Adecoagro SA delivered a challenging QQ1 2024 despite a positive net income print. Revenue of USD 160.8 million contracted by 60.1% year over year (YoY) and by 59.42% quarter over quarter (QoQ), reflecting a pronounced operating and demand headwind. On a GAAP-like basis, gross profit was negative at USD -7.23 million, producing a gross margin of -4.5%, and operating income deteriorated to a loss of USD -51.85 million, signaling significant margin pressures in the core operating activities. EBITDA remained strong at USD 114.12 million with an EBITDA margin of roughly 70.98%, underscoring substantial non-operating and non-cash contributions to profitability; however, operating cash flow was negative for the quarter (-USD 38.70 million), and free cash flow burned USD -133.44 million as working capital and capital expenditure (capex) consumed liquidity.
The reported net income USD 47.39 million translated to a net margin of 29.47% driven largely by non-operating items and a favorable tax line rather than by operating cash generation. Pre-tax income stood at USD 60.25 million, with total other income/expenses contributing USD 20.49 million, while interest expenses and depreciation/damortization shaped the cost structure. The balance sheet shows a solid liquidity position at period-end with USD 135.5 million of cash and cash equivalents and USD 181.6 million of total cash and short-term investments, but a meaningful debt burden remains (total debt USD 1.1999 billion; net debt USD 1.064 billion) with negative interest coverage (-2.43x).
From a benchmarking perspective, the company traded at a price-to-sales ratio of 7.19x and a price-to-earnings ratio of 6.10x, with an enterprise value multiple around 19.45x and a price-to-book ratio near 0.84x, suggesting a valuation that prices in near-term earnings expectations and asset-light upside but may underappreciate ongoing cash flow challenges. Management commentary is not available in the provided transcript data, limiting direct insight into strategic pivots or margin recovery plans. The near-term outlook will hinge on working capital normalization, capex discipline, and the ability to convert EBITDA into sustainable free cash flow while managing debt service.