Adecoagro recorded Adjusted EBITDA of $34.7 million in 1Q14, marking a 19.7% growth over 1Q13
LUXEMBOURG, May 14, 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 first quarter of 2014.
Main highlights for the period:
Financial & Operational Highlights
-- Adecoagro recorded Adjusted EBITDA of $ 34.7 million in 1Q14, representing a $5.7 million or 19.7% increase compared to 1Q13. -- Adjusted EBITDA margin during 1Q14 reached 36.7% in 1Q14, compared to 28.2% in 1Q13. -- The Farming and Land Transformation businesses' Adjusted EBITDA in 1Q14 was $35.9 million, $17.1 million higher than 1Q13. This improvement is explained by increased operational and financial performance in each of our segments: (i) in the Rice segment, an increase in planted area coupled with lower costs driven by the devaluation of the Argentine peso and the implementation of efficient production technologies increased Adjusted EBITDA by 183.2%; (ii) in the Crops segment, higher productivity per hectare and lower production costs increased our margins resulting in 45.8% growth in Adjusted EBITDA; and (iii) in the Dairy segment a combination of a larger cow herd and higher productivity per cow resulted in a 680.9% increase in Adjusted EBITDA. Operational performance was partially offset by a $12.5 million non-cash loss resulting from the mark-to-market of our commodity hedge position, compared to a $2.6 million gain in 1Q13. -- The Sugar, Ethanol and Energy business underwent the annual inter-harvest maintenance of the mills and equipment during the first quarter of 2014. Accordingly, 1Q14 Adjusted EBITDA primarily reflects the sale of sugar and ethanol inventories, the expenses incurred in sugarcane maintenance and treatment, overhead expenses and derivative hedge results. Net sales and gross profit increased by 22.1% and 11.3%, respectively, driven by (i) our ethanol carry strategy implemented in 2013 to capture higher off-season prices, and (ii) our ability to capture peak energy prices currently in Brazil by using bagasse leftover from the previous season to cogenerate electricity at the Angelica mill. Despite the growth in net sales and gross profit, Adjusted EBITDA decreased to $3.8 million in 1Q14, from $14.9 million in 1Q13. Adjusted EBITDA was negatively affected by: (i) a $1.4 million non-cash loss resulting from the mark-to-market of our sugar derivative hedge position, contrasted by a $9.6 million gain in 1Q13; (ii) an 11.2% increase in sugarcane crop treatment expenses --incurred primarily for fertilizers and agrochemicals to maintain crop productivity--as a result of the expansion in the size of our sugarcane plantation; and (iii) lower sugar and ethanol prices in US dollar terms year-over-year. -- Net Income in 1Q14 was $2.6 million, $0.1 million higher than in 1Q13. Net income was enhanced by operational and financial improvements in the Farming business in Argentina and offset by losses in our Brazilian and Uruguayan subsidiaries, higher interest expenses and higher accrued income taxes.
-- During late March and April our Sugar, Ethanol and Energy mills have begun crushing operations for the 2014/15 sugarcane harvest. Maintenance of industrial equipment and sugarcane plantations was successfully performed between January and March 2014. Our cluster has a sufficient supply of cane and is expected to crush at full nominal capacity. The Angelica mill began crushing on March 26 to benefit from attractive off-season ethanol prices and peak energy prices; the Ivinhema mill started operating on April 25 as planned; and the UMA mill began crushing on April 11 as scheduled. Our agricultural and industrial teams have undergone a thorough training process and are set to enhance operational and productive efficiencies throughout the year.
To read the full 1Q14 earnings release, please access ir.adecoagro.com. A conference call to discuss 1Q14 results will be held tomorrow with live webcast through the internet:
English Conference Call
May 15, 2014
9 a.m. (US EST)
10 a.m. Buenos Aires
10 a.m. Sao Paulo
3 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
Tel: +54 (11) 4836-8651
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.