6-K
Adecoagro S.A. (AGRO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2024
Commission File Number: 001-35052
Adecoagro S.A.
(Translation of registrant’s name into English)
28, Boulevard F.W. Raiffeisen,
L-2411, Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
| Form 20-F | X | Form 40-F |
|---|
TABLE OF CONTENTS
| ITEM | |
|---|---|
| 99.1 | Press release dated November 13, 2024 related to the registrant’s results of operations for the nine-month period ended September 30, 2024. |
| 99.2 | Unaudited condensed consolidated interim financial statements of the registrant as of and for the nine-month period ended September 30, 2024. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Adecoagro S.A. | ||
|---|---|---|
| By: | /s/ Emilio Federico Gnecco | |
| Name: | Emilio Federico Gnecco | |
| Title: | Chief Financial Officer |
Date: November 13, 2024
Document
| Adjusted EBITDA reached 341.0 million in 9M24. Second installment of the 35 million annual cash dividend to be paid in November. 96.3 million committed to shareholder distribution year-to-date. | |||||||
|---|---|---|---|---|---|---|---|
| 3Q24 Earning Release Conference Call | |||||||
| English Conference Call | |||||||
| November 14, 2024 | |||||||
| 10 a.m. (US EST) | |||||||
| 12 p.m. (Buenos Aires/Sao Paulo time) | |||||||
| 4 p.m. (Luxembourg) | |||||||
| Zoom ID: 836 3938 7045 | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | |
| Passcode: 995202 | 456,653 | 387,947 | 17.7% | 1,107,999 | 1,042,302 | 6.3% | |
| 110,900 | 155,299 | (28.6)% | 341,011 | 380,807 | (10.5)% | ||
| Investor Relations | 25% | 41% | (39.0)% | 31% | 37% | (15.0)% | |
| Emilio Gnecco | 27,894 | 88,559 | (68.5)% | 156,653 | 169,865 | (7.8)% | |
| CFO | 0.28 | 0.83 | (66.7)% | 1.55 | 1.59 | (2.5)% | |
| Victoria Cabello | 16,583 | 7,542 | 119.9% | 75,779 | 36,512 | 107.5% | |
| IR Officer | 26,132 | 13,254 | 97.2% | 71,587 | 51,896 | 37.9% | |
| 645,818 | 706,752 | (8.6)% | 645,818 | 706,752 | (8.6)% | ||
| 1.5x | 1.5x | 1.8% | 1.5x | 1.5x | 1.8% | ||
| [email protected] | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | |
| 100,130 | 114,630 | (12.6)% | 258,871 | 308,161 | (16.0)% | ||
| 2,025 | 28,793 | (93.0)% | 22,288 | 27,283 | (18.3)% | ||
| 7,430 | 11,603 | (36.0)% | 51,399 | 39,681 | 29.5% | ||
| 7,930 | 6,255 | 26.8% | 25,504 | 22,555 | 13.1% | ||
| Website: | (6,615) | (5,982) | 10.6% | (17,051) | (16,873) | 1.1% | |
| www.adecoagro.com | 110,900 | 155,299 | (28.6)% | 341,011 | 380,807 | (10.5)% | |
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All values are in US Dollars.
Sugar, Ethanol & Energy business
Performance Highlights
◦Adjusted EBITDA in the SE&E business reached $100.1 million during 3Q24 and $258.9 million during 9M24, 12.6% and 16.0% lower year-over-year, respectively.
▪(+) Sugar maximization (55% in 3Q24 / 51% in 9M24) as prices traded above ethanol. We continue to maximize hydrous ethanol within our ethanol production on better pricing.
▪(+) Higher net sales on higher sugar and ethanol volumes sold.
▪(+) Cost of production remained flat at 7.8 cts/lb driven by better dilution and weaker FX.
▪(-/+) 10.1% lower year-over-year crushing volume in 3Q24 on lower yields. Year-to-date crushing was up 6.4% on greater sugarcane availability and higher third-party cane.
▪(-) Year-over-year loss in biological asset due to lower expected yields versus 2023, on below average rains, coupled with year-over-year decline in sugar and ethanol prices.
Outlook
◦(+) Rains received during October aid in yield recovery. We expect to slightly increase crushing YoY.
◦(+) Sugar price recovery and potential upside to spot level. 14% of our 2024's sugar production is still unhedged (balance sold at 22.8 cts/lb). 2025's production is open (10% hedged at 20.8 cts/lb).
◦(+) Expected tight supply & demand scenario for ethanol for the upcoming months. We continue to hold on to our ethanol inventories (49% of year-to-date production) to profit from better prices.
◦(+) Energy spot price recovery (October 2024: +R$400/MWh) on lower water levels in the reservoirs. Stored bagasse available to increase energy production.
Farming business
Performance Highlights
◦Adjusted EBITDA for the Farming business amounted to $17.4 million during 3Q24, representing a $26.8 million year-over-year decline due to a farm sale conducted in September 2023. Excluding this event, Adjusted EBITDA performance was in line versus the prior year. Year-to-date, Adjusted EBITDA reached $99.2 million, 10.8% higher compared to the same period of last year.
▪(+) Year-over-year gains in the mark-to-market of our biological asset and agricultural produce for our Crops (better yields and area) and Rice operations (better prices and area).
▪(+) Higher prices for Rice and Dairy's higher value-added products.
▪(-) Lower prices for soybean, corn and wheat.
▪(-) Higher costs in U.S. dollar terms.
▪(+/-) One-off events. Sale of La Pecuaria farm ($15.3 million in Adjusted EBITDA) conducted in 2Q24 versus the sale of El Meridiano in 3Q23 ($29.8 million in Adjusted EBITDA).
Outlook
◦(-/+) Crops: International prices for our main grains continue to be pressured on greater global supply, together with cost inflation in U.S. dollars terms. Undergoing planting activities for our 2024/25 harvest season.
◦(+) Rice: Our diversified product portfolio and flexibility enable us to capture price premiums, despite a reduction in global prices as India returned to the market in 4Q. Beginning of 2024/25 season with greater planted area and good water availability. Expectations to improve productivity year-over-year.
◦(+) Dairy: High productivity indicators; prices for our higher value-added products continue at attractive levels.
| Remarks |
|---|
2024 Shareholder Distribution Update
◦As of the date of this report, we have already committed $96.3 million to shareholder distribution, equivalent to 55% of the Adjusted Free Cash Flow from Operations (NCFO) generated in 2023. This represents $26.0 million above the annual minimum stated in our distribution policy.
▪Cash dividends: $35.0 million approved. On November 27th, we will pay the second installment of $17.5 million (approximately $0.1740 per share) to shareholders of the Company of record at close of business on November 12th. First installment of $17.5 million paid on May 29th (approximately $0.1682 per share).
▪Share repurchases: $61.3 million expended year-to-date in repurchasing 5.7% of the company's equity (6.0 million shares at an average price of $10.16 per share).
Independent Farmland Appraisal Report
◦As of September 30th, 2024, Cushman & Wakefield (C&W) updated its independent appraisal of Adecoagro's farmland which consists of 210,371 hectares valued at $682.6 million. On a comparable basis, current valuation of our land portfolio represents a year-over-year increase of 0.4%.
Cash Tender of AGRO'27s 6.00% Notes - Final Result
◦On August 17th, 2024, we finalized the cash tender offer of AGRO's 6.00% Senior Notes due 2027. The Company repurchased $84.4 million aggregate principal amount of the outstanding senior bonds. This proves the Company's disciplined and constant search for Liability Management opportunities to better finance our operations at attractive rates and add value to shareholders.
| ESG Update |
|---|
Expansion of our Capacity to Produce Biomethane
We are proud to announce our plans to expand our biomethane production at our biogas unit in Ivinhema mill. By 2027, we expect to increase our current production by five times via the construction of two biodigestors. Once completed they will produce 30 thousand Nm3 of biomethane per day, which is equivalent to 10 million liters of diesel annually. We secured financing from FINEP for the total amount of the project (R$226 million; equivalent to $41 million) at an attractive rate and due in 16 years (including 4 years of grace period).
By using concentrated vinasse, which is a by-product of the ethanol production process, the Company has been producing biogas, which is then converted into biomethane to be used as an alternative source of fuel for adapted vehicles. As of today, we have over 120 light vehicles, 6 trucks, 1 tractor and 4 motor pumps adapted and running on biomethane. Moreover, we have started to test our biomethane to fuel our trucks that transport sugar production to the railroad terminal in Maringá.
Powering our own fleet with biomethane will enable us to cut down our carbon emissions, contributing to the Company's emission reduction target. All of the above is part of our energy transition strategy. And it is possible thanks to our sustainable production approach, which in the long run will contribute to replace consumption of fossil fuel through innovative developments as we adapt our logistics towards green mobility while generating positive impact on our results.
| Sugar, Ethanol & Energy Segment - Operational Performance | | --- || SUGAR, ETHANOL & ENERGY - SELECTED INFORMATION | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Operating Data | Metric | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | | Milling | | | | | | | | | Sugarcane Milled | tons | 4,038,787 | 4,491,938 | (10.1)% | 10,186,956 | 9,569,836 | 6.4% | | Own Cane | tons | 3,299,059 | 4,021,209 | (18.0)% | 9,226,947 | 8,993,678 | 2.6% | | Third Party Cane | tons | 739,728 | 470,729 | 57.1% | 960,009 | 576,158 | 66.6% | | Production | | | | | | | | | TRS Equivalent Produced | tons | 612,820 | 676,070 | (9.4)% | 1,418,778 | 1,333,817 | 6.4% | | Sugar | tons | 303,167 | 319,959 | (5.2)% | 656,479 | 619,165 | 6.0% | | Ethanol | M3 | 174,809 | 203,503 | (14.1)% | 433,760 | 403,194 | 7.6% | | Hydrous Ethanol | M3 | 134,847 | 196,324 | (31.3)% | 358,038 | 255,312 | 40.2% | | Anhydrous Ethanol (1) | M3 | 39,962 | 7,179 | 456.7% | 75,722 | 147,882 | (48.8)% | | Sugar mix in production | % | 55% | 52% | 5.9% | 51% | 51% | 0.6% | | Ethanol mix in production | % | 45% | 48% | (6.4)% | 49% | 49% | (0.6)% | | Energy Exported (sold to grid) | MWh | 242,757 | 254,851 | (4.7)% | 563,947 | 495,364 | 13.8% | | Cogen efficiency (KWh sold/ton crushed) | KWh/ton | 60.1 | 56.7 | 5.9% | 55.4 | 51.8 | 6.9% | | Agricultural Metrics | | | | | | | | | Harvested area | Hectares | 48,280 | 48,800 | (1.1)% | 127,903 | 113,915 | 12.3% | | Yield | tons/hectare | 68 | 82 | (17.2)% | 72 | 79 | (8.7)% | | TRS content | kg/ton | 146 | 145 | 0.9% | 133 | 131 | 1.2% | | Area | | | | | | | | | Sugarcane Plantation | hectares | 208,241 | 196,827 | 5.8% | 208,241 | 196,827 | 5.8% | | Expansion Area | hectares | 4,147 | 1,202 | 244.9% | 9,493 | 3,841 | 147.2% | | Renewal Area | hectares | 2,561 | 7,061 | (63.7)% | 17,790 | 21,722 | (18.1)% |
(1) Does not include 2,988 and 8,954 cubic meters of anhydrous ethanol that were converted by dehydrating our hydrous ethanol stocks during 3Q24 and 9M24, respectively. During 9M23, we dehydrated 53,374 cubic meters of hydrous ethanol (no dehydration during 3Q23).
Crushing volumes during 3Q24 amounted to 4.0 million tons, 10.1% lower than in 3Q23. Throughout the year, Brazil's sugarcane production areas have experienced lower-than-average rainfalls, which translated into a faster harvesting pace, but also into a decline in productivity indicators, mainly yields. Consequently, our yields stood at 68 tons per hectare during the quarter, marking a 17.2% year-over-year reduction. On the other hand, we increased sourcing of third-party cane by 269 thousand tons year-over-year, thanks to opportunities that arose from producers in nearby areas. This, in turn, enabled us to mitigate the reduction in crushing volume from own cane, while allowing it to be harvested in the upcoming months with better expected productivity.
On a year-to-date basis, total crushing volume reached 10.2 million tons, marking a 6.4% increase compared to last year, on higher crushing during the first semester of 2024. This was explained by (i) greater sugarcane availability thanks to the expansion planting activities conducted in the last years; coupled with
(ii) higher crushing of third-party cane. In terms of productivity, TRS content was flat at 133 kg/ton, whereas yields were 8.7% lower year-over-year, standing at 72 tons per hectare.
During 3Q24, average sugar prices traded at a premium to both hydrous and anhydrous ethanol in Mato Grosso do Sul (22% and 7%, respectively). Consequently, we maximized sugar production, achieving a 55% mix during the period. Within our ethanol production, 77% was hydrous ethanol as demand for this type of fuel significantly increased and gained market share in the Otto cycle. This high degree of flexibility constitutes one of our most important competitive advantages, since it allows us to make a more efficient use of our fixed assets and profit from higher relative prices. Moreover, we can dehydrate hydrous ethanol at any time and turn it into anhydrous ethanol, which can be sold either to the domestic or export market, wherever the price premium is better.
On a year-to-date basis, we maximized the production of sugar given its attractive pricing premium over ethanol, as was the case during the same period of last year. Total volume produced for both sugar and ethanol in 9M24 saw an increase of 6.0% and 7.6%, respectively compared to 9M23 driven by the increase in total TRS equivalent produced on higher crushing volume.
Exported energy during the quarter totaled 243 thousand MWh, 4.7% lower compared to 3Q23 despite a 10.1% lower crushing volume, as we used stored bagasse to produce energy in order to comply with our contracts. On a year-to-date basis energy exported reached 564 thousand MWh, 13.8% higher year-over-year. Consequently, our cogeneration efficiency ratio was up 5.9% and 6.9%, respectively, compared to the previous year.
| Sugar, Ethanol & Energy Segment - Financial Performance | |||||||
|---|---|---|---|---|---|---|---|
| NET SALES BREAKDOWN | thousands | Units | (/unit) | ||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| 3Q24 | Chg % | 3Q24 | 3Q23 | Chg % | 3Q24 | Chg % | |
| Sugar (tons) | 135,623 | 9.9% | 310,233 | 229,335 | 35.3% | 437 | (18.8)% |
| Ethanol (cubic meters) | 78,862 | 54.9% | 177,869 | 110,082 | 61.6% | 443 | (4.1)% |
| Hydrous Ethanol (cubic meters) | 57,705 | 94.6% | 134,886 | 68,193 | 97.8% | 428 | (1.6)% |
| Anhydrous Ethanol (cubic meters) | 21,157 | (0.4)% | 42,982 | 41,889 | 2.6% | 492 | (3.0)% |
| Energy (Mwh) (2) | 9,505 | (18.6)% | 256,454 | 289,485 | (11.4)% | 37 | (8.1)% |
| CBios | 2,039 | 31.0% | 164,021 | 67,696 | 142.3% | 12 | (45.9)% |
| Others (5) | 72 | 260.0% | 74 | 22 | 236.4% | 973 | 7.0% |
| TOTAL (3) | 226,101 | 20.5% | |||||
| Cover Crops (tons) (4) | 501 | (81.4)% | 1,368 | 5,663 | (75.8)% | 366 | (23.0)% |
| TOTAL NET SALES (1) | 226,602 | 19.1% | |||||
| NET SALES BREAKDOWN | 9M24 | Chg % | 9M24 | 9M23 | Chg % | 9M24 | Chg % |
| Sugar (tons) | 289,127 | 4.1% | 631,728 | 546,045 | 15.7% | 458 | (10.0)% |
| Ethanol (cubic meters) | 179,169 | 16.1% | 403,311 | 278,746 | 44.7% | 444 | (19.8)% |
| Hydrous Ethanol (cubic meters) | 120,994 | 144.0% | 281,036 | 105,244 | 167.0% | 431 | (8.6)% |
| Anhydrous Ethanol (cubic meters) | 58,175 | (44.5)% | 122,275 | 173,502 | (29.5)% | 476 | (21.2)% |
| Energy (Mwh) (2) | 20,390 | (12.0)% | 608,729 | 593,720 | 2.5% | 33 | (14.2)% |
| CBios | 6,048 | (0.4)% | 404,672 | 323,877 | 24.9% | 15 | (20.3)% |
| Others (5) | 557 | 202.7% | 560 | 202 | 177.2% | 995 | 9.2% |
| TOTAL (3) | 495,291 | 7.3% | |||||
| Cover Crops (tons) (4) | 6,447 | (34.9)% | 16,698 | 22,762 | (26.6)% | 386 | (11.3)% |
| TOTAL NET SALES (1) | 501,738 | 6.4% |
All values are in US Dollars.
| HIGHLIGHTS - $ thousand | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % |
|---|---|---|---|---|---|---|
| Net Sales (1) | 226,602 | 190,268 | 19.1% | 501,738 | 471,401 | 6.4% |
| Margin on Manufacturing and Agricultural Act. Before Opex | 80,498 | 93,865 | (14.2)% | 188,578 | 256,948 | (26.6)% |
| Adjusted EBITDA | 100,130 | 114,630 | (12.6)% | 258,871 | 308,161 | (16.0)% |
| Adjusted EBITDA Margin | 44.2% | 60.2% | (26.7)% | 51.6% | 65.4% | (21.1)% |
(1) Net Sales are calculated as Gross Sales net of ICMS, PIS COFINS, INSS and IPI taxes; (2) Includes commercialization of energy from third parties; (3) Total Net Sales do not include the sale of soybean, corn and beans planted as cover crop during the implementation of the agricultural technique known as meiosis; (4) Corresponding to the sale of soybean, corn and beans planted as cover crop during the implementation of meiosis. (5) Diesel sold by Monte Alegre Distribuidora (MAC), our own fuel distributor located in UMA mill.
Adjusted EBITDA during 3Q24 was $100.1 million, 12.6% lower than the same period of last year. Despite presenting a year-over-year increase in net sales coupled with a $6.6 million year-over-year gain in the mark-to-market of our commodity hedge position, lower EBITDA generation was mainly driven by a $20.9 million year-over-year loss in the mark-to-market of our biological assets. As explained in prior releases, the biological assets line captures the present value of the sugarcane that is going to be harvested in the following 12 months, in addition to the one already harvested. In this case, the year-over-year decline is mainly explained by a decline in crushing volume and Consecana prices. Results were also affected by a
$3.8 million year-over-year increase in selling expenses on higher taxes due to higher volumes of ethanol sold, coupled with an increase in freight costs on higher sugar sold. On a year-to-date basis, Adjusted EBITDA amounted to $258.9 million, presenting an 16.0% decrease versus last year explained by the same aforementioned drivers, coupled with lower expected productivity compared to the previous year given the different weather scenarios and lower sugar and ethanol prices.
Net sales reached $226.6 million and $501.7 million in 3Q24 and 9M24, respectively, marking a 19.1% and 6.4% increase compared to the same period of last year. Higher sales during both periods was mainly explained by a year-over-year increase in sugar and ethanol volumes sold, which, in turn, fully mitigated the lower prices in US dollars in all our products.
In the case of sugar, greater volumes sold throughout the quarter as well as on a year-to-date basis were the main drivers towards the increase in revenues. This, in turn, fully offset the year-over-year decrease in prices. Global prices saw record levels in 2023 while in 2024 they decreased driven by a stronger pace of milling in Brazil, which resulted in higher sugar production.
Ethanol sales presented a 54.9% and 16.1% year-over-year increase during the quarter and on a year-to-date basis, respectively. This was driven by higher volumes sold of hydrous ethanol which, in turn, fully offset the year-over-year decrease in selling prices in US dollars. As explained in prior releases, ethanol prices were pressured throughout the year by an overall increase in production on greater cane crushing in Brazil. Nevertheless, prices have been recovering month-over-month (+37% in Brazilian Real versus the lowest level seen in early 2024) on strong domestic consumption given the low parity at the pump versus gasoline. During the quarter we strategically sold our production in order to profit from peaks in prices, while our tanks remain full as we continue to hold on to our ethanol inventories (49% of our year-to-date production) in order to capture higher expected prices.
Due to the efficiency and sustainability in our operations, ranked among the highest in the industry, we have the right to issue carbon credits (CBio) every time we sell ethanol. During the quarter, we sold $2.0 million worth of CBios, marking a 31.0% year-over-year increase. Year-to-date, we have already sold 405 thousand CBios, amounting to $6.0 million.
Net sales of energy presented a year-over-year reduction for both 3Q24 and 9M24 due to (i) lower energy prices; as well as to (ii) a weaker Brazilian Real compared to the previous year. In terms of volume sold, throughout the year we mostly exported energy related to our long-term contracts given the low spot energy prices.
| SUGAR, ETHANOL & ENERGY - PRODUCTION COSTS(1) | |||||
|---|---|---|---|---|---|
| Total Cost ('000) | Total Cost per Pound (cts/lbs) | ||||
| 3Q24 | Chg % | 3Q24 | 3Q23 | Chg % | |
| Industrial costs | 48,849 | 1.1% | 3.9 | 3.5 | 11.5% |
| Industrial costs | 21,007 | (28.9)% | 1.7 | 2.2 | (21.6)% |
| Cane from 3rd parties | 27,842 | 48.4% | 2.2 | 1.4 | 63.6% |
| Agricultural costs | 102,562 | (8.8)% | 8.3 | 8.2 | 0.6% |
| Harvest costs | 40,019 | (10.4)% | 3.2 | 3.3 | (1.2)% |
| Cane depreciation | 28,212 | (3.4)% | 2.3 | 2.1 | 6.5% |
| Agricultural Partnership Costs | 12,801 | (25.1)% | 1.0 | 1.2 | (17.4)% |
| Maintenance costs | 21,530 | 0.5% | 1.7 | 1.6 | 10.8% |
| Total Production Costs | 151,411 | (5.8)% | 12.2 | 11.7 | 3.9% |
| Depreciation & Amortization PP&E | (54,338) | (6.4)% | (4.4) | (4.2) | 3.2% |
| Total Production Costs (excl D&A) | 97,073 | (5.5)% | 7.8 | 7.5 | 4.2% |
All values are in US Dollars.
| SUGAR, ETHANOL & ENERGY - PRODUCTION COSTS(1) | |||||
|---|---|---|---|---|---|
| Total Cost ('000) | Total Cost per Pound (cts/lbs) | ||||
| 9M24 | Chg % | 9M24 | 9M23 | Chg % | |
| Industrial costs | 91,755 | 12.5% | 3.2 | 3.1 | 4.4% |
| Industrial costs | 56,240 | (4.9)% | 2.0 | 2.2 | (11.7)% |
| Cane from 3rd parties | 35,515 | 58.3% | 1.2 | 0.8 | 46.9% |
| Agricultural costs | 273,763 | 7.2% | 9.6 | 9.7 | (0.5)% |
| Harvest costs | 103,105 | 5.5% | 3.6 | 3.7 | (2.1)% |
| Cane depreciation | 74,475 | 23.0% | 2.6 | 2.3 | 14.1% |
| Agricultural Partnership Costs | 38,479 | (2.1)% | 1.4 | 1.5 | (9.1)% |
| Maintenance costs | 57,704 | —% | 2.0 | 2.2 | (7.2)% |
| Total Production Costs | 365,518 | 8.5% | 12.8 | 12.7 | 0.7% |
| Depreciation & Amortization PP&E | (141,982) | 9.2% | (5.0) | (4.9) | 1.3% |
| Total Production Costs (excl D&A) | 223,536 | 8.1% | 7.8 | 7.8 | 0.3% |
All values are in US Dollars.
(1)Total production cost may differ from our COGS figure as the former refers to the cost of our goods produced, whereas the latter refers to the cost of our goods sold.
In 3Q24, total production costs excluding depreciation and amortization totaled 7.8 cts/lb, 4.2% higher than the same period of last year. Although production costs in nominal terms experienced a 5.5% year-over-year decrease due to the depreciation of the Brazilian Real, the increase in unitary basis was mainly explained by (i) the 10.1% decrease in crushing volume, coupled with (ii) higher third party cane purchases. However, our cost of production on a year-to-date basis was in line versus the prior year, standing at 7.8 cts/lb. This was due to higher crushing volume which enabled us to better dilute our fixed costs, especially agricultural costs that represent roughly 80% of our cost structure. As always, we continue to use concentrated vinasse and filter cake to replace 100% of our potash fertilizer requirements and 48% of total fertilizers, reducing our sourcing needs.
| Farming - Financial Performance | | --- || FARMING - FINANCIAL HIGHLIGHTS(2) | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | | Gross Sales | | | | | | | | Crops | 66,600 | 61,126 | 9.0% | 175,065 | 170,841 | 2.5% | | Rice | 70,124 | 60,381 | 16.1% | 199,035 | 196,116 | 1.5% | | Dairy | 83,414 | 69,772 | 19.6% | 209,248 | 192,084 | 8.9% | | Total Sales | 220,138 | 191,279 | 15.1% | 583,348 | 559,041 | 4.3% | | Adjusted EBITDA (1) | | | | | | | | Crops | 2,025 | 28,793 | (93.0)% | 22,288 | 27,283 | (18.3)% | | Rice | 7,430 | 11,603 | (36.0)% | 51,399 | 39,681 | 29.5% | | Dairy | 7,930 | 6,255 | 26.8% | 25,504 | 22,555 | 13.1% | | Total Adjusted EBITDA (1) | 17,385 | 46,651 | (62.7)% | 99,191 | 89,519 | 10.8% |
(1) Please see “Reconciliation of Non-IFRS measures” starting on page 23 for a reconciliation of Adjusted EBITDA; (2) Figures for 3Q23 & 9M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.
Adjusted EBITDA in our Farming business totaled $17.4 million in 3Q24, compared to $46.7 million during 3Q23. The latter figure includes the sale of El Meridiano farm that generated an Adjusted EBITDA of $29.8 million, which previously was allocated in the Land Transformation segment. Excluding the farm sale, Adjusted EBITDA was in line versus the prior year. Results were positively impacted by an outperformance of our Dairy operations on higher prices of our value added products, especially in the domestic market; together with a $131/ton year-over-year increase in the average selling price of our rice. Results were partially offset by higher costs in U.S. dollar terms for our Crops and Rice segments, coupled with lower prices for most of our crops.
Year-to-date, Adjusted EBITDA was $99.2 million, 10.8% higher than the previous year. Higher results were mainly driven by (i) the outperformance in our Dairy segment, coupled with (ii) year-over-year gains in the mark-to-market of our biological assets for both our Crops and Rice operations. In the case of Rice, higher rice prices at the moment of harvest and higher planted area were the main growth drivers; whereas in Crops, the recovery in yields drove the increase in results. Also, during 2Q24 we completed the sale of La Pecuaria farm, which generated an Adjusted EBITDA of $15.3 million in our Crops operations.
For a more detailed explanation, please refer to the performance description of each business line starting next page.
| Crops Segment | |||||||
|---|---|---|---|---|---|---|---|
| GROSS SALES BREAKDOWN | Amount ( '000) | Volume | per unit | ||||
| --- | --- | --- | --- | --- | |||
| Crops | 3Q24 | Chg % | 3Q24 | 3Q23 | 3Q24 | 3Q23 | Chg % |
| Soybean | 15,923 | 24.6% | 52,262 | 27,978 | 305 | 457 | (33.3)% |
| Corn (1) | 13,977 | (27.9)% | 80,269 | 88,242 | 174 | 220 | (20.8)% |
| Wheat (2) | 4,978 | 211.1% | 21,199 | 7,275 | 235 | 220 | 6.8% |
| Sunflower | 2,505 | (39.8)% | 3,920 | 6,701 | 639 | 621 | 2.8% |
| Cotton Lint | 1,352 | (32.8)% | 862 | 1,006 | 1,569 | 2,000 | (21.6)% |
| Peanut | 21,583 | 21.9% | 11,752 | 13,784 | 1,836 | 1,285 | 42.9% |
| Others (3) | 6,281 | 80.9% | 2,010 | 3,185 | |||
| Total | 66,600 | 9.0% | 172,275 | 148,171 | |||
| GROSS SALES BREAKDOWN | 9M24 | Chg % | 9M24 | 9M23 | 9M24 | 9M23 | Chg % |
| Soybean | 55,232 | 31.7% | 177,998 | 90,338 | 310 | 464 | (33.2)% |
| Corn (1) | 40,744 | 38.2% | 232,801 | 131,999 | 175 | 223 | (21.6)% |
| Wheat (2) | 14,299 | 5.1% | 64,225 | 49,798 | 223 | 273 | (18.5)% |
| Sunflower | 7,988 | (55.9)% | 13,395 | 32,340 | 596 | 561 | 6.4% |
| Cotton Lint | 3,154 | (51.9)% | 2,153 | 3,188 | 1,465 | 2,058 | (28.8)% |
| Peanut | 39,782 | (19.9)% | 22,549 | 39,154 | 1,764 | 1,269 | 39.1% |
| Others (3) | 13,866 | 21.2% | 2,828 | 6,874 | |||
| Total | 175,065 | 2.5% | 515,949 | 353,691 |
All values are in US Dollars.
| HIGHLIGHTS - $ thousand(4) | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % |
|---|---|---|---|---|---|---|
| Gross Sales | 66,600 | 61,126 | 9.0% | 175,065 | 170,841 | 2.5% |
| Adjusted EBITDA | 2,025 | 28,793 | (93.0)% | 22,288 | 27,283 | (18.3)% |
(1) Includes sorghum; (2) Includes barley; (3) Includes sale of certifications related to RTRS soybean (Round Table on Responsible Soy Association) and sales related to our cattle activities; (4) Figures for 3Q23 & 9M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.
As stated in prior releases, we modified our internal reporting and farm sales are now being allocated to the operating segment where it belongs. Consequently, Adjusted EBITDA for 3Q24 was $26.8 million lower than 3Q23 due to an uneven year-over-year comparison as the latter reflects the sale of El Meridiano Farm completed in September 2023 ($29.8 million booked in Adjusted EBITDA), whereas no farm sales were conducted in 3Q24. On a year-to-date basis, Adjusted EBITDA was $22.3 million, which includes the sale of La Pecuaria farm conducted in April 2024 ($15.3 million booked in Adjusted EBITDA) while 9M23 reflects the aforementioned sale.
Focusing solely on our Crops performance, although we saw a significant year-over-year recovery in production (mainly soybean, wheat and peanut) due to normal weather conditions, results were negatively impacted by (i) lower international prices for our main products on higher global supply; (ii) higher costs in U.S. dollar terms; and (iii) lower-than-expected corn production due to the impact of spiroplasma (bacteria transmitted by leafhoppers).
By the end of 3Q24, we experienced a fire event in one of our storage cells at our peanut industrial facility in Cordoba, Argentina. Approximately 20% of our peanut production related to the 2023/24 harvest season was affected. We believe this incident will not have an impact in our financial figures since it was fully covered under our insurance policy and was peanut to be processed in February-March 2025 on or about the time in which we should start collecting the insurance indemnification.
| Rice Segment | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RICE(3) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Highlights | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | ||||||
| Gross Sales | 70,124 | 60,381 | 16.1% | 199,035 | 196,116 | 1.5% | ||||||
| Sales of white rice | 76 | 72 | 4.7% | 205 | 255 | (19.5)% | ||||||
| per ton | 683 | 19.2% | 841 | 652 | 29.0% | |||||||
| thousands | 49,266 | 24.8% | 172,801 | 166,386 | 3.9% | |||||||
| Sales of By-products | 8,630 | 11,115 | (22.4)% | 26,234 | 29,730 | (11.8)% | ||||||
| Adjusted EBITDA | 7,430 | 11,603 | (36.0)% | 51,399 | 39,681 | 29.5% | ||||||
| Rice Mills | ||||||||||||
| Total Processed Rough Rice(2) | 84 | 57 | 46.4% | 214 | 191 | 12.2% | ||||||
| Ending stock - White Rice | 67 | 35 | 90.1% | 67 | 35 | 90.1% |
All values are in US Dollars.
(1) Includes the sale of 1k and 36k tons of white rice sourced from third-parties during 9M24 & 9M23, respectively (no sourcing during 3Q24 and 3Q23); (2) Expressed in white rice equivalent; (3) Figures for 3Q23 & 9M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.
Rice sales throughout the quarter marked a 16.1% year-over-year increase, mainly explained by our average selling price, which stood at $814/ton, whereas volume sold was slightly up versus the prior year. Global rice prices continued to be high compared to historical levels due to the lower supply, mainly from India who remained out of the export market due to government restrictions. During the first nine months of the year, rice sales were flat compared to 9M23. Despite capturing a $189/ton year-over-year increase in the average selling price, this was partially offset by lower volumes sold given the lower production at the farm level.
Adjusted EBITDA amounted to $7.4 million in 3Q24, marking a 36.0% year-over-year decrease. Lower EBITDA generation was fully explained by higher costs in U.S. dollar terms, partially mitigated by the increase in revenues. However, on a year-to-date basis Adjusted EBITDA marked a 29.5% increase versus the previous year, reaching $51.4 million, mostly driven by year-over-year gains reported in our biological assets line on higher prices and higher planted area, which in turn, fully offset the increase in costs in U.S. dollar terms.
| Dairy Segment | | --- || DAIRY | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Highlights | | metric | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | | Gross Sales | | $ thousands (1) | 83,414 | 69,772 | 19.6% | 209,248 | 192,084 | 8.9% | | | | million liters (2) (3) | 98.9 | 112.2 | (11.9)% | 273.7 | 296.2 | (7.6)% | | Adjusted EBITDA | | $ thousands | 7,930 | 6,255 | 26.8% | 25,504 | 22,555 | 13.1% | | Dairy - Farm | | | | | | | | | | Milking Cows | average heads | 14,494 | 14,487 | 0.1% | 14,490 | 14,496 | —% | | Cow Productivity | | liter/cow/day | 38.1 | 38.8 | (1.7)% | 37.4 | 37.5 | (0.1)% | | Total Milk Produced | million liters | 50.8 | 51.7 | (1.7)% | 148.7 | 148.3 | 0.2% | | Dairy - Industry | | | | | | | | | | Total Milk Processed | million liters | 93.1 | 96.4 | (3.5)% | 260.3 | 255.0 | 2.1% |
(1) Includes sales of raw milk, processed dairy products, electricity and culled cows; (2) Includes sales of raw milk, fluid milk, powder milk and cheese, among others; (3) The difference between volume processed and volume sold is explained by the sale of raw milk to third parties.
In 3Q24, raw milk production was 50.8 million liters, 1.7% lower compared to the same period of last year. This was explained by a slight decline in productivity compared to 3Q23, although levels are still strong at 38.1 liters per cow per day. Year-to-date, total raw milk production amounted to 148.7 million liters in line with the previous year. We continue enhancing efficiencies in our free-stalls, which are already at full capacity.
At the industry level, we processed 93.1 million liters of raw milk during the quarter, 3.5% less than last year. Out of this volume, approximately 43% came from our dairy farm operations whereas the balance was sourced from local producers in nearby areas or supplied by partners to whom we provide tolling services. On a year-to-date basis, total processed milk amounted to 260.3 million liters of raw milk, marking a 2.1% year-over-year increase. We continue working on product development for the domestic and export markets, offering higher value added products as well as commoditized products, and being present across different price tiers with our consumer product brands.
Adjusted EBITDA amounted to $7.9 million in 3Q24 and $25.5 million in 9M24, marking a 26.8% and 13.1% increase compared to the same period of last year. Results were positively impacted by (i) an increase in sales due to higher average selling prices, as we improved the mix of higher value added products; (ii) our continuous focus on achieving efficiencies in our vertically integrated operations and increasing our productivity levels in every stage of the value chain; and (iii) our flexibility to divert milk to the production of a variety of dairy products, as well as to shift sales across markets.
Adjusted EBIT was $5.1 million and $17.0 million during 3Q24 and 9M24, respectively. However, once interest expense and the foreign exchange loss related to the financial debt are considered, the year-to-date results decrease to negative $7.5 million.
| Corporate expenses | | --- || CORPORATE EXPENSES | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | | Corporate Expenses | (6,615) | (5,982) | 10.6% | (17,051) | (16,873) | 1.1% |
Adecoagro’s corporate expenses include items that are not allocated to a specific business segment, such as the remuneration of executive officers and headquarters staff, certain professional services, office lease expenses, among others. Corporate expenses for 3Q24 were $6.6 million, 10.6% higher than the previous year, while on a year-to-date basis it amounted to $17.1 million, 1.1% higher year-over-year. In both cases this reflects the impact in costs from inflation in U.S. dollar terms.
| Net Income & Adjusted Net Income |
|---|
Net income amounted to $18.7 million and $75.9 million during 3Q24 and 9M24, respectively, down $56.7 million and $68.6 million year-over-year.
Adjusted net income reached $27.9 million during the quarter, whereas on an accumulated basis it reached $156.7 million, down $60.7 million and a $13.2 million year-over-year, respectively. This was explained by (i) lower results at a consolidated level as explained throughout the earnings release; together with (ii) a year-over-year loss in financial results due to a one-time event as in 9M23 we reflected financial gains from opportunities that the Argentine financial market offered. Nevertheless, these impacts were partially offset by year-over-year gains recorded within the income tax line due to effects of inflation in the income tax calculation in Argentina.
| ADJUSTED NET INCOME (1) | ||||||
|---|---|---|---|---|---|---|
| $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % |
| Profit for the period | 18,711 | 75,387 | (75.2)% | 75,923 | 144,512 | (47.5)% |
| Foreign exchange losses/(gains), net | (16,972) | 1,396 | n.a. | 5,051 | (33,954) | n.a |
| Cash flow hedge - transfer from equity | 1,912 | 9,357 | (79.6)% | 28,224 | 43,221 | (34.7)% |
| Inflation accounting effects | 7,528 | (17,409) | n.a. | 1,911 | (5,072) | n.a. |
| Net results from Fair Value adjustment of Investment Property | 2,679 | (417) | n.a | 22,484 | 913 | n.m |
| Impairment of assets destroyed by fire | 14,036 | — | n.m. | 14,036 | — | n.m. |
| Revaluation surplus of farmland sold | — | 20,245 | n.m. | 9,024 | 20,245 | (55.4)% |
| Adjusted Net Income | 27,894 | 88,559 | (68.5)% | 156,653 | 169,865 | (7.8)% |
(1) Please see “Reconciliation of Non-IFRS measures” starting on page 23 for a reconciliation of Adjusted Net Income.
| Indebtedness | | --- || NET DEBT BREAKDOWN | | | | | | | --- | --- | --- | --- | --- | --- | | $ thousands | 3Q24 | 2Q24 | Chg % | 3Q23 | Chg % | | Farming | 156,203 | 119,791 | 30.4% | 375,916 | (58.4)% | | Short term Debt | 123,744 | 105,843 | 16.9% | 329,240 | (62.4)% | | Long term Debt | 32,459 | 13,948 | n.m | 46,676 | (30.5)% | | Sugar, Ethanol & Energy | 703,221 | 710,880 | (1.1)% | 720,574 | (2.4)% | | Short term Debt | 47,052 | 46,023 | 2.2% | 14,984 | 214.0% | | Long term Debt | 656,169 | 664,857 | (1.3)% | 705,590 | (7.0)% | | Total Short term Debt | 170,796 | 151,866 | 12.5% | 344,224 | (50.4)% | | Total Long term Debt | 688,628 | 678,805 | 1.4% | 752,266 | (8.5)% | | Gross Debt | 859,424 | 830,671 | 3.5% | 1,096,490 | (21.6)% | | Cash & Equivalents | 198,255 | 140,311 | 41.3% | 349,812 | (43.3)% | | Short-Term Investments | 15,351 | 58,616 | (73.8)% | 39,926 | (61.6)% | | Net Debt | 645,818 | 631,744 | 2.2% | 706,752 | (8.6)% | | EOP Net Debt / Adj. EBITDA LTM | 1.5x | 1.3x | 12.6% | 1.5x | 1.8% |
As of September 30, 2024, Adecoagro's net debt position amounted to $645.8 million, marking an 8.6% year-over-year reduction. Throughout the year, we have been diligently reducing our gross debt and cash in the most efficient manner while looking to finance our operations at the lowest cost. This was achieved thanks to the cash generated during the year, which also enabled us to continue investing in growth projects across all our operating segments as well as distributing profits to shareholders, via cash dividend and share repurchases.
Our Net Debt ratio (Net Debt/EBITDA) as of 3Q24 was 1.5x, in line with the previous year due to the lower EBITDA generation during the last-twelve-months. We expect this ratio to be reduced in the following quarter, as most of our collections from product sales are concentrated in 4Q. Our Liquidity ratio (Cash & Equivalents + Marketable Inventories / Short Term Debt), reached 2.6x, showing the Company's full capacity to repay short term debt with its cash balance.
We believe that our balance sheet is in a healthy position based not only on the adequate overall debt levels but also in terms of our indebtedness, most of which is long-term debt.
| Capital Expenditures | | --- || CAPITAL EXPENDITURES | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | | Farming | 9,196 | 4,456 | 106.4% | 37,758 | 17,924 | 110.7% | | Expansion | 8,035 | 3,587 | 124.0% | 27,457 | 14,058 | 95.3% | | Maintenance | 1,162 | 869 | 33.8% | 10,301 | 3,867 | 166.4% | | Sugar, Ethanol & Energy | 39,750 | 43,479 | (8.6)% | 178,282 | 172,552 | 3.3% | | Maintenance | 21,653 | 33,812 | (36.0)% | 134,152 | 134,714 | (0.4)% | | Planting | 18,570 | 29,560 | (37.2)% | 63,045 | 74,188 | (15.0)% | | Industrial & Agricultural Machinery | 3,083 | 4,252 | (27.5)% | 71,107 | 60,526 | 17.5% | | Expansion | 18,097 | 9,667 | 87.2% | 44,130 | 37,838 | 16.6% | | Planting | 16,231 | 7,818 | 107.6% | 38,174 | 20,757 | 83.9% | | Industrial & Agricultural Machinery | 1,866 | 1,849 | 0.9% | 5,956 | 17,081 | (65.1)% | | Total | 48,947 | 47,935 | 2.1% | 216,040 | 190,476 | 13.4% | | Total Maintenance Capex | 22,815 | 34,681 | (34.2)% | 144,453 | 138,580 | 4.2% | | Total Expansion Capex | 26,132 | 13,254 | 97.2% | 71,587 | 51,896 | 37.9% |
Adecoagro's capital expenditures amounted to $48.9 million in 3Q24, in line versus the prior year, while on an accumulated basis it reached $216.0 million, marking a 13.4% year-over-year increase.
The Sugar, Ethanol and Energy business accounted for 81% or $39.8 million of total capex during the quarter. The year-over-year reduction in capex was mainly driven by lower hectares of renewal planting versus the prior year. On the other hand, expansion capex throughout the quarter increased versus the prior year given a greater expansion in sugarcane area. Year-to-date, capital expenditures amounted to $178.3 million, marking a 3.3% increase compared to the same period of last year, explained by the 9,493 hectares of expansion planting conducted during 2024.
The Farming businesses accounted for 19%, or $9.2 million of total capex in 3Q24, which was mostly deployed on expansion projects. Investments on this front include (i) the acquisition of agricultural equipment (seeders, harvesters and tractors) for our Rice operations; (ii) rice land development (previously not croppable); coupled with (iii) the construction of a new warehouse for our dairy products at our Chivilcoy facility. On a year-to-date basis, total capex amounted to $37.8 million, marking a $19.8 million year-over-year increase. This was fully explained by (i) a $6.4 million year-over-year increase in maintenance capex due to the renewal of our agricultural fleet; together with (ii) the payment of our third (and final) installment of Viterra's rice mills in Argentina and Uruguay, which was booked under expansion capex.
| Other Operational & Financial Metrics |
|---|
2023/24 Harvest Season
| FARMING PRODUCTION DATA | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Planting & Production | Planted Area (hectares) | 2023/24 Harvested Area | Yields (Tons per hectare) | ||||||
| 2023/24 | 2022/23 | Chg % | Hectares | % Harvested | Production | 2023/24 | 2022/23 | Chg % | |
| Soybean | 64,753 | 51,944 | 24.7% | 64,753 | 100.0% | 181,702 | 2.8 | 1.8 | 57.3% |
| Soybean 2nd Crop | 23,927 | 29,827 | (19.8)% | 23,927 | 100.0% | 52,362 | 2.2 | 1.0 | 109.3% |
| Corn (1) | 57,043 | 38,575 | 47.9% | 57,043 | 100.0% | 298,969 | 5.2 | 4.9 | 7.7% |
| Corn 2nd Crop | 2,548 | 2,836 | (10.1)% | 2,548 | 100.0% | 11,528 | 4.5 | 1.7 | 160.2% |
| Wheat (2) | 28,142 | 35,789 | (21.4)% | 28,142 | 100.0% | 88,207 | 3.1 | 2.3 | 34.7% |
| Sunflower | 10,832 | 18,131 | (40.3)% | 10,832 | 100.0% | 18,500 | 1.7 | 1.8 | (4.9)% |
| Cotton | 5,199 | 10,075 | (48.4)% | 5,199 | 100.0% | 2,207 | 0.4 | 0.6 | (31.3)% |
| Peanut | 24,282 | 19,813 | 22.6% | 24,282 | 100.0% | 87,586 | 3.6 | 2.0 | 81.8% |
| Other (3) | 3,698 | 2,658 | 39.1% | 3,698 | 100.0% | 2,452 | |||
| Total Crops | 220,425 | 209,646 | 5.1% | 220,425 | 100.0% | 743,514 | |||
| Rice(4) | 58,452 | 55,648 | 5.0% | 58,452 | 100.0% | 357,980 | 6.1 | 6.4 | (3.8)% |
| Total Farming | 278,877 | 265,294 | 5.1% | 278,877 | 100.0% | 1,101,494 | |||
| Owned Croppable Area | 99,357 | 97,812 | 1.6% | ||||||
| Leased Area | 153,044 | 134,820 | 13.5% | ||||||
| Second Crop Area | 26,476 | 32,662 | (18.9)% | ||||||
| Total Farming Area | 278,877 | 265,294 | 5.1% |
(1) Includes sorghum; (2) Includes barley and peas; (3) Includes chia, sesame, potatoes and beans; (4) Production does not include 125,502 tons of rough rice sourced from third-parties.
As of end of October 2024, we concluded harvesting activities related to our 2023/24 harvest season and produced 1,101,494 tons of aggregate grains. As previously explained, most of our crops presented a significant recovery in productivity given the normal weather conditions experienced, as opposed to last year which was affected by La Niña weather event. Nevertheless, we experienced lower-than-expected yields for our late corn production as it was negatively impacted by spiroplasma.
Planting activities for our 2024/25 campaign are currently underway, in which we expect to plant 304,207 hectares, marking a 9.1% year-over-year increase. We have already planted 47,876 hectares of winter crops, 70.1% more than the prior year, due to better soil moisture conditions in the Northern region of Argentina. Consequently, our area of second crop soybean increased, while first crop was reduced, as those hectares will have two crops cycles now rather than one. In the case of rice, growth in planted area was done via leasing. For this harvest season, we were able to enter into new area in the Northeast region of Argentina, where crop development cycle is slightly earlier on in the year, enabling us to make better use of our industrial capacity throughout the year.
A weak-to-moderate "La Niña" is forecasted until year-end. For a correct crop development, rainfalls must occur from January onwards as that is the moment when most of the crops define their yields.
2024/25 Planting Plan
| FARMING PLANTING PLAN | |||||
|---|---|---|---|---|---|
| Planting | Planting Plan (hectares) | 2024/25 Planting Progress | |||
| 2024/25 | 2023/24 | Chg % | Hectares | % Planted | |
| Soybean | 48,933 | 64,753 | (24.4)% | 1,655 | 3.4% |
| Soybean 2nd Crop | 43,211 | 23,927 | 80.6% | — | —% |
| Corn (1) | 43,616 | 57,043 | (23.5)% | 18,930 | 43.4% |
| Corn 2nd Crop | 2,295 | 2,548 | (9.9)% | — | —% |
| Wheat (2) | 47,876 | 28,142 | 70.1% | 47,876 | 100.0% |
| Sunflower | 13,119 | 10,832 | 21.1% | 6,081 | 46.4% |
| Cotton | 5,694 | 5,199 | 9.5% | — | —% |
| Peanut | 25,854 | 24,282 | 6.5% | 9,126 | 35.3% |
| Other (3) | 8,437 | 3,698 | 128.1% | — | —% |
| Total Crops | 239,034 | 220,425 | 8.4% | 83,668 | 35.0% |
| Rice | 65,172 | 58,452 | 11.5% | 60,029 | 92.1% |
| Total Farming | 304,207 | 278,877 | 9.1% | 143,697 | 47.2% |
| Owned Croppable Area | 99,305 | 99,357 | (0.1)% | ||
| Leased Area | 159,395 | 153,044 | 4.1% | ||
| Second Crop Area | 45,507 | 26,476 | 71.9% | ||
| Total Farming Area | 304,207 | 278,877 | 9.1% |
(1) Includes sorghum; (2) Includes barley and peas; (3) Includes chia, sesame and beans.
Inventories
| END OF PERIOD INVENTORIES | ||||||
|---|---|---|---|---|---|---|
| Volume | thousand | |||||
| Product | Metric | 3Q24 | 3Q23 | % Chg | 3Q24 | % Chg |
| Soybean | tons | 62,489 | 32,637 | 91.5% | 19,056 | 29.7% |
| Corn (1) | tons | 97,739 | 55,712 | 75.4% | 15,764 | 48.1% |
| Wheat (2) | tons | 9,495 | 5,146 | 84.5% | 1,757 | 57.1% |
| Sunflower | tons | 965 | 2,763 | (65.1)% | 692 | (61.2)% |
| Cotton | tons | 2,071 | 4,320 | (52.1)% | 4,209 | 7.7% |
| Rice (3) | tons | 67,274 | 35,390 | 90.1% | 30,193 | 130.4% |
| Peanut | tons | 16,352 | 11,161 | 46.5% | 17,288 | 38.9% |
| Organic Sugar | tons | — | 3,402 | (100.0)% | — | (100.0)% |
| Sugar | tons | 100,131 | 140,682 | (28.8)% | 31,681 | (29.8)% |
| Ethanol | m3 | 214,683 | 251,816 | (14.7)% | 97,967 | (15.9)% |
| Hydrous Ethanol | m3 | 202,090 | 204,294 | (1.1)% | 91,929 | (1.7)% |
| Anhydrous Ethanol | m3 | 12,594 | 47,522 | (73.5)% | 6,038 | (73.7)% |
| Fluid Milk | Th Lts | 6,819 | 6,037 | 13.0% | 4,548 | 35.8% |
| Powder Milk | tons | 1,172 | 1,298 | (9.7)% | 4,069 | (0.7)% |
| Cheese | tons | 458 | 383 | 19.6% | 2,152 | 19.2% |
| Butter | tons | — | 110 | (100.0)% | — | (100.0)% |
| Cbios | units | 125,647 | 37,847 | 232.0% | 1,567 | 98.9% |
| Fuel | m3 | 51 | 110 | (53.7)% | 45 | (55.0)% |
| Others | tons | 982 | 3,637 | (73.0)% | 755 | (73.2)% |
| Total | 231,742 | (1.1)% |
All values are in US Dollars.
(1) Includes sorghum; (2) Includes barley: (3) Expressed in white rice equivalent
Variations in inventory levels between 3Q24 and 3Q23 are attributable to changes in (i) production volumes resulting from changes in planted area, (ii) production mix between different crops and in yields obtained, (iii) different percentage of area harvested during the period, and (iv) commercial strategy or selling pace for each product.
Commodity Hedging
Adecoagro’s financial performance is affected by the volatile price environment inherent in agricultural commodities. The company uses forward and derivative markets to mitigate swings in commodity prices and stabilize cash flows.
The table below shows the average selling price of our hedged production volumes, including volumes that have already been invoiced and delivered, forward contracts with fixed-price and volumes hedged through derivative instruments.
| COMMODITY HEDGE POSITION - As of September 30, 2024 | |||||
|---|---|---|---|---|---|
| Consolidated Hedge Position | |||||
| Crops | Avg. FAS Price | CBOT FOB | |||
| Volume | USD/Ton | USD/Bu | Hedge (%) | ||
| 2023/2024 Harvest season | |||||
| Soybeans (tons) | 165,767 | 318.1 | 1,275.9 | 81% | |
| Corn (tons) | 200,758 | 181.0 | 580.6 | 84% | |
| Wheat (tons) | 65,699 | 228.6 | 733.2 | 99% | |
| 2024/2025 Harvest season | |||||
| Soybeans (tons) | 17,100 | 296.7 | 1,222.0 | 8% | |
| Corn (tons) | 15,500 | 174.2 | 560.9 | 6% | |
| Wheat (tons) | 37,900 | 228.4 | 742.0 | 37% | |
| Consolidated Hedge Position | |||||
| Sugar, Ethanol & Energy | Avg. FOB Price | ICE FOB | |||
| Volume | USD/Unit | Cents/Lb | Hedge (%) | ||
| 2024 FY | |||||
| Sugar (tons) | 669,568 | 503.2 | 22.8 | 84% | |
| Ethanol (m3) | — | — | — | —% | |
| Energy (MW/h) (1) | 744,153 | 41.0 | n.a. | 89% | |
| 2025 FY | |||||
| Sugar (tons) | 76,200 | 456.6 | 20.7 | 10% | |
| Ethanol (m3) | — | — | — | —% | |
| Energy (MW/h) (1) | 508,296 | 45.8 | n.a | 63% |
(1) Energy prices in 2024 were converted to USD at an exchange rate of BRL/USD 5.26. Energy prices in 2025 were converted to USD at an exchange rate of BRL/USD 5.50.
| 3Q24 Market Highlights |
|---|
◦Sugar prices remained under pressure throughout most of 3Q24. This was explained by (i) a solid export pace in Brazil's Center-South region (no logistic disruptions); coupled with (ii) expectations of a recovery in the country's sugar mix. However, by the end of August fires affecting part of Brazil's sugarcane fields led to unprecedented damages and losses. This, combined with the low cane purity due to the ongoing drought, led to a downward revision in the sugar mix expectation. Consequently, sugar prices rallied driven mostly by funds switching their position from net short to net long in New York ICE #11.
◦Ethanol prices presented another significant rally during 3Q24, mainly supported by (i) domestic demand; (ii) an increase in gasoline prices; as well as to (iii) concerns related to a crop reduction given the fire events that occurred in Brazil's Center-South region, which are expected to lead to a longer interharvest season. According to ESALQ index, both hydrous and anhydrous ethanol prices increased on average 18% and 14%, respectively, compared to 3Q23. On a quarter-over-quarter basis, prices were up 8% and 10%, respectively. Additionally, UNICA (Brazil's sugarcane association) reported that hydrous sales continued to achieve impressive results during the quarter, marking an 18% year-over-year increase and 31% year-to-date increase versus the same period of last year.
◦Brazil's carbon credit market under the RenovaBio program presented a 42% year-over-year decrease in 3Q24, reaching an average price of 76 BRL/CBio (approximately 14 USD/CBio).
◦In 3Q24, energy spot prices in the southeast region of Brazil were 235% higher year-over-year and 272% higher compared to 2Q24. The low prices seen during the first semester presented a significant increase during August and September due to the decline in the reservoir levels (41% versus 68% in June) on below-average rains. According to the market, there is an upside risk to current prices.
◦Grain prices did not present significant changes during 3Q24. Soybean prices were down by 0.4%, whereas corn decreased by 3% versus 2Q24. Initially, there was a decline in prices due to favorable weather conditions in the United States, as it confirmed a good harvest season and thus increased global stocks, while global demand remained stable. Nevertheless, prices experienced an increase, returning to the levels seen at the beginning of 3Q24, given (i) dry weather and high temperatures in South America, coupled with (ii) policies implemented in China to boost economic growth. Locally, prices were 1% higher for soybean and 4% higher for corn versus 2Q24. Despite following the same global trends, local prices were positively impacted by an appreciation of the Argentine Peso.
◦During 3Q24, global rice prices remained at high levels, even though there was some volatility seen in Asian rice prices due to the speculation of a potential reopening of non-basmati exports coming from India in the near future - the accumulation of stocks in India as the ban continued led to these rumors. In South America, exports kept running at a normal pace, despite prices losing competitiveness in many destinations, coupled with an increase in freight costs to Central America. Planting activities in Argentina and the Southwest region of Brazil were normal, whereas there were delays in Uruguay and in the South Central and Southeast region of Brazil. Planting area in the region (Argentina-Brazil-Uruguay) is expected to be 15% higher than the prior year.
◦During 3Q24, international dairy prices recovered on the back of (i) dry weather in South America; (ii) higher prices for fat in Europe; coupled with (iii) tariff protections and sanitary restrictions, among other drivers. Looking at the domestic market (Argentina), prices of raw milk continue to trade at high historical levels due to the decline in production on adverse weather and lower amount of milking cows.
| 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.
The forward-looking statements included in this press release relate to, among others: (i) our business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing our business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which we operate, environmental laws and regulations; (iv) the implementation of our business strategy; (v) the correlation between petroleum, ethanol and sugar prices; (vi) our plans relating to acquisitions, joint ventures, strategic alliances or divestitures, and to consolidate our position in different businesses; (vii) the efficiencies, cost savings and competitive advantages resulting from acquisitions; (viii) the implementation of our financing strategy, capital expenditure plan and expected shareholder distributions; (ix) the maintenance of our relationships with customers; (x) the competitive nature of the industries in which we operate; (xi) the cost and availability of financing; (xii) future demand for the commodities we produce; (xiii) international prices for commodities; (xiv) the condition of our land holdings; (xv) the development of the logistics and infrastructure for transportation of our products in the countries where we operate; (xvi) the performance of the South American and world economies; and (xvii) the relative value of the Brazilian Reais, the Argentine Peso, and the Uruguayan Peso compared to other currencies.
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.
| Reconciliation of Non-IFRS measures |
|---|
To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS financial measures in this press release:
•Adjusted EBITDA
•Adjusted EBIT
•Adjusted EBITDA margin
•Net Debt
•Net Debt to Adjusted EBITDA
•Adjusted Net Income
In this section, we provide an explanation and a reconciliation of each of our non-IFRS financial measures to their most directly comparable IFRS measures. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS.
We believe these non-IFRS financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management for financial and operational decision making.
There are limitations associated with the use of non-IFRS financial measures as an analytical tool. In particular, many of the adjustments to our IFRS financial measures reflect the exclusion of items, such as depreciation and amortization, changes in fair value, the related income tax effects of the aforementioned exclusions and exchange differences generated by the net liability monetary position in USD in the countries where the functional currency is the local currency, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-IFRS financial measures used by other companies, limiting their usefulness for comparison purposes.
Adjusted EBITDA & Adjusted EBIT
Adjusted Consolidated EBITDA equals the sum of our Adjusted Segment EBITDA for each of our operating segments. Effective for the third quarter ended September 30, 2024, we changed our definition of Adjusted Consolidated EBITDA and Adjusted Segment EBITDA to exclude any charges related to impairments. We did not have any impairment or disposal charges for any of the previous periods presented.
We define “Adjusted Consolidated EBITDA” as (i) consolidated net profit (loss) for the year, as applicable, before interest expense, income taxes, depreciation of property, plant and equipment and amortization of intangible assets, net gain or loss from fair value adjustments of investment property land, foreign exchange gains or losses, other net financial results and bargain purchase gain on acquisition and any charges related to impairments (ii) adjusted by those items, that do not impact profit and loss, but are recorded directly in shareholders’ equity, including (a) the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, reflected under the line item: "Reserve from the sale of noncontrolling interests in subsidiaries” and (b) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings; and (iii) net of the combined effect of the application of IAS 29 and IAS 21 from the Argentine operations included in profit from operations.
We believe that Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are important measures of operating performance for our company and each operating segment, respectively, because they allow investors to evaluate and compare our consolidated operating results and to evaluate and compare the operating performance of our segments, respectively, including our return on capital and operating efficiencies, from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences (income taxes), bargain purchase gain, any charges related to impairments, foreign exchange gains or losses and other financial results. In addition, by including the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, investors can also evaluate and compare the full value and returns generated by our land transformation activities. Other companies may calculate Adjusted Consolidated EBITDA and Adjusted Segment EBITDA differently, and therefore our Adjusted Consolidated EBITDA and Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are not measures of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss), cash flows from operating activities, segment profit from operations and other measures determined in accordance with IFRS. Items excluded from Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are significant and necessary
components to the operations of our business, and, therefore, Adjusted Consolidated EBITDA and Adjusted Segment EBITDA should only be used as a supplemental measure of our company’s operating performance, and of each of our operating segments, respectively. We also believe Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are useful for securities analysts, investors and others to evaluate and compare the financial performance of our company and other companies in the agricultural industry. These non-IFRS measures should be considered in addition to, but not as a substitute for or superior to, the information contained in either our statements of income or segment information.
Our Adjusted Consolidated EBIT equals the sum of our Adjusted Segment EBITs for each of our operating segments. Effective for the third quarter ended September 30, 2024, we changed our definition of Adjusted Consolidated EBIT and Adjusted Segment EBIT to exclude any charges related to impairments. We did not have any impairment or disposal charges for any of the previous periods presented.
We define “Adjusted Consolidated EBIT” as (i) consolidated net profit (loss) for the year, as applicable, before interest expense, income taxes, net gain from fair value adjustments of investment property land, foreign exchange gains or losses, other net financial results, bargain purchase gain on acquisition and any charges related to impairments (ii) adjusted by those items, that do not impact profit and loss, but are recorded directly in shareholders’ equity, including (a) the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, reflected under the line item: "Reserve from the sale of noncontrolling interests in subsidiaries” and (b) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings; and (iii) net of the combined effect of the application of IAS 29 and IAS 21 from the Argentine operations included in profit from operations.
We believe that Adjusted Consolidated EBIT and Adjusted Segment EBIT are important measures of operating performance, for our company and each operating segment, respectively, because they allow investors to evaluate and compare our consolidated operating results and to evaluate and compare the operating performance of our segments, from period to period by including the impact of depreciable fixed assets and removing the impact of our capital structure (interest expense from our outstanding debt), tax consequences (income taxes), foreign exchange gains or losses and other financial results. In addition, by including the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland and also the sale of farmlands, and impairments, investors can evaluate the full value and returns generated by our land transformation activities. Other companies may calculate Adjusted Consolidated EBIT and Adjusted Segment EBIT differently, and therefore our Adjusted Consolidated EBIT and Adjusted Segment EBIT may not be comparable to similar measures used by other companies. Adjusted Consolidated EBIT and Adjusted Segment EBIT are not measures of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss), cash flows from operating activities, segment profit from operations and other measures determined in accordance with IFRS. Items excluded from Adjusted Consolidated EBIT and Adjusted Segment EBIT are significant and necessary components to the operations of our business, and, therefore, Adjusted Consolidated EBIT and Adjusted Segment EBIT should only be used as a supplemental measure of the operating performance of our company, and of each of our operating segments, respectively.
Reconciliation of both Adjusted EBITDA and Adjusted EBIT starts on page 26.
Net Debt & Net Debt to Adjusted EBITDA
Net debt is defined as the sum of non-current and current borrowings less cash and cash equivalents and short-term investments (namely US-Treasury Bills use as collateral of short-term borrowings). This measure is widely used by management. Management is consistently tracking our leverage position and our ability to repay and service our debt obligations over time. We have therefore set a leverage ratio target that is measured by net debt divided by Adjusted Consolidated EBITDA.
We believe that the ratio net debt to Adjusted Consolidated EBITDA provides useful information to investors because management uses it to manage our debt-equity ratio in order to promote access to capital markets and our ability to meet scheduled debt service obligations.
| RECONCILIATION - NET DEBT | |||||
|---|---|---|---|---|---|
| $ thousands | 3Q24 | 2Q24 | Chg % | 3Q23 | Chg % |
| Total Borrowings | 859,424 | 830,671 | 3.5% | 1,096,490 | (21.6)% |
| Cash and Cash equivalents | 198,255 | 140,311 | 41.3% | 349,812 | (43.3)% |
| Short-term investments | 15,351 | 58,616 | (73.8)% | 39,926 | (61.6)% |
| Net Debt | 645,818 | 631,744 | 2.2% | 706,752 | (8.6)% |
Adjusted Net Income
Effective for the third quarter ended September 30, 2024, we changed our definition of Adjusted Net Income to exclude any charges related to impairments. We did not have any impairment or disposal charges for any of the previous periods presented.
We define Adjusted Net Income as (i) profit / (loss) of the period/year before net gain / (losses) from fair value adjustments of investment property land, bargain purchase gain on acquisition and any impairment; plus (ii) any non-cash finance costs resulting from foreign exchange gain/losses for such period, which are composed by both exchange differences and cash flow hedge transfer from equity, included in Financial Results, net, in our statement of income; net of the related income tax effects, plus (iii) gains or losses from disposals of non-controlling interests in subsidiaries whose main underlying asset is farmland, which are reflected in our shareholders’ equity under the line item “Reserve from the sale of non-controlling interests in subsidiaries” if any, plus (iv) the reversal of the aforementioned income tax effect, plus (v) inflation accounting effect; plus (vi) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings, if any.
We believe that Adjusted Net Income is an important measure of performance for our company allowing investors to properly assess the impact of the results of our operations in our equity. In fact, results arising from the revaluation effect of our net monetary position held in foreign currency in the countries where our functional currency is the local currency do not affect the equity of the Company, when measured in foreign / reporting currency. Conversely, the tax effect resulting from the aforementioned revaluation effect does impact the equity of the Company, since it reduces/increases the income tax to be paid in each country. Accordingly we have added back the income tax effect to Adjusted Net Income.
In addition, by including the gains or losses from disposals of non-controlling interests in subsidiaries whose main underlying asset is farmland, investors can also include the full value and returns generated by our land transformation activities.
Other companies may calculate Adjusted Net Income differently, and therefore our Adjusted Net Income may not be comparable to similar measures used by other companies. Adjusted Net Income is not a measure of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss). This non-IFRS measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our financial statements.
| ADJUSTED NET INCOME | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | ||||
| Profit for the period | 18,711 | 75,387 | (75.2)% | 75,923 | 144,512 | (47.5)% | ||||
| Foreign exchange losses/(gains), net | (16,972) | 1,396 | n.a. | 5,051 | (33,954) | n.a | ||||
| Cash flow hedge - transfer from equity | 1,912 | 9,357 | (79.6)% | 28,224 | 43,221 | (34.7)% | ||||
| Inflation accounting effects | 7,528 | (17,409) | n.a | 1,911 | (5,072) | n.a. | ||||
| Net results from Fair Value adjustment of Investment Property | 2,679 | (417) | n.a | 22,484 | 913 | n.m | ||||
| Impairment of assets destroyed by fire | 14,036 | — | n.m. | 14,036 | — | n.m. | ||||
| Revaluation surplus of farmland sold | — | 20,245 | n.m. | 9,024 | 20,245 | (55.4)% | ||||
| Adjusted Net Income | 27,894 | 88,559 | (68.5)% | 156,653 | 169,865 | (7.8)% | ||||
| ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 3Q24 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | Crops | Rice | Dairy | Farming | Sugar, Ethanol & Energy | Corporate | Total | |||
| Sales of goods and services rendered | 66,600 | 70,124 | 83,414 | 220,138 | 236,515 | — | 456,653 | |||
| Cost of goods sold and services rendered | (56,635) | (57,157) | (71,701) | (185,493) | (160,617) | — | (346,110) | |||
| Initial recog. and changes in FV of BA and agricultural produce | 2,146 | 584 | 2,649 | 5,379 | 4,577 | — | 9,956 | |||
| Gain from changes in NRV of agricultural produce after harvest | (5,189) | 1 | — | (5,188) | 23 | — | (5,165) | |||
| Margin on Manufacturing and Agricultural Act. Before Opex | 6,922 | 13,552 | 14,362 | 34,836 | 80,498 | — | 115,334 | |||
| General and administrative expenses | (1,906) | (2,436) | (3,032) | (7,374) | (6,135) | (8,227) | (21,736) | |||
| Selling expenses | (6,257) | (8,965) | (7,634) | (22,856) | (23,614) | 1,341 | (45,129) | |||
| Other operating income, net | (13,320) | (85) | 1,399 | (12,006) | (4,956) | (134) | (17,096) | |||
| Profit from Operations Before Financing and Taxation | (14,561) | 2,066 | 5,095 | (7,400) | 45,793 | (7,020) | 31,373 | |||
| Net results from Fair value adjustment of Investment property | 22 | 1,577 | — | 1,599 | — | — | 1,599 | |||
| Impairment of assets destroyed by fire | 14,162 | — | — | 14,162 | — | — | 14,162 | |||
| Adjusted EBIT | (377) | 3,643 | 5,095 | 8,361 | 45,793 | (7,020) | 47,134 | |||
| (-) Depreciation and Amortization | 2,402 | 3,787 | 2,835 | 9,024 | 54,337 | 405 | 63,766 | |||
| Adjusted EBITDA | 2,025 | 7,430 | 7,930 | 17,385 | 100,130 | (6,615) | 110,900 | |||
| Reconciliation to Profit/(Loss) | ||||||||||
| Adjusted EBITDA | 110,900 | |||||||||
| (+) Depreciation and Amortization | (63,766) | |||||||||
| (+) Financial result, net | (6,424) | |||||||||
| (+) Net results from Fair value adjustment of Investment property | (1,599) | |||||||||
| (+) Income Tax (Charge)/Benefit | (4,544) | |||||||||
| (+) Impairment of assets destroyed by fire | (14,162) | |||||||||
| (+) Translation Effect (IAS 21) | (1,694) | |||||||||
| Profit/(Loss) for the Period | 18,711 | |||||||||
| ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 3Q23 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | Crops | Rice | Dairy | Farming | Sugar, Ethanol & Energy | Corporate | Total | |||
| Sales of goods and services rendered | 61,126 | 60,381 | 69,772 | 191,279 | 196,668 | — | 387,947 | |||
| Cost of goods sold and services rendered | (53,573) | (43,799) | (57,351) | (154,723) | (128,570) | — | (283,293) | |||
| Initial recog. and changes in FV of BA and agricultural produce | 1,206 | (699) | (212) | 295 | 25,519 | — | 25,814 | |||
| Gain from changes in NRV of agricultural produce after harvest | (568) | — | — | (568) | 248 | — | (320) | |||
| Margin on Manufacturing and Agricultural Act. Before Opex | 8,191 | 15,883 | 12,209 | 36,283 | 93,865 | — | 130,148 | |||
| General and administrative expenses | (3,302) | (2,683) | (2,056) | (8,041) | (5,929) | (6,275) | (20,245) | |||
| Selling expenses | (5,129) | (8,307) | (6,603) | (20,039) | (19,805) | (82) | (39,926) | |||
| Other operating income, net | 6,878 | 2,625 | (22) | 9,481 | (11,544) | 41 | (2,022) | |||
| Profit from Operations Before Financing and Taxation | 6,638 | 7,518 | 3,528 | 17,684 | 56,587 | (6,316) | 67,955 | |||
| Net results from Fair value adjustment of Investment property | (110) | (145) | — | (255) | — | — | (255) | |||
| Transfer of revaluation surplus derived from the disposals of assets | 20,245 | — | — | 20,245 | — | — | 20,245 | |||
| Adjusted EBIT | 26,773 | 7,373 | 3,528 | 37,674 | 56,587 | (6,316) | 87,945 | |||
| (-) Depreciation and Amortization | 2,020 | 4,230 | 2,727 | 8,977 | 58,043 | 334 | 67,354 | |||
| Adjusted EBITDA | 28,793 | 11,603 | 6,255 | 46,651 | 114,630 | (5,982) | 155,299 | |||
| Reconciliation to Profit/(Loss) | ||||||||||
| Adjusted EBITDA | 155,299 | |||||||||
| (+) Depreciation and Amortization | (67,354) | |||||||||
| (+) Financial result, net | 20,897 | |||||||||
| (+) Net results from Fair value adjustment of Investment property | 255 | |||||||||
| (+) Income Tax (Charge)/Benefit | (13,645) | |||||||||
| (+) Revaluation surplus of farmland sold | (20,245) | |||||||||
| (+) Translation Effect (IAS 21) | 180 | |||||||||
| Profit/(Loss) for the Period | 75,387 | |||||||||
| ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 9M24 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | Crops | Rice | Dairy | Farming | Sugar, Ethanol & Energy | Corporate | Total | |||
| Sales of goods and services rendered | 175,065 | 199,035 | 209,248 | 583,348 | 524,651 | — | 1,107,999 | |||
| Cost of goods sold and services rendered | (159,224) | (157,478) | (174,854) | (491,556) | (378,144) | — | (869,700) | |||
| Initial recog. and changes in FV of BA and agricultural produce | 28,954 | 31,927 | 6,661 | 67,542 | 41,531 | — | 109,073 | |||
| Gain from changes in NRV of agricultural produce after harvest | (17,583) | — | — | (17,583) | 540 | — | (17,043) | |||
| Margin on Manufacturing and Agricultural Act. Before Opex | 27,212 | 73,484 | 41,055 | 141,751 | 188,578 | — | 330,329 | |||
| General and administrative expenses | (16,195) | (11,391) | (8,271) | (35,857) | (18,364) | (19,754) | (73,975) | |||
| Selling expenses | (13,206) | (24,506) | (19,188) | (56,900) | (55,884) | 1,314 | (111,470) | |||
| Other operating income, net | (5,358) | (14,327) | 3,450 | (16,235) | 2,560 | 272 | (13,403) | |||
| Profit from Operations Before Financing and Taxation | (7,547) | 23,260 | 17,046 | 32,759 | 116,890 | (18,168) | 131,481 | |||
| Net results from Fair value adjustment of Investment property | 588 | 17,600 | — | 18,188 | — | — | 18,188 | |||
| Transfer of revaluation surplus derived from the disposals of assets | 9,024 | — | — | 9,024 | — | — | 9,024 | |||
| Impairment of assets destroyed by fire | 14,162 | 14,162 | 14,162 | |||||||
| Adjusted EBIT | 16,227 | 40,860 | 17,046 | 74,133 | 116,890 | (18,168) | 172,855 | |||
| (-) Depreciation and Amortization | 6,061 | 10,539 | 8,458 | 25,058 | 141,981 | 1,117 | 168,156 | |||
| Adjusted EBITDA | 22,288 | 51,399 | 25,504 | 99,191 | 258,871 | (17,051) | 341,011 | |||
| Reconciliation to Profit/(Loss) | ||||||||||
| Adjusted EBITDA | 341,011 | |||||||||
| (+) Depreciation and Amortization | (168,156) | |||||||||
| (+) Financial result, net | (98,809) | |||||||||
| (+) Net results from Fair value adjustment of Investment property | (18,188) | |||||||||
| (+) Income Tax (Charge)/Benefit | 39,980 | |||||||||
| (+) Revaluation surplus of farmland sold | (9,024) | |||||||||
| (+) Impairment of assets destroyed by fire | (14,162) | |||||||||
| (+) Translation Effect (IAS 21) | 3,271 | |||||||||
| Profit/(Loss) for the Period | 75,923 | |||||||||
| ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 9M23 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | Crops | Rice | Dairy | Farming | Sugar, Ethanol & Energy | Corporate | Total | |||
| Sales of goods and services rendered | 170,841 | 196,116 | 192,084 | 559,041 | 483,261 | — | 1,042,302 | |||
| Cost of goods sold and services rendered | (150,431) | (140,191) | (160,349) | (450,971) | (324,103) | — | (775,074) | |||
| Initial recog. and changes in FV of BA and agricultural produce | 2,174 | 6,988 | 9,902 | 19,064 | 97,957 | — | 117,021 | |||
| Gain from changes in NRV of agricultural produce after harvest | (337) | — | — | (337) | (167) | — | (504) | |||
| Margin on Manufacturing and Agricultural Act. Before Opex | 22,247 | 62,913 | 41,637 | 126,797 | 256,948 | — | 383,745 | |||
| General and administrative expenses | (12,585) | (11,126) | (7,382) | (31,093) | (18,228) | (17,650) | (66,971) | |||
| Selling expenses | (17,377) | (25,459) | (19,488) | (62,324) | (43,592) | (108) | (106,024) | |||
| Other operating income, net | 7,524 | 2,796 | (226) | 10,094 | (17,043) | (64) | (7,013) | |||
| Profit from Operations Before Financing and Taxation | (191) | 29,124 | 14,541 | 43,474 | 178,085 | (17,822) | 203,737 | |||
| Net results from Fair value adjustment of Investment property | 993 | 107 | — | 1,100 | — | — | 1,100 | |||
| Transfer of revaluation surplus derived from the disposals of assets | 20,245 | — | — | 20,245 | — | — | 20,245 | |||
| Adjusted EBIT | 21,047 | 29,231 | 14,541 | 64,819 | 178,085 | (17,822) | 225,082 | |||
| (-) Depreciation and Amortization | 6,236 | 10,450 | 8,014 | 24,700 | 130,076 | 949 | 155,725 | |||
| Adjusted EBITDA | 27,283 | 39,681 | 22,555 | 89,519 | 308,161 | (16,873) | 380,807 | |||
| Reconciliation to Profit/(Loss) | ||||||||||
| Adjusted EBITDA | 380,807 | |||||||||
| (+) Depreciation and Amortization | (155,725) | |||||||||
| (+) Financial result, net | (6,786) | |||||||||
| (+) Net results from Fair value adjustment of Investment property | (1,100) | |||||||||
| (+) Income Tax (Charge)/Benefit | (51,774) | |||||||||
| (+) Revaluation surplus of farmland sold | (20,245) | |||||||||
| (+) Translation Effect (IAS 21) | (665) | |||||||||
| Profit/(Loss) for the Period | 144,512 | |||||||||
| Condensed Consolidated Interim Financial Statments | ||||||||||
| --- | ||||||||||
| Statement of Income | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | ||||
| Revenue | 471,495 | 385,794 | 22.2% | 1,144,687 | 1,034,925 | 10.6% | ||||
| Cost of revenue | (361,003) | (281,660) | 28.2% | (900,810) | (769,671) | 17.0% | ||||
| Initial recognition and Changes in fair value of biological assets and agricultural produce | 13,602 | 25,643 | (47.0)% | 121,302 | 116,008 | 4.6% | ||||
| Changes in net realizable value of agricultural produce after harvest | (5,874) | (215) | n . a | (19,453) | (399) | n . a | ||||
| Margin on Manufacturing and Agricultural Activities Before Operating Expenses | 118,220 | 129,562 | (8.8)% | 345,726 | 380,863 | (9.2)% | ||||
| General and administrative expenses | (24,111) | (19,957) | 20.8% | (78,958) | (65,994) | 19.6% | ||||
| Selling expenses | (46,790) | (39,543) | 18.3% | (115,511) | (104,870) | 10.1% | ||||
| Other operating income, net | (17,640) | (1,926) | 815.9% | (16,505) | (6,927) | 138.3% | ||||
| Profit from operations | 29,679 | 68,136 | (56.4)% | 134,752 | 203,072 | (33.6)% | ||||
| Finance income | 4,139 | 29,934 | (86.2)% | 9,164 | 105,783 | (91.3)% | ||||
| Finance costs | (3,035) | (26,446) | (88.5)% | (106,062) | (117,641) | (9.8)% | ||||
| Other financial results - Net gain / (loss) of inflation effects on the monetary items | (7,528) | 17,408 | n .a | (1,911) | 5,072 | n .a | ||||
| Financial results, net | (6,424) | 20,896 | (130.7)% | (98,809) | (6,786) | 1,356.1% | ||||
| Profit before income tax | 23,255 | 89,032 | (73.9)% | 35,943 | 196,286 | (81.7)% | ||||
| Income tax | (4,544) | (13,645) | (66.7)% | 39,980 | (51,774) | (177.2)% | ||||
| Profit for the period | 18,711 | 75,387 | (75.2)% | 75,923 | 144,512 | (47.5)% | ||||
| Statement of Cashflows | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | ||||
| Cash flows from operating activities: | ||||||||||
| Profit from operations | 18,711 | 75,387 | (75.2)% | 75,923 | 144,512 | (47.5)% | ||||
| Adjustments for: | ||||||||||
| Income tax (benefit) / expense | 4,544 | 13,645 | (66.7)% | (39,980) | 51,774 | (177.2)% | ||||
| Depreciation | 64,124 | 66,731 | (3.9)% | 168,845 | 153,533 | 10.0% | ||||
| Amortization | 624 | 511 | 22.1% | 1,769 | 1,585 | 11.6% | ||||
| Depreciation of right of use assets | 16,761 | 22,130 | (24.3)% | 64,127 | 59,859 | 7.1% | ||||
| Gain from disposal of farmland and other assets | — | (9,526) | n . a | (6,050) | (9,526) | n . a | ||||
| Loss / (gain) from disposal of other property items | (810) | (666) | 21.6% | (478) | (1,828) | (73.9)% | ||||
| Impairment due to fire | 14,036 | — | n . a | 14,036 | — | n . a | ||||
| Equity settled shared-based compensation granted | 1,615 | 1,819 | (11.2)% | 5,081 | 6,684 | (24.0)% | ||||
| Loss / (gain) from derivative financial instruments and forwards | 6,226 | 10,473 | (40.6)% | (3,118) | 13,053 | (123.9)% | ||||
| Interest and other expense , net | 14,098 | (15,097) | (193.4)% | 58,885 | (1,222) | (4,918.7)% | ||||
| Initial recognition and changes in fair value of non harvested biological assets (unrealized) | 35,219 | 22,222 | n . a | (5,904) | (15,320) | (61.5)% | ||||
| Changes in net realizable value of agricultural produce after harvest (unrealized) | (3,254) | 1,729 | n . a | 1,834 | 1,622 | n . a | ||||
| Provision and allowances | (2,005) | (257) | 680.2% | (1,993) | (121) | 1,547.1% | ||||
| Net gain from fair value adjustment of Investment property | 2,679 | (417) | n . a | 22,484 | 913 | n . a | ||||
| Net gain of inflation effects on the monetary items of the effect of inflation on monetary items | 7,528 | (17,408) | n . a | 1,911 | (5,072) | (137.7)% | ||||
| Foreign exchange gains, net | (16,972) | 1,396 | (1,315.8)% | 5,051 | (33,954) | (114.9)% | ||||
| Cash flow hedge – transfer from equity | 1,912 | 9,357 | (79.6)% | 28,224 | 43,221 | (34.7)% | ||||
| Subtotal | 165,036 | 182,029 | (9.3)% | 390,647 | 409,713 | (4.7)% | ||||
| Changes in operating assets and liabilities: | ||||||||||
| (Increase)/Decrease in trade and other receivables | (113,241) | 5,264 | (2,251.2)% | (150,992) | (67,473) | 123.8% | ||||
| (Increase)/Decrease in inventories | 55,994 | (16,556) | (438.2)% | (111,079) | (94,969) | 17.0% | ||||
| (Increase)/Decrease in biological assets | (57,527) | (19,497) | 195.1% | 64,349 | 65,192 | (1.3)% | ||||
| (Increase)/Decrease in other assets | 17 | (306) | (105.6)% | (374) | (655) | (42.9)% | ||||
| (Increase)/Decrease in derivatives financial instruments | (288) | (3,198) | (91.0)% | 20,471 | (10,790) | (289.7)% | ||||
| (Increase)/Decrease in trade and other payables | (8,097) | 60,858 | (113.3)% | (49,063) | (54,040) | (9.2)% | ||||
| (Increase)/Decrease in payroll and social securities liabilities | 9,143 | 8,084 | 13.1% | 4,970 | 10,133 | (51.0)% | ||||
| (Increase)/Decrease in provisions for other liabilities | 433 | 88 | 392.0% | 901 | 828 | 8.8% | ||||
| Cash generated in operations | 51,470 | 216,766 | (76.3)% | 169,830 | 257,939 | (34.2)% | ||||
| Income taxes paid | (2,404) | 749 | (421.0)% | (4,963) | (740) | 570.7% | ||||
| Net cash generated from operating activities (a) | 49,066 | 217,515 | (77.4)% | 164,867 | 257,199 | (35.9)% | ||||
| Statement of Cashflows | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| $ thousands | 3Q24 | 3Q23 | Chg % | 9M24 | 9M23 | Chg % | ||||
| Cash flows from investing activities | ||||||||||
| Acquisition of business, net of cash acquired | (658) | — | n . a | (15,923) | (3,193) | 398.7% | ||||
| Purchases of property, plant and equipment | (49,056) | (47,284) | 3.7% | (203,153) | (184,870) | 9.9% | ||||
| Purchase of cattle and non current biological assets planting cost | (261) | 9 | n . a | (1,445) | (770) | 87.7% | ||||
| Purchases of intangible assets | (462) | (594) | (22.2)% | (1,019) | (1,356) | (24.9)% | ||||
| Interest received | 2,023 | 30,537 | (93.4)% | 6,496 | 69,681 | (90.7)% | ||||
| Proceeds from sale of property, plant and equipment | 270 | 938 | (71.2)% | 890 | 2,728 | (67.4)% | ||||
| Proceeds from sale of farmlands | 3,215 | 46,989 | n . a | 23,259 | 48,097 | (51.6)% | ||||
| Acquisition of short term | — | — | n . a | (33,711) | (34,500) | (2.3)% | ||||
| Dispositions of short term investment | 40,975 | — | n . a | 77,551 | 93,009 | (16.6)% | ||||
| Net cash used in investing activities (b) | (3,954) | 30,595 | (112.9)% | (147,055) | (11,174) | 1216.0% | ||||
| Cash flows from financing activities | ||||||||||
| Proceeds from EQ settled share-based compensation exercise | 98 | 38 | 157.9% | 98 | 38 | 157.9% | ||||
| Interest paid (c) | (10,993) | (8,180) | 34.4% | (19,064) | (32,816) | (41.9)% | ||||
| Proceeds from long-term borrowings | 74,225 | (4,813) | (1642.2)% | 94,594 | 19,900 | 375.3% | ||||
| Payment of long-term borrowings | (84,987) | (11,797) | n . a | (96,727) | (11,797) | n . a | ||||
| Proceeds from short-term borrowings | 40,065 | 84,137 | (52.4)% | 89,936 | 480,297 | (81.3)% | ||||
| Payment of short-term borrowings | (4,617) | (39,566) | (88.3)% | (121,660) | (365,810) | (66.7)% | ||||
| Payment of derivatives financial instruments | (502) | — | n . a | (581) | — | n . a | ||||
| Lease Payments | (25,306) | (22,782) | 11.1% | (80,756) | (81,651) | (1.1)% | ||||
| Purchase of own shares | (16,584) | (7,542) | 119.9% | (58,279) | (19,012) | 206.5% | ||||
| Dividends paid to non-controlling interest | (252) | — | n . a | (376) | — | n . a | ||||
| Dividends to shareholders | — | — | n . a | (17,500) | (17,500) | —% | ||||
| Net cash used in financing activities (d) | (28,853) | (10,505) | 174.7% | (210,315) | (28,351) | 641.8% | ||||
| Net increase / (decrease) in cash and cash equivalents | 16,259 | 237,605 | (93.2)% | (192,503) | 217,674 | (188.4)% | ||||
| Cash and cash equivalents at beginning of year | 140,311 | 196,609 | (28.6)% | 339,781 | 230,653 | 47.3% | ||||
| Exchange gains on cash and cash equivalents (e) | 41,685 | (84,402) | (149.4)% | 50,977 | (98,515) | (151.7)% | ||||
| Cash and cash equivalents at end of year | 198,255 | 349,812 | (43.3)% | 198,255 | 349,812 | (43.3)% | ||||
| Combined effect of IAS 29 and IAS 21 of the Argentine subsidiaries over: | 3Q24 | 3Q23 | 9M24 | 9M23 | ||||||
| --- | --- | --- | --- | --- | --- | |||||
| Operating activities | (a) | (48,525) | 70,219 | (67,244) | 25,113 | |||||
| Investing activities | (b) | (3,886) | (606) | (7,889) | (1,370) | |||||
| Interest paid | (c) | 3,277 | 2,309 | 7,429 | 1,655 | |||||
| Financing activities | (d) | 9,144 | 5,228 | 42,457 | 55,229 | |||||
| Exchange rate changes and inflation on cash and cash equivalents | (e) | 43,267 | (74,841) | 32,676 | (78,972) | Statement of Financial position | ||||
| --- | --- | --- | --- | |||||||
| $ thousands | 9M24 | 12M23 | Chg % | |||||||
| ASSETS | ||||||||||
| Non-Current Assets | ||||||||||
| Property, plant and equipment | 1,597,718 | 1,549,565 | 3.1% | |||||||
| Right of use assets | 387,375 | 406,713 | (4.8)% | |||||||
| Investment property | 33,542 | 33,364 | 0.5% | |||||||
| Intangible assets, net | 38,224 | 27,519 | 38.9% | |||||||
| Biological assets | 42,414 | 23,706 | 78.9% | |||||||
| Deferred income tax assets | 6,554 | 9,777 | (33.0)% | |||||||
| Trade and other receivables, net | 37,872 | 39,060 | (3.0)% | |||||||
| Derivative financial instruments | 15,183 | 18,001 | (15.7)% | |||||||
| Other Assets | 2,163 | 1,515 | 42.8% | |||||||
| Total Non-Current Assets | 2,161,045 | 2,109,220 | 2.5% | |||||||
| Current Assets | ||||||||||
| Biological assets | 182,696 | 204,331 | (10.6)% | |||||||
| Inventories | 400,630 | 256,051 | 56.5% | |||||||
| Trade and other receivables, net | 269,648 | 179,055 | 50.6% | |||||||
| Derivative financial instruments | 85 | 13,819 | (99.4)% | |||||||
| Short-term investment | 15,351 | 62,637 | (75.5)% | |||||||
| Cash and cash equivalents | 198,255 | 339,781 | (41.7)% | |||||||
| Total Current Assets | 1,066,665 | 1,055,674 | 1.0% | |||||||
| TOTAL ASSETS | 3,227,710 | 3,164,894 | 2.0% | |||||||
| SHAREHOLDERS EQUITY | ||||||||||
| Capital and reserves attributable to equity holders of the parent | ||||||||||
| Share capital | 167,073 | 167,073 | —% | |||||||
| Share premium | 666,839 | 743,810 | (10.3)% | |||||||
| Cumulative translation adjustment | (378,876) | (603,861) | (37.3)% | |||||||
| Equity-settled compensation | 16,128 | 18,654 | (13.5)% | |||||||
| Cash Flow Hedge | — | (17,124) | (100.0)% | |||||||
| Other reserves | 151,254 | 150,677 | 0.4% | |||||||
| Treasury shares | (15,814) | (8,062) | 96.2% | |||||||
| Revaluation surplus | 246,699 | 317,598 | (22.3)% | |||||||
| Reserve from the sale of minority interests in subsidiaries | 41,574 | 41,574 | —% | |||||||
| Retained earnings | 501,698 | 418,789 | 19.8% | |||||||
| Equity attributable to equity holders of the parent | 1,396,575 | 1,229,128 | 13.6% | |||||||
| Non controlling interest | 39,470 | 36,520 | 8.1% | |||||||
| TOTAL SHAREHOLDERS EQUITY | 1,436,045 | 1,265,648 | 13.5% | |||||||
| LIABILITIES | ||||||||||
| Non-Current Liabilities | ||||||||||
| Trade and other payables | 494 | 1,008 | (51.0)% | |||||||
| Borrowings | 688,628 | 697,843 | (1.3)% | |||||||
| Lease liabilities | 301,465 | 325,569 | (7.4)% | |||||||
| Deferred income tax liabilities | 352,272 | 376,331 | (6.4)% | |||||||
| Payrroll and Social liabilities | 1,278 | 1,570 | (18.6)% | |||||||
| Provisions for other liabilities | 2,742 | 2,871 | (4.5)% | |||||||
| Total Non-Current Liabilities | 1,346,879 | 1,405,192 | (4.1)% | |||||||
| Current Liabilities | ||||||||||
| Trade and other payables | 174,699 | 190,730 | (8.4)% | |||||||
| Current income tax liabilities | 6,342 | 5,023 | 26.3% | |||||||
| Payrroll and Social liabilities | 37,963 | 37,357 | 1.6% | |||||||
| Borrowings | 170,796 | 207,106 | (17.5)% | |||||||
| Lease liabilities | 52,827 | 52,941 | (0.2)% | |||||||
| Derivative financial instruments | 1,355 | 169 | 701.8% | |||||||
| Provisions for other liabilities | 804 | 728 | 10.4% | |||||||
| Total Current Liabilities | 444,786 | 494,054 | (10.0)% | |||||||
| TOTAL LIABILITIES | 1,791,665 | 1,899,246 | (5.7)% | |||||||
| TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 3,227,710 | 3,164,894 | 2.0% |
33
Document
Adecoagro S.A.
Condensed Consolidated Interim Financial Statements as of September 30, 2024 and for the nine-month periods ended September 30, 2024 and 2023
Legal information
Denomination: Adecoagro S.A.
Legal address: 28, Boulevard Raiffeisen, L-2411, 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 (Note 21)
Outstanding Capital Stock: 100,836,801 common shares
Treasury Shares: 10,545,014 common shares
F - 1
Adecoagro S.A.
Condensed Consolidated Interim Statements of Income
for the nine-month and three-month periods ended September 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Nine-months ended September 30, | Three-months ended September 30, | ||||
|---|---|---|---|---|---|
| Note | 2024 | 2023 | 2024 | 2023 | |
| (unaudited) | |||||
| Revenue | 4 | 1,144,687 | 1,034,925 | 471,495 | 385,794 |
| Cost of revenue | 5 | (900,810) | (769,671) | (361,003) | (281,660) |
| Initial recognition and changes in fair value of biological assets and agricultural produce | 15 | 121,302 | 116,008 | 13,602 | 25,643 |
| Changes in net realizable value of agricultural produce after harvest | (19,453) | (399) | (5,874) | (215) | |
| Margin on manufacturing and agricultural activities before operating expenses | 345,726 | 380,863 | 118,220 | 129,562 | |
| General and administrative expenses | 6 | (78,958) | (65,994) | (24,111) | (19,957) |
| Selling expenses | 6 | (115,511) | (104,870) | (46,790) | (39,543) |
| Other operating expense, net | 8 | (16,505) | (6,927) | (17,640) | (1,926) |
| Profit from operations | 134,752 | 203,072 | 29,679 | 68,136 | |
| Finance income | 9 | 9,164 | 105,783 | 4,139 | 29,934 |
| Finance costs | 9 | (106,062) | (117,641) | (3,035) | (26,446) |
| Other financial results - Net (loss) / gain of inflation effects on the monetary items | 9 | (1,911) | 5,072 | (7,528) | 17,408 |
| Financial results, net | 9 | (98,809) | (6,786) | (6,424) | 20,896 |
| Profit before income tax | 35,943 | 196,286 | 23,255 | 89,032 | |
| Income tax benefit / (expense) | 10 | 39,980 | (51,774) | (4,544) | (13,645) |
| Profit for the period | 75,923 | 144,512 | 18,711 | 75,387 | |
| Attributable to: | |||||
| Equity holders of the parent | 75,974 | 143,747 | 19,061 | 75,910 | |
| Non-controlling interest | (51) | 765 | (350) | (523) | |
| Earnings per share attributable to the equity holders of the parent during the period: | |||||
| Basic earnings per share | 0.735 | 1.338 | 0.189 | 0.708 | |
| Diluted earnings per share | 0.732 | 1.334 | 0.189 | 0.705 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 2
Adecoagro S.A.
Condensed Consolidated Interim Statements of Comprehensive Income
for the nine-month and three-month periods ended September 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Nine-months ended September 30, | Three-months ended September 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (unaudited) | ||||
| Profit for the period | 75,923 | 144,512 | 18,711 | 75,387 |
| Other comprehensive income: | ||||
| Items that may be reclassified subsequently to profit or loss: | ||||
| Exchange differences on translating foreign operations | 428,407 | 23,378 | 64,355 | (36,153) |
| Cash flow hedge, net of tax (Note 2) | 17,124 | 24,235 | 217 | 5,706 |
| Items that will not be reclassified to profit or loss: | ||||
| Revaluation surplus net of tax | (264,129) | (9,518) | (33,456) | 12,190 |
| Other comprehensive income | 181,402 | 38,095 | 31,116 | (18,257) |
| Total comprehensive income for the period | 257,325 | 182,607 | 49,827 | 57,130 |
| Attributable to: | ||||
| Equity holders of the parent | 254,119 | 181,531 | 49,518 | 57,590 |
| Non-controlling interest | 3,206 | 1,076 | 309 | (460) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 3
Adecoagro S.A.
Condensed Consolidated Interim Statements of Financial Position
as of September 30, 2024 and December 31, 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| September 30, | December 31, | ||
|---|---|---|---|
| Note | 2024 | 2023 | |
| (unaudited) | |||
| ASSETS | |||
| Non-Current Assets | |||
| Property, plant and equipment, net | 11 | 1,597,718 | 1,549,565 |
| Right of use assets | 12 | 387,375 | 406,713 |
| Investment property | 13 | 33,542 | 33,364 |
| Intangible assets, net | 14 | 38,224 | 27,519 |
| Biological assets | 15 | 42,414 | 23,706 |
| Deferred income tax assets | 10 | 6,554 | 9,777 |
| Trade and other receivables, net | 17 | 37,872 | 39,060 |
| Derivative financial instruments | 16 | 15,183 | 18,001 |
| Other Assets | 2,163 | 1,515 | |
| Total Non-Current Assets | 2,161,045 | 2,109,220 | |
| Current Assets | |||
| Biological assets | 15 | 182,696 | 204,331 |
| Inventories | 18 | 400,630 | 256,051 |
| Trade and other receivables, net | 17 | 269,648 | 179,055 |
| Derivative financial instruments | 16 | 85 | 13,819 |
| Short-term investments | 15,351 | 62,637 | |
| Cash and cash equivalents | 19 | 198,255 | 339,781 |
| Total Current Assets | 1,066,665 | 1,055,674 | |
| TOTAL ASSETS | 3,227,710 | 3,164,894 | |
| SHAREHOLDERS EQUITY | |||
| Capital and reserves attributable to equity holders of the parent | |||
| Share capital | 21 | 167,073 | 167,073 |
| Share premium | 21 | 666,839 | 743,810 |
| Cumulative translation adjustment | (378,876) | (603,861) | |
| Equity-settled compensation | 16,128 | 18,654 | |
| Cash flow hedge | — | (17,124) | |
| Other reserves | 151,254 | 150,677 | |
| Treasury shares | (15,814) | (8,062) | |
| Revaluation surplus | 246,699 | 317,598 | |
| Reserve from the sale of non-controlling interests in subsidiaries | 41,574 | 41,574 | |
| Retained earnings | 501,698 | 418,789 | |
| Equity attributable to equity holders of the parent | 1,396,575 | 1,229,128 | |
| Non-controlling interest | 39,470 | 36,520 | |
| TOTAL SHAREHOLDERS EQUITY | 1,436,045 | 1,265,648 | |
| LIABILITIES | |||
| Non-Current Liabilities | |||
| Trade and other payables | 23 | 494 | 1,008 |
| Borrowings | 24 | 688,628 | 697,843 |
| Lease liabilities | 25 | 301,465 | 325,569 |
| Deferred income tax liabilities | 10 | 352,272 | 376,331 |
| Payroll and social security liabilities | 26 | 1,278 | 1,570 |
| Provisions for other liabilities | 27 | 2,742 | 2,871 |
| Total Non-Current Liabilities | 1,346,879 | 1,405,192 | |
| Current Liabilities | |||
| Trade and other payables | 23 | 174,699 | 190,730 |
| Current income tax liabilities | 10 | 6,342 | 5,023 |
| Payroll and social security liabilities | 26 | 37,963 | 37,357 |
| Borrowings | 24 | 170,796 | 207,106 |
| Lease liabilities | 25 | 52,827 | 52,941 |
| Derivative financial instruments | 16 | 1,355 | 169 |
| Provisions for other liabilities | 27 | 804 | 728 |
| Total Current Liabilities | 444,786 | 494,054 | |
| TOTAL LIABILITIES | 1,791,665 | 1,899,246 | |
| TOTAL SHAREHOLDERS EQUITY AND LIABILITIES | 3,227,710 | 3,164,894 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 4
Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the nine-month periods ended September 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Attributable to equity holders of the parent | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share Capital (Note 21) | Share Premium | Cumulative Translation Adjustment | Equity-settled Compensation | Cash flow hedge | Other reserves | Treasury shares | Revaluation surplus | Reserve from the sale of non-controlling interests in subsidiaries | Retained Earnings | Subtotal | Non-Controlling Interest | Total Shareholders’ Equity | ||
| 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 period | — | — | — | — | — | — | — | — | — | 143,747 | 143,747 | 765 | 144,512 | |
| Other comprehensive income: | ||||||||||||||
| - Items that may be reclassified subsequently to profit or loss: | ||||||||||||||
| Exchange differences on translating foreign operations | — | — | 13,589 | — | — | — | — | 8,639 | — | — | 22,228 | 1,150 | 23,378 | |
| Cash flow hedge (*) | — | — | — | — | 24,235 | — | — | — | — | — | 24,235 | — | 24,235 | |
| Revaluation of surplus (**) | — | — | — | — | — | — | — | (8,679) | — | — | (8,679) | (839) | (9,518) | |
| Transfer of the revaluation surplus derived from the disposals of assets (**) | — | — | — | — | — | — | — | (13,148) | — | 13,148 | — | — | — | |
| Other comprehensive income for the period | — | — | 13,589 | — | 24,235 | — | — | (13,188) | — | 13,148 | 37,784 | 311 | 38,095 | |
| Total comprehensive income for the period | — | — | 13,589 | — | 24,235 | — | — | (13,188) | — | 156,895 | 181,531 | 1,076 | 182,607 | |
| Reserves for the benefit of government grants (1) | — | — | — | — | — | 13,634 | — | — | — | (13,634) | — | — | — | |
| - Employee share options (Note 21) | ||||||||||||||
| Exercised | — | 42 | — | (14) | — | — | 10 | — | — | — | 38 | — | 38 | |
| - Restricted shares and restricted units (Note 22): | ||||||||||||||
| Value of employee services | — | — | — | 4,744 | — | — | — | — | — | — | 4,744 | — | 4,744 | |
| Vested | — | 7,528 | — | (6,145) | — | 1,554 | — | — | — | — | 2,937 | — | 2,937 | |
| Forfeited | — | — | — | — | — | 30 | (30) | — | — | — | — | — | — | |
| Granted | — | — | — | — | — | (824) | 824 | — | — | — | — | — | — | |
| -Purchase of own shares (Note 21) | — | (15,888) | — | — | — | — | (3,124) | — | — | — | (19,012) | — | (19,012) | |
| - Dividends to shareholders (Note 21) | — | (35,000) | — | — | — | — | — | — | — | — | (35,000) | — | (35,000) | |
| Balance at September 30, 2023 (unaudited) | 167,073 | 749,851 | (442,440) | 17,377 | (20,637) | 141,319 | (7,112) | 268,721 | 41,574 | 345,603 | 1,261,329 | 38,628 | 1,299,957 |
(*) Net of 9,893 of Income tax.
(**) Net of 12,317 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.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 5
Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the nine-month periods ended September 30, 2024 and 2023 (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Attributable to equity holders of the parent | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share Capital (Note 21) | Share Premium | Cumulative Translation Adjustment | Equity-settled Compensation | Cash flow hedge | Other reserves | Treasury shares | Revaluation surplus | Reserve from the sale of non-controlling interests in subsidiaries | Retained Earnings | Subtotal | Non-Controlling Interest | Total Shareholders’ Equity | |
| Balance at January 1, 2024 | 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 |
| Profit for the period | — | — | — | — | — | — | — | — | 75,974 | 75,974 | (51) | 75,923 | |
| Other comprehensive loss: | |||||||||||||
| - Items that may be reclassified subsequently to profit or loss: | |||||||||||||
| Exchange differences on translating foreign operations | — | — | 224,985 | — | — | — | — | 178,277 | — | — | 403,262 | 25,145 | 428,407 |
| Cash flow hedge (*) | — | — | — | — | 17,124 | — | — | — | — | — | 17,124 | — | 17,124 |
| - Items that will not be reclassified to profit or loss: | |||||||||||||
| Revaluation surplus (**) | — | — | — | — | — | — | — | (242,241) | — | — | (242,241) | (21,888) | (264,129) |
| Transfer of the revaluation surplus derived from the disposals of assets (**) | — | — | — | — | — | — | — | (6,935) | — | 6,935 | — | — | — |
| Other comprehensive income for the period | — | — | 224,985 | — | 17,124 | — | — | (70,899) | — | 6,935 | 178,145 | 3,257 | 181,402 |
| Total comprehensive income for the period | — | — | 224,985 | — | 17,124 | — | — | (70,899) | — | 82,909 | 254,119 | 3,206 | 257,325 |
| - Employee share options (Note 22): | |||||||||||||
| Exercised | — | 115 | — | (38) | — | — | 22 | — | — | — | 99 | — | 99 |
| - Restricted shares and restricted units (Note 22): | |||||||||||||
| Value of employee services | — | — | — | 3,623 | — | — | — | — | — | — | 3,623 | — | 3,623 |
| Vested | — | 7,540 | — | (6,111) | — | 1,456 | — | — | — | — | 2,885 | — | 2,885 |
| Forfeited | — | — | — | — | — | 27 | (27) | — | — | — | — | — | — |
| Granted | — | — | — | — | — | (906) | 906 | — | — | — | — | — | — |
| - Purchase of own shares (Note 21) | — | (49,626) | — | — | — | — | (8,653) | — | — | — | (58,279) | — | (58,279) |
| - Dividends to shareholders (Note 21) | — | (35,000) | — | — | — | — | — | — | — | — | (35,000) | — | (35,000) |
| - Dividends to non-controlling interest | — | — | — | — | — | — | — | — | — | — | — | (256) | (256) |
| Balance at September 30, 2024 (unaudited) | 167,073 | 666,839 | (378,876) | 16,128 | — | 151,254 | (15,814) | 246,699 | 41,574 | 501,698 | 1,396,575 | 39,470 | 1,436,045 |
(*) Net of 7,973 of Income tax.
(**) Net of 144,594 of Income tax.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 6
Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the nine-month periods ended September 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Nine-months ended September 30, | |||
|---|---|---|---|
| Note | 2024 | 2023 | |
| (unaudited) | |||
| Cash flows from operating activities: | |||
| Profit for the period | 75,923 | 144,512 | |
| Adjustments for: | |||
| Income tax (benefit) / expense | 10 | (39,980) | 51,774 |
| Depreciation of property, plant and equipment | 11 | 168,845 | 153,533 |
| Depreciation of right of use assets | 12 | 64,127 | 59,859 |
| Net loss from the fair value adjustment of investment properties | 13 | 22,484 | 913 |
| Amortization of intangible assets | 14 | 1,769 | 1,585 |
| Gain from the sale of farmland and other assets | 8 | (6,050) | (9,526) |
| Gain from disposal of other property items | 8 | (478) | (1,828) |
| Impairment due to fire | 20 | 14,036 | — |
| Equity settled share-based compensation granted | 7 | 5,081 | 6,684 |
| (Gain) / loss from derivative financial instruments | 8, 9 | (3,118) | 13,053 |
| Interest, finance cost related to lease liabilities and other financial expense, net | 9 | 58,885 | (1,222) |
| Initial recognition and changes in fair value of non-harvested biological assets (unrealized) | (5,904) | (15,320) | |
| Changes in net realizable value of agricultural produce after harvest (unrealized) | 1,834 | 1,622 | |
| Provision and allowances | (1,993) | (121) | |
| Net (gain) / loss of inflation effects on the monetary items | 9 | 1,911 | (5,072) |
| Foreign exchange loss / (gains), net | 9 | 5,051 | (33,954) |
| Cash flow hedge – transfer from equity | 9 | 28,224 | 43,221 |
| Subtotal | 390,647 | 409,713 | |
| Changes in operating assets and liabilities: | |||
| Increase in trade and other receivables | (150,992) | (67,473) | |
| Increase in inventories | (111,079) | (94,969) | |
| Decrease in biological assets | 64,349 | 65,192 | |
| Increase in other assets | (374) | (655) | |
| Decrease / (increase) in derivative financial instruments | 20,471 | (10,790) | |
| Decrease in trade and other payables | (49,063) | (54,040) | |
| Increase in payroll and social security liabilities | 4,970 | 10,133 | |
| Increase in provisions for other liabilities | 901 | 828 | |
| Net cash provided by operating activities before taxes paid | 169,830 | 257,939 | |
| Income tax paid | (4,963) | (740) | |
| Net cash provided by operating activities | (a) | 164,867 | 257,199 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 7
Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the nine-month periods ended September 30, 2024 and 2023 (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
| Nine-months ended September 30, | |||
|---|---|---|---|
| Note | 2024 | 2023 | |
| (unaudited) | |||
| Cash flows from investing activities: | |||
| Acquisition of a business, net of cash and cash equivalents acquired | (15,923) | (3,193) | |
| Purchases of property, plant and equipment | 11 | (203,153) | (184,870) |
| Purchases of cattle and non-current biological assets | (1,445) | (770) | |
| Purchases of intangible assets | 14 | (1,019) | (1,356) |
| Interest received and others | 6,496 | 69,681 | |
| Proceeds from sale of property, plant and equipment | 890 | 2,728 | |
| Proceeds from sale of farmlands and other assets | 27 | 23,259 | 48,097 |
| Acquisition of short-term investment | 16 | (33,711) | (34,500) |
| Disposal of short-term investment | 16 | 77,551 | 93,009 |
| Net cash used in investing activities | (b) | (147,055) | (11,174) |
| Cash flows from financing activities: | |||
| Proceeds from equity settled share-based compensation exercise | 98 | 38 | |
| Proceeds from long-term borrowings | 94,594 | 19,900 | |
| Payments of long-term borrowings | (96,727) | (11,797) | |
| Proceeds from short-term borrowings | 89,936 | 480,297 | |
| Payment of short-term borrowings | (121,660) | (365,810) | |
| Payments of derivative financial instruments | (581) | — | |
| Lease payments | (80,756) | (81,651) | |
| Interest paid | (c) | (19,064) | (32,816) |
| Purchase of own shares | (58,279) | (19,012) | |
| Dividends paid to non-controlling interest | (376) | — | |
| Dividends to shareholders | 21 | (17,500) | (17,500) |
| Net cash used in financing activities | (d) | (210,315) | (28,351) |
| Net decrease in cash and cash equivalents | (192,503) | 217,674 | |
| Cash and cash equivalents at beginning of period | 19 | 339,781 | 230,653 |
| Effect of exchange rate changes and inflation on cash and cash equivalents | (e) | 50,977 | (98,515) |
| Cash and cash equivalents at end of period | 19 | 198,255 | 349,812 |
Combined effect of IAS 29 and IAS 21 of the Argentine subsidiaries over:
| Nine-months ended September 30, | |||
|---|---|---|---|
| 2024 | 2023 | ||
| Operating activities | (a) | (67,244) | 25,113 |
| Investing activities | (b) | (7,889) | (1,370) |
| Interest paid | (c) | 7,429 | 1,655 |
| Financing activities | (d) | 42,457 | 55,229 |
| Exchange rate changes and inflation on cash and cash equivalents | (e) | 32,676 | (78,972) |
For non-cash transactions, see Note 12 for right of use assets.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 8
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
1. General information
Adecoagro S.A. (the “Company” or “Adecoagro”) is the Group’s ultimate parent company and is a société anonyme (stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are collectively referred to hereinafter as the "Group." The Group’s activities are carried out through two major lines of business, namely, Farming and Sugar, Ethanol and Energy. The Farming line of business is further comprised of three reportable segments, which are described in detail in Note 3 to these condensed consolidated interim financial statements (hereinafter referred to as the “Interim Financial Statements”).
Adecoagro is a public company listed in the New York Stock Exchange (NYSE) as a foreign registered company under the ticker symbol of AGRO.
These Interim Financial Statements have been approved for issue by the Board of Directors on November 12, 2024.
2. Financial risk management
Risk management principles and processes
The Group is exposed to several risks arising from financial instruments including price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and the Group’s approach to the identification, assessment and mitigation of risks is included in the annual consolidated financial statements. There have been no significant changes to the Group's exposure and risk management principles and processes since December 31, 2023. See Note 2 to the annual consolidated financial statements for more information.
However, the Group considers that the following tables below provide useful information to understand the Group’s interim results for the nine-month period ended September 30, 2024. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.
Argentina status:
The Argentine subsidiaries of the Group operate in an economic context in which main variables have a strong volatility as a consequence of political and economic uncertainties, both in national and international environments. Argentina’s inflation rate for the nine-month period ended September 30, 2024 and 2023 were 101.6% and 103.2%, respectively. December 31, 2023, 2022 and 2021 was 211.4%, 94.8% and 50.9%, respectively. The Group uses Argentina’s official exchange rate to account for transactions in Argentina, mainly affecting the farming business segment, which as of September 30, 2024 and 2023, respectively, was 970.5 and 350, respectively, against the U.S. dollar.
On December 10, 2023, a new government took office with the aim to boost a deregulation of the Argentine economy and other regulations. Certain regulations and/or restrictions have been eased and others remain in force, although it is expected that they will be lifted gradually. However, the scope and timing of the measures, including but not limited to the existing foreign exchange regulations remains uncertain as of the date of these Consolidated Financial Statements.
The Argentine Central Bank under prior administration, had implemented certain measures that control and restrict the ability of companies and individuals to access the foreign exchange market known as MULC (for its acronym in Spanish) for certain transactions. However, the performance of blue-chip swap transactions known as “Contado con Liquidación” or CCL (for its acronym in Spanish) was an alternative lawful mechanism. The blue-chip swap transactions are capital markets transactions that could be implemented in different ways, both for the inflow and outflow of funds. The implicit exchange rate applicable to this type of transactions is higher with respect to the official foreign exchange rate.
The Company is permanently monitoring the evolution of the program to determine the possible impacts that these new measures could have on the Company’s business and financial position.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 9
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
2. Financial risk management (continued)
•Exchange rate risk
The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates at September 30, 2024. All amounts are shown in US dollars.
| September 30, 2024 | |||||
|---|---|---|---|---|---|
| (unaudited) | |||||
| Functional currency | |||||
| Net monetary position (Liability)/ Asset | Argentine <br>Peso | Brazilian <br>Reais | Uruguayan<br>Peso | US Dollar | Total |
| Argentine Peso | (11,271) | — | — | — | (11,271) |
| Brazilian Reais | — | (605,103) | — | — | (605,103) |
| US Dollar | (132,769) | (230,130) | 37,864 | (7,090) | (332,125) |
| Uruguayan Peso | — | — | (941) | — | (941) |
| Total | (144,040) | (835,233) | 36,923 | (7,090) | (949,440) |
The Group’s analysis shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the U.S. Dollar. The Group estimated that, other factors being constant, a hypothetical 10% appreciation/(depreciation) of the U.S. Dollar against the Brazilian real respective functional currencies for the period ended September 30, 2024 or the Uruguayan peso, or a 25% appreciation/(depreciation) of the U.S. Dollar against the Argentine peso. A portion of this effect would have been recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future revenue in U.S. Dollars (see Hedge Accounting - Cash Flow Hedge below for details).
| September 30, 2024 | ||||
|---|---|---|---|---|
| (unaudited) | ||||
| Functional currency | ||||
| Net monetary position | Argentine <br>Peso | Brazilian <br>Reais | Uruguayan<br>Peso | Total |
| US Dollar | (33,192) | (23,013) | 3,786 | (52,419) |
| (Decrease) or increase in Profit before income tax | (33,192) | (23,013) | 3,786 | (52,419) |
Hedge Accounting - Cash flow hedge
As part of the exchange rate risk, the Group may document and designate cash flow hedging relationships to hedge the foreign exchange rate risk of all or part of its highly probable future sales in U.S. Dollars using either all or a portion of its US dollar-denominated borrowings and/or derivative instruments including but not limited to currency forwards and foreign currency floating-to-fixed interest rate swaps, as needed.
The Group had formally hedged a portion of its highly probable future US dollar-denominated sales using a portion of its US dollar-denominated borrowings. For the nine-month period ended September 30, 2024, a loss before income tax of US$ 601 was recognized in other comprehensive income (September 30, 2023: US$ 7,389) and US$ 28,224 (September 30, 2023: US$ 43,221) was reclassified from equity to profit or loss within “Financial results, net
•Interest rate risk
The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans at September 30, 2024 (all amounts are shown in US dollars):
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 10
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
2. Financial risk management (continued)
| September 30, 2024 | ||||
|---|---|---|---|---|
| (unaudited) | ||||
| Functional currency | ||||
| Rate per currency denomination | Argentine <br>Peso | Brazilian <br>Reais | US Dollar | Total |
| Fixed rate: | ||||
| Argentine Peso | 39,091 | — | — | 39,091 |
| Brazilian Reais | — | 52,271 | — | 52,271 |
| US Dollar | 52,626 | 328,282 | 146,121 | 527,029 |
| Subtotal fixed-rate borrowings | 91,717 | 380,553 | 146,121 | 618,391 |
| Variable rate: | ||||
| Brazilian Reais | — | 227,598 | — | 227,598 |
| US Dollar | 13,435 | — | — | 13,435 |
| Subtotal variable-rate borrowings | 13,435 | 227,598 | — | 241,033 |
| Total borrowings as per analysis | 105,152 | 608,151 | 146,121 | 859,424 |
At September 30, 2024, if interest rates on floating-rate borrowings had been 1% higher (or lower) with all other variables held constant, Profit before income tax for the period would decrease as follows:
| September 30, 2024 | |||
|---|---|---|---|
| (unaudited) | |||
| Functional currency | |||
| Rate per currency denomination | Argentine <br>Peso | Brazilian <br>Reais | Total |
| Variable rate: | |||
| Brazilian Reais | — | (2,276) | (2,276) |
| US Dollar | (134) | — | (134) |
| Decrease in profit before income tax | (134) | (2,276) | (2,410) |
•Credit risk
As of September 30, 2024, six banks accounted for approximately 70% of the total cash deposited (J.P. Morgan, Banco Bladex, Banco do Brasil, Credit Agricole, Galicia and Itaú).
•Derivative financial instruments
The following table shows the outstanding positions for each type of derivative contract as of September 30, 2024:
§ Futures / Options
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 11
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
2. Financial risk management (continued)
| September 30, 2024 | ||||||
|---|---|---|---|---|---|---|
| Type of | Quantities (thousands)<br>(**) | Notional | Market | Profit / (Loss)<br><br>(*) | ||
| derivative contract | amount | Value Asset/ (Liability) | ||||
| (unaudited) | (unaudited) | |||||
| Futures: | ||||||
| Sale | ||||||
| Corn | (9) | (1,556) | 52 | 52 | ||
| Soybean | (6) | (1,887) | 24 | 24 | ||
| Wheat | 4 | 950 | 9 | 9 | ||
| Sugar | 70 | 30,307 | (1,335) | (736) | ||
| Total | 59 | 27,814 | (1,250) | (651) |
(*) Included in line "Gain / (Loss) from commodity derivative financial instruments" Note 8.
(**) All quantities expressed in tons except otherwise indicated.
Commodity future contract fair values are computed with reference to quoted market prices on future exchanges.
▪Other derivative financial instruments
Floating-to-fixed interest rate swaps
In December 2020 the Group's subsidiary in Brazil, Adecoagro Vale do Ivinhema entered into a interest rate swap operation with Itaú BBA in an aggregate amount of R$ 400 million. In these operation Adecoagro Vale do Ivinhema receives IPCA (Extended National Consumer Price Index) plus 4,24% per year, and pays CDI (an interbank floating interest rate in Reais) plus 1,85% per year. This swap expires semiannually until December, 2026. This swap expires semiannually until December, 2026.
In July 2024, the Group's subsidiary in Brazil, Adecoagro Vale do Ivinhema, entered an interest rate swap transaction with Itaú BBA in an aggregate amount of R$ 76 million. In this operation Adecoagro Vale do Ivinhema receives IPCA (Extended National Consumer Price Index) plus 6.80% per year and pays CDI (an interbank floating interest rate in Reais) plus 0.49% per year. This swap expires in July 2034.
Also, Adecoagro Vale do Ivinhema, entered an interest rate swap transaction with BR Partners in an aggregate amount of R$ 115 million. In this operation Adecoagro Vale do Ivinhema receives IPCA (Extended National Consumer Price Index) plus 6.76% per year and pays CDI (an interbank floating interest rate in Reais) plus 0.41% per year. This swap expires in July 2031.
Finally, Adecoagro Vale do Ivinhema, entered an interest rate swap transaction with XP Investimentos in an aggregate amount of R$ 209 million. In this operation Adecoagro Vale do Ivinhema receives pre-fixed rate 12.61% per year and pays CDI (an interbank floating interest rate in Reais) plus 0.48% per year. This swap expires in July 2031.
The swap agreements resulted in a recognition of a loss of US$ 3.5 million for the nine-month period ended September 30, 2024.
▪Currency forward
During the nine-month period ended on September 30, 2024, the Group entered into several currency forward contracts with some Brazilian banks, in order to hedge the fluctuation of the Brazilian Reais against the U.S. Dollar, for an aggregate amount of US$ 4 million. These financial instruments resulted in the recognition of a gain amounting to US$ 0.02 million for the nine-month period ended September 30, 2024. The currency forward contracts are due in March 2025.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 12
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
2. Financial risk management (continued)
Also, during the nine-month period ended on September 30, 2024, the Group entered into several currency forward contracts with some Argentine banks, in order to hedge the fluctuation of the Argentine Peso against the U.S. Dollar, for an aggregate amount of US$ 16 million. These financial instruments resulted in the recognition of a gain amounting to US$ 1.86 million for the nine-month period ended September 30, 2024. The currency forward contracts are due in December 2024.
Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.
3. Segment information
We are engaged in agricultural, manufacturing and land transformation activities.
Our agricultural activities consist of (i) harvesting certain agricultural products, including crops, rough rice, and sugarcane, either for sale to third parties or for our own internal use as inputs in manufacturing processes, and (ii) producing fluid milk.
Our manufacturing activities consist of (i) selling manufactured products, including processed peanuts, sunflower rice, sugar, ethanol and energy, among others, (ii) producing UHT and UP milk, powder milk and semi-hard cheese, among others; and (iii) providing services, such as grain warehousing and conditioning and handling and drying services, among others.
Our land transformation activities relate to the acquisition of farmlands or businesses with underdeveloped or underutilized agricultural land and the implementation of production technology and agricultural best practices on these farmlands to enhance yields and increase their value for potential realization through sale.
According to IFRS 8, operating segments are identified based on the ‘management approach’. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the Management Committee. IFRS 8 stipulates external segment reporting based on our internal organizational and management structure and on internal financial reporting to the chief operating decision maker.
Effective for our year ended December 31, 2023, our CODM changed its internal reporting mainly to refine the way it views our farming business and its interaction with our overarching land transformation activities embedded within such farming business. Previously, our CODM reviewed the results of our land transformation strategy as a separate activity upon disposition of transformed farmlands and/or other rural properties, or the acquisition of an under-utilized land. As from the fourth quarter of 2023, our CODM started allocating any profit from disposition of a farmland or, a bargain purchase gain, as part of the farming activity where such farmland belongs. Our CODM believes that this allocation better aligns the activities which were conducted to achieve the full growth potential of the land through the years with its ultimate realization of incremental value. Therefore, any profit on the realization of land transformation activities is now included in the respective farming business operating segment to which the disposed/acquired land belongs.
Also, our CODM started allocating the results of our minor cattle activities – which were previously reported as part of “all other segments” since they did not meet the quantitative thresholds for disclosure – to the farmland where the cattle is assigned. We maintain cattle as a complementary activity to the farming activities rather than as a separate business itself. Cattle helps preserve the value and productive capacity of the farmlands, avoiding the growth of undesired weed.
These changes resulted in revisions to the financial information provided to our CODM on a recurring basis in their evaluation of our financial performance and the decision-making process. Our CODM believes these changes better reflect the performance of our reportable segments. Accordingly, we changed the segment reporting under IFRS 8 as further described below. Previously reported segment financial information was recast for the nine-month period ended September 30, 2023 to reflect the new reportable segments’ structure.
Based on the foregoing, we operate in two major lines of business, namely, “Farming” and “Sugar, Ethanol and Energy”.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 13
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
•The ‘Farming’ business is further comprised of three reportable segments:
•‘Crops’ Segment which consists of planting, harvesting and sale of grains, oilseeds and fibers (including wheat, corn, soybeans, peanuts, cotton and sunflowers, among others), and to a lesser extent the provision of grain warehousing/conditioning and handling and drying services to third parties. Each underlying crop in this segment does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several factors, some of them out of our control. Management is focused on the long-term performance of the productive land, and to that extent, the performance is assessed considering the aggregated combination, if any, of crops planted in the land. A single manager is responsible for the management of operating activity of all crops rather than for each individual crop.
•‘Rice’ Segment which consists of planting, harvesting, processing and marketing of rice.
•‘Dairy’ Segment which consists of the production and sale of raw milk and industrialized products, including UHT, cheese and powder milk among others.
•‘Sugar, Ethanol and Energy’ Segment which consists of cultivating sugarcane which is processed in owned sugar mills, transformed into ethanol, sugar and electricity and then marketed;
Total segment assets and liabilities are measured in a manner consistent with that of the Interim Financial Statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the asset.
As further discussed in Note 32 to our consolidated financial statements for the year ended December 31, 2023, we apply IAS 29 to our operations in Argentina. According to IAS 29, all Argentine Peso-denominated non-monetary items in the statement of financial position are adjusted by applying a general price index from the date they were initially recognized to the end of the reporting period. Likewise, all Argentine Peso-denominated items in the statement of income are expressed in terms of the measuring unit current at the end of the reporting period, consequently, income statement items are adjusted by applying a general price index on a monthly basis from the dates they were initially recognized in the financial statements to the end of the reporting period. This process is called “re-measurement”. Once the re-measurement process is completed, all Argentine Peso denominated accounts are translated into U.S. Dollars, which is our reporting currency, applying the guidelines in IAS 21 “The Effects of Changes in Foreign Exchange Rates”(“IAS 21”). IAS 21 requires that amounts be translated at the closing rate at the date of the most recent statement of financial position. This process is called “translation”. The re-measurement and translation processes are applied on a monthly basis until year-end. Due to these processes, the re-measured and translated results of operations for a given month are subject to change until year-end, affecting comparison and analysis.
However, the internal reporting reviewed by our CODM departs from the application of IAS 29 and IAS 21 re-measurement and translation processes discussed above. For segment reporting purposes, the segment results of Argentine operations for each reporting period were adjusted for inflation and translated into the reporting currency using the reporting period average exchange rate. The translated amounts were not subsequently re-measured and translated in accordance with the IAS 29 and IAS 21 guidelines. In order to evaluate the segment’s performance, results of operations in Argentina are based on monthly data adjusted for inflation and converted into the monthly US dollar average exchange rate. These converted amounts are not subsequently readjusted and reconverted as described under IAS 29 and IAS 21. It should be noted that this translation methodology for evaluating segment information is the same that we use to translate results of operations from our subsidiaries from countries that have not been designated hyperinflationary economies because it allows for a more accurate analysis of the economic performance of its business as a whole. Our CODM believes that the exclusion of the re-measurement and translation processes from the segment reporting structure allows for a more useful presentation and facilitates period-to-period comparison and performance analysis.
The primary operating performance measure for all of our segments is “Profit or Loss from Operations” which we measure in accordance with the procedure outlined above.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 14
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
The following tables show a reconciliation of the reportable segments information reviewed by our CODM with the reportable segment information measured in accordance with IAS 29 and IAS 21 as per the Interim Financial Statements for the periods presented. These tables do not include information for the Sugar, Ethanol and Energy reportable segment since this information is not affected by the application of IAS 29 and therefore there is no difference between the information reviewed by our CODM and the information included in the Interim Financial Statements:
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 15
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
Segment reconciliation for the nine-month period ended
| September 30,2024 (unaudited) | Crops | Rice | Dairy | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | |||||||||
| Revenue | 175,065 | 11,050 | 186,115 | 199,035 | 10,904 | 209,939 | 209,248 | 14,734 | 223,982 | ||||||||
| Cost of revenue | (159,224) | (10,566) | (169,790) | (157,478) | (9,038) | (166,516) | (174,854) | (11,506) | (186,360) | ||||||||
| Initial recognition and changes in fair value of biological assets and agricultural produce | 28,954 | 4,230 | 33,184 | 31,927 | 7,187 | 39,114 | 6,661 | 812 | 7,473 | ||||||||
| Changes in net realizable value of agricultural produce after harvest | (17,583) | (2,410) | (19,993) | — | — | — | — | — | — | ||||||||
| Margin on Manufacturing and Agricultural Activities Before Operating Expenses | 27,212 | 2,304 | 29,516 | 73,484 | 9,053 | 82,537 | 41,055 | 4,040 | 45,095 | ||||||||
| General and administrative expenses | (16,195) | (1,185) | (17,380) | (11,391) | (1,183) | (12,574) | (8,271) | (784) | (9,055) | ||||||||
| Selling expenses | (13,206) | (871) | (14,077) | (24,506) | (1,493) | (25,999) | (19,188) | (1,646) | (20,834) | ||||||||
| Other operating income, net | (5,358) | 386 | (4,972) | (14,327) | (3,963) | (18,290) | 3,450 | 469 | 3,919 | ||||||||
| Profit / (loss) from Operations | (7,547) | 634 | (6,913) | 23,260 | 2,414 | 25,674 | 17,046 | 2,079 | 19,125 | ||||||||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (6,061) | (474) | (6,535) | (10,539) | (994) | (11,533) | (8,458) | (883) | (9,341) | ||||||||
| Net loss from Fair value adjustment of Investment property | (588) | (40) | (628) | (17,600) | (4,256) | (21,856) | — | — | — | ||||||||
| Impairment of assets destroyed by fire | 14,162 | (126) | 14,036 | — | — | — | — | — | — | September 30,2024 (unaudited) | Corporate | Total | |||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||||
| Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | ||||||||||||
| Revenue | — | — | — | 1,107,999 | 36,688 | 1,144,687 | |||||||||||
| Cost of revenue | — | — | — | (869,700) | (31,110) | (900,810) | |||||||||||
| Initial recognition and changes in fair value of biological assets and agricultural produce | — | — | — | 109,073 | 12,229 | 121,302 | |||||||||||
| Changes in net realizable value of agricultural produce after harvest | — | — | — | (17,043) | (2,410) | (19,453) | |||||||||||
| Margin on Manufacturing and Agricultural Activities Before Operating Expenses | — | — | — | 330,329 | 15,397 | 345,726 | |||||||||||
| General and administrative expenses | (19,754) | (1,831) | (21,585) | (73,975) | (4,983) | (78,958) | |||||||||||
| Selling expenses | 1,314 | (31) | 1,283 | (111,470) | (4,041) | (115,511) | |||||||||||
| Other operating income, net | 272 | 6 | 278 | (13,403) | (3,102) | (16,505) | |||||||||||
| Profit / (loss) from Operations | (18,168) | (1,856) | (20,024) | 131,481 | 3,271 | 134,752 | |||||||||||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (1,117) | (107) | (1,224) | (168,156) | (2,458) | (170,614) | |||||||||||
| Net loss from Fair value adjustment of Investment property | — | — | — | (18,188) | (4,296) | (22,484) | |||||||||||
| Impairment of assets destroyed by fire | — | — | — | 14,162 | (126) | 14,036 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 16
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
Segment reconciliation for the nine-month period ended
| September 30,2023 (unaudited) | Crops | Rice | Dairy | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | |||||||
| Revenue | 170,841 | (3,072) | 167,769 | 196,116 | (1,017) | 195,099 | 192,084 | (3,288) | 188,796 | ||||||
| Cost of revenue | (150,431) | 2,776 | (147,655) | (140,191) | (41) | (140,232) | (160,349) | 2,668 | (157,681) | ||||||
| Initial recognition and changes in fair value of biological assets and agricultural produce | 2,174 | (358) | 1,816 | 6,988 | (146) | 6,842 | 9,902 | (509) | 9,393 | ||||||
| Changes in net realizable value of agricultural produce after harvest | (337) | 105 | (232) | — | — | — | — | — | — | ||||||
| Margin on Manufacturing and Agricultural Activities Before Operating Expenses | 22,247 | (549) | 21,698 | 62,913 | (1,204) | 61,709 | 41,637 | (1,129) | 40,508 | ||||||
| General and administrative expenses | (12,585) | 383 | (12,202) | (11,126) | 245 | (10,881) | (7,382) | 189 | (7,193) | ||||||
| Selling expenses | (17,377) | 322 | (17,055) | (25,459) | 448 | (25,011) | (19,488) | 384 | (19,104) | ||||||
| Other operating income, net | 7,524 | 57 | 7,581 | 2,796 | 27 | 2,823 | (226) | 5 | (221) | ||||||
| (Loss) / profit from Operations | (191) | 213 | 22 | 29,124 | (484) | 28,640 | 14,541 | (551) | 13,990 | ||||||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (6,236) | 161 | (6,075) | (10,450) | 219 | (10,231) | (8,014) | 203 | (7,811) | ||||||
| Net loss from Fair value adjustment of Investment property | (993) | 160 | (833) | (107) | 27 | (80) | — | — | — | September 30,2023 (unaudited) | Corporate | Total | |||
| --- | --- | --- | --- | --- | |||||||||||
| Total segment reporting | Adjustment | Total as per statement of income | Total segment reporting | Adjustment | Total as per statement of income | ||||||||||
| Revenue | — | — | — | 1,042,302 | (7,377) | 1,034,925 | |||||||||
| Cost of revenue | — | — | — | (775,074) | 5,403 | (769,671) | |||||||||
| Initial recognition and changes in fair value of biological assets and agricultural produce | — | — | — | 117,021 | (1,013) | 116,008 | |||||||||
| Changes in net realizable value of agricultural produce after harvest | — | — | — | (504) | 105 | (399) | |||||||||
| Margin on Manufacturing and Agricultural Activities Before Operating Expenses | — | — | — | 383,745 | (2,882) | 380,863 | |||||||||
| General and administrative expenses | (17,650) | 160 | (17,490) | (66,971) | 977 | (65,994) | |||||||||
| Selling expenses | (108) | — | (108) | (106,024) | 1,154 | (104,870) | |||||||||
| Other operating income, net | (64) | (3) | (67) | (7,013) | 86 | (6,927) | |||||||||
| (Loss) / profit from Operations | (17,822) | 157 | (17,665) | 203,737 | (665) | 203,072 | |||||||||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (949) | 24 | (925) | (155,725) | 607 | (155,118) | |||||||||
| Net loss from Fair value adjustment of Investment property | — | — | — | (1,100) | 187 | (913) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 17
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
Segment analysis for the nine-month period ended September 30, 2024 (unaudited)
| Farming | Sugar, Ethanol and Energy | Corporate | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Crops | Rice | Dairy | Farming subtotal | ||||||
| Revenue | 175,065 | 199,035 | 209,248 | 583,348 | 524,651 | — | 1,107,999 | ||
| Cost of revenue | (159,224) | (157,478) | (174,854) | (491,556) | (378,144) | — | (869,700) | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce | 28,954 | 31,927 | 6,661 | 67,542 | 41,531 | — | 109,073 | ||
| Changes in net realizable value of agricultural produce after harvest | (17,583) | — | — | (17,583) | 540 | — | (17,043) | ||
| Margin on manufacturing and agricultural activities before operating expenses | 27,212 | 73,484 | 41,055 | 141,751 | 188,578 | — | 330,329 | ||
| General and administrative expenses | (16,195) | (11,391) | (8,271) | (35,857) | (18,364) | (19,754) | (73,975) | ||
| Selling expenses | (13,206) | (24,506) | (19,188) | (56,900) | (55,884) | 1,314 | (111,470) | ||
| Other operating (loss) / income, net | (5,358) | (14,327) | 3,450 | (16,235) | 2,560 | 272 | (13,403) | ||
| (Loss) / profit from Operations | (7,547) | 23,260 | 17,046 | 32,759 | 116,890 | (18,168) | 131,481 | ||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (6,061) | (10,539) | (8,458) | (25,058) | (141,981) | (1,117) | (168,156) | ||
| Net loss from Fair value adjustment of Investment property | (588) | (17,600) | — | (18,188) | — | — | (18,188) | ||
| Transfer of revaluation surplus derived from disposals of assets before taxes | 9.024 | — | — | 9.024 | — | — | 9.024 | ||
| Impairment of assets destroyed by fire | 14,162 | — | — | 14,162 | — | — | 14,162 | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized) | 18,544 | 11,934 | (23,488) | 6,990 | (5,444) | — | 1,546 | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce (realized) | 10,410 | 19,993 | 30,149 | 60,552 | 46,975 | — | 107,527 | ||
| Changes in net realizable value of agricultural produce after harvest (unrealized) | (1,834) | — | — | (1,834) | — | — | (1,834) | ||
| Changes in net realizable value of agricultural produce after harvest (realized) | (15,749) | — | — | (15,749) | 540 | — | (15,209) | ||
| As of September 30, 2024: | |||||||||
| Farmlands and farmland improvements, net | 432,381 | 176,335 | 2,451 | 611,167 | 79,181 | — | 690,348 | ||
| Machinery, equipment, building and facilities, and other fixed assets, net | 39,281 | 104,808 | 134,213 | 278,302 | 232,097 | — | 510,399 | ||
| Bearer plants, net | 1,265 | — | — | 1,265 | 361,491 | — | 362,756 | ||
| Work in progress | 624 | 3,224 | 18,714 | 22,562 | 11,653 | — | 34,215 | ||
| Right of use asset | 11,614 | 13,307 | 568 | 25,489 | 361,603 | 283 | 387,375 | ||
| Investment property | 28,193 | 5,349 | — | 33,542 | — | — | 33,542 | ||
| Goodwill | 10,235 | 6,220 | — | 16,455 | 4,008 | — | 20,463 | ||
| Biological assets | 49,293 | 48,477 | 42,193 | 139,963 | 85,147 | — | 225,110 | ||
| Finished goods | 59,475 | 30,193 | 10,804 | 100,472 | 131,270 | — | 231,742 | ||
| Raw materials, Stocks held by third parties and others | 65,069 | 63,846 | 16,235 | 145,150 | 23,738 | — | 168,888 | ||
| Total segment assets | 697,430 | 451,759 | 225,178 | 1,374,367 | 1,290,188 | 283 | 2,664,838 | ||
| Borrowings | 36,360 | 51,051 | 68,792 | 156,203 | 619,184 | 84,037 | 859,424 | ||
| Lease liabilities | 12,538 | 11,100 | 590 | 24,228 | 329,871 | 193 | 354,292 | ||
| Total segment liabilities | 48,898 | 62,151 | 69,382 | 180,431 | 949,055 | 84,230 | 1,213,716 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 18
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
3. Segment information (continued)
Segment analysis for the nine-month period ended September 30, 2023 (unaudited)
| Farming | Sugar, Ethanol and Energy | Corporate | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Crops | Rice | Dairy | Farming subtotal | ||||||
| Revenue | 170,841 | 196,116 | 192,084 | 559,041 | 483,261 | — | 1,042,302 | ||
| Cost of revenue | (150,431) | (140,191) | (160,349) | (450,971) | (324,103) | — | (775,074) | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce | 2,174 | 6,988 | 9,902 | 19,064 | 97,957 | — | 117,021 | ||
| Changes in net realizable value of agricultural produce after harvest | (337) | — | — | (337) | (167) | — | (504) | ||
| Margin on manufacturing and agricultural activities before operating expenses | 22,247 | 62,913 | 41,637 | 126,797 | 256,948 | — | 383,745 | ||
| General and administrative expenses | (12,585) | (11,126) | (7,382) | (31,093) | (18,228) | (17,650) | (66,971) | ||
| Selling expenses | (17,377) | (25,459) | (19,488) | (62,324) | (43,592) | (108) | (106,024) | ||
| Other operating income / (loss), net | 7,524 | 2,796 | (226) | 10,094 | (17,043) | (64) | (7,013) | ||
| (Loss) / profit from Operations | (191) | 29,124 | 14,541 | 43,474 | 178,085 | (17,822) | 203,737 | ||
| Depreciation of Property, plant and equipment and amortization of Intangible assets | (6,236) | (10,450) | (8,014) | (24,700) | (130,076) | (949) | (155,725) | ||
| Net loss from Fair value adjustment of Investment property | (993) | (107) | — | (1,100) | — | — | (1,100) | ||
| Transfer of revaluation surplus derived from the disposals of assets before taxes | 20,245 | — | — | 20,245 | — | — | 20,245 | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized) | 1,180 | 2,439 | (12,668) | (9,049) | 18,854 | — | 9,805 | ||
| Initial recognition and changes in fair value of biological assets and agricultural produce (realized) | 994 | 4,549 | 22,570 | 28,113 | 79,103 | — | 107,216 | ||
| Changes in net realizable value of agricultural produce after harvest (unrealized) | (1,622) | — | — | (1,622) | — | — | (1,622) | ||
| Changes in net realizable value of agricultural produce after harvest (realized) | 1,285 | — | — | 1,285 | (167) | — | 1,118 | ||
| As of December 31, 2023: | |||||||||
| Farmlands and farmland improvements, net | 447,772 | 178,291 | 1,462 | 627,525 | 78,322 | — | 705,847 | ||
| Machinery, equipment, building and facilities, and other fixed assets, net | 24,250 | 71,584 | 86,670 | 182,504 | 264,561 | — | 447,065 | ||
| Bearer plants, net | 753 | — | — | 753 | 375,089 | — | 375,842 | ||
| Work in progress | 10 | 291 | 5,584 | 5,885 | 14,926 | — | 20,811 | ||
| Right of use assets | 13,608 | 15,076 | 29 | 28,713 | 377,420 | 580 | 406,713 | ||
| Investment property | 29,192 | 4,172 | — | 33,364 | — | — | 33,364 | ||
| Goodwill | 6,095 | 3,704 | — | 9,799 | 4,510 | — | 14,309 | ||
| Biological assets | 55,545 | 32,843 | 23,191 | 111,579 | 116,458 | — | 228,037 | ||
| Finished goods | 33,407 | 9,306 | 9,927 | 52,640 | 126,971 | — | 179,611 | ||
| Raw materials, Stocks held by third parties and others | 26,779 | 16,577 | 11,230 | 54,586 | 21,854 | — | 76,440 | ||
| Total segment assets | 637,411 | 331,844 | 138,093 | 1,107,348 | 1,380,111 | 580 | 2,488,039 | ||
| Borrowings | 30,326 | 32,340 | 57,376 | 120,042 | 604,827 | 180,080 | 904,949 | ||
| Lease liabilities | 12,341 | 13,475 | 57 | 25,873 | 352,238 | 399 | 378,510 | ||
| Total segment liabilities | 42,667 | 45,815 | 57,433 | 145,915 | 957,065 | 180,479 | 1,283,459 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 19
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
4. Revenue
The following tables show our various sources of revenue for the periods indicated:
| Nine-months ended September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| (unaudited) | ||
| Revenue of manufactured products and services rendered: | ||
| Ethanol | 195,820 | 161,482 |
| Sugar | 291,891 | 279,195 |
| Energy (*) | 25,028 | 26,622 |
| Peanut | 39,965 | 48,647 |
| Sunflower | 5,588 | 7,194 |
| Cotton | 3,455 | 6,405 |
| Rice (*) | 181,064 | 170,006 |
| Fluid milk (UHT) | 103,843 | 84,081 |
| Powder milk | 41,039 | 36,354 |
| Other dairy products | 56,899 | 36,871 |
| Services | 8,423 | 6,268 |
| Rental income | 2,543 | 1,530 |
| Others | 35,974 | 34,181 |
| Subtotal manufactured products and services rendered | 991,532 | 898,836 |
| Agricultural produce and biological assets: | ||
| Soybean | 65,032 | 50,108 |
| Corn | 42,685 | 28,534 |
| Wheat | 14,299 | 9,309 |
| Sunflower | 2,910 | 10,460 |
| Barley | 2,057 | 3,983 |
| Seeds | 3,741 | — |
| Milk | 6,968 | 17,852 |
| Cattle | 4,205 | 3,578 |
| Cattle for dairy | 9,122 | 8,035 |
| Others | 2,136 | 4,230 |
| Subtotal agricultural produce and biological assets | 153,155 | 136,089 |
| Total revenue | 1,144,687 | 1,034,925 |
(*) Includes revenue of mwh of energy and tons of rice produced by third parties for an amount of US$ 0.7 million and US$ 0.7 million, respectively (September 30, 2023: revenue of mwh of energy and tons of rice produced by third parties for an amount of US$ 24 million).
Commitments to sell commodities at a future date
The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn through sales forward contracts. Those contracts are held for purposes of delivery the non-financial instrument in accordance with the Group’s expected sales. Accordingly, as the own use exception criteria are met, those contracts are not recorded as derivatives.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 20
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
4. Revenue (continued)
The notional amount of these contracts is US$ 87.2 million as of September 30, 2024 (September 30, 2023: US$ 127.1 million) comprised primarily of 20,281 liters of ethanol (US$ 11 million), 178,404 mwh of energy (US$ 9 million), 90,016 tons of sugar (US$ 44 million), 25,687 tons of soybean (US$ 8 million), 30,260 tons of corn (US$ 5 million) and 38,913 tons of wheat (US$ 9 million) which expire between December 2024 and August 2025.
5. Cost of revenue
The following tables show our cost of revenue for the periods indicated:
| Nine-month ended September 30, 2024 (unaudited) | |||||
|---|---|---|---|---|---|
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | |
| Finished goods at the beginning of 2024 (Note 18) | 33,407 | 9,306 | 9,927 | 126,971 | 179,611 |
| Cost of production of manufactured products (Note 6) | 49,640 | 189,461 | 169,715 | 423,226 | 832,042 |
| Purchases | 15,241 | 1,939 | 6,624 | 654 | 24,458 |
| Agricultural produce | 194,297 | — | 16,091 | 6,067 | 216,455 |
| Transfer to raw material | (82,716) | (4,740) | — | — | (87,456) |
| Direct agricultural selling expenses | 21,403 | — | — | — | 21,403 |
| Tax recoveries (i) | — | — | — | (34,016) | (34,016) |
| Changes in net realizable value of agricultural produce after harvest | (19,993) | — | — | 540 | (19,453) |
| Finished goods as of September 30, 2024 (Note 18) | (59,475) | (30,193) | (10,804) | (131,270) | (231,742) |
| Exchange differences | 17,986 | 743 | (5,193) | (14,028) | (492) |
| Cost of revenues and direct agricultural selling expenses period | 169,790 | 166,516 | 186,360 | 378,144 | 900,810 |
(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.
| Nine-month ended September 30, 2023 (unaudited) | |||||
|---|---|---|---|---|---|
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | |
| Finished goods at the beginning of 2023 | 37,539 | 13,659 | 12,825 | 88,693 | 152,716 |
| Cost of production of manufactured products (Note 6) | 52,557 | 127,443 | 137,833 | 404,039 | 721,872 |
| Purchases | 9,513 | 27,270 | 360 | 2,449 | 39,592 |
| Agricultural produce | 143,697 | 27 | 17,852 | 9,736 | 171,312 |
| Transfer to raw material | (60,727) | (7,321) | — | — | (68,048) |
| Direct agricultural selling expenses | 12,537 | — | — | — | 12,537 |
| Tax recoveries (i) | — | — | — | (15,187) | (15,187) |
| Changes in net realizable value of agricultural produce after harvest | (232) | — | — | (167) | (399) |
| Finished goods as of September 30, 2023 | (46,597) | (13,104) | (9,411) | (165,186) | (234,298) |
| Exchange differences | (632) | (7,742) | (1,778) | (274) | (10,426) |
| Cost of revenues and direct agricultural selling expenses period | 147,655 | 140,232 | 157,681 | 324,103 | 769,671 |
(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 21
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
6. Expenses by nature
The following table provides the additional disclosure required on the nature of expenses and their relationship to the function within the Group:
| Nine-month ended September 30, 2024 (unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Cost of production of manufactured products (Note 5) | General and Administrative Expenses | Selling Expenses | Total | |||||
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | ||||
| Salaries, social security expenses and employee benefits | 3,941 | 11,935 | 10,222 | 34,870 | 60,968 | 27,417 | 7,670 | 96,055 |
| Raw materials and consumables | — | 742 | 19,131 | 5,132 | 25,005 | — | — | 25,005 |
| Depreciation and amortization | 3,445 | 3,809 | 4,042 | 111,520 | 122,816 | 18,172 | 1,137 | 142,125 |
| Depreciation of right-of-use assets | — | 40 | — | 6,607 | 6,647 | 13,563 | 578 | 20,788 |
| Fuel, lubricants and others | 233 | 1,362 | 1,298 | 27,881 | 30,774 | 848 | 342 | 31,964 |
| Maintenance and repairs | 1,396 | 3,892 | 4,156 | 28,011 | 37,455 | 3,656 | 655 | 41,766 |
| Freights | 179 | 10,143 | 2,576 | 375 | 13,273 | — | 53,783 | 67,056 |
| Export taxes / selling taxes | — | — | — | — | — | — | 26,792 | 26,792 |
| Export expenses | — | — | — | — | — | — | 11,334 | 11,334 |
| Contractors and services | 2,316 | 1,098 | 376 | 10,207 | 13,997 | — | — | 13,997 |
| Energy transmission | — | — | — | — | — | — | 1,769 | 1,769 |
| Energy power | 1,015 | 2,931 | 2,296 | 534 | 6,776 | 502 | 166 | 7,444 |
| Professional fees | 67 | 271 | 84 | 864 | 1,286 | 8,448 | 610 | 10,344 |
| Other taxes | 56 | 367 | 165 | 7,729 | 8,317 | 577 | 23 | 8,917 |
| Contingencies | — | — | — | — | — | 621 | — | 621 |
| Lease expense and similar arrangements | 182 | 865 | 153 | — | 1,200 | 1,211 | 525 | 2,936 |
| Third parties raw materials | 4,014 | 27,278 | 63,351 | 35,515 | 130,158 | — | — | 130,158 |
| Tax recoveries | — | — | — | (4,975) | (4,975) | — | — | (4,975) |
| Others | 601 | 2,348 | 2,276 | 6,856 | 12,081 | 3,943 | 10,127 | 26,151 |
| Subtotal | 17,445 | 67,081 | 110,126 | 271,126 | 465,778 | 78,958 | 115,511 | 660,247 |
| Own agricultural produce consumed | 32,195 | 122,380 | 59,589 | 152,100 | 366,264 | — | — | 366,264 |
| Total | 49,640 | 189,461 | 169,715 | 423,226 | 832,042 | 78,958 | 115,511 | 1,026,511 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 22
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
6. Expenses by nature (continued)
| Nine-month ended September 30, 2023 (unaudited) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Cost of production of manufactured products (Note 5) | General and Administrative Expenses | Selling Expenses | Total | ||||||
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | |||||
| Salaries, social security expenses and employee benefits | 2,895 | 9,873 | 8,761 | 34,042 | 55,571 | 26,833 | 7,919 | 90,323 | |
| Raw materials and consumables | 276 | 629 | 22,393 | 6,652 | 29,950 | — | — | 29,950 | |
| Depreciation and amortization | 3,519 | 4,319 | 3,401 | 97,635 | 108,874 | 14,638 | 1,010 | 124,522 | |
| Depreciation of right-of-use assets | — | 36 | 527 | 7,005 | 7,568 | 10,084 | 278 | 17,930 | |
| Fuel, lubricants and others | 181 | 604 | 1,491 | 27,717 | 29,993 | 482 | 251 | 30,726 | |
| Maintenance and repairs | 804 | 2,136 | 1,687 | 23,199 | 27,826 | 1,115 | 492 | 29,433 | |
| Freights | 112 | 8,340 | 2,124 | 72 | 10,648 | — | 46,021 | 56,669 | |
| Export taxes / selling taxes | — | — | — | — | — | — | 23,926 | 23,926 | |
| Export expenses | — | — | — | — | — | — | 11,964 | 11,964 | |
| Contractors and services | 2,857 | 2,255 | 87 | 7,861 | 13,060 | — | (90) | 12,970 | |
| Energy transmission | — | — | — | — | — | — | 1,945 | 1,945 | |
| Energy power | 1,016 | 2,360 | 2,007 | 584 | 5,967 | 339 | 87 | 6,393 | |
| Professional fees | 43 | 80 | 71 | 736 | 930 | 7,071 | 1,116 | 9,117 | |
| Other taxes | 15 | 141 | 118 | 3,391 | 3,665 | 550 | 25 | 4,240 | |
| Contingencies | — | — | — | — | — | 857 | — | 857 | |
| Lease expense and similar arrangements | 98 | 571 | 163 | — | 832 | 780 | 307 | 1,919 | |
| Third parties raw materials | 2,913 | 29,634 | 54,581 | 22,432 | 109,560 | — | — | 109,560 | |
| Tax recoveries | — | — | — | — | — | — | — | — | |
| Others | 616 | 1,210 | 1,529 | 4,713 | 8,068 | 3,245 | 9,619 | 20,932 | |
| Subtotal | 15,345 | 62,188 | 98,940 | 236,039 | 412,512 | 65,994 | 104,870 | 583,376 | |
| Own agricultural produce consumed | 37,212 | 65,255 | 38,893 | 168,000 | 309,360 | — | — | 309,360 | |
| Total | 52,557 | 127,443 | 137,833 | 404,039 | 721,872 | 65,994 | 104,870 | 892,736 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 23
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
7. Salaries and social security expenses
| Nine-month period ended September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| (unaudited) | ||
| Wages and salaries | 118,508 | 106,440 |
| Social security costs | 35,502 | 32,719 |
| Equity-settled share-based compensation | 5,081 | 6,684 |
| 159,091 | 145,843 |
8. Other operating income / (expense), net
| Nine-month period ended September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| (unaudited) | ||
| Gain from disposals of farmland and other assets (Note 20) | 6,050 | 9,526 |
| Gain /(loss) from commodity derivative financial instruments | 5,757 | (12,464) |
| Gain from disposal of other property items | 478 | 1,828 |
| Net loss from fair value adjustment of investment property | (22,484) | (913) |
| Impairment of assets destroyed by fire (*) | (14,036) | — |
| Others | 7,730 | (4,904) |
| (16,505) | (6,927) |
(*) In September 2024, a fire in our Peanut facility located in the Province of Cordoba damaged a warehouse cell and inventory stored therein. As a result, the Company recognized an impairment loss of approximately US$ 12.0 million and US$ 2.0 million for inventories and property, plant and equipment, respectively. The appraisal of damages is currently being evaluated by insurance experts. The Company has insurance coverage that we estimate will cover all damages caused by the event suffered. Any insurance proceeds will be recognized as other income when received.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 24
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
9. Financial results, net
| Nine-month period ended September 30, | ||
|---|---|---|
| 2024 | 2023 | |
| (unaudited) | ||
| Finance income: | ||
| - Interest income | 8,610 | 3,334 |
| - Foreign exchange gain, net | — | 33,954 |
| - Gain from interest rate/foreign exchange rate derivative financial instruments | — | 1,736 |
| - Other income | 554 | 66,759 |
| Finance income | 9,164 | 105,783 |
| Finance costs: | ||
| - Interest expense | (28,581) | (34,660) |
| - Finance cost related to lease liabilities | (29,317) | (28,812) |
| - Cash flow hedge – transfer from equity | (28,224) | (43,221) |
| - Foreign exchange losses, net | (5,051) | — |
| - Taxes | (5,860) | (5,670) |
| - Loss from interest rate/foreign exchange rate derivative financial instruments | (871) | — |
| - Other expenses | (8,158) | (5,278) |
| Finance costs | (106,062) | (117,641) |
| Other financial results - Net (loss)/gain of inflation effects on the monetary items | (1,911) | 5,072 |
| Total financial results, net | (98,809) | (6,786) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 25
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
10. Taxation
Taxes on income in the interim periods are recognized using the tax rate that would be applicable to expected total annual earnings.
| September 30,<br>2024 | September 30,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Current income tax | (8,013) | (6,485) |
| Deferred income tax | 47,993 | (45,289) |
| Income tax benefit / (expense) | 39,980 | (51,774) |
The gross movement on the deferred income tax liability is as follows:
| September 30,<br>2024 | September 30,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Beginning of period | (366,554) | (292,656) |
| Exchange differences | (165,352) | (9,580) |
| Effect of fair value valuation for farmlands | 142,514 | 5,236 |
| Disposal of farmland (Note 20) | 2,080 | 7,081 |
| Tax charge relating to cash flow hedge (i) | (7,973) | (10,639) |
| Others | 1,574 | 1,008 |
| Income tax benefit / (expense) | 47,993 | (45,289) |
| End of period | (345,718) | (344,839) |
(i)It relates to the amount reclassified of US$ 28,224 loss and US$ 43,221 loss from equity to profit and loss for the nine-month period ended September 30, 2024 and 2023, respectively.
Tax Inflation Adjustment in Argentina
The information of Tax Inflation Adjustment in Argentina which is described in detail in Note 10 to annual consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 26
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
10. Taxation (continued)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:
| September 30,<br>2024 | September 30,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Tax calculated at the tax rates applicable to profits in the respective countries | (8,887) | (65,968) |
| Non-deductible items | (94) | (1,121) |
| Effect of the changes in the statutory income tax rate in Argentina | — | 2,933 |
| Non-taxable income | 10,447 | 14,023 |
| Tax losses where no deferred tax asset was recognized | (27) | (794) |
| Previously unrecognized tax losses now recouped to reduce tax expenses (1) | 9,326 | 33,913 |
| Effect of IAS 29 on Argentina’s shareholder’s equity and deferred income tax. | 32,134 | (32,933) |
| Others | (2,919) | (1,827) |
| Income tax benefit / (expense) | 39,980 | (51,774) |
(1) 2024 includes 8,594 of adjustment by inflation of tax loss carryforwards in Argentina (31,823 in 2023).
OECD Pillar Two model rules
The Group is within the scope of the OECD (Organization for Economic Cooperation and Development) Pillar Two model rules (the Global Anti-base Erosion rules or GloBE). Pillar Two legislation was enacted in Luxembourg, the jurisdiction in which the company is incorporated, and came into effect as from January 1, 2024.
As of September 30, 2024, we did not have any significant impact as a consequence of Pillar Two rules.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 27
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
11. Property, plant and equipment, net
Changes in the Group’s property, plant and equipment for the nine-month periods ended September 30, 2024 and 2023 were as follows:
| Farmlands | Farmland improvements | Buildings and facilities | Machinery, equipment, furniture and<br>Fittings | Bearer plants | Others | Work in progress | Total | |
|---|---|---|---|---|---|---|---|---|
| Nine-month period ended September 30, 2023 | ||||||||
| Opening net book amount. | 727,591 | 16,742 | 268,380 | 91,212 | 352,727 | 29,614 | 79,089 | 1,565,355 |
| Exchange differences | 22,036 | 427 | 4,301 | 13,514 | 11,773 | 475 | 2,241 | 54,767 |
| Additions | — | — | 10,348 | 46,190 | 103,325 | 510 | 28,248 | 188,621 |
| Revaluation surplus | (14,760) | — | — | — | — | — | — | (14,760) |
| Transfers | — | 436 | 17,842 | 13,680 | 8,939 | 18 | (40,915) | — |
| Disposals | (37,432) | — | (3,061) | (2,437) | — | (40) | — | (42,970) |
| Reclassification to non-income tax credits (*) | — | — | — | (201) | — | — | — | (201) |
| Depreciation | — | (2,892) | (24,603) | (60,145) | (64,297) | (1,596) | — | (153,533) |
| Closing net book amount | 697,435 | 14,713 | 273,207 | 101,813 | 412,467 | 28,981 | 68,663 | 1,597,279 |
| At September 30, 2023 (unaudited) | ||||||||
| Cost | 697,435 | 47,011 | 555,894 | 963,918 | 982,860 | 53,809 | 68,663 | 3,369,590 |
| Accumulated depreciation | — | (32,298) | (282,687) | (862,105) | (570,393) | (24,828) | — | (1,772,311) |
| Net book amount | 697,435 | 14,713 | 273,207 | 101,813 | 412,467 | 28,981 | 68,663 | 1,597,279 |
| Nine-month period ended September 30, 2024 | ||||||||
| Opening net book amount | 694,202 | 11,645 | 241,156 | 196,995 | 375,842 | 8,914 | 20,811 | 1,549,565 |
| Exchange differences | 403,590 | 4,612 | 66,987 | 8,010 | (42,780) | 5,024 | 2,766 | 448,209 |
| Additions | — | — | 10,510 | 46,525 | 108,930 | 5,200 | 24,281 | 195,446 |
| Revaluation surplus | (407,056) | — | — | — | — | — | — | (407,056) |
| Transfers | — | — | 7,591 | 5,966 | — | 86 | (13,643) | — |
| Disposals | (13,732) | (8) | (3,039) | (2,539) | — | (59) | — | (19,377) |
| Reclassification to non-income tax credits (*) | — | — | — | (224) | — | — | — | (224) |
| Depreciation | — | (2,905) | (24,829) | (60,022) | (79,236) | (1,853) | — | (168,845) |
| Closing net book amount | 677,004 | 13,344 | 298,376 | 194,711 | 362,756 | 17,312 | 34,215 | 1,597,718 |
| At September 30, 2024 (unaudited) | ||||||||
| Cost | 677,004 | 48,030 | 610,026 | 1,138,156 | 1,032,317 | 43,882 | 34,215 | 3,583,630 |
| Accumulated depreciation | — | (34,686) | (311,650) | (943,445) | (669,561) | (26,570) | — | (1,985,912) |
| Net book amount | 677,004 | 13,344 | 298,376 | 194,711 | 362,756 | 17,312 | 34,215 | 1,597,718 |
(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of September 30, 2024, ICMS tax credits were reclassified to trade and other receivables.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 28
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
11. Property, plant and equipment, net (continued)
The Group determined the valuation of farmlands (US$ 681 million as of September 30, 2024) using, a “Sales Comparison Approach” prepared by an independent expert. Under the Sales Comparison Approach, the Group uses sale prices of comparable properties further adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare (Level 3). The Group estimated that, other factors being constant, a 10% reduction on the sales price as of September 30, 2024 would have reduced the value of the farmlands by US$ 68.1 million, which would impact, net of its tax effect, the "Revaluation surplus" item in the statement of Changes in Shareholders' Equity.
Depreciation charges are included in “Cost of production of Biological Assets”, “Cost of production of manufactured products”, “General and administrative expenses”, “Selling expenses”, as appropriate, and/or capitalized in “Property, plant and equipment” for the nine-month periods ended September 30, 2024 and 2023.
As of September 30, 2024, borrowing costs of US$ 3,782 (September 30, 2023: US$ 2,993) were capitalized as components of the cost of acquisition or construction of qualifying assets.
Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 218,021 as of September 30, 2024 (September 30, 2023: US$ 358,373).
12. Right of use assets
Changes in the Group’s right of use assets for the nine-month periods ended September 30, 2024 and 2023 were as follows:
| Agricultural partnership (*) | Others | Total | |
|---|---|---|---|
| (unaudited) | |||
| As of September 30, 2023 | |||
| Opening net book amount | 333,562 | 26,619 | 360,181 |
| Exchange differences | 13,594 | 1,046 | 14,640 |
| Additions and re-measurement | 78,512 | 2,617 | 81,129 |
| Depreciation | (51,297) | (8,562) | (59,859) |
| Closing net book amount | 374,371 | 21,720 | 396,091 |
| As of September 30, 2024 | |||
| Opening net book amount | 384,848 | 21,865 | 406,713 |
| Exchange differences | (29,488) | 1,357 | (28,131) |
| Additions and re-measurement | 63,038 | 9,882 | 72,920 |
| Depreciation | (56,597) | (7,530) | (64,127) |
| Closing net book amount | 361,801 | 25,574 | 387,375 |
(*) Agricultural partnerships have an average term of 6 years.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 29
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
13. Investment property
Changes in the Group’s investment property for the nine-month periods ended September 30, 2024 and 2023 were as follows:
| September 30,<br>2024 | September 30,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Beginning of period | 33,364 | 33,330 |
| Loss from fair value adjustment (Note 8) | (22,484) | (913) |
| Exchange differences | 22,662 | 947 |
| End of period | 33,542 | 33,364 |
| Fair value | 33,542 | 33,364 |
| Net book amount | 33,542 | 33,364 |
The Group determined the valuation of investment properties using a “Sales Comparison Approach” prepared by an independent expert. Sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare. (Level 3). The increase /decrease in the fair value is recognized in the Statement of income under the line item “Other operating income, net”. There were no changes to the valuation techniques for any of the periods presented. The Group estimated that, other factors being constant, a 10% reduction on the Sales price as of September 30, 2024 would have reduced the value of the Investment properties on US$ 3.4 million, which would impact the line item “Net loss from fair value adjustment.”
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 30
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
14. Intangible assets, net
Changes in the Group’s intangible assets in the nine-month periods ended September 30, 2024 and 2023 were as follows:
| Goodwill | Software | Trademarks | Others | Total | |
|---|---|---|---|---|---|
| As of September 30, 2023 | |||||
| Opening net book amount | 18,544 | 7,742 | 9,101 | 733 | 36,120 |
| Exchange differences | 584 | 1,311 | 1,615 | 34 | 3,544 |
| Additions | — | 1,349 | — | 7 | 1,356 |
| Amortization charge (i) | — | (1,185) | (343) | (57) | (1,585) |
| Closing net book amount | 19,128 | 9,217 | 10,373 | 717 | 39,435 |
| At September 30, 2023 (unaudited) | |||||
| Cost | 19,128 | 19,918 | 13,463 | 1,318 | 53,827 |
| Accumulated amortization | — | (10,701) | (3,090) | (601) | (14,392) |
| Net book amount | 19,128 | 9,217 | 10,373 | 717 | 39,435 |
| As of September 30, 2024 | |||||
| Opening net book amount | 14,309 | 6,042 | 6,431 | 737 | 27,519 |
| Exchange differences | 6,154 | 2,135 | 3,246 | (80) | 11,455 |
| Additions | — | 1,019 | — | — | 1,019 |
| Amortization charge (i) | — | (1,387) | (377) | (5) | (1,769) |
| Closing net book amount | 20,463 | 7,809 | 9,300 | 652 | 38,224 |
| At September 30, 2024 (unaudited) | |||||
| Cost | 20,463 | 20,062 | 12,740 | 1,264 | 54,529 |
| Accumulated amortization | — | (12,253) | (3,440) | (612) | (16,305) |
| Net book amount | 20,463 | 7,809 | 9,300 | 652 | 38,224 |
(i) Amortization charges are included in “General and administrative expenses” and “Selling expenses” for the period ended September 30, 2024 and 2023, respectively.
The Group conducts an impairment test annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable (See note 30).
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 31
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
15. Biological assets
Changes in the Group’s biological assets in the nine-month periods ended September 30, 2024 and 2023 were as follows:
| September 30, 2024 (unaudited) | |||||
|---|---|---|---|---|---|
| Crops (i) | Rice (i) | Dairy (ii) | Sugarcane (i) | Total | |
| Beginning of year | 55,545 | 32,843 | 23,191 | 116,458 | 228,037 |
| Increase due to purchases | 802 | 643 | — | — | 1,445 |
| Initial recognition and changes in fair value of biological assets | 33,184 | 39,114 | 7,473 | 41,531 | 121,302 |
| Decrease due to harvest / disposals | (194,622) | (148,827) | (77,560) | (163,719) | (584,728) |
| Costs incurred during the period | 118,324 | 104,617 | 73,334 | 104,695 | 400,970 |
| Exchange differences | 36,060 | 20,087 | 15,755 | (13,818) | 58,084 |
| End of period | 49,293 | 48,477 | 42,193 | 85,147 | 225,110 |
| September 30, 2023 (unaudited) | |||||
| --- | --- | --- | --- | --- | --- |
| Crops (i) | Rice (i) | Dairy (ii) | Sugarcane (i) | Total | |
| Beginning of year | 72,842 | 54,126 | 30,045 | 109,431 | 266,444 |
| Increase due to purchases | 555 | 215 | — | — | 770 |
| Initial recognition and changes in fair value of biological assets | 1,816 | 6,842 | 9,393 | 97,957 | 116,008 |
| Decrease due to harvest / disposals | (143,858) | (84,697) | (65,417) | (184,162) | (478,134) |
| Costs incurred during the period | 97,889 | 49,200 | 55,008 | 104,943 | 307,040 |
| Exchange differences | 2,086 | 1,211 | 853 | 6,888 | 11,038 |
| End of period | 31,330 | 26,897 | 29,882 | 135,057 | 223,166 |
(i)Biological assets that are measured at fair value within level 3 of the hierarchy.
(ii)Biological assets that are measured at fair value within level 2 of the hierarchy
For those biological assets measured at fair value within level 3 of the fair value hierarchy, the Group uses valuation techniques based on unobservable inputs. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data
The discounted cash flow valuation technique and the significant unobservable inputs used to calculate the fair value of these biological assets are consistent with those described in Note 16 to of the consolidated financial statements for the year ended December 31, 2023.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 32
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
15. Biological assets (continued)
Cost of production for the nine-month period ended September 30, 2024:
| September 30, 2024 | |||||
|---|---|---|---|---|---|
| (unaudited) | |||||
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | |
| Salaries, social security expenses and employee benefits | 4,397 | 11,081 | 10,307 | 10,224 | 36,009 |
| Depreciation and amortization | — | — | — | 3,585 | 3,585 |
| Depreciation of right-of-use assets | — | — | — | 36,796 | 36,796 |
| Fertilizers, agrochemicals and seeds | 46,406 | 27,006 | 49 | 33,367 | 106,828 |
| Fuel, lubricants and others | 759 | 1,623 | 1,244 | 3,163 | 6,789 |
| Maintenance and repairs | 1,834 | 14,383 | 3,812 | 3,112 | 23,141 |
| Freights | 5,341 | 1,747 | 149 | — | 7,237 |
| Contractors and services | 11,411 | 37,916 | — | 7,876 | 57,203 |
| Feeding expenses | 254 | 117 | 35,866 | — | 36,237 |
| Veterinary expenses | 214 | 56 | 4,020 | — | 4,290 |
| Energy power | 50 | 3,020 | 1,607 | — | 4,677 |
| Professional fees | 646 | 276 | 140 | 252 | 1,314 |
| Other taxes | 714 | 82 | 211 | 33 | 1,040 |
| Lease expense and similar arrangements | 45,094 | 5,153 | 2 | — | 50,249 |
| Others | 736 | 2,088 | 675 | 6,287 | 9,786 |
| Subtotal | 117,856 | 104,548 | 58,082 | 104,695 | 385,181 |
| Own agricultural produce consumed | 468 | 69 | 15,252 | — | 15,789 |
| Total | 118,324 | 104,617 | 73,334 | 104,695 | 400,970 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 33
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
15. Biological assets (continued)
Cost of production for the nine-month period ended September 30, 2023:
| September 30, 2023 | |||||
|---|---|---|---|---|---|
| (unaudited) | |||||
| Crops | Rice | Dairy | Sugar, Ethanol and Energy | Total | |
| Salaries, social security expenses and employee benefits | 3,413 | 8,275 | 7,346 | 9,997 | 29,031 |
| Depreciation and amortization | — | — | — | 3,707 | 3,707 |
| Depreciation of right-of-use assets | — | — | — | 41,764 | 41,764 |
| Fertilizers, agrochemicals and seeds | 27,264 | 9,112 | 1 | 33,235 | 69,612 |
| Fuel, lubricants and others | 884 | 1,052 | 993 | 2,731 | 5,660 |
| Maintenance and repairs | 2,066 | 5,912 | 3,128 | 2,663 | 13,769 |
| Freights | 2,440 | 439 | 103 | — | 2,982 |
| Contractors and services | 28,454 | 18,481 | — | 7,567 | 54,502 |
| Feeding expenses | 1,695 | 60 | 26,255 | — | 28,010 |
| Veterinary expenses | 143 | 78 | 2,536 | — | 2,757 |
| Energy power | 34 | 1,663 | 1,590 | — | 3,287 |
| Professional fees | 364 | 372 | 216 | 316 | 1,268 |
| Other taxes | 627 | 179 | 153 | 45 | 1,004 |
| Lease expense and similar arrangements | 29,091 | 2,175 | 1 | 1,451 | 32,718 |
| Others | 788 | 1,334 | 437 | 1,467 | 4,026 |
| Subtotal | 97,263 | 49,132 | 42,759 | 104,943 | 294,097 |
| Own agricultural produce consumed | 626 | 68 | 12,249 | — | 12,943 |
| Total | 97,889 | 49,200 | 55,008 | 104,943 | 307,040 |
Biological assets as of September 30, 2024 and December 31, 2023 were as follows:
| September 30,<br>2024 | December 31, 2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | ||
| Cattle for dairy production | 41,665 | 23,191 |
| Breeding cattle | 447 | 371 |
| Other cattle | 302 | 144 |
| 42,414 | 23,706 | |
| Current | ||
| Breeding cattle | 9,327 | 6,037 |
| Other cattle | 528 | — |
| Sown land – crops | 41,206 | 49,813 |
| Sown land – rice | 46,488 | 32,023 |
| Sown land – sugarcane | 85,147 | 116,458 |
| 182,696 | 204,331 | |
| Total biological assets | 225,110 | 228,037 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 34
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
15. Biological assets (continued)
“La Niña” weather event in 2023
“La Niña” is a weather phenomenon caused by the fluctuation of the ocean temperatures in the central and eastern equatorial Pacific due to changes in the atmosphere, which affects the climate of several regions worldwide. When the temperature of the ocean decreases by 0.5°C below the five-quarter average, a so called “La Niña” weather pattern begins. This whether phenomenon is characterized by below average precipitations during spring and summertime in South America. We have experienced this weather pattern in Argentina and Uruguay, where most of our Farming operations are based, throughout the last three consecutive years and it has extended its effects during 2023, resulting in a severe drought in almost all productive regions in Argentina and Uruguay. Our diversification in terms of geographic footprint and crops planted (soybean, peanut, corn, wheat, sunflower, among others), acts as a natural hedge against weather risk, and enables us to adopt defensive strategies such as delaying planting activities and switching between crops which are either more resilient to dry weather or have a later development stage. However, and despite our ability to partially mitigate this effect, during 2023, as a consequence of the La Niña weather event, yields of our different crops had a reduction ranging from 18% to 60%, depending on the crop, thus significantly affecting our results of operations for the year ended December 31,2023.
16. Financial instruments
As of September 30, 2024, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial instruments.
For Level 1 instruments, valuation is based on the unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. Level 1 financial instruments mainly consist of crop futures and options traded on the stock market. In the case of securities, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.
Derivatives not traded on the stock market are categorized as Level 2 instruments and are valued using models based on observable market data. The Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the derivative financial instrument has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. Level 2 financial instruments mainly consist of interest-rate swaps and foreign-currency interest-rate swaps.
For Level 3 instruments, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group does not have any Level 3 financial instruments for any of the periods presented.
There were no transfers between any levels during any of the periods presented.
The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of September 30, 2024 and their allocation to the fair value hierarchy:
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 35
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
16. Financial instruments (continued)
| 2024 | |||
|---|---|---|---|
| Level 1 | Level 2 | Total | |
| Assets | |||
| Derivative financial instruments | 85 | 15,183 | 15,268 |
| Short-term investment (1) | 15,351 | — | 15,351 |
| Total assets | 15,436 | 15,183 | 30,619 |
| Liabilities | |||
| Derivative financial instruments | (1,355) | — | (1,355) |
| Total liabilities | (1,355) | — | (1,355) |
(1) It includes US$ 1,402 of BOPREAL (Bonos para la Reconstrucción de una Argentina Libre) and US$ 13,949 of LECAPs (Letras del Tesoro Nacional Capitalizables en Pesos).
When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for this purpose, details of which may be obtained from the following table:
| Class | Pricing Method | Parameters | Pricing Model | Level | Total |
|---|---|---|---|---|---|
| Futures | Quoted price | - | - | 1 | (1,250) |
| NDF | Quoted price | Foreign-exchange curve | Present value method | 1 | (20) |
| Interest-rate swaps | Theoretical price | Money market interest-rate curve. | Present value method | 2 | 15,183 |
| Public securities | Quoted price | — | — | 1 | 15,351 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 36
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
17. Trade and other receivables, net
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | ||
| Advances to suppliers | 3,333 | 3,266 |
| Income tax credits | 7,109 | 2,332 |
| Non-income tax credits (i) | 22,420 | 24,860 |
| Judicial deposits | 2,064 | 2,187 |
| Receivable from disposal of subsidiary | — | 3,899 |
| Other receivables | 2,946 | 2,516 |
| Non-current portion | 37,872 | 39,060 |
| Current | ||
| Trade receivables | 161,337 | 90,526 |
| Less: Allowance for trade receivables | (1,265) | (2,888) |
| Trade receivables – net | 160,072 | 87,638 |
| Prepaid expenses | 9,645 | 6,953 |
| Advance to suppliers | 51,428 | 42,808 |
| Income tax credits | 966 | 1,253 |
| Non-income tax credits (i) | 33,843 | 22,812 |
| Receivable from disposal of subsidiary | 3,123 | 3,971 |
| Cash collateral | — | 11 |
| Other receivables | 10,571 | 13,609 |
| Subtotal | 109,576 | 91,417 |
| Current portion | 269,648 | 179,055 |
| Total trade and other receivables, net | 307,520 | 218,115 |
(i) Includes US$ 224 for the nine-month period ended September 30, 2024 reclassified from property, plant and equipment (for the year ended December 31, 2023: US$ 293).
The fair values of current trade and other receivables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other receivables approximate their carrying amount, as the impact of discounting is not significant.
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies (expressed in US dollars):
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Currency | ||
| US Dollar | 132,854 | 88,811 |
| Argentine Peso | 63,936 | 24,304 |
| Uruguayan Peso | 2,740 | 6,570 |
| Brazilian Reais | 107,990 | 98,430 |
| 307,520 | 218,115 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 37
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
17. Trade and other receivables, net (continued)
As of September 30, 2024 trade receivables of US$ 22,988 (December 31, 2023: US$ 22.989) were past due but not impaired. The ageing analysis of these receivables indicates that US$ 302 and US$ 449 are over 6 months in September 30, 2024 and December 31, 2023, respectively.
The creation and release of allowance for trade receivables have been included in ‘Selling expenses’ in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.
The other classes within other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
18. Inventories
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Raw materials | 168,888 | 76,440 |
| Finished goods (Note 5) | 231,742 | 179,611 |
| 400,630 | 256,051 |
19. Cash and cash equivalents
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Cash at bank and on hand | 52,620 | 179,068 |
| Short-term bank deposits | 145,635 | 160,713 |
| 198,255 | 339,781 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 38
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
20. Disposals
In September 2023, the Company sold “El Meridiano”, a 6,302 hectares farm located in the Province of Buenos Aires, Argentina for an aggregate amount of US$ 48 million, collected in full. This transaction resulted in a gain before tax of US$ 9.5 million included in the line item “Other operating income”.
In April 2024, the Company sold “La Pecuaria” farm, a 3,177 hectares farm located in Uruguay for an aggregate amount of US$ 20.7 million, collected in full at closing. This transaction resulted in a pre-tax gain of US$ 6.1 million included in the line item “Other operating income” in the statement of income for the nine-month period ended September 30, 2024. Also, an amount of US$ 6.9 million was reclassified to retained earnings out of the revaluation surplus reserve.
21. Shareholder’s contribution
| Number of shares (thousands) | Share capital and share premium | |
|---|---|---|
| At January 1, 2023 | 111,382 | 960,242 |
| Employee share options exercised (Note 22) | — | 42 |
| Restricted shares vested | — | 7,528 |
| Purchase of own shares | — | (15,888) |
| Dividends to shareholders | — | (35,000) |
| At September 30,2023 (unaudited) | 111,382 | 916,924 |
| At January 1, 2024 | 111,382 | 910,883 |
| Employee share options exercised (Note 22) | — | 115 |
| Restricted share vested | — | 7,540 |
| Purchase of own shares | — | (49,626) |
| Dividends to shareholders | — | (35,000) |
| At September 30,2024 (unaudited) | 111,382 | 833,912 |
Share Repurchase Program
On July 11, 2024, the Group’s share repurchase program was renewed to purchase up to five per cent (5%) of the Company’s total outstanding share capital until December 31, 2024 or reaching the maximum number of shares authorized for purchase under the program, whichever occurs first.
As of September 30, 2024, the Company repurchased an aggregate of 30,463,019 shares under the program, of which 9,067,146 have been utilized to cover the exercise of the Company’s employee stock option plan and the granted of the restricted stock plan and 11 million shares were reduced from capital. During the nine-month periods ended September 30, 2024 and 2023 the Company repurchased shares for an amount of 5,768,614 and 2,082,837 respectively.
Annual dividends
On April 17, 2024, the Company’s general shareholders’ meeting approved the payment of an annual dividend of $35 million payable in two installments in May and November of 2024. On May 29, 2024, the first installment of US$ 17.5 million (0.1682 per share) was paid.
On April 19, 2023, the Company’s general shareholders’ meeting approved the payment of an annual dividend of $35 million payable in two installments made on May 17, 2023 and November 16, 2023, respectively.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 39
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
22. Equity-settled share-based payments
In 2004, the Group established the “2004 Incentive Option Plan” (“Option Schemes”) under which the Group granted equity-settled options to senior managers and selected employees of the Group’s subsidiaries.
Further, in 2010, the Group established the “Adecoagro Restricted Share and Restricted Stock Unit Plan” (the “Restricted Share Plan”) under which the Group grants restricted shares, or restricted stock units to directors of the Board, senior and medium management and key employees of the Group.
(a)Option Schemes
No expense was accrued for both periods under the Options Schemes.
As of September 30, 2024, 14,396 options (September 30, 2023: 6,500) were exercised. No options were forfeited or expired for any of the periods presented. On August 15, 2023, the plan was extended for an additional 10 years, whereas the expiration to exercise the options was extended.
(b)Restricted Share and Restricted Stock Unit Plan
As of September 30, 2024, the Group recognized compensation expense of US$ 4.6 million related to the restricted shares granted under the Restricted Share Plan (September 30, 2023: US$ 4.9 million). For the nine-month period ended September 30, 2024, 603,799 Restricted Shares were granted (September 30, 2023: 549,233), 970,511 were vested (September 30, 2023: 828,690), and 18,280 Restricted shares were forfeited (September 30, 2023: 26,049).
23. Trade and other payables
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | ||
| Trade payables | 55 | 514 |
| Other payables | 439 | 494 |
| 494 | 1,008 | |
| Current | ||
| Trade payables | 138,214 | 140,949 |
| Advances from customers | 6,434 | 16,351 |
| Taxes payable | 10,291 | 9,482 |
| Dividends payables | 18,513 | 1,024 |
| Payables from acquisition of subsidiaries | — | 13,404 |
| Other payables | 1,247 | 9,520 |
| 174,699 | 190,730 | |
| Total trade and other payables | 175,193 | 191,738 |
The fair values of current trade and other payables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other payables approximate their carrying amount, as the impact of discounting is not significant.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 40
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
24. Borrowings
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | ||
| Senior Notes (*) | 414,547 | 498,347 |
| Bank borrowings (*) | 274,081 | 199,496 |
| 688,628 | 697,843 | |
| Current | ||
| Senior Notes (*) | 623 | 8,250 |
| Bank overdrafts | 2,838 | 4,386 |
| Bank borrowings (*) | 167,335 | 194,470 |
| 170,796 | 207,106 | |
| Total borrowings | 859,424 | 904,949 |
(*) As of September 30, 2024, the Group was in compliance with the related financial covenants under the respective loan agreements.
As of September 30, 2024, total bank borrowings do not include any collateralized liabilities (December 31, 2023: US$ 77,055). These loans were mainly collateralized by property, plant and equipment, sugarcane plantations, sugar export contracts, shares of certain subsidiaries of the Group and restricted short-term investment, see Note 16.
Notes 2027
On September 21, 2017, the Company issued senior notes (the “Notes”) for US$ 500 million, at an annual nominal rate of 6%. The Notes will mature on September 21, 2027. Interest on the Notes are payable semi-annually in arrears on March 21 and September 21 of each year. The total proceeds nets of expenses was US$ 415.2 million.
The Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our current and future subsidiaries, currently: Adeco Agropecuaria S.A., Adecoagro Brasil Participações S.A., Adecoagro Vale do Ivinhema S.A., Pilagá S.A. and Usina Monte Alegre Ltda. are the only Subsidiary Guarantors.
The Notes contain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among other restrictions.
On July 22, 2024, the Company announced a cash tender offer for up to US$100.0 million of the Notes due 2027. As of the closing date of the Tender, (August 19, 2024) US$84.36 million in aggregate principal amount of Notes had been validly tendered by Holders and fully cancelled. The total consideration, including the Early Tender Premium, was US$ 980 for each US$ 1,000 principal amount of Notes.
Loan with International Finance Corporation (IFC)
During 2024, the Group settled the outstanding amount of US$16.4 million under the loan agreement entered into with the International Finance Corporation (IFC), a member of the World Bank Group, in June 2020.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 41
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
24. Borrowings (continued)
The maturity of the Group’s borrowings and the Group’s exposure to fixed and variable interest rates is as follows:
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Fixed rate: | ||
| Less than 1 year | 134,836 | 117,105 |
| Between 1 and 2 years | 24,215 | 6,010 |
| Between 2 and 3 years | 2,881 | 5,508 |
| Between 3 and 4 years | 414,980 | — |
| Between 4 and 5 years | 433 | 498,347 |
| More than 5 years | 41,046 | — |
| 618,391 | 626,970 | |
| Variable rate: | ||
| Less than 1 year | 35,960 | 90,001 |
| Between 1 and 2 years | 34,246 | 37,712 |
| Between 2 and 3 years | 83,329 | 91,878 |
| Between 3 and 4 years | 51,865 | 56,605 |
| Between 4 and 5 years | 1,172 | 1,783 |
| More than 5 years | 34,461 | — |
| 241,033 | 277,979 | |
| 859,424 | 904,949 |
The breakdown of the Group’s borrowing by currency is included in Note 2 - Interest rate risk.
The carrying amount of short-term borrowings is approximate its fair value due to the short-term maturity. Long term borrowings subject to variable rate approximate their fair value. The fair value of long-term subject to fix rate do not significant differ from their fair value. The fair value (level 2) of the senior notes equals US$ 415 million, 99.73% of the nominal amount.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 42
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
25. Lease liabilities
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | 301,465 | 325,569 |
| Current | 52,827 | 52,941 |
| 354,292 | 378,510 |
The maturity of the Group's lease liabilities is as follows:
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Less than 1 year | 52,827 | 52,941 |
| Between 1 and 2 years | 12,467 | 66,474 |
| Between 2 and 3 years | 62,564 | 61,398 |
| Between 3 and 4 years | 52,471 | 47,677 |
| Between 4 and 5 years | 42,990 | 39,254 |
| More than 5 years | 130,973 | 110,766 |
| 354,292 | 378,510 |
26. Payroll and social security liabilities
| September 30,<br>2024 | December 31,<br>2023 | |
|---|---|---|
| (unaudited) | ||
| Non-current | ||
| Social security payable | 1,278 | 1,570 |
| 1,278 | 1,570 | |
| Current | ||
| Salaries payable | 10,732 | 4,498 |
| Social security payable | 4,367 | 4,062 |
| Provision for vacations | 13,291 | 12,783 |
| Provision for bonuses | 9,573 | 16,014 |
| 37,963 | 37,357 | |
| Total payroll and social security liabilities | 39,241 | 38,927 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 43
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
27. Provisions for other liabilities
The Group is subject to several laws, regulations and business practices of the countries where it operates. In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have been no material changes to claimed amounts and current proceedings since December 31, 2023.
28. Related-party transactions
The following is a summary of the balances and transactions with related parties:
| Related party | Relationship | Description of transaction | Expense included in the statement of income | Balance payable | |||
|---|---|---|---|---|---|---|---|
| September 30,<br>2024 | September 30,<br>2023 | September 30,<br>2024 | December 31,<br>2023 | ||||
| (unaudited) | (unaudited) | (unaudited) | |||||
| Directors and senior management | Employment | Compensation selected employees | (5,698) | (6,200) | (16,273) | (18,781) |
29. Basis of preparation and presentation
The information presented in the accompanying condensed consolidated interim financial statements (“interim financial statements”) as of September 30, 2024 and for the nine-month and the three-month periods ended September 30, 2024 and 2023 is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as of September 30, 2024, results of operations for the nine-month and three months periods ended September 30, 2024 and 2023 and cash flows for the nine-month periods ended September 30, 2024 and 2023. All such adjustments are of a normal recurring nature. In preparing these accompanying interim financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.
These interim financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34), ‘Interim financial reporting’ as issued by the International Accounting Standards Board (IASB) and they should be read in conjunction with the annual financial statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS Accounting Standards as issued by the IASB.
The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2023.
Seasonality of operations
The Group’s business activities are inherently seasonal. The Group generally harvest and sell its grains (corn, soybean, rice and sunflower) between February and August, with the exception of wheat, which is harvested from December to January. Peanut is harvested from April to May, and revenue are executed with higher intensity during the third quarter of the year. Cotton is a unique in that while it is typically harvested from June to August, it requires processing which takes about two to three months to complete. Revenue in our Dairy business segment tend to be more stable. However, milk production is generally higher during the fourth quarter, when the weather is more suitable for production. Although our Sugar, Ethanol and Electricity cluster is
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 44
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
29. Basis of preparation and presentation (continued)
currently operating under a “non-stop” or “continuous” harvest and without stopping during traditional off-season, the rest of the sector in Brazil is still primarily operating with large off-season periods from December/January to March/April. The result of large off-season periods is fluctuations in our sugar and ethanol revenue and in our inventories, usually peaking in December to take advantage of higher prices during the traditional off-season period (i.e., January through April). As a result of the above factors, there may be significant variations in our financial results from one quarter to another. In addition, our quarterly results may vary as a result of the effects of fluctuations in commodities prices, production yields and costs on the determination of initial recognition and changes in fair value of biological assets and agricultural produce.
30. Critical accounting estimates and judgments
The Group's critical accounting policies are also consistent with those of the annual financial statements for the year ended December 31, 2023 described in Note 32.
Impairment of non-financial assets
At the date of each statement of financial position, the Group reviews the carrying amounts of its property, plant and equipment and finite lived intangible assets to determine whether there is any indication that those assets could have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independently, assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The Group’s property, plant and equipment items generally do not generate independent cash flows.
In the case of goodwill, any goodwill acquired is allocated to the cash-generating unit (‘CGU’) expected to benefit from the business combination. CGU to which goodwill is allocated is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount of the CGU may be impaired. The carrying amount of the CGU is compared to its recoverable amount, which is the higher of fair value less costs to sell and the value in use. An impairment loss is recognized for the amount by which the carrying amount exceeds its recoverable amount. The impairment review requires management to undertake certain significant judgments, including estimating the recoverable value of the CGU to which goodwill is allocated, based on either fair value less costs-to-sell or the value-in-use, as appropriate, in order to reach a conclusion on whether it deems the goodwill is impaired or not.
For purposes of the impairment testing, each CGU represents the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or group of assets.
Each farmland in Argentina and Uruguay represents one CGU (see Note 3). For its properties in Brazil, management identified a farmland together with its related mill as separate CGUs. Most of the farmlands in Argentina and Uruguay are treated as single CGUs.
Based on these criteria, management identified a total amount of 29 CGUs as of September 30, 2024 and 30 CGUs as of September 30, 2023.
As of September 30, 2024 and 2023, due to the fact that there were no impairment indicators, the Group only tested those CGUs with allocated goodwill in Argentina and Brazil.
CGUs tested based on a fair-value-less-costs-to-sell model at September 30, 2024 and 2023:
As of September 30, 2024, the Group identified 6 CGUs in Argentina (2023: 6 CGUs) to be tested based on this model (all CGUs with allocated goodwill). Estimating the fair value less costs-to-sell is based on the best information available, and refers to the amount at which the CGU could be bought or sold in a current transaction between willing parties. Management may be assisted by the work of external advisors. When using this model, the Group applies the “sales comparison approach” as its method of valuing most properties, which relies on results of sales of similar agricultural properties to estimate the value of the
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 45
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
30. Critical accounting estimates and judgments (continued)
CGU. This approach is based on the theory that the fair value of a property is directly related to the selling prices of similar properties.
Fair values are determined by extensive analysis which includes current and potential soil productivity of the land (the ability to produce crops and maintain livestock) projected margins derived from soil use, rental value obtained for soil use, if applicable, and other factors such as climate and location. Farmland ratings are established by considering such factors as soil texture and quality, yields, topography, drainage and rain levels. Farmland may contain farm outbuildings. A farm outbuilding is any improvement or structure that is used for farming operations. Outbuildings are valued based on their size, age and design.
Based on the factors described above, each farm property is assigned different soil classifications for the purposes of establishing a value, Soil classifications quantify the factors that contribute to the agricultural capability of the soil. Soil classifications range from the most productive to the least productive.
The first step to establishing an assessment for a farm property is a sales investigation that identifies the valid farm sales in the area where the farm is located. A price per hectare is assigned for each soil class within each farm property. This price per hectare is determined based on the quantitative and qualitative analysis mainly described above.
The results are then tested against actual sales, if any, and current market conditions to ensure the values produced are accurate, consistent and fair.
The following table shows only the 6 CGUs (2023: 6 CGUs) where goodwill was allocated at each period end and the corresponding amount of goodwill allocated to each one:
| CGU / Operating segment / Country | September 30, 2024 | September 30, 2023 |
|---|---|---|
| La Carolina / Crops / Argentina | 314 | 281 |
| El Orden / Crops / Argentina | 301 | 271 |
| La Guarida / Crops / Argentina | 2,923 | 2,623 |
| Los Guayacanes / Crops / Argentina | 3,573 | 3,206 |
| Doña Marina / Rice / Argentina | 6,220 | 5,582 |
| El Colorado / Crops / Argentina | 3,124 | 2,804 |
| Closing net book value of goodwill allocated to CGUs tested (Note 13) | 16,455 | 14,767 |
| Closing net book value of PPE items and other assets allocated to CGUs tested | 159,918 | 158,744 |
| Total assets allocated to CGUs tested | 176,373 | 173,511 |
Based on the testing above, the Group determined that none of the CGUs, with allocated goodwill, were impaired at September 30, 2024 and 2023.
CGUs tested based on a value-in-use model at September 30, 2024 and 2023:
As of September 30, 2024, the Group identified 2 CGUs (2023: 2 CGUs) in Brazil to be tested based on this model (all CGUs with allocated goodwill). The determination of the value-in-use calculation required the use of significant estimates and assumptions related to management’s cash flow projections In performing the value-in-use calculation, the Group applied pre-tax rates to discount the future pre-tax cash flows. In each case, these key assumptions have been made by management reflecting
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 46
Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
30. Critical accounting estimates and judgments (continued)
past experience and are consistent with relevant external sources of information, such as appropriate market data. In calculating value-in-use, management may be assisted by the work of external advisors.
The key assumptions used by management in the value-in-use calculations which are considered to be most sensitive to the calculation are:
| Key Assumptions | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Financial projections | Covers 5 years for UMA (*) | Covers 5 years for UMA (*) |
| Covers 5 years for AVI (**) | Covers 5 years for AVI (**) | |
| Yield average growth rates | 0-2% | 0-2% |
| Future pricing increases | 0.46% per annum | 0.46% per annum |
| Future cost decrease | 0.96% per annum | 0.96% per annum |
| Discount rates | 5.0% | 5.2% |
| Perpetuity growth rate | 1% | 1% |
(*) UMA stands for Usina Monte Alegre LTDA.
(**) AVI stands for Adecoagro Vale Do Ivinhema S.A.
Discount rates are based on the risk-free rate for U. S. government bonds, adjusted for a risk premium to reflect the increased risk of investing in South America and Brazil in particular. The risk premium adjustment is assessed for factors specific to the respective CGUs and reflects the countries that the CGUs operate in.
The following table shows only the 2 CGUs where goodwill was allocated at each period end and the corresponding amount of goodwill allocated to each one:
| CGU/ Operating segment | September 30, 2024 | September 30, 2023 |
|---|---|---|
| AVI / Sugar, Ethanol and Energy | 2,915 | 2,937 |
| UMA / Sugar, Ethanol and Energy | 1,093 | 1,102 |
| Closing net book value of goodwill allocated to CGUs tested (Note 14) | 4,008 | 4,039 |
| Closing net book value of PPE items and other assets allocated to CGUs tested | 599,509 | 600,764 |
| Total assets allocated to 2 CGUs tested | 603,517 | 604,803 |
Based on the testing above, the Group determined that none of the CGUs, with allocated goodwill, were impaired at September 30, 2024 and 2023.
Management views these assumptions are conservative and does not believe that any reasonable change in the assumptions would cause the carrying value of these CGU’s to exceed the recoverable amount.
The accompanying notes are an integral part of these condensed consolidated interim financial statements
F- 47