Adecoagro Q2 2026 earnings: Fertilizers drive record adjusted EBITDA

Adecoagro (NYSE: AGRO) reported Q2 2026 gross sales broadly in line with the prior-year quarter and record adjusted EBITDA of $172.5 million for the three months ended June 30, 2026. Fertilizers led the result, as higher urea production, stronger realized prices, and lower unit costs more than offset weaker adjusted EBITDA in Sugar, Ethanol & Energy.

Core earnings data

The flat gross-sales result reflected mixed pricing and volume trends across Adecoagro’s portfolio. Profit performance was considerably stronger because Fertilizers benefited simultaneously from higher output, better pricing, and production efficiencies.

Adjusted EBITDA is a non-IFRS measure. The Fertilizers year-over-year comparison is presented on a pro forma basis that assumes the Profertil acquisition occurred on January 1, 2025.

Business and segment performance

Fertilizers

Fertilizers was the main earnings driver. Urea production increased 21.6% from Q2 2025 because the plants recorded more operating days, while six-month production reached 617 thousand tons, up 15.9% year over year.

Urea realized prices averaged $699 per ton in Q2 2026 and $620 per ton during the first half, compared with $444 per ton in 2025. Higher production also spread costs across more output, while operating efficiencies further reduced production costs and expanded margins.

The combination of these factors lifted segment adjusted EBITDA to $121.2 million, an increase of 109.7% on the company’s pro forma comparison. This segment alone accounted for most of consolidated adjusted EBITDA, although segment figures should not be added directly because the release did not provide details on corporate items or eliminations.

Sugar, Ethanol & Energy

Sugarcane crushing increased 2.8% to 3.5 million tons during Q2 and 16.8% to 5.8 million tons during the first half. Better agricultural yields and greater cane availability supported the higher volume, with six-month yields reaching 83 tons per hectare.

However, segment adjusted EBITDA fell 21.8% to $53.2 million. Lower sugar selling volumes and prices weighed on net sales, while ethanol sales volumes declined as Adecoagro deliberately built inventory. The company allocated 78% of its first-half production mix to ethanol because its margins were more attractive than sugar margins.

Biological-asset losses associated with lower Consecana prices created another headwind. First-half production costs increased to 10.4 cents per pound from 9.0 cents per pound a year earlier because of the Brazilian real’s appreciation; excluding currency effects, costs in local currency were broadly unchanged.

Food & Agriculture

Food & Agriculture adjusted EBITDA rose to $4.9 million from $1.1 million in Q2 2025. Better crop yields increased grain production as the 2025/26 harvest concluded, while higher cow productivity supported greater milk-processing volume.

The quarterly improvement did not reverse the weaker first-half performance: six-month adjusted EBITDA was $6.2 million, down 64.9% year over year. Commodity prices declined between 3% and 43%, depending on the product and excluding soybeans, while costs increased in U.S. dollar terms.

Flat sales and fertilizer margin expansion drove the earnings divergence

Adecoagro’s record adjusted EBITDA came despite gross sales remaining broadly unchanged. The main explanation was mix: higher-margin fertilizer earnings expanded sharply, supported by both price and volume, while production efficiencies lowered costs.

Sugar, Ethanol & Energy moved in the opposite direction. Higher crushing did not translate into higher adjusted EBITDA because of lower sugar pricing and sales volumes, ethanol inventory accumulation, biological-asset losses, and currency-driven cost pressure. The quarter therefore depended more on fertilizer profitability than on broad-based sales growth across the portfolio.

Leverage and capital position

Pro forma net debt to last-12-month adjusted EBITDA declined to 3.0x from 3.2x in Q1 2026. Management attributed the improvement to adjusted EBITDA growth, which more than offset seasonal working-capital requirements.

The company intends to continue reducing leverage through higher expected operating results. The release did not quantify operating cash flow or free cash flow, making the leverage ratio the clearest disclosed indicator of balance-sheet progress for the quarter.

Earnings guidance

Adecoagro reaffirmed that its crushing pace remains consistent with its full-year objective. Assuming normal weather, management expects 2026 crushing volume to grow at a low-double-digit rate from 2025.

Management also expects 2026 Fertilizers adjusted EBITDA to exceed prior years following better-than-expected prices captured during the first half, although it did not provide a numerical range.

Recent insider transactions

The supplied six-month insider data show 34,884 shares purchased across six transactions and 107,978 shares sold across eight transactions, resulting in net sales of 73,094 shares. Total insider ownership was reported at 105.85 million shares, with net activity equal to negative 0.10% of insider holdings.

The latest 10 reported records consist of six director sales and four stock awards. These transactions are presented objectively and do not establish insiders’ views about the company’s outlook.

Risks investors should watch

• Lower urea prices: Urea prices peaked near $800 per ton in April amid conflict in the Middle East but later returned toward mid-cycle levels. At the release date, CFR Brazil prices averaged approximately $480 per ton, below Adecoagro’s Q2 realized price of $699 per ton.
• Ethanol inventory and pricing: Adecoagro stored 41% of its year-to-date ethanol production in anticipation of higher prices. Delayed or weaker pricing could postpone the conversion of production into sales and cash.
• Currency-driven production costs: Appreciation of the Brazilian real increased Sugar, Ethanol & Energy production costs in U.S. dollar terms even though local-currency costs were stable.
• Weather and crushing execution: The low-double-digit crushing-growth outlook assumes normal weather. Adverse conditions could affect cane availability, yields, and full-year volumes.
• Dependence on earnings for further deleveraging: The leverage ratio improved to 3.0x, but management’s plan for additional reductions relies on the higher operating results it expects to generate.

Summary

Adecoagro’s Q2 2026 result was defined by a sharp increase in fertilizer profitability rather than top-line growth. Higher urea production and pricing, together with lower unit costs, drove record adjusted EBITDA and helped reduce leverage, while Sugar, Ethanol & Energy faced weaker pricing, inventory timing, and foreign-exchange pressure. Future performance will depend on fertilizer earnings after urea prices normalize, the monetization of ethanol inventories, weather-dependent crushing growth, and continued balance-sheet improvement.