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| Statement |
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| For the new campaign that we are currently engaged in we have completed planting activities in 279,000 hectares with a favorable weather outlook |
| Within our ethanol production, 72% was hydrous as demand for this type of ethanol had been significantly increasing and gaining market share offering the better margin |
| This is mostly explained by a significant improvement in agricultural productivity indicators, including a 20% year-over-year increase in yields to 80 tons per hectare as well as to greater sugarcane availability |
| This resulted in a sugar production of 806,000 tons in 2023, making a new record for our mills as well as a year-over-year increase of over 300,000 tons |
| So, all in all for our sugar and ethanol business we believe it is a positive impact |
| And regarding the export, I think we export a lot of ethanol to Europe in 2022, there was a very good opportunity |
| Now looking ahead, we are very enthusiastic about the outlook of all our operating segments |
| In the case of crops, yields are being defined and we feel confident that production will go back to normal levels, consequently showing a significant recovery in adjusted EBITDA in 2024 |
| Having in place a fully integrated business model enables us to offer high quality rice at attractive prices |
| Regarding the sugarcane question as it was mentioned in the presentation in the last quarter of last year we have a very good range that's one of the reasons that we crushed less cane compared to the year before, but we entered the first quarter in a very good condition which was very good considering our continuous harvest model so today we have already crushed in the first quarter more sugarcane than we crushed in the first quarter of last year so it's a very good situation |
| To conclude I would like to thank our team for the extraordinary results delivered as you know and Mariano also mentioned when we opened the call 2023 started as a very challenging year but we were able to turn around the odds and deliver strong results showing the company's resilience against adverse conditions based on great productive assets diversification of products and regions and last but not least our people |
| This was explained by a significant reduction in the gross debt position mainly in our farming business thanks to very good operational results and the company's financial strategy carried out throughout the year that enabled us to take advantage of opportunities in Argentina's financial market and benefit from the short depreciation of the Argentine peso |
| So that's why we are very if it is a La Niña year for the rice business is a very positive has a very positive impact |
| Despite having experienced the worst drought in Argentina's history, these accomplishments were possible because of the investment made through the years to grow our production capability, strengthen our asset base and teams, the synergies achieved across all our businesses, our continuous focus on efficiency and being the low-cost producer, our geographic and product diversification, our flexibility to shift across markets and products |
| We are in an excellent position to profit from this scenario as we have 53% of our expected 2024 sugar production still unhedged |
| On an annual basis, gross sales amounted to $1.4 billion and adjusted EBITDA was $477 million making a 7% and 10% increase, respectively, versus the prior year as well as all-time records for the company |
| These results were mostly explained by an outperformance of the sugar, ethanol and energy business on greater cane productivity which enabled us to increase our sugar production and execute sales at solid prices |
| Results were also positively impacted by solid returns from our rice segment on higher average selling prices and the sale of a farm in September |
| On a full year basis, crushing volume reached 12.5 million tons, 19% higher year-over-year and a record for our mills |
| We believe ethanol prices have room to increase since less ethanol is expected to be produced during 2024-2025 harvest, explained by less cane being crushed in Brazil on account of drier weather and our players still maximizing sugar production given its attractive premium |
| The increase in cash generation was driven by an outstanding operational performance |
| We expect a full recovery in our crops production in 2024 while for our rice segment we are forecasting better yields due to the full recovery in water reservoirs |
| From a commercial point of view sugar prices continue to be supported by strong fundamentals |
| On a full year basis adjusted EBITDA reached $396 million presenting a 6% increase versus last year and a new record for this business unit mostly explained by the increasing net sales |
| We expect to achieve our newly disclosed 2030 decarbonization targets by reinforcing these models and investing in new technologies with attractive financial returns, like the biomethane |
| However, cow productivity reached record levels and we leveraged from our industrial flexibility to continue producing the product with the highest marginal contribution |
| Adjusted EBITDA for the farming business totaled $14 million during the quarter making a 34% year-over-year increase while on an annual basis reached 103 million 25% higher than the previous year |
| This was mostly possible thanks to the implementation of innovative agriculture techniques such as pre-sprouted seedling which enabled us to reproduce sugar cane varieties that have better growth development in our region both in yields and TRS content |
| Because there are many different factors and within the factors that are improving costs are all our efficiencies that we've been working with the increase in the area and coming into Uruguay and all the acquisition that we are taking care of last year |
| Being able to crush year-round even during the traditional inter-harvest period is one of our main competitive advantages |
| Statement |
|---|
| Adjusted EBITDA for our crop segment amounted to a negative of $304,000 during the fourth quarter while on an annual basis reached $27 million |
| Adjusted EBITDA amounted to $87 million during the fourth quarter, 14% lower than the same period of last year |
| On the other hand, total production in our farming division reported a 29% year-over-year reduction fully explained by the reduction in yields and planted area in our crop segment because of La Niña weather event |
| During the fourth quarter, crushing volume reached 2.9 million tons, 7% lower versus the prior year due to higher rainfall received compared to the same period of last year |
| Lower crop output increased coin silage prices which is our main cow feed driving the year over year decline in our dairy segment |
| Moving on to the dairy segment adjusted EBITDA totaled $6 million, 25% lower than the prior year while on a full year basis it stood at $28 million making a 9% year over year reduction |
| In the case of ethanol parity at the pump currently stands at low 60%, pressured by greater inventory levels in Brazil even though demand has significantly switched to this type of fuel |
| Results were mainly impacted by the reduction in yields coupled with a genuine increase in cost in dollar terms |
| Despite the increasing net sales and the gains reported in the mark-to-market of our commodity hedge position lower adjusted EBITDA generation was driven by a year-over-year loss in the mark-to-market of our biological assets |
| Despite representing an 8% year-over-year increase in the selling price the declining volume sold is explained by lower volumes of CBios issued on lower ethanol sales |
| In the case of ethanol, we made the commercial decision to reduce sales and build stocks as prices decreased anticipating high supply levels |
| As we continue ramping up operations in our cluster cash cost will resume its downward trend |
| On an accumulated basis, energy selling volumes increased 18% compared to the prior year but the average selling price decreased by 9% due to low energy spot prices |
| The great issue that we had with La Niña the previous year was because of a third consecutive year of La Niña and this is a very different situation than what we have today where we have most of the reservoirs full and then you have a La Niña effect |
| Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Adecoagro and could cause results to differ materially from those expressed in such forward-looking statements |
| In this regard we'd like to mention that weather in South America has shifted to El Nino after three consecutive years of dry weather |
| Net debt amounted to $503 million making a 26% decrease compared to the same period of last year and a 29% reduction quarter over quarter |
| So regarding the cost, we think that there are some components of the cost that is going to increase, such as labor that increase according to inflation, freight that is still under pressure |
| During 2023 we reviewed our CapEx investments in our farming business to generate savings in a year of adverse weather in Argentina |
| Also the price of oil when we exported ethanol back in 2022 was very high which is not the case right now |
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