Key Takeaways
- Adecoagro S.A. reported a 2.6% increase in gross sales for Q1 2024, driven by higher sugar production and increased rice prices.
- Adjusted EBITDA for Q1 2024 was $90.1 million, slightly above Q1 2023.
- Adjusted net income for Q1 2024 was $23.3 million, a 40.1% decrease from the previous year.
- Net debt reduced by 23.0% year-over-year to $639.2 million.
- Shareholder distribution includes a $35 million cash dividend and a $26.6 million share buyback program.
Adecoagro S.A. (NYSE: AGRO), a leading sustainable production company in South America, has released its financial results for the first quarter ended March 31, 2024.
Adecoagro Financial Performance Highlights
Gross Sales and Adjusted EBITDA
Gross sales for Q1 2024 increased by 2.6%, attributed to higher sugar production from increased sugarcane crushing and elevated average selling prices in the Rice segment. Adjusted EBITDA reached $90.1 million, 1.1% higher than in Q1 2023. Strong Farming business results drove this performance, offset declines in the Sugar, Ethanol & Energy segment.
Net Income and Debt Reduction
Adjusted net income for the quarter amounted to $23.3 million, a 40.1% decrease compared to last year. Net debt was reduced by 23.0% year-over-year, totaling $639.2 million. The net debt to last twelve months (LTM) Adjusted EBITDA ratio improved to 1.3x, a reduction of 0.6x from Q1 2023.
Segment Performance of Adecoagro
Sugar, Ethanol & Energy Business
The Sugar, Ethanol & Energy segment saw a record Q1 milling figure with 2.2 million tons crushed, 47% higher year-over-year. Sugar production was prioritized, with 49% of the crush diverted to sugar production, which traded, on average, 48% above hydrous ethanol. The company produced 91% hydrous ethanol, responding to strong market demand. Despite higher crushing volumes and a 9% decrease in unitary production costs, Adjusted EBITDA for this segment fell by 32% to $51.9 million, impacted by lower sugar prices and higher freight costs.
Farming Business
The Farming business experienced significant growth, with Adjusted EBITDA increasing to $44.0 million, $25.5 million higher than Q1 2023. The Rice segment reported a $19.4 million year-over-year increase, driven by improved productivity, better pricing, and strong market presence. The Crops segment benefited from recovered yields, leading to a $5.8 million increase in results. In the Dairy business, Adjusted EBITDA rose by 5%, aided by lower feed costs.
Shareholder Returns and Investments
Dividend and Share Buyback For Adecoagro
The Annual Shareholder Meeting on April 17th approved a $35 million cash dividend to be paid in two installments of $17.5 million each. The first installment of $0.1682 per share will be paid on May 29th, 2024, to shareholders of record as of May 14th, 2024. The second installment is scheduled for November 2024. Additionally, the company has invested $26.6 million in repurchasing 2.6 million shares under its share buyback program.
Farmland Sale
Sale of La Pecuaria Farm
In April 2024, Adecoagro completed the sale of the La Pecuaria farm in Durazno, Uruguay, for $20.7 million. This sale, conducted at a premium to the independent appraisal, generated an Adjusted EBITDA of $15.3 million, which will be reflected in the Crops segment in Q2 2024.
Image provided by Adecoagro
