LUXEMBOURG, May 12, 2022
/PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO, Bloomberg:
AGRO US, Reuters: AGRO.K), a leading
sustainable production company in South
America, announced today its results for the first quarter
ended March 31, 2022. The financial
information contained in this press release is based on unaudited
condensed consolidated interim 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 27 for a definition and reconciliation to IFRS of the
Non - IFRS measures used in this earnings release.
Main highlights for the period:
- Adjusted EBITDA reached $86.5
million in 1Q22, 20.8% lower year-over-year driven by lower
yields and prices in the Rice business. Adjusted EBITDA in the
Sugar, Ethanol & Energy business was flattish year-over-year
despite lower crushing, on account of strong sales.
- Net income reached $65.2 million
during 1Q22, 3.4x higher year-over-year.
Financial & Operational Highlights
Sugar, Ethanol & Energy business
- Adjusted EBITDA in our Sugar, Ethanol & Energy business
reached $57.3 million in 1Q22, only
1.5% lower compared to 1Q21. Crushing volume during 1Q22 amounted
to 0.3 million tons as we resumed harvesting activities in our
Cluster in mid-March, following a short interharvest period.
Despite the lower production volume, our commercial strategy to
carry-over 153 thousand m3 of ethanol and 23 thousand tons of sugar
from 4Q21 into 1Q22 enabled us to benefit from attractive prices of
ethanol and sugar. Strong ethanol prices continued during April,
supported by the delay in the Center-South's beginning of harvest,
and we were able to capture them by selling our remaining ethanol
stocks in addition to our monthly production. During April we made
a monthly record sale of 125 thousand cubic meters comprised of 70%
hydrous ethanol and 30% anhydrous at an average price of 26.4
cts/lb sugar equivalent (6.7 cts/lb higher than the average price
for sugar).
- Operational results achieved are not an indication of our
expectation for the full year. As anticipated in past releases, we
expect crushing volume during 2022 to be in line with 2021 but
concentrated towards the second semester, as our plantation
continues to recover from 2021's adverse weather. In line with this
strategy, during 1Q22 we focused on harvesting reform areas mainly
related to 5th cut and above, with limited growth potential. This
enabled us to (i) maximize ethanol (97% mix) and capture attractive
prices; (ii) allow sugarcane areas with greater potential to
continue to grow; and (iii) liberate area to plant new cane that
will be harvested next season. The improvement in cane availability
and the positive outlook in terms of productivity favored by above
average rainfalls during March and April, will allow us to continue
to take advantage of the constructive price scenario. We believe we
are in a solid position to benefit from this due to our low sugar
commitments (38% hedged) which grants us the flexibility to
continuously maximize the product with the highest marginal
contribution.
Farming & Land Transformation businesses
- Adjusted EBITDA in the Farming and Land Transformation business
amounted to $35.6 million in 1Q22,
marking a 36.6% or $20.6 million
decrease compared to 1Q21. Despite the good performance of the
Crops and Dairy businesses, the decline was mainly explained by a
lower contribution from our Rice business. Lower rice prices at the
time of harvest coupled with lower yields as a consequence of La
Niña weather effect, resulted in a $16.3
million year-over-year loss in the valuation of our
biological asset and agricultural produce.
- In May, we closed the acquisition of Viterra's rice operations
in Uruguay and Argentina, as reported in our past release. We
believe this transaction will enhance the performance of our Rice
business, as it will contribute Uruguayan branded rice and a better
mitigation of weather risk, in addition to providing further
commercial and logistics advantages.
Net Income & Adjusted Net Income
- Net Income amounted to $65.2
million during 1Q22, marking a year-over-year gain of
$45.8 million. This was mostly
explained by the effect of foreign exchange. In the case of
Brazil, the domestic currency
appreciated 15.1% during 1Q22, compared to a 9.6% depreciation
during 1Q21.
- Adjusted Net Income in 1Q22 reached $14.7 million, $39.8
million lower than in 1Q21. Adjusted Net Income excludes,
(i) any non-cash result derived from bilateral exchange variations;
(ii) any revaluation resulting 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
- Our Annual Shareholder Meeting held on April 20th approved a cash dividend distribution
of $35 million to be paid in two
installments of $17.5 million each.
The first installment represents approximately $0.1571 per share and will be paid on
May 17th, 2022 to shareholders of the
Company of record at close of business of May 2nd, 2022. The second installment shall be
payable in or about November 2022 in
an equal cash amount. A Luxembourg
withholding tax of 15% will be applied to each installment of the
gross cash dividend distribution amount.
- In addition, year-to-date we have repurchased 1.5 million
shares under our existing share buyback program, totaling
$11.6 million.
- Dividend distribution and share repurchases are part of the
company's distribution policy, 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.
Pioneers in the commercialization of
renewable natural gas certificates
- In early April, Adecoagro officially became the first company
in Brazil to commercialize
renewable natural gas certificates. Gas-recs, as they referred to
in the market, attest to the production of renewable natural gas
(non-fossil). In this line, industries in Brazil can voluntarily purchase these credits
to decarbonize the gas consumed in their operations. The sale
involved 25 thousand certificates to Metso Outotec, at a unit price
of 1.80 BRL.
- In 2022 our biogas unit in Ivinhema (Mato Grosso do Sul) will be generating 1
gas-rec for every 1 million Btu produced (approximately 30m3 of
methane), used both in our industrial process to generate steam, or
in its conversion to biomethane.
- We are proud to be the first movers in a market that rewards
sustainable operations, as was the case in 2020 when we kickstarted
the commercialization of carbon credits under the RenovaBio
program.
Non-Gaap Financial Measures: For a full
reconciliation of non-gaap financial measures please refer to page
27 of our 1Q22 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 1Q22 earnings release, please access
ir.adecoagro.com. A conference call to discuss 1Q22 results will be
held on May 13, 2022 with a live
webcast through the internet:
Conference Call
May 13, 2022
09 a.m. US EST
10 a.m. Buenos Aires
10 a.m. Sao
Paulo
3 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: 9810624
Investor Relations Department
Charlie Boero Hughes
CFO
Victoria Cabello
IRO
Email: ir@adecoagro.com
Tel: +54 (11) 4836-8651
About Adecoagro:
Adecoagro is a leading agroindustrial
company in South America.
Adecoagro owns 219.8 thousand hectares of farmland and several
industrial facilities spread across the most productive regions of
Argentina, Brazil and Uruguay, where it produces over 2.7 million
tons of agricultural products and over 1 million of MWh of
bio-electricity.
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SOURCE Adecoagro S.A.