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    AGRO
    Earnings call· Jun 2026(Q2 FY26)

    Adecoagro S.A. Q2 FY26 earnings call AGRO

    Aug 12, 2026 Source

    Executive summary

    Adecoagro Q2 FY26 — Record Adjusted EBITDA Driven by Fertilizers, Strategic Sugar/Ethanol Inventory Build

    Adecoagro delivered record adjusted EBITDA in Q2 FY26, primarily fueled by exceptional performance in its Fertilizers segment, which benefited from strong pricing and increased production. The company strategically built ethanol inventory amidst low domestic prices, anticipating future recovery, while also progressing with the accretive Carapa Mill acquisition to expand sugar and ethanol operations. Despite seasonal debt peaks and mixed commodity prices in Food & Agriculture, management remains focused on deleveraging and operational efficiencies.

    Highlights

    5

    • Consolidated adjusted EBITDA reached a record $258 million year-to-date and $173 million during the second quarter.

    • Fertilizers segment adjusted EBITDA more than doubled both in the quarter and on a year-to-date basis.

    • Urea production increased 22% year-over-year in Q2, reaching 617,000 tonnes year-to-date.

    • Sugarcane crushing volume grew 3% year-over-year to 3.5 million tonnes in Q2.

    • Liquidity ratio improved to 1.9x compared to 1.2x in the previous quarter.

    Concerns

    4

    • Sugar, Ethanol and Energy segment adjusted EBITDA declined to $53 million in Q2 and $94 million year-to-date.

    • Domestic ethanol prices declined sharply, leading to a strategic inventory build of 41% of year-to-date production.

    • Food and Agriculture segment year-to-date results reflected lower commodity prices and higher U.S. dollar costs.

    • Net debt peaked seasonally due to working capital requirements, with pro forma net leverage standing at 3x.

    Guidance & targets

    7
    CategoryTargetConfidence
    Fertilizers segment annual performance
    above our initial projections
    medium materiality
    High
    Impact of Carapa Mill acquisition on deleveraging
    does not alter our deleveraging progress nor our target net debt to EBITDA for the full year
    high materiality
    High
    Sugar, Ethanol and Energy crushing volumes growth
    low double-digit growth
    medium materiality
    High
    Fertilizers segment full year EBITDA
    above our original projections
    medium materiality
    High
    Impact of Carapa Mill acquisition on deleveraging targets
    not expect the acquisition to affect our deleveraging targets for year-end
    high materiality
    High
    Net leverage trajectory
    decline as EBITDA generation increases
    high materiality
    High
    Sugar, Ethanol and Energy production cost reduction
    10% reduction cost compared to last year
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Consolidated
    Consolidated adjusted EBITDA marked new records, reaching $258 million year-to-date and $173 million during the second quarter. Overall revenues remained in line across both periods, reflecting mixed prices and volume dynamics.
    Gross sales (Q2): $535 millionGross sales (YTD): $928 millionAdjusted EBITDA (YTD): $258 million
    		$535 million——$173 million
    Fertilizers
    Stronger operational performance resulted in higher production volumes, while higher prices and cost efficiencies supported margin expansion. Adjusted EBITDA more than doubled both in the quarter and on a year-to-date basis, driven by higher production and stronger pricing.
    Urea production (Q2 YoY growth): 22%Urea production (YTD): 617,000 tonnes
    		———more than doubled
    Sugar, Ethanol and Energy
    Despite above-average rainfall, crushing reached 3.5 million tonnes, up 3% YoY. Cane yields recovered, and the segment maximized ethanol production given its attractive premium. Adjusted EBITDA declined compared to last year due to lower sales and lower CONSECANA prices.
    Crushing volume (Q2): 3.5 million tonnesCrushing volume (Q2 YoY growth): 3%Ethanol mix (YTD): 78%
    		———$53 million
    Food and Agriculture
    Stronger productivity enabled higher cost dilution. Year-to-date results reflected lower commodity prices and higher U.S. dollar costs, but Q2 showed improved revenues and adjusted EBITDA. Margins are expected to continue improving with cost reduction initiatives and new harvest sales.
    Planted area harvested (end of July): 92%Crops produced: >1.1 million tonnesDairy processing volumes: increased
    		————

    Operational metrics

    19
    Liquidity ratio
    1.9xcompared to 1.2x in the previous quarter
    Q2 FY26

    demonstrating our ability to comfortably meet short-term obligations.

    Net leverage
    3x
    Q2 FY26

    consistent with our deleveraging path and reflects the stronger earnings generation we are seeing across the operations, despite the seasonality in cash needs and our commercial strategy to hold inventories.

    Ethanol inventory stored
    41%
    YTD

    positioning us to capture stronger margins once prices recover.

    Sugar hedging
    7%
    FY26

    This is not counting in Carapa production.

    Sugar hedging
    16%
    FY27

    This is not counting in Carapa production.

    Production cost reduction
    10%compared to last year
    FY26

    still possible to reach the 10% reduction cost compared to last year, driven by cost dilution, lower leasing costs, and headcount reduction.

    Urea imports
    10 million tonnes
    annual

    South America imports 10 million tonnes of urea annually.

    Urea consumption
    2.5 million tonnes
    annual

    Argentina consumes 2.5 million tonnes of urea annually.

    Urea production
    1.3 million tonnes
    annual

    Adecoagro produced 1.3 million tonnes of urea per year.

    Competitor announced urea production
    2.1 million tonnes
    annual

    A major Argentinian competitor announced investment in a new greenfield urea plant to produce 2.1 million tonnes annually.

    Carapa Mill crushing capacity increase
    almost double
    future

    Carapa Mill has a potential to increase its effective crushing significantly, almost doubling it.

    Sugarcane diverted to Carapa Mill
    500,000 tonnes to 1 million tonnes
    next 3 years

    Existing cane surplus from the cluster can be diverted to be crushed in Carapa for the next 3 years.

    Annual cash dividend
    $35 million
    annual

    The first installment of $17.5 million ($0.12 per share) was paid on May 19, with the second installment of $17.5 million to be paid in November.

    Sugarcane crushing volume
    3.5 million tonnesup 3% compared to the same period of last year
    Q2 FY26

    The company crushed 3.5 million tonnes of cane during the quarter.

    Ethanol production mix
    78%
    YTD

    The company reached 78% ethanol mix year-to-date, maximizing ethanol production.

    Urea production
    617,000 tonneswell above last year's level
    YTD

    Year-to-date urea production reached 617,000 tonnes, driven by higher plant utilization.

    Planted area harvested
    92%
    end of July

    As of the end of July, 92% of the planted area has been harvested.

    Crops produced
    1.1 million tonnes
    current campaign

    The current campaign produced more than 1.1 million tonnes of crops.

    Urea price
    $800 per tonne
    Q2 FY26

    International urea prices reached nearly $800 per tonne during the quarter following the escalation of conflict in the Middle East.

    Deals & partnerships

    1
    Carapa MillAcquisition of a sugar and ethanol mill to expand operations and leverage surplus cane.

    The acquisition of Carapa Mill is expected to close in the coming weeks, with the purchase price paid in cash at closing. It will enable milling of surplus cane from Adecoagro's cluster and strengthen regional presence.

    Capital programs

    7
    Profertil Acquisitioncompleted
    Period spend: $400 million

    Final payment of approximately $400 million related to the acquisition of Profertil was completed during the previous quarter, representing the largest capital deployment year-to-date.

    Sugarcane plantations and biomethane operations expansionunderway

    Ongoing investments in the expansion of sugarcane plantations and biomethane operations in Brazil.

    Agricultural machineryunderway

    Ongoing investments in additional agricultural machinery.

    New cheese packaging line at Morterosterry facilityunderway

    Ongoing investments in a new cheese packaging line at the Morterosterry facility.

    Carapa Mill acquisitionpending regulatory approval
    Funding: cash

    Benefit: increased crushing capacity, operational synergies

    The acquisition of Carapa Mill remains subject to customary closing conditions and is expected to close in the coming weeks, with the purchase price paid in cash at closing.

    Perpetual plant expansion (brownfield)underway

    Benefit: increased urea production capacity

    Engineering work is ongoing for the brownfield expansion project, leveraging synergies with existing assets to maintain low-cost production.

    Carapa Mill Cogen improvementsplanned

    Benefit: improved energy consumption and export potential

    Small CapEx investments are planned to improve the Cogen's efficiency by isolating main equipment and reducing energy consumption, leading to more energy for export.

    Risks & headwinds

    5
    Lower domestic ethanol pricesQ2 FY26

    sharp decline

    Mitigation: Strategic inventory build (41% of YTD production stored), shift production mix to sugar, anticipate price recovery in Q4 FY26/Q1 FY27.

    Lower sugar prices and volumes soldQ2 FY26

    decline

    Mitigation: Shift production mix to ethanol when premium, maximize sugar hedging during rallies, leverage flexible industrial assets.

    Lower CONSECANA pricesQ2 FY26

    lower

    Mitigation: Impacted mark-to-market valuation of biological assets; no specific mitigation stated beyond general operational efficiency.

    Seasonal net debt peakQ2 FY26

    peak

    Mitigation: Stronger earnings generation, expectation for leverage to decline as EBITDA increases, strategic inventory holding for better pricing.

    Potential competitor urea plant4 or 5 years from now

    2.1 million tonnes

    Mitigation: Large South American import market (10 million tonnes), Adecoagro's brownfield advantage for expansion, competitive gas prices, focus on remaining low-cost producer.

    What to watch in Q3 FY26

    5

    Ethanol price recovery

    Q4 FY26 / Q1 FY27
    Currentlow
    Targetimproved prices

    Why it matters

    Ethanol prices significantly impacted Q2 results; recovery is key to realizing value from strategic inventory build.

    I think the situation for the Q4 and Q1 is going to be better.

    Q&A highlights

    5

    Clarify the mismatch between Q2 production and sales volumes for urea, considering seasonality, price spikes, and full-year sales expectations.

    Mariano Bosch explained that annual urea sales will reach 1.3 million tonnes, driven by Argentina's 2.5 million tonne consumption. The sales strategy prioritizes peak consumption periods (Sept-Nov) for higher domestic prices. Q2 sales were impacted by a June price dip, leading to inventory build for future higher prices, despite pushing sales in April/May.

    “So we have more inventory today to be sold during -- at a higher price.”

    asked by Gustavo Troyano · answered by Mariano Bosch

    2 min read5 chapters

    Detailed Narrative

    01

    Fertilizers Segment Outperformance

    The Fertilizers segment significantly exceeded expectations, driven by a 22% year-over-year increase in urea production and a surge in international urea prices, particularly following Middle East conflicts. This led to a doubling of adjusted EBITDA for the segment, with management expecting full-year performance to remain above initial projections despite recent price moderation. The company's cost structure remains largely fixed, supporting margin expansion.

    02

    Strategic Ethanol Inventory Build

    Facing sharply declined domestic ethanol prices, Adecoagro implemented a commercial strategy to build inventories, storing approximately 41% of its year-to-date ethanol production. This move aims to capture stronger margins when prices recover, leveraging the company's flexible industrial assets to shift production mix towards sugar. Management anticipates improved ethanol prices in Q4 FY26 and Q1 FY27 due to lower supply and increasing demand.

    03

    Carapa Mill Acquisition Progress

    The acquisition of Carapa Mill is viewed as highly accretive, enabling organic expansion of sugar and ethanol operations by milling surplus cane and strengthening the company's regional presence. Management anticipates unlocking value through increased crushing and operational synergies, without impacting deleveraging targets. The transaction is expected to close in the coming weeks, with the purchase price paid in cash.

    04

    Food & Agriculture Recovery and El Niño Impact

    While year-to-date results in Food & Agriculture reflected lower commodity prices and higher costs, the second quarter showed improvement in revenues and adjusted EBITDA. The company expects continued margin recovery in coming quarters due to cost reduction initiatives and new harvest sales. The El Niño weather phenomenon is projected to positively impact Argentina farming, leading to normalized or improved yields and higher rice prices.

    05

    Deleveraging and Liquidity Position

    Despite a seasonal peak in net debt due to working capital needs and strategic inventory holding, Adecoagro's pro forma net leverage stood at 3x, consistent with its deleveraging path. The company's liquidity ratio improved to 1.9x, demonstrating strong short-term obligation coverage. Most debt remains long-term and currency-aligned with revenue, helping reduce foreign exchange risk.

    AI-generated summary of the company’s earnings call. Not investment advice.