Adecoagro EBITDA Drops 60 Percent

Adecoagro(NYSE:AGRO) reported fiscal second quarter 2025 earnings on August 11, 2025, posting consolidated adjusted EBITDA of $55 million. Adjusted EBITDA was down 60% year-over-year compared to fiscal second quarter 2024, on sales of $392 million. Management confirmed operational resilience through flexible production strategies and signaled the early-stage testing of bitcoin mining in partnership with Tether as a potential high-margin outlet for surplus energy. (Note: Adecoagro's fiscal second quarter 2025 ended June 30, 2025.)

Adjusted EBITDA declines 60% as cost pressures persist

Quarterly sales totaled $392 million, though results were heavily impacted by a 20% year-over-year reduction in crushing volumes for the year-to-date period and sharp declines in crop and rice prices. Net debt rose 11% year-over-year to $699 million, driving net leverage to 2.3x amid short-term borrowings for working capital.

"Adjusted EBITDA marked a 60% year-over-year decline in both periods, reaching $55 million during the quarter and $91 million year-to-date. Lower results were mainly explained by losses in our biological assets in line with our sugar, ethanol, and energy businesses on lower production as well as in our crops and rice operations on lower prices. In addition, results were also negatively impacted by higher costs in US dollar terms in our farming division together with one-off expenses incurred by the company in connection with Tether's tender offer."
-- Emilio Gnecco, CFO

The collapse in profitability indicates ongoing exposure to weather, commodity volatility, and cost inflation, necessitating continued discipline in cost management and asset allocation to protect margins.

Adecoagro flexes commercial and operational agility in sugar and ethanol

Adecoagro capitalized on ethanol price recovery by selling carryover stock at an 18% year-over-year premium, while maximizing ethanol output in Mato Grosso do Sul when hydrous ethanol parity topped 18.5¢ per pound, above spot sugar levels. Retaining exposure to upside if sugar prices rebound on tightening supply.

"Consequently, we have already sold 320,000 cubic meters of ethanol at an average net selling price close to 2,700 Brazilian real per cubic meter, 18% higher year-over-year. Regarding sugar, the combination of lower prices and the decline in production given the lower crushing were the main drivers towards the decline in sales year-to-date. Nevertheless, we were able to profit from the sale of back VHP during the quarter, which commanded a premium over spot prices. In the case of energy, higher selling prices more than offset the decline in volume exported driven by the lower milling year-to-date. Regarding carbon credits, we sold over 390,000 CBios at an average price of $10 per CBio, reaching $4 million in revenues."
-- Emilio Gnecco, CFO

Dynamic product and sales mix management, along with opportunistic commodity sales, provide margin resilience and sustain cash flows even in an adverse operating environment.

Tether partnership launches bitcoin mining pilot with surplus power

Adecoagro signed a memorandum of understanding with Tether and is testing the use of 5% of its energy production in Mato Grosso do Sul for bitcoin mining, targeting potential sale prices above $80 per megawatt hour (MWh). Initial bitcoin mining operations will be limited-scale with financial returns to be validated before full rollout.

"And then very specifically on this test on Bitcoin mining that we are doing is a test. This is 5% of the energy that we are generating in Mato Grosso do Sul. So it's a clear test, but we are enthusiastic about the potential returns we can get there. It looks like they are very attractive, but we need to see them and as part of the culture and this new shareholder also wants us to continue with this idea of making things happen and then continue growing once we see the returns and we can be sure about what we are doing."
-- Mariano Bosch, CEO

This pilot leverages existing cogeneration assets and validates the company's strategy of asset flexibility and value maximization.

Looking Ahead

Driven by accelerated harvesting in the second half and expanded plantation area. No specific forward guidance was issued for EBITDA or net income, but dividend distribution remains on track, with a second $17.5 million installment scheduled in November. The company will evaluate further expansion of bitcoin mining contingent on realized project returns.

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