#Luxembourg #Adecoagro #Sugar Production #Ethanol Maximization

Adecoagro S.A. Achieves Significant Milestones in 3Q25

Adecoagro S.A., a prominent sustainable production company in South America, recently shared its impressive financial results for the third quarter ending September 30, 2025. With an adjusted EBITDA of $115.1 million, the company has reached an all-time high in crushing, along with a strategic shift to maximize ethanol production. Despite ongoing challenges in the global pricing environment, Adecoagro's latest performance marks a pivotal moment for its operations.

Financial Highlights

The third quarter has shown significant growth in various sectors, particularly in the Sugar, Ethanol, and Energy business. The adjusted EBITDA for this segment soared to $120.5 million, representing a 20.3% year-over-year increase. However, on a year-to-date basis, the adjusted EBITDA showed a decline of 15.6%, highlighting the impact of lower prices and higher operational costs.

Additionally, the company noted a dramatic increase in its crushing volume, achieving a record 4.9 million tons in 3Q25, a stellar 20.4% increase compared to the same quarter last year. The focus on ethanol production has been a significant driver of this growth, with a notable switch to an ethanol maximization scenario that now stands at 58%. This change has been instrumental in enhancing profit margins despite the volatility in the sugar market.

Operational Challenges

While Adecoagro has achieved remarkable crushing records and improved EBITDA, the business has not been without its challenges. The company has faced a tough pricing environment, resulting in lower net sales and profit margins in both 3Q25 and year-to-date comparisons. The farming segment, in particular, has reported a marked decline in adjusted EBITDA, primarily due to lower prices for crops, dairy products, and rice, alongside increasing production costs.

The company's farming operations reached an adjusted EBITDA of $1.5 million in 3Q25, down from $19.2 million in the same period last year. These figures underscore the mixed performance within the agricultural sector, as pressures from market dynamics continue to affect profitability.

Strategic Acquisition Plans

In a notable strategic move, Adecoagro has announced plans to acquire a 50% interest in Profertil S.A., a leading urea producer in South America, from Nutrien Ltd. This acquisition, valued at around $600 million, aims to bolster Adecoagro's agro-industrial platform and diversify its revenue sources. The move is part of a larger strategy to enhance the company's operational efficiency and capitalize on new growth opportunities within the agricultural inputs market.

The partnership structure includes an 80%-20% collaboration with Asociación de Cooperativas Argentinas (ACA), positioning Adecoagro to achieve greater cost efficiencies and robust cash flows moving forward.

Future Outlook

As the company navigates the complexities of the agricultural landscape, it has put in place an action plan to optimize its cost structure and reassess its capital allocation strategy. With a net debt-to-adjusted EBITDA ratio standing at 2.8x, the firm is strategically positioned to sustain its growth trajectory while managing its financial commitments.

In line with strong performance and shareholder expectations, Adecoagro also declared a second cash dividend for 2025, amounting to $17.5 million, thereby reinforcing its commitment to returning value to its investors. The anticipated closing of the Profertil acquisition before year-end is expected to further solidify Adecoagro's market position as a dominant player in the agricultural sector.

In conclusion, Adecoagro S.A.’s performance in 3Q25 signifies not only its resilience in a challenging market but also its strategic foresight in expanding operations and enhancing shareholder value. With a robust foundation and a clear growth strategy, the company is poised for continued success in the quarters to come.