LUXEMBOURG, March 14,
2022 /PRNewswire/ -- Adecoagro S.A.
(NYSE: AGRO, Bloomberg: AGRO US,
Reuters: AGRO.K), a sustainable production company in South America, announced today its results for
the year ended December 31, 2021. The
financial information contained in this press release is based on
audited 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 38 for a definition and reconciliation to IFRS of the
Non - IFRS measures used in this report.
Main highlights for the period:
- Gross sales reached $1.1
billion in 2021 and $320.5
million in 4Q21, marking a year-over-year increase of 33.5%
and 32.3%, respectively.
- Adjusted Net Income registered a gain of $156.8 million in 2021 and $56.9 million in 4Q21, reporting a year-over-year
increase of $25.0 million and
$26.6 million, respectively.
- Adjusted Free Cash Flow from Operations amounted to
$152.1 million in 2021, resulting in
a minimum distribution of $60.8
million to be paid in 2022 via dividend and share
repurchase.
Financial & Operational Highlights
Sugar, Ethanol & Energy business
- Adjusted EBITDA in our Sugar, Ethanol & Energy
business reached $334.9 million in
2021, 31.9%, or $81.1 million higher
compared to 2020. In spite of the challenging weather scenario
which led to a reduction in yields of 13.3% and an early end of
harvesting activities, the reduction in total crushing volume was
only 1.5% year-over-year. We successfully crushed 10.9 million tons
of sugarcane thanks to our ongoing strategy of expanding our
sugarcane plantation, which enabled us to add 15.5% of more area.
Price scenario for sugar, ethanol and energy continued to improve
throughout the year as the market factored in the impact of the dry
weather in Center-South Brazil,
the frost and fire events. We were able to capture the high prices
favored by our low hedging commitments at the beginning of the
season, which granted us the flexibility to continuously maximize
the product with the highest marginal contribution. In this line,
62% of total TRS produced was diverted to ethanol, especially
anhydrous ethanol which traded on average at a 9.2% premium to
sugar.
- During 2021 adjusted EBITDA was positively impacted by
(i) a $149.2 million year-over-year
increase in net sales mainly driven by an increase in the price of
all three products, coupled with (ii) a $38.3 million year-over-year gain in the
mark-to-market of our harvested cane led by a 54.0% increase in
Consecana prices. It is worth highlighting that due to the fact
that 95% of crushed volume is own cane, every time Consecana´s
price increases our agricultural margin improves. These positive
effects were partially offset by an increase in cost mostly
explained by (i) the above mentioned increase in harvested area and
(ii) an increase in the price of fertilizers, fuel and lubricants
among other inputs, coupled with a lower depreciation of the
Brazilian Real. Higher fertilizer costs, in turn, were partially
offset by the use of concentrated vinasse. Total cash cost in 2021
stood at 10.5 ct/lb, 33.4% higher compared to 2020. EBITDA price
reached 16.4 ct/lb, resulting in a 5.9 ct/lb margin. During the
year we generated $3.7 million from
the sale of over 500 thousand carbon credits under the Renovabio
program.
- Going forward we expect to resume crushing activities in
March 2022, and use this short
interharvest period to perform maintenance programs. We foresee
below average agricultural productivity indicators during the first
semester of the year. However, a recovery in productivity towards
the second semester along with strong prices should continue to
drive solid results. We are in a good position to continue to
capture the increase in prices as 76% of our expected sugar
production and 100% of ethanol production related to the 22/23
campaign remain unhedged. In addition, carry-over stocks into 2022
amounted to $79.9 million, marking a
2.3x year-over-year increase, led by our view of higher expected
prices.
Farming & Land Transformation businesses
- Adjusted EBITDA in the Farming and Land Transformation
businesses was $123.8 million for the
fullyear, marking a 15.8% or $16.9
million year-over-year increase. All segments outperformed
2020's EBITDA generation except for Land Transformation since
we did not conduct any farm sale during the year. Key drivers that
contributed to this growth include (i) constructive
price scenario; (ii) increase in harvested area; (iii) higher
yields especially in the Rice segment which marked a record-high of
7.8 Tn/ Ha; and (iv) an increase in milk
production in our Dairy business as we continue to increase our cow
herd and maintain high productivity levels in our four
free-stalls.
Net Income & Adjusted Net Income
- Net Income during 4Q21 was positive at $58.8 million, marking a 24.2% or $11.4 million year-over-year increase compared to
4Q20. The 28.7% reduction in Adjusted EBITDA generation was fully
offset by a higher income tax benefit coupled with lower D&A.
On an annual basis, net income resulted in a gain of $130.7 million, compared to the $1.1 million reported in the previous year. The
large increase is mainly explained by the $95.2 million year-over-year increase in Adjusted
EBITDA generation and a decrease of $99.9
million in Financial results, driven by the reduction in the
nominal depreciation of both the Brazilian Real and Argentina
Peso.
- Adjusted Net Income reached $56.9
million during 4Q21 and $156.8
million during 2021, $26.6
million and $25.0 million
higher year-over-year, respectively. Adjusted Net Income excludes:
(i) any non-cash result derived from bilateral exchange
variations, (ii) any revaluation result 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
Distribution update
- The company announces the distribution of dividends in
the amount of $35 million to be paid
in two installments of $17.5 million
each, on or about May and November
2022. Such dividend distribution is subject to the approval
of the annual shareholder meeting to be held on April 20th.
- The dividend is part of the company's distribution policy
announced in November 2021 which
consists of a minimum distribution of 40% of the Adjusted Free Cash
Flow from Operations (NCFO) generated during the previous year. In
2021 we generated $152.1
million of NCFO.
- In addition, during 2021 we repurchased 6.2 million
shares under our existing share buyback program, totaling
$55.5 million net of the issuance of
restricted share, representing 51% of 2020's NCFO.
Adecoagro to acquire high quality rice operations in
Uruguay
- Adecoagro signed an agreement to acquire the rice
production operations in Uruguay
and Argentina owned by certain
subsidiaries of Viterra Limited. The operations are conducted
through four rice processing and storage plants in Uruguay and one in Argentina. The assets acquired will include
all biological assets and inventories of processed and rough rice.
The acquisition is subject to the satisfaction of customary closing
conditions, including the receipt of certain government approvals
in Uruguay, which are still
pending as of the date of this release.
- The price, subject to certain adjustments, amounts to
approximately $18 million payable in
three annual installments, and contemplates the assumption of
financial debt for an amount of approximately $20 million, to be finally determined at closing.
Under current price scenario we believe the transaction will
generate a very attractive IRR, and expect contribution to our
Adjusted EBITDA of $10 million per
year.
- Uruguayan rice is internationally recognized as being of
the highest quality standards. The expansion of Adecoagro's rice
business into Uruguay will provide
geographic diversification and hence contribute to mitigate weather
risk, bring logistics synergies, increase our current capacity by
230 thousand tons (150 thousand in Uruguay and 80 thousand in Argentina) totalizing 580 thousand tons; and
expand our product portfolio by incorporating high quality
Uruguayan branded rice, and therefore access to new
markets.
Non-Gaap Financial Measures:
For a full reconciliation of non-gaap financial measures
please refer to page 38 of our 4Q21 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 4Q21 earnings release, please access
ir.adecoagro.com. A conference call to discuss 4Q21 results will be
held on March 15, 2022 with a live
webcast through the internet:
Conference Call
March 15, 2022 09 a.m. US EST
10 a.m. Buenos Aires 10
a.m. Sao Paulo
2 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: 10158085
Investor Relations Department
Charlie Boero Hughes
CFO
Victoria Cabello
IRO
Email: ir@adecoagro.com
Tel: +54 (11) 4836-8651
About Adecoagro:
Adecoagro is a sustainable production company in South America. Adecoagro owns over 220
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.