LUXEMBOURG, Aug. 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 second quarter of 2014.

Important Notice:


    --  Under IFRS accounting, the sale of a non-controlling interest in a
        subsidiary is accounted for as an equity transaction, with no gain or
        loss recognized in the consolidated statement of income. Any difference
        between the selling price and the book value is recognized in
        Shareholder's Equity. This type of transaction had not been contemplated
        when the Company originally defined its Adjusted EBITDA in 2011.
        Management believes that the sale of a controlling or non-controlling
        interest in a subsidiary, whose main underlying asset is farmland, is a
        key element in its Land Transformation business since in either case it
        allows the company to monetize the capital gains generated by the
        transformation of undeveloped or underutilized farmland, thereby
        enhancing return on invested capital. Accordingly, the Company has
        decided to include the gains or losses from sales of non-controlling
        interests in subsidiaries in its Adjusted EBITDA definition.

Financial & Operational Highlights:


    --  In 2Q14, Adecoagro recorded an Adjusted EBITDA((1)) of $72.8 million,
        75.6% higher than 2Q13. Adjusted EBITDA margin was 36.9% in 2Q14
        compared to 22.0% in 2Q13. 6M14 Adjusted EBITDA was $107.5 million,
        52.6% higher than 6M13.
    --  Adjusted EBITDA margin grew to 35.5% in 6M14 from 24.2% in 6M13.
    --  Net Sales in 2Q14 reached $197.5 million, while 6M14 net sales were
        $302.8 million, showing a 5.0% and 4.0% respective increase compared to
        last year.
    --  In our Farming and Land Transformation businesses, Adjusted EBITDA in
        2Q14 was $41.8 million, $20.6 million or 96.9% higher than 2Q13.
        Year-to-date Adjusted EBITDA stands at $77.7 million, marking a 94.3%
        increase over 6M13. These improvements are explained by increased
        operational and financial performance in the following segments: (i) in
        the Crops segment, higher crop yields coupled with lower production
        costs resulting from operational efficiencies and devaluation of the
        Argentine peso, increased our margins, resulting in a 42.4% growth in
        Adjusted EBITDA; (ii) in the Rice segment, an increase in planted area
        together with lower costs driven by the implementation of efficient
        production technologies and the devaluation of the Argentine peso
        expanded Adjusted EBITDA by 232.8%.                                     
        Performance was enhanced by the Land Transformation business which
        generated $25.6 million of Adjusted EBITDA in 2Q14, 269.6% higher
        quarter-over-quarter, through the sale of a 49% stake in Global Anceo
        S.L.U. and Global Hisingen S.L.U. (please see transaction details in
        page 3, Strategy Execution - Land Transformation).
    --  In the Sugar, Ethanol and Energy business, our mills crushed 2.1 million
        tons of sugarcane in 2Q14, 21.1% higher than 2Q13. The increase in cane
        milling, resulted from (i) the ramp up and consolidation of our cluster
        in Mato Grosso do Sul, which resulted in higher milling efficiency per
        hour; (ii) favorable weather conditions during June which allowed us to
        accelerate the harvesting pace; and (iii) a 17.6% expansion of our
        sugarcane plantation. As a result, year-over-year sugar, ethanol and
        energy production volumes grew by 40.6%, 9.8% and 31.3% respectively. In
        addition, financial performance was enhanced by (i) a 5.5% increase in
        sugarcane yields coupled with a 0.9% increase in TRS; (ii) operational
        synergies and efficiencies which reduced our production costs; and (iii)
        a 79.0% increase in energy revenues resulting from higher cogeneration
        productivity and higher prices; and partially offset by lower sugar and
        ethanol prices. As a result of the above, Adjusted EBITDA in 2Q14
        reached $35.6 million, 37.8% higher than 2Q13, while Adjusted EBITDA
        margin expanded to 46.7% from 33.1% in 2Q13.
    --  Net income in 2Q14 totaled $1.5 million, $25.3 million higher than 2Q13.
        Net income in the quarter was enhanced by operational and financial
        improvements in the Farming and Sugar & Ethanol businesses coupled with
        (i) a $23.6 million increase in Financial Results primarily explained by
        the appreciation of the Brazilian Real in 2Q14 compared to a
        depreciation in 2Q13, and our adoption of Cash Flow Hedge Accounting as
        of July 1, 2013; and (ii) a $16.3 million increase in long term
        biological assets primarily explained by an increase in sugarcane
        yields; and partially offset by (i) a $5.8 million higher D&A charge
        resulting from the expansion of our asset base; and (ii) an $11.6
        million lower tax benefit.

Strategy Execution


    --  On June 17, 2014, Adecoagro completed the sale of a 49.0% interest in
        Global Anceo S.L.U. and Global Hisingen S.L.U, two Spanish subsidiaries,
        for a total price of $50.6 million, which has been paid in full at
        closing. The main underlying assets of Global Anceo S.L.U. and Global
        Hisingen S.L.U are La Guarida and Los Guayacanes, two farms located in
        the Argentine provinces of Salta and Santiago del Estero, respectively.
        This transaction generated $25.6 million of Adjusted EBITDA in 2Q14,
        representing a 28.0% premium over the Cushman & Wakefield independent
        appraisal dated September 2013.
    --  Guayacanes and La Guarida farms have a total area of 26,299 hectares and
        were acquired by Adecoagro in 2007, for a total of $51.1 million.
        Following the acquisition, Adecoagro transformed and developed over
        10,000 hectares of cattle pastures into crop production. The farm is
        currently composed of 17,371 hectares of croppable land which are used
        for growing grains and oilseeds and over 6,000 hectares of cattle
        grazing pastures. Adecoagro has operated these farms under a sustainable
        production model focused on no-till farming, crop rotation and other
        agricultural best practices, which have enhanced productivity and soil
        quality. After accounting for the purchase price, transformation capital
        expenditures, operating cash flows and selling price, these investments
        generated an internal rate of return of 19.1%
    --  The construction of the second phase of the Ivinhema mill, which will
        add 3.0 million tons of nominal crushing capacity and consolidate our
        10.0 million ton cluster in Mato Grosso do Sul, is progressing slightly
        ahead of schedule and on budget regarding capital expenditures. We are
        currently in the process of assembling the second boiler, the ethanol
        distillery and the power substation, and are closely monitoring the
        manufacture and delivery of key equipment parts. We expect phase II to
        commence crushing activities by the start of the 2015/16 sugarcane
        harvest.
    --  On August, 12, 2014, the Board of Directors approved the extension of
        the Company's share repurchase program for an additional twelve month
        period, and therefore ending on September 23, 2015. Under the buyback
        program, the Company can continue acquiring shares up to 5% of the
        outstanding share capital. As of the date of this report, the Company
        has repurchased a total of 2.3 million shares for a total consideration
        of $18.1 million and an average price of $7.72 dollars per share.

Notes:

(1) Adjusted EBITDA is defined as consolidated profit from operations before financing and taxation, depreciation, amortization and unrealized changes in fair value of long-term biological assets (sugarcane, coffee and cattle) plus the gains or losses from disposals of non-controlling interests in subsidiaries. Adjusted EBIT is defined as consolidated profit from operations before financing and taxation, and unrealized changes in fair value of long-term biological assets (sugarcane, coffee and cattle) plus the gains or losses from disposals of non-controlling interests in subsidiaries. Adjusted EBITDA margin and Adjusted EBIT margin are calculated as a percentage of net sales.

To read the full 2Q14 earnings release, please access www.ir.adecoagro.com. A conference call to discuss 2Q14 results will be held tomorrow with live webcast through the internet:

English Conference Call
August 15, 2014
8 a.m. (US EST)
9 a.m. Buenos Aires & Sao Paulo
2 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
CFO

Hernan Walker
IR Manager
Email: ir@adecoagro.com
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.