Industry Overview - The Zacks Agriculture – Operations industry faces challenges such as fluctuating commodity prices, rising input costs, trade uncertainties, and growing operational expenses, which affect productivity, profitability, and long-term sustainability [1] - The industry is set to benefit from innovation and rising demand for healthy products, with investments in acquisitions, joint ventures, and expansions expected to boost growth [2] - The industry comprises companies involved in producing, transporting, storing, processing, and distributing agricultural commodities, as well as distributing ingredients to other parts of the agriculture industry [3] - Activities include traditional farming of crops (corn, soybean, wheat, cotton) and livestock/poultry products (meat, dairy, eggs), which are sold at grocery stores, exported, or used as feedstock for other industries [4] Factors Shaping the Industry - Agricultural exports are projected to decline by 2% to $169.5 billion in fiscal 2025, driven by lower unit values for soybeans, corn, and cotton, and reduced beef volumes, while imports are projected to reach $212 billion, widening the trade deficit to $42.5 billion [5] - Rising costs due to fluctuating commodity prices, inflation-driven input increases, and trade uncertainties are squeezing profitability, with companies adopting pricing strategies and improving supply-chain resilience to combat these pressures [6] - Companies are managing higher SG&A expenses driven by performance-related compensation, project costs, and technology investments, which may continue to weigh on profitability [7] Industry Trends and Innovations - Rising consumer demand for healthier food is driving a shift toward organic farming practices, reduced use of chemicals and pesticides, and innovations in food processing and grain-handling techniques [8] - Alternative protein consumption is expected to rise as healthy eating trends expand, with industry players prioritizing productivity and innovation to align with food security and health trends [9] - Companies are investing in acquisitions and joint ventures to create high-quality ingredients and solutions that meet the growing demand for healthy products [10] Industry Performance and Valuation - The Zacks Agriculture – Operations industry carries a Zacks Industry Rank 151, placing it in the bottom 40% of Zacks industries, indicating dull near-term prospects due to a negative aggregate earnings outlook [11][12][13] - The industry has underperformed the S&P 500, with stocks collectively falling 3.4% in a year against the S&P 500's 25.6% growth, while the Zacks Consumer Staples sector declined 3.6% [14] - The industry is currently trading at a forward 12-month P/E ratio of 13.63X, compared to the S&P 500's 22.23X and the sector's 16.25X, with a five-year range of 10.91X to 17.3X [15] Key Companies in Focus - **Mission Produce (AVO)**: Engaged in sourcing, farming, packaging, marketing, and distribution of avocados, mangoes, and blueberries, with a 44.8% upward revision in fiscal 2024 earnings estimates and a 24.1% stock rise in the past year [17][18] - **Archer Daniels Midland (ADM)**: Focused on flexitarian diets, nutrition, and sustainable materials, with a 2.6% decline in 2025 earnings estimates and a 25.8% stock decline in the past year [19][20][21] - **Adecoagro (AGRO)**: Engages in farming, dairy operations, sugar, ethanol, and energy production, with a 4.2% sales growth and 14.3% EPS growth projected for 2025, despite a 2.7% stock decline in the past year [22][23][24] - **Calavo Growers (CVGW)**: A global leader in the avocado industry, with a 5.1% sales growth and 24.1% earnings growth projected for fiscal 2024, despite a 9.3% stock decline in the past year [25][26] - **Alico (ALCO)**: Benefits from strong consumption of not-from-concentrate orange juice, with a 13.5% stock rally in the past year, despite a projected 49.8% decline in current fiscal-year sales [27][28]

Adecoagro (NYSE: AGRO ) 3Q24 results were not outside of expectations, particularly for a low-seasonal quarter. Challenges in margins remain, given the generalized bear market in agricultural commodities. The company presented interesting information regarding land prices and the plans forLong-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, ...

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA for Q3 2024 reached $111 million, a 29% decline year-over-year, primarily due to a lack of farm sales compared to the previous year [11][12] - Gross sales increased to $457 million during Q3, with year-to-date sales exceeding $1.1 billion, driven by higher volumes sold offsetting lower prices for some commodities [10][11] - Year-to-date adjusted EBITDA stood at $341 million, with lower results in the Sugar, Ethanol, and Energy business impacting overall performance [11][12] Business Line Data and Key Metrics Changes - Rice operations achieved record results due to past investments, with year-to-date adjusted EBITDA reaching $51 million, marking a new record for this segment [21][22] - The Sugar, Ethanol, and Energy business reported adjusted EBITDA of $100 million for Q3, with a year-to-date total of $259 million, affected by lower sugar and ethanol prices [16][18] - Dairy segment adjusted EBITDA totaled $8 million during the quarter, positively impacted by higher sales and improved product mix [23] Market Data and Key Metrics Changes - Crushing volumes in the Sugar, Ethanol, and Energy business were up 6% year-over-year, but down 10% for the quarter due to dry weather conditions [12][13] - Ethanol demand remains strong, with expectations for prices to improve as the parity rate at the pump is low, favoring ethanol consumption [29][30] - Sugar prices are expected to remain tight due to production challenges in Brazil, particularly from regions affected by fires [30][31] Company Strategy and Development Direction - The company is committed to shareholder distribution, having allocated $96 million, including $35 million in cash dividends and $61 million in share repurchases [4][24] - Investments are focused on expanding sugarcane plantations and enhancing rice operations, with a strong emphasis on sustainable production models [4][26] - The company is also investing in energy transition projects, including the construction of biodigestors to increase biomethane production [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improved yields for the upcoming harvest season due to better weather conditions and ongoing investments [20][32] - The outlook for the Sugar, Ethanol, and Energy business remains cautious, with expectations of lower yields in the first half of the year due to previous weather impacts [30][31] - The company anticipates a recovery in ethanol prices and a tight market for sugar, which may benefit its production strategy [30][31] Other Important Information - The company has reduced net debt to $646 million, a 9% decrease year-over-year, while maintaining a liquidity ratio of 2.6 times [25] - Capital expenditures for expansion reached $26 million in Q3, with ongoing investments in sugarcane and biogas production [26][27] Q&A Session Summary Question: Discussion on ethanol and sugar prices - The management highlighted strong ethanol demand and expected price recovery due to low parity rates at the pump, while also noting the impact of fires on sugar production for the next year [28][29][30] Question: Expectations for yields and crop mix - Management indicated improved yields for the upcoming season and discussed a shift in crop focus, particularly increasing peanut and sunflower production due to favorable market conditions [31][32] Question: CapEx and cost development - The company plans to maintain a higher CapEx in the coming years, focusing on sustainable production and cost reduction strategies [33][34]

[Legal Information](index=2&type=section&id=Legal%20information) [Denomination and Company Details](index=2&type=section&id=Denomination%20and%20Company%20Details) Provides basic legal and registration details of **Adecoagro S.A.**, including its denomination, legal address, activity, registration date, and capital stock information - Denomination: **Adecoagro S.A.**[3](index=3&type=chunk) - Legal address: **28, Boulevard Raiffeisen, L-2411, Luxembourg**[4](index=4&type=chunk) - Company activity: **Agricultural and agro-industrial**[4](index=4&type=chunk) Capital Stock Information | Metric | Value | | :----- | :---- | | Issued Capital Stock | 111,381,815 common shares | | Outstanding Capital Stock | 100,836,801 common shares | | Treasury Shares | 10,545,014 common shares | [Condensed Consolidated Interim Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Income) [Nine-months ended September 30, 2024 vs 2023](index=3&type=section&id=Nine-months%20ended%20September%2030%2C%202024%20vs%202023) The Group experienced a significant increase in revenue for the nine-month period ended September 30, 2024, but profit from operations and net profit decreased substantially compared to the prior year, primarily due to higher costs, increased general and administrative expenses, and a significant negative swing in financial results Key Income Statement Data (Nine-months ended September 30) | Metric | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------------- | :------------------- | :------------------- | :------------ | | Revenue | 1,144,687 | 1,034,925 | +10.6% | | Cost of revenue | (900,810) | (769,671) | +17.0% | | Margin on manufacturing and agricultural activities before operating expenses | 345,726 | 380,863 | -9.2% | | Profit from operations | 134,752 | 203,072 | -33.7% | | Financial results, net | (98,809) | (6,786) | -1355.9% | | Profit for the period | 75,923 | 144,512 | -47.4% | | Basic earnings per share | 0.735 | 1.338 | -45.1% | [Three-months ended September 30, 2024 vs 2023](index=3&type=section&id=Three-months%20ended%20September%2030%2C%202024%20vs%202023) For the three-month period, revenue increased, but profit from operations and net profit saw substantial declines, mirroring the nine-month trend, driven by higher operating expenses and a negative shift in financial results Key Income Statement Data (Three-months ended September 30) | Metric | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------------- | :------------------- | :------------------- | :------------ | | Revenue | 471,495 | 385,794 | +22.2% | | Cost of revenue | (361,003) | (281,660) | +28.2% | | Margin on manufacturing and agricultural activities before operating expenses | 118,220 | 129,562 | -8.7% | | Profit from operations | 29,679 | 68,136 | -56.4% | | Financial results, net | (6,424) | 20,896 | -130.7% | | Profit for the period | 18,711 | 75,387 | -75.2% | | Basic earnings per share | 0.189 | 0.708 | -73.3% | [Condensed Consolidated Interim Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Comprehensive%20Income) [Nine-months ended September 30, 2024 vs 2023](index=4&type=section&id=Nine-months%20ended%20September%2030%2C%202024%20vs%202023) Total comprehensive income for the nine-month period significantly increased, primarily driven by a substantial positive exchange difference on translating foreign operations, despite a decrease in profit for the period Key Comprehensive Income Data (Nine-months ended September 30) | Metric | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Profit for the period | 75,923 | 144,512 | -47.4% | | Exchange differences on translating foreign operations | 428,407 | 23,378 | +1732.4% | | Revaluation surplus net of tax | (264,129) | (9,518) | +2675.0% | | Total comprehensive income for the period | 257,325 | 182,607 | +40.9% | [Three-months ended September 30, 2024 vs 2023](index=4&type=section&id=Three-months%20ended%20September%2030%2C%202024%20vs%202023) For the three-month period, total comprehensive income decreased, mainly due to a significant drop in profit for the period and a negative revaluation surplus, partially offset by positive exchange differences Key Comprehensive Income Data (Three-months ended September 30) | Metric | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Profit for the period | 18,711 | 75,387 | -75.2% | | Exchange differences on translating foreign operations | 64,355 | (36,153) | N/A (swing from loss to gain) | | Revaluation surplus net of tax | (33,456) | 12,190 | -374.5% | | Total comprehensive income for the period | 49,827 | 57,130 | -12.7% | [Condensed Consolidated Interim Statements of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) [As of September 30, 2024 vs December 31, 2023](index=5&type=section&id=As%20of%20September%2030%2C%202024%20vs%20December%2031%2C%202023) Total assets increased slightly, driven by higher inventories and trade receivables, while cash and cash equivalents decreased. Total shareholders' equity saw a notable increase, primarily due to retained earnings and cumulative translation adjustment, despite a decrease in total liabilities Key Financial Position Data (As of September 30, 2024 vs December 31, 2023) | Metric | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :------- | | **ASSETS** | | | | | Total Non-Current Assets | 2,161,045 | 2,109,220 | +2.5% | | Total Current Assets | 1,066,665 | 1,055,674 | +1.0% | | TOTAL ASSETS | 3,227,710 | 3,164,894 | +2.0% | | **SHAREHOLDERS EQUITY** | | | | | TOTAL SHAREHOLDERS EQUITY | 1,436,045 | 1,265,648 | +13.5% | | **LIABILITIES** | | | | | TOTAL LIABILITIES | 1,791,665 | 1,899,246 | -5.7% | - Key changes in current assets include a significant increase in inventories (**+56.5%**) and trade and other receivables (**+50.6%**), while cash and cash equivalents decreased by **41.7%**[8](index=8&type=chunk) - Key changes in shareholders' equity include a positive cumulative translation adjustment (from **-$603.86 million** to **-$378.88 million**) and an increase in retained earnings (from **$418.79 million** to **$501.70 million**)[8](index=8&type=chunk) [Condensed Consolidated Interim Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) [Nine-months ended September 30, 2024](index=8&type=section&id=Nine-months%20ended%20September%2030%2C%202024) For the nine-month period ended September 30, 2024, total shareholders' equity increased significantly, primarily driven by a substantial positive cumulative translation adjustment and retained earnings, despite share repurchases and dividend payments Key Changes in Shareholders' Equity (Nine-months ended September 30, 2024) | Metric | Balance at Jan 1, 2024 (US$ thousands) | Profit for the period (US$ thousands) | Other comprehensive income (US$ thousands) | Employee share options (US$ thousands) | Purchase of own shares (US$ thousands) | Dividends (US$ thousands) | Balance at Sep 30, 2024 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :------------------------------------ | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------- | :------------------------------------- | | Equity attributable to equity holders of the parent | 1,229,128 | 75,974 | 178,145 | 6,607 | (58,279) | (35,000) | 1,396,575 | | Non-controlling interest | 36,520 | (51) | 3,257 | — | — | (256) | 39,470 | | **Total Shareholders' Equity** | **1,265,648** | **75,923** | **181,402** | **6,607** | **(58,279)** | **(35,256)** | **1,436,045** | - Cumulative Translation Adjustment shifted from **-$603.86 million** at Jan 1, 2024 to **-$378.88 million** at Sep 30, 2024, indicating a significant positive impact from foreign currency translation[16](index=16&type=chunk) [Nine-months ended September 30, 2023](index=7&type=section&id=Nine-months%20ended%20September%2030%2C%202023) For the nine-month period ended September 30, 2023, total shareholders' equity increased, driven by profit for the period and other comprehensive income, despite share repurchases and dividend payments Key Changes in Shareholders' Equity (Nine-months ended September 30, 2023) | Metric | Balance at Jan 1, 2023 (US$ thousands) | Profit for the period (US$ thousands) | Other comprehensive income (US$ thousands) | Employee share options (US$ thousands) | Purchase of own shares (US$ thousands) | Dividends (US$ thousands) | Balance at Sep 30, 2023 (US$ thousands) | | :------------------------------------------ | :------------------------------------- | :------------------------------------ | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------- | :------------------------------------- | | Equity attributable to equity holders of the parent | 1,126,091 | 143,747 | 37,784 | 7,721 | (19,012) | (35,000) | 1,261,329 | | Non-controlling interest | 37,552 | 765 | 311 | — | — | — | 38,628 | | **Total Shareholders' Equity** | **1,163,643** | **144,512** | **38,095** | **7,721** | **(19,012)** | **(35,000)** | **1,299,957** | [Condensed Consolidated Interim Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) [Nine-months ended September 30, 2024 vs 2023](index=9&type=section&id=Nine-months%20ended%20September%2030%2C%202024%20vs%202023) Net cash provided by operating activities decreased significantly in 2024 compared to 2023, primarily due to increased trade and other receivables and inventories. Investing activities shifted from a slight net cash outflow to a substantial net cash outflow, driven by higher purchases of property, plant, and equipment and business acquisitions. Financing activities also saw a much larger net cash outflow in 2024, mainly due to increased payments of borrowings and purchase of own shares Key Cash Flow Data (Nine-months ended September 30) | Metric | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------ | :------------------- | :------------------- | :------------ | | Net cash provided by operating activities | 164,867 | 257,199 | -35.9% | | Net cash used in investing activities | (147,055) | (11,174) | +1216.0% | | Net cash used in financing activities | (210,315) | (28,351) | +641.1% | | Net decrease in cash and cash equivalents | (192,503) | 217,674 | N/A (swing from increase to decrease) | | Cash and cash equivalents at end of period | 198,255 | 349,812 | -43.4% | - Operating cash flow was negatively impacted by a **$150.99 million** increase in trade and other receivables and a **$111.08 million** increase in inventories in 2024[19](index=19&type=chunk) - Investing cash flow was significantly impacted by **$203.15 million** in purchases of property, plant and equipment and **$15.92 million** for acquisition of a business in 2024[21](index=21&type=chunk) - Financing cash flow was heavily influenced by **$96.73 million** in payments of long-term borrowings, **$121.66 million** in payment of short-term borrowings, and **$58.28 million** in purchase of own shares in 2024[21](index=21&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. General information](index=11&type=section&id=1.%20General%20information) **Adecoagro S.A.** is a Luxembourg-based holding company engaged in agricultural and agro-industrial activities through its operating subsidiaries, listed on the **NYSE** under **AGRO**. The Group operates in two main business lines: **Farming and Sugar, Ethanol and Energy** - **Adecoagro S.A.** is the Group's ultimate parent company, organized under **Luxembourg laws**, primarily engaged in **agricultural and agro-industrial activities**[23](index=23&type=chunk) - The Group's activities are carried out through two major lines of business: **Farming and Sugar, Ethanol and Energy**[23](index=23&type=chunk) - **Adecoagro** is a public company listed in the **New York Stock Exchange (NYSE)** as a foreign registered company under the ticker symbol of **AGRO**[24](index=24&type=chunk) [2. Financial risk management](index=11&type=section&id=2.%20Financial%20risk%20management) The Group is exposed to **price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk**, with no significant changes in risk management principles since December 31, 2023, and employs hedging strategies for its Argentine subsidiaries operating in a highly volatile economic context - The Group is exposed to **price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk**, with no significant changes in risk management principles since December 31, 2023[26](index=26&type=chunk) - Argentina's inflation rate for the nine-month period ended September 30, 2024, was **101.6%**, and the official exchange rate against the U.S. dollar was **970.5**[28](index=28&type=chunk) - 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[31](index=31&type=chunk) [Exchange rate risk](index=13&type=section&id=Exchange%20rate%20risk) The Group manages exchange rate risk, particularly for its Argentine and Brazilian operations, which have significant net monetary liabilities in local currencies. A hypothetical **10%** appreciation of the U.S. Dollar against the Brazilian real or Uruguayan peso, or **25%** against the Argentine peso, would decrease profit before income tax by **$52.4 million**. The Group uses cash flow hedging relationships, including US dollar-denominated borrowings, to mitigate foreign exchange rate risk on future US dollar sales Net Monetary Position by Functional Currency (September 30, 2024) | Functional currency | Argentine Peso | Brazilian Reais | Uruguayan Peso | US Dollar | Total | | :------------------ | :------------- | :-------------- | :------------- | :-------- | :---- | | Argentine Peso | (11,271) | — | — | — | (11,271) | | Brazilian Reais | — | (605,103) | — | — | (605,103) | | US Dollar | (132,769) | (230,130) | 37,864 | (7,090) | (332,125) | | Uruguayan Peso | — | — | (941) | — | (941) | | **Total** | **(144,040)** | **(835,233)** | **36,923** | **(7,090)** | **(949,440)** | - A hypothetical **10%** appreciation of the U.S. Dollar against the Brazilian real or Uruguayan peso, or a **25%** appreciation against the Argentine peso, would decrease Profit before income tax by **US$ 52.42 million**[35](index=35&type=chunk)[36](index=36&type=chunk) - 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[37](index=37&type=chunk) [Interest rate risk](index=13&type=section&id=Interest%20rate%20risk) The Group's borrowings are a mix of fixed and variable rates across different currencies. A **1%** increase in interest rates on floating-rate borrowings would decrease profit before income tax by **US$ 2.41 million** Borrowings by Rate Type and Currency (September 30, 2024) | Rate per currency denomination | Argentine Peso | Brazilian Reais | US Dollar | Total | | :--------------------------- | :------------- | :-------------- | :-------- | :---- | | Fixed rate | 91,717 | 380,553 | 146,121 | 618,391 | | Variable rate | 13,435 | 227,598 | — | 241,033 | | **Total borrowings** | **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 by **US$ 2.41 million**[39](index=39&type=chunk) [Credit risk](index=14&type=section&id=Credit%20risk) As of September 30, 2024, approximately **70%** of the Group's total cash deposited was held across six banks, indicating a concentration of credit risk with these institutions - 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)[40](index=40&type=chunk) [Derivative financial instruments](index=14&type=section&id=Derivative%20financial%20instruments) The Group uses various derivative instruments, including commodity futures/options, interest rate swaps, and currency forwards, to manage market risks. For the nine-month period ended September 30, 2024, commodity futures resulted in a net loss of **$651 thousands**, interest rate swaps in a loss of **$3.5 million**, and currency forwards in a gain of **$1.88 million** Futures/Options Outstanding Positions (September 30, 2024) | Type of derivative contract | Notional amount (US$ thousands) | Market Value Asset/(Liability) (US$ thousands) | Profit / (Loss) (US$ thousands) | | :------------------------ | :------------------------------ | :------------------------------------------- | :------------------------------ | | Corn (Sale) | (1,556) | 52 | 52 | | Soybean (Sale) | (1,887) | 24 | 24 | | Wheat (Sale) | 950 | 9 | 9 | | Sugar (Sale) | 30,307 | (1,335) | (736) | | **Total** | **27,814** | **(1,250)** | **(651)** | - The swap agreements resulted in a recognition of a loss of **US$ 3.5 million** for the nine-month period ended September 30, 2024[47](index=47&type=chunk) - Currency forward contracts resulted in a gain of **US$ 0.02 million** for hedging Brazilian Reais and a gain of **US$ 1.86 million** for hedging Argentine Peso against the U.S. Dollar for the nine-month period ended September 30, 2024[48](index=48&type=chunk)[50](index=50&type=chunk) [3. Segment information](index=16&type=section&id=3.%20Segment%20information) The Group operates in two major lines of business: **Farming (Crops, Rice, Dairy)** and **Sugar, Ethanol and Energy**, with internal reporting refined in Q4 2023 to align with land transformation and productive land management, while Argentine segment results are adjusted for inflation and translated using average exchange rates, differing from **IAS 29 and IAS 21** for external reporting - The Group's business activities include agricultural (harvesting crops, producing milk), manufacturing (processed peanuts, sugar, ethanol, energy, dairy products), and land transformation[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - 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[56](index=56&type=chunk) - The Group operates in two major lines of business: '**Farming**' (comprised of Crops, Rice, and Dairy segments) and '**Sugar, Ethanol and Energy**'[59](index=59&type=chunk)[66](index=66&type=chunk) - 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, departing from **IAS 29 and IAS 21**[64](index=64&type=chunk) [Segment analysis for the nine-month period ended September 30, 2024](index=21&type=section&id=Segment%20analysis%20for%20the%20nine-month%20period%20ended%20September%2030%2C%202024) For the nine-month period ended September 30, 2024, the **Sugar, Ethanol and Energy** segment was the primary driver of profit from operations, while the **Farming (Crops, Rice, Dairy)** segment showed mixed results, with Crops reporting a loss from operations. Total segment assets were dominated by **Farming** and **Sugar, Ethanol and Energy** Segment Revenue and Profit from Operations (Nine-months ended September 30, 2024) | Segment | Revenue (US$ thousands) | Profit / (loss) from Operations (US$ thousands) | | :-------------------- | :---------------------- | :-------------------------------------------- | | Crops | 175,065 | (7,547) | | Rice | 199,035 | 23,260 | | Dairy | 209,248 | 17,046 | | **Farming subtotal** | **583,348** | **32,759** | | Sugar, Ethanol and Energy | 524,651 | 116,890 | | Corporate | — | (18,168) | | **Total** | **1,107,999** | **131,481** | Total Segment Assets and Liabilities (As of September 30, 2024) | Segment | Total segment assets (US$ thousands) | Total segment liabilities (US$ thousands) | | :-------------------- | :--------------------------------- | :------------------------------------ | | Crops | 697,430 | 48,898 | | Rice | 451,759 | 62,151 | | Dairy | 225,178 | 69,382 | | **Farming subtotal** | **1,374,367** | **180,431** | | Sugar, Ethanol and Energy | 1,290,188 | 949,055 | | Corporate | 283 | 84,230 | | **Total** | **2,664,838** | **1,213,716** | [Segment analysis for the nine-month period ended September 30, 2023](index=22&type=section&id=Segment%20analysis%20for%20the%20nine-month%20period%20ended%20September%2030%2C%202023) In the nine-month period ended September 30, 2023, the **Sugar, Ethanol and Energy** segment was the largest contributor to both revenue and profit from operations. The **Farming** segment also showed positive profit from operations, with Rice being the strongest performer Segment Revenue and Profit from Operations (Nine-months ended September 30, 2023) | Segment | Revenue (US$ thousands) | Profit / (loss) from Operations (US$ thousands) | | :-------------------- | :---------------------- | :-------------------------------------------- | | Crops | 170,841 | (191) | | Rice | 196,116 | 29,124 | | Dairy | 192,084 | 14,541 | | **Farming subtotal** | **559,041** | **43,474** | | Sugar, Ethanol and Energy | 483,261 | 178,085 | | Corporate | — | (17,822) | | **Total** | **1,042,302** | **203,737** | Total Segment Assets and Liabilities (As of December 31, 2023) | Segment | Total segment assets (US$ thousands) | Total segment liabilities (US$ thousands) | | :-------------------- | :--------------------------------- | :------------------------------------ | | Crops | 637,411 | 42,667 | | Rice | 331,844 | 45,815 | | Dairy | 138,093 | 57,433 | | **Farming subtotal** | **1,107,348** | **145,915** | | Sugar, Ethanol and Energy | 1,380,111 | 957,065 | | Corporate | 580 | 180,479 | | **Total** | **2,488,039** | **1,283,459** | [4. Revenue](index=23&type=section&id=4.%20Revenue) Total revenue increased by **10.6%** to **$1,144.7 million** for the nine-month period ended September 30, 2024, driven by growth in manufactured products and agricultural produce, with commodity sales forward contracts totaling **$87.2 million** Revenue Sources (Nine-months ended September 30) | Revenue Source | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :-------------------------------------- | :------------------- | :------------------- | :------------ | | Subtotal manufactured products and services rendered | 991,532 | 898,836 | +10.3% | | Subtotal agricultural produce and biological assets | 153,155 | 136,089 | +12.5% | | **Total revenue** | **1,144,687** | **1,034,925** | **+10.6%** | - Key manufactured product revenue increases include Ethanol (**+21.3%**), Sugar (**+4.5%**), Rice (**+6.5%**), Fluid milk (UHT) (**+23.5%**), Powder milk (**+12.9%**), and Other dairy products (**+54.3%**)[72](index=72&type=chunk) - Key agricultural produce revenue increases include Soybean (**+29.8%**), Corn (**+49.6%**), and Wheat (**+53.6%**)[72](index=72&type=chunk) - The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn through sales forward contracts. The notional amount of these contracts is **US$ 87.20 million** as of September 30, 2024[73](index=73&type=chunk)[76](index=76&type=chunk) [5. Cost of revenue](index=24&type=section&id=5.%20Cost%20of%20revenue) Total cost of revenue increased by **17.0%** to **$900.8 million** for the nine-month period ended September 30, 2024. This increase was primarily driven by higher cost of production of manufactured products and agricultural produce, partially offset by tax recoveries Cost of Revenue Components (Nine-months ended September 30) | Component | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Finished goods at the beginning of period | 179,611 | 152,716 | +17.6% | | Cost of production of manufactured products | 832,042 | 721,872 | +15.3% | | Agricultural produce | 216,455 | 171,312 | +26.4% | | Tax recoveries | (34,016) | (15,187) | +124.0% | | Finished goods at end of period | (231,742) | (234,298) | -1.1% | | **Total Cost of revenues and direct agricultural selling expenses** | **900,810** | **769,671** | **+17.0%** | - The increase in cost of revenue was mainly driven by higher cost of production of manufactured products and agricultural produce[77](index=77&type=chunk)[78](index=78&type=chunk) [6. Expenses by nature](index=25&type=section&id=6.%20Expenses%20by%20nature) Total expenses by nature, including cost of production, general and administrative, and selling expenses, increased to **$1,026.5 million** in 2024 from **$892.7 million** in 2023. Key increases were seen in salaries, depreciation, freights, and third-party raw materials Total Expenses by Nature (Nine-months ended September 30) | Expense Category | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Salaries, social security expenses and employee benefits | 96,055 | 90,323 | +6.3% | | Depreciation and amortization | 142,125 | 124,522 | +14.1% | | Depreciation of right-of-use assets | 20,788 | 17,930 | +16.0% | | Freights | 67,056 | 56,669 | +18.3% | | Third parties raw materials | 130,158 | 109,560 | +18.8% | | Own agricultural produce consumed | 366,264 | 309,360 | +18.4% | | **Total** | **1,026,511** | **892,736** | **+15.0%** | [7. Salaries and social security expenses](index=27&type=section&id=7.%20Salaries%20and%20social%20security%20expenses) Total salaries and social security expenses increased by **9.1%** to **$159.1 million** for the nine-month period ended September 30, 2024, primarily due to higher wages and social security costs, partially offset by a decrease in equity-settled share-based compensation Salaries and Social Security Expenses (Nine-months ended September 30) | Expense Category | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :-------------------------------- | :------------------- | :------------------- | :------------ | | Wages and salaries | 118,508 | 106,440 | +11.3% | | Social security costs | 35,502 | 32,719 | +8.5% | | Equity-settled share-based compensation | 5,081 | 6,684 | -24.0% | | **Total** | **159,091** | **145,843** | **+9.1%** | [8. Other operating income / (expense), net](index=27&type=section&id=8.%20Other%20operating%20income%20%2F%20(expense)%2C%20net) The Group reported a net operating expense of **$16.5 million** for the nine-month period ended September 30, 2024, a significant increase from **$6.9 million** in 2023. This was primarily due to a substantial net loss from fair value adjustment of investment property and an impairment loss from a fire at a peanut facility, partially offset by gains from disposals of assets and commodity derivative financial instruments Other Operating Income / (Expense), Net (Nine-months ended September 30) | Item | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Gain from disposals of farmland and other assets | 6,050 | 9,526 | -36.5% | | Gain /(loss) from commodity derivative financial instruments | 5,757 | (12,464) | N/A (swing from loss to gain) | | Net loss from fair value adjustment of investment property | (22,484) | (913) | +2362.6% | | Impairment of assets destroyed by fire | (14,036) | — | N/A | | **Total** | **(16,505)** | **(6,927)** | **+138.3%** | - 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$ 12.00 million** and **US$ 2.00 million** for inventories and property, plant and equipment, respectively[83](index=83&type=chunk) [9. Financial results, net](index=28&type=section&id=9.%20Financial%20results%2C%20net) The Group reported a significant net financial loss of **$98.8 million** for the nine-month period ended September 30, 2024, a substantial negative swing from a **$6.8 million** loss in 2023. This was primarily driven by a sharp decrease in finance income (especially foreign exchange gains and other income) and increased finance costs, including cash flow hedge transfers and foreign exchange losses Financial Results, Net (Nine-months ended September 30) | Item | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :------------ | | Finance income | 9,164 | 105,783 | -91.3% | | Finance costs | (106,062) | (117,641) | -9.8% | | Other financial results - Net (loss)/gain of inflation effects on the monetary items | (1,911) | 5,072 | N/A (swing from gain to loss) | | **Total financial results, net** | **(98,809)** | **(6,786)** | **+1355.9%** | - Finance income decreased significantly due to the absence of large foreign exchange gains and other income seen in 2023[85](index=85&type=chunk) - Finance costs included **$28.2 million** from cash flow hedge transfers from equity and **$5.1 million** in foreign exchange losses in 2024[85](index=85&type=chunk) [10. Taxation](index=29&type=section&id=10.%20Taxation) The Group recognized an income tax benefit of **$39.98 million** for the nine-month period ended September 30, 2024, a significant positive swing from an expense of **$51.77 million** in 2023. This was primarily driven by a large deferred income tax benefit and the effect of **IAS 29** on Argentina's shareholder's equity and deferred income tax. The Group is within the scope of **OECD Pillar Two** rules, effective January 1, 2024, but reported no significant impact as of September 30, 2024 Income Tax Benefit / (Expense) (Nine-months ended September 30) | Item | 2024 (US$ thousands) | 2023 (US$ thousands) | Change (YoY) | | :-------------------------- | :------------------- | :------------------- | :------------ | | Current income tax | (8,013) | (6,485) | +23.6% | | Deferred income tax | 47,993 | (45,289) | N/A (swing from expense to benefit) | | **Income tax benefit / (expense)** | **39,980** | **(51,774)** | **N/A** | - The deferred income tax benefit in 2024 was significantly influenced by exchange differences and the effect of fair value valuation for farmlands[87](index=87&type=chunk) - The income tax benefit was also positively impacted by the effect of **IAS 29** on Argentina's shareholder's equity and deferred income tax (**$32.1 million** in 2024)[90](index=90&type=chunk) - The Group is within the scope of the **OECD Pillar Two** model rules, effective as from January 1, 2024, but did not have any significant impact as of September 30, 2024[91](index=91&type=chunk)[92](index=92&type=chunk) [11. Property, plant and equipment, net](index=31&type=section&id=11.%20Property%2C%20plant%20and%20equipment%2C%20net) Net property, plant and equipment (PPE) remained relatively stable at **$1,597.7 million** as of September 30, 2024, with movements from exchange differences and additions largely offset by revaluation adjustments and depreciation, and farmlands valued using a **Sales Comparison Approach** by an independent expert Property, Plant and Equipment, Net (Nine-months ended September 30, 2024) | Item | Opening net book amount (US$ thousands) | Exchange differences (US$ thousands) | Additions (US$ thousands) | Revaluation surplus (US$ thousands) | Depreciation (US$ thousands) | Closing net book amount (US$ thousands) | | :------------------------------------ | :-------------------------------------- | :----------------------------------- | :------------------------ | :---------------------------------- | :------------------------- | :-------------------------------------- | | Farmlands | 694,202 | 403,590 | — | (407,056) | — | 677,004 | | Machinery, equipment, furniture and fittings | 196,995 | 8,010 | 46,525 | — | (60,022) | 194,711 | | Bearer plants | 375,842 | (42,780) | 108,930 | — | (79,236) | 362,756 | | **Total** | **1,549,565** | **448,209** | **195,446** | **(407,056)** | **(168,845)** | **1,597,718** | - The Group determined the valuation of farmlands (**US$ 681.00 million** as of September 30, 2024) using a "**Sales Comparison Approach**" prepared by an independent expert. A **10%** reduction on the sales price would have reduced the value of the farmlands by **US$ 68.10 million**[97](index=97&type=chunk) - As of September 30, 2024, borrowing costs of **US$ 3.78 million** were capitalized as components of the cost of acquisition or construction of qualifying assets[98](index=98&type=chunk) - The net book value of pledged assets amounts to **US$ 218.02 million** as of September 30, 2024[99](index=99&type=chunk) [12. Right of use assets](index=32&type=section&id=12.%20Right%20of%20use%20assets) Right of use assets decreased slightly to **$387.4 million** as of September 30, 2024, primarily due to negative exchange differences and depreciation, partially offset by additions and re-measurements, with agricultural partnerships being the largest component Right of Use Assets (Nine-months ended September 30, 2024) | Item | Opening net book amount (US$ thousands) | Exchange differences (US$ thousands) | Additions and re-measurement (US$ thousands) | Depreciation (US$ thousands) | Closing net book amount (US$ thousands) | | :----------------------- | :-------------------------------------- | :----------------------------------- | :------------------------------------------- | :------------------------- | :-------------------------------------- | | Agricultural partnership | 384,848 | (29,488) | 63,038 | (56,597) | 361,801 | | Others | 21,865 | 1,357 | 9,882 | (7,530) | 25,574 | | **Total** | **406,713** | **(28,131)** | **72,920** | **(64,127)** | **387,375** | - Agricultural partnerships have an average term of **6 years**[100](index=100&type=chunk) [13. Investment property](index=33&type=section&id=13.%20Investment%20property) Investment property remained stable at **$33.5 million** as of September 30, 2024, with a significant loss from fair value adjustment largely offset by positive exchange differences, and valuation based on a **Sales Comparison Approach** by an independent expert Investment Property (Nine-months ended September 30) | Item | 2024 (US$ thousands) | 2023 (US$ thousands) | | :-------------------------------- | :------------------- | :------------------- | | Beginning of period | 33,364 | 33,330 | | Loss from fair value adjustment | (22,484) | (913) | | Exchange differences | 22,662 | 947 | | **End of period** | **33,542** | **33,364** | - The Group determined the valuation of investment properties using a "**Sales Comparison Approach**" prepared by an independent expert. A **10%** reduction on the Sales price as of September 30, 2024 would have reduced the value of the Investment properties on **US$ 3.40 million**[102](index=102&type=chunk) [14. Intangible assets, net](index=34&type=section&id=14.%20Intangible%20assets%2C%20net) Net intangible assets increased to **$38.2 million** as of September 30, 2024, primarily due to significant positive exchange differences and additions, partially offset by amortization charges, with goodwill being the largest component Intangible Assets, Net (Nine-months ended September 30, 2024) | Item | Opening net book amount (US$ thousands) | Exchange differences (US$ thousands) | Additions (US$ thousands) | Amortization charge (US$ thousands) | Closing net book amount (US$ thousands) | | :--------- | :-------------------------------------- | :----------------------------------- | :------------------------ | :---------------------------------- | :-------------------------------------- | | Goodwill | 14,309 | 6,154 | — | — | 20,463 | | Software | 6,042 | 2,135 | 1,019 | (1,387) | 7,809 | | Trademarks | 6,431 | 3,246 | — | (377) | 9,300 | | Others | 737 | (80) | — | (5) | 652 | | **Total** | **27,519** | **11,455** | **1,019** | **(1,769)** | **38,224** | - 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[104](index=104&type=chunk) [15. Biological assets](index=35&type=section&id=15.%20Biological%20assets) Total biological assets decreased slightly to **$225.1 million** as of September 30, 2024, due to decreases from harvest/disposals partially offset by recognition, fair value changes, costs, and exchange differences, with the **La Niña** weather event severely impacting 2023 crop yields Biological Assets (Nine-months ended September 30, 2024) | Item | Beginning of year (US$ thousands) | Initial recognition and changes in fair value (US$ thousands) | Decrease due to harvest / disposals (US$ thousands) | Costs incurred during the period (US$ thousands) | Exchange differences (US$ thousands) | End of period (US$ thousands) | | :-------------------- | :-------------------------------- | :-------------------------------------------------- | :------------------------------------------ | :--------------------------------------- | :----------------------------------- | :-------------------------------- | | Crops | 55,545 | 33,184 | (194,622) | 118,324 | 36,060 | 49,293 | | Rice | 32,843 | 39,114 | (148,827) | 104,617 | 20,087 | 48,477 | | Dairy | 23,191 | 7,473 | (77,560) | 73,334 | 15,755 | 42,193 | | Sugarcane | 116,458 | 41,531 | (163,719) | 104,695 | (13,818) | 85,147 | | **Total** | **228,037** | **121,302** | **(584,728)** | **400,970** | **58,084** | **225,110** | - Biological assets that are measured at fair value within **Level 3** of the hierarchy use valuation techniques based on unobservable inputs (discounted cash flow), while **Level 2** assets are measured at fair value within **Level 2** of the hierarchy[107](index=107&type=chunk) - The "**La Niña**" weather event in 2023 resulted in a severe drought in Argentina and Uruguay, causing a reduction in crop yields ranging from **18%** to **60%**, significantly affecting results of operations for the year ended December 31, 2023[111](index=111&type=chunk) [16. Financial instruments](index=38&type=section&id=16.%20Financial%20instruments) The Group's financial instruments measured at fair value, primarily derivative financial instruments and short-term investments, are categorized into **Level 1** and **Level 2** of the fair value hierarchy, with no **Level 3** instruments or transfers between levels during the periods presented Financial Instruments Measured at Fair Value (September 30, 2024) | Item | Level 1 (US$ thousands) | Level 2 (US$ thousands) | Total (US$ thousands) | | :-------------------------- | :---------------------- | :---------------------- | :-------------------- | | **Assets** | | | | | Derivative financial instruments | 85 | 15,183 | 15,268 | | Short-term investment | 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)** | - **Level 1** financial instruments mainly consist of crop futures and options traded on the stock market, NDFs, and public securities[113](index=113&type=chunk)[118](index=118&type=chunk) - **Level 2** financial instruments mainly consist of interest-rate swaps and foreign-currency interest-rate swaps, valued using models based on observable market data[114](index=114&type=chunk)[118](index=118&type=chunk) - The Group does not have any **Level 3** financial instruments for any of the periods presented, and there were no transfers between any levels[115](index=115&type=chunk) [17. Trade and other receivables, net](index=40&type=section&id=17.%20Trade%20and%20other%20receivables%2C%20net) Total trade and other receivables, net, increased significantly to **$307.5 million** as of September 30, 2024, driven by higher current trade receivables and advances to suppliers, with the majority denominated in US Dollar and Brazilian Reais Trade and Other Receivables, Net (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Non-current portion | 37,872 | 39,060 | -3.1% | | Current portion | 269,648 | 179,055 | +50.6% | | **Total trade and other receivables, net** | **307,520** | **218,115** | **+41.0%** | - Current trade receivables increased from **$87.6 million** to **$160.1 million**, and advances to suppliers increased from **$42.8 million** to **$51.4 million**[119](index=119&type=chunk) Trade and Other Receivables by Currency (As of September 30, 2024 vs December 31, 2023) | Currency | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | | :--------------- | :--------------------------- | :--------------------------- | | US Dollar | 132,854 | 88,811 | | Argentine Peso | 63,936 | 24,304 | | Uruguayan Peso | 2,740 | 6,570 | | Brazilian Reais | 107,990 | 98,430 | | **Total** | **307,520** | **218,115** | [18. Inventories](index=41&type=section&id=18.%20Inventories) Total inventories increased significantly by **56.5%** to **$400.6 million** as of September 30, 2024, driven by increases in both raw materials and finished goods Inventories (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :------------ | :--------------------------- | :--------------------------- | :------- | | Raw materials | 168,888 | 76,440 | +121.0% | | Finished goods | 231,742 | 179,611 | +29.0% | | **Total** | **400,630** | **256,051** | **+56.5%** | [19. Cash and cash equivalents](index=41&type=section&id=19.%20Cash%20and%20cash%20equivalents) Cash and cash equivalents decreased by **41.7%** to **$198.3 million** as of September 30, 2024, with declines observed in both cash at bank and on hand, and short-term bank deposits Cash and Cash Equivalents (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :-------------------- | :--------------------------- | :--------------------------- | :------- | | Cash at bank and on hand | 52,620 | 179,068 | -70.6% | | Short-term bank deposits | 145,635 | 160,713 | -9.3% | | **Total** | **198,255** | **339,781** | **-41.7%** | [20. Disposals](index=42&type=section&id=20.%20Disposals) In April 2024, the Company sold **La Pecuaria** farm for **$20.7 million**, generating a **$6.1 million** pre-tax gain, following the September 2023 sale of **El Meridiano** farm for **$48 million** with a **$9.5 million** pre-tax gain - In April 2024, the Company sold "**La Pecuaria**" farm, a **3,177** hectares farm located in Uruguay for an aggregate amount of **US$ 20.70 million**, resulting in a pre-tax gain of **US$ 6.10 million**[129](index=129&type=chunk) - 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$ 48.00 million**, resulting in a gain before tax of **US$ 9.50 million**[128](index=128&type=chunk) [21. Shareholder's contribution](index=42&type=section&id=21.%20Shareholder's%20contribution) The Company's share capital and share premium decreased to **$833.9 million** as of September 30, 2024, primarily due to share repurchases and dividend payments, partially offset by employee share option exercises and restricted share vesting, with the share repurchase program renewed in July 2024 and **$35 million** in annual dividends approved Share Capital and Share Premium (As of September 30, 2024 vs January 1, 2024) | Item | At January 1, 2024 (US$ thousands) | Employee share options exercised (US$ thousands) | Restricted share vested (US$ thousands) | Purchase of own shares (US$ thousands) | Dividends to shareholders (US$ thousands) | At September 30, 2024 (US$ thousands) | | :------------------------ | :--------------------------------- | :--------------------------------------- | :------------------------------------ | :------------------------------------- | :---------------------------------------- | :------------------------------------ | | Share capital and share premium | 910,883 | 115 | 7,540 | (49,626) | (35,000) | 833,912 | - 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[131](index=131&type=chunk) - During the nine-month period ended September 30, 2024, the Company repurchased shares for an amount of **5,768,614**[132](index=132&type=chunk) - 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[133](index=133&type=chunk) [22. Equity-settled share-based payments](index=44&type=section&id=22.%20Equity-settled%20share-based%20payments) The Group operates the **2004 Incentive Option Plan** and the **Adecoagro Restricted Share and Restricted Stock Unit Plan**, recognizing **$4.6 million** in compensation expense for restricted shares in the nine-month period ended September 30, 2024, with **603,799** shares granted and **970,511** vested - The Group established the "**2004 Incentive Option Plan**" and the "**Adecoagro Restricted Share and Restricted Stock Unit Plan**" for equity-settled share-based payments[136](index=136&type=chunk)[137](index=137&type=chunk) - As of September 30, 2024, the Group recognized compensation expense of **US$ 4.60 million** related to the restricted shares granted under the Restricted Share Plan (September 30, 2023: **US$ 4.90 million**)[139](index=139&type=chunk) - For the nine-month period ended September 30, 2024, **603,799** Restricted Shares were granted and **970,511** were vested[139](index=139&type=chunk) [23. Trade and other payables](index=44&type=section&id=23.%20Trade%20and%20other%20payables) Total trade and other payables decreased by **8.6%** to **$175.2 million** as of September 30, 2024, mainly due to decreases in current trade payables, advances from customers, and payables from acquisition of subsidiaries, partially offset by an increase in dividends payables Trade and Other Payables (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :-------------------------- | :--------------------------- | :--------------------------- | :------- | | Non-current | 494 | 1,008 | -51.0% | | Current | 174,699 | 190,730 | -8.4% | | **Total trade and other payables** | **175,193** | **191,738** | **-8.6%** | - Current trade payables decreased from **$140.9 million** to **$138.2 million**, and advances from customers decreased from **$16.4 million** to **$6.4 million**. Dividends payables increased from **$1.0 million** to **$18.5 million**[140](index=140&type=chunk) [24. Borrowings](index=45&type=section&id=24.%20Borrowings) Total borrowings decreased by **5.0%** to **$859.4 million** as of September 30, 2024, primarily due to a reduction in Senior Notes, short-term bank borrowings, and the settlement of a loan with **International Finance Corporation (IFC)**, with the Company remaining in compliance with financial covenants Borrowings (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :---------------- | :--------------------------- | :--------------------------- | :------- | | Non-current | 688,628 | 697,843 | -1.3% | | Current | 170,796 | 207,106 | -17.5% | | **Total borrowings** | **859,424** | **904,949** | **-5.0%** | - 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)**[147](index=147&type=chunk) - A cash tender offer for up to **US$100.0 million** of the Notes due 2027 resulted in **US$84.36 million** in aggregate principal amount of Notes being validly tendered and fully cancelled[146](index=146&type=chunk) - As of September 30, 2024, the Group was in compliance with the related financial covenants under the respective loan agreements[142](index=142&type=chunk) [25. Lease liabilities](index=47&type=section&id=25.%20Lease%20liabilities) Total lease liabilities decreased by **6.4%** to **$354.3 million** as of September 30, 2024, with the majority being long-term and a significant portion maturing in more than 5 years Lease Liabilities (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :---------- | :--------------------------- | :--------------------------- | :------- | | Non-current | 301,465 | 325,569 | -7.4% | | Current | 52,827 | 52,941 | -0.2% | | **Total** | **354,292** | **378,510** | **-6.4%** | - Lease liabilities maturing in more than **5 years** amount to **US$ 130.97 million** as of September 30, 2024[152](index=152&type=chunk) [26. Payroll and social security liabilities](index=47&type=section&id=26.%20Payroll%20and%20social%20security%20liabilities) Total payroll and social security liabilities remained stable at **$39.2 million** as of September 30, 2024, with an increase in salaries payable largely offset by a decrease in provision for bonuses Payroll and Social Security Liabilities (As of September 30, 2024 vs December 31, 2023) | Item | Sep 30, 2024 (US$ thousands) | Dec 31, 2023 (US$ thousands) | Change | | :-------------------------- | :--------------------------- | :--------------------------- | :------- | | Non-current | 1,278 | 1,570 | -18.6% | | Current | 37,963 | 37,357 | +1.6% | | **Total** | **39,241** | **38,927** | **+0.8%** | - Salaries payable increased from **$4.5 million** to **$10.7 million**, while provision for bonuses decreased from **$16.0 million** to **$9.6 million**[153](index=153&type=chunk) [27. Provisions for other liabilities](index=48&type=section&id=27.%20Provisions%20for%20other%20liabilities) The Group accrues liabilities for contingent claims, lawsuits, and other proceedings when probable and estimable. There have been no material changes to claimed amounts and current proceedings since December 31, 2023 - The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them[154](index=154&type=chunk) - There have been no material changes to claimed amounts and current proceedings since December 31, 2023[154](index=154&type=chunk) [28. Related-party transactions](index=48&type=section&id=28.%20Related-party%20transactions) Compensation to directors and senior management for employment services amounted to **$5.7 million** for the nine-month period ended September 30, 2024, a decrease from **$6.2 million** in 2023. The balance payable to related parties was **$16.3 million** as of September 30, 2024 Related-Party Transactions (Nine-months ended September 30) | Item | 2024 (US$ thousands) | 2023 (US$ thousands) | | :------------------------------------ | :------------------- | :------------------- | | Compensation to Directors and senior management | (5,698) | (6,200) | | Balance payable (Sep 30) | (16,273) | (18,781) | [29. Basis of preparation and presentation](index=48&type=section&id=29.%20Basis%20of%20preparation%20and%20presentation) The unaudited condensed consolidated interim financial statements, prepared in accordance with **IAS 34**, reflect management's estimates and assumptions, and should be read with annual statements, noting the Group's inherently seasonal business activities lead to fluctuating financial results, particularly for grains, peanuts, cotton, and sugar/ethanol/electricity, while dairy is more stable - The condensed consolidated interim financial statements are unaudited and have been prepared in accordance with International Accounting Standard 34 (**IAS 34**), 'Interim financial reporting'[156](index=156&type=chunk)[157](index=157&type=chunk) - The Group's business activities are inherently seasonal, with harvesting and selling of grains (corn, soybean, rice and sunflower) between February and August, wheat from December to January, peanut from April to May, and cotton from June to August[159](index=159&type=chunk) - The Sugar, Ethanol and Electricity cluster, despite continuous operation, still experiences fluctuations due to traditional off-season periods in the sector, usually peaking in December to take advantage of higher prices during the traditional off-season period (i.e., January through April)[161](index=161&type=chunk) [30. Critical accounting estimates and judgments](index=50&type=section&id=30.%20Critical%20accounting%20estimates%20and%20judgments) The Group's critical accounting policies are consistent with its annual financial statements, with impairment tests conducted annually or more frequently for non-financial assets and **Cash Generating Units (CGUs)** with allocated goodwill, using **fair-value-less-costs-to-sell** for Argentine farmlands and **value-in-use** for Brazilian **CGUs**, with no impairment identified as of September 30, 2024 and 2023 - 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[163](index=163&type=chunk) - Goodwill acquired is allocated to **Cash Generating Units (CGUs)** and tested for impairment annually, or more frequently if events or changes in circumstances indicate impairment[164](index=164&type=chunk) - As of September 30, 2024, the Group identified **6 CGUs** in Argentina (Farming segments) tested based on a "**fair-value-less-costs-to-sell**" model and **2 CGUs** in Brazil (**Sugar, Ethanol and Energy** segment) tested based on a "**value-in-use**" model[166](index=166&type=chunk)[167](index=167&type=chunk)[174](index=174&type=chunk) - Based on the testing, the Group determined that none of the **CGUs**, with allocated goodwill, were impaired at September 30, 2024 and 2023[173](index=173&type=chunk)[177](index=177&type=chunk)

The Zacks Agriculture – Operations industry is poised to benefit from innovations and growing consumer demand for healthy products. Positive agricultural export projections for fiscal 2024 support a favorable near-term outlook for the industry. Investments in acquisitions, joint ventures and expansions are expected to further enhance the industry players’ prospects. Continued investments in assets and technology to foster innovation and improve customer service are especially advantageous for companies like ...

Adecoagro (AGRO) closed the most recent trading day at $11.50, moving -0.78% from the previous trading session. This change lagged the S&P 500's 0.74% gain on the day.The producer of agricultural products and renewable energy's stock has climbed by 5.17% in the past month, exceeding the Consumer Staples sector's loss of 2.87% and the S&P 500's gain of 3.16%.Investors will be eagerly watching for the performance of Adecoagro in its upcoming earnings disclosure. The company's earnings report is set to be unve ...

Adecoagro (AGRO) closed the latest trading day at $11.77, indicating a +0.77% change from the previous session's end. This change outpaced the S&P 500's 0.03% loss on the day. Elsewhere, the Dow lost 0.61%, while the tech-heavy Nasdaq added 0.56%.Prior to today's trading, shares of the producer of agricultural products and renewable energy had gained 0.6% over the past month. This has outpaced the Consumer Staples sector's loss of 2.17% and lagged the S&P 500's gain of 1.39% in that time.The investment comm ...

The most recent trading session ended with Adecoagro (AGRO) standing at $11.30, reflecting a +0.98% shift from the previouse trading day's closing. The stock exceeded the S&P 500, which registered a loss of 0.29% for the day. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, lost 0.31%.The producer of agricultural products and renewable energy's shares have seen an increase of 1.36% over the last month, not keeping up with the Consumer Staples sector's gain of 3.54% and the S&P 500's gain o ...

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:Adecoagro S.A. (AGRO) is an agro-industrial company. The Zacks Consensus Estimate for its current year earnings has been revised 6.1% downward over the last 60 days.Azul S.A. (AZUL) is an air transport company. The Zacks Consensus Estimate for its current year earnings has been revised 35% downward over the last 60 days.Allegiant Travel Company (ALGT) is a leisure travel company.The Zacks Consensus Estimate for its current year earnin ...

The Zacks Agriculture – Operations industry is set to gain from innovations and rising consumer demand for healthy products. Positive agricultural export projections for fiscal 2024 boost optimism for the industry’s near-term outlook. Investments in acquisitions, joint ventures and expansions are expected to strengthen the prospects of the industry players. Ongoing investments in assets and technological advancements to drive innovation and better serve customers are favorable for companies like Corteva Inc ...