UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of August 2024
 
Commission File Number: 001-35052 
 
Adecoagro S.A.
(Translation of registrant’s name into English)
 
28, Boulevard F.W. Raiffeisen,
L-2411, Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
 
Form 20-FX Form 40-F
  
 
 
 

    


 
TABLE OF CONTENTS
 
ITEM 
99.1Press release dated August 12, 2024 related to the registrant’s results of operations for the six-month period ended June 30, 2024.
99.2Unaudited condensed consolidated interim financial statements of the registrant as of and for the six-month period ended June 30, 2024.
 


    


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  Adecoagro S.A.
   
   
   By:
/s/ Emilio Federico Gnecco
    Name:
Emilio Federico Gnecco
    Title:Chief Financial Officer
Date: August 12, 2024
 
 


    


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Adjusted EBITDA increased to $140.0 million in 2Q24. Strong crushing pace and volume recovery in Farming. Shareholder distribution YTD above policy minimum.
2Q24 Earning Release Conference Call
English Conference CallLuxembourg, August 12, 2024 - Adecoagro S.A. (NYSE: AGRO, Bloomberg: AGRO US, Reuters: AGRO.K), a leading sustainable production company in South America, announced today its results for the second quarter ended June 30, 2024. The financial information contained in this press release is based on consolidated interim financial statements presented in US dollars and prepared in accordance with International Financial Reporting Standards (IFRS) except for Non - IFRS measures. Please refer to page 23 for a definition and reconciliation to IFRS of the Non - IFRS measures used in this earnings release.
August 13, 2024
10 a.m. (US EST)
11 a.m. (Buenos Aires/Sao Paulo time)
4 p.m. (Luxembourg)
Consolidated Financial Performance - Highlights
Zoom ID: 850 3594 0619$ thousands2Q242Q23Chg %6M246M23Chg %
Passcode: 995202
Gross Sales (1)
397,547407,082(2.3)%651,346654,355(0.5)%
Adjusted EBITDA (2)
139,995136,3462.7%230,111225,5082.0%
Investor Relations
Adjusted EBITDA Margin (2)
36%34%6.7%36%35%3.7%
Emilio Gnecco
Adjusted Net Income (2)
105,45442,428148.5%128,75981,30558.4%
CFOAdjusted Net Income per Share1.030.40160.4%1.260.7665.9%
Victoria Cabello
Distribution to Shareholders (3)
37,86321,07279.7%59,19528,970104.3%
IR OfficerExpansion Capex16,77816,5701.3%45,45538,64117.6%
Net Debt631,744852,368(25.9)%631,744852,368(25.9)%
Net Debt(2) / LTM Adj EBITDA (x)
1.3x1.9x(30.1)%1.3x1.9x(30.1)%
EmailBreakdown by Operating Segment - Adjusted EBITDA
ir@adecoagro.com$ thousands2Q242Q23Chg %6M246M23Chg %

Sugar, Ethanol & Energy106,886116,843(8.5)%158,741193,531(18.0)%

Crops15,481197n.m20,263(1,510)n.a
Rice11,18413,971(19.9)%43,96928,07856.6%
Dairy11,12710,1789.3%17,57416,3007.8%
Website:Corporate Expenses(4,683)(4,843)(3.3)%(10,436)(10,891)(4.2)%
www.adecoagro.comTotal Adjusted EBITDA139,995136,3462.7%230,111225,5082.0%
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Gross sales were down 2.3% and 0.5% year-over-year during 2Q24 and 6M24, respectively. Higher volumes sold given the year-over-year increase in production were fully offset by lower prices of our main commodities.
Adjusted EBITDA was up 2.7% and 2.0% year-over-year during 2Q24 and 6M24. This was explained by an outperformance of our Crops segment on the sale of La Pecuaria farm, and better results of our Dairy operations.
Year-to-date we have already committed to distribution $16.1 million more than the annual minimum figure required by our policy ($86.4 million vs $70.3 million - via dividend and share repurchase). During the rest of the year we expect to continue returning cash to shareholders.

(1) Gross Sales are equal to Net Sales plus sales taxes related to sugar, ethanol and energy.
(2) Please see “Reconciliation of Non-IFRS measures” starting on page 23 for a reconciliation of Adjusted EBITDA, Adjusted Net Income and Net Debt for the period. Adjusted EBITDA margin is calculated as a percentage of net sales.
(3) Includes cash dividends and share repurchases as of June 30th. For more information on distribution as of the date of this report, please refer to the Remarks section on page 3.



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Sugar, Ethanol & Energy business
Performance Highlights
Adjusted EBITDA in the SE&E business reached $106.9 million and $158.7 million during 2Q24 and 6M24, 8.5% and 18.0% lower year-over-year respectively.
(+) Higher year-over-year crushing during 2Q24 and 6M24 (4.0 million tons and 6.1 million tons, respectively) on greater sugarcane availability and higher effective milling days.
(+) Sugar max scenario (49% production mix) as prices traded above hydrous ethanol in MS. Ethanol carry-over (84% of year-to-date production) to profit from higher expected prices.
(+) Low cost producers: unitary cost of production in line versus prior year on better cost dilution.
(-) Decline in net sales on lower prices compared to the prior year.
(-) Year-over-year loss in biological asset due to lower expected yields versus 2023, on lower-than-average rains.
Outlook
(+) Expectation to increase crushing YoY assuming weather going normal, given good harvest pace and cane availability.
(+) 69% of sugar hedged at an average price of 23.1 cts/lb. Expected upside in prices versus spot level.
(+) Ethanol price recovery and expectation to continue increasing to restore technical parity at the pump (70%) given strong demand and lower expected production.

Farming business
Performance Highlights
Adjusted EBITDA for the Farming business amounted to $37.8 million during 2Q24 and $81.8 million during 6M24, 55.2% and 90.8% higher year-over-year, respectively.
(+) Farm sale conducted in April 2024 (La Pecuaria farm in Uruguay), which generated an Adjusted EBITDA of $15.3 million, reflected in our Crops segment.
(+) Year-over-year gains in the mark-to-market of our biological asset and agricultural produce for our Crops (better yields and area) and Rice operations (better prices and area).
(+) Higher prices for Rice and Dairy's higher value-added products.
(-) Lower prices for soybean, corn and wheat.
(-) Higher costs in U.S. dollar terms.
Outlook
(-/+) Crops: Lower international prices for our main grains, coupled with higher costs in U.S. dollars terms will pressure margins during 2024. Planting activities for our winter crops are underway, good weather conditions led to higher planted area (2024/25 harvest season).
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(+) Rice: Solid prices captured thanks to our commercial strategy and production flexibility. Working on our farms to initiate planting activities (2024/25 harvest season).
(+) Dairy: High productivity indicators; prices for our higher value-added products continue at attractive levels.
Remarks
2024 Shareholder Distribution Update
As of the date of this report, we have already committed $86.4 million to distribution, equivalent to 49% of the Adjusted Free Cash Flow from Operations (NCFO) generated in 2023. This represents $16.1 million above the annual minimum stated in our distribution policy.
Cash dividends: $35.0 million approved. First installment of $17.5 million paid on May 29th (approximately $0.1682 per share); second installment of $17.5 million shall be payable in or about November 2024.
Share repurchase: $51.4 million invested year-to-date in repurchasing 4.9% of the company's equity (5.2 million shares at an average price of $9.98 per share).
Going forward we expect to continue returning cash to our shareholders via share repurchase. To execute this, in July 2024 the Company's Board of Directors approved the renewal of our existing buyback program until December 31, 2024 to repurchase up to an additional 5% of the company's equity - in addition to the 4.9% equity that we have already repurchased year-to-date, as noted above.

Cash Tender of AGRO'27s 6.00% Senior Notes
As an example of our disciplined and constant search for Liability Management opportunities to better finance our operations at attractive rates and add value to shareholders, the Company announced a cash tender offer for up to US$100.0 million of AGRO's 6.00% Senior Notes due 2027. On August 6, 2024, we repurchased approximately $83.6 million aggregate principal amount of our outstanding senior bonds in our ongoing tender offer. The offer expires on August 19, 2024. For more information, please refer to our 6-K releases, available in our IR website (https://ir.adecoagro.com/).

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ESG Update
2023 Integrated Report
We believe we have a key role in supplying food and renewable energy to a growing population in a way that preserves natural resources and the environment. On May 20th, we published our third-party verified Integrated Report where we disclosed our decarbonization target, described our sustainable production model and our ESG strategy and practices, among others.
The report was prepared following the Integrated Reporting Framework, GRI and SASB standards, and showing our contribution to the United Nations' 2030 Agenda.
Below are some of 2023's main highlights:
Commitment to a 20% reduction in our carbon intensity by 2030 vs. 2021 base year.
88% of the company's total energy consumption is self-generated and renewable; 1.1+ million MWh of renewable energy produced.
Inauguration of the second biodigester (2 MW) in our dairy free stalls which injects electricity into the grid.
Strengthening the role of women in our company through 4 strategic pillars: Women in Agribusiness, Maternity, Leadership and Communication.
10% of cash bonus linked to ESG variables (carbon intensity and gender diversity).


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Sugar, Ethanol & Energy Segment - Operational Performance
SUGAR, ETHANOL & ENERGY - SELECTED INFORMATION
Operating DataMetric2Q242Q23Chg %6M246M23Chg %
Milling
Sugarcane Milledtons3,980,9243,606,17710.4%6,148,1695,077,89821.1%
Own Cane tons3,820,3893,537,5498.0%5,927,8884,972,46919.2%
Third Party Cane tons160,53568,628133.9%220,281105,428108.9%
Production
TRS Equivalent Producedtons534,251484,45210.3%805,958657,74722.5%
Sugar tons233,881223,0694.8%353,312299,20618.1%
Ethanol M3171,654145,46618.0%258,951199,69129.7%
Hydrous EthanolM3143,40143,383230.5%223,19258,987278.4%
Anhydrous Ethanol (1)
M328,254102,083(72.3)%35,759140,704(74.6)%
Sugar mix in production%49%51%(4.8)%49%51%(3.5)%
Ethanol mix in production%51%49%5.1%51%49%3.6%
Energy Exported (sold to grid)MWh249,076182,29136.6%321,190240,51333.5%
Cogen efficiency (KWh sold/ton crushed)KWh/ton62.650.523.8%52.247.410.3%
Agricultural Metrics
Harvested areaHectares49,49545,4798.8%79,62365,11522.3%
Yieldtons/hectare7778(0.8)%7476(2.5)%
TRS contentkg/ton1271260.9%1241221.4%
Area
Sugarcane Plantationhectares204,094195,6254.3%204,094195,6254.3%
Expansion Areahectares2,6521,113138.2%5,3472,639102.6%
Renewal Areahectares6,58310,078(34.7)%15,22914,6613.9%
(1) Does not include 5,965 cubic meters of anhydrous ethanol that were converted by dehydrating our hydrous ethanol stocks during 6M24 (no dehydration during 2Q24). During 2Q23 and 6M23, we dehydrated 22,931 and 53,374 cubic meters of hydrous ethanol, respectively.     

Crushing volume during 2Q24 amounted to 4.0 million tons, 10.4% higher than the same period of last year. This was explained by (i) greater sugarcane availability thanks to the expansion planting activities conducted in the last years; coupled with (ii) higher effective milling days. The latter was possible due to the dry weather experienced throughout the last months in Mato Grosso do Sul, which in turn, enabled us to accelerate our harvesting pace. In terms of productivity, both yields and TRS content remained in line versus the prior year at 77 tons per hectare and 127 kg/ton, respectively.
Year-to-date, total crushing volume reached 6.1 million tons, marking a 21.1% increase compared to last year on higher crushing during both 1Q and 2Q24, while TRS equivalent produced increased by 22.5% year-over-year.
During 2Q24, average sugar prices traded at a premium to both hydrous and anhydrous ethanol in Mato Grosso do Sul (23% and 8%, respectively). Consequently, we maximized the production of sugar. Within our ethanol production, 84% was hydrous ethanol, compared to 30% in 2Q23, as demand for this type of fuel
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significantly increased and gained market share in the Otto cycle. This high degree of flexibility constitutes one of our most important competitive advantages, since it allows us to make a more efficient use of our fixed assets and profit from higher relative prices. Moreover, we can dehydrate hydrous ethanol at any time and turn it into anhydrous ethanol, which can be sold either to the domestic or export market, wherever the price premium is better.
On a year-to-date basis, we maximized the production of sugar throughout the year given its attractive premium over ethanol, as was the case in 6M23. Nevertheless, total volume produced for both sugar and ethanol in 6M24 saw an increase (18.1% and 29.7% higher, respectively) driven by the increase in total TRS equivalent produced.
Exported energy during the quarter totaled 249 thousand MWh, 36.6% higher compared to 2Q23, whereas year-to-date it reached 321 thousand MWh, marking a 33.5% year-over-year increase. Higher energy exported in both periods was fully driven by the use of our stored bagasse to produce energy in order to comply with our long-term contracts. Consequently, our cogeneration efficiency ratio was up 23.8% and 10.3%, respectively, compared to the previous year.


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Sugar, Ethanol & Energy Segment - Financial Performance
NET SALES BREAKDOWN$ thousandsUnits($/unit)
2Q242Q23Chg %2Q242Q23Chg %2Q242Q23Chg %
Sugar (tons)90,363106,801(15.4)%201,367210,461(4.3)%449507(11.6)%
Ethanol (cubic meters)67,60161,14310.6%146,93297,92650.0%460624(26.3)%
Hydrous Ethanol (cubic meters)43,94615,306187.1%98,09727,584255.6%448555(19.3)%
Anhydrous Ethanol (cubic meters)23,65545,837(48.4)%48,83570,342(30.6)%484652(25.7)%
Energy (Mwh) (2)
8,6338,954(3.6)%261,326199,70730.9%3345(26.3)%
CBios2,3532,1708.4%151,890109,78038.4%1520(21.6)%
Others (5)
418138202.9%421155171.6%99389011.5%
TOTAL (3)
169,368179,206(5.5)%
Cover Crops (tons) (4)
2,3755,242(54.7)%6,24013,200(52.7)%381397(4.2)%
TOTAL NET SALES (1)
171,743184,448(6.9)%
NET SALES BREAKDOWN6M246M23Chg %6M246M23Chg %6M246M23Chg %
Sugar (tons)153,504154,295(0.5)%321,495316,7111.5%477487(2.0)%
Ethanol (cubic meters)100,306103,460(3.0)%225,443168,66433.7%445613(27.5)%
Hydrous Ethanol (cubic meters)63,28819,933217.5%146,15037,050294.5%433538(19.5)%
Anhydrous Ethanol (cubic meters)37,01883,527(55.7)%79,293131,614(39.8)%467635(26.4)%
Energy (Mwh) (2)
10,88511,490(5.3)%352,276304,23515.8%3138(18.2)%
CBios4,0094,515(11.2)%240,651256,181(6.1)%1718(5.5)%
Others (5)
485164195.7%486180170.0%9989119.5%
TOTAL (3)
269,189273,924(1.7)%
Cover Crops (tons) (4)
5,9477,210(17.5)%15,33017,100(10.3)%388422(8.0)%
TOTAL NET SALES (1)
275,136281,134(2.1)%

HIGHLIGHTS - $ thousand2Q242Q23Chg %6M246M23Chg %
Net Sales (1)
171,743184,448(6.9)%275,136281,134(2.1)%
Margin on Manufacturing and Agricultural Act. Before Opex59,53987,823(32.2)%108,080163,083(33.7)%
Adjusted EBITDA106,886116,843(8.5)%158,741193,531(18.0)%
Adjusted EBITDA Margin62.2%63.3%(1.8)%57.7%68.8%(16.2)%
(1) Net Sales are calculated as Gross Sales net of ICMS, PIS COFINS, INSS and IPI taxes; (2) Includes commercialization of energy from third parties; (3) Total Net Sales do not include the sale of soybean, corn and beans planted as cover crop during the implementation of the agricultural technique known as meiosis; (4) Corresponding to the sale of soybean, corn and beans planted as cover crop during the implementation of meiosis. (5) Diesel sold by Monte Alegre Distribuidora (MAC), our own fuel distributor located in UMA mill.

Adjusted EBITDA during 2Q24 was $106.9 million, 8.5% lower than the same period of last year. Despite presenting a $15.6 million year-over-year gain in the mark-to-market of our commodity hedge position, lower EBITDA generation was mainly driven by (i) a $12.7 million year-over-year decrease in net sales; coupled with (ii) a $10.4 million year-over-year loss in the mark-to-market of our biological assets. As explained in prior releases, the biological assets line captures the present value of the sugarcane that is going to be harvested in the following 12 months (in addition to the one already harvested). In this case, the year-over-year decline is explained by lower expected productivity compared to the previous year given the
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different weather scenarios. Furthermore, results were also affected by a $3.4 million year-over-year increase in selling expenses on higher PIS/COFINS due to higher volumes of ethanol sold, as well as to a higher tax burden since PIS/COFINS was below current levels during the same period of last year. On a year-to-date basis, Adjusted EBITDA amounted to $158.7 million, presenting an 18.0% decrease versus last year explained by the same aforementioned drivers.
Net sales reached $171.7 million during 2Q24, marking a 6.9% decrease compared to the previous year due to lower prices in US dollars in all our products, partially offset by higher ethanol volumes. During the first semester, net sales amounted to $275.1 million, marking a 2.1% year-over-year decline mainly on lower selling prices of ethanol.
In the case of sugar, the lower revenues reported during 2Q24 were mainly explained by a decline in global sugar prices due to a stronger pace of milling in Brazil during 1H24, increasing the year-over-year sugar production. On an year-to-date basis, sugar sales were in line with the previous year on greater volume sold despite the slight decrease in selling prices.
Ethanol sales presented a 10.6% year-over-year increase on higher volume sold of hydrous ethanol (71 thousand cubic meters more than the prior year), which in turn fully offset the year-over-year decrease in selling prices. As explained in prior releases, the decline in prices was mainly driven by an overall increase in ethanol production on greater cane crushing in Brazil. Nevertheless, demand for this type of fuel has significantly increased throughout the last months, consequently absorbing all the new production and leading to a price recovery (+30% in Brazilian reais versus the lowest level seen in early 2024). In terms of volume, we strategically conducted our sales throughout the quarter in order to profit from peaks in prices, capturing a 10% quarter-over-quarter increase.
On a year-to-date basis, lower ethanol revenues were driven by the decline in selling prices due to the above mentioned drivers, despite presenting a 33.7% year-over-year increase in volumes sold given the strong demand. We continue to hold on to our ethanol inventories (84% of our year-to-date production) in order to capture higher expected prices.
Due to the efficiency and sustainability in our operations, ranked among the highest in the industry, we have the right to issue carbon credits (CBio) every time we sell ethanol. During the quarter, we sold $2.4 million worth of CBios, marking a 8.4% year-over-year increase. Year-to-date, we have already sold 241 thousand CBios, amounting to $4.0 million.
Net sales of energy presented a year-over-year reduction for both 2Q24 and 6M24. Despite the higher volume sold related to our long-term energy contracts, the decline in revenues is fully explained by (i) lower energy prices; as well as to (ii) a weaker Brazilian Real compared to the previous year.
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SUGAR, ETHANOL & ENERGY - PRODUCTION COSTS(1)
Total Cost ($'000)Total Cost per Pound (cts/lbs)
2Q242Q23Chg %2Q242Q23Chg %
Industrial costs28,67124,05519.2%2.72.57.0%
Industrial costs22,82521,6085.6%2.12.2(5.2)%
Cane from 3rd parties5,8462,447138.9%0.50.3114.5%
Agricultural costs107,24996,38111.3%10.010.0(0.1)%
Harvest costs42,19737,92011.3%3.93.9(0.1)%
Cane depreciation30,41822,01038.2%2.82.324.1%
Agricultural Partnership Costs15,89717,467(9.0)%1.51.8(18.3)%
Maintenance costs18,73718,984(1.3)%1.82.0(11.4)%
Total Production Costs135,920120,43612.9%12.712.51.3%
Depreciation & Amortization PP&E(55,328)(48,701)13.6%(5.2)(5.1)2.0%
Total Production Costs (excl D&A)80,59271,73512.3%7.57.50.8%
SUGAR, ETHANOL & ENERGY - PRODUCTION COSTS(1)
Total Cost ($'000)Total Cost per Pound (cts/lbs)
6M246M23Chg %6M246M23Chg %
Industrial costs43,16133,24029.8%2.72.55.7%
Industrial costs35,48829,57120.0%2.22.3(2.3)%
Cane from 3rd parties7,6733,669109.1%0.50.370.3%
Agricultural costs171,202143,41619.4%10.711.0(2.8)%
Harvest costs63,08653,10018.8%3.94.1(3.3)%
Cane depreciation46,26331,34447.6%2.92.420.2%
Agricultural Partnership Costs25,67822,69013.2%1.61.7(7.9)%
Maintenance costs36,17536,282(0.3)%2.32.8(18.8)%
Total Production Costs214,363176,65621.3%13.413.5(1.2)%
Depreciation & Amortization PP&E(87,643)(72,033)21.7%(5.5)(5.5)(0.9)%
Total Production Costs (excl D&A)126,720104,62321.1%7.98.0(1.4)%
(1)Total production cost may differ from our COGS figure as the former refers to the cost of our goods produced, whereas the latter refers to the cost of our goods sold.

In 2Q24, total production costs excluding depreciation and amortization totaled 7.5 cts/lb, in line versus the prior year. Although production costs in nominal terms experienced a 12.3% year-over-year increase due to (i) higher third party cane purchases, and (ii) higher harvest costs on higher harvested area, it was fully offset by the 10.4% year-over-year increase in volume. This is so, because the higher the milling, the better we are diluting fixed costs, especially agricultural costs which represent roughly 80% of our cost structure. The same trend was observed in our production cost structure for the first half of the year, which amounted to 7.9 cts/lb. As always, we continue to use concentrated vinasse and filter cake to replace 100% of our potash fertilizer requirements and 48% of total agricultural inputs needs, reducing our sourcing needs.


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Farming - Financial Performance
FARMING - FINANCIAL HIGHLIGHTS(2)
$ thousands2Q242Q23Chg %6M246M23Chg %
Gross Sales
Crops76,50675,4621.4%108,465109,715(1.1)%
Rice70,97280,069(11.4)%128,911135,735(5.0)%
Dairy69,14063,7048.5%125,834122,3122.9%
     Total Sales216,618219,235(1.2)%363,210367,762(1.2)%
Adjusted EBITDA (1)
Crops15,481197n.m20,263(1,510)n.a
Rice11,18413,971(19.9)%43,96928,07856.6%
Dairy11,12710,1789.3%17,57416,3007.8%
     Total Adjusted EBITDA (1)
37,79224,34655.2%81,80642,86890.8%
(1) Please see “Reconciliation of Non-IFRS measures” starting on page 23 for a reconciliation of Adjusted EBITDA; (2) Figures for 2Q23 & 6M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.
Adjusted EBITDA in our Farming business totaled $37.8 million in 2Q24, marking a 55.2% increase compared to the same period of last year. This was mostly explained by (i) the sale of La Pecuaria farm, which generated an Adjusted EBITDA of $15.3 million, coupled with (ii) higher results on our Dairy operations on higher prices of our higher value added products, especially in the domestic market. Results were partially offset by higher costs in U.S. dollar terms, lower prices of most of our crops and lower rice volumes sold.
Year-to-date, Adjusted EBITDA was $81.8 million, 90.8% higher than the previous year. Higher results were mainly driven by (i) the aforementioned farm sale, together with (ii) year-over-year gains in the mark-to-market of our biological assets for both our Crops and Rice operations. In the case of Rice, higher rice prices at the moment of harvest and higher planted area were the main growth drivers; whereas in Crops, the recovery in yields drove the increase in results. Lastly, higher EBITDA generation from our Dairy segment was explained by better prices captured.
For a more detailed explanation, please refer to the performance description of each business line starting next page.


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Crops Segment
GROSS SALES BREAKDOWNAmount ($ '000)Volume$ per unit
Crops2Q242Q23Chg %2Q242Q23Chg %2Q242Q23Chg %
Soybean39,50928,89136.8%114,15861,75384.9%346468(26.0)%
Corn (1)
23,3757,657205.3%133,55934,319289.2%175223(21.6)%
Wheat (2)
5924,697(87.4)%2,80117,037(83.6)%211276(23.3)%
Sunflower2,6939,513(71.7)%4,19118,689(77.6)%64350926.3%
Cotton Lint7402,521(70.6)%5191,306(60.2)%1,4251,930(26.2)%
Peanut8,82416,878(47.7)%5,13014,184(63.8)%1,7201,19044.6%
Others (3)
7735,305(85.4)%1272,542(95.0)%
Total76,50675,4621.4%260,486149,83073.9%
GROSS SALES BREAKDOWN6M246M23Chg %6M246M23Chg %6M246M23Chg %
Soybean41,68329,16042.9%121,13662,35994.3%344468(26.4)%
Corn (1)
26,76710,091165.3%152,53243,757248.6%175231(23.9)%
Wheat (2)
9,32112,011(22.4)%43,02642,5231.2%217282(23.3)%
Sunflower5,48313,969(60.7)%9,47525,639(63.0)%5795456.2%
Cotton Lint1,8024,549(60.4)%1,2912,182(40.8)%1,3962,085(33.0)%
Peanut18,19931,963(43.1)%10,79725,371(57.4)%1,6861,26033.8%
Others (3)
5,2107,972(34.7)%8183,689(77.8)%
Total108,465109,715(1.1)%339,075205,52065.0%
HIGHLIGHTS - $ thousand(4)
2Q242Q23Chg %6M246M23Chg %
Gross Sales76,50675,4621.4%108,465109,715(1.1)%
Adjusted EBITDA15,481197n.m20,263(1,510)n.a
(1) Includes sorghum; (2) Includes barley; (3) Includes sale of certifications related to RTRS soybean (Round Table on Responsible Soy Association) and sales related to our cattle activities; (4) Figures for 2Q23 & 6M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.
During 2Q24, Adjusted EBITDA amounted to $15.5 million, reflecting the sale of La Pecuaria farm (Uruguay) which was completed in April 2024. As reported in our previous release, this farm was sold - and fully collected - at $20.7 million ($6,500/hectare) and generated an Adjusted EBITDA of $15.3 million. On a year-to-date basis, Adjusted EBITDA was $20.3 million, compared to negative $1.5 million in 6M23. The growth in Adjusted EBITDA was mainly explained by the aforementioned farm sale as well as to greater yields in the 23/24 campaign compared to the prior harvest season which was severely affected by La Niña weather event.
Focusing solely on our Crops results, although we saw a significant year-over-year recovery in production (mainly soybean, wheat and peanut) due to normal weather conditions, results were negatively impacted by (i) lower international prices for our main products on higher global supply; (ii) higher costs in U.S. dollar terms; and (iii) lower-than-expected corn production due to the impact of spiroplasma.
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Rice Segment
RICE(3)
Highlightsmetric2Q242Q23Chg %6M246M23Chg %
Gross Sales$ thousands70,97280,069(11.4)%128,911135,735(5.0)%
      Sales of white rice
thousand tons (1)
7889(12.9)%130183(29.0)%
$ per ton7927673.3%85764033.9%
$ thousands61,46568,337(10.1)%111,307117,120(5.0)%
      Sales of By-products$ thousands9,50711,732(19.0)%17,60418,615(5.4)%
Adjusted EBITDA$ thousands11,18413,971(19.9)%43,96928,07856.6%
Rice Mills
Total Processed Rough Rice(2)
thousand tons7187(18.6)%149160(6.8)%
Ending stock - White Ricethousand tons3943(9.6)%3943(9.6)%
(1) Includes the sale of 30k tons of white rice sourced from third-parties during 2Q23 (no sourcing during 2Q24). During 6M23 and 6M24, 1k and 36k tons were sourced from third-parties, respectively; (2) Expressed in white rice equivalent; (3) Figures for 2Q23 & 6M23 differ from the ones previously reported in order to reflect the reclassification in reporting segments communicated in 4Q23's Earnings Release. Any profit derived from the disposition of farmland or a bargain purchase gain, which was previously reported under the Land Transformation segment is now reported within the operating segment where such farmland belongs. The same applies to results derived from our minor cattle activities, which were previously reported under the "All Other" segment.

Rice sales were down year-over-year during 2Q24 due to a reduction in volumes sold, while average price stood at $792/ton during the quarter, in line with 2Q23. Prices continued to be high compared to historical levels, but presented a reduction compared to 1Q24, as expected, mainly driven by new rice supply (23/24 harvest season) putting pressure on domestic prices. On a year-to-date basis, the reduction in sales was also affected by the aforementioned drivers, although during 1Q24 we were able to capture record prices given low rice availability in the market.
Adjusted EBITDA amounted to $11.2 million in 2Q24, marking a 19.9% year-over-year decrease due to a decline in sales and higher costs in U.S. dollar terms. Results were partially offset by a $11.6 million year-over-year gain in our biological asset and agricultural produce on higher rice prices and higher planted area. During the first semester, Adjusted EBITDA reached $44.0 million, marking a 56.6% increase versus the previous year, mostly explained by year-over-year gains reported in our biological assets line on higher prices.

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Dairy Segment
DAIRY
Highlightsmetric2Q242Q23Chg %6M246M23Chg %
Gross Sales
$ thousands (1)
69,14063,7048.5%125,834122,3122.9%
million liters (2) (3)
87.087.7(0.8)%175.9184.0(4.4)%
Adjusted EBITDA$ thousands11,12710,1789.3%17,57416,3007.8%
Dairy - Farm
Milking Cowsaverage heads14,56814,5310.3%14,48814,501(0.1)%
Cow Productivity liter/cow/day36.937.7(2.2)%37.136.80.8%
Total Milk Producedmillion liters48.949.9(2.0)%97.896.61.3%
Dairy - Industry
Total Milk Processedmillion liters87.281.96.5%168.4158.96.0%
(1) Includes sales of raw milk, processed dairy products, electricity and culled cows; (2) Includes sales of raw milk, fluid milk, powder milk and cheese, among others; (3) The difference between volume processed and volume sold is explained by the sale of raw milk to third parties.
In 2Q24, raw milk production was 48.9 million liters, 2.0% lower compared to the same period of last year. This was explained by a slight decline in productivity compared to 2Q23, although levels are still strong at 36.9 liters per cow per day. Year-to-date, total raw milk production amounted to 97.8 million liters, marking a 1.3% year-over-year increase compared to the previous year. This was mostly driven by a 0.8% increase in cow productivity to 37.1 liters per cow per day, as we continue enhancing efficiencies in our free-stalls, which are already at full capacity.
At the industry level, we processed 87.2 million liters of raw milk during the quarter, 6.5% higher than last year. Out of this volume, approximately 51% came from our dairy farm operations whereas the balance was sourced from local producers in nearby areas or supplied by partners to whom we provide tolling services. During the first semester, total processed milk amounted to 168.4 million liters of raw milk, marking a 6.0% year-over-year increase. We continue working on product development for the domestic and export market, offering higher value added products as well as commoditized products, and being present across different price tiers with our consumer product brands.
Adjusted EBITDA amounted to $11.1 million and $17.6 million in 2Q24 and 6M24, respectively, marking a 9.3% and 7.8% increase compared to the same period of last year. Results were positively impacted by (i) an increase in sales due to higher average selling prices, as we improved the mix of higher value added products; (ii) our continuous focus on achieving efficiencies in our vertically integrated operations and increasing our productivity levels in every stage of the value chain; and (iii) our flexibility to divert milk to the production of a variety of dairy products, as well as to shift sales across markets.
Adjusted EBIT was $8.1 million and $12.0 million during 2Q24 and 6M24, respectively. However, once interest expense and the foreign exchange loss related to the financial debt are considered, the year-to-date results decrease to negative $3.7 million.

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Corporate expenses
CORPORATE EXPENSES
$ thousands2Q242Q23Chg %6M246M23Chg %
Corporate Expenses(4,683)(4,843)(3.3)%(10,436)(10,891)(4.2)%
Adecoagro’s corporate expenses include items that are not allocated to a specific business segment, such as the remuneration of executive officers and headquarters staff, certain professional services, office lease expenses, among others. Corporate expenses for 2Q24 were $4.7 million, 3.3% lower than the previous year, while year-to-date it amounted to $10.4 million, down 4.2% year-over-year. Despite experiencing an impact in costs from inflation in U.S. dollar terms, the year-over-year reduction is explained by our focus on reducing expenses and generate savings.

Net Income & Adjusted Net Income
Net income amounted to $9.9 million and $57.2 million during 2Q24 and 6M24, respectively, marking a $36.3 million and $11.9 million year-over-year reduction.
Nevertheless, once we exclude the impact of foreign exchange variation, as well as inflation accounting effects (all non-cash impacts), Adjusted net income reached $105.5 million during the quarter, whereas on an accumulated basis it reached $128.8 million. Higher year-over-year results were mainly explained by tax gains recorded throughout 2024 ($57.4 million and $44.5 million in 2Q24 & 6M24, respectively) versus tax expenses booked during the previous year. These gains recorded within the income tax line are fully related to the effects of inflation in the income tax calculation in Argentina.
ADJUSTED NET INCOME (1)
$ thousands2Q242Q23Chg %6M246M23Chg %
Profit for the period9,86846,119(78.6)%57,21269,125(17.2)%
Foreign exchange losses/(gains), net27,647(29,570)n.a22,023(35,350)n.a
Cash flow hedge - transfer from equity26,31225,0035.2%26,31233,864(22.3)%
Inflation accounting effects27,100607n.a.(5,617)12,336n.a.
Net results from Fair Value adjustment of Investment Property5,503269n.m19,8051,330n.m
Revaluation surplus of farmland sold9,024n.m.9,024n.m.
Adjusted Net Income105,45442,428148.5%128,75981,30558.4%
(1) Please see “Reconciliation of Non-IFRS measures” starting on page 23 for a reconciliation of Adjusted Net Income.

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Indebtedness
NET DEBT BREAKDOWN
$ thousands2Q241Q24Chg %2Q23Chg %
Farming119,791100,57919.1%356,821(66.4)%
Short term Debt105,84386,69622.1%310,308(65.9)%
Long term Debt13,94813,8840.5%46,513(70.0)%
Sugar, Ethanol & Energy710,880720,231(1.3)%731,890(2.9)%
Short term Debt46,02340,03515.0%20,321126.5%
Long term Debt664,857680,196(2.3)%711,569(6.6)%
Total Short term Debt151,866126,73119.8%330,628(54.1)%
Total Long term Debt678,805694,079(2.2)%758,082(10.5)%
Gross Debt830,671820,8101.2%1,088,710(23.7)%
Cash & Equivalents140,311135,5113.5%196,609(28.6)%
Short-Term Investments(1)
58,61646,10927.1%39,73347.5%
Net Debt631,744639,190(1.2)%852,368(25.9)%
EOP Net Debt / Adj. EBITDA LTM1.3x1.3x(1.9)%1.9x(30.1)%
(1) It includes US T-Bills with maturity from the date of acquisition longer than 90 days for US$25,589 thousand, US$ 31,747 thousand of promissory notes and US$ 1,280 thousand of BOPREAL (Bonos para la Reconstrucción de una Argentina Libre). As of June 30, 2024, nil (US$ 59,475 thousand as of December 31, 2023) of these US T-bills are used as collateral for short-term borrowings and are not available for use by other entities of the Group.
As of June 30, 2024, Adecoagro's net debt position amounted to $631.7 million, marking a 25.9% year-over-year reduction. This was mainly explained by our financial decision to take debt in Argentine Peso during 2023 against dollarized assets, and benefit from the sharp depreciation of the currency that occurred by year-end (255% in 2Q24 LTM). Furthermore, the year-over-year increase in our net cash from operations, which includes the latest two farm sales (El Meridiano and La Pecuaria), enabled us to reduce our net debt position, as well as to invest in growth projects across all our operating segments; and distribute profits with shareholders via cash dividend and share repurchase.
Consequently, our Net Debt ratio (Net Debt/EBITDA) as of 2Q24 was 1.3x, 0.6x lower than the previous year. Furthermore, our Liquidity ratio (Cash & Equivalents + Marketable Inventories / Short Term Debt), reached 2.9x, showing the Company's full capacity to repay short term debt with its cash balances.
We believe that our balance sheet is in a healthy position based not only on the adequate overall debt levels but also in terms of our indebtedness, most of which is long-term debt.
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Capital Expenditures
CAPITAL EXPENDITURES
$ thousands2Q242Q23Chg %6M246M23Chg %
Farming7,1101,728311.6%28,56213,468112.1%
Expansion3,8571,673130.5%19,42210,47085.5%
Maintenance3,25455n.a.9,1392,998204.8%
Sugar, Ethanol & Energy52,83856,079(5.8)%138,532129,0737.3%
Maintenance39,91741,181(3.1)%112,499100,90211.5%
Planting24,85328,915(14.0)%44,47544,628(0.3)%
Industrial & Agricultural Machinery15,06412,26622.8%68,02456,27420.9%
Expansion12,92114,897(13.3)%26,03328,171(7.6)%
Planting10,9165,426101.2%21,94312,93969.6%
Industrial & Agricultural Machinery2,0059,471(78.8)%4,09015,232(73.1)%
Total59,94857,8063.7%167,093142,54117.2%
Total Maintenance Capex43,17141,2364.7%121,638103,90017.1%
Total Expansion Capex16,77816,5701.3%45,45538,64117.6%
Adecoagro's capital expenditures amounted to $59.9 million in 2Q24, 3.7% higher compared to last year, while on an accumulated basis it reached $167.1 million, marking a 17.2% year-over-year increase.
The Sugar, Ethanol and Energy business accounted for 88% or $52.8 million of total capex during the quarter. The total year-over-year reduction in capex is mainly explained by (i) lower hectares of renewal planting versus the prior year; coupled with (ii) lower investments related to the expansion of our equipment (mostly small projects such as our biogas unit in Ivinhema). This, in turn, fully mitigated the increase in expansion planting activities and in the renewal of our fleet and industrial equipment. Year-to-date, capital expenditures amounted to $138.5 million for this business unit.
The Farming businesses accounted for 12%, or $7.1 million of total capex in 2Q24. The renewal of our agricultural equipment (seeders, harvesters and tractors) were the main drivers towards the year-over-year increase in maintenance capex. Regarding expansion capex, investments in this front were mostly related to minor industrial improvements within our two dairy processing facilities, and the acquisition of new harvesters for our Rice operations. On a year-to-date basis, total capex amounted to $28.6 million.
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Other Operational & Financial Metrics

2023/24 Harvest Season

FARMING PRODUCTION DATA
Planting & ProductionPlanted Area (hectares) 2023/24 Harvested AreaYields (Tons per hectare)
2023/242022/23Chg %Hectares% HarvestedProduction2023/242022/23Chg %
Soybean64,75351,90724.7%64,753100.0%181,6492.81.858.6%
Soybean 2nd Crop23,92729,818(19.8)%23,927100.0%52,3772.21.0108.6%
Corn (1)
57,04341,75336.6%53,26193.4%278,8655.24.89.2%
Corn 2nd Crop2,5482,836(10.1)%2,26989.1%10,5464.61.5201.8%
Wheat (2)
28,14235,789(21.4)%28,142100.0%88,2073.12.334.7%
Sunflower10,83218,131(40.3)%10,832100.0%18,6581.71.8(4.1)%
Cotton 5,19910,075(48.4)%5,07897.7%2,1580.40.7(34.7)%
Peanut24,28219,81322.6%23,70097.6%88,7983.72.092.0%
Other (3)
3,6982,65839.1%3,48994.3%2,312
Total Crops220,425212,7793.6%215,45297.7%723,571
Rice58,45255,6485.0%58,452100.0%357,9806.16.4(3.6)%
Total Farming278,877268,4273.9%273,90598.2%1,081,551
Owned Croppable Area99,357102,122(2.7)%
Leased Area153,044133,65014.5%
Second Crop Area26,47632,654(18.9)%
Total Farming Area278,877268,4273.9%
(1) Includes sorghum; (2) Includes barley and peas; (3) Includes chia, sesame, potatoes and beans
As of beginning of August 2024, we harvested 273,905 hectares, or 98.2% of total area, and produced 1,081,551 tons of aggregate grains. The remaining hectares are expected to be fully harvested during the rest of the month. As anticipated, most of our crops presented a significant year-over-year increase in productivity given the normal weather conditions experienced, as opposed to last year which was affected by La Niña weather event.
Soybean 1st crop: As of the end of July, we concluded the harvest of our soybean production, reaching an average yield of 2.8 Tn/Ha. Precipitations received throughout the year favored crop development, consequently leading to volume recovery compared to the prior campaign. Some regions received rainfalls during the harvest window, leading to a slight impact on yields and lower quality. However, due to our geographic diversification, average yields stood at historical levels.
Corn: As of the date of this report, we are still undergoing harvesting activities for our late corn, whereas early corn harvest has been completed. In the case of the latter, yields were in line with historical as the crop received good precipitations throughout its yield definition stage, consequently recovering the volume lost in the prior year. On the other hand, our late corn production was negatively impacted by spiroplasma, mainly in the Northern region of the country, consequently affecting the total crop yield
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versus our initial expectations. In this regard, our teams are being trained on how to treat this type of bacteria during the upcoming campaigns. Moreover, we are planning on reducing corn area during the 2024/25 season to lower our exposure and switch to other more suitable crops.
Peanut: Harvesting activities are still on its way for our peanut production, with less than 10% of our area left to be harvested. So far, we have reached a yield of 3.7 Tn/ha, doubling the productivity of the previous year. This increase was mainly driven by (i) good amount of rainfalls received throughout summertime; coupled with (ii) fine-tuning on where to plant our peanut, taking into consideration the different types of soil and weather dynamics.
Winter Crops: We are undergoing planting activities related to the 2024/25 season for our winter crops (mainly wheat), with a total planting size expectation of over 40,000 hectares. Due to normal weather conditions experienced during the first half of 2024, the soil recovered its moisture, enabling us to conduct our planting activities within the optimal window. What is more, planting activities spread to the Northern region, an area which wasn't included in prior harvest seasons given the low soil moisture levels presented. Weather evolution throughout the second semester will be key for yield definition.
Rice: We concluded harvesting activities for our rice by mid 2Q24, reaching an average yield of 6.1 Tn/ha. The year-over-year decline in productivity was mostly explained by (i) low water levels in the reservoirs and low soil moisture during the beginning of planting activities given the dry weather experienced; together with (ii) excessive rainfalls received by the end of the planting window, leading to a portion of our rice hectares being planted outside the optimal period. Furthermore, during summertime we received excessive rainfalls in the regions where our rice farms are located, negatively impacting yield potential.

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Inventories
END OF PERIOD INVENTORIES
Volumethousand $
ProductMetric2Q242Q23% Chg2Q242Q23% Chg
Soybeantons115,71266,08375.1%33,29623,68940.6%
Corn (1)
tons114,96356,429103.7%17,36613,11932.4%
Wheat (2)
tons30,8439,851213.1%6,8902,220210.4%
Sunflowertons1,1714,517(74.1)%6152,417(74.6)%
Cotton tons1,4981,581(5.2)%1,2722,684(52.6)%
Rice (3)
tons38,56042,639(9.6)%20,10417,86412.5%
Peanuttons9,9749,1568.9%13,8458,71059.0%
Organic Sugartons30369(91.9)%13176(92.6)%
Sugartons109,22154,98498.6%32,87418,70475.8%
Ethanolm3218,438159,70736.8%97,18179,56122.1%
Hydrous Ethanolm3205,70774,398176.5%91,18736,314151.1%
Anhydrous Ethanolm312,73285,308(85.1)%5,99443,247(86.1)%
Fluid MilkTh Lts5,9254,90420.8%4,2073,01439.6%
Powder Milktons9511,953(51.3)%3,8597,461(48.3)%
Cheesetons76443675.4%3,4851,93779.9%
Buttertons80100(19.7)%4784555.0%
Cbiosunits69,19917,038306.1%822374119.8%
Fuelm3198199(0.4)%1991848.2%
Otherstons1,8326,719(72.7)%1,2372,694(54.1)%
Total719,358436,66364.7%237,740185,26128.3%
(1) Includes sorghum; (2) Includes barley: (3) Expressed in white rice equivalent

Variations in inventory levels between 2Q24 and 2Q23 are attributable to changes in (i) production volumes
resulting from changes in planted area, (ii) production mix between different crops and in yields obtained,
(iii) different percentage of area harvested during the period, and (iv) commercial strategy or selling pace
for each product.

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Commodity Hedging
Adecoagro’s financial performance is affected by the volatile price environment inherent in agricultural commodities. The company uses forward and derivative markets to mitigate swings in commodity prices and stabilize cash flows.
The table below shows the average selling price of our hedged production volumes, including volumes that have already been invoiced and delivered, forward contracts with fixed-price and volumes hedged through derivative instruments.

COMMODITY HEDGE POSITION - As of June 30, 2024
Consolidated Hedge Position
CropsAvg. FAS PriceCBOT FOB
Volume USD/TonUSD/BuHedge (%)
2023/2024 Harvest season
Soybeans (tons)148,345316.11,278.372%
Corn (tons)151,139181.0580.562%
Wheat (tons)41,042222.3707.962%
2024/2025Harvest season
Soybeans (tons)—%
Corn (tons)—%
Wheat (tons)23,300234.2759.920%
Consolidated Hedge Position
Sugar, Ethanol & EnergyAvg. FOB PriceICE FOB
Volume
USD/UnitCents/LbHedge (%)
2024 FY
Sugar (tons)486,282513.923.364%
Ethanol (m3)—%
Energy (MW/h) (1)
726,92040.2n.a.83%
2025 FY
Sugar (tons)—%
Ethanol (m3)
Energy (MW/h) (1)
463,53646.2n.a56%
(1) Energy prices in 2024 were converted to USD at an exchange rate of BRL/USD 5.26. Energy prices in 2025 were converted to USD at an exchange rate of BRL/USD 5.50.



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2Q24 Market Highlights
Sugar prices ranged between 22.7 cts/lb and 18.1 cts/lb during 2Q24. The main drivers towards the decline in prices were (i) funds selling their position on the commodity; coupled with (ii) good precipitations received during April in Brazil (even though dry conditions returned by the end of 2Q24). Furthermore, higher-than-expected production from other key producing countries from the Northern Hemisphere improved the global supply expectations.
Ethanol prices presented another significant rally during 2Q24, mainly supported by strong demand and concerns over a potential crop failure coming from Brazil's Center-South. According to ESALQ index, both hydrous and anhydrous ethanol prices decreased on average 12% and 14%, respectively, compared to 2Q23. On a quarter-over-quarter basis, prices for hydrous and anhydrous ethanol were up 13% and 16%, respectively. Additionally, UNICA (Brazil's sugarcane association) reported that hydrous sales achieved impressive results during the quarter, marking a 47% year-over-year increase.
Brazil's carbon credit market under the RenovaBio program presented a 21% year-over-year decrease in 2Q24, reaching an average price of 90 BRL/CBio (approximately 17 USD/CBio).
In 2Q24, energy spot prices in the southeast region of Brazil were 9% lower than 2Q23, but 10% higher compared to 1Q24. Despite the low prices seen during the first semester, there was an increase at the end of June due to lower reservoirs levels (68% versus 71% in May), coupled with the potential scenario of drier weather ("La Niña"). Market agents believe that the event will impact the rain frequency, but the intensity is still unknown. Therefore, energy price forecast is unclear but has a bullish perspective.
During 2Q24, soybean traded 5% lower at CBOT compared to 1Q24, while corn traded 12% lower. The decrease was driven by (i) good weather conditions in the USA, higher production and consequently higher expected stocks; (ii) solid harvests in Argentina and Brazil; together with (iii) no major changes in global demand. Moreover, macroeconomic indicators in the USA (inflation, FX and interest rates), put some pressure in the commodities market in Chicago. Thus, funds increased their short position on wheat, corn and all soybean complex during 2Q24, reaching record levels. On the local market, prices traded 5% lower for soybean and 4% lower for corn compared to 1Q24. Despite a larger price reduction at CBOT, local prices for corn were more resilient due to (i) lower-than-expected quality (mainly in the Northern region), and (ii) government interventions in the market ("agri dollar" scheme).
During 2Q24, global rice market remained firm, with Asian origins continuing to benefit from an increase in demand due to India's export ban on long grain white rice. In the South American region, despite the arrival of the new crop into the market, prices remained at high levels due to lower-than-historical carry-over and delays in harvesting activities caused by rains. Furthermore, floods in Río Grande do Sul helped to sustain prices in Brazil. In the case of Argentina, local market was also impacted by the lower stocks and harvest delays, thus prices continued strong (even higher than in the region), but below 1Q24 in anticipation of a potential supply and demand balance by mid 2024.
During 2Q24, prices of raw milk reached the highest level in the last 3 years (excluding the price of November 2023 which was prior to the sharp devaluation of the Argentine peso). The main drivers behind the increase in prices were (i) the decline in milk production, down 14% year-over-year, explained by the dry weather experienced during 2023; and (ii) less milking cows. In the case of powder milk, lower demand coming from China (15% lower imports compared to 2023) caused pressure on global prices. Cheese prices remain in line with historical levels.
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Forward-looking Statements
This press release contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “forecast”, “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.
The forward-looking statements included in this press release relate to, among others: (i) our business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing our business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which we operate, environmental laws and regulations; (iv) the implementation of our business strategy; (v) the correlation between petroleum, ethanol and sugar prices; (vi) our plans relating to acquisitions, joint ventures, strategic alliances or divestitures, and to consolidate our position in different businesses; (vii) the efficiencies, cost savings and competitive advantages resulting from acquisitions; (viii) the implementation of our financing strategy, capital expenditure plan; (ix) the maintenance of our relationships with customers; (x) the competitive nature of the industries in which we operate; (xi) the cost and availability of financing; (xii) future demand for the commodities we produce; (xiii) international prices for commodities; (xiv) the condition of our land holdings; (xv) the development of the logistics and infrastructure for transportation of our products in the countries where we operate; (xvi) the performance of the South American and world economies; and (xvii) the relative value of the Brazilian Reais, the Argentine Peso, and the Uruguayan Peso compared to other currencies.
These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this press release might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.
The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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Reconciliation of Non-IFRS measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS financial measures in this press release:
Adjusted EBITDA
Adjusted EBIT
Adjusted EBITDA margin
Net Debt
Net Debt to Adjusted EBITDA
Adjusted Net Income
In this section, we provide an explanation and a reconciliation of each of our non-IFRS financial measures to their most directly comparable IFRS measures. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS.
We believe these non-IFRS financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management for financial and operational decision making.
There are limitations associated with the use of non-IFRS financial measures as an analytical tool. In particular, many of the adjustments to our IFRS financial measures reflect the exclusion of items, such as depreciation and amortization, changes in fair value, the related income tax effects of the aforementioned exclusions and exchange differences generated by the net liability monetary position in USD in the countries where the functional currency is the local currency, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-IFRS financial measures used by other companies, limiting their usefulness for comparison purposes.
Adjusted EBITDA & Adjusted EBIT
Adjusted Consolidated EBITDA equals the sum of our Adjusted Segment EBITDA for each of our operating segments. We define “Adjusted Consolidated EBITDA” as (i) consolidated net profit (loss) for the year, as applicable, before interest expense, income taxes, depreciation of property, plant and equipment and amortization of intangible assets, net gain from fair value adjustments of investment property land foreign exchange gains or losses, other net financial results and bargain purchase gain on acquisition (ii) adjusted by those items, that do not impact profit and loss, but are recorded directly in shareholders’ equity, including (a) the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, reflected under the line item: "Reserve from the sale of noncontrolling interests in subsidiaries” and (b) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings; and (iii) net of the combined effect of the application of IAS 29 and IAS 21 from the Argentine operations included in profit from operations.
We define “Adjusted Consolidated EBITDA” as (i) consolidated net profit (loss) for the year, as applicable, before interest expense, income taxes, depreciation of property, plant and equipment and amortization of intangible assets, net gain from fair value adjustments of investment property land foreign, exchange gains or losses, other net financial results and bargain purchase gain on acquisition (ii) adjusted by those items, that do not impact profit and loss, but are recorded directly in shareholders’ equity, including (a) the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, reflected under the line item: "Reserve from the sale of noncontrolling interests in subsidiaries” and (b) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings; and (iii) net of the combined effect of the application of IAS 29 and IAS 21 from the Argentine operations included in profit from operations.
We believe that Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are important measures of operating performance for our company and each operating segment, respectively, because they allow investors to evaluate and compare our consolidated operating results and to evaluate and compare the operating performance of our segments, respectively, including our return on capital and operating efficiencies, from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences (income taxes), bargain purchase gain, foreign exchange gains or losses and other financial results. In addition, by including the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, investors can also evaluate and compare the full value and returns generated by our land transformation activities. Other companies may calculate Adjusted Consolidated EBITDA and Adjusted
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Segment EBITDA differently, and therefore our Adjusted Consolidated EBITDA and Adjusted Segment EBITDA may not be comparable to similar measures used by other companies. Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are not measures of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss), cash flows from operating activities, segment profit from operations and other measures determined in accordance with IFRS. Items excluded from Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are significant and necessary components to the operations of our business, and, therefore, Adjusted Consolidated EBITDA and Adjusted Segment EBITDA should only be used as a supplemental measure of our company’s operating performance, and of each of our operating segments, respectively. We also believe Adjusted Consolidated EBITDA and Adjusted Segment EBITDA are useful for securities analysts, investors and others to evaluate and compare the financial performance of our company and other companies in the agricultural industry. These non-IFRS measures should be considered in addition to, but not as a substitute for or superior to, the information contained in either our statements of income or segment information.
Our Adjusted Consolidated EBIT equals the sum of our Adjusted Segment EBITs for each of our operating segments. We define “Adjusted Consolidated EBIT” as (i) consolidated net profit (loss) for the year, as applicable, before interest expense, income taxes, net gain from fair value adjustments of investment property land foreign, exchange gains or losses, other net financial results and bargain purchase gain on acquisition (ii) adjusted by those items, that do not impact profit and loss, but are recorded directly in shareholders’ equity, including (a) the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland, reflected under the line item: "Reserve from the sale of noncontrolling interests in subsidiaries” and (b) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings; and (iii) net of the combined effect of the application of IAS 29 and IAS 21 from the Argentine operations included in profit from operations.
We believe that Adjusted Consolidated EBIT and Adjusted Segment EBIT are important measures of operating performance, for our company and each operating segment, respectively, because they allow investors to evaluate and compare our consolidated operating results and to evaluate and compare the operating performance of our segments, from period to period by including the impact of depreciable fixed assets and removing the impact of our capital structure (interest expense from our outstanding debt), tax consequences (income taxes), foreign exchange gains or losses and other financial results. In addition, by including the gains or losses from disposals of noncontrolling interests in subsidiaries whose main underlying asset is farmland and also the sale of farmlands, investors can evaluate the full value and returns generated by our land transformation activities. Other companies may calculate Adjusted Consolidated EBIT and Adjusted Segment EBIT differently, and therefore our Adjusted Consolidated EBIT and Adjusted Segment EBIT may not be comparable to similar measures used by other companies. Adjusted Consolidated EBIT and Adjusted Segment EBIT are not measures of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss), cash flows from operating activities, segment profit from operations and other measures determined in accordance with IFRS. Items excluded from Adjusted Consolidated EBIT and Adjusted Segment EBIT are significant and necessary components to the operations of our business, and, therefore, Adjusted Consolidated EBIT and Adjusted Segment EBIT should only be used as a supplemental measure of the operating performance of our company, and of each of our operating segments, respectively.
Reconciliation of both Adjusted EBITDA and Adjusted EBIT starts on page 26.
Net Debt & Net Debt to Adjusted EBITDA
Net debt is defined as the sum of non-current and current borrowings less cash and cash equivalents and short-term investments (namely US-Treasury Bills use as collateral of short-term borrowings). This measure is widely used by management. Management is consistently tracking our leverage position and our ability to repay and service our debt obligations over time. We have therefore set a leverage ratio target that is measured by net debt divided by Adjusted Consolidated EBITDA.
We believe that the ratio net debt to Adjusted Consolidated EBITDA provides useful information to investors because management uses it to manage our debt-equity ratio in order to promote access to capital markets and our ability to meet scheduled debt service obligations.     
RECONCILIATION - NET DEBT
$ thousands2Q241Q24Chg %2Q23Chg %
Total Borrowings830,671820,8101.2%1,088,710(23.7)%
Cash and Cash equivalents140,311135,5113.5%196,609(28.6)%
Short-term investments58,61646,10927.1%39,73347.5%
Net Debt631,744639,190(1.2)%852,368(25.9)%

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Adjusted Net Income
We define Adjusted Net Income as (i) profit / (loss) of the period/year before net gain / (losses) from fair value adjustments of investment property land and bargain purchase gain on acquisition; plus (ii) any non-cash finance costs resulting from foreign exchange gain/losses for such period, which are composed by both exchange differences and cash flow hedge transfer from equity, included in Financial Results, net, in our statement of income; net of the related income tax effects, plus (iii) gains or losses from disposals of non-controlling interests in subsidiaries whose main underlying asset is farmland, which are reflected in our shareholders’ equity under the line item “Reserve from the sale of non-controlling interests in subsidiaries” if any, plus (iv) the reversal of the aforementioned income tax effect, plus (v) inflation accounting effect; plus (vi) the net increase in value of sold farmland, which has been recognized in either revaluation surplus or retained earnings, if any.
We believe that Adjusted Net Income is an important measure of performance for our company allowing investors to properly assess the impact of the results of our operations in our equity. In fact, results arising from the revaluation effect of our net monetary position held in foreign currency in the countries where our functional currency is the local currency do not affect the equity of the Company, when measured in foreign / reporting currency. Conversely, the tax effect resulting from the aforementioned revaluation effect does impact the equity of the Company, since it reduces/increases the income tax to be paid in each country. Accordingly we have added back the income tax effect to Adjusted Net Income.
In addition, by including the gains or losses from disposals of non-controlling interests in subsidiaries whose main underlying asset is farmland, investors can also include the full value and returns generated by our land transformation activities.
Other companies may calculate Adjusted Net Income differently, and therefore our Adjusted Net Income may not be comparable to similar measures used by other companies. Adjusted Net Income is not a measure of financial performance under IFRS, and should not be considered in isolation or as an alternative to consolidated net profit (loss). This non-IFRS measure should be considered in addition to, but not as a substitute for or superior to, the information contained in our financial statements.
ADJUSTED NET INCOME
$ thousands2Q242Q23Chg %6M246M23Chg %
Profit for the period9,86846,119(78.6)%57,21269,125(17.2)%
Foreign exchange losses/(gains), net27,647(29,570)n.a22,023(35,350)n.a
Cash flow hedge - transfer from equity26,31225,0035.2%26,31233,864(22.3)%
Inflation accounting effects27,100607n.m(5,617)12,336n.a.
Net results from Fair Value adjustment of Investment Property5,503269n.m19,8051,330n.m
Revaluation surplus of farmland sold9,024n.m.9,024n.m.
Adjusted Net Income105,45442,428148.5%128,75981,30558.4%






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ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 2Q24
$ thousandsCropsRiceDairyFarmingSugar, Ethanol & EnergyCorporateTotal
Sales of goods and services rendered76,50670,97269,140216,618180,929397,547
Cost of goods sold and services rendered(72,315)(59,876)(56,254)(188,445)(135,354)(323,799)
Initial recog. and changes in FV of BA and agricultural produce 12,7079,6413,65526,00313,80239,805
Gain from changes in NRV of agricultural produce after harvest (3,895)(18)(3,913)162(3,751)
Margin on Manufacturing and Agricultural Act. Before Opex13,00320,71916,54150,26359,539109,802
General and administrative expenses (11,916)(5,199)(2,845)(19,960)(6,326)(4,994)(31,280)
Selling expenses (4,416)(8,815)(6,373)(19,604)(18,985)53(38,536)
Other operating income, net 18,558(13,644)7845,69817,329(135)22,892
Profit from Operations Before Financing and Taxation 15,229(6,939)8,10716,39751,557(5,076)62,878
Net results from Fair value adjustment of Investment property(10,708)14,4743,7663,766
Transfer of revaluation surplus derived from the disposals of assets 9,0249,0249,024
Adjusted EBIT13,5457,5358,10729,18751,557(5,076)75,668
(-) Depreciation and Amortization1,9363,6493,0208,60555,32939364,327
Adjusted EBITDA15,48111,18411,12737,792106,886(4,683)139,995
Reconciliation to Profit/(Loss)
Adjusted EBITDA139,995
(+) Depreciation and Amortization(64,327)
(+) Financial result, net(112,872)
(+) Net results from Fair value adjustment of Investment property(3,766)
(+) Income Tax (Charge)/Benefit57,445
(+) Revaluation surplus of farmland sold(9,024)
(+) Translation Effect (IAS 21)2,417
Profit/(Loss) for the Period9,868

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ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 2Q23
$ thousandsCropsRiceDairyFarmingSugar, Ethanol & EnergyCorporateTotal
Sales of goods and services rendered75,46280,06963,704219,235187,847407,082
Cost of goods sold and services rendered(66,500)(54,121)(51,896)(172,517)(123,666)(296,183)
Initial recog. and changes in FV of BA and agricultural produce 2,614(1,927)4,6345,32124,18229,503
Gain from changes in NRV of agricultural produce after harvest 500500(540)(40)
Margin on Manufacturing and Agricultural Act. Before Opex12,07624,02116,44252,53987,823140,362
General and administrative expenses (7,992)(3,802)(2,325)(14,119)(5,848)(5,097)(25,064)
Selling expenses (6,648)(9,416)(6,468)(22,532)(15,598)(12)(38,142)
Other operating income, net 138235(160)2131,764(57)1,920
Bargain purchase gain
Profit from Operations Before Financing and Taxation (2,426)11,0387,48916,10168,141(5,166)79,076
Net results from Fair value adjustment of Investment property469(194)275275
Bargain purchase gain
Adjusted EBIT(1,957)10,8447,48916,37668,141(5,166)79,351
(-) Depreciation and Amortization2,1543,1272,6897,97048,70232356,995
Adjusted EBITDA19713,97110,17824,346116,843(4,843)136,346
Reconciliation to Profit/(Loss)
Adjusted EBITDA136,346
(+) Depreciation and Amortization(56,995)
(+) Financial result, net(10,891)
(+) Net results from Fair value adjustment of Investment property(275)
(+) Income Tax (Charge)/Benefit(21,912)
(-) Bargain purchase gain
(+) Translation Effect (IAS 21)(154)
Profit/(Loss) for the Period46,119









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ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 6M24
$ thousandsCropsRiceDairyFarmingSugar, Ethanol & EnergyCorporateTotal
Sales of goods and services rendered108,465128,911125,834363,210288,136651,346
Cost of goods sold and services rendered(102,589)(100,321)(103,153)(306,063)(217,527)(523,590)
Initial recog. and changes in FV of BA and agricultural produce 26,80831,3434,01262,16336,95499,117
Gain from changes in NRV of agricultural produce after harvest (12,394)(1)(12,395)517(11,878)
Margin on Manufacturing and Agricultural Act. Before Opex20,29059,93226,693106,915108,080214,995
General and administrative expenses (14,289)(8,955)(5,239)(28,483)(12,229)(11,527)(52,239)
Selling expenses (6,949)(15,541)(11,554)(34,044)(32,270)(27)(66,341)
Other operating income, net 7,962(14,242)2,051(4,229)7,5164063,693
Profit from Operations Before Financing and Taxation 7,01421,19411,95140,15971,097(11,148)100,108
Net results from Fair value adjustment of Investment property56616,02316,58916,589
Transfer of revaluation surplus derived from the disposals of assets 9,0249,0249,024
Adjusted EBIT16,60437,21711,95165,77271,097(11,148)125,721
(-) Depreciation and Amortization3,6596,7525,62316,03487,644712104,390
Adjusted EBITDA20,26343,96917,57481,806158,741(10,436)230,111
Reconciliation to Profit/(Loss)
Adjusted EBITDA230,111
(+) Depreciation and Amortization(104,390)
(+) Financial result, net(92,385)
(+) Net results from Fair value adjustment of Investment property(16,589)
(+) Income Tax (Charge)/Benefit44,524
(+) Revaluation surplus of farmland sold(9,024)
(+) Translation Effect (IAS 21)4,965
Profit/(Loss) for the Period57,212









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ADJUSTED EBITDA & ADJUSTED EBITDA RECONCILIATION TO PROFIT/LOSS - 6M23
$ thousandsCropsRiceDairyFarmingSugar, Ethanol & EnergyCorporateTotal
Sales of goods and services rendered109,715135,735122,312367,762286,593654,355
Cost of goods sold and services rendered(96,858)(96,392)(102,998)(296,248)(195,533)(491,781)
Initial recog. and changes in FV of BA and agricultural produce 9687,68710,11418,76972,43891,207
Gain from changes in NRV of agricultural produce after harvest 231231(415)(184)
Margin on Manufacturing and Agricultural Act. Before Opex14,05647,03029,42890,514163,083253,597
General and administrative expenses (9,283)(8,443)(5,326)(23,052)(12,299)(11,375)(46,726)
Selling expenses (12,248)(17,152)(12,885)(42,285)(23,787)(26)(66,098)
Other operating income, net 646171(204)613(5,499)(105)(4,991)
Bargain purchase gain
Profit from Operations Before Financing and Taxation (6,829)21,60611,01325,790121,498(11,506)135,782
Net results from Fair value adjustment of Investment property1,1032521,3551,355
Bargain purchase gain
Adjusted EBIT(5,726)21,85811,01327,145121,498(11,506)137,137
(-) Depreciation and Amortization4,2166,2205,28715,72372,03361588,371
Adjusted EBITDA(1,510)28,07816,30042,868193,531(10,891)225,508
Reconciliation to Profit/(Loss)
Adjusted EBITDA225,508
(+) Depreciation and Amortization(88,371)
(+) Financial result, net(27,682)
(+) Net results from Fair value adjustment of Investment property(1,355)
(+) Income Tax (Charge)/Benefit(38,129)
(-) Bargain purchase gain
(+) Translation Effect (IAS 21)(846)
Profit/(Loss) for the Period69,125

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Condensed Consolidated Interim Financial Statments
    
Statement of Income
$ thousands2Q242Q23Chg %6M246M23Chg %
Revenue411,417 402,873 2.1%673,192 649,131 3.7%
Cost of revenue(334,466)(293,123)14.1%(539,807)(488,011)10.6%
Initial recognition and Changes in fair value of biological assets and agricultural produce44,595 29,441 51.5%107,700 90,365 19.2%
Changes in net realizable value of agricultural produce after harvest(4,561)(33)n . a(13,579)(184)n . a
Margin on Manufacturing and Agricultural Activities Before Operating Expenses116,985 139,158 (15.9)%227,506 251,301 (9.5)%
General and administrative expenses(33,163)(24,561)35.0%(54,847)(46,037)19.1%
Selling expenses(40,136)(37,583)6.8%(68,721)(65,327)5.2%
Other operating income, net21,609 1,908 1,032.5%1,135 (5,001)(122.7)%
Profit from operations65,295 78,922 (17.3)%105,073 134,936 (22.1)%
Finance income(4,479)54,330 (108.2)%5,025 75,849 (93.4)%
Finance costs(81,293)(64,614)25.8%(103,027)(91,195)13.0%
Other financial results - Net gain / (loss) of inflation effects on the monetary items(27,100)(607)n .a5,617 (12,336)n .a
Financial results, net(112,872)(10,891)936.4%(92,385)(27,682)233.7%
Profit / (loss) before income tax(47,577)68,031 (169.9)%12,688 107,254 (88.2)%
Income tax57,445 (21,912)(362.2)%44,524 (38,129)(216.8)%
Profit for the period9,868 46,119 (78.6)%57,212 69,125 (17.2)%


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Statement of Cashflows
$ thousands2Q242Q23Chg %6M246M23Chg %
Cash flows from operating activities:
Profit from operations9,868 46,119 (78.6)%57,212 69,125 (17.2)%
Adjustments for:
Income tax (benefit) / expense(57,445)21,912 (362.2)%(44,524)38,129 (216.8)%
Depreciation64,763 56,158 15.3%104,721 86,802 20.6%
Amortization581 533 9.0%1,145 1,074 6.6%
Depreciation of right of use assets30,843 26,778 15.2%47,366 37,729 25.5%
Gain from disposal of farmland and other assets(6,050)— n . a(6,050)— n . a
Loss / (gain) from disposal of other property items1,050 651 61.3%332 (1,162)(128.6)%
Equity settled shared-based compensation granted1,622 1,888 (14.1)%3,466 4,865 (28.8)%
Loss / (gain) from derivative financial instruments and forwards(18,666)(2,405)676.1%(9,344)2,580 (462.2)%
Interest and other expense , net27,984 12,132 130.7%44,787 13,875 222.8%
Initial recognition and changes in fair value of non harvested biological assets (unrealized)653 3,189 n . a(41,123)(37,542)9.5%
Changes in net realizable value of agricultural produce after harvest (unrealized)1,824 (456)n . a5,088 (107)n . a
Provision and allowances269 (129)(308.5)%12 136 (91.2)%
Net gain from fair value adjustment of Investment property5,503 269 n . a19,805 1,330 n . a
Net gain of inflation effects on the monetary items of the effect of inflation on monetary items27,100 607 n . a(5,617)12,336 (145.5)%
Foreign exchange gains, net27,647 (29,570)(193.5)%22,023 (35,350)(162.3)%
Cash flow hedge – transfer from equity26,312 25,003 5.2%26,312 33,864 (22.3)%
Subtotal143,858 162,679 (11.6)%225,611 227,684 (0.9)%
Changes in operating assets and liabilities:
(Increase)/Decrease in trade and other receivables(5,393)(34,659)(84.4)%(37,751)(72,737)(48.1)%
(Increase)/Decrease in inventories(102,847)(69,282)48.4%(167,073)(78,413)113.1%
(Increase)/Decrease in biological assets90,553 43,935 106.1%121,876 84,689 43.9%
(Increase)/Decrease in other assets(10)(182)(94.5)%(391)(349)12.0%
(Increase)/Decrease in derivatives financial instruments20,641 2,177 848.1%20,759 (7,592)(373.4)%
(Increase)/Decrease in trade and other payables10,666 (16,899)(163.1)%(40,966)(114,898)(64.3)%
(Increase)/Decrease in payroll and social securities liabilities(1,472)5,124 (128.7)%(4,173)2,049 (303.7)%
(Increase)/Decrease in provisions for other liabilities197 107 84.1%468 740 (36.8)%
Cash generated in operations156,193 93,000 67.9%118,360 41,173 187.5%
Income taxes paid(1,691)(593)185.2%(2,559)(1,489)71.9%
Net cash generated from operating activities (a)154,502 92,407 67.2%115,801 39,684 191.8%



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Statement of Cashflows
$ thousands2Q242Q23Chg %6M246M23Chg %
Cash flows from investing activities
Acquisition of business, net of cash acquired(2,529)(401)n . a(15,265)(3,193)378.1%
Purchases of property, plant and equipment(60,143)(57,528)4.5%(154,097)(137,586)12.0%
Purchase of cattle and non current biological assets planting cost(1,000)(37)n . a(1,184)(779)52.0%
Purchases of intangible assets39 (468)(108.3)%(557)(762)(26.9)%
Interest received2,167 28,757 (92.5)%4,473 39,144 (88.6)%
Proceeds from sale of property, plant and equipment261 384 (32.0)%620 1,790 (65.4)%
Proceeds from sale of farmlands20,044 1,108 n . a20,044 1,108 1709.0%
Acquisition of short term(30,102)(29,500)2.0%(33,711)(34,500)(2.3)%
Dispositions of short term investment15,606 55,713 (72.0)%36,576 93,009 (60.7)%
Net cash used in investing activities (b)(55,657)(1,972)2722.4%(143,101)(41,769)242.6%
Cash flows from financing activities
Interest paid (c)
4,013 (11,738)(134.2)%(8,071)(24,636)(67.2)%
Proceeds from long-term borrowings17,381 4,748 266.1%20,369 24,713 (17.6)%
Payment of long-term borrowings(11,740)— n . a(11,740)— n . a
Proceeds from short-term borrowings40,141 201,575 (80.1)%49,871 396,160 (87.4)%
Payment of short-term borrowings(46,814)(103,994)(55.0)%(117,043)(326,244)(64.1)%
Payment of derivatives financial instruments(139)104 (233.7)%(79)— n . a
Lease Payments(37,156)(39,647)(6.3)%(55,450)(58,869)(5.8)%
Purchase of own shares(20,362)(3,572)470.0%(41,695)(11,470)263.5%
Dividends paid to non-controlling interest— — n . a(124)— n . a
Dividends to shareholders(17,500)(17,500)—%(17,500)(17,500)—%
Net cash used in financing activities (d)(72,176)29,976 (340.8)%(181,462)(17,846)916.8%
Net increase / (decrease) in cash and cash equivalents26,669 120,411 (77.9)%(208,762)(19,931)947.4%
Cash and cash equivalents at beginning of year135,511 85,867 n . a339,781 230,653 47.3%
Exchange gains on cash and cash equivalents (e)
(21,869)(9,669)126.2%9,292 (14,113)(165.8)%
Cash and cash equivalents at end of year140,311 196,609 (28.6)%140,311 196,609 (28.6)%

Combined effect of IAS 29 and IAS 21 of the Argentine subsidiaries over:2Q242Q236M246M23
Operating activities(a)34,384 (21,431)(18,719)(45,106)
Investing activities(b)(4,334)(1,505)(4,003)(764)
Interest paid(c)4,635 (743)4,152 (654)
Financing activities(d)(10,565)24,843 33,313 50,001 
Exchange rate changes and inflation on cash and cash equivalents(e)(19,485)(1,907)(10,591)(4,131)
32

bannerer.jpg
Statement of Financial position
$ thousands6M2412M23Chg %
ASSETS
Non-Current Assets
Property, plant and equipment1,582,210 1,549,565 2.1%
Right of use assets368,205 406,713 (9.5)%
Investment property33,364 33,364 —%
Intangible assets, net36,674 27,519 33.3%
Biological assets37,387 23,706 57.7%
Deferred income tax assets10,164 9,777 4.0%
Trade and other receivables, net37,209 39,060 (4.7)%
Derivative financial instruments17,081 18,001 (5.1)%
Other Assets2,103 1,515 38.8%
Total Non-Current Assets2,124,397 2,109,220 0.7%
Current Assets
Biological assets155,477 204,331 (23.9)%
Inventories455,387 256,051 77.9%
Trade and other receivables, net212,007 179,055 18.4%
Derivative financial instruments2,177 13,819 (84.2)%
Short-term investment58,616 62,637 (6.4)%
Cash and cash equivalents140,311 339,781 (58.7)%
Total Current Assets1,023,975 1,055,674 (3.0)%
TOTAL ASSETS3,148,372 3,164,894 (0.5)%
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital167,073 167,073 —%
Share premium680,990 743,810 (8.4)%
Cumulative translation adjustment(416,132)(603,861)(31.1)%
Equity-settled compensation14,984 18,654 (19.7)%
Cash Flow Hedge(217)(17,124)(98.7)%
Other reserves151,250 150,677 0.4%
Treasury shares(13,377)(8,062)65.9%
Revaluation surplus253,715 317,598 (20.1)%
Reserve from the sale of minority interests in subsidiaries41,574 41,574 —%
Retained earnings482,637 418,789 15.2%
Equity attributable to equity holders of the parent1,362,497 1,229,128 10.9%
Non controlling interest39,417 36,520 7.9%
TOTAL SHAREHOLDERS EQUITY1,401,914 1,265,648 10.8%
LIABILITIES
Non-Current Liabilities
Trade and other payables478 1,008 (52.6)%
Borrowings678,805 697,843 (2.7)%
Lease liabilities289,818 325,569 (11.0)%
Deferred income tax liabilities351,002 376,331 (6.7)%
Payrroll and Social liabilities1,099 1,570 (30.0)%
Provisions for other liabilities2,734 2,871 (4.8)%
Total Non-Current Liabilities1,323,936 1,405,192 (5.8)%
Current Liabilities
Trade and other payables183,142 190,730 (4.0)%
Current income tax liabilities2,093 5,023 (58.3)%
Payrroll and Social liabilities28,985 37,357 (22.4)%
Borrowings151,866 207,106 (26.7)%
Lease liabilities55,749 52,941 5.3%
Derivative financial instruments48 169 (71.6)%
Provisions for other liabilities639 728 (12.2)%
Total Current Liabilities422,522 494,054 (14.5)%
TOTAL LIABILITIES1,746,458 1,899,246 (8.0)%
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES3,148,372 3,164,894 (0.5)%
33




Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of June 30, 2024 and for the six-month periods ended June 30, 2024 and 2023




Legal information


Denomination: Adecoagro S.A.
Legal address: 28, Boulevard Raiffeisen, L-2411, Luxembourg


Company activity: Agricultural and agro-industrial
Date of registration: June 11, 2010
Expiration of company charter: No term defined
Number of register (RCS Luxembourg): B153.681
Issued Capital Stock: 111,381,815 common shares (Note 21)
Outstanding Capital Stock: 102,461,382 common shares
Treasury Shares: 8,920,433 common shares

F - 1


Adecoagro S.A.
Condensed Consolidated Interim Statements of Income
for the six-month and three-month periods ended June 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Six-months ended June 30,Three-months ended June 30,
Note2024202320242023
(unaudited)
Revenue
4673,192 649,131 411,417 402,873 
Cost of revenue
5(539,807)(488,011)(334,466)(293,123)
Initial recognition and changes in fair value of biological assets and agricultural produce
15107,700 90,365 44,595 29,441 
Changes in net realizable value of agricultural produce after harvest
(13,579)(184)(4,561)(33)
Margin on manufacturing and agricultural activities before operating expenses 227,506 251,301 116,985 139,158 
General and administrative expenses 6(54,847)(46,037)(33,163)(24,561)
Selling expenses 6(68,721)(65,327)(40,136)(37,583)
Other operating income/(expense), net81,135 (5,001)21,609 1,908 
Profit from operations105,073 134,936 65,295 78,922 
Finance income
95,025 75,849 (4,479)54,330 
Finance costs
9(103,027)(91,195)(81,293)(64,614)
Other financial results - Net gain / (loss) of inflation effects on the monetary items95,617 (12,336)(27,100)(607)
Financial results, net 9(92,385)(27,682)(112,872)(10,891)
Profit / (loss) before income tax
12,688 107,254 (47,577)68,031 
Income tax benefit / (expense)1044,524 (38,129)57,445 (21,912)
Profit for the period57,212 69,125 9,868 46,119 
Attributable to:
Equity holders of the parent 56,913 67,837 9,526 46,268 
Non-controlling interest 299 1,288 342 (149)
Earnings per share attributable to the equity holders of the parent during the period:
Basic earnings per share0.546 0.6300.094 0.430 
Diluted earnings per share0.543 0.6290.093 0.429 





The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 2


Adecoagro S.A.
Condensed Consolidated Interim Statements of Comprehensive Income
for the six-month and three-month periods ended June 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


Six-months ended June 30,Three-months ended June 30,
2024202320242023
(unaudited)
Profit for the period57,212 69,125 9,868 46,119 
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
364,052 59,531 72,168 27,794 
Cash flow hedge, net of tax (Note 2)
16,907 18,529 16,963 15,287 
Items that will not be reclassified to profit or loss:
Revaluation surplus net of tax
(230,673)(21,708)(60,229)(6,541)
Other comprehensive income 150,286 56,352 28,902 36,540 
Total comprehensive income for the period 207,498 125,477 38,770 82,659 
Attributable to:
Equity holders of the parent 204,601 123,941 37,695 82,741 
Non-controlling interest 2,897 1,536 1,075 (82)



The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 3


Adecoagro S.A.
Condensed Consolidated Interim Statements of Financial Position
as of June 30, 2024 and December 31, 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
June 30,December 31,
Note20242023
(unaudited)
ASSETS
Non-Current Assets
Property, plant and equipment, net111,582,210 1,549,565 
Right of use assets12368,205 406,713 
Investment property1333,364 33,364 
Intangible assets, net 1436,674 27,519 
Biological assets1537,387 23,706 
Deferred income tax assets1010,164 9,777 
Trade and other receivables, net1737,209 39,060 
Derivative financial instruments1617,081 18,001 
Other Assets2,103 1,515 
Total Non-Current Assets2,124,397 2,109,220 
Current Assets
Biological assets15155,477 204,331 
Inventories18455,387 256,051 
Trade and other receivables, net17212,007 179,055 
Derivative financial instruments162,177 13,819 
Short-term investments58,616 62,637 
Cash and cash equivalents19140,311 339,781 
Total Current Assets 1,023,975 1,055,674 
TOTAL ASSETS3,148,372 3,164,894 
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital 21167,073 167,073 
Share premium 21680,990 743,810 
Cumulative translation adjustment (416,132)(603,861)
Equity-settled compensation 14,984 18,654 
Cash flow hedge (217)(17,124)
Other reserves151,250 150,677 
Treasury shares (13,377)(8,062)
Revaluation surplus253,715 317,598 
Reserve from the sale of non-controlling interests in subsidiaries 41,574 41,574 
Retained earnings 482,637 418,789 
Equity attributable to equity holders of the parent 1,362,497 1,229,128 
Non-controlling interest 39,417 36,520 
TOTAL SHAREHOLDERS EQUITY 1,401,914 1,265,648 
LIABILITIES
Non-Current Liabilities
Trade and other payables 23478 1,008 
Borrowings 24678,805 697,843 
Lease liabilities25289,818 325,569 
Deferred income tax liabilities 10351,002 376,331 
Payroll and social security liabilities 261,099 1,570 
Provisions for other liabilities 272,734 2,871 
Total Non-Current Liabilities 1,323,936 1,405,192 
Current Liabilities
Trade and other payables 23183,142 190,730 
Current income tax liabilities 102,093 5,023 
Payroll and social security liabilities 2628,985 37,357 
Borrowings 24151,866 207,106 
Lease liabilities2555,749 52,941 
Derivative financial instruments 1648 169 
Provisions for other liabilities 27639 728 
Total Current Liabilities 422,522 494,054 
TOTAL LIABILITIES 1,746,458 1,899,246 
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 3,148,372 3,164,894 

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 4



Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the six-month periods ended June 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Attributable to equity holders of the parent
Share Capital (Note 21)Share PremiumCumulative Translation AdjustmentEquity-settled CompensationCash flow hedgeOther reservesTreasury sharesRevaluation surplusReserve from the sale of non-controlling interests in subsidiariesRetained EarningsSubtotalNon-Controlling InterestTotal Shareholders’ Equity
Balance at January 1, 2023167,073793,169(456,029)18,792(44,872)126,925(4,792)281,90941,574202,3421,126,09137,5521,163,643
Profit for the period— — — — — — — — — 67,837 67,8371,288 69,125
Other comprehensive income:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations 44,89213,09157,9831,54859,531
Cash flow hedge (*)
18,52918,52918,529
Revaluation of surplus (**)(20,408)(20,408)(1,300)(21,708)
Other comprehensive income for the period 44,89218,529(7,317)56,10424856,352
Total comprehensive income for the period 44,89218,529(7,317)67,837123,9411,536125,477
Reserves for the benefit of government grants (1)— — — — — 6,266 — — — (6,266)— 
- Restricted shares and restricted units (Note 22):
Value of employee services — — — 3,458 — — — — — — 3,458— 3,458
Vested— 7,528 — (6,145)— 1,554 — — — — 2,937— 2,937
Forfeited
— — — — — 18 (18)— — — — 
Granted— — — — — (822)822 — — — — 
-Purchase of own shares (Note 21)— (9,374)— — — — (2,096)— — — (11,470)— (11,470)
- Dividends to shareholders (Note 22)— (35,000)— — — — — — — — (35,000)— (35,000)
Balance at June 30, 2023 (unaudited)167,073756,323(411,137)16,105(26,343)133,941(6,084)274,59241,574263,9131,209,95739,0881,249,045
(*) Net of 9,739 of Income tax.
(**) Net of 11,455 of Income tax.
(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy business.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 5



Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the six-month periods ended June 30, 2024 and 2023 (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Attributable to equity holders of the parent
Share Capital (Note 21)Share PremiumCumulative Translation AdjustmentEquity-settled CompensationCash flow hedge
Other reserves
Treasury sharesRevaluation surplusReserve from the sale of non-controlling interests in subsidiariesRetained EarningsSubtotalNon-Controlling InterestTotal Shareholders’ Equity
Balance at January 1, 2024167,073 743,810 (603,861)18,654 (17,124)150,677 (8,062)317,598 41,574 418,789 1,229,128 36,520 1,265,648 
Profit for the period— — — — — — — — 56,913 56,913 299 57,212 
Other comprehensive loss:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations — — 187,729 — — — — 154,339 — — 342,068 21,984 364,052 
Cash flow hedge (*)
— — — — 16,907 — — — — — 16,907 — 16,907 
- Items that will not be reclassified to profit or loss:
Revaluation surplus (**)
— — — — — — — (211,287)— — (211,287)(19,386)(230,673)
Transfer of the revaluation surplus derived from the disposals of assets (**)— — — — — — — (6,935)— 6,935  —  
Other comprehensive income for the period — — 187,729 — 16,907 — — (63,883)— 6,935 147,688 2,598 150,286 
Total comprehensive income for the period — — 187,729 — 16,907 — — (63,883)— 63,848 204,601 2,897 207,498 
- Employee share options (Note 22):
Exercised — 115 — (38)— — 22 — — — 99 — 99 
- Restricted shares and restricted units (Note 22):
Value of employee services— — — 2,479 — — — — — — 2,479 — 2,479 
Vested— 7,540 — (6,111)— 1,456 — — — — 2,885 — 2,885 
Forfeited— — — — — 23 (23)— — —  —  
Granted— — — — — (906)906 — — —  —  
- Purchase of own shares (Note 21)— (35,475)— — — — (6,220)— — — (41,695)— (41,695)
- Dividends to shareholders (Note 22)— (35,000)— — — — — — — — (35,000)— (35,000)
Balance at June 30, 2024 (unaudited)167,073 680,990 (416,132)14,984 (217)151,250 (13,377)253,715 41,574 482,637 1,362,497 39,417 1,401,914 

(*) Net of 9,335 of Income tax.
(**) Net of 126,591 of Income tax.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 6


Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the six-month periods ended June 30, 2024 and 2023
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Six-months ended June 30,
Note20242023
(unaudited)
Cash flows from operating activities:
Profit for the period57,212 69,125 
Adjustments for:
Income tax (benefit) / expense10(44,524)38,129 
Depreciation of property, plant and equipment11104,721 86,802 
Depreciation of right of use assets1247,366 37,729 
Net loss from the fair value adjustment of investment properties1319,805 1,330 
Amortization of intangible assets141,145 1,074 
Gain from the sale of farmland and other assets8(6,050)— 
Loss /(gain) from disposal of other property items8332 (1,162)
Equity settled share-based compensation granted 73,466 4,865 
(Gain) / loss from derivative financial instruments8, 9(9,344)2,580 
Interest, finance cost related to lease liabilities and other financial expense, net944,787 13,875 
Initial recognition and changes in fair value of non-harvested biological assets (unrealized) (41,123)(37,542)
Changes in net realizable value of agricultural produce after harvest (unrealized) 5,088 (107)
Provision and allowances
12 136 
Net (gain) / loss of inflation effects on the monetary items9(5,617)12,336 
Foreign exchange loss / (gains), net 922,023 (35,350)
Cash flow hedge – transfer from equity 926,312 33,864 
Subtotal 225,611 227,684 
Changes in operating assets and liabilities:
Increase in trade and other receivables(37,751)(72,737)
Increase in inventories(167,073)(78,413)
Decrease in biological assets121,876 84,689 
Increase in other assets(391)(349)
Decrease / (increase) in derivative financial instruments20,759 (7,592)
Decrease in trade and other payables(40,966)(114,898)
(Increase) / Decrease in payroll and social security liabilities(4,173)2,049 
Increase in provisions for other liabilities468 740 
Net cash provided by operating activities before taxes paid 118,360 41,173 
Income tax paid (2,559)(1,489)
Net cash provided by operating activities (a)115,801 39,684 


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 7


Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the six-month periods ended June 30, 2024 and 2023 (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)
Six-months ended June 30,
Note20242023
(unaudited)
Cash flows from investing activities:
 Acquisition of a business, net of cash and cash equivalents acquired(15,265)(3,193)
 Purchases of property, plant and equipment 11(154,097)(137,586)
 Purchases of cattle and non-current biological assets (1,184)(779)
 Purchases of intangible assets 14(557)(762)
 Interest received and others4,473 39,144 
 Proceeds from sale of property, plant and equipment 620 1,790 
 Proceeds from sale of farmlands and other assets2720,044 1,108 
 Acquisition of short-term investment16(33,711)(34,500)
 Disposal of short-term investment1636,576 93,009 
Net cash used in investing activities (b)(143,101)(41,769)
Cash flows from financing activities:
Proceeds from long-term borrowings 20,369 24,713 
Payments of long-term borrowings (11,740)— 
Proceeds from short-term borrowings 49,871 396,160 
Payment of short-term borrowings (117,043)(326,244)
Payments of derivative financial instruments(79)— 
Lease payments(55,450)(58,869)
Interest paid (c)(8,071)(24,636)
Purchase of own shares (41,695)(11,470)
Dividends paid to non-controlling interest (124)— 
Dividends to shareholders21(17,500)(17,500)
Net cash used in financing activities (d)(181,462)(17,846)
Net decrease in cash and cash equivalents(208,762)(19,931)
Cash and cash equivalents at beginning of period 19339,781 230,653 
Effect of exchange rate changes and inflation on cash and cash equivalents (e)9,292 (14,113)
Cash and cash equivalents at end of period 19140,311 196,609 

Combined effect of IAS 29 and IAS 21 of the Argentine subsidiaries over:
Six-months ended June 30,
20242023
Operating activities(a)(18,719)(45,106)
Investing activities(b)(4,003)(764)
Interest paid(c)4,152 (654)
Financing activities(d)33,313 50,001 
Exchange rate changes and inflation on cash and cash equivalents(e)(10,591)(4,131)

For non-cash transactions, see Note 12 for right of use assets.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 8



Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)






1.    General information

Adecoagro S.A. (the “Company” or “Adecoagro”) is the Group’s ultimate parent company and is a société anonyme (stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are collectively referred to hereinafter as the "Group." The Group’s activities are carried out through two major lines of business, namely, Farming and Sugar, Ethanol and Energy. The Farming line of business is further comprised of three reportable segments, which are described in detail in Note 3 to these condensed consolidated interim financial statements (hereinafter referred to as the “Interim Financial Statements”).
Adecoagro is a public company listed in the New York Stock Exchange (NYSE) as a foreign registered company under the ticker symbol of AGRO.
These Interim Financial Statements have been approved for issue by the Board of Directors on August 9, 2024.

2.    Financial risk management

Risk management principles and processes

The Group is exposed to several risks arising from financial instruments including price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and the Group’s approach to the identification, assessment and mitigation of risks is included in the annual consolidated financial statements. There have been no significant changes to the Group's exposure and risk management principles and processes since December 31, 2023. See Note 2 to the annual consolidated financial statements for more information.

However, the Group considers that the following tables below provide useful information to understand the Group’s interim results for the six-month period ended June 30, 2024. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.

Argentina status:
The Argentine subsidiaries of the Group operate in an economic context in which main variables have a strong volatility as a consequence of political and economic uncertainties, both in national and international environments. Argentina’s inflation rate for the six-month period ended June 30, 2024 and 2023 were 79.8% and 50.7%, respectively. December 31, 2023, 2022 and 2021 was 211.4%, 94.8% and 50.9%, respectively. The Group uses Argentina’s official exchange rate to account for transactions in Argentina, mainly affecting the farming business segment, which as of June 30, 2024 and 2023, respectively, was 912 and 268, respectively, against the U.S. dollar.

On December 10, 2023, a new government took office with the aim to boost a deregulation of the Argentine economy and other regulations. Certain regulations and/or restrictions have been eased and others remain in force, although it is expected that they will be lifted gradually. However, the scope and timing of the measures, including but not limited to the existing foreign exchange regulations remains uncertain as of the date of these Consolidated Financial Statements.

The Argentine Central Bank under prior administration, had implemented certain measures that control and restrict the ability of companies and individuals to access the foreign exchange market known as MULC (for its acronym in Spanish) for certain transactions. However, the performance of blue-chip swap transactions known as “Contado con Liquidación” or CCL (for its acronym in Spanish) was an alternative lawful mechanism. The blue-chip swap transactions are capital markets transactions that could be implemented in different ways, both for the inflow and outflow of funds. The implicit exchange rate applicable to this type of transactions is higher with respect to the official foreign exchange rate.

The Company is permanently monitoring the evolution of the program to determine the possible impacts that these new measures could have on the Company’s business and financial position.

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 9


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.    Financial risk management (continued)
Exchange rate risk

The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates at June 30, 2024. All amounts are shown in US dollars.
June 30, 2024
(unaudited)
Functional currency
Net monetary position (Liability)/ AssetArgentine
Peso
Brazilian
Reais
Uruguayan
Peso
US DollarTotal
Argentine Peso (23,807)— — — (23,807)
Brazilian Reais — (510,160)— — (510,160)
US Dollar (125,558)(327,623)42,087 (21,687)(432,781)
Uruguayan Peso — — (11,040)— (11,040)
Total (149,365)(837,783)31,047 (21,687)(977,788)

The Group’s analysis shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the U.S. Dollar. The Group estimated that, other factors being constant, a hypothetical 10% appreciation/(depreciation) of the U.S. Dollar against the Brazilian real respective functional currencies for the period ended June 30, 2024 or the Uruguayan peso, or a 25% appreciation/(depreciation) of the U.S. Dollar against the Argentine peso. A portion of this effect would have been recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future revenue in U.S. Dollars (see Hedge Accounting - Cash Flow Hedge below for details).

A portion of this effect would be recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future revenue in US dollars (see Hedge Accounting - Cash Flow Hedge below for details).

June 30, 2024
(unaudited)
Functional currency
Net monetary position
Argentine
Peso
Brazilian
Reais
Uruguayan
Peso
Total
US Dollar
(31,390)(32,762)4,209 (59,943)
(Decrease) or increase in Profit before income tax
(31,390)(32,762)4,209 (59,943)


Hedge Accounting - Cash flow hedge

The Group formally documents and designates cash flow hedging relationships to hedge the foreign exchange rate risk of a portion of its highly probable future revenue in U.S. Dollars using a portion of its borrowings denominated in U.S. Dollars, currency forwards and foreign currency floating-to-fixed interest rate swaps, as needed.
 
Generally, the principal amounts of long-term borrowings (non-derivative financial instruments) and notional values of foreign currency forward contracts (derivative financial instruments) are designated as hedging instruments. These instruments are exposed to foreign currency risks, mainly Brazilian Reais/ U.S. Dollar related to operations in Brazil and Argentine Peso/U.S. Dollar in Argentina related to operations in Argentina. As of June 2024 and 2023, approximately 10% of projected revenue within those countries qualify as highly probable forecast transactions for hedge accounting purposes and are designated as hedged items

The Group prepares formal documentation to support hedge designation, including an explanation of how the designation of the hedging relationship is aligned with the Group’s Risk Management Policy, identification of the hedging
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 10


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.    Financial risk management (continued)
instrument, the hedged transactions, the nature of the risk being hedged and an analysis which demonstrates that the hedge is expected to be highly effective. The Group reassesses the prospective and retrospective effectiveness of the hedge on an ongoing basis comparing the foreign currency component of the carrying amount of the hedging instruments and of the highly probable future revenue.
 
Under cash flow hedge accounting, the effect of changes in foreign currency exchange rates on derivative and non-derivative hedging instruments are not immediately recognized in profit or loss but are reclassified from equity to profit or loss in the periods when the future revenue occur, thus allowing for a more appropriate presentation of the results for the period reflecting the strategy in the Group’s Risk Management Policy.

The Group expects that the cash flows will occur and affect profit or loss between 2024 and 2025.

For the six-month period ended June 30, 2024, a loss before income tax of US$ 531 was recognized in other comprehensive income (June 30, 2023: US$7,313) and US$ 26,550 (June 30, 2023: US$ 35,735) was reclassified from equity to profit or loss within “Financial results, net”.

Interest rate risk

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans at June 30, 2024 (all amounts are shown in US dollars):
June 30, 2024
(unaudited)
Functional currency
Rate per currency denominationArgentine
Peso
Brazilian
Reais
US DollarTotal
Fixed rate:
Argentine Peso 19,176 — — 19,176 
Brazilian Reais — 12,480 — 12,480 
US Dollar 34,136 366,268 197,647 598,051 
Subtotal fixed-rate borrowings 53,312 378,748 197,647 629,707 
Variable rate:
Brazilian Reais — 187,508  187,508 
US Dollar 13,456 — — 13,456 
Subtotal variable-rate borrowings 13,456 187,508  200,964 
Total borrowings as per analysis 66,768 566,256 197,647 830,671 

At June 30, 2024, if interest rates on floating-rate borrowings had been 1% higher (or lower) with all other variables held constant, Profit before income tax for the period would decrease as follows:
June 30, 2024
(unaudited)
Functional currency
Rate per currency denominationArgentine
Peso
Brazilian
Reais
Total
Variable rate:
Brazilian Reais (1,875)(1,875)
US Dollar (135)(135)
Decrease in profit before income tax (135)(1,875)(2,010)

Credit risk
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 11


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.    Financial risk management (continued)

As of June 30, 2024, six banks accounted for more than 75% of the total cash deposited (J.P. Morgan, Portfolio Personal Inversiones, Banco do Brasil, Credit Agricole, Galicia and Itaú).

Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2024:

§    Futures / Options
June 30, 2024
Type ofQuantities (thousands)
(**)
NotionalMarket
Profit / (Loss)
(*)
derivative contractamountValue Asset/ (Liability)
(unaudited)(unaudited)
Futures:
Sale
Corn (10)(1,784)(26)(26)
Soybean (1)(261)(13)(13)
Wheat 703 (9)(9)
Sugar 61 29,399 1,913 2,417 
Total 53 28,057 1,865 2,369 

(*) Included in line "Gain / (Loss) from commodity derivative financial instruments" Note 8.
(**) All quantities expressed in tons except otherwise indicated.

Commodity future contract fair values are computed with reference to quoted market prices on future exchanges.

Other derivative financial instruments

Floating-to-fixed interest rate swaps
In December 2020 the Group's subsidiary in Brazil, Adecoagro Vale do Ivinhema entered into an interest rate swap agreement with Itaú BBA for an aggregate amount of US$ 400 million. According to the swap instrument, Adecoagro Vale do Ivinhema receives IPCA (Extended National Consumer Price Index) plus 4.24% per year and pays CDI (an interbank floating interest rate in Reais) plus 1,85% per year. This swap expires semiannually until December 2026. The swap agreement resulted in a recognition of a loss of US$ 1.3 million for the six-month period ended June 30, 2024.

Currency forward
During the six months period ended on June 30, 2024, the Group entered into several currency forward contracts with some Brazilian banks, in order to hedge the fluctuation of the Brazilian Reais against the U.S. Dollar, for an aggregate amount of US$ 5 million. These financial instruments resulted in the recognition of a gain amounting to US$ 0.09 million for the six months period ended June 30, 2024. The currency forward contracts are due in September 2024.
Also, during the six months period ended on June 30, 2024, the Group entered into several currency forward contracts with some Argentine banks, in order to hedge the fluctuation of the Argentine Peso against the U.S. Dollar, for an aggregate amount of US$ 14 million. These financial instruments resulted in a non-significant loss for the six months period ended June 30, 2024. The currency forward contracts are due in December 2024.
Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 12


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information


We are engaged in agricultural, manufacturing and land transformation activities.

Our agricultural activities consist of (i) harvesting certain agricultural products, including crops, rough rice, and sugarcane, either for sale to third parties or for our own internal use as inputs in manufacturing processes, and (ii) producing fluid milk.

Our manufacturing activities consist of (i) selling manufactured products, including processed peanuts, sunflower rice, sugar, ethanol and energy, among others, (ii) producing UHT and UP milk, powder milk and semi-hard cheese, among others; and (iii) providing services, such as grain warehousing and conditioning and handling and drying services, among others.

Our land transformation activities relate to the acquisition of farmlands or businesses with underdeveloped or underutilized agricultural land and the implementation of production technology and agricultural best practices on these farmlands to enhance yields and increase their value for potential realization through sale.

According to IFRS 8, operating segments are identified based on the ‘management approach’. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is the Management Committee. IFRS 8 stipulates external segment reporting based on our internal organizational and management structure and on internal financial reporting to the chief operating decision maker.

Effective for our year ended December 31, 2023, our CODM changed its internal reporting mainly to refine the way it views our farming business and its interaction with our overarching land transformation activities embedded within such farming business. Previously, our CODM reviewed the results of our land transformation strategy as a separate activity upon disposition of transformed farmlands and/or other rural properties, or the acquisition of an under-utilized land. As from the fourth quarter of 2023, our CODM started allocating any profit from disposition of a farmland or, a bargain purchase gain, as part of the farming activity where such farmland belongs. Our CODM believes that this allocation better aligns the activities which were conducted to achieve the full growth potential of the land through the years with its ultimate realization of incremental value. Therefore, any profit on the realization of land transformation activities is now included in the respective farming business operating segment to which the disposed/acquired land belongs.

Also, our CODM started allocating the results of our minor cattle activities – which were previously reported as part of “all other segments” since they did not meet the quantitative thresholds for disclosure – to the farmland where the cattle is assigned. We maintain cattle as a complementary activity to the farming activities rather than as a separate business itself. Cattle helps preserve the value and productive capacity of the farmlands, avoiding the growth of undesired weed.

These changes resulted in revisions to the financial information provided to our CODM on a recurring basis in their evaluation of our financial performance and the decision-making process. Our CODM believes these changes better reflect the performance of our reportable segments. Accordingly, we changed the segment reporting under IFRS 8 as further described below. Previously reported segment financial information was recast for the six-month period ended June 30, 2023 to reflect the new reportable segments’ structure.

Based on the foregoing, we operate in two major lines of business, namely, “Farming” and “Sugar, Ethanol and Energy”.

The ‘Farming’ business is further comprised of three reportable segments:

‘Crops’ Segment which consists of planting, harvesting and sale of grains, oilseeds and fibers (including wheat, corn, soybeans, peanuts, cotton and sunflowers, among others), and to a lesser extent the provision of grain warehousing/conditioning and handling and drying services to third parties. Each underlying crop in this segment does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several factors, some of them out of our control. Management is focused on the long-term performance of the productive land, and to that extent, the performance is assessed
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 13


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information (continued)

considering the aggregated combination, if any, of crops planted in the land. A single manager is responsible for the management of operating activity of all crops rather than for each individual crop.

‘Rice’ Segment which consists of planting, harvesting, processing and marketing of rice.

‘Dairy’ Segment which consists of the production and sale of raw milk and industrialized products, including UHT, cheese and powder milk among others.

‘Sugar, Ethanol and Energy’ Segment which consists of cultivating sugarcane which is processed in owned sugar mills, transformed into ethanol, sugar and electricity and then marketed;

Total segment assets and liabilities are measured in a manner consistent with that of the Interim Financial Statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the asset.

As further discussed in Note 32 to our consolidated financial statements for the year ended December 31, 2023, we apply IAS 29 to our operations in Argentina. According to IAS 29, all Argentine Peso-denominated non-monetary items in the statement of financial position are adjusted by applying a general price index from the date they were initially recognized to the end of the reporting period. Likewise, all Argentine Peso-denominated items in the statement of income are expressed in terms of the measuring unit current at the end of the reporting period, consequently, income statement items are adjusted by applying a general price index on a monthly basis from the dates they were initially recognized in the financial statements to the end of the reporting period. This process is called “re-measurement”. Once the re-measurement process is completed, all Argentine Peso denominated accounts are translated into U.S. Dollars, which is our reporting currency, applying the guidelines in IAS 21 “The Effects of Changes in Foreign Exchange Rates”(“IAS 21”). IAS 21 requires that amounts be translated at the closing rate at the date of the most recent statement of financial position. This process is called “translation”. The re-measurement and translation processes are applied on a monthly basis until year-end. Due to these processes, the re-measured and translated results of operations for a given month are subject to change until year-end, affecting comparison and analysis.

However, the internal reporting reviewed by our CODM departs from the application of IAS 29 and IAS 21 re-measurement and translation processes discussed above. For segment reporting purposes, the segment results of Argentine operations for each reporting period were adjusted for inflation and translated into the reporting currency using the reporting period average exchange rate. The translated amounts were not subsequently re-measured and translated in accordance with the IAS 29 and IAS 21 guidelines. In order to evaluate the segment’s performance, results of operations in Argentina are based on monthly data adjusted for inflation and converted into the monthly US dollar average exchange rate. These converted amounts are not subsequently readjusted and reconverted as described under IAS 29 and IAS 21. It should be noted that this translation methodology for evaluating segment information is the same that we use to translate results of operations from our subsidiaries from countries that have not been designated hyperinflationary economies because it allows for a more accurate analysis of the economic performance of its business as a whole. Our CODM believes that the exclusion of the re-measurement and translation processes from the segment reporting structure allows for a more useful presentation and facilitates period-to-period comparison and performance analysis.

The primary operating performance measure for all of our segments is “Profit or Loss from Operations” which we measure in accordance with the procedure outlined above.
The following tables show a reconciliation of the reportable segments information reviewed by our CODM with the reportable segment information measured in accordance with IAS 29 and IAS 21 as per the Interim Financial Statements for the periods presented. These tables do not include information for the Sugar, Ethanol and Energy reportable segment since this information is not affected by the application of IAS 29 and therefore there is no difference between the information reviewed by our CODM and the information included in the Interim Financial Statements:
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 14


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information (continued)

Segment reconciliation for the six-month period ended
June 30,2024 (unaudited)CropsRiceDairy
Total segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of income
Revenue108,465 5,911 114,376 128,911 7,251 136,162 125,834 8,684 134,518 
Cost of revenue(102,589)(5,615)(108,204)(100,321)(3,901)(104,222)(103,153)(6,701)(109,854)
Initial recognition and changes in fair value of biological assets and agricultural produce 26,808 2,872 29,680 31,343 5,232 36,575 4,012 479 4,491 
Changes in net realizable value of agricultural produce after harvest (12,394)(1,695)(14,089)(1)(6)(7)— — — 
Margin on Manufacturing and Agricultural Activities Before Operating Expenses 20,290 1,473 21,763 59,932 8,576 68,508 26,693 2,462 29,155 
General and administrative expenses (14,289)(534)(14,823)(8,955)(608)(9,563)(5,239)(462)(5,701)
Selling expenses (6,949)(475)(7,424)(15,541)(899)(16,440)(11,554)(991)(12,545)
Other operating income, net 7,962 (3,719)4,243 (14,242)827 (13,415)2,051 331 2,382 
Profit / (loss) from Operations 7,014 (3,255)3,759 21,194 7,896 29,090 11,951 1,340 13,291 
Depreciation of Property, plant and equipment and amortization of Intangible assets (3,659)(361)(4,020)(6,752)(526)(7,278)(5,623)(526)(6,149)
Net loss from Fair value adjustment of Investment property(566)(3,868)(4,434)(16,023)652 (15,371)— — — 
June 30,2024 (unaudited)CorporateTotal
Total segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of income
Revenue— — — 651,346 21,846 673,192 
Cost of revenue— — — (523,590)(16,217)(539,807)
Initial recognition and changes in fair value of biological assets and agricultural produce — — — 99,117 8,583 107,700 
Changes in net realizable value of agricultural produce after harvest — — — (11,878)(1,701)(13,579)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses    214,995 12,511 227,506 
General and administrative expenses (11,527)(1,004)(12,531)(52,239)(2,608)(54,847)
Selling expenses (27)(15)(42)(66,341)(2,380)(68,721)
Other operating income, net 406 409 3,693 (2,558)1,135 
Profit / (loss) from Operations(11,148)(1,016)(12,164)100,108 4,965 105,073 
Depreciation of Property, plant and equipment and amortization of Intangible assets(712)(63)(775)(104,390)(1,476)(105,866)
Net loss from Fair value adjustment of Investment property— — — (16,589)(3,216)(19,805)


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 15


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information (continued)
Segment reconciliation for the six-month period ended
June 30,2023 (unaudited)CropsRiceDairy
Total segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of income
Revenue109,715 (2,249)107,466 135,735 (698)135,037 122,312 (2,277)120,035 
Cost of revenue(96,858)2,021 (94,837)(96,392)(75)(96,467)(102,998)1,824 (101,174)
Initial recognition and changes in fair value of biological assets and agricultural produce968 (413)555 7,687 (86)7,601 10,114 (343)9,771 
Changes in net realizable value of agricultural produce after harvest231 — 231 — — — — — — 
Margin on Manufacturing and Agricultural Activities Before Operating Expenses14,056 (641)13,415 47,030 (859)46,171 29,428 (796)28,632 
General and administrative expenses(9,283)278 (9,005)(8,443)168 (8,275)(5,326)133 (5,193)
Selling expenses(12,248)226 (12,022)(17,152)278 (16,874)(12,885)267 (12,618)
Other operating income, net646 (20)626 171 178 (204)(201)
(Loss) / profit from Operations(6,829)(157)(6,986)21,606 (406)21,200 11,013 (393)10,620 
Depreciation of Property, plant and equipment and amortization of Intangible assets(4,216)171 (4,045)(6,220)159 (6,061)(5,287)147 (5,140)
Net loss from Fair value adjustment of Investment property(1,103)21 (1,082)(252)(248)— — — 
June 30,2023 (unaudited)CorporateTotal
Total segment reportingAdjustmentTotal as per statement of incomeTotal segment reportingAdjustmentTotal as per statement of income
Revenue— — — 654,355 (5,224)649,131 
Cost of revenue— — — (491,781)3,770 (488,011)
Initial recognition and changes in fair value of biological assets and agricultural produce— — — 91,207 (842)90,365 
Changes in net realizable value of agricultural produce after harvest— — — (184)— (184)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses   253,597 (2,296)251,301 
General and administrative expenses(11,375)110 (11,265)(46,726)689 (46,037)
Selling expenses(26)— (26)(66,098)771 (65,327)
Other operating income, net(105)— (105)(4,991)(10)(5,001)
(Loss) / profit from Operations(11,506)110 (11,396)135,782 (846)134,936 
Depreciation of Property, plant and equipment and amortization of Intangible assets(615)18 (597)(88,371)495 (87,876)
Net loss from Fair value adjustment of Investment property— — — (1,355)25 (1,330)

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 16


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information (continued)
Segment analysis for the six-month period ended June 30, 2024 (unaudited)
FarmingSugar, Ethanol and EnergyCorporateTotal
CropsRiceDairyFarming subtotal
Revenue108,465 128,911 125,834 363,210288,136 — 651,346
Cost of revenue(102,589)(100,321)(103,153)(306,063)(217,527)— (523,590)
Initial recognition and changes in fair value of biological assets and agricultural produce 26,808 31,343 4,012 62,16336,954 — 99,117
Changes in net realizable value of agricultural produce after harvest (12,394)(1)— (12,395)517 — (11,878)
Margin on manufacturing and agricultural activities before operating expenses 20,290 59,932 26,693 106,915108,080  214,995
General and administrative expenses (14,289)(8,955)(5,239)(28,483)(12,229)(11,527)(52,239)
Selling expenses (6,949)(15,541)(11,554)(34,044)(32,270)(27)(66,341)
Other operating (loss) / income, net 7,962 (14,242)2,051 (4,229)7,516 406 3,693
(Loss) / profit from Operations7,014 21,194 11,951 40,15971,097 (11,148)100,108
Depreciation of Property, plant and equipment and amortization of Intangible assets(3,659)(6,752)(5,623)(16,034)(87,644)(712)(104,390)
Net loss from Fair value adjustment of Investment property(566)(16,023)— (16,589)— — (16,589)
Transfer of revaluation surplus derived from disposals of assets before taxes9.024 — — 9.024 — — 9.024
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized) 25,682 22,080 (14,629)33,1334,749 — 37,882
Initial recognition and changes in fair value of biological assets and agricultural produce (realized) 1,126 9,263 18,641 29,03032,205 — 61,235
Changes in net realizable value of agricultural produce after harvest (unrealized) (5,088)— — (5,088)— — (5,088)
Changes in net realizable value of agricultural produce after harvest (realized) (7,306)(1)— (7,307)517 — (6,790)
As of June 30, 2024:
Farmlands and farmland improvements, net 424,009 184,099 2,327 610,43578,323 — 688,758
Machinery, equipment, building and facilities, and other fixed assets, net 38,168 102,005 130,866 271,039247,298 — 518,337
Bearer plants, net 1,200 — — 1,200346,439 — 347,639
Work in progress 445 1,144 13,674 15,26312,213 — 27,476
Right of use asset9,563 18,626 640 28,829338,915 461 368,205
Investment property 28,044 5,320 — 33,364— — 33,364
Goodwill 9,713 5,903 — 15,6163,929 — 19,545
Biological assets 42,173 14,661 38,821 95,65597,209 — 192,864
Finished goods 74,031 20,106 12,027 106,164131,576 — 237,740
Raw materials, Stocks held by third parties and others 79,030 99,360 19,802 198,19219,455 — 217,647
Total segment assets 706,376 451,224 218,157 1,375,7571,275,357 461 2,651,575
Borrowings 23,087 53,025 43,680 119,792577,419 133,460 830,671
Lease liabilities12,084 20,312 678 33,074312,234 259 345,567
Total segment liabilities 35,171 73,337 44,358 152,866889,653 133,719 1,176,238
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 17


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.    Segment information (continued)
Segment analysis for the six-month period ended June 30, 2023 (unaudited)
FarmingSugar, Ethanol and EnergyCorporateTotal
CropsRiceDairyFarming subtotal
Revenue109,715 135,735 122,312 367,762 286,593 — 654,355 
Cost of revenue(96,858)(96,392)(102,998)(296,248)(195,533)— (491,781)
Initial recognition and changes in fair value of biological assets and agricultural produce 968 7,687 10,114 18,769 72,438 — 91,207 
Changes in net realizable value of agricultural produce after harvest 231 — — 231 (415)— (184)
Margin on manufacturing and agricultural activities before operating expenses 14,056 47,030 29,428 90,514 163,083  253,597 
General and administrative expenses (9,283)(8,443)(5,326)(23,052)(12,299)(11,375)(46,726)
Selling expenses (12,248)(17,152)(12,885)(42,285)(23,787)(26)(66,098)
Other operating income / (loss), net 646 171 (204)613 (5,499)(105)(4,991)
(Loss) / profit from Operations(6,829)21,606 11,013 25,790 121,498 (11,506)135,782 
Depreciation of Property, plant and equipment and amortization of Intangible assets(4,216)(6,220)(5,287)(15,723)(72,033)(615)(88,371)
Net loss from Fair value adjustment of Investment property(1,103)(252)— (1,355)— — (1,355)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized) (851)3,837 (5,725)(2,739)36,857 — 34,118 
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)1,819 3,850 15,839 21,508 35,581 — 57,089 
Changes in net realizable value of agricultural produce after harvest (unrealized) 107 — — 107 — — 107 
Changes in net realizable value of agricultural produce after harvest (realized) 124 — — 124 (415)— (291)
As of December 31, 2023:
Farmlands and farmland improvements, net 447,772 178,291 1,462 627,525 78,322 — 705,847 
Machinery, equipment, building and facilities, and other fixed assets, net 24,250 71,584 86,670 182,504 264,561 — 447,065 
Bearer plants, net 753 — — 753 375,089 — 375,842 
Work in progress 10 291 5,584 5,885 14,926 — 20,811 
Right of use assets13,608 15,076 29 28,713 377,420 580 406,713 
Investment property 29,192 4,172 — 33,364 — — 33,364 
Goodwill 6,095 3,704 — 9,799 4,510 — 14,309 
Biological assets 55,545 32,843 23,191 111,579 116,458 — 228,037 
Finished goods 33,407 9,306 9,927 52,640 126,971 — 179,611 
Raw materials, Stocks held by third parties and others 26,779 16,577 11,230 54,586 21,854 — 76,440 
Total segment assets 637,411 331,844 138,093 1,107,348 1,380,111 580 2,488,039 
Borrowings 44,692 (9,207)84,557 120,042 604,827 180,080 904,949 
Lease liabilities12,341 13,475 57 25,873 352,238 399 378,510 
Total segment liabilities 57,033 4,268 84,614 145,915 957,065 180,479 1,283,459 

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 18


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)






4.    Revenue

The following tables show our various sources of revenue for the periods indicated:
Six-months ended June 30,
20242023
(unaudited)
Revenue of manufactured products and services rendered:
Ethanol109,870 106,622 
Sugar155,005 154,545 
Energy (*)13,804 13,310 
Peanut18,313 31,559 
Sunflower3,389 5,054 
Cotton1,986 4,435 
Rice (*)117,014 119,414 
Fluid milk (UHT)63,495 54,251 
Powder milk23,904 22,490 
Other dairy products33,529 23,260 
Services5,329 4,233 
Rental income2,134 1,263 
Others22,379 22,856 
Subtotal manufactured products and services rendered570,151 563,292 
Agricultural produce and biological assets:
Soybean46,315 35,309 
Corn27,211 9,597 
Wheat9,163 8,000 
Sunflower2,439 8,594 
Barley1,733 3,805 
Milk3,983 11,428 
Cattle2,059 2,145 
Cattle for dairy5,832 4,760 
Others4,306 2,201 
Subtotal agricultural produce and biological assets103,041 85,839 
Total revenue673,192 649,131 

(*) Includes revenue of mwh of energy and tons of rice produced by third parties for an amount of US$ 0.6 million and US$ 0.7 million, respectively (June 30, 2023: revenue of mwh of energy and tons of rice produced by third parties for an amount of US$ 23.5 million).

Commitments to sell commodities at a future date

The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn through sales forward contracts. Those contracts are held for purposes of delivery the non-financial instrument in accordance with the Group’s expected sales. Accordingly, as the own use exception criteria are met, those contracts are not recorded as derivatives.

The notional amount of these contracts is US$ 116.2 million as of June 30, 2024 (June 30, 2023: US$ 113.1 million) comprised primarily of 29,098 liters of ethanol (US$ 15 million), 376,797 mwh of energy (US$ 16 million), 141,063 tons of sugar
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 19


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

4.    Revenue (continued)

(US$ 63 million), 34,068 tons of soybean (US$ 10 million), 33,797 tons of corn (US$ 6 million) and 20,088 tons of wheat (US$ 5 million) which expire between July 2024 and December 2024.

5.    Cost of revenue
The following tables show our cost of revenue for the periods indicated:
Six-month ended June 30, 2024 (unaudited)
Crops
Rice
Dairy
Sugar, Ethanol and Energy
Total
Finished goods at the beginning of 2024 (Note 18)
33,407 9,306 9,927 126,971 179,611 
Cost of production of manufactured products (Note 6)
20,651 119,491 102,265 249,158 491,565 
Purchases
14,125 1,931 6,250 356 22,662 
Agricultural produce
164,471 — 9,815 6,007 180,293 
Transfer to raw material
(67,602)(6,773)— — (74,375)
Direct agricultural selling expenses
14,742 — — — 14,742 
Tax recoveries (i)
— — — (17,297)(17,297)
Changes in net realizable value of agricultural produce after harvest
(14,089)(7)— 517 (13,579)
Finished goods as of June 30, 2024 (Note 18)
(74,031)(20,106)(12,027)(131,576)(237,740)
Exchange differences
16,530 380 (6,376)(16,609)(6,075)
Cost of revenues and direct agricultural selling expenses period
108,204 104,222 109,854 217,527 539,807 
(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.
Six-month ended June 30, 2023 (unaudited)
Crops
Rice
Dairy
Sugar, Ethanol and Energy
Total
Finished goods at the beginning of 2023
37,539 13,659 12,825 88,693 152,716 
Cost of production of manufactured products (Note 6)
31,170 87,129 89,361 200,945 408,605 
Purchases
10,409 14,942 — 615 25,966 
Agricultural produce
121,012 3,582 11,428 9,502 145,524 
Transfer to raw material
(59,172)(4,296)(137)— (63,605)
Direct agricultural selling expenses
7,238 — — — 7,238 
Tax recoveries (i)
— — — (7,174)(7,174)
Changes in net realizable value of agricultural produce after harvest
231 — — (415)(184)
Finished goods as of June 30, 2023
(53,377)(18,085)(12,610)(101,189)(185,261)
Exchange differences
(213)(464)307 4,556 4,186 
Cost of revenues and direct agricultural selling expenses period
94,837 96,467 101,174 195,533 488,011 
(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 20


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





6.    Expenses by nature

The following table provides the additional disclosure required on the nature of expenses and their relationship to the function within the Group:

Six-month ended June 30, 2024 (unaudited)
Cost of production of manufactured products (Note 5)General and Administrative ExpensesSelling ExpensesTotal
CropsRiceDairySugar, Ethanol and EnergyTotal
Salaries, social security expenses and employee benefits
2,402 7,981 6,127 20,248 36,758 16,920 5,782 59,460
Raw materials and consumables
— 640 12,728 2,767 16,135 — — 16,135
Depreciation and amortization
2,034 2,448 2,562 68,010 75,054 11,691 730 87,475
Depreciation of right-of-use assets
— 25 — 4,282 4,307 13,886 113 18,306
Fuel, lubricants and others
126 1,128 787 18,466 20,507 630 202 21,339
Maintenance and repairs
978 2,642 2,477 16,186 22,283 2,000 461 24,744
Freights
63 8,916 1,629 301 10,909 — 30,568 41,477
Export taxes / selling taxes
— — — —  — 15,744 15,744
Export expenses
— — — —  — 7,125 7,125
Contractors and services
835 585 190 6,929 8,539 — — 8,539
Energy transmission
— — — —  — 1,135 1,135 
Energy power
474 1,928 1,338 384 4,124 327 81 4,532
Professional fees
39 178 52 400 669 5,347 395 6,411
Other taxes
11 157 101 1,938 2,207 351 15 2,573
Contingencies
— — — —  714 — 714
Lease expense and similar arrangements
112 572 77 — 761 772 288 1,821
Third parties raw materials
3,809 15,260 36,767 7,673 63,509 — — 63,509
Tax recoveries
— — — (97)(97)— — (97)
Others
356 1,468 1,348 4,186 7,358 2,209 6,082 15,649
Subtotal
11,239 43,928 66,183 151,673 273,023 54,847 68,721 396,591
Own agricultural produce consumed
9,412 75,563 36,082 97,485 218,542 — — 218,542
Total
20,651 119,491 102,265 249,158 491,565 54,847 68,721 615,133


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 21



Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

6.    Expenses by nature (continued)

Six-month ended June 30, 2023 (unaudited)
Cost of production of manufactured products (Note 5)General and Administrative ExpensesSelling ExpensesTotal
CropsRiceDairySugar, Ethanol and EnergyTotal
Salaries, social security expenses and employee benefits
2,177 6,934 5,877 18,098 33,086 17,973 4,750 55,809 
Raw materials and consumables 242 1,408 15,859 3,528 21,037 — — 21,037 
Depreciation and amortization
2,327 2,109 2,162 51,358 57,956 9,918 671 68,545 
Depreciation of right-of-use assets— 24 457 4,635 5,116 8,051 301 13,468 
Fuel, lubricants and others
110 558 783 16,263 17,714 318 154 18,186 
Maintenance and repairs
640 1,486 960 11,233 14,319 788 355 15,462 
Freights
60 8,152 1,368 27 9,607 — 29,883 39,490 
Export taxes / selling taxes
— — — —  — 14,396 14,396 
Export expenses
— — — —  — 7,672 7,672 
Contractors and services
961 1,450 54 4,508 6,973 — — 6,973 
Energy transmission
— — — —  — 1,232 1,232 
Energy power
743 1,766 1,365 407 4,281 226 40 4,547 
Professional fees
33 60 45 352 490 4,869 439 5,798 
Other taxes
11 108 79 1,972 2,170 378 23 2,571 
Contingencies
— — — —  820 — 820 
Lease expense and similar arrangements
64 410 114 — 588 508 197 1,293 
Third parties raw materials
2,209 13,689 32,902 3,669 52,469 — — 52,469 
Tax recoveries
— — — (220)(220)— — (220)
Others
446 1,146 838 1,508 3,938 2,188 5,214 11,340 
Subtotal
10,023 39,300 62,863 117,338 229,524 46,037 65,327 340,888 
Own agricultural produce consumed
21,147 47,829 26,498 83,607 179,081 — — 179,081 
Total
31,170 87,129 89,361 200,945 408,605 46,037 65,327 519,969 

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 22


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





7.    Salaries and social security expenses

Six-month period ended June 30,
20242023
(unaudited)
Wages and salaries 76,057 71,328 
Social security costs 23,955 19,874 
Equity-settled share-based compensation 3,466 4,865 
103,478 96,067 

8.    Other operating income / (expense), net
Six-month period ended June 30,
20242023
(unaudited)
Gain from disposals of farmland and other assets (Note 20)6,050 — 
Gain /(loss) from commodity derivative financial instruments9,746 (3,470)
(Loss) / gain from disposal of other property items(332)1,162 
Net loss from fair value adjustment of investment property(19,805)(1,330)
Others 5,476 (1,363)
1,135 (5,001)


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 23


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





9.    Financial results, net
Six-month period ended June 30,
20242023
(unaudited)
Finance income:
- Interest income 4,566 3,151 
- Foreign exchange gain, net— 35,350 
- Gain from interest rate/foreign exchange rate derivative financial instruments— 744 
- Other income 459 36,604 
Finance income 5,025 75,849 
Finance costs:
- Interest expense (16,516)(33,440)
- Finance cost related to lease liabilities(28,013)(16,025)
- Cash flow hedge – transfer from equity(26,312)(33,864)
- Foreign exchange losses, net (22,023)— 
- Taxes (4,159)(3,565)
- Loss from interest rate/foreign exchange rate derivative financial instruments(709)— 
- Other expenses (5,295)(4,301)
Finance costs (103,027)(91,195)
Other financial results - Net gain/(loss) of inflation effects on the monetary items5,617 (12,336)
Total financial results, net (92,385)(27,682)

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 24



Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





10.    Taxation

Taxes on income in the interim periods are recognized using the tax rate that would be applicable to expected total annual earnings.

June 30,
2024
June 30,
2023
(unaudited)
Current income tax (2,011)(2,985)
Deferred income tax 46,535 (35,144)
Income tax benefit / (expense)44,524 (38,129)

The gross movement on the deferred income tax liability is as follows:
June 30,
2024
June 30,
2023
(unaudited)
Beginning of period (366,554)(292,656)
Exchange differences (140,242)(15,256)
Effect of fair value valuation for farmlands124,511 11,455 
Disposal of farmland (Note 20)2,080 — 
Tax charge relating to cash flow hedge (i) (9,335)(9,739)
Others2,167 1,542 
Income tax benefit / (expense)46,535 (35,144)
End of period (340,838)(339,798)

(i)It relates to the amount reclassified of US$ 26,019 loss and US$ 8,861 loss from equity to profit and loss for the six-month period ended June 30, 2024 and 2023, respectively.

Tax Inflation Adjustment in Argentina

The information of Tax Inflation Adjustment in Argentina which is described in detail in Note 10 to annual consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 25



Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.    Taxation (continued)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

June 30,
2024
June 30,
2023
(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries (2,061)(35,488)
Non-deductible items 324 (967)
Effect of the changes in the statutory income tax rate in Argentina— 3,664 
Non-taxable income6,006 6,696 
Tax losses where no deferred tax asset was recognized (18)(6,390)
Previously unrecognized tax losses now recouped to reduce tax expenses (1)
9,873 19,028 
Effect of IAS 29 on Argentina’s shareholder’s equity and deferred income tax.
27,202 (23,683)
Others 3,198 (989)
Income tax benefit / (expense)44,524 (38,129)
(1) 2024 includes 9,873 of adjustment by inflation of tax loss carryforwards in Argentina (18,567 in 2023).

OECD Pillar Two model rules

The Group is within the scope of the OECD (Organization for Economic Cooperation and Development) Pillar Two model rules (the Global Anti-base Erosion rules or GloBE). Pillar Two legislation was enacted in Luxembourg, the jurisdiction in which the company is incorporated, and came into effect as from January 1, 2024.

As of June 30, 2024, we did not have any significant impact as a consequence of Pillar Two rules.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 26


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





11.    Property, plant and equipment, net

Changes in the Group’s property, plant and equipment for the six-month periods ended June 30, 2024 and 2023 were as follows:

FarmlandsFarmland improvementsBuildings and facilitiesMachinery, equipment, furniture and
Fittings
Bearer plantsOthersWork in progressTotal
Six-month period ended June 30, 2023
Opening net book amount. 727,591 16,742 268,380 91,212 352,727 29,614 79,089 1,565,355 
Exchange differences 32,790 475 11,417 19,153 24,825 666 3,171 92,497 
Additions — — 9,651 43,384 62,682 339 21,704 137,760 
Revaluation surplus(33,155)— — — — — — (33,155)
Transfers — 594 6,052 11,920 — 20 (18,586)— 
Disposals — — (61)(2,052)— (17)(1)(2,131)
Reclassification to non-income tax credits (*) — — — (118)— — — (118)
Depreciation— (1,810)(14,406)(35,483)(33,807)(1,296)— (86,802)
Closing net book amount 727,226 16,001 281,033 128,016 406,427 29,326 85,377 1,673,406 
At June 30, 2023 (unaudited)
Cost 727,226 47,217 553,523 965,459 946,330 53,870 85,377 3,379,002 
Accumulated depreciation — (31,216)(272,490)(837,443)(539,903)(24,544)— (1,705,596)
Net book amount 727,226 16,001 281,033 128,016 406,427 29,326 85,377 1,673,406 
Six-month period ended June 30, 2024
Opening net book amount 694,202 11,645 241,156 196,995 375,842 8,914 20,811 1,549,565 
Exchange differences 350,046 4,031 57,247 1,549 (50,029)4,304 160 367,308 
Additions — — 9,528 42,051 71,726 3,812 14,739 141,856 
Revaluation surplus(355,597)— — — — — — (355,597)
Transfers — 51 3,900 4,187 — 96 (8,234)— 
Disposals (13,732)(8)(924)(1,390)— (3)— (16,057)
Reclassification to non-income tax credits (*) — — — (144)— — — (144)
Depreciation— (1,880)(15,451)(36,403)(49,900)(1,087)— (104,721)
Closing net book amount 674,919 13,839 295,456 206,845 347,639 16,036 27,476 1,582,210 
At June 30, 2024 (unaudited)
Cost 674,919 47,500 597,728 1,126,671 987,864 41,840 27,476 3,503,998 
Accumulated depreciation  (33,661)(302,272)(919,826)(640,225)(25,804)— (1,921,788)
Net book amount 674,919 13,839 295,456 206,845 347,639 16,036 27,476 1,582,210 
(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of June 30, 2024, ICMS tax credits were reclassified to trade and other receivables.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 27


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.    Property, plant and equipment, net (continued)

The Group determined the valuation of farmlands (US$ 683 million as of June 30, 2024) using, a “Sales Comparison Approach” prepared by an independent expert. Under the Sales Comparison Approach, the Group uses sale prices of comparable properties further adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare (Level 3). The Group estimated that, other factors being constant, a 10% reduction on the sales price as of June 30, 2024 would have reduced the value of the farmlands by US$ 68.3 million, which would impact, net of its tax effect, the "Revaluation surplus" item in the statement of Changes in Shareholders' Equity.

Depreciation charges are included in “Cost of production of Biological Assets”, “Cost of production of manufactured products”, “General and administrative expenses”, “Selling expenses”, as appropriate, and/or capitalized in “Property, plant and equipment” for the six-month periods ended June 30, 2024 and 2023.

As of June 30, 2024, borrowing costs of US$ 2,384 (June 30, 2023: US$ 1,600) were capitalized as components of the cost of acquisition or construction of qualifying assets.

Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 217,831 as of June 30, 2024 (June 30, 2023: U$S 349,231).


12.    Right of use assets

Changes in the Group’s right of use assets for the six-month periods ended June 30, 2024 and 2023 were as follows:

Agricultural partnership (*)OthersTotal
(unaudited)
As of June 30, 2023
Opening net book amount333,562 26,619 360,181 
Exchange differences27,272 1,862 29,134 
Additions and re-measurement45,644 1,452 47,096 
Depreciation(32,023)(5,706)(37,729)
Closing net book amount374,455 24,227 398,682 
As of June 30, 2024
Opening net book amount384,844 21,869 406,713 
Exchange differences (37,758)844 (36,914)
Additions and re-measurement37,681 8,091 45,772 
Depreciation (42,465)(4,901)(47,366)
Closing net book amount 342,302 25,903 368,205 

(*) Agricultural partnerships have an average term of 6 years.



The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 28


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





13.    Investment property

Changes in the Group’s investment property for the six-month periods ended June 30, 2024 and 2023 were as follows:
June 30,
2024
June 30,
2023
(unaudited)
Beginning of period 33,364 33,330 
Loss from fair value adjustment (Note 8)(19,805)(1,330)
Exchange differences 19,805 1,330 
End of period 33,364 33,330 
Fair value33,364 33,330 
Net book amount33,364 33,330 


The Group determined the valuation of investment properties using a “Sales Comparison Approach” prepared by an independent expert. Sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare. (Level 3). The increase /decrease in the fair value is recognized in the Statement of income under the line item “Other operating income, net”. There were no changes to the valuation techniques for any of the periods presented. The Group estimated that, other factors being constant, a 10% reduction on the Sales price as of June 30, 2024 would have reduced the value of the Investment properties on US$ 3.3 million, which would impact the line item “Net loss from fair value adjustment.”


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 29


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





14.    Intangible assets, net

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2024 and 2023 were as follows:

Goodwill
Software
Trademarks
Others
Total
As of June 30, 2023
Opening net book amount 18,544 7,742 9,101 733 36,120 
Exchange differences 919 427 334 62 1,742 
Additions— 752 762 
Amortization charge (i)— (800)(231)(43)(1,074)
Closing net book amount 19,463 8,121 9,206 760 37,550 
At June 30, 2023 (unaudited)
Cost 19,463 18,437 12,184 1,347 51,431 
Accumulated amortization — (10,316)(2,978)(587)(13,881)
Net book amount 19,463 8,121 9,206 760 37,550 
As of June 30, 2024
Opening net book amount 14,309 6,042 6,431 737 27,519 
Exchange differences5,236 1,775 2,825 (93)9,743 
Additions
— 557 — — 557 
Amortization charge (i)— (901)(241)(3)(1,145)
Closing net book amount 19,545 7,473 9,015 641 36,674 
At June 30, 2024 (unaudited)
Cost 19,545 19,240 12,319 1,251 52,355 
Accumulated amortization — (11,767)(3,304)(610)(15,681)
Net book amount 19,545 7,473 9,015 641 36,674 

(i) Amortization charges are included in “General and administrative expenses” and “Selling expenses” for the period ended June 30, 2024 and 2023, respectively.

The Group conducts an impairment test annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The last impairment test of goodwill was performed as of September 30, 2023 and no goodwill impairment was recognized.


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 30


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





15.    Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2024 and 2023 were as follows:
June 30, 2024 (unaudited)
Crops (i)
Rice (i)
Dairy (ii)
Sugarcane (i)
Total
Beginning of year
55,545 32,843 23,191 116,458 228,037 
Increase due to purchases
625 560 — — 1,185 
Initial recognition and changes in fair value of biological assets
29,680 36,575 4,491 36,954 107,700 
Decrease due to harvest / disposals
(164,779)(141,582)(48,628)(107,564)(462,553)
Costs incurred during the period
89,521 68,618 45,999 66,910 271,048 
Exchange differences
31,581 17,647 13,768 (15,549)47,447 
End of period
42,173 14,661 38,821 97,209 192,864 

June 30, 2023 (unaudited)
Crops (i)
Rice (i)
Dairy (ii)
Sugarcane (i)
Total
Beginning of year
72,843 54,125 30,045 109,431 266,444 
Increase due to purchases562 217 — — 779 
Initial recognition and changes in fair value of biological assets
555 7,601 9,771 72,438 90,365 
Decrease due to harvest / disposals
(121,121)(84,939)(43,386)(97,247)(346,693)
Costs incurred during the period
76,281 31,354 34,979 63,302 205,916 
Exchange differences
2,971 1,935 1,198 12,546 18,650 
End of period
32,091 10,293 32,607 160,470 235,461 

(i)Biological assets that are measured at fair value within level 3 of the hierarchy.
(ii)Biological assets that are measured at fair value within level 2 of the hierarchy

For those biological assets measured at fair value within level 3 of the fair value hierarchy, the Group uses valuation techniques based on unobservable inputs. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data

The discounted cash flow valuation technique and the significant unobservable inputs used to calculate the fair value of these biological assets are consistent with those described in Note 16 to of the consolidated financial statements for the year ended December 31, 2023.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 31


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.    Biological assets (continued)


Cost of production for the six-month period ended June 30, 2024:
June 30, 2024
(unaudited)
CropsRiceDairySugar, Ethanol and EnergyTotal
Salaries, social security expenses and employee benefits
3,050 7,238 5,085 6,112 21,485 
Depreciation and amortization
— — — 2,019 2,019 
Depreciation of right-of-use assets
— — — 25,144 25,144 
Fertilizers, agrochemicals and seeds
33,066 15,334 47 21,460 69,907 
Fuel, lubricants and others
530 1,251 746 1,993 4,520 
Maintenance and repairs
1,479 6,702 2,271 1,754 12,206 
Freights
3,837 1,239 105 — 5,181 
Contractors and services
10,486 28,506 — 6,296 45,288 
Feeding expenses
96 73 23,463 — 23,632 
Veterinary expenses
142 43 2,694 — 2,879 
Energy power
30 2,199 1,088 — 3,317 
Professional fees
278 120 81 164 643 
Other taxes
540 60 19 625 
Lease expense and similar arrangements
35,544 4,825 — — 40,369 
Others
252 968 389 1,949 3,558 
Subtotal
89,330 68,558 35,975 66,910 260,773 
Own agricultural produce consumed
191 60 10,024 — 10,275 
Total
89,521 68,618 45,999 66,910 271,048 


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 32


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.    Biological assets (continued)


Cost of production for the six-month period ended June 30, 2023:
June 30, 2023
(unaudited)
CropsRiceDairySugar, Ethanol and EnergyTotal
Salaries, social security expenses and employee benefits
2,329 5,056 5,106 5,818 18,309 
Depreciation and amortization
— — — 1,849 1,849 
Depreciation of right-of-use assets— — — 23,253 23,253 
Fertilizers, agrochemicals and seeds
12,151 3,422 — 22,446 38,019 
Fuel, lubricants and others
495 985 657 1,685 3,822 
Maintenance and repairs
1,638 3,291 1,955 1,270 8,154 
Freights
1,601 286 66 — 1,953 
Contractors and services
28,815 14,167 — 5,850 48,832 
Feeding expenses
1,058 39 16,806 — 17,903 
Veterinary expenses
96 36 1,709 — 1,841 
Energy power
23 1,337 1,178 — 2,538 
Professional fees
111 237 65 185 598 
Other taxes
445 151 84 33 713 
Lease expense and similar arrangements
26,766 1,729 — — 28,495 
Others
419 571 271 913 2,174 
Subtotal
75,947 31,307 27,897 63,302 198,453 
Own agricultural produce consumed
334 47 7,082  7,463 
Total
76,281 31,354 34,979 63,302 205,916 

Biological assets as of June 30, 2024 and December 31, 2023 were as follows:

June 30,
2024
December 31, 2023
(unaudited)
Non-current
Cattle for dairy production
36,774 23,191 
Breeding cattle
352 371 
Other cattle
261 144 
37,387 23,706 
Current
Breeding cattle
7,838 6,037 
Other cattle
2,047 — 
Sown land – crops
33,722 49,813 
Sown land – rice
14,661 32,023 
Sown land – sugarcane
97,209 116,458 
155,477 204,331 
Total biological assets
192,864 228,037 


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 33


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.    Biological assets (continued)


 La Niña” weather event in 2023

“La Niña” is a weather phenomenon caused by the fluctuation of the ocean temperatures in the central and eastern equatorial Pacific due to changes in the atmosphere, which affects the climate of several regions worldwide. When the temperature of the ocean decreases by 0.5°C below the five-quarter average, a so called “La Niña” weather pattern begins. This whether phenomenon is characterized by below average precipitations during spring and summertime in South America. We have experienced this weather pattern in Argentina and Uruguay, where most of our Farming operations are based, throughout the last three consecutive years and it has extended its effects during 2023, resulting in a severe drought in almost all productive regions in Argentina and Uruguay. Our diversification in terms of geographic footprint and crops planted (soybean, peanut, corn, wheat, sunflower, among others), acts as a natural hedge against weather risk, and enables us to adopt defensive strategies such as delaying planting activities and switching between crops which are either more resilient to dry weather or have a later development stage. However, and despite our ability to partially mitigate this effect, during 2023, as a consequence of the La Niña weather event, yields of our different crops had a reduction ranging from 18% to 60%, depending on the crop, thus significantly affecting our results of operations for the year ended December 31,2023.


16.    Financial instruments

As of June 30, 2024, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial instruments.

For Level 1 instruments, valuation is based on the unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. Level 1 financial instruments mainly consist of crop futures and options traded on the stock market. In the case of securities, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.

Derivatives not traded on the stock market are categorized as Level 2 instruments and are valued using models based on observable market data. The Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the derivative financial instrument has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. Level 2 financial instruments mainly consist of interest-rate swaps and foreign-currency interest-rate swaps.

For Level 3 instruments, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group does not have any Level 3 financial instruments for any of the periods presented.

There were no transfers between any levels during any of the periods presented.

The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of June 30, 2024 and their allocation to the fair value hierarchy:

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 34


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

16.    Financial instruments (continued)

2024
Level 1
Level 2
Total
Assets
Derivative financial instruments
2,177 17,081 19,258 
Short-term investment (1)
26,869 — 26,869 
Total assets
29,046 17,081 46,127 
Liabilities
Derivative financial instruments
(48)— (48)
Total liabilities
(48) (48)

(1) It includes US T-Bills with maturity from the date of acquisition longer than 90 days for US$ 25,589 and US$ 1,280 of BOPREAL (Bonos para la Reconstrucción de una Argentina Libre). As of June 30, 2024, nil (US$ 59,475 as of December 31, 2023) of these US T-bills are used as collateral for short-term borrowings and are not available for use by other entities of the Group. See Note 23.

When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for this purpose, details of which may be obtained from the following table:
ClassPricing MethodParametersPricing ModelLevelTotal
FuturesQuoted price--11,865 
NDFQuoted priceForeign-exchange curvePresent value method1264 
Interest-rate swapsTheoretical priceMoney market interest-rate curve.Present value method217,081 
US T-BillsQuoted price125,589 
BoprealQuoted price11,280 

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 35


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





17.    Trade and other receivables, net
June 30,
2024
December 31,
2023
(unaudited)
Non-current
Advances to suppliers 4,314 3,266 
Income tax credits 4,492 2,332 
Non-income tax credits (i) 23,332 24,860 
Judicial deposits 1,915 2,187 
Receivable from disposal of subsidiary— 3,899 
Other receivables 3,156 2,516 
Non-current portion 37,209 39,060 
Current
Trade receivables 110,374 90,526 
Less: Allowance for trade receivables (943)(2,888)
Trade receivables – net 109,431 87,638 
Prepaid expenses 11,033 6,953 
Advance to suppliers 51,743 42,808 
Income tax credits 769 1,253 
Non-income tax credits (i) 20,752 22,812 
Receivable from disposal of subsidiary6,416 3,971 
Cash collateral — 11 
Other receivables 11,863 13,609 
Subtotal 102,576 91,417 
Current portion 212,007 179,055 
Total trade and other receivables, net 249,216 218,115 

(i) Includes US$ 144 for the six-month period ended June 30, 2024 reclassified from property, plant and equipment (for the year ended December 31, 2023: US$ 293).
The fair values of current trade and other receivables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other receivables approximate their carrying amount, as the impact of discounting is not significant.

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies (expressed in US dollars):
June 30,
2024
December 31,
2023
(unaudited)
Currency
US Dollar 95,187 88,811 
Argentine Peso 64,523 24,304 
Uruguayan Peso 2,605 6,570 
Brazilian Reais 86,901 98,430 
249,216 218,115 
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 36


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

17.    Trade and other receivables, net (continued)


As of June 30, 2024 trade receivables of US$ 18,165 (December 31, 2023: US$ 22.989) were past due but not impaired. The ageing analysis of these receivables indicates that US$ 298 and US$ 449 are over 6 months in June 30, 2024 and December 31, 2023, respectively.

The creation and release of allowance for trade receivables have been included in ‘Selling expenses’ in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The other classes within other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.

18.    Inventories
June 30,
2024
December 31,
2023
(unaudited)
Raw materials 217,647 76,440 
Finished goods (Note 5)
237,740 179,611 
455,387 256,051 


19.    Cash and cash equivalents
June 30,
2024
December 31,
2023
(unaudited)
Cash at bank and on hand 70,594 179,068 
Short-term bank deposits 69,717 160,713 
140,311 339,781 
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 37


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)








20.    Disposals

In April 2024, the Company sold “La Pecuaria” farm, a 3,177 hectares farm located in Uruguay for an aggregate amount of US$ 20.7 million, collected in full at closing. This transaction resulted in a pre-tax gain of US$ 6.1 million included in the line item “Other operating income” in the statement of income for the six-month period ended June 30, 2024. Also, an amount of US$ 6.9 million was reclassified to retained earnings out of the revaluation surplus reserve.

21.    Shareholder’s contribution

Number of shares (thousands)Share capital and share premium
At January 1, 2023111,382 960,242 
Restricted shares vested— 7,528 
Purchase of own shares
— (9,374)
Dividends to shareholders (35,000)
At June 30,2023 (unaudited)111,382 923,396 
At January 1, 2024111,382 910,883 
Employee share options exercised (Note 22)— 115 
Restricted share vested
— 7,540 
Purchase of own shares
— (35,475)
Dividends to shareholders— (35,000)
At June 30,2024 (unaudited)111,382 848,063 
Share Repurchase Program

On July 11, 2024, the Group’s share repurchase program was renewed to purchase up to five per cent (5%) of the Company’s total outstanding share capital until December 31, 2024 or reaching the maximum number of shares authorized for purchase under the program, whichever occurs first.

As of June 30, 2024, the Company repurchased an aggregate of 28,841,056 shares under the program, of which 9,067,146 have been utilized to cover the exercise of the Company’s employee stock option plan and the granted of the restricted stock plan and 11 million shares were reduced from capital. During the six-month periods ended June 30, 2024 and 2023 the Company repurchased shares for an amount of 4,146,651 and 1,397,415 respectively.

Annual dividends

On April 17, 2024, the Company’s general shareholders’ meeting approved the payment of an annual dividend of $35 million payable in two installments in May and November of 2024. On May 29, 2024, the first installment of US$ 17.5 million (0.1682 per share) was paid.
On April 19, 2023, the Company’s general shareholders’ meeting approved the payment of an annual dividend of $35 million payable in two installments made on May 17, 2023 and November 16, 2023, respectively


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 38


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)



22.    Equity-settled share-based payments

In 2004, the Group established the “2004 Incentive Option Plan” (“Option Schemes”) under which the Group granted equity-settled options to senior managers and selected employees of the Group’s subsidiaries.

Further, in 2010, the Group established the “Adecoagro Restricted Share and Restricted Stock Unit Plan” (the “Restricted Share Plan”) under which the Group grants restricted shares, or restricted stock units to directors of the Board, senior and medium management and key employees of the Group.

(a)Option Schemes

No expense was accrued for both periods under the Options Schemes.

As of June 30, 2024, 14,396 options (June 30, 2023: nil) were exercised. No options were forfeited or expired for any of the periods presented. On August 15, 2023, the plan was extended for an additional 10 years, whereas the expiration to exercise the options was extended.

(b)Restricted Share and Restricted Stock Unit Plan

As of June 30, 2024, the Group recognized compensation expense of US$ 3.4 million related to the restricted shares granted under the Restricted Share Plan (June 30, 2023: US$ 4.9 million). For the six-month period ended June 30, 2024, 603,799 Restricted Shares were granted (June 30, 2023: 548,233), 970,511 were vested (June 30, 2023: 1,035,765), and 15,662 Restricted shares were forfeited (June 30, 2023: nil).



23.    Trade and other payables
June 30,
2024
December 31,
2023
(unaudited)
Non-current
Trade payables54 514 
Other payables 424 494 
478 1,008 
Current
Trade payables 135,953 140,949 
Advances from customers 6,448 16,351 
Taxes payable 8,323 9,482 
Dividends payables18,296 1,024 
Payables from acquisition of subsidiaries— 13,404 
Other payables 14,122 9,520 
183,142 190,730 
Total trade and other payables 183,620 191,738 

The fair values of current trade and other payables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other payables approximate their carrying amount, as the impact of discounting is not significant.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 39


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)






24.    Borrowings
June 30,
2024
December 31,
2023
(unaudited)
Non-current
Senior Notes (*) 498,570 498,347 
Bank borrowings (*) 180,235 199,496 
678,805 697,843 
Current
Senior Notes (*) 8,250 8,250 
Bank overdrafts — 4,386 
Bank borrowings (*) 143,616 194,470 
151,866 207,106 
Total borrowings 830,671 904,949 

(*) As of June 30, 2024, the Group was in compliance with the related financial covenants under the respective loan agreements.

As of June 30, 2024, total bank borrowings do not include any collateralized liabilities (December 31, 2023: US$ 77,055). These loans were mainly collateralized by property, plant and equipment, sugarcane plantations, sugar export contracts, shares of certain subsidiaries of the Group and restricted short-term investment, see Note 16.

Notes 2027

On September 21, 2017, the Company issued senior notes (the “Notes”) for US$ 500 million, at an annual nominal rate of 6%. The Notes will mature on September 21, 2027. Interest on the Notes are payable semi-annually in arrears on March 21 and September 21 of each year. The total proceeds nets of expenses was US$ 496.5 million.

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our current and future subsidiaries, currently: Adeco Agropecuaria S.A., Adecoagro Brasil Participações S.A., Adecoagro Vale do Ivinhema S.A., Pilagá S.A. and Usina Monte Alegre Ltda. are the only Subsidiary Guarantors.

The Notes contain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among other restrictions.

On July 22, 2024, the Company announced a cash tender offer for up to US$100.0 million of the Notes due 2027. As of the Early Tender Date, on August 2, 2024, US$83.65 million in aggregate principal amount of Notes had been validly tendered by Holders and fully cancelled. The total consideration, including the Early Tender Premium, was US$ 980 for each US$ 1,000 principal amount of Notes.

Loan with International Finance Corporation (IFC)

During 2024, the Group settled the outstanding amount of US$16.4 million under the loan agreement entered into with the International Finance Corporation (IFC), a member of the World Bank Group, in June 2020.
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 40


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

24.    Borrowings (continued)

The maturity of the Group’s borrowings and the Group’s exposure to fixed and variable interest rates is as follows:

June 30,
2024
December 31,
2023
(unaudited)
Fixed rate:
Less than 1 year
118,971 117,105 
Between 1 and 2 years
5,946 6,010 
Between 2 and 3 years
2,823 5,508 
Between 3 and 4 years
498,995 — 
Between 4 and 5 years
425 498,347 
More than 5 years
2,547 — 
629,707 626,970 
Variable rate:
Less than 1 year
32,895 90,001 
Between 1 and 2 years
33,885 37,712 
Between 2 and 3 years
81,651 91,878 
Between 3 and 4 years
50,859 56,605 
Between 4 and 5 years
1,674 1,783 
200,964 277,979 
830,671 904,949 

The breakdown of the Group’s borrowing by currency is included in Note 2 - Interest rate risk.

The carrying amount of short-term borrowings is approximate its fair value due to the short-term maturity. Long term borrowings subject to variable rate approximate their fair value. The fair value of long-term subject to fix rate do not significant differ from their fair value. The fair value (level 2) of the senior notes equals US$ 464 million, 92.77% of the nominal amount.


The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 41


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





25.    Lease liabilities
June 30,
2024
December 31,
2023
(unaudited)
Non-current289,818 325,569 
Current55,749 52,941 
345,567 378,510 

The maturity of the Group's lease liabilities is as follows:
June 30,
2024
December 31,
2023
(unaudited)
Less than 1 year55,749 52,941 
Between 1 and 2 years23,936 66,474 
Between 2 and 3 years59,334 61,398 
Between 3 and 4 years49,537 47,677 
Between 4 and 5 years40,805 39,254 
More than 5 years116,206 110,766 
345,567 378,510 

26.    Payroll and social security liabilities
June 30,
2024
December 31,
2023
(unaudited)
Non-current
Social security payable 1,099 1,570 
1,099 1,570 
Current
Salaries payable 7,580 4,498 
Social security payable 4,738 4,062 
Provision for vacations 11,126 12,783 
Provision for bonuses 5,541 16,014 
28,985 37,357 
Total payroll and social security liabilities30,084 38,927 

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 42


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)





27.    Provisions for other liabilities

The Group is subject to several laws, regulations and business practices of the countries where it operates. In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have been no material changes to claimed amounts and current proceedings since December 31, 2023.

28.    Related-party transactions

The following is a summary of the balances and transactions with related parties:

Related partyRelationshipDescription of transactionExpense included in the statement of incomeBalance payable
June 30,
2024
June 30,
2023
June 30,
2024
December 31,
2023
(unaudited)(unaudited)(unaudited)
Directors and senior managementEmploymentCompensation selected employees(3,103)(4,225)(15,129)(18,781)


29.    Basis of preparation and presentation

The information presented in the accompanying condensed consolidated interim financial statements (“interim financial statements”) as of June 30, 2024 and for the six-month and the three-month periods ended June 30, 2024 and 2023 is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as of June 30, 2024, results of operations for the six-month and three months periods ended June 30, 2024 and 2023 and cash flows for the six-month periods ended June 30, 2024 and 2023. All such adjustments are of a normal recurring nature. In preparing these accompanying interim financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

These interim financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34), ‘Interim financial reporting’ as issued by the International Accounting Standards Board (IASB) and they should be read in conjunction with the annual financial statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS Accounting Standards as issued by the IASB.

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2023.

Seasonality of operations

The Group’s business activities are inherently seasonal. The Group generally harvest and sell its grains (corn, soybean, rice and sunflower) between February and August, with the exception of wheat, which is harvested from December to January. Peanut is harvested from April to May, and revenue are executed with higher intensity during the third quarter of the year. Cotton is a unique in that while it is typically harvested from June to August, it requires processing which takes about two to three months to complete. Revenue in our Dairy business segment tend to be more stable. However, milk production is generally higher during the fourth quarter, when the weather is more suitable for production. Although our Sugar, Ethanol and Electricity cluster is
The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 43


Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

29.    Basis of preparation and presentation (continued)

currently operating under a “non-stop” or “continuous” harvest and without stopping during traditional off-season, the rest of the sector in Brazil is still primarily operating with large off-season periods from December/January to March/April. The result of large off-season periods is fluctuations in our sugar and ethanol revenue and in our inventories, usually peaking in December to take advantage of higher prices during the traditional off-season period (i.e., January through April). As a result of the above factors, there may be significant variations in our financial results from one quarter to another. In addition, our quarterly results may vary as a result of the effects of fluctuations in commodities prices, production yields and costs on the determination of initial recognition and changes in fair value of biological assets and agricultural produce.

The accompanying notes are an integral part of these condensed consolidated interim financial statements

F- 44

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