LUXEMBOURG, May 13, 2021 /PRNewswire/ -- Adecoagro
S.A. (NYSE: AGRO, Bloomberg: AGRO
US, Reuters: AGRO.K), a leading agro-industrial company in
South America, announced today its
results for the first quarter ended March
31, 2021. The financial information contained in this press
release is based on unaudited condensed consolidated interim
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 30 for a
definition and reconciliation to IFRS of the Non - IFRS measures
used in this earnings release.
Main highlights for the period:
- Adjusted EBITDA(3) during 1Q21 was 78.7% higher than in
the same period of last year driven by a 42.1% increase in the
Sugar, Ethanol & Energy segment, and an increase of over 2x in
the Farming and Land Transformation segment.
- Adjusted Net Income reached $54.5
million during 1Q21, 24.4% higher year-over-year.
Financial & Operational Highlights
- In our Sugar, Ethanol & Energy business, Adjusted EBITDA
reached $58.2 million in 1Q21, 42.1%,
or $17.2 million higher compared to
the same period of last year. Financial results were positively
impacted by (i) our strategy of extracting the highest value from
our sugarcane and maximizing production of the product with the
highest marginal contribution, enabling us to capture high sugar
prices during the quarter. Out of the total TRS produced during the
quarter, we diverted as much as 40% to sugar production, compared
to only 5% in 1Q20, evidencing the high degree of flexibility of
our industrial assets and marking a record high for the first
quarter considering the inherent seasonality in the content and
quality of cane. Financial results were also favored by a (i) lower
unitary cost of production as a consequence of a 58.3% increase in
crushing volume and enhanced efficiencies at the farm and industry
level; (ii) the depreciation of the Brazilian Real, that further
contributed to reduce costs measured in U.S dollar; coupled with
(iii) a $26.5 million gain derived
from the mark-to-market of our biological asset and agricultural
produce, out of which $15.0 million
is harvested sugarcane and hence, realized margin, while the
balance will become cash in the upcoming quarters. This was
partially offset by a $23.8 million
loss derived from the mark-to-market of our commodity hedge
position following the increase in sugar and ethanol prices.
- Adjusted EBITDA in the Farming and Land Transformation
businesses reached $56.2 million in
1Q21, $31.5 million, or over 2x
higher year-over-year. The increase was mostly attributable to the
Farming business, which registered a year-over-year increase in
Adjusted EBITDA of $28.7 million,
explained by the $13.2 million higher
results in our Rice business, $14.0
million in our Crops business and $1.6 million in our Dairy business.
Adjusted EBITDA in the Rice
business during 1Q21 reached $28.3
million, 86.7% higher compared to the same period of last
year. This increase was explained by (i) an 11.9% increase in
yields and an increase in prices which led to a $13.7 million increase in the mark-to-market of
our biological asset and agricultural produce; and (ii) an increase
in gross sales driven by higher average selling prices. We were
able to achieve these results because for the past years we have
focused on three main goals: (i) productivity as the key variable
to minimize costs per ton, (ii) grain quality to improve industrial
efficiencies coupled with traceability to be used as a commercial
tool; and (iii) efficiency throughout the value chain by focusing
on synergies at every level. In this line, by carrying out
investments to improve logistics and enhance efficiencies at the
farm level we were able to achieve higher yields and reduce cost
per ton. And by diversifying our product portfolio, offering
tailor-made products traceable from field to fork, working on our
own genetics and achieving a customer centric view, among others,
we have successfully increased our average selling prices and
opened doors to new markets.
The Crops business generated an
adjusted EBITDA of $17.9 million in
1Q21, more than 4x higher than during 1Q20. Gross sales decreased
compared to 1Q20, despite an increase in average selling prices,
due to a 43.8% reduction in selling volumes mainly explained by the
intensive rains registered during March which led to a lower
harvesting progress achieved during the quarter, which has since
been resumed with no impact on yields. This was fully offset by (i)
a $5.8 million gain in the
mark-to-market of our biological assets, driven by an increase in
commodity prices especially soybean and corn, despite lower yields
and harvested area; and (ii) a $9.0
million cost reduction due to lower volume, enhanced
efficiencies and the depreciation of the Argentine peso, which led
to a dilution of costs in U.S. dollars.
- Net Income in 1Q21 resulted in a gain of $19.3 million, compared to a loss of
$54.4 million recorded during
the same period of last year. The $73.8
million increase is mainly explained by the year-over-year
increase in EBITDA generation coupled with a lower FX loss. In the
case of Brazil, currency
depreciation presented a nominal decrease from 28.9% during 1Q20 to
9.6% during 1Q21.
- Adjusted Net Income in 1Q21 reached $54.5 million, $10.7
million higher than in 1Q20. Adjusted Net Income excludes,
(i) any non-cash result derived from bilateral exchange variations;
(ii) any revaluation resulting from the hectares held as investment
property; (iii) any inflation accounting result; and includes (iv)
any gains or losses from disposals of non-controlling interests in
subsidiaries whose main underlying asset is farmland (the latter is
already included in Adj. EBITDA). We believe Adjusted Net Income is
a more appropriate metric to reflect the Company´s
performance.
Remarks
A solid start to the
year
- During 1Q21 Adecoagro achieved solid results both from an
operational and financial point of view. Adjusted EBITDA amounted
to $109.1 million, 78.7% higher
year-over-year, marking a new record high for the first three
months of the year. This is the result of the success of the
investments we made across all our businesses, which are driving
our EBITDA and cash generation. Since we started our 5 Year Plan –
back in 2017 – we have invested approximately $400 million in growth projects both in our
Farming and SE&E businesses which are generating attractive
returns on invested capital, as we projected. Now that the results
are in front of us, we expect our operating cash flow to continue
increasing going forward. This places us in a position where we
feel confident that we will generate enough cash to first
distribute to our shareholders and, in addition, to pursue growth
opportunities to the extent that projected ROICs are in line with
those already achieved.
Share repurchase program
update
- As part of our commitment to generate long term value for our
shareholders, we have continued our share repurchase program. As of
the date of this report we have purchased over 1.5 million shares
at an average price of $7.96 per
share, totaling $12.0 million. Going
forward we expect to continue repurchasing shares, as our buyback
program is part of our strategy to return capital to
shareholders.
Non-Gaap Financial Measures: For a full
reconciliation of non-gaap financial measures please refer to page
30 of our 1Q21 Earnings Release found on Adecoagro's website
(ir.adecoagro.com)
Forward-Looking Statements: This press release
contains forward-looking statements that are based on our current
expectations, assumptions, estimates and projections about us and
our industry. These forward-looking statements can be
identified by words or phrases such as "anticipate," "forecast",
"believe," "continue," "estimate," "expect," "intend," "is/are
likely to," "may," "plan," "should," "would," or other similar
expressions.
These forward-looking statements involve various risks and
uncertainties. Although we believe that our expectations expressed
in these forward-looking statements are reasonable, our
expectations may turn out to be incorrect. Our actual results
could be materially different from our expectations. In light
of the risks and uncertainties described above, the estimates and
forward-looking statements discussed in this press release might
not occur, and our future results and our performance may differ
materially from those expressed in these forward-looking statements
due to, inclusive, but not limited to, the factors mentioned
above. Because of these uncertainties, you should not make
any investment decision based on these estimates and
forward-looking statements.
The forward-looking statements made in this press release
relate only to events or information as of the date on which the
statements are made in this press release. We undertake no
obligation to update any forward-looking statements to reflect
events or circumstances after the date on which the statements are
made or to reflect the occurrence of unanticipated events.
To read the full 1Q21 earnings release, please access
ir.adecoagro.com. A conference call to discuss 1Q21 results will be
held on May 14, 2021 with a live
webcast through the internet:
Conference Call
May 14, 2021
9 a.m. (US EST)
10 a.m. Buenos Aires
10 a.m. Sao
Paulo
3 p.m. Luxembourg
Participants calling from the US: Tel: +1 (844) 435-0324
Participants calling from other countries: Tel: +1 (412)
317-6366
Access Code: Adecoagro
Conference Call Replay
Participants calling from the US: Tel: +1 (877) 344-7529
Participants calling from other countries: Tel: +1 (412)
317-0088
Access Code: 101552278
Investor Relations Department
Charlie Boero Hughes
CFO
Juan Ignacio Galleano
IRO
Email: ir@adecoagro.com
Tel: +54 (11) 4836-8624
About Adecoagro:
Adecoagro is a leading agricultural
company in South America.
Adecoagro owns over 247 thousand hectares of farmland and several
industrial facilities spread across the most productive regions of
Argentina, Brazil and Uruguay, where it produces over 1.9 million
tons of agricultural products including sugar, ethanol,
bio-electricity, milled rice, corn, wheat, soybean and dairy
products, among others.
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SOURCE Adecoagro S.A.