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Adecoagro recorded Adjusted EBITDA of $43.8 million in 3Q13

November 12, 2013

LUXEMBOURG, Nov. 12, 2013 /PRNewswire/ — Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), one of the leading agricultural companies in South America, announced today its results for the third quarter of 2013. Main highlights for the period:

Financial & Operational Highlights

    --  Adecoagro recorded Adjusted EBITDA of $43.8 million, 7.6% higher than in
        3Q12. Adjusted EBITDA margin was 24.8% in 3Q13 compared to 24.4% in
        3Q12.
    --  9M13, Adjusted EBITDA was $114.2 million, 58.1% higher than in 9M12.
        Adjusted EBITDA margin grew to 24.1% from 17.2% in 9M12.

    --  The Farming and Land Transformation businesses' Adjusted EBITDA in 3Q13
        was $10.7 million, compared to $0.7 million in 3Q12. Since most of our
        crops are harvested during the first and second quarter, Adjusted EBITDA
        in the third quarter tends to be the lowest of the year, and is
        primarily derived from the mark-to-market of grain inventories and
        commodity hedge positions. Financial performance quarter-over-quarter is
        primarily explained by: (i) profit generated by the mark-to-market of
        our soybean and corn derivative hedge positions; (ii) increased
        productivity per cow and higher milk prices in the dairy business; and
        (iii) higher industrial efficiency and prices in the rice business.We
        completed the 2012/13 crop year. 9M13 Adjusted EBITDA totaled $50.7
        million, 41% higher than 9M12. Results from the Crops segment were
        negatively affected by dry weather during the growth season, resulting
        in below average crop yields. These effects were partially offset by
        significant operational and financial improvements in the Dairy and the
        Rice segments.  During the fourth quarter, we expect that earnings from
        the Farming & Land Transformation businesses will be mainly driven by
        the biological growth of the new 2013/14 crop and rice planted area,
        productivity of the dairy business, mark-to-market of our hedge
        positions for the new crop and the sale of the San Martin farm, which
        will generate roughly $6.5 million of operating profit.

    --  In the Sugar, Ethanol and Energy business, good weather conditions
        allowed our mills to crush a record of 2.8 million tons of sugarcane
        during 3Q13, 32.6% higher than in 3Q12. Nevertheless, Adjusted EBITDA
        during 3Q13 was $39.2 million, 15.5% below that of 3Q12, primarily
        explained by: (i) the commercial strategy to carry ethanol seeking
        higher prices, resulting in a 72.6% increase in ethanol inventories and
        a deferment of sales; (ii) a 4.4% fall in sugarcane TRS (Total
        Recoverable Sugar) as a result of the frost that affected the center
        south region of Brazil during mid-July 2013 and the excess rains that
        affected the region during June 2013; and (iii) lower sugar and ethanol
        prices.Year-to-date, Adjusted EBITDA was $79.9 million, $24.7 million or
        44.8% higher than the same period of the prior year. Adjusted EBITDA
        margin expanded from 32.2% in 9M12 to 42.1% in 9M13. We expect to
        continue crushing sugarcane until mid-December with financial
        performance subject to weather conditions and ethanol prices.
    --  Net income in 3Q13 totaled a loss of $6.1 million, $3.3 million lower
        than in 3Q12. The loss for the period is primarily the result of: (i) a
        $5.8 million foreign exchange loss, generated by the mark-to-market
        effect of non-deliverable currency forwards; and (ii) a $12.2 million
        non-cash loss resulting from the mark-to-market of our sugarcane
        biological assets.

Farmland Valuation Report

    --  As of September 30, 2013 Cushman & Wakefield updated its independent
        appraisal of Adecoagro's farmland. Adecoagro's 278,336 hectares were
        valued at $919.3 million.((1)) Adjusted by the sale of the Santa Regina
        farm in December 2012 and the Lagoa do Oeste and Mimoso farms in May
        2013, the appraised value of our farmland portfolio increased by $18.4
        million or 2.0%, since September 30, 2012. We believe that the increase
        in the appraised value from September 30, 2012 to September 30, 2013 was
        mainly driven by: (i) the transformation of underutilized or
        undermanaged land into high yielding crop and rice land; (ii) the
        ongoing transformation and productivity improvement of all our farmland
        through our sustainable farming model focused on cutting edge technology
        and best practices, such as, no-till farming, crop rotation, balanced
        fertilization, integrated pest management, and water efficiency
        practices; and (iii) land appreciation.These gains 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.

Share Repurchase Program

    --  On September 23, 2013, Adecoagro announced that its Board of Directors
        had authorized the implementation of a share repurchase program for up
        to 5% of the outstanding shares. As of September 30, 2013, Adecoagro
        repurchased a total of 55,899 shares at an average price per share of
        $7.50.

Farm Sales

    --  On October 3, 2013, Adecoagro completed the sale of the San Martin farm
        for a total price of $8.0 million, equivalent to $2,294 per hectare,
        representing a 15% premium over the Cushman & Wakefield independent
        appraisal dated September 30, 2013. San Martin is a 3,502 hectare farm
        located in the province of Corrientes, Argentina. The farm is used for
        cattle grazing activities and is a subdivision of the Ita Caabo farm
        acquired by Adecoagro in 2007. This transaction will generate
        approximately $6.5 million of operating profit in 4Q13.

To read the full 3Q13 earnings release, please access ir.adecoagro.com. A conference call to discuss 3Q13 results will be held tomorrow with live webcast through the internet:

English Conference Call

Nov 13, 2013

11 a.m. (US EST)

1 p.m. Buenos Aires

2 p.m. Sao Paulo

5 p.m. Luxembourg

Tel: (877) 317-6776

Participants calling from the US

Tel: +1 (412) 317-6776

Participants calling from other countries

Access Code: Adecoagro

Investor Relations Department

Charlie Boero Hughes

CFO

Hernan Walker

IR Manager

Email:
ir@adecoagro.com

Tel: +54 (11) 4836-8651

About Adecoagro:

Adecoagro is a leading agricultural company in South America. Adecoagro owns over 278 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1.2 million tons of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.

SOURCE Adecoagro S.A.


Source: PR Newswire