Adecoagro S.A. Q2 FY2025 earnings call

• Consolidated Performance: Consolidated adjusted EBITDA for Q2 was $55M, YTD $91M. Sales in Q2 were $392M, YTD $716M.
• Strategic Focus: Aim to be lowest-cost producer via diversifying geographies/products; weather risks managed through asset consolidation and operational efficiencies.
• Sugar, Ethanol and Energy: Weather issues affected crushing volumes, but strategy of expanding plantations and operational flexibility helped maintain crushing forecast. Focus on maximizing sugar and hydrous ethanol for margins.
• Farming: Focus on value chain efficiencies; rice leveraging seed genetics; dairy expanding product portfolio; crops reducing leased area to improve margins.
• MOU with Tether: Analyzing use of energy production for Bitcoin mining as innovative project to maximize asset value.
• Sustainability: Published 2024 integrated report aligning sustainability with profitability.

Sugar, Ethanol and Energy Business

• Second quarter adjusted EBITDA: $55 million; year-to-date: $91 million.
• Q2 sales: $183 million; year-to-date: $302 million.
• Crushing volume in Q2: 3.4 million tons; year-to-date: 4.9 million tons (20% lower YOY).
• Productivity indicators improved vs Q1 2025 but remained below prior year due to dry weather lag.

Farming Business

• Q2 adjusted EBITDA: $1 million; year-to-date: $18 million.
• Total area planted 97% as of early August, produced over 1.2 million tons of agriculture produce.
• Average yields below initial expectations due to weather impacts (dry weather, high temps, excess rainfall).
• Rice had record yield per hectare (8 tons) due to seed genetics and tech; dairy working on reversing cow productivity decline; crops saw lower prices and costs, with 30% reduction in leased area planned for upcoming season.

• Crushing Volumes: Anticipate crushing volumes to be similar to previous years despite slower start, with improved yields in the last quarter.
• Prices: Optimistic on sugar and ethanol prices in short term; ethanol demand strong with hydrous demand near 2B liters/month and E30 mandate boosting demand; sugar prices expected to react to lower Brazilian production and TRS content.
• Hedging: Plan to accelerate hedging for next year's sugar once market reacts to Brazilian crop conditions; already hedged 5% of next year's sugar position.
• Tether Partnership: Enthusiastic about potential of Bitcoin mining project to generate attractive returns from energy production.

• Commodity and Weather Risks: Volatile commodity prices and adverse weather (dry, cold fronts, temperature extremes) impact production and margins.
• Production and Price Pressures: Lower production and prices in Sugar, Ethanol and Energy; lower international prices and higher costs in US dollar terms affecting Farming margins.
• Yield Uncertainty: Weather impacts led to below-expected yields in Farming, potentially affecting future production and profitability.

Q: Can you give more details about the Bitcoin mining partnership?

A: It's a test using 5% of energy production in Mato Grosso do Sul. Enthusiastic about potential attractive returns, but depends on understanding conversions and seeing them happen.

Q: How is the company seeing the impact on stock liquidity recently?

A: Liquidity is reasonable, above average trading volume in the company's 11-year public history, with no immediate issues observed.