|
|
(2,283)
|
|
(740)
|
|
(195)
|
|
(5,152)
|
|
(15,169)
|
|
-
|
|
(15,883)
|
|
(36,204)
|
Selling
expenses
|
|
(4,421)
|
|
(9,238)
|
|
(476)
|
|
(46)
|
|
(14,181)
|
|
(35,803)
|
|
-
|
|
(31)
|
|
(50,015)
|
Other
operating income, net
|
|
(8,796)
|
|
314
|
|
468
|
|
8,137
|
|
123
|
|
(22,877)
|
|
-
|
|
(199)
|
|
(22,953)
|
Share
of gain/(loss) of joint ventures
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Profit
from Operations Before Financing and Taxation
|
|
21,875
|
|
9,937
|
|
3,074
|
|
8,659
|
|
43,545
|
|
74,396
|
|
-
|
|
(16,113)
|
|
101,828
|
Reserve
from the sale of minority interests in subsidiaries
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Adjusted
EBIT
|
|
21,875
|
|
9,937
|
|
3,074
|
|
8,659
|
|
43,545
|
|
74,396
|
|
-
|
|
(16,113)
|
|
101,828
|
(-)
Depreciation and Amortization
|
|
1,029
|
|
1,880
|
|
723
|
|
156
|
|
3,788
|
|
78,581
|
|
-
|
|
-
|
|
82,369
|
Adjusted
EBITDA
|
|
22,904
|
|
11,817
|
|
3,797
|
|
8,815
|
|
47,333
|
|
152,977
|
|
-
|
|
(16,113)
|
|
184,197
|
Reconciliation
to Profit/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
184,197
|
(+)
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82,369)
|
(+)
Financial result, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(107,118)
|
(+)
Income Tax (Charge)/Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,901)
|
Profit/(Loss)
for the Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,191)
|
25
Condensed
Consolidated Interim Statement of Income
|
Condensed
Consolidated Interim Statement of Income
Statement
of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Sales
of goods and services rendered
|
|
262,988
|
|
246,443
|
|
6.7%
|
|
657,609
|
|
537,147
|
|
22.4%
|
Cost
of goods sold and services rendered
|
|
(206,890)
|
|
(190,437)
|
|
8.6%
|
|
(542,199)
|
|
(428,865)
|
|
26.4%
|
Initial
recognition and changes in fair value of biological assets and agricultural produce
|
|
1,524
|
|
25,430
|
|
(94.0%)
|
|
24,226
|
|
108,924
|
|
(77.8%)
|
Changes
in net realizable value of agricultural produce after harvest
|
|
4,843
|
|
(5,837)
|
|
-
%
|
|
8,036
|
|
(6,206)
|
|
-
%
|
Margin
on Manufacturing and Agricultural Activities Before Operating Expenses
|
|
62,465
|
|
75,599
|
|
n.m
|
|
147,672
|
|
211,000
|
|
(30.0%)
|
General
and administrative expenses
|
|
(15,982)
|
|
(14,594)
|
|
9.5%
|
|
(44,483)
|
|
(36,204)
|
|
22.9%
|
Selling
expenses
|
|
(27,681)
|
|
(22,850)
|
|
21.1%
|
|
(64,758)
|
|
(50,015)
|
|
29.5%
|
Other
operating income, net
|
|
3,262
|
|
11,208
|
|
(70.9%)
|
|
39,400
|
|
(22,953)
|
|
-
%
|
Profit
from Operations Before Financing and Taxation
|
|
22,064
|
|
49,363
|
|
(55.3%)
|
|
77,831
|
|
101,828
|
|
(23.6%)
|
Finance
income
|
|
3,520
|
|
1,904
|
|
84.9%
|
|
8,742
|
|
6,975
|
|
25.3%
|
Finance
costs
|
|
(31,269)
|
|
(46,175)
|
|
(32.3%)
|
|
(76,679)
|
|
(114,093)
|
|
(32.8%)
|
Financial
results, net
|
|
(27,749)
|
|
(44,271)
|
|
(37.3%)
|
|
(67,937)
|
|
(107,118)
|
|
(36.6%)
|
Profit
(Loss) Before Income Tax
|
|
(5,685)
|
|
5,092
|
|
-
%
|
|
9,894
|
|
(5,290)
|
|
(287.0%)
|
Income
tax benefit
|
|
2,727
|
|
1,715
|
|
59.0%
|
|
(3,084)
|
|
(2,901)
|
|
6.3%
|
Profit
(Loss) for the Period from Continuing Operations
|
|
(2,958)
|
|
6,807
|
|
(143.5%)
|
|
6,810
|
|
(8,191)
|
|
(183.1%)
|
Profit
(loss) for the Period from discontinued operations
|
|
-
|
|
-
|
|
-
%
|
|
-
|
|
-
|
|
-
%
|
Income
/ (Loss) for the Period
|
|
(2,958)
|
|
6,807
|
|
(143.5%)
|
|
6,810
|
|
(8,191)
|
|
(183.1%)
|
26
Condensed
Consolidated Interim Statement of Cash Flow
Statement
of Cashflows
|
|
|
|
|
|
|
|
|
|
|
|
|
$
thousands
|
|
3Q17
|
|
3Q16
|
|
Chg
%
|
|
9M17
|
|
9M16
|
|
Chg
%
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
for the period
|
|
(2,958)
|
|
6,807
|
|
n.a
|
|
6,810
|
|
(8,191)
|
|
n.a
|
Adjustments
for
:
|
|
|
|
|
|
|
|
|
|
|
|
n.a
|
Income
tax benefit
|
|
(2,727)
|
|
(1,715)
|
|
59.0%
|
|
3,084
|
|
2,901
|
|
6.3%
|
Depreciation
|
|
52,971
|
|
40,295
|
|
31.5%
|
|
108,721
|
|
81,887
|
|
32.8%
|
Amortization
|
|
249
|
|
169
|
|
47.3%
|
|
665
|
|
482
|
|
38.0%
|
Gain
from of disposal of other property items
|
|
(89)
|
|
104
|
|
n.a
|
|
529
|
|
(77)
|
|
n.a
|
Gain
from disposal of subsidiary
|
|
|
|
-
|
|
n.a
|
|
-
|
|
-
|
|
n.a
|
Equity
settled share-based compensation granted
|
|
1,417
|
|
1,380
|
|
2.7%
|
|
4,224
|
|
3,925
|
|
7.6%
|
Loss/(Gain)
from derivative financial instruments and forwards
|
|
(2,223)
|
|
(2,566)
|
|
(13.4%)
|
|
(38,781)
|
|
38,555
|
|
n.a
|
Interest
and other expense, net
|
|
12,549
|
|
12,056
|
|
4.1%
|
|
33,737
|
|
30,996
|
|
8.8%
|
Initial
recognition and changes in fair value of non harvested biological assets (unrealized)
|
|
5,949
|
|
13,128
|
|
(54.7%)
|
|
8,390
|
|
(36,464)
|
|
n.a
|
Changes
in net realizable value of agricultural produce after harvest (unrealized)
|
|
(2,595)
|
|
(702)
|
|
269.7%
|
|
(3,211)
|
|
840
|
|
n.a
|
Provision
and allowances
|
|
375
|
|
37
|
|
914%
|
|
673
|
|
85
|
|
691.8%
|
Foreign
exchange gains, net
|
|
6,627
|
|
2,908
|
|
127.9%
|
|
18,510
|
|
15,184
|
|
21.9%
|
Cash
flow hedge - transfer from equity
|
|
7,369
|
|
28,592
|
|
(74.2%)
|
|
10,689
|
|
52,186
|
|
(79.5%)
|
Subtotal
|
|
76,914
|
|
100,493
|
|
(23.5%)
|
|
154,040
|
|
182,309
|
|
(15.5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in trade and other receivables
|
|
(19,475)
|
|
(33,424)
|
|
(41.7%)
|
|
(48,530)
|
|
(77,361)
|
|
(37.3%)
|
Increase
in inventories
|
|
(27,168)
|
|
84,391
|
|
n.a
|
|
(56,892)
|
|
46,936
|
|
n.a
|
Decrease
in biological assets
|
|
(1,111)
|
|
(122,852)
|
|
(99.1%)
|
|
24,560
|
|
(107,314)
|
|
n.a
|
Decrease
in other assets
|
|
(231)
|
|
111
|
|
n.a
|
|
(207)
|
|
51
|
|
n.a
|
(Increase)
in derivative financial instruments
|
|
126
|
|
(7,788)
|
|
n.a
|
|
40,136
|
|
(27,411)
|
|
n.a
|
Decrease
in trade and other payables
|
|
13,048
|
|
475
|
|
2,646.9%
|
|
(19,942)
|
|
11,986
|
|
n.a
|
(Decrease)/Increase
in payroll and social security liabilities
|
|
5,690
|
|
4,645
|
|
22.5%
|
|
7,268
|
|
5,888
|
|
23.4%
|
Increase/(Decrease)
in provisions for other liabilities
|
|
517
|
|
(632)
|
|
n.a
|
|
429
|
|
1,008
|
|
(57.4%)
|
Net
cash generated in operating activities before interest and taxes paid
|
|
48,310
|
|
25,419
|
|
90.1%
|
|
100,862
|
|
36,092
|
|
179.5%
|
Income
tax paid
|
|
(595)
|
|
(90)
|
|
561.1%
|
|
(2,248)
|
|
(1,001)
|
|
124.6%
|
Net
cash generated from operating activities
|
|
47,715
|
|
25,329
|
|
88.4%
|
|
98,614
|
|
35,091
|
|
181.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
Continuing operations:
Purchases of property,
plant and equipment
|
|
(36,170)
|
|
(32,896)
|
|
10.0%
|
|
(142,223)
|
|
(92,930)
|
|
53.0%
|
Purchases
of intangible assets
|
|
(814)
|
|
(213)
|
|
282.2%
|
|
(1,390)
|
|
(1,017)
|
|
36.8%
|
Purchase
of cattle and non current biological assets planting cost
|
|
(426)
|
|
-
|
|
n.a
|
|
(1,007)
|
|
-
|
|
n.a
|
Interest
received
|
|
3,425
|
|
2,102
|
|
62.9%
|
|
8,446
|
|
6,723
|
|
25.6%
|
Payment
of seller financing arising on subsidiaries acquired
|
|
|
|
-
|
|
n.a
|
|
-
|
|
-
|
|
n.a
|
Proceeds
from sale of property, plant and equipment
|
|
1,061
|
|
796
|
|
33.3%
|
|
1,859
|
|
1,550
|
|
19.9%
|
Proceeds
from disposal of subsidiaries
|
|
|
|
3,423
|
|
(100.0%)
|
|
-
|
|
3,423
|
|
(100.0%)
|
Net
cash used in investing activities
|
|
(32,924)
|
|
(26,788)
|
|
22.9%
|
|
(134,315)
|
|
(82,251)
|
|
63.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
Proceeds from equity
settled share-based compensation exercised
|
|
39
|
|
|
|
n.a
|
|
39
|
|
276
|
|
(85.9%)
|
Proceeds
from long-term borrowings
|
|
40,622
|
|
68,879
|
|
(41.0%)
|
|
230,391
|
|
111,580
|
|
106.5%
|
Payments
of long-term borrowings
|
|
(226,148)
|
|
(93,215)
|
|
142.6%
|
|
(329,872)
|
|
(162,729)
|
|
102.7%
|
Net
increase in short-term borrowings
|
|
(10,828)
|
|
10,359
|
|
n.a
|
|
64,236
|
|
62,926
|
|
2.1%
|
Interest
paid
|
|
(10,898)
|
|
(11,311)
|
|
(3.7%)
|
|
(33,438)
|
|
(31,815)
|
|
5.1%
|
Dividends
paid to non-controlling interest
|
|
-
|
|
|
|
|
|
(1,506)
|
|
|
|
|
Payment
of derivatives financial instruments
|
|
55
|
|
(1,117)
|
|
n.a
|
|
(9,364)
|
|
(2,330)
|
|
301.9%
|
Purchase
of own shares
|
|
(2,661)
|
|
(1,028)
|
|
158.9%
|
|
(11,342)
|
|
(1,028)
|
|
1,003.3%
|
Issuance
of Senior Notes
|
|
|
|
|
|
|
|
496,151
|
|
|
|
|
Net
cash generated from financing activities
|
|
(209,819)
|
|
(27,433)
|
|
664.8%
|
|
405,295
|
|
(23,120)
|
|
n.a
|
Net
increase/(decrease) in cash and cash equivalents
|
|
(195,028)
|
|
(28,892)
|
|
575.0%
|
|
369,594
|
|
(70,280)
|
|
n.a
|
Cash
and cash equivalents at beginning of period
|
|
219,934
|
|
167,587
|
|
31.2%
|
|
158,568
|
|
198,894
|
|
(20.3%)
|
Effect
of exchange rate changes on cash and cash equivalents
|
|
(15,068)
|
|
(2,213)
|
|
580.9%
|
|
(4,987)
|
|
7,868
|
|
n.a
|
Cash
and cash equivalents at end of period
|
|
9,838
|
|
136,482
|
|
(92.8%)
|
|
523,175
|
|
136,482
|
|
283.3%
|
27
Condensed
Consolidated Interim Balance Sheet
Statement of Financial
Position
|
|
|
|
|
|
|
$ thousands
|
|
September 30, 2017
|
|
December 31, 2016
|
|
Chg
%
|
ASSETS
|
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
|
|
Property,
plant and equipment
|
|
847,443
|
|
802,608
|
|
5.6%
|
Investment property
|
|
2,447
|
|
2,666
|
|
(8.2%)
|
Intangible assets
|
|
17,658
|
|
17,252
|
|
2.4%
|
Biological assets
|
|
9,117
|
|
8,516
|
|
7.1%
|
Deferred income tax
assets
|
|
42,911
|
|
38,586
|
|
11.2%
|
Trade and other receivables
|
|
17,763
|
|
17,412
|
|
2.0%
|
Other assets
|
|
768
|
|
566
|
|
35.7%
|
Total
Non-Current Assets
|
|
938,107
|
|
887,606
|
|
5.7%
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Biological assets
|
|
97,257
|
|
136,888
|
|
(29.0%)
|
Inventories
|
|
173,678
|
|
111,754
|
|
55.4%
|
Trade and other receivables
|
|
203,622
|
|
157,528
|
|
29.3%
|
Derivative financial
instruments
|
|
5,673
|
|
3,398
|
|
67.0%
|
Other
|
|
36
|
|
24
|
|
|
Cash and cash equivalents
|
|
523,175
|
|
158,568
|
|
229.9%
|
Total
Current Assets
|
|
1,003,441
|
|
568,160
|
|
76.6%
|
TOTAL
ASSETS
|
|
1,941,548
|
|
1,455,766
|
|
33.4%
|
|
|
|
|
|
|
|
SHAREHOLDERS
EQUITY
|
|
|
|
|
|
|
Capital
and reserves attributable to equity holders of the parent
Share capital
|
|
183,573
|
|
183,573
|
|
- %
|
Share premium
|
|
931,751
|
|
937,250
|
|
(0.6%)
|
Cumulative translation
adjustment
|
|
(519,870)
|
|
(527,364)
|
|
(1.4%)
|
Equity-settled compensation
|
|
16,538
|
|
17,218
|
|
(3.9%)
|
Cash flow hedge
|
|
(24,097)
|
|
(37,299)
|
|
(35.4%)
|
Reserve for the sale
of non contolling interests in subsidiaries
|
|
41,574
|
|
41,574
|
|
- %
|
Treasury shares
|
|
(2,759)
|
|
(1,859)
|
|
48.4%
|
Retained earnings
|
|
56,682
|
|
50,998
|
|
11.1%
|
Equity
attributable to equity holders of the parent
|
|
683,392
|
|
664,091
|
|
2.9%
|
Non controlling interest
|
|
6,460
|
|
7,582
|
|
(14.8%)
|
TOTAL
SHAREHOLDERS EQUITY
|
|
689,852
|
|
671,673
|
|
2.7%
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
|
Trade and other payables
|
|
871
|
|
1,427
|
|
(39.0%)
|
Borrowings
|
|
925,589
|
|
430,304
|
|
115.1%
|
Deferred income tax
liabilities
|
|
14,493
|
|
14,689
|
|
(1.3%)
|
Payroll and social
security liabilities
|
|
1,204
|
|
1,235
|
|
(2.5%)
|
Derivatives financial
instruments
|
|
-
|
|
662
|
|
(100.0%)
|
Provisions for other
liabilities
|
|
4,055
|
|
3,299
|
|
22.9%
|
Total
Non-Current Liabilities
|
|
946,212
|
|
451,616
|
|
109.5%
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
Trade and other payables
|
|
75,065
|
|
92,158
|
|
(18.5%)
|
Current income tax
liabilities
|
|
11,553
|
|
1,387
|
|
732.9%
|
Payroll and social
security liabilities
|
|
34,324
|
|
26,844
|
|
27.9%
|
Borrowings
|
|
183,288
|
|
205,092
|
|
(10.6%)
|
Derivative financial
instruments
|
|
795
|
|
6,406
|
|
(87.6%)
|
Provisions for other
liabilities
|
|
459
|
|
590
|
|
(22.2%)
|
Total
Current Liabilities
|
|
305,484
|
|
332,477
|
|
(8.1%)
|
TOTAL
LIABILITIES
|
|
1,251,696
|
|
784,093
|
|
59.6%
|
TOTAL
SHAREHOLDERS EQUITY AND LIABILITIES
|
|
1,941,548
|
|
1,455,766
|
|
33.4%
|
28