Core Viewpoint - Adecoagro S.A. has entered into a Transaction Agreement with Tether Investments S.A. de C.V. for Tether to acquire up to 49,596,510 Common Shares at a price of $12.41 per share, which will result in Tether owning approximately 70% of the outstanding shares of Adecoagro upon completion of the transaction [1] Group 1: Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and producing over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity [4] - The company operates in the agribusiness sector, focusing on food and renewable energy production while integrating cutting-edge technology across its four business segments [2] Group 2: Transaction Details - The tender offer by Tether is subject to conditions, including the valid tendering of shares representing at least 51% of the outstanding shares on a fully diluted basis [1] - The transaction has been unanimously approved by Adecoagro's Board of Directors, indicating strong internal support for the deal [1] Group 3: Management and Strategic Vision - Mariano Bosch, CEO of Adecoagro, expressed excitement about Tether's involvement, highlighting the alignment of entrepreneurial spirit and the importance of technology in the company's growth strategy [2] - The transaction is expected to enhance the governance model of Adecoagro by incorporating new directors while retaining some current members [2][3] - Emilio Gnecco, CFO of Adecoagro, noted that the company is well-positioned for long-term sustainable growth and that Tether's investment will enable a more ambitious growth plan [3] Group 4: Tether's Commitment - Tether's CEO, Paolo Ardoino, emphasized the company's commitment to investing in sustainable and innovative companies, aligning with Tether's broader strategy to support economic freedom and resilience [3]

Core Viewpoint - Adecoagro S.A. is in discussions with Tether Investments regarding a proposal for Tether to acquire outstanding Common Shares at a price of $12.41 per share, which would result in Tether holding 51% of the company [1] Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and several industrial facilities in Argentina, Brazil, and Uruguay [4] - The company produces over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity [4] Tender Offer Details - The expiration date for the Exclusivity Letter between Adecoagro and Tether has been extended to March 30, 2025 [1] - The tender offer has not yet commenced, and this announcement serves informational purposes only [4]

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA for Q4 2024 reached $103 million, with a total of $444 million for the year, marking an 8% year-over-year increase [14][5][10] - Gross sales totaled $368 million in Q4, with annual revenues reaching almost $1.5 billion, a 2% increase year-over-year [14][10] - Net cash from operations for 2024 was $161 million, allowing for a minimum distribution of $64 million in 2025 [10][41] Business Line Data and Key Metrics Changes - Record results were achieved in the rice and dairy segments, while the sugar, ethanol, and energy business marked operational records despite challenges [14][15] - Adjusted EBITDA for the farming business totaled $4 million in Q4 and $103 million for the year, consistent with the previous year [35][36] - In the sugar, ethanol, and energy business, adjusted EBITDA was $105 million in Q4 and $364 million for the year, impacted by losses in biological assets [28][14] Market Data and Key Metrics Changes - The sugar mix reached 52.2%, with total sugar production hitting 832,000 tons, both new records for the company [19][28] - Ethanol prices have been recovering due to strong domestic consumption, although still below the previous year due to the depreciation of the Brazilian real [22][81] - The company sold over 600,000 carbon credits at an average price of $14 per credit, totaling $9 million in net sales [24] Company Strategy and Development Direction - The company is focusing on vertical integration to cater to both export and domestic markets, enhancing its product portfolio [6] - Investments are being made in expanding sugarcane plantations and developing biomethane production in Brazil, alongside rice and dairy operations in Argentina and Uruguay [10][43] - The company aims to maximize sugar production due to its attractive premium over ethanol, with a strategy to gradually increase hedges as prices rise [55] Management's Comments on Operating Environment and Future Outlook - Management noted that the Brazilian sugar production is expected to be smaller due to adverse weather conditions, which may lead to higher sugar prices [54][30] - The company anticipates a slight increase in annual crushing figures for 2025, assuming normal weather conditions [30] - Management emphasized the importance of community engagement and talent development through various programs [11] Other Important Information - The company distributed $102 million in 2024, exceeding its distribution policy by $32 million, with a 9.4% distribution yield [39] - Net debt remained at $522 million, with a liquidity ratio of 4.5 times, indicating strong capacity to repay short-term debt [41][42] - The company is currently in discussions regarding a proposal from Tether Investments to acquire a majority stake, but no further comments can be made due to legal restrictions [44][46] Q&A Session Summary Question: What are the main triggers for positive price action on sugar? - Management highlighted disappointing crops in the Northern Hemisphere and a smaller Brazilian crop as key factors that could drive sugar prices higher [52][54] Question: What are the potential impacts of U.S. import tariffs on Adecoagro's business? - Management noted potential benefits for South American soy and corn production due to tariffs, as well as opportunities in rice and dairy markets [56][58] Question: When can more clarity be expected regarding the Tether offer? - Management stated that no further comments would be made until deemed appropriate, emphasizing normal operations and focus on delivering results [74] Question: What are the constraints around raising sugarcane crushing volumes? - Management indicated that weather conditions and the selection of sugarcane for harvesting would impact crushing volumes, with expectations for improvement in the second half of the year [70][72] Question: What are the expectations for margins in the sugar and ethanol division for 2025? - Management expects production costs to be similar to last year in real terms, with a slight decrease in dollar terms due to various cost components [91][92] Question: How are production costs calculated with tax credits? - Management clarified that production costs are calculated based on the ethanol sold during the year, with expectations for similar production costs moving forward [102][106]

Adecoagro (AGRO) Q4 2024 Earnings Call March 14, 2025 08:00 AM ET Company Participants Mariano Bosch - Co-Founder, CEO & DirectorEmilio Gnecco - CFO & Chief Legal OfficerRenato Junqueira - VP of the Sugar, Ethanol and Energy BusinessIsabella Simonato Alonso - Managing DirectorLarissa Pérez - Equity Research Associate Conference Call Participants Gustavo Troyano - Equity AnalystMatheus Enfeldt - Equity AnalystJulia Rizzo - Analyst Operator Good morning, ladies and gentlemen, and thank you for waiting. At thi ...

Core Insights - Adecoagro S.A. reported its fourth quarter results for 2024, highlighting a mixed performance across its business segments, with a notable increase in adjusted EBITDA for the Sugar, Ethanol & Energy business but a significant decline in the Farming business [1][4][7]. Financial Performance - Adjusted EBITDA for the Sugar, Ethanol & Energy business reached $105.3 million in 4Q24, a 20.4% increase year-over-year, while the full year adjusted EBITDA was $364.2 million, down 8.0% from the previous year [4]. - The company achieved a record sugar production mix of 55% in 4Q24, up from 52% in 2024, despite lower quarterly crushing volumes due to dry weather [5]. - Cash costs decreased by 8.4% year-over-year to 12.7 cents per pound, attributed to better cost dilution and higher tax recovery on ethanol sales [5]. - The Farming business saw adjusted EBITDA drop to $3.8 million in 4Q24, a 72.4% decline year-over-year, while the full year adjusted EBITDA was $103.0 million, consistent with the previous year [7]. - Overall adjusted EBITDA for 2024 was $444.3 million, a 6.8% decrease from the prior year, with net cash flow from operations (NCFO) at $160.9 million, down 8.5% year-over-year [8]. Shareholder Returns - In 2024, Adecoagro distributed a total of $101.9 million to shareholders, representing 58% of the NCFO generated in 2023, with a distribution yield of 9.4% [16]. - The company plans to distribute a minimum of $64.4 million in 2025, with cash dividends of $35.0 million to be paid in two installments [11]. Strategic Developments - The company is engaging in discussions regarding an unsolicited non-binding proposal from Tether Investments S.A. to acquire outstanding shares at $12.41 per share, which would result in Tether holding 51% of the company [17]. - Adecoagro continues to focus on investments in organic projects with attractive returns, maintaining a net debt of $522.2 million, equivalent to 1.2x net debt to adjusted EBITDA [8]. Operational Highlights - The company produced over 3.1 million tons of agricultural products and over 1 million MWh of renewable electricity across its 210.4 thousand hectares of farmland in South America [23]. - Adecoagro's commercial strategy allowed it to capitalize on market opportunities, including maximizing production of fluid milk and conducting rice sales during supply constraints [8].

Revenue and Profit - Revenue for the year ended December 31, 2024, was $1,518.9 million, an increase of 16.9% compared to $1,298.9 million in 2023[21] - Profit for the year was $92.1 million, a decrease of 59.3% from $226.7 million in 2023[21] - Basic earnings per share for 2024 was $0.900, down from $2.113 in 2023[21] - Total comprehensive income for the year was $237.2 million, an increase of 52.9% from $155.1 million in 2023[23] - Profit for the year 2023 was $226.291 million, while the profit for 2024 was $92.340 million[30][34] - Total comprehensive income for 2023 was $155.096 million, compared to $237.226 million for 2024[30][34] Assets and Liabilities - The Company's net assets balance was $1.4 billion as of December 31, 2024[13] - Total assets decreased from $3,164,894 thousand in 2023 to $3,114,888 thousand in 2024, a decline of approximately 1.58%[24] - Total liabilities decreased from $1,899,246 thousand in 2023 to $1,706,787 thousand in 2024, a reduction of approximately 10.14%[24] - Total shareholders' equity increased from $1,265,648 thousand in 2023 to $1,408,101 thousand in 2024, an increase of about 11.25%[24] - The Group's total liabilities as of December 31, 2024, were US$1.335 billion, including US$779.556 million in borrowings and US$342.030 million in lease liabilities[178] Cash Flow and Financing - The company reported a decrease in cash and cash equivalents from $339,781 thousand in 2023 to $211,244 thousand in 2024, a decline of approximately 37.87%[24] - The net cash generated from operating activities was $328,331 thousand in 2024, down from $434,907 thousand in 2023, a decrease of 25%[38] - The net cash used in financing activities was $274,000 thousand in 2024, compared to $208,743 thousand in 2023, indicating increased financing outflows[38] - The company incurred interest expenses of $24,629 thousand in 2024, a decrease from $55,476 thousand in 2023[38] - The Group's cash and cash equivalents as of December 31, 2024, totaled US$211.244 million[177] Expenses - General and administrative expenses increased to $103.9 million in 2024 from $70.3 million in 2023[21] - Total expenses for 2024 amounted to $1,346,503 thousand, reflecting a rise from $1,073,000 thousand in 2023[120] - Salaries and social security expenses increased to $214,547 thousand in 2024 from $177,098 thousand in 2023, reflecting a rise of 21.1%[123] - Selling expenses for 2024 were $153,482 thousand, compared to $129,092 thousand in 2023, indicating an increase of about 19%[104] Biological Assets and Agricultural Produce - The total aggregated fair value of the Company's level 3 biological assets was $239 million as of December 31, 2024[9] - Total biological assets increased to $293,945 thousand in 2024 from $228,037 thousand in 2023, representing a growth of 28.9%[166] - The initial recognition and changes in fair value of biological assets amounted to $143,081 thousand in 2024, compared to $87,858 thousand in 2023, marking a significant increase of 62.9%[162] - The fair value of agricultural produce at the point of harvest reached $578,085 thousand in 2024, up from $419,442 thousand in 2023, indicating a 37.9% increase[168] Financial Performance and Ratios - The Group's profit from operations attributable to equity holders of the parent for 2024 was $92,340 thousand, a decrease of 59% compared to $226,291 thousand in 2023[146] - The Group's diluted earnings per share for 2024 was $0.896, slightly down from $2.105 in 2023[148] - The Group's total borrowings decreased from $904,949 thousand in 2023 to $779,556 thousand in 2024, resulting in a gearing ratio of 0.36 compared to 0.42 in 2023[83] - The Group's interest rate risk management includes using floating-to-fixed interest rate swaps to mitigate cash flow interest rate risk[69] Market and Economic Conditions - Argentina's annual inflation rate was 117.8% in 2024, down from 211.4% in 2023, reflecting a decrease in inflationary pressure[47] - The official exchange rate of the Argentine Peso against the U.S. dollar increased by 27.7% in 2024, compared to a 356.3% increase in 2023[47] - A hypothetical 10% appreciation of the U.S. Dollar against the Brazilian real would have a significant impact on the Group's financial position, affecting the fair value of biological assets and agricultural produce prices[56] Risk Management - The Group's exposure to liquidity risks includes refinancing borrowings and ensuring availability of funding, with total liabilities amounting to $1.7 billion as of December 31, 2024[67] - The Group's credit risk is considered low due to defined trading limits and a large base of customers with a good credit history[75] - The Group's exposure to credit risk from trade receivables is detailed in Note 18, with no credit limits exceeded during the reporting periods[79] Strategic Initiatives - The company plans to continue expanding its market presence through strategic contracts for sugar, soybean, and corn[113] - The company is focusing on enhancing its product offerings and technological advancements in the agricultural sector[113]

Core Insights - Adecoagro (NYSE: AGRO) faces challenges beyond management effectiveness, emphasizing the importance of farmland stewardship, planting decisions, and operational efficiency in its sugar, ethanol, and energy (SEE) and farming operations [1] Company Analysis - The management of Adecoagro is crucial, but it is not the sole factor for success; effective land management and operational strategies are equally important [1]

Core Viewpoint - Adecoagro S.A. is in discussions with Tether Investments regarding a proposal for Tether to acquire outstanding Common Shares at a price of $12.41 per share, which would result in Tether holding 51% of the company’s shares [1] Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and several industrial facilities across Argentina, Brazil, and Uruguay [4] - The company produces over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity [4]

Core Viewpoint - Adecoagro S.A. received an unsolicited non-binding acquisition proposal from Tether Investments S.A. de C.V. to acquire outstanding Common Shares at a price of $12.41 per share, which would result in Tether holding 51% of the company [1][2]. Group 1: Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and several industrial facilities in Argentina, Brazil, and Uruguay [3]. - The company produces over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity [3]. Group 2: Proposal Details - Tether currently holds approximately 19.4% of Adecoagro's outstanding Common Shares as per its last public filing on Schedule 13D dated November 14, 2024 [1]. - The Board of Directors met to discuss the proposal and decided to engage legal and financial advisors for further evaluation [2].

Company Performance - Adecoagro (AGRO) closed at $9.75, with a daily increase of +1.04%, outperforming the S&P 500's gain of 0.67% [1] - Over the past month, Adecoagro's shares have decreased by 1.83%, lagging behind the Consumer Staples sector's gain of 1.72% and the S&P 500's gain of 2.07% [2] Analyst Estimates - Recent changes in analyst estimates for Adecoagro are crucial as they indicate shifts in near-term business trends, with positive revisions suggesting optimism about the company's outlook [3] - The Zacks Rank system, which incorporates estimate changes, provides actionable ratings, with a track record of 1 stocks yielding an average annual return of +25% since 1988 [4][5] Valuation Metrics - Adecoagro is currently trading at a Forward P/E ratio of 7.37, which is below the industry average of 11.02, indicating a valuation discount [6] - The company has a PEG ratio of 1.28, compared to the Agriculture - Operations industry's average PEG ratio of 1.56, suggesting a favorable growth outlook relative to its valuation [6] Industry Context - The Agriculture - Operations industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 174, placing it in the bottom 31% of over 250 industries [7] - Research indicates that industries in the top 50% of the Zacks Industry Rank outperform those in the bottom half by a factor of 2 to 1 [7]