Adjusted EBITDA reached $35.9 million in 1Q25. Selective milling pace and strong commercial strategy. Record productivity in Rice.

Rhea-AI Summary

Adecoagro (NYSE: AGRO) reported its Q1 2025 financial results, with Adjusted EBITDA reaching $35.9 million, down 60.1% year-over-year. Gross sales increased 27.5% driven by higher ethanol volumes. The company's Sugar, Ethanol & Energy business saw Adjusted EBITDA of $29.9 million, declining 42.4% YoY due to lower crushing volumes and biological asset losses. The Farming business recorded Adjusted EBITDA of $16.6 million, down 62.2% YoY. Notably, Tether Investments acquired a 70% stake in Adecoagro at $12.41 per share. The company committed $45.2 million to shareholder distributions, including $35 million in cash dividends and $10.2 million in share repurchases, as part of its minimum 40% distribution policy of prior year's Adjusted Free Cash Flow.

Positive

• Gross sales increased 27.5% year-over-year driven by higher ethanol volumes
• Ethanol prices 30% higher versus 1Q24 in local currency
• Strategic partnership with Tether secured through 70% stake acquisition
• $45.2 million committed to shareholder distributions
• Higher prices achieved for Dairy's value-added products

Negative

• Adjusted EBITDA declined 60.1% year-over-year to $35.9 million
• Sugar, Ethanol & Energy EBITDA dropped 42.4% to $29.9 million
• Crushing volume down 31.3% year-over-year due to dry weather
• Farming business EBITDA decreased 62.2% to $16.6 million
• Higher costs in U.S. dollar terms affecting operations

Insights

Agricultural Financial Analyst

Adecoagro reports mixed Q1 results with 60.1% EBITDA decline amid strategic milling reduction, despite strong ethanol sales.

Adecoagro's Q1 2025 results present a mixed picture with some concerning trends. The headline $35.9 million Adjusted EBITDA represents a significant 60.1% decline year-over-year, despite gross sales increasing by 27.5%. This divergence reveals underlying operational challenges.

The Sugar, Ethanol & Energy segment delivered $29.9 million in Adjusted EBITDA, down 42.4% YoY. While management successfully executed their commercial strategy by selling ethanol inventories at 30% higher prices, this was overshadowed by a 31.3% reduction in crushing volume. The decision to selectively harvest lower-yielding cane fields (5th cut and above) is strategically sound for long-term productivity but negatively impacts short-term financial performance.

The Farming business saw even steeper declines, with Adjusted EBITDA falling 62.2% to $16.6 million. Rice prices retreated from record 2024 levels, and Crops faced a double-hit of lower-than-expected yields and prices. The biological asset mark-to-market losses across multiple segments signal potential downstream pressure on future quarters.

The $45.2 million shareholder distribution commitment ($35 million in dividends and $10.2 million in share repurchases) maintains the company's 40% minimum distribution policy based on prior-year cash flow, but may prove difficult to sustain if operational performance continues to deteriorate.

The most transformative development is Tether's acquisition of a 70% stake at $12.41 per share. This transaction fundamentally changes Adecoagro's shareholder structure and brings significant new capital and potential blockchain/digital expertise from the USDT stablecoin creator, though integration questions remain.

LUXEMBOURG, May 12, 2025 /PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), a leading sustainable production company in South America, announced today its results for the first quarter ended March 31, 2025. The financial information contained in this press release is based on consolidated interim financial statements presented in US dollars and prepared in accordance with International Financial Reporting Standards (IFRS), except for Non - IFRS measures. Please refer to page 22 for definitions and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.

Main highlights for the period:

• Gross sales were up 27.5% year-over-year on higher volumes sold, mainly ethanol as our commercial strategy to clear out our tanks at higher prices paid off. This, in turn, more than offset the lower prices of some of our main commodities.
• Adjusted EBITDA amounted to $35.9 million in 1Q25, down 60.1% versus the same period of last year. Despite an outperformance from our Dairy business, the decrease was mainly driven by a year-over-year loss in the mark-to-market of our biological assets in our Sugar, Ethanol & Energy business on lower crushing volume, as well as in our Rice operations on lower prices compared to record levels seen in 1Q24. Furthermore, corporate expenses were $4.8 million higher year-over-year, mainly due to one-off expenses related to the Tender Offer.
• Year to date, we have already committed $45.2 million to shareholder distribution via a combination of cash dividends ($35 million split in two equal installments) and share repurchases ($10.2 million).

Sugar, Ethanol & Energy business:

• Adjusted EBITDA in the SE&E business reached $29.9 million during 1Q25, 42.4% lower year-over-year.
  (+) Higher net sales on greater ethanol volume sold and prices. Commercial strategy paid off as we emptied our tanks (30% of the total ethanol produced in 2024) at prices 30% above versus 1Q24 in local currency.
  (-) Crushing down 31.3% year-over-year on lower yields given the dry weather experienced in 2024 (33% lower rains versus the 15-year average). Furthermore, we strategically decided to harvest cane with limited growth potential (5th cut and above) to allow younger cane to continue growing.
  (-) Sugar/Ethanol mix at 42%/58% given lower production flexibility. We continue to maximize sugar production and prefer hydrous ethanol over anhydrous on better prices.
  (-) Cost of production at 11.1 cts/lb driven by lower dilution of fixed costs on lower volume.
  (-) Year-over-year loss in biological assets (harvested cane) due to lower crushing volume and lower Consecana price versus 1Q24.

Farming business:

• Adjusted EBITDA for the Farming business amounted to $16.6 million during 1Q25, marking a 62.2% year-over-year decline.
  (+) Higher prices for Dairy's value-added products.
  (-) Lower prices for Rice, especially compared to the record levels seen in 1Q24.
  (-) Year-over-year losses in the mark-to-market of our biological assets and agricultural produce for our Crops (lower-than-expected yields and prices).
  (-) Higher costs in U.S. dollar terms.

Remarks

Tether Investments S.A. de C.V. Acquires 70% Stake in Adecoagro

• On March 27, 2025, Adecoagro's Board of Directors unanimously approved Tether's offer to acquire at least 51% and up to 70% of the Company's common shares at $12.41 per share and recommended to shareholders of the Company to accept the offer and tender their shares.
• The Tender Offer, open from March 28 to April 24, 2025, resulted in 67,075,545 shares being tendered - meeting the minimum and exceeding the maximum threshold. As a result, shares were accepted on a prorated basis at approximately 73.9%.
• Tether is a global leader in stablecoin technology and the creator of the USDT. Their support will enhance Adecoagro's ability to accelerate growth in sustainable agriculture and energy, maintain financial discipline, and drive long-term value creation across South America. In alignment with this vision, the Transaction Agreement reflects a shared commitment to continuity, with both parties agreeing to preserve the existing management structure and the current four business units, while also incorporating a series of protections for minority shareholders.
• For more information, please refer to our Investor Relations' website (www.ir.adecoagro.com).

2025 Shareholder Distribution

• As of the date of this report, we have already committed $45.2 million to shareholder distributions. This was executed via:
  • Cash dividends: $35.0 million approved. On May 16, 2025, we will pay the first installment of $17.5 million (~$0.1750 per share) to shareholders of the Company of record at close of business on May 2, 2025. The second installment shall be payable in November 2025 in an equal cash amount.
  • Share repurchases: $10.2 million expended year-to-date in repurchasing 1.1% of the company's equity (1.1 million shares at an average price of $9.65 per share).
• Dividend distribution and share repurchases are part of the company's distribution policy, which consists of a minimum distribution of 40% of the Adjusted Free Cash Flow from Operations (NCFO) generated in the prior year. Based on 2024's NCFO, the minimum during 2025 is $64.4 million.

Non-Gaap Financial Measures: For a full reconciliation of non-gaap financial measures please refer to page 22 of our 1Q25 Earnings Release found on Adecoagro's website (ir.adecoagro.com)

Forward-Looking Statements: This press release contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as "anticipate," "forecast", "believe," "continue," "estimate," "expect," "intend," "is/are likely to," "may," "plan," "should," "would," or other similar expressions.

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; (xvii) the relative value of the Brazilian Reais, the Argentine Peso, and the Uruguayan Peso compared to other currencies; and (xviii) the acquisition by Tether of a 70% stake in Adecoagro.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this press release might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

To read the full 1Q25 earnings release, please access ir.adecoagro.com. A conference call to discuss 1Q25 results will be held on May 13, 2025, with a live webcast through the internet:

Conference Call
May 13, 2025
9 a.m. US EST
10 a.m. Buenos Aires
10 a.m. São Paulo
3 p.m. Luxembourg
To participate, please register at the link

Investor Relations Department
Emilio Gnecco
CFO
Victoria Cabello
IRO
Email: ir@adecoagro.com

About Adecoagro:
Adecoagro is a leading sustainable production company in South America. Adecoagro owns 210.4 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 3.1 million tons of agricultural products and over 1 million MWh of renewable electricity.

View original content:https://www.prnewswire.com/news-releases/adjusted-ebitda-reached-35-9-million-in-1q25--selective-milling-pace-and-strong-commercial-strategy-record-productivity-in-rice-302452866.html

SOURCE Adecoagro S.A.

FAQ

What was Adecoagro's (AGRO) Adjusted EBITDA in Q1 2025?

Adecoagro reported Adjusted EBITDA of $35.9 million in Q1 2025, representing a 60.1% decrease compared to the same period last year.

How much did Tether Investments pay per share for its stake in Adecoagro (AGRO)?

Tether Investments acquired a 70% stake in Adecoagro at $12.41 per share through a tender offer completed in April 2025.

What is Adecoagro's (AGRO) shareholder distribution plan for 2025?

Adecoagro committed $45.2 million to shareholder distributions, including $35 million in cash dividends (split in two installments) and $10.2 million in share repurchases.

Why did Adecoagro's (AGRO) crushing volume decline in Q1 2025?

Crushing volume decreased 31.3% year-over-year due to lower yields caused by dry weather in 2024, with 33% lower rains versus the 15-year average.

What was the performance of Adecoagro's (AGRO) Farming business in Q1 2025?

The Farming business recorded Adjusted EBITDA of $16.6 million, marking a 62.2% year-over-year decline, mainly due to lower Rice prices and higher costs in U.S. dollar terms.