Adecoagro Recorded Adjusted EBITDA of $10.3 Million in 1Q11, 69.2% Higher than 1Q10
LUXEMBOURG, May 16, 2011 /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 2011.
- Adecoagro recorded Adjusted EBITDA of $10.3 million in 1Q11, representing a 69.2% increase compared to 1Q10.
- Gross Sales in 1Q11 reached $58.3 million, 11.3% higher than 1Q10.
- Farming and Land Transformation businesses’ Adjusted EBITDA grew 50.1% in 1Q11 compared to 1Q10, from $13.8 million to $20.8 million. This increase is primarily explained by an expansion in the planted area for rice and an increase in most commodity prices. It also reflects the benefits of our model based on diversification and no-till production, which mitigated the dry weather conditions that some areas suffered during the period.
- The Sugar, Ethanol and Energy business underwent the inter-harvest maintenance of mills and equipment in 1Q11. Therefore, Adjusted EBITDA in 1Q11 only reflects the sale of sugar and ethanol inventories, the expenses incurred in sugarcane maintenance and preparation for the next harvest season and hedging results. Adjusted EBITDA decreased $2.4 million, from $(3.0) million in 1Q10 to $(5.4) million in 1Q11. However, 1Q10 included a $10.6 million gain from hedged positions of futures and forwards while 1Q11 only included a $1.3 million hedge gain.
- Net income in 1Q11 totaled $15.4 million, $32.2 million above 1Q10, mainly due to the recognition of a non-cash gain (unrealized changes in fair value of long term biological assets) of $30.5 million. The gain was generated by an increase in the fair value of our sugarcane plantation, primarily as a result of higher sugar price estimates used in our sugarcane valuation model.
- As of March 31, 2011, Adecoagro successfully planted a total of 192.2K hectares corresponding to the 2010/11 harvest year, 4.8% more than in the previous harvest year. The planted area for rice also increased by 51.8%, reaching a total of 27.5K hectares in the 2010/11 harvest year.
- Given the seasonality of the business, Adjusted EBITDA tends to vary from quarter to quarter. In an average year, considering normal sales distribution and price fluctuations, we would expect the first quarter to contribute the least to the full year Adjusted EBITDA, since it would only reflect sugar and ethanol inventory sales, as well as both biological growth and a portion of the harvest of our summer crops and rice. During the second quarter, as most of our crops are harvested and the sugarcane harvest season starts, we expect to record the highest Adjusted EBITDA. During the third quarter, Adjusted EBITDA will primarily reflect the results of the Sugar, Ethanol and Energy business. This is the period when the sugar content of cane reaches its highest levels. Lastly, during the fourth quarter Adjusted EBITDA would reflect the conclusion of the sugarcane harvest season, the harvest of our winter crops and the biological growth of our planted summer crops and rice.
To read the full Earnings Release, please access www.adecoagro.com.br/ir
Charlie Boero – CFO
Hernan Walker – IR Manager
Adecoagro is a leading agricultural company in South America. Adecoagro owns over 283 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces a wide range of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.
SOURCE Adecoagro S.A.