Adecoagro recorded Adjusted EBITDA of $41.4 million in 2Q13

LUXEMBOURG, Aug. 14, 2013

Financial & Operational Performance

•  Adecoagro recorded Adjusted EBITDA of $41.4 million in 2Q13, 39.3% higher than 2Q12. Adjusted EBITDA margin in 2Q13 grew to 22.0% from 19.5% in 2Q12.
•  6M13 Adjusted EBITDA was $70.5 million, 123.2%  higher than 6M12. Adjusted EBITDA margin in 6M13 grew to 24.2% from 12.3% in 6M12.
• Gross Sales reached $192.6 million in 2Q13 and $298.4 million in 6M13, showing a 24.2% and 14.1% increase compared to the same periods of the previous year, respectively.
• The Farming and Land Transformation businesses' Adjusted EBITDA in 2Q13 was $21.2 million, 6.0% lower than 2Q12. Operational and financial performance during 2Q13 was negatively affected by a lack of rainfall in our production regions, which reduced our soybean and corn yields. Performance was enhanced by the sale of our coffee farms in Brazil and the sale of the Santa Regina farm in Argentina, which generated in aggregate Adjusted EBITDA of $6.9 million.
  The 2012/13 harvest year was completed during the first six months of the year. 6M13 Adjusted EBITDA totaled $40.0 million, 13.5% higher than 6M12. Results were negatively affected by below average crop yields as a result of dry weather during the growth season, and positively affected by favorable commodity prices and farm sales. During the second half of 2013, we will be focused on crop planting activities for the 2013/14 harvest year. Earnings will be driven mainly by the biological growth of our crops as of year end and the mark-to-market of our hedge positions.
•  In the Sugar, Ethanol and Energy business, despite a challenging start to the harvest due to above average rains, our mills crushed 1.8 million tons of sugarcane in 2Q13, 78.1% higher than 2Q12. Sugar, ethanol and energy production volumes grew by 60.7%, 85.5% and 71.4% respectively. As a result, Adjusted EBITDA increased by 91.1% from $13.5 million in 2Q12 to $25.8 million in 2Q13. Adjusted EBITDA margin grew from 25.0% in 2Q12 to 33.1% in 2Q13. Year-to-date, Adjusted EBITDA stands at $40.7 million, compared to $8.8 million the same period of last year.
  The sugarcane harvest will reach its peak during the third quarter and continue throughout the fourth quarter. Earnings for the second half of 2013 will be mainly driven sugar content (TRS), ethanol prices and our ability to mill at full capacity.
•  Net income in 2Q13 totaled a loss of $26.9 million, $12.0 million greater than 2Q12. The loss for the period is primarily the result of: (i) a $27.2 million foreign exchange loss, mainly non-cash, generated by the impact of the depreciation of the Brazilian Real and the Argentine Peso on our outstanding dollar-denominated debt and the mark-to-market effect of non-deliverable forward currency hedges, and (ii) a $16.3 million non-cash loss resulting from the mark-to-market of our sugarcane and coffee biological assets.
  

Strategy Execution

• On April 25, 2013, the Ivinhema mill successfully began the 2013/14 sugarcane harvest, with 2.0 million tons of nominal sugarcane crushing capacity and the flexibility to produce both sugar and ethanol. Adecoagro has begun the construction of the second phase of this greenfield project which will expand nominal capacity to 4.0 million tons by early 2015. Total capital expenditure including the mill facility, agricultural machinery and sugarcane plantations for the second phase is estimated at $222 million. This expansion will be fully financed by the 10-year loan granted by Banco Nacional de Desenvolvimiento Economico e Social (BNDES), on December 27, 2012, at an average interest rate of 4.65% in Reais.
• On June 14, 2013, Adecoagro sold its remaining 49% interest in Santa Regina S.A., a company whose sole asset is the Santa Regina farm located in Buenos Aires, Argentina. The farm was sold for $13.1 million or $7,370 per hectare, 16% above Cushman and Wakefield's independent appraisal dated September 2012.
• During 2Q13, Adecoagro disposed of its interest in "La Lacteo", a milk processing facility located in Cordoba, Argentina. The transaction generated $2.9 million of Adjusted EBITDA during the quarter. Adecoagro will continue operating and producing raw milk in its state-of-the-art free-stall dairy facilities, where vegetable protein produced on its farms is transformed into value-added animal protein.

The foregoing highlights are only a summary of our results for the second quarter of 2013. You should read the full 2Q13 earnings release, including a reconciliation of Adjusted EBITDA to IFRS, that is available through our website at ir.adecoagro.com.

A conference call to discuss 2Q13 results will be held tomorrow with live webcast through the internet:

English Conference Call
August 15, 2013
11 a.m. (US EST)
12 p.m. Buenos Aires
12 p.m. Sao Paulo
5 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