Adecoagro recorded Adjusted EBITDA of $66.5 million in 4Q13, driving 2013 Adjusted EBITDA to $180.7 million

March 20, 2014

LUXEMBOURG, March 20, 2014 /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 fourth quarter of 2013.

Main highlights for the period:

Financial & Operational Highlights

    --  In the 2013 fiscal year, Adecoagro recorded an Adjusted EBITDA of $180.7
        million, 28.4% higher than that of 2012. Adjusted EBITDA margin in 2013
        reached 28.9% compared to 23.8% in 2012.
    --  In 4Q13, Adjusted EBITDA was $66.5 million with an Adjusted EBITDA
        margin of 42.1%, compared to $68.5 million and 40.0% in 4Q12,

    --  The Farming and Land Transformation businesses' Adjusted EBITDA in 4Q13
        was 38.5 million, 17.6% higher than 4Q12. This increase is mainly
        explained by: (i) higher rice yields and white rice prices; (ii) an
        increase in cow productivity coupled with higher milk prices in the
        dairy business; and (iii) the sale of the San Martin and San Agustin
        farms which generated a $21.3 million gain in 4Q13 compared to a $19.4
        million gain in 4Q12. On an annual basis, Adjusted EBITDA grew by 29.6%,
        from $68.6 million in 2012 to $88.9 million mainly driven by: (i)
        operational and financial performance in the dairy and rice businesses;
        (ii) gains generated from our commodity hedge position; and (iii) the
        sale of five developed farms generating $28.2 million gains in 2013
        compared to $27.5 million the previous year.

    --  In the Sugar, Ethanol and Energy business, the fourth quarter of 2013
        marked the conclusion of the 2013/14 sugarcane harvest. Favorable
        weather during the quarter allowed our mills to increase the pace of
        milling, which reached a total of 1.8 million tons, marking a 28.7%
        growth quarter-over-quarter. Adjusted EBITDA of our Sugar, Ethanol and
        Energy business during 4Q13 was $35.2 million with an EBITDA margin of
        33.9%, compared to $42.3 million and 43.2% in 4Q12, respectively. This
        reduction was mainly driven by: (i) 9.2% lower TRS content as a result
        of the frost which impacted the Center-South region of Brazil in mid
        July 2013; (ii) lower sugar and ethanol prices; and (iii) the commercial
        strategy to carry sugar and ethanol inventories into the inter-harvest
        season to capture higher prices, postponing sales and margins to 1Q14.
        On an annual basis, Adjusted EBITDA in 2013 totaled $115.2 million,
        18.2% above 2012. Adjusted EBITDA margin during the period expanded to
        38.8% from 36.2%. The improvement in financial performance was primarily
        driven by a 43.0% increase in cane milling, resulting from (i) a 16.0%
        expansion of our sugarcane plantation, (ii) the ramp up of the Ivinhema
        mill which increased our nominal crushing capacity by 2.0 million tons,
        and (iii) a 4.6% increase in sugarcane yields. The growth in crushing
        and production was partially offset by: (i) a 5.4% reduction in TRS
        content; (ii) lower sugar and ethanol prices throughout the year; and
        (iii) our commercial strategy to increase year-end sugar and ethanol
        inventories by 58.6% and 45.5% respectively, as explained above.
    --  Consolidated Net Income in 2013 totaled a loss of $25.8 million,
        compared to a $9.3 million gain in 2012. Despite the 28.5% growth in
        Adjusted EBITDA, the net loss is mainly explained by: (i) a $55.7
        million non-cash loss generated by the mark-to-market of our long term
        biological assets (primarily sugarcane); (ii) a 19.0 million loss
        resulting from the mark-to-market of currency derivatives used to hedge
        future US dollar inflows generated by our forward sugar sales; (iii) a
        $25.9 million increase in accrued interest expenses as a result of lower
        interest income, and higher interest expenses resulting from an increase
        in oustanding debt and lower capitalization of interests related to
        growth projects; and (iv) a $23.6 million foreign exchange loss,
        generated by the impact of the depreciation of the Brazilian Reais and
        Argentine Peso on our outsanding dollar-denominated debt.

Strategy Execution

    --  Farm Sales: During the fourth quarter, Adecoagro successfully sold the
        San Agustin and San Martin farms. The San Agustin farm was sold for
        $17.5 million, representing a 19% premium over the latest Cushman and
        Wakefield independent appraisal. The transaction generated $14.9 million
        of Adjusted EBITDA and resulted in an IRR of 20.3%.  The San Martin farm
        was sold for $7.8 million, representing a 15% premium over Cushman and
        Wakefield. The transaction generated $6.3 million of Adjusted EBITDA and
        resulted in an IRR of 34%.In aggregate, during 2013 Adecoagro monetized
        five farms or 14.2 thousand hectares of its developed land portfolio.
        All farms were sold at premiums to the Cushman & Wakefield independent
        appraisal dated September 30, 2013 and generated in aggregate $59.4
        million dollars of cash proceeds and $28.2 million of Adjusted EBITDA.

    --  Sugar, Ethanol & Energy Expansion: The construction of the first phase
        of the Ivinhema mill was completed during the beginning of 2013 on
        schedule and budget. Ivinhema's milling operations commenced on April
        25, 2013, with 2.0 million tons of nominal crushing capacity, generating
        important synergies and efficiencies with the Angelica mill. We are
        currently commencing the construction of the second phase of Ivinhema,
        which will expand milling capacity to 5.0 million tons per year by 2015,
        rather than 4.0 million tons as originally planned. The enlargement of
        Phase 2 will allow Ivinhema to enhance operational efficiencies and
        economies of scale, improving operating margins and accelerating free
        cash flow generation. Phase 2 will consist of expanding the milling
        equipment, building a new fluidized bed boiler, 2 new electrical
        generators and expanding the sugar factory and ethanol distillery.
        Annual production is expected to increase to 300,000 tons of sugar,
        240,000 cubic meters of ethanol and 360,000 MWh of energy exports. Total
        capital expenditure is estimated at BRL 583 million.
    --  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 over the next
        12-months. As of the date of this report, Adecoagro repurchased a total
        of 2.3 million shares or 1.9% of shares outstanding.

To read the full 4Q13 earnings release, please access ir.adecoagro.com. A conference call to discuss 4Q13 results will be held tomorrow with live webcast through the internet:

English Conference Call

Mar 21, 2014

11 a.m. (US EST)

12 p.m. Buenos Aires

12 p.m. Sao Paulo

4 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


Hernan Walker

IR Manager


Tel: +54 (11) 4836-8651

About Adecoagro:

Adecoagro is a leading agricultural company in South America. Adecoagro owns over 269 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1.3 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

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