Adjusted EBITDA reached $55.4 million in 2Q25. Leveraging on our production and commercial flexibility to mitigate lower global prices across our businesses

Rhea-AI Summary

Adecoagro (NYSE: AGRO) reported mixed second quarter 2025 results, with Adjusted EBITDA reaching $55.4 million, marking a 60.5% year-over-year decline. The company's gross sales decreased by 1.4% in Q2 due to lower commodity prices, though 6-month sales were up 9.9% on higher volumes.

The Sugar, Ethanol & Energy segment generated $68.1 million in Adjusted EBITDA, down 36.3% year-over-year, while the Farming business contributed just $1.1 million. Notable financial developments include the issuance of $500 million Senior Notes due 2032 and a tender offer for 2027 notes. The company committed $45.2 million to shareholder distributions, including share repurchases and dividends.

Positive

• Successfully issued $500 million Senior Notes due 2032 at 7.50% coupon
• Higher ethanol sales volumes due to efficient carry-over strategy
• Record production achieved in Rice operations
• Committed $45.2 million to shareholder distributions
• 6-month sales increased 9.9% year-over-year

Negative

• Adjusted EBITDA declined 60.5% year-over-year in Q2
• Net Debt/LTM Adj. EBITDA increased to 2.3x
• Lower crushing volumes (down 13.5% in Q2) due to weather impacts
• Higher production costs (9.0 cts/lb vs 7.9 cts/lb)
• Declining prices across most products affecting margins

Insights

Financial Analyst

Adecoagro's Q2 results show significant earnings decline amid pricing pressures, with proactive debt management offering some stability.

Adecoagro's Q2 2025 results reveal a concerning 60.5% year-over-year decline in Adjusted EBITDA to $55.4 million, primarily driven by lower global commodity prices across its business segments. The company's Sugar, Ethanol & Energy business, while still the primary earnings contributor at $68.1 million, suffered a 36.3% year-over-year decline amid reduced crushing volumes and higher production costs.

The Farming business shows particularly troubling performance, with Adjusted EBITDA collapsing to just $1.1 million in Q2, down $36.7 million year-over-year. This dramatic decline stems from a combination of lower commodity prices, higher dollar-denominated costs, and negative mark-to-market adjustments to biological assets.

On a more positive note, Adecoagro has strategically improved its capital structure by issuing $500 million in 7-year Senior Notes with a 7.50% coupon, using proceeds to tender approximately $150.9 million of its 6.00% Senior Notes due 2027. This liability management demonstrates financial discipline but comes at a higher interest cost reflecting the current rate environment.

The company's leverage ratio has increased to 2.3x Net Debt/LTM Adjusted EBITDA, reflecting the weaker earnings profile. While continuing shareholder distributions ($45.2 million committed through dividends and share repurchases), management appears to be prioritizing financial flexibility during this challenging commodity price environment.

The combination of weather disruptions, cost inflation, and pricing pressure creates significant headwinds, but Adecoagro's commercial flexibility - particularly its ability to shift production between sugar and ethanol based on relative pricing - provides some operational resilience in a challenging environment.

LUXEMBOURG, Aug. 18, 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 second quarter ended June 30, 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 24 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.

Main highlights for the period:

• During 2Q25, gross sales were down 1.4% year-over-year on lower prices for most of our products. On an accumulated basis, sales were 9.9% higher versus the same period last year driven by higher volumes sold across all segments - particularly ethanol, reflecting the success of our commercial strategy to clear out inventories at favorable prices.
• Adjusted EBITDA was 60.5% and 60.3% lower year-over-year during 2Q25 and 6M25, respectively. The decline was driven by year-over-year losses in the mark-to-market of our biological assets in our Sugar, Ethanol & Energy business mainly due to lower quantity of harvested cane, as well as in our Rice operations on lower prices and in Crops on pressured margins. Furthermore, results were also negatively impacted by higher costs in U.S. dollar terms across our Farming operations, together with higher corporate expenses due to one-off expenses related to Tether's tender offer for our common shares.
• Net Debt/LTM Adj. EBITDA stood at 2.3x on lower consolidated results.

Sugar, Ethanol & Energy business:

• Adjusted EBITDA in the SE&E business reached $68.1 million and $98.0 million during 2Q25 and 6M25, 36.3% and 38.3% lower year-over-year respectively.
  (+) Higher net sales driven by (i) higher volumes of ethanol sold thanks to our efficient carry-over strategy and (ii) higher average selling prices for both ethanol and energy.
  (+) Sugar max scenario (50% in 2Q25 / 48% in 6M25) as prices traded above hydrous ethanol in MS. Within ethanol, we prefer hydrous over anhydrous due to better prices.
  (-) Lower crushing during 2Q25 and 6M25 (13.5% and 19.8% down, respectively) explained by less effective milling days during 2Q25 (75% higher rains in April versus the 15-year average), coupled with selective cane crushing done in 1Q25 (focused on cane with limited growth potential).
  (-) Year-to-date cost of production at 9.0 cts/lb (versus 7.9 cts/lb in 6M24) driven by lower dilution of fixed and variable costs on lower TRS equivalent produced.
  (-) Year-over-year loss in biological assets due to lower quantity of harvested cane versus 2Q24 and 6M24, coupled with lower year-over-year gains in our commodity hedge position.

Farming business:

• Adjusted EBITDA for the Farming business reached $1.1 million in 2Q25 and $17.7 million in 6M25, $36.7 million and $64.1 million lower year-over-year, respectively. Excluding the sale of La Pecuaria farm in April 2024, Adjusted EBITDA was down $21.7 million and $49.1 million during each period, respectively.
  (+) Higher volumes sold of our Dairy value-added products.
  (+) Record production in our Rice operations.
  (-) Lower prices for crops, rice and dairy products.
  (-) Year-over-year losses in the mark-to-market of our biological asset and agricultural produce for our Crops and Rice operations on lower prices.
  (-) Higher costs in U.S. dollar terms.

Remarks

Issuance of US$500 million Senior Notes due 2032 & Cash Tender Offer for Senior Notes due 2027

• On July 29, 2025, we completed the issuance of a 7-year $500 million bond with a 7.50% coupon. The notes are due on July 29, 2032, and are guaranteed on a senior unsecured basis by certain of the Company's subsidiaries. The Company has used the proceeds of the transaction to primarily fund the cash tender offer for its 6.00% Senior Notes due 2027, which expired on July 24, 2025, with approximately $150.9 million aggregate principal of notes tendered out of the $415.6 million outstanding. Other uses of the proceeds include general corporate purposes, such as capital expenditures and liability management.
• This transaction marks another milestone in Adecoagro's history. Not only have we improved our debt maturity profile, but also this liability management reflects our disciplined and constant search for opportunities to better finance our operations while adding financial flexibility.

2025 Shareholder Distribution

• As of the date of this report, we have already committed $45.2 million to shareholder distributions. $10.2 million were expended in repurchasing 1.1% of the company's equity (1.1 million shares at an average price of $9.65 per share), and $35.0 million correspond to cash dividends (the first installment of $17.5 million was already paid on May 16, 2025 and the second installment will be paid in November 2025).

Non-Gaap Financial Measures: For a full reconciliation of non-gaap financial measures please refer to page 24 of our 2Q25 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; 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.

To read the full 2Q25 earnings release, please access ir.adecoagro.com. A conference call to discuss 2Q25 results will be held on August 19, 2025, with a live webcast through the internet:

Conference Call
August 19, 2025
10 a.m. US EST
11 a.m. Buenos Aires
11 a.m. São Paulo
4 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.

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SOURCE Adecoagro S.A.

FAQ

What was Adecoagro's (AGRO) Adjusted EBITDA in Q2 2025?

Adecoagro reported Adjusted EBITDA of $55.4 million in Q2 2025, representing a 60.5% decrease year-over-year.

How much did AGRO's Sugar, Ethanol & Energy segment earn in Q2 2025?

The Sugar, Ethanol & Energy segment generated $68.1 million in Adjusted EBITDA, down 36.3% compared to Q2 2024.

What is Adecoagro's current debt position in 2025?

Adecoagro's Net Debt/LTM Adjusted EBITDA ratio stands at 2.3x. The company recently issued $500 million in Senior Notes due 2032 with a 7.50% coupon.

How much is AGRO returning to shareholders in 2025?

Adecoagro committed $45.2 million to shareholder distributions, including $10.2 million in share repurchases and $35.0 million in cash dividends.

What caused the decline in Adecoagro's Q2 2025 performance?

The decline was due to lower commodity prices, reduced crushing volumes (down 13.5%), higher production costs, and losses in biological assets mark-to-market valuations.