- In 4Q12, Adecoagro recorded Adjusted EBITDA of $68.5 million and an Adjusted EBITDA margin of 40.0%, compared to $24.1 million and 16.4% respectively in 4Q11. Adjusted EBITDA for 2012 reached $140.7 million, 6.2% below 2011.
- The Sugar, Ethanol and Energy business delivered a strong fourth quarter. In 4Q12 Adjusted EBITDA was $42.3 million and Adjusted EBITDA margin was 43.2%, compared to $22.6 million and 28.8% respectively in 4Q11. Positive performance was driven by the delay in the start of harvest, which resulted in higher sugarcane volumes to be milled in 4Q12 and a 12% increase in total recoverable sugar ("TRS") per hectare. As a result, cane crushing increased by 89.8% and product sales rose 17.6%.
- The 2012 fiscal year for the Sugar, Ethanol and Energy business concluded with $97.5 million of Adjusted EBITDA, 11.0% below the $109.5 million generated in 2011. The decrease is primarily explained by lower sugar prices in 2012. Our sugarcane plantation grew by 20,355 hectares during 2012. We expect this growth will allow us to maximize capacity utilization at the Angelica and UMA mills and begin milling operations at the Ivinhema mill, in the upcoming 2013 harvest season.
- The Farming and Land Transformation businesses' Adjusted EBITDA in 4Q12 was $32.7 million, $24.6 million higher than 4Q11. This increase is mainly explained by: (i) higher biological asset margins from crops and rice in 4Q12 than those realized in 4Q11, which had been impacted by the summer drought suffered during November and December 2011; and (ii) the sale of the Santa Regina farm, which generated a $19.4 million gain in 4Q12 compared to $8.8 million gain generated from the sale of La Alegria farm in 4Q11.
- On an annual basis, Adjusted EBITDA in 2012 was $68.6 million, 1.8% higher than 2011. The increase is primarily explained by: (i) the land transformation business which generated a gain of $27.5 million from farm sales in 2012 compared to $8.8 million in 2011; and (ii) offset by the lower performance of the farming business in 2012, primarily as a result of the climatic difficulties experienced during the 2011/12 harvest year that impacted yields and margins.
- Consolidated Net Income in 2012 totaled $9.3 million, $47.6 million lower than 2011. The decrease is mainly explained by: (i) a $27.3 million non-cash loss generated by the mark-to-market of our long term biological assets (primarily sugarcane), compared to a $8.9 million gain generated in 2011; and (ii) a $9.4 million lower Adjusted EBITDA, primarily as a result of lower sugar prices.
- The construction of the first phase of the Ivinhema mill was completed. Test runs were succesfully completed during November and December and the mill is now on plan to commence milling operations in April 2013, when the sugarcane harvest year begins. Ivinhema currently has 2.0 million tons of crushing capacity. During the next five years, Adecoagro expects to complete the construction of the second and third phase of the mill, reaching a total of 4.0 million tons of capacity in 2015, and 6.3 million tons of crushing capacity in 2017.
- Adecoagro raised a total of R$680.4 million to finance the construction of the Ivinhema Mill at an average rate of 4.14% in Reals. On December 27, 2012, Adecoagro Vale do Ivinhema, a Brazilian wholly owned subsidiary, entered into a loan agreement with the Brazilian development bank, Banco Nacional de Desenvolvimento Econômico e Social (BNDES), in an amount equal to R$488.6 million, of which (i) R$215.4 million is a direct loan from BNDES, called BNDES Direto, with a 10-year tenor and a 2-year grace period, bearing interest at an average of 3.34%, and (ii) R$273.2 million is an indirect loan through Banco do Brasil and Itaú BBA, called BNDES Indireto, also with a 10-year tenor and a 2-year grace period, bearing an average interest rate of 5.69%.
- In addition to the BNDES loan, Adecoagro obtained a R$130.0 million FCO loan through Banco do Brasil and a R$45.9 million loan with Itaú BBA (FINAME PSI), both with a 10-year tenor and a 3-year and 2-year grace period, respectively, bearing interest rate at an average of 2.50%, and other credits in the amount of R$ 15.9 million.
- During 2012, Adecoagro completed the sale of two farms, namely San Jose and Santa Regina(3). Both sales were completed at a premium to the Cushman & Wakefield independent appraisal dated September 2011 and September 2012, respectively. After accounting for the purchase price, capital expenditures incurred in land transformation, the operating cash flows and the selling price of these two farms, the internal rates of return of the investments in nominal dollar terms were 31.8% and 34.2%, respectively.
Adecoagro Recorded Adjusted EBITDA Of $140.7 Million In 2012
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