ADECOAGRO S.A. Adecoagro S.A.
Consolidated Financial Statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Adecoagro S.A.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Adecoagro S.A. and its subsidiaries (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Level 3 Biological Assets
As described in Notes 16, 32 (b) and 33.11 to the consolidated financial statements, the total aggregated fair value of the Company's level 3 biological assets related to sown land - crops, sown land - rice and sown land - sugarcane was US$ 198 million as of December 31, 2023. The fair value of these level 3 biological assets is determined by management using a discounted cash flow model which requires the input of highly subjective assumptions including significant unobservable inputs. The discounted cash flow model included significant judgements and assumptions relating to management's cash flow projections including future market prices, estimated yields at the point of harvest, estimated production cycle, future costs of harvesting and other costs and estimated discount rate.
The principal considerations for our determination that performing procedures relating to the valuation of the level 3 biological assets related to sown land - crops, sown land - rice and sown land - sugarcane is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement; (ii) a high degree of
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auditor judgement, subjectivity, and effort in performing procedures and evaluating management's cash flow projections and significant assumptions related to future market prices, estimated yields at the point of harvest, estimated production cycle, future costs of harvesting and other costs and estimated discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of the level 3 biological assets related to sown land - crops, sown land - rice and sown land - sugarcane. These procedures also included, among others evaluating the significant assumptions and methods used by management in developing the fair value measurement including future market prices, estimated yields at the point of harvest, estimated production cycle, future costs of harvesting and other costs and estimated discount rate. Evaluating management's assumptions involved evaluating whether these assumptions were reasonable considering the consistency with external information and past records and testing management's sensitivity analysis of certain significant assumptions. Professionals with specialized skill and knowledge were used to assist in the evaluation of certain significant assumptions, including estimated yields at the point of harvest and estimated production cycle.
/s/ PRICE WATERHOUSE & CO. S.R.L. /s/ Eduardo Alfredo Loiácono (Partner)Eduardo Alfredo Loiácono
Buenos Aires, Argentina.
March 12, 2024.
We have served as the Company's auditor since 2008.
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Legal information
Name as specified in charter: Adecoagro S.A.
Legal address: Vertigo Naos Building, 6, Rue Eugène Ruppert, L-2453, Luxembourg
Company activity: Agricultural and agro-industrial
Date of registration: June 11, 2010
Expiration of company charter: No term defined
Number of register (RCS Luxembourg): B153.681
Issued Capital Stock: 111,381,815 common shares
Outstanding Capital stock: 106,005,500 common shares
Treasury shares: 5,376,315 common shares
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Adecoagro S.A.
Consolidated Statements of Income
for the years ended December 31, 2023, 2022 and 2021
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Note | 2023 | 2022 | 2021 | |||
Sales of goods and services rendered | 4 | 1,298,871 | 1,347,724 | 1,124,352 | ||
Cost of goods sold and services rendered | 5 | (973,180) | (1,075,747) | (854,965) | ||
Initial recognition and changes in fair value of biological assets and | 87,858 | 215,941 | 227,740 | |||
agricultural produce | 16 | |||||
Changes in net realizable value of agricultural produce after harvest | 1,838 | (22,293) | (12,879) | |||
Margin on manufacturing and agricultural activities before | 415,387 | 465,625 | 484,248 | |||
operating expenses | ||||||
General and administrative expenses | 6 | (70,320) | (84,287) | (69,794) | ||
Selling expenses | 6 | (129,092) | (143,515) | (117,662) | ||
Other operating income / (expense), net | 8 | 25,590 | 1,870 | (18,768) | ||
Bargain purchase gain on acquisition | 21 | - | 10,107 | - | ||
Profit from operations | 241,565 | 249,800 | 278,024 | |||
Finance income | 9 | 157,100 | 25,308 | 36,670 | ||
Finance costs | 9 | (122,087) | (137,600) | (151,681) | ||
Other financial results - Net gain / (loss) | of inflation effects on | 28,816 | (2,144) | 11,541 | ||
monetary items | 9 | |||||
Financial results, net | 9 | 63,829 | (114,436) | (103,470) | ||
Profit before income tax | 305,394 | 135,364 | 174,554 | |||
Income tax expense | 10 | (78,673) | (26,758) | (43,837) | ||
Profit for the year | 226,721 | 108,606 | 130,717 | |||
Attributable to: | ||||||
Equity holders of the parent | 226,291 | 108,138 | 130,669 | |||
Non-controlling interest | 430 | 468 | 48 | |||
Earnings per share attributable to the equity holders of the | ||||||
parent during the year: | ||||||
Basic earnings per share | 11 | 2.113 | 0.982 | 1.135 | ||
Diluted earnings per share | 11 | 2.105 | 0.979 | 1.130 |
The accompanying notes are an integral part of these consolidated financial statements.
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Adecoagro S.A.
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
2023 | 2022 | |||
Profit for the year | 226,721 | 108,606 | ||
Other comprehensive income: | ||||
- | Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences on translation of foreign operations | (222,166) | 98,741 | ||
Cash flow hedge, net of income tax | 27,748 | 16,060 | ||
- | Items that will not be reclassified to profit or loss: | |||
Revaluation surplus net of income tax (Note 12) | 122,793 | (46,903) | ||
Other comprehensive (loss) / income for the year | (71,625) | 67,898 | ||
Total comprehensive income / (loss) for the year | 155,096 | 176,504 | ||
Attributable to: | ||||
Equity holders of the parent | 155,044 | 174,705 | ||
Non-controlling interest | 52 | 1,799 |
The accompanying notes are an integral part of these consolidated financial statements.
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2021
130,717
121,146
29,758
(136,622)
14,282
144,999
147,273
(2,274)
Adecoagro S.A.
Consolidated Statements of Financial Position
as of December 31, 2023 and 2022
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
ASSETS | Note | 2023 | 2022 | |
Non-Current Assets | ||||
Property, plant and equipment, net | 12 | 1,549,565 | 1,565,355 | |
Right of use assets | 13 | 406,713 | 360,181 | |
Investment property | 14 | 33,364 | 33,330 | |
Intangible assets, net | 15 | 27,519 | 36,120 | |
Biological assets | 16 | 23,706 | 30,622 | |
Deferred income tax assets | 10 | 9,777 | 8,758 | |
Trade and other receivables, net | 18 | 39,060 | 44,558 | |
Derivative financial instruments | 17 | 18,001 | 5,208 | |
Other assets | 1,515 | 1,701 | ||
Total Non-Current Assets | 2,109,220 | 2,085,833 | ||
Current Assets | ||||
Biological assets | 16 | 204,331 | 235,822 | |
Inventories | 19 | 256,051 | 274,022 | |
Trade and other receivables, net | 18 | 179,055 | 183,820 | |
Derivative financial instruments | 17 | 13,819 | 134 | |
Short-term investment | 17 | 62,637 | 98,571 | |
Cash and cash equivalents | 20 | 339,781 | 230,653 | |
Total Current Assets | 1,055,674 | 1,023,022 | ||
TOTAL ASSETS | 3,164,894 | 3,108,855 | ||
SHAREHOLDERS EQUITY | ||||
Capital and reserves attributable to equity holders of the parent | ||||
Share capital | 22 | 167,073 | 167,073 | |
Share premium | 22 | 743,810 | 793,169 | |
Cumulative translation adjustment | (603,861) | (456,029) | ||
Equity-settled compensation | 18,654 | 18,792 | ||
Cash flow hedge | 2 | (17,124) | (44,872) | |
Other reserves | 150,677 | 126,925 | ||
Treasury shares | (8,062) | (4,792) | ||
Revaluation surplus | 317,598 | 281,909 | ||
Reserve from the sale of non-controlling interests in subsidiaries | 41,574 | 41,574 | ||
Retained earnings | 418,789 | 202,342 | ||
Equity attributable to equity holders of the parent | 1,229,128 | 1,126,091 | ||
Non-controlling interest | 36,520 | 37,552 | ||
TOTAL SHAREHOLDERS EQUITY | 1,265,648 | 1,163,643 | ||
LIABILITIES | ||||
Non-Current Liabilities | ||||
Trade and other payables | 25 | 1,008 | 17,210 | |
Borrowings | 26 | 697,843 | 727,983 | |
Lease liabilities | 27 | 325,569 | 283,549 | |
Deferred income tax liabilities | 10 | 376,331 | 301,414 | |
Payroll and social security liabilities | 28 | 1,570 | 1,581 | |
Derivatives financial instruments | 18 | - | 96 | |
Provisions for other liabilities | 29 | 2,871 | 2,526 | |
Total Non-Current Liabilities | 1,405,192 | 1,334,359 | ||
Current Liabilities | ||||
Trade and other payables | 25 | 190,730 | 242,397 | |
Current income tax liabilities | 5,023 | 422 | ||
Payroll and social security liabilities | 28 | 37,357 | 29,964 | |
Borrowings | 26 | 207,106 | 279,769 | |
Lease liabilities | 27 | 52,941 | 54,431 | |
Derivative financial instruments | 17 | 169 | 2,961 | |
Provisions for other liabilities | 29 | 728 | 909 | |
Total Current Liabilities | 494,054 | 610,853 | ||
TOTAL LIABILITIES | 1,899,246 | 1,945,212 | ||
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 3,164,894 | 3,108,855 |
The accompanying notes are an integral part of these consolidated financial statements.
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Adecoagro S.A.
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 2023, 2022 and 2021
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Attributable to equity holders of the parent
Reserve from | |||||||||||||
Share | Cumulative | the sale of | Non- | Total | |||||||||
Share capital | Equity-settled | Cash flow | Other | Treasury | Revaluation | non- | Retained | ||||||
premium | translation | Subtotal | controlling | shareholders' | |||||||||
(Note 22) | compensation | hedge | Reserves | shares | surplus | controlling | earnings | ||||||
(Note 22) | adjustment | interest | equity | ||||||||||
interests in | |||||||||||||
subsidiaries | |||||||||||||
Balance at January 1, 2021 | 183,573 | 902,815 | (555,044) | 14,795 | (90,689) | 83,406 | (7,630) | 343,570 | 41,574 | 8,671 | 925,041 | 38,683 | 963,724 |
Profit for the year | - | - | - | - | - | - | - | - | - | 130,669 | 130,669 | 48 | 130,717 |
Other comprehensive income: |
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations | - | - | 40,435 | - | - | - | - | 71,731 | - | - | 112,166 | 8,980 | 121,146 |
Cash flow hedge (*) | - | - | - | - | 29,757 | - | - | - | - | - | 29,757 | 1 | 29,758 |
- Items that will not be reclassified subsequently to profit or loss:
Revaluation surplus (**) | - | - | - | - | - | - | - | (125,319) | - | - | (125,319) | (11,303) | (136,622) |
Other comprehensive income for the year | - | - | 40,435 | - | 29,757 | - | - | (53,588) | - | - | 16,604 | (2,322) | 14,282 |
Total comprehensive income for the year | - | - | 40,435 | - | 29,757 | - | - | (53,588) | - | 130,669 | 147,273 | (2,274) | 144,999 |
Reserves for the benefit of government grants (1) | - | - | - | - | - | 23,605 | - | - | - | (23,605) | - | - | - |
Employee share options (Note 23) | |||||||||||||
- Exercised | - | - | - | - | - | - | - | - | - | - | - | - | - |
- Forfeited | - | - | - | - | - | - | - | - | - | - | - | - | - |
Restricted shares (Note 23): | |||||||||||||
- Value of employee services | - | - | - | 5,420 | - | - | - | - | - | - | 5,420 | - | 5,420 |
- Vested | - | 3,594 | - | (4,142) | - | 734 | 262 | - | - | - | 448 | - | 448 |
- Forfeited | - | - | - | - | - | 27 | (27) | - | - | - | - | - | - |
- Granted | - | - | - | - | - | (1,600) | 1,600 | - | - | - | - | - | - |
Purchase of own shares (Note 22) | - | (55,349) | - | - | - | - | (11,114) | - | - | - | (66,463) | - | (66,463) |
Dividends to non-controlling interest | - | - | - | - | - | - | - | - | - | - | - | (298) | (298) |
Balance at December 31, 2021 | 183,573 | 851,060 | (514,609) | 16,073 | (60,932) | 106,172 | (16,909) | 289,982 | 41,574 | 115,735 | 1,011,719 | 36,111 | 1,047,830 |
- Net of $2,526 of income tax. (**) Net of $9,953 of Income tax.
(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy business. (please see Note 24).
The accompanying notes are an integral part of these consolidated financial statements.
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Adecoagro S.A.
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 2023, 2022 and 2021
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Attributable to equity holders of the parent | |||||||||||||
Share | Cumulative | Reserve from the | Non- | Total | |||||||||
Share capital | Equity-settled | Cash flow | Other | Treasury | Revaluation | sale of non- | Retained | ||||||
premium | translation | controlling | Subtotal | controlling | shareholders' | ||||||||
(Note 22) | compensation | hedge | Reserves | shares | surplus | earnings | |||||||
(Note 22) | adjustment | interests in | interest | equity | |||||||||
subsidiaries | |||||||||||||
Balance at January 1, 2022 | 183,573 | 851,060 | (514,609) | 16,073 | (60,932) | 106,172 | (16,909) | 289,982 | 41,574 | 115,735 | 1,011,719 | 36,111 | 1,047,830 |
Profit for the year | - | - | - | - | - | - | - | - | - | 108,138 | 108,138 | 468 | 108,606 |
Other comprehensive income: |
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations | - | - | 58,580 | - | - | - | - | 35,367 | - | - | 93,947 | 4,794 | 98,741 |
Cash flow hedge (*) | - | - | - | - | 16,060 | - | - | - | - | - | 16,060 | - | 16,060 |
- Items that will not be reclassified subsequently to | |||||||||||||
profit or loss: | |||||||||||||
Revaluation surplus (**) | - | - | - | - | - | - | - | (43,440) | - | - | (43,440) | (3,463) | (46,903) |
Other comprehensive (loss) / income for the year | - | - | 58,580 | - | 16,060 | - | - | (8,073) | - | - | 66,567 | 1,331 | 67,898 |
Total comprehensive income for the year | - | - | 58,580 | - | 16,060 | - | - | (8,073) | - | 108,138 | 174,705 | 1,799 | 176,504 |
Reduction of issued share capital of the company (Note22) | (16,500) | - | - | - | - | - | 16,500 | - | - | - | - | - | - |
Reserves for the benefit of government grants (1) | - | - | - | - | - | 21,531 | - | - | - | (21,531) | - | - | - |
Employee share options (Note 23): | |||||||||||||
- Forfeited | - | 2,432 | - | (778) | - | - | 470 | - | - | - | 2,124 | - | 2,124 |
Restricted shares and restricted units (Note 23): | |||||||||||||
- Value of employee services | - | - | - | 7,563 | - | - | - | - | - | - | 7,563 | - | 7,563 |
- Vested | - | 4,647 | - | (4,066) | - | 1,243 | - | - | - | - | 1,824 | - | 1,824 |
- Forfeited | - | - | - | - | - | 85 | (85) | - | - | - | - | - | - |
- Granted | - | - | - | - | - | (2,106) | 2,106 | - | - | - | - | - | - |
Purchase of own shares (Note 22) | - | (29,970) | - | - | - | - | (6,874) | - | - | - | (36,844) | - | (36,844) |
Dividends to shareholders (Note 22) | - | (35,000) | - | - | - | - | - | - | - | - | (35,000) | - | (35,000) |
Dividends to non-controlling interest | - | - | - | - | - | - | - | - | - | - | - | (358) | (358) |
Balance at December 31, 2022 | 167,073 | 793,169 | (456,029) | 18,792 | (44,872) | 126,925 | (4,792) | 281,909 | 41,574 | 202,342 | 1,126,091 | 37,552 | 1,163,643 |
- Net of $2,526 of Income tax. (**) Net of $25,307 of Income tax.
(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy business. (please see Note 24).
The accompanying notes are an integral part of these consolidated financial statements.
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Adecoagro S.A.
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 2023, 2022 and 2021
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Attributable to equity holders of the parent | |||||||||||||
Share | Cumulative | Reserve from the | Non- | Total | |||||||||
Share capital | Equity-settled | Cash flow | Treasury | Revaluation | sale of non- | Retained | |||||||
premium | translation | Other reserves | Subtotal | controlling | shareholders' | ||||||||
(Note 22) | compensation | hedge | shares | surplus | controlling interests | earnings | |||||||
(Note 22) | adjustment | interest | equity | ||||||||||
in subsidiaries | |||||||||||||
Balance at January 1, 2023 | 167,073 | 793,169 | (456,029) | 18,792 | (44,872) | 126,925 | (4,792) | 281,909 | 41,574 | 202,342 | 1,126,091 | 37,552 | 1,163,643 |
Profit for the year | - | - | - | - | - | - | - | - | - | 226,291 | 226,291 | 430 | 226,721 |
Other comprehensive income: | |||||||||||||
- Items that may be reclassified subsequently | |||||||||||||
to profit or loss: | |||||||||||||
Exchange differences on translating foreign | - | - | (147,832) | - | - | - | - | (63,523) | - | - | (211,355) | (10,811) | (222,166) |
operations | |||||||||||||
Cash flow hedge (*) | - | - | - | - | 27,748 | - | - | - | - | - | 27,748 | - | 27,748 |
- Items will not be reclassified to profit or | |||||||||||||
loss: | |||||||||||||
Revaluation surplus (**) | - | - | - | - | - | - | - | 112,360 | - | - | 112,360 | 10,433 | 122,793 |
Reserve of the revaluation surplus derived | - | - | - | - | - | - | - | (13,148) | - | 13,148 | - | - | - |
from the disposals of assets (***) | |||||||||||||
Other comprehensive income/ (loss) for the | - | - | (147,832) | - | 27,748 | - | - | 35,689 | - | 13,148 | (71,247) | (378) | (71,625) |
year | |||||||||||||
Total comprehensive income/ (loss) for the | - | - | (147,832) | - | 27,748 | - | - | 35,689 | - | 239,439 | 155,044 | 52 | 155,096 |
year | |||||||||||||
Reserves for the benefit of government grants | - | - | - | - | - | 22,992 | - | - | - | (22,992) | - | - | - |
(1) | |||||||||||||
Employee share options (Note 23): | |||||||||||||
- Exercised | - | 236 | - | (77) | - | - | 55 | - | - | - | 214 | - | 214 |
Restricted shares (Note 23): | |||||||||||||
- Value of employee services | - | - | - | 6,084 | - | - | - | - | - | - | 6,084 | - | 6,084 |
- Vested | - | 7,528 | - | (6,145) | - | 1,554 | - | - | - | - | 2,937 | - | 2,937 |
- Forfeited | - | - | - | - | - | 30 | (30) | - | - | - | - | - | - |
- Granted | - | - | - | - | - | (824) | 824 | - | - | - | - | - | - |
Purchase of own shares (Note 22) | - | (22,123) | - | - | - | - | (4,119) | - | - | - | (26,242) | - | (26,242) |
Dividends to shareholders (Note 22) | - | (35,000) | - | - | - | - | - | - | - | - | (35,000) | - | (35,000) |
Dividends to non-controlling interest | - | - | - | - | - | - | - | - | - | - | - | (1,084) | (1,084) |
Balance at December 31, 2023 | 167,073 | 743,810 | (603,861) | 18,654 | (17,124) | 150,677 | (8,062) | 317,598 | 41,574 | 418,789 | 1,229,128 | 36,520 | 1,265,648 |
- Net of $7,337 of Income tax. (**) Net of $(62,988) of Income tax.
(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy business. (please see Note 24).
The accompanying notes are an integral part of these consolidated financial statements.
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Adecoagro SA published this content on 08 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 March 2024 20:55:02 UTC.
