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Press release from PR Newswire

Adecoagro recorded 1Q13 Adjusted EBITDA of $29.0 million

Wednesday, May 15, 2013

Adecoagro recorded 1Q13 Adjusted EBITDA of $29.0 million

17:09 EDT Wednesday, May 15, 2013

LUXEMBOURG, May 15, 2013 /PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), one of the leading agricultural companies in South America, announced today its results for the first quarter ended on March 31, 2013. Main highlights for the period:

  • Adecoagro recorded Adjusted EBITDA of $29.0 million in 1Q13, representing an $27.2 million increase compared to 1Q12. Adjusted EBITDA margin during 1Q13 reached 28.3% in 1Q13, compared to 1.2% in 1Q12.
  • The Sugar, Ethanol and Energy business underwent the annual inter-harvest maintenance of the mills and equipment during the first quarter. Accordingly, 1Q13 Adjusted EBITDA reflects the sale of sugar and ethanol inventories, the expenses incurred in sugarcane maintenance and preparation for the next harvest season and hedging results. Adjusted EBITDA in 1Q13 was $14.9 million, $19.6 million higher than in 1Q12. This improvement is primarily explained by: (i) a $7.9 million higher gross margin in 1Q13 compared to 1Q12, primarily as a result of a lower cost of sugarcane for the production of sugar, ethanol and energy; and (ii) a $15.8 million higher gain resulting from the mark-to-market of our sugar and ethanol hedge position (247K tons of sugar hedged at 20.8 US cents/lb compared to current futures price of 17.7 US cents/lb).
  • The Farming and Land Transformation businesses' Adjusted EBITDA in 1Q13 was $18.8 million, $6.1 million higher than 1Q12. This improvement is primarily explained by: (i) an increase in rice yields, which drove the Adjusted EBITDA of our rice segment from $0.8 million in 1Q12 to $4.6 million in 1Q13, and; (ii) a $4.8 million increase in the result generated from the mark-to-market of our hedge positions.
  • Net Income in 1Q13 totaled $2.5 million, $1.3 million higher than in 1Q12. During 1Q13, net income was negatively affected by (i) a $9.4 million non-cash loss resulting from the mark-to-market of our coffee plantation (biological asset), which was impacted by a 10% fall in coffee prices and (ii) a $2.5 million non-cash foreign exchange loss resulting from the impact of the depreciation of the Argentine peso on our dollar-denominated debt. We expect that the loss recognized in respect of our coffee plantation will be offset in part in the second quarter as a result of the sale of the Mimoso and Lagoa do Oeste coffee farms (see Recent Developments).
  • On April 26, 2013, Adecoagro celebrated the inauguration of the Ivinhema mill located in Mato Grosso do Sul, Brazil. Ivinhema is a milestone event in our consolidation as a leading producer of food and renewable energy. The construction of the first phase of Ivinhema was completed on schedule and on budget. The Ivinhema mill currently has 2.0 million tons of crushing capacity and will expand to 4.0 million tons in 2015 and 6.3 million tons in 2017. Together with the Angelica mill, our first greenfield completed in 2010, it will form a 10.3 million ton cluster surrounded by over 120,000 hectares of sugarcane plantations, which we believe will allow us to be one of the most efficient and low cost producers of sugar, ethanol and electricity in Brazil. Ivinhema has successfully commenced the 2013/14 sugarcane harvest and is expected to crush approximately 1.5 million tons of sugarcane, producing sugar, ethanol and electricity for the local and international markets.
  • Our sugar, ethanol and energy mills have begun the 2013/14 sugarcane harvest and milling operations. Maintenance of industrial equipment and sugarcane plantations was successfully performed during January-March. Angelica and UMA have sufficient cane and are expected to crush at full nominal capacity, while Ivinhema will operate at 75% capacity.The Angelica mill began crushing on March 26 to benefit from attractive inter-harvest ethanol and energy prices. UMA mill began crushing on April 9 as scheduled while Ivinhema started operating on April 26.
  • On May 2, 2013, Adecoagro entered into an agreement to sell the Lagoa do Oeste and Mimoso farms located in Luis Eduardo Magalhaes, Bahia, Brazil. The farms have a total area of 3,834 hectares of which 904 hectares are planted with coffee trees. In addition, Adecoagro entered into an agreement whereby the buyer will operate and make use of 728 hectares of existing coffee trees in Adecoagro' Rio de Janeiro farm during an 8-year period. Adecoagro will receive a total of $20.8 million in cash proceeds for the farm sales and $3.8 million for the Rio de Janeiro farm agreement. The sale price represents a 7% premium to the aggregate value of the Cushman & Wakefield farm appraisal dated September 2012 and the fair value of the coffee plantation. We estimate this transaction will result in approximately $8.0 million of operating profit recorded in 2Q13.

To read the full 1Q13 earnings release, please access ir.adecoagro.com. A conference call to discuss 1Q13 results will be held tomorrow with live webcast through the internet:

English Conference Call May 16th, 20139 a.m. (US EST)10 a.m. Buenos Aires10 a.m. Sao Paulo3 p.m. Luxembourg

Tel: (877) 317-6776 Participants calling from the US Tel: +1 (412) 317-6776 Participants calling from other countries Access Code: Adecoagro

Investor Relations DepartmentCharlie Boero Hughes CFO

Hernan Walker IR Manager Email: ir@adecoagro.comTel: +54 (11)4836-8651

About Adecoagro:Adecoagro is a leading agricultural company in South America. Adecoagro owns over 283 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1 million tons of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.

SOURCE Adecoagro S.A.

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