Adecoagro S.A.

Gross sales were $535 million in Q2 and $928 million year to date. Consolidated adjusted EBITDA was $173 million in the quarter and $258 million year to date, both record highs. In sugar, ethanol and energy, adjusted EBITDA was $53 million in Q2 and $94 million year to date; the segment crushed 3.5 million tons of cane, up 3% year over year. In fertilizers, urea production rose 22% year over year and year-to-date production reached 617 thousand tons; management said adjusted EBITDA more than doubled both in the quarter and year to date. In food and agriculture, the quarter improved versus last year, though year-to-date results still reflected lower commodity prices and higher U.S.-dollar costs. Looking ahead, management said sugar/ethanol is still on track for its full-year target and expects low double-digit crushing growth; fertilizers should end the year above original EBITDA projections; and leverage should continue to decline as EBITDA grows. Net leverage stood at 3x on a pro forma basis, liquidity at 1.9x, and the annual cash dividend totals $35 million.

Mariano Bosch framed the quarter as evidence of the earnings power of Adecoagro’s diversified platform, highlighting record adjusted EBITDA and saying the company is benefiting from years of investment in productivity. He was upbeat about Brazilian sugarcane conditions, the accretive logic of the Carapo Mill acquisition, and the idea that the expansion does not derail deleveraging goals. On food and agriculture, he said improved productivity and better raw milk production are helping margins, while in Argentina he described El Niño as a positive for yields, costs, rice pricing, and urea demand.

Emilio Federico Gnecco said gross sales were $535 million in Q2 and $928 million year to date, and that the main EBITDA driver was fertilizers, which more than offset softer results in sugar/ethanol/energy and food/agriculture. He detailed that sugar/ethanol crushed 3.5 million tons of cane, up 3% year over year, with 78% ethanol mix year to date and about 41% of year-to-date ethanol production stored in inventory to sell later at better margins. On capital allocation, he noted the final approximately $400 million payment for Profertil, ongoing organic growth CapEx, and that Carapo is expected to close in coming weeks with cash paid at closing; he also said pro forma net leverage was 3x, liquidity was 1.9x, and the annual dividend is $35 million with $17.5 million already paid.

Analysts focused on the urea sales/production mismatch, sugar and ethanol pricing and inventory strategy, the Carapo Mill acquisition, and whether the company would expand planted area or CapEx to support more crushing. Management said urea sales were intentionally shifted to maximize seasonal pricing, that the company will still sell 1.3 million tons for the year, and that holding inventory in June was preferable because prices were then lower than current levels. On Carapo, management said the asset has similar capacity to existing mills, could nearly double crushing over time, and offers synergies from continuous harvest, logistics, G&A, and modest CapEx; they also said about 500 thousand to 1 million tons of cane could be diverted there for the next 2-3 years, while larger output would require additional sugarcane planting.