Amendment to Form 6-K

6-K/A 1 d424001d6ka.htm AMENDMENT TO FORM 6-K Amendment to Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K/A

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of October, 2012

Commission File Number 001-35052

Adecoagro S.A.

(Translation of registrant’s name into English)

13-15 Avenue de la Liberté

L-1931 Luxembourg

R.C.S. Luxembourg B 153 681

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-.

This amendment to our report on Form 6-K for the month of August 2012 (filed with the SEC on August 14, 2012) is being filed to furnish revised unaudited condensed consolidated interim financial statements as of and for the six and three months ended June 30, 2012 and 2011 (the “Consolidated Financial Statements”) as the registrant has discovered an inadvertent error in the Consolidated Financial Statements furnished with the originally filed Form 6-K.

Specifically:

(a) On the Condensed Consolidated Interim Statements of Income for the three-month and six-month periods ended June 30, 2012 and 2011, (Loss)/Gain Attributable to Equity Holders of the Parent and (Loss)/Earnings Per Share Attributable to Equity Holders of the Parent for the three-month period ended June 30, 2012 were incorrectly reported as ($ 13,521 thousands) and (0.2349), respectively; the correct figures, as disclosed in the Consolidated Financial Statements being furnished with this amendment to our Form 6-K, and also on our website, were respectively, ($ 14,763 thousands) and (0.1217); and

(b) On the Condensed Consolidated Interim Statements of Income for the three-month and six-month periods ended June 30, 2012 and 2011, the (Loss)/Earnings Per Share Attributable to Equity Holders of the Parent for the six-month period ended June 30, 2012 was incorrectly reported as (0.2246); the correct figure, as disclosed in the Consolidated Financial Statements being furnished with this amendment to our Form 6-K, and also on our website, was (0.1125).

The company has not revised any other financial figures in this corrected Form 6-K. The company does not intend to revise, update, amend or restate the information presented in any other items of the Form 6-K or reflect any events that have occurred after the submission of the Form 6-K.

The attachment contains forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in the attachment.

The registrant’s forward-looking statements are based on the registrant’s current expectations, assumptions, estimates and projections about the registrant and its industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.

The forward-looking statements included in the attached relate to, among others: (i) the registrant’s business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing the registrant’s business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which the registrant operate, environmental laws and regulations; (iv) the implementation of the registrant’s business strategy, including its development of the Ivinhema mill and other current projects; (v) the registrant’s plans relating to acquisitions, joint ventures, strategic alliances or divestitures; (vi) the implementation of the registrant’s financing strategy and capital expenditure plan; (vii) the maintenance of the registrant’s relationships with customers; (viii) the competitive nature of the industries in which the registrant operates; (ix) the cost and availability of financing; (x) future demand for the commodities the registrant produces; (xi) international prices for commodities; (xii) the condition of the registrant’s land holdings; (xiii) the development of the logistics and infrastructure for transportation of the registrant’s products in the countries where it operates; (xiv) the performance of the South American and world economies; and (xv) the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan Peso compared to other currencies; as well as other risks included in the registrant’s other filings and submissions with the United States Securities and Exchange Commission.

These forward-looking statements involve various risks and uncertainties. Although the registrant believes that its expectations expressed in these forward-looking statements are reasonable, its expectations may turn out to be incorrect. The registrant’s actual results could be materially different from its expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in the attached might not occur, and the registrant’s future results and its performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

The forward-looking statements made in the attached relate only to events or information as of the date on which the statements are made in the attached. The registrant undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Adecoagro S.A.

By:		/s/ Carlos A Boero Hughes
Name:		Carlos A. Boero Hughes
Title:		Chief Financial Officer and Chief Accounting Officer

Date: October 12, 2012

Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of June 30, 2012 and for the six-month periods ended June 30, 2012 and 2011

Report of Independent Registered Public Accounting Firm

To the Shareholders of

Adecoagro S.A.

We have reviewed the accompanying condensed consolidated interim statements of financial position of Adecoagro S.A. and its subsidiaries as of June 30, 2012, and the related condensed consolidated interim statements of income and comprehensive income for each of the three-month and six-month periods ended June 30, 2012 and 2011 and the condensed consolidated interim statements of changes in shareholders´ equity and of cash flows for the six-month periods ended June 30, 2012 and 2011. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with International Accounting Standard 34, ‘Interim Financial Reporting’, as issued by the International Accounting Standards Board.

Buenos Aires, Argentina

August 7, 2012

PRICE WATERHOUSE & CO. S.R.L.



		by: /s/ Marcelo de Nicola
		Marcelo de Nicola

Legal information

Denomination: Adecoagro S.A.

Legal address: 13-15 Avenue de la Liberté, L-1931, Luxembourg

Company activity: Agricultural and agro-industrial

Date of registration: June 11, 2010

Expiration of company charter: No term defined

Number of register: B153.681

Capital stock: 121,262,416 common shares (of which 3,262 are treasury shares)

Majority shareholder: Quantum Partners LP

Legal address: 1300 Thames St. 5^th FL, Baltimore MD 21231-3495, United States of America

Parent company activity: Investing

Capital stock: 25,384,049 common shares

F - 3

Adecoagro S.A.

Condensed Consolidated Interim Statements of Financial Position

as of June 30, 2012 and December 31, 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


		June 30,			December 31,
	Note	2012			2011
		(unaudited)
ASSETS
Non-Current Assets
Property, plant and equipment	6		822,770			759,696
Investment property	7		16,884			27,883
Intangible assets	8		34,579			36,755
Biological assets	9		214,078			187,973
Investments in joint ventures			6,473			4,299
Deferred income tax assets	17		41,774			37,081
Trade and other receivables	10		31,672			15,746
Other assets			1,397			1,408

Total Non-Current Assets			1,169,627			1,070,841

Current Assets
Biological assets	9		24,748			51,627
Inventories	11		117,003			96,147
Trade and other receivables	10		155,302			141,181
Derivative financial instruments			5, 502			10,353
Cash and cash equivalents	12		233,743			330,546

Total Current Assets			536,298			629,854

TOTAL ASSETS			1,705,925			1,700,695

SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital	13		181,894			180,800
Share premium	13		933,178			926,005
Cumulative translation adjustment			(162,275	)		(99,202	)
Equity-settled compensation			15,655			15,306
Other reserves			(350	)		(526	)
Treasury shares			(5	)		(4	)
Retained earnings			44,770			57,497

Equity attributable to equity holders of the parent			1,012,867			1,079,876

Non controlling interest			8,132			14,993

TOTAL SHAREHOLDERS EQUITY			1,020,999			1,094,869

LIABILITIES
Non-Current Liabilities
Trade and other payables	15		8,652			8,418
Borrowings	16		205,823			203,409
Deferred income tax liabilities	17		88,103			92,989
Payroll and social security liabilities	18		1,298			1,431
Provisions for other liabilities			3,395			3,358

Total Non-Current Liabilities			307,271			309,605

Current Liabilities
Trade and other payables	15		108,000			114,020
Current income tax liabilities			1,034			872
Payroll and social security liabilities	18		20,164			17,010
Borrowings	16		230,469			157,296
Derivative financial instruments			17,204			6,054
Provisions for other liabilities			784			969

Total Current Liabilities			377,655			296,221

TOTAL LIABILITIES			684,926			605,826

TOTAL SHAREHOLDERS EQUITY AND LIABILITIES			1,705,925			1,700,695

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 4

Adecoagro S.A.

Condensed Consolidated Interim Statements of Income

for the three-month and six-month periods ended June 30, 2012 and 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


			Six-months ended June 30						Three-months ended June 30
	Note		2012			2011			2012			2011
			(unaudited)

Sales of manufactured products and services rendered		20		147,652			146,178			80,374			119,837
Cost of manufactured products sold and services rendered		21		(115,845	)		(96,086	)		(62,043	)		(74,142	)

Gross Profit from Manufacturing Activities				31,807			50,092			18,331			45,695

Sales of agricultural produce and biological assets		20		117,984			88,693			76,780			56,782
Cost of agricultural produce sold and direct agricultural selling expenses		21		(117,984	)		(88,693	)		(76,780	)		(56,782	)
Initial recognition and changes in fair value of biological assets and agricultural produce				18,317			55,969			(8,792	)		(2,489	)
Changes in net realizable value of agricultural produce after harvest				9,893			4,069			6,944			1,449

Gross Profit/(Loss) from Agricultural Activities				28,210			60,038			(1,848	)		(1,040	)

Margin on Manufacturing and Agricultural Activities Before Operating Expenses				60,017			110,130			16,483			44,655

General and administrative expenses		21		(28,171	)		(33,508	)		(14,965	)		(16,201	)
Selling expenses		21		(27,988	)		(24,074	)		(14,750	)		(18,204	)
Other operating income, net		23		8,361			(304	)		16,056			5,392
Share of loss of joint ventures				(1,084	)		(350	)		(851	)		(350	)

Gain from Operations Before Financing and Taxation				11,135			51,894			1,973			15,292

Finance income		24		6,970			13,611			1,390			10,188
Finance costs		24		(38,600	)		(24,654	)		(28,801	)		(9,346	)

Financial results, net		24		(31,630	)		(11,043	)		(27,411	)		842

(Loss)/Gain Before Income Tax				(20,495	)		40,851			(25,438	)		16,134

Income tax benefit / (charge)		17		6,875			(12,754	)		10,560			(3,398	)

(Loss)/Gain for the Period				(13,620	)		28,097			(14,878	)		12,736

Attributable to:
Equity holders of the parent				(13,520	)		27,569			(14,763	)		12,486
Non controlling interest				(100	)		528			(115	)		250

(Loss) / earnings per share attributable to the equity holders of the parent during the period:
Basic				(0.1125	)		0.2320			(0.1217	)		0.1040
Diluted				(0.1125	)		0.2304			(0.1217	)		0.1033

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 5

Adecoagro S.A.

Condensed Consolidated Interim Statements of Comprehensive Income

for the three-month and six-month periods ended June 30, 2012 and 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Six-months ended June 30					Three-months ended June 30
	2012			2011		2012			2011
	(unaudited)
(Loss)/Gain for the period		(13,620	)		28,097		(14,878	)		12,736
Other comprehensive income:
Exchange differences on translating foreign operations		(62,335	)		31,477		(78,305	)		21,927

Other comprehensive (loss)/income for the period		(62,335	)		31,477		(78,305	)		21,927

Total comprehensive (loss)/income for the period		(75,955	)		59,574		(93,183	)		34,663

Attributable to:
Equity holders of the parent		(75,365	)		58,404		(92,452	)		33,971
Non controlling interest		(590	)		1,170		(731	)		692

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 6

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2012 and 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Attributable to equity holders of the parent
	Share Capital (Note 13)		Share Premium		Cumulative Translation Adjustment		Equity-settled Compensation			Other reserves		Treasury shares		Retained Earnings		Subtotal		Non Controlling Interest		Total Shareholders’ Equity
Balance at January 1, 2011		120,000		563,343		11,273		13,659			—		—		257		708,532		14,570		723,102
Profit for the year		—		—		—		—			—		—		27,569		27,569		528		28,097
Other comprehensive income for the year		—		—		30,835		—			—		—		—		30,835		642		31,477

Total comprehensive income for the period		—		—		30,835		—			—		—		27,569		58,404		1,170		59,574
Net proceeds from IPO and Private placement (Note 13)		60,104		362,926		—		—			—		—		—		423,030		—		423,030
Employee share options (Note 14):
— Value of employee services		—		—		—		458			—		—		—		458		9		467
— Forfeited		—		—		—		(1,078	)		—		—		1,078		—		—		—
Restricted shares (Note 14):
— Value of employee services		—		—		—		674			—		—		—		674		13		687

Balance at June 30, 2011 (unaudited)		180,104		926,269		42,108		13,713			—		—		28,904		1,191,098		15,762		1,206,860

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 7

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2012 and 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Attributable to equity holders of the parent
	Share Capital (Note 13)		Share Premium		Cumulative Translation Adjustment			Equity-settled Compensation			Other reserves			Treasury shares			Retained Earnings			Subtotal			Non Controlling Interest			Total Shareholders’ Equity
Balance at January 1, 2012		180,800		926,005		(99,202	)		15,306			(526	)		(4	)		57,497			1,079,876			14,993			1,094,869
Loss for the year		—		—		—			—			—			—			(13,520	)		(13,520	)		(100	)		(13,620	)
Other comprehensive loss for the year		—		—		(61,845	)		—			—			—			—			(61,845	)		(490	)		(62,335	)

Total comprehensive loss for the period		—		—		(61,845	)		—			—			—			(13,520	)		(75,365	)		(590	)		(75,955	)
Employee share options (Note 14):
— Value of employee services		—		—		—			140			—			—			—			140			1			141
— Exercised		49		263		—			(93	)		—			—			—			219			(2	)		217
— Forfeited		—		—		—			(82	)		—			—			82			—			—			—
Restricted shares (Note 14):
— Value of employee services		—		—		—			1,711			—			—			—			1,711			16			1,727
— Vested		—		1,347		—			(1,516	)		181			—			—			12			(12	)		—
— Forfeited		—		—		—			—			1			(1	)		—			—			—			—
Acquisition of non controlling interest		1,045		5,563		(1,228	)		189			(6	)		—			711			6,274			(6,274	)		—

Balance at June 30, 2012 (unaudited)		181,894		933,178		(162,275	)		15,655			(350	)		(5	)		44,770			1,012,867			8,132			1,020,999

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 8

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2012 and 2011

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Note	June 30, 2012			June 30, 2011
		(unaudited)			(unaudited)
Cash flows from operating activities:

(Loss)/Gain for the period			(13,620	)		28,097
Adjustments for:
Income tax (benefit)/charge	17		(6,875	)		12,754
Depreciation	6, 21		21,233			13,799
Amortization	8, 21		171			189
Loss/(Gain) from disposal of other property items	23		385			(335	)
Gain from disposal of subsidiary	26		(7,963	)		—
Equity settled share-based compensation granted	22		1,868			1,154
Loss/(gain) from derivative financial instruments and forwards	23, 24		9,682			(7,829	)
Interest and other financial expense, net	24		6,676			14,667
Initial recognition and changes in fair value of non harvested biological assets (unrealized)			(8,310	)		(16,665	)
Changes in net realizable value of agricultural produce after harvest (unrealized)			(1,316	)		(28	)
Provision and allowances			(432	)		(2,406	)
Share of loss from joint venture			1,084			350
Foreign exchange gains, net	24		13,271			(713	)

Subtotal			15,854			43,034
Changes in operating assets and liabilities:
Increase in trade and other receivables			(27,109	)		(10,002	)
Increase in inventories			(21,457	)		(73,828	)
Decrease in biological assets			32,191			50,835
Decrease in other assets			11			1
Decrease/(increase) in derivative financial instruments			6,318			(9,510	)
Increase in trade and other payables			7,287			3,811
Increase in payroll and social security liabilities			2,785			2,870
Decrease in provisions for other liabilities			(18	)		(3	)

Net cash generated from operating activities before interest and taxes paid			15,862			7,208
Income tax paid			(2,542	)		(15,527	)

Net cash generated from/(used in) operating activities			13,320			(8,319	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 9

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2012 and 2011 (Continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Note	June 30, 2012			June 30, 2011
		(unaudited)			(unaudited)
Cash flows from investing activities:
Purchases of property, plant and equipment			(120,651	)		(23,577	)
Purchases of intangible assets	8		(59	)		(37	)
Purchase of cattle and non current biological assets planting cost			(41,336	)		(24,801	)
Interest received	24		6,200			2,468
Proceeds from sale of property, plant and equipment			460			890
Short-term investments			—			(48,000	)
Payment of seller financing arising on subsidiaries acquired			(6,807	)		—
Investments in joint ventures			(3,000	)		—
Acquisition of currency forward			—			(205,000	)

Net cash used in investing activities			(165,193	)		(298,057	)

Cash flows from financing activities:
Net proceeds from IPO and Private placement	13		—			421,778
Proceeds from equity settled share-based compensation exercised			218			—
Proceeds from long-term borrowings			44,380			17,167
Payments of long-term borrowings			(12,587	)		(13,709	)
Interest paid			(11,553	)		(16,682	)
Net increase in short-term borrowings			42,384			39,931

Net cash generated from financing activities			62,842			448,485

Net (decrease)/increase in cash and cash equivalents			(89,031	)		142,109

Cash and cash equivalents at beginning of period			330,546			70,269
Effect of exchange rate changes on cash and cash equivalents			(7,772	)		(3,372	)

Cash and cash equivalents at end of period			233,743			209,006

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 10

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

1.	General information

Adecoagro S.A. (the “Company” or “Adecoagro”) is a société anonyme (stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. These activities are carried out through three major lines of business, namely, Farming; Sugar, Ethanol and Energy; and Land Transformation. Farming is further comprised of five reportable segments, which are described in detail in Note 5 to these condensed consolidated interim financial statements. The address of its registered office is 13-15 Avenue de la Liberté, L-1931, Luxembourg.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on August 7, 2012.

2.	Basis of preparation

The information presented in the accompanying interim six-month condensed consolidated financial statements is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as of June 30, 2012, results of operations and cash flows for the six months ended June 30, 2012 and 2011. All such adjustments are of a normal recurring nature. In preparing the accompanying condensed consolidated interim financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. These condensed consolidated interim financial statements follow the same accounting policies and methods of their application as the Group's audited December 31, 2011 annual financial statements. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the audited financial statements of the Group as of that date.

These condensed consolidated interim financial information as of June 30, 2012 and for the six-month periods ended June 30, 2012 and 2011 have been prepared in accordance with IAS 34, ‘Interim financial reporting’. The annual financial statements for the year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC). The condensed consolidated interim financial statements are presented in United States Dollars.

A complete list of standards, amendments and interpretations to existing standards published but not yet effective for the Group is described in Note 2.1 to the annual financial statements. None of those standards became effective for the Group in the six-month period ended June 30, 2012.

During the six months ended June 30, 2012, the IASB did not publish new standards that would have a material impact on the Group when they become effective.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 11

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

2.	Basis of preparation (continued)

Seasonality of operations

The Group’s business activities are inherently seasonal. The Group generally harvest and sell its grains (corn, soybean, rice and sunflower) between February and June, with the exception of wheat, which is harvested from December to January. Coffee and cotton are different in that while both are typically harvested from June to August, they require a conditioning process which takes about two to three months. Sales in other business segments, such as in Cattle and Dairy business segments, tend to be more stable. However, the raising of cattle and sale of milk is generally higher during the fourth quarter, when the weather is warmer and pasture conditions are more favorable. The sugarcane harvesting period typically begins April/May and ends in November/December. This creates fluctuations in sugarcane inventory, usually peaking in December to cover sales between crop harvests (i.e., January through April). As a result of the above factors, there may be significant variations in the results of operations from one quarter to another, as planting activities may be more concentrated in one quarter whereas harvesting activities may be more concentrated in another quarter. In addition, quarterly results may vary as a result of the effects of fluctuations in commodities prices, production yields and costs on the determination of initial recognition and changes in fair value of biological assets and agricultural produce.

3.	Financial risk management

Risk management principles and processes

The Group continues to be exposed to several risks arising from financial instruments including price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and the Group´s approach to the identification, assessment and mitigation of risks is included in Note 3 to the annual financial statements. There have been no changes to the Group´s exposure and risk management principles and processes since December 31, 2011 and refers readers to the annual financial statements for information.

However, the Group considers that the following tables below provide useful information to understand the Group´s interim results for the six months ended June 30, 2012. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.

•

Exchange rate risk

The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates at June 30, 2012. All amounts are shown in US dollars.


	June 30, 2012
	Functional currency
Net monetary position (Liability)/ Asset	Argentine Peso			Brazilian Reais			Uruguayan Peso			US Dollar		Total
Argentine Peso		(17,058	)		—			—			—		(17,058	)
Brazilian Reais		—			(138,360	)		—			—		(138,360	)
US Dollar		(131,970	)		(115,712	)		22,656			141,079		(83,947	)
Uruguayan Peso		—			—			(1,203	)		—		(1,203	)

Total		(149,028	)		(254,072	)		21,453			141,079		(240,568	)

The Group’s analysis is carried out based on the exposure of each functional currency subsidiary against the US dollar. The Group estimates that, other factors being constant, a 10% devaluation (revaluation) of the respective functional currencies against the US dollar at June 30, 2012 would decrease or (increase) Loss Before Income Tax for the period, as described in the tables below:

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 12

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)


	June 30, 2012
	Functional currency
Net monetary position	Argentine Peso			Brazilian Reais			Uruguayan Peso		US Dollar		Total
Argentine Peso		n/a			—			—		—		—
Brazilian Reais		—			n/a			n/a		—		—
US Dollar		(13,197	)		(11,571	)		2,266		n/a		(22,503	)
Uruguayan Peso		—			—			—		—		—

(Increase) or decrease in Loss Before Income Tax		(13,197	)		(11,571	)		2,266		—		(22,503	)

•

Interest rate risk

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans (excluding finance leases) at June 30, 2012 (all amounts are shown in US dollars):


	June 30, 2012
	Functional currency
Rate per currency denomination	Argentine Peso			Brazilian Reais			Uruguayan Peso			Total
	(unaudited)
Fixed rate:
Argentine Peso		(5,539	)		—			—			(5,539	)
Brazilian Reais		—			(69,089	)		—			(69,089	)
US Dollar		(74,026	)		—			(468	)		(74,494	)
Uruguayan Peso		—			—			(29	)		(29	)

Subtotal Fixed-rate borrowings		(79,565	)		(69,089	)		(497	)		(149,151	)

Variable rate:
Brazilian Reais		—			(100,206	)		—			(100,206	)
US Dollar		(58,979	)		(127,076	)		—			(186,055	)

Subtotal Variable-rate borrowings		(58,979	)		(227,282	)		—			(286,261	)

Total borrowings as per analysis		(138,544	)		(296,371	)		(497	)		(435,412	)

Finance leases		(783	)		(97	)		—			(880	)

Total borrowings at June 30, 2012		(139,327	)		(296,468	)		(497	)		(436,292	)

At June 30, 2012, if interest rates on floating-rate borrowings had been 1 % higher (or lower) with all other variables held constant, Loss Before Income Tax for the period would increase as follows:


	June 30, 2012
	Functional currency
Rate per currency denomination	Argentine Peso			Brazilian Reais			Uruguayan Peso		Total
	(unaudited)
Variable rate:
Brazilian Reais		—			(1,002	)		—		(1,002	)
US Dollar		(590	)		(1,271	)		—		(1,861	)

Total effects on Loss Before Income Tax		(590	)		(2,273	)		—		(2,863	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 13

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)

•

Credit risk

As of June 30, 2012, 4 banks accounted for more than 90% of the total cash deposited (HSBC, Rabobank, Banco Do Brasil, and ABC Brasil).

•

Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2012:

•

Futures / Options

As of June 30, 2012


	June 30, 2012
Type of derivative contract	Tons		Notional amount			Market Value Asset/ (Liability)			(Loss)/Gain *()**
						(unaudited)			(unaudited)
Futures:
Sale
Corn		75		16,650			(2,285	)		(2,285	)
Soybean		56		19,098			(335	)		(335	)
Wheat		16		4,035			(396	)		(396	)
Cotton		3		5,107			(64	)		(24	)
Sugar		111		48,842			4,155			(3,406	)
Ethanol		19		10,764			148			73
Options:
*Buy put*
Soybean		28		353			112			(241	)
Wheat		27		600			113			(345	)
Sugar		25		1,089			974			(890	)
*Sell call*
Corn		2		(17	)		(12	)		5
Sugar		25		1,089			(440	)		1,970
Wheat		2		(51	)		(72	)		(4	)

Total		389		107,559			1,898			(5,878	)

(*)

Included in the line item “Gain from commodity derivative financial instruments” of Note 23.

Commodity future contract fair values are computed with reference to quoted market prices on future exchanges.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 14

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)

•

Currency forward

Between August 2011 and June 2012, the Group entered into several currency forward contracts with Brazilian banks in order to hedge the fluctuation of the Brazilian Reais against US Dollar for a total notional amount of US$ 134.9 million, with maturity dates between July 2012 and December 2013. The outstanding contracts resulted in the recognition of a loss amounting to US$ 8.4 million included within “Financial results, net.”

Additionally the Group has a floating-to-fixed interest rate swap. There have been no significant changes to these contracts since December 31, 2011.

4.	Critical accounting estimates and judgments

The Group's critical accounting policies are also consistent with those of the audited annual financial statements for the year ended December 31, 2011 described in Note 4.

5.	Segment information

The Group operates in three major lines of business, namely, Farming; Sugar, Ethanol and Energy; and Land Transformation.

The Group’s ‘Farming’ is further comprised of five reportable segments: Crops, Rice, Dairy, Coffee and Cattle.

The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the condensed consolidated interim financial statements. Revenue generated and goods and services exchanged between segments are calculated on the basis of market prices.

The following table presents information with respect to the Group’s reportable segments. Certain other activities of a holding function nature not allocable to the segments are disclosed in the column ‘Corporate’.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 15

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2012 (unaudited):


	*Farming*																		*Sugar,* *ethanol and* *energy*			*Land* *transformation*		Corporate			Total
	Crops			Rice			Dairy			Coffee			Cattle			*Farming* *subtotal*			*Sugar,* *ethanol and* *energy*			*Land* *transformation*		Corporate			Total
Sales of manufactured products and services rendered		417			40,445			—			—			2,406			43,268			104,384			—		—			147,652
Cost of manufactured products sold and services rendered		—			(35,654	)		—			—			(134	)		(35,788	)		(80,057	)		—		—			(115,845	)

Gross Profit from Manufacturing Activities		417			4,791			—			—			2,272			7,480			24,327			—		—			31,807

Sales of agricultural produce and biological assets		107,296			76			9,319			827			277			117,795			189			—		—			117,984
Cost of agricultural produce sold and direct agricultural selling expenses		(107,296	)		(76	)		(9,319	)		(827	)		(277	)		(117,795	)		(189	)		—		—			(117,984	)
Initial recognition and changes in fair value of biological assets and agricultural produce		22,004			1,439			(78	)		(687	)		(89	)		22,589			(4,272	)		—		—			18,317
Gain from changes in net realizable value of agricultural produce after harvest		9,688			—			—			205			—			9,893			—			—		—			9,893

Gross Profit from Agricultural Activities		31,692			1,439			(78	)		(482	)		(89	)		32,482			(4,272	)		—		—			28,210

Margin on Manufacturing and Agricultural Activities Before Operating Expenses		32,109			6,230			(78	)		(482	)		2,183			39,962			20,055			—		—			60,017

General and administrative expenses		(2,130	)		(2,113	)		(434	)		(484	)		(24	)		(5,185	)		(10,833	)		—		(12,153	)		(28,171	)
Selling expenses		(2,980	)		(7,766	)		(119	)		(139	)		(19	)		(11,023	)		(16,929	)		—		(36	)		(27,988	)
Other operating (loss)/ income, net		(4,666	)		467			—			2,179			(11	)		(2,031	)		2,673			7,963		(244	)		8,361
Share of loss of joint ventures		—			—			(1,084	)		—			—			(1,084	)		—			—		—			(1,084	)

Gain/ (Loss) from Operations Before Financing and Taxation		22,333			(3,182	)		(1,715	)		1,074			2,129			20,639			(5,034	)		7,963		(12,433	)		11,135

Depreciation and amortization		884			1,995			428			306			106			3,719			17,685			—		—			21,404
Initial recognition and changes in fair value of biological assets (unrealized)		(527	)		—			(803	)		(2,097	)		—			(3,427	)		3,873			—		—			446
Initial recognition and changes in fair value of agricultural produce (unrealized)		6,859			748			—			1,410			—			9,017			(1,153	)		—		—			7,864
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		15,672			691			725			—			(89	)		16,999			(6,992	)		—		—			10,007
Gain from changes in net realizable value of agricultural produce after harvest (unrealized)		1,234			—			—			82			—			1,316			—			—		—			1,316
Gain from changes in net realizable value of agricultural produce after harvest (realized)		8,454			—			—			123			—			8,577			—			—		—			8,577
Property, plant and equipment, net		233,631			48,373			14,522			21,184			19,900			337,610			485,160			—		—			822,770
Investment property		—			—			—			—			16,884			16,884			—			—		—			16,884
Goodwill		13,757			6,098			—			1,104			1,141			22,100			10,797			—		—			32,897
Biological assets		20,112			4,417			10,649			15,321			1,316			51,815			187,011			—		—			238,826
Investment in joint ventures		—			—			6,473			—			—			6,473			—			—		—			6,473
Inventories		42,824			41,987			3,081			8,044			17			95,953			21,050			—		—			117,003

Total segment assets		310,324			100,875			34,725			45,653			39,258			530,835			704,018			—		—			1,234,853

Borrowings		82,997			55,731			13,933			13,008			—			165,669			270,623			—		—			436,292

Total segment liabilities		82,997			55,731			13,933			13,008			—			165,669			270,623			—		—			436,292

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 16

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2011 (unaudited):


	*Farming*																		*Sugar,* *ethanol and* *energy*			*Land* *transformation*		Corporate			Total
	Crops			Rice			Dairy			Coffee			Cattle			*Farming* *subtotal*			*Sugar,* *ethanol and* *energy*			*Land* *transformation*		Corporate			Total
Sales of manufactured products and services rendered		176			33,884			—			713			2,345			37,118			109,060			—		—			146,178
Cost of manufactured products sold and services rendered		—			(29,720	)		—			(629	)		(191	)		(30,540	)		(65,546	)		—		—			(96,086	)

Gross Profit from Manufacturing Activities		176			4,164			—			84			2,154			6,578			43,514			—		—			50,092

Sales of agricultural produce and biological assets		75,973			35			8,963			3,204			518			88,693			—			—		—			88,693
Cost of agricultural produce sold and direct agricultural selling expenses		(75,973	)		(35	)		(8,963	)		(3,204	)		(518	)		(88,693	)		—			—		—			(88,693	)
Initial recognition and changes in fair value of biological assets and agricultural produce		37,030			8,275			3,424			2,338			351			51,418			4,551			—		—			55,969
Gain from changes in net realizable value of agricultural produce after harvest		5,832			—			—			(1,763	)		—			4,069			—			—		—			4,069

Gross Profit/ (Loss) from Agricultural Activities		42,862			8,275			3,424			575			351			55,487			4,551			—		—			60,038

Margin on Manufacturing and Agricultural Activities Before Operating Expenses		43,038			12,439			3,424			659			2,505			62,065			48,065			—		—			110,130

General and administrative expenses		(4,806	)		(4,016	)		(798	)		(635	)		(164	)		(10,419	)		(11,265	)		—		(11,824	)		(33,508	)
Selling expenses		(813	)		(5,605	)		(188	)		(235	)		(27	)		(6,868	)		(17,206	)		—		—			(24,074	)
Other operating income, net		(3,047	)		113			—			241			—			(2,693	)		2,411			—		(22	)		(304	)
Share of loss of joint ventures		—			—			(350	)		—			—			(350	)		—			—		—			(350	)

Gain/ (Loss) from Operations Before Financing and Taxation		34,372			2,931			2,088			30			2,314			41,735			22,005			—		(11,846	)		51,894

Depreciation and amortization		658			1,351			232			281			120			2,642			11,346			—		—			13,988
Initial recognition and changes in fair value of biological assets (unrealized)		5,074			—			1,485			(817	)		—			5,742			(10,650	)		—		—			(4,908	)
Initial recognition and changes in fair value of agricultural produce (unrealized)		10,026			4,123			—			3,155			—			17,304			4,269			—		—			21,573
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		21,930			4,152			1,939			—			351			28,372			10,932			—		—			39,304
Gain from changes in net realizable value of agricultural produce after harvest (unrealized)		—			—			—			28			—			28			—			—		—			28
Gain from changes in net realizable value of agricultural produce after harvest (realized)		5,832			—			—			(1,791	)		—			4,041			—			—		—			4,041

As of December 31, 2011:
Property, plant and equipment, net		209,859			43,781			4,202			25,806			19,568			303,216			451,873			—		—			755,089
Investment property		—			—			—			—			20,852			20,852			—			—		—			20,852
Goodwill		4,892			6,943			—			1,140			316			13,291			13,406			—		—			26,697
Biological assets		46,878			3,292			8,102			22,062			302			80,636			152,284			—		—			232,920
Investment in joint ventures		—			—			6,182			—			—			6,182			—			—		—			6,182
Inventories		28,333			32,449			2,231			2,751			13			65,777			31,217			—		—			96,994

Total segment assets		289,962			86,465			20,717			51,759			41,051			489,954			648,780			—		—			1,138,734

Borrowings		67,170			42,965			10,740			16,072			—			136,947			266,939			—		—			403,886

Total segment liabilities		67,170			42,965			10,740			16,072			—			136,947			266,939			—		—			403,886

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 17

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Total segment assets are measured in a manner consistent with that of the condensed consolidated interim financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. The Group’s investment in the joint venture Grupo La Lácteo is allocated to the ‘Dairy’ segment. Therefore, the Group’s share of profit or loss after income taxes and its carrying amount are reported in this segment.

Total segment liabilities are measured in a manner consistent with that of the condensed consolidated interim financial statements. These liabilities are allocated based on the operations of the segment.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 18

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

6.	Property, plant and equipment

Changes in the Group’s property, plant and equipment in the six-month periods ended June 30, 2012 and 2011 were as follows:


	Farmlands			Farmland improvements			Buildings and facilities			Machinery, equipment, furniture and fittings			Computer equipment			Vehicles			Work in progress			Total
Six-month period ended June 30, 2011
Opening net book amount		305,412			245			165,248			239,910			1,602			1,103			38,472			751,992
Exchange differences		(158	)		(14	)		9,877			15,172			90			(20	)		919			25,866
Additions		—			—			246			6,899			220			149			17,059			24,573
Transfers		—			542			7,927			4,317			137			—			(12,923	)		—
Disposals		—			—			(36	)		(489	)		—			(30	)		—			(555	)
Reclassification to non-income tax credits (*)		—			—			—			(1,533	)		—			—			—			(1,533	)
Depreciation charge		—			(127	)		(4,503	)		(13,488	)		(300	)		(188	)		—			(18,606	)

Closing net book amount		305,254			646			178,759			250,788			1,749			1,014			43,527			781,737

At June 30, 2011 (unaudited)
Cost		305,254			3,597			211,372			355,013			3,321			2,961			43,527			925,045
Accumulated depreciation		—			(2,951	)		(32,613	)		(104,225	)		(1,572	)		(1,947	)		—			(143,308	)

Net book amount		305,254			646			178,759			250,788			1,749			1,014			43,527			781,737

Six-month period ended June 30, 2012
Opening net book amount		313,685			930			153,617			204,441			1,474			993			84,556			759,696
Exchange differences		(16,862	)		(50	)		(11,608	)		(14,018	)		(99	)		(107	)		(5,558	)		(48,302	)
Additions		—			—			82			15,724			397			1,558			107,521			125,282
Transfers		—			147			10,965			15,105			—			—			(26,217	)		—
Disposals		—			—			(86	)		(745	)		(4	)		(11	)		—			(846	)
Disposal from subsidiary		(1,118	)		—			(17	)		(1	)		—			—			—			(1,136	)
Transfers from investment property		9,625			—			—			—			—			—			—			9,625
Reclassification to non-income tax credits (*)		—			—			—			(316	)		—			—			—			(316	)
Depreciation charge		—			(201	)		(6,998	)		(13,493	)		(267	)		(274	)		—			(21,233	)

Closing net book amount		305,330			826			145,955			206,697			1,501			2,159			160,302			822,770

At June 30, 2012 (unaudited)
Cost		305,330			4,165			190,041			335,410			3,649			4,562			160,302			1,003,459
Accumulated depreciation		—			(3,339	)		(44,086	)		(128,713	)		(2,148	)		(2,403	)		—			(180,689	)

Net book amount		305,330			826			145,955			206,697			1,501			2,159			160,302			822,770

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 19

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

6.	Property, plant and equipment (continued)

(*)

Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. The procedure adopted initially was to recognize such credits proportionally to the depreciation of these fixed assets on a monthly basis. During 2009, the Group elected to change the procedure to recognize these federal tax credits separately when the assets is purchased and, as permitted, the tax credits already “embedded” within the cost of the assets were reclassified to tax credit (See Note 10).

An amount of US$ 18,115 and US$ 11,229 of depreciation charges are included in “Cost of manufactured products sold and services rendered” for the six-month periods ended June 30, 2012 and 2011, respectively. An amount of US$ 2,788 and US$ 2,570 of depreciation charges are included in “General and administrative expenses” for the six-month periods ended June 30, 2012 and 2011, respectively. An amount of US$ 330 and US$ nil of depreciation charges are included in “Selling expenses” for the six-month periods ended June 30, 2012 and 2011, respectively. An amount of US$ nil and 4,807 of depreciation charge were not charged in the result of the period and were capitalized in “Inventories”.

As of June 30, 2012, borrowing costs of US$ 4,631 (June 30, 2011: US$ 475) were capitalized as components of the cost of acquisition or construction of qualifying assets.

Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 312,168 as of June 30, 2012.

As of June 30, 2012, included within property, plant and equipment balances are US$ 1,068 million related to the net book value of assets under finance leases.

7.	Investment property

Changes in the Group’s investment property in the six-month periods ended June 30, 2012 and 2011 were as follows:


	June 30, 2012			June 30, 2011
Beginning of the year		27,883			21,261
Transfers (i)		(9,625	)		—
Exchange difference		(1,374	)		(693	)

End of the year		16,884			20,568

Cost		16,884			20,568
Accumulated depreciation		—			—

Net book amount		16,884			20,568

The following amounts have been recognized in the statement of income in the line “Sales of manufactured products and services rendered”:


	June 30, 2012		June 30, 2011
Rental income		2,676		2,364

(i)	Transferred to property, plant and equipment in the six-month period ended June 30, 2012. Relates to finalization of contracts with third parties.

As of June 30, 2012, the fair value of investment property was US$ 70,945 million (2011: US$ 103,169 million).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 20

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

8.	Intangible assets

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2012 and 2011 were as follows:


	Goodwill			Trademarks			Software			Total
Six-month period ended June 30, 2011
Opening net book amount		26,494			1,884			275			28,653
Exchange differences		681			19			21			721
Additions		—			—			37			37
Amortization charge (i) (Note 21)		—			(107	)		(82	)		(189	)

Closing net book amount		27,175			1,796			251			29,222

At June 30, 2011 (unaudited)
Cost		27,175			2,792			725			30,692
Accumulated amortization					(996	)		(474	)		(1,470	)

Net book amount		27,175			1,796			251			29,222

Six-month period ended June 30, 2012
Opening net book amount		34,886			1,592			277			36,755
Exchange differences		(1,989	)		(47	)		(28	)		(2,064	)
Additions		—			—			59			59
Amortization charge (ii) (Note 21)		—			(86	)		(85	)		(171	)

Closing net book amount		32,897			1,459			223			34,579

At June 30, 2012 (unaudited)
Cost		32,897			1,545			308			34,750
Accumulated amortization		—			(86	)		(85	)		(171	)

Net book amount		32,897			1,459			223			34,579

(i)	For the six-month period ended June 30, 2012 an amount of US$ 85 and US$ 85 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

(ii)	For the six-month period ended June 30, 2011 an amount of US$ 82 and US$ 107 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

The Group tests annually whether goodwill has suffered any impairment. The last impairment test of goodwill was performed as of September 30, 2011.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 21

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

9.	Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2012 and 2011 were as follows:


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Beginning of the period		239,600			186,757
Increase due to purchases		1,367			—
Initial recognition and changes in fair value of biological assets (i)		18,317			55,969
Decrease due to harvest		(170,649	)		(196,322	)
Decrease due to sales		(1,074	)		(1,212	)
Costs incurred during the period		169,492			132,196
Exchange differences		(18,227	)		10,306

End of the period		238,826			187,694

(i)

Biological asset with a production cycle of more than one year (that is, sugarcane, coffee, dairy and cattle) generated “Initial recognition and changes in fair value of biological assets” amounting to US$ (5,126) loss for the six-month period ended June 30, 2012 (June 30, 2011: US$ 10,664 gain). In 2012, an amount of US$ (20,783) (2011: US$ 26,814) was attributable to price changes, and an amount of US$ 15,657 (2011: US$ (16,150)) was attributable to physical changes.

Biological assets as of June 30, 2012 and December 31, 2011 were as follows:


	June 30, 2012		December 31, 2011
	(unaudited)
Non-current
Cattle for dairy production		10,649		9,338
Other cattle		1,097		1,341
Sown land — coffee		15,321		18,369
Sown land — sugarcane		187,011		158,925

		214,078		187,973

Current
Other cattle		219		160
Sown land — crops		20,112		28,300
Sown land — rice		4,417		23,167

		24,748		51,627

Total biological assets		238,826		239,600

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 22

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.

Trade and other receivables, net


	June 30, 2012			December 31, 2011
	(unaudited)
Non current
Receivables from related parties (Note 25)		63			63

Trade receivables — net		63			63

Advances to suppliers		9,190			2,719
Income tax credits		4,917			3,682
Non-income tax credits (i)		11,554			6,988
Receivable from disposal of subsidiary (Note 26)		2,037			—
Cash collateral		1,414			1,469
Other receivables		2,497			825

Non current portion		31,672			15,746

Current
Trade receivables		38,093			38,178
Receivables from related parties (Note 25)		1,248			4,846
Less: Allowance for trade receivables		(1,270	)		(1,622	)

Trade receivables — net		38,071			41,402

Prepaid expenses		16,115			12,102
Advances to suppliers		19,890			11,872
Income tax credits		4,489			2,522
Non-income tax credits (i)		39,800			45,659
Cash collateral		509			1,792
Receivables from related parties (Note 25)		1,719			—
Receivable from disposal of subsidiary (Note 26)		7,299			—
Receivable from disposal of farmland		18,453			18,090
Other receivables		8,957			7,742

Subtotal		117,231			99,779

Current portion		155,302			141,181

Total trade and other receivables, net		186,974			156,927

(i)	Includes US$ 316 and US$ 3,021 reclassified from property, plant and equipment as of June 30, 2012 and December 31, 2011, respectively.

The fair values of current trade and other receivables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other receivables approximate their carrying amount, as the impact of discounting is not significant.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 23

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.

Trade and other receivables, net (continued)

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies (expressed in US dollars):


	June 30, 2012		December 31, 2011
	(unaudited)
Currency
US Dollar		66,302		51,338
Argentine Peso		52,060		42,163
Uruguayan Peso		1,080		803
Brazilian Reais		67,532		62,622

		186,974		156,927

As of June 30, 2012 trade receivables of US$ 5,722 (December 31, 2011: US$ 18,938) were past due but not impaired. The ageing analysis of these receivables is as follows:


	June 30, 2012		December 31, 2011
	(unaudited)
Up to 3 months		5,134		17,996
3 to 6 months		341		914
Over 6 months		247		28

		5,722		18,938

The creation and release of allowance for trade receivables have been included in ‘Selling expenses’ in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The other classes within other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group holds mortgages as collateral for the sale of La Macarena and La Alegría farmlands.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 24

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.

Inventories


	June 30, 2012		December 31, 2011
	(unaudited)
Raw materials		29,148		31,539
Finished goods		75,692		60,067
Stocks held by third parties		9,415		4,528
Others		2,748		13

		117,003		96,147

The cost of inventories recognized as expense and included in “Cost of manufactured products sold and services rendered” amounted to US$ 110,926 for the six-month period ended June 30, 2012. The cost of inventories recognized as expense and included in “Cost of agricultural produce sold and direct agricultural selling expenses” amounted to US$ 98,064 for the six-month period ended June 30, 2012.

12.

Cash and cash equivalents


	June 30, 2012		December 31, 2011
	(unaudited)
Cash at bank and on hand		182,652		238,902
Short-term bank deposits		51,091		91,644

		233,743		330,546

13.

Shareholders’ contributions


	Number of shares (thousands)		Share capital and share premium
At January 1, 2011 (1)		80,000		683,343
Issue of shares — Initial Public Offering and private placement		40,069		423,030
At June 30, 2011		120,069		1,106,373

At January 1, 2012		120,533		1,106,805
Employee share options exercised (Note 14)		32		312
Restricted shares vested (Note 14)		—		1,347
Exchange of shares		697		6,608
At June 30, 2012		121,262		1,115,072

(1)

The Extraordinary General Meeting of Adecoagro’s shareholders held on January 24, 2011 approved the reverse split of Adecoagro’s common shares, changing the nominal value of Adecoagro’s common shares from US$ 1 to US$ 1.5. Therefore, Adecoagro reduced total shares outstanding as of that date from 119,999,997 shares to 79,999,985 shares.

During March, 2012, the Company issued 696,618 shares to certain limited partners of International Farmland Holdings LP (“IFH”) in exchange for their residual interest, totaling 0.57230% interest in IFH thereby increasing its interest in IFH to 99.2%.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 25

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Equity-settled share-based payments

The Group has set a “2004 Incentive Option Plan” and a “2007/2008 Equity Incentive Plan” (collectively referred to as “Option Schemes”) under which the Group grants equity-settled options to senior managers and selected employees of the Group’s subsidiaries. Additionally, in 2010 the Group has set a “Adecoagro 2010 Restricted Share Plan” (referred to as “Restricted Share Plan”) under which the Group grants restricted shares to senior and medium management and key employees of the Group’s subsidiaries.

(a) Option Schemes

For the six-month periods ended June 30, 2012 and 2011 the Group incurred US$ 0.1 million and US$ 0.5 million respectively, related to the options granted under the Option Schemes.

Movements in the number of equity-settled options outstanding and their related weighted average exercise prices under plans are as follows:

2004 Incentive Option Plan


	June 30, 2012					June 30, 2011
	Average exercise price per share		Options (thousands)			Average exercise price per share		Options (thousands)
At January 1		6.68		2,134			6.67		2,176
Granted		—		—			—		—
Forfeited		—		(2	)		—		—
Exercised		6.71		(32	)		—		—
Expired							—		—

At June 30		6.68		2,100			6.67		2,176

2007/2008 Equity Incentive Plan


	June 30, 2012					June 30, 2011
	Average exercise price per share		Options (thousands)			Average exercise price per share		Options (thousands)
At January 1		13.06		2,038			13.05		2,113
Granted		—		—			—		—
Forfeited		13.17		(24	)		12.82		(46	)
Exercised		—		—			—		—
Expired		—		—			—		—

At June 30		13.06		2,014			13.05		2,067

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 26

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Equity-settled share-based payments (continued)

Options outstanding under the plans have the following expiry date and exercise prices:

2004 Incentive Option Plan


	Exercise price per share
			Shares (in thousands)
			June 30, 2012		June 30, 2011
Expiry date:
May 1, 2014		5.83		674		674
May 1, 2015		5.83		553		556
May 1, 2016		5.83		173		229
February 16, 2016		7.11		110		110
October 1, 2016		8.62		592		607

2007/2008 Equity Incentive Plan


	Exercise price per share
			Shares (in thousands)
			June 30, 2012		June 30, 2011
Expiry date:
Dec 1, 2017		12.83		1,138		1,151
Jan 30, 2019		13.40		687		700
Nov 1, 2019		13.40		8		18
Jan 30, 2020		12.82		28		35
Jan 30, 2020		13.40		71		81
Jun 30, 2020		13.40		22		22
Sep 1, 2020		13.40		44		44
Sep 1, 2020		12.82		15		15

The following table shows the exercisable shares at period end under both the Adecoagro/ IFH 2004 Incentive Option Plan and the Adecoagro/ IFH 2007/ 2008 Equity Incentive Plan:


	Exercisable shares in thousands
June 30, 2012		3,832
June 30, 2011		3,423

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 27

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

14.

Equity-settled share-based payments (continued)

(b) Restricted Share and Restricted Stock Unit Plan

As June 30, 2012, the Group recognized compensation expense US$ 1.7 million related to the restricted shares granted under the Restricted Share and Restricted Stock Unit Plan.

Key grant-date fair value and other assumptions under the Restricted Share and Restricted Stock Unit Plan are detailed below:


Grant Date	Apr 1, 2011			Apr 1, 2011			May 13, 2011			Apr 1, 2012			May 15, 2012
Fair value		12.69			12.69			12.36			9.81			9.33
Possibility of ceasing employment before vesting		2.6	%		4.25	%		0	%		5	%		0	%

Movements in the number of restricted shares outstanding under the Restricted Share and Restricted Stock Unit Plan are as follows:


	Restricted shares (thousands)			Restricted stock units (thousands)
	2012			2012
At January 1, 2012		356			—
Granted (1)		—			515
Forfeited		(1	)		—
Vested		(121	)		—

At June 30, 2012		234			515

(1)	Approved by the Board of Directors of March 27, 2012 and the Shareholders Meeting of April 18, 2012.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 28

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

15.

Trade and other payables


	June 30, 2012		December 31, 2011
	(unaudited)
Non-current
Payable from acquisition of property, plant and equipment (i)		3,646		3,646
Taxes payable		1,914		1,547
Other payables		679		885
Escrows arising on business combinations		2,413		2,340

		8,652		8,418

Current
Trade payables		63,048		68,672
Payable from acquisition of subsidiary		26,394		35,730
Advances from customers		10,079		1,721
Amounts due to related parties (Note 25)		—		318
Taxes payable		3,402		4,989
Other payables		5,077		2,590

		108,000		114,020

Total trade and other payables		116,652		122,438

(i)	These trades payable are mainly collateralized by property, plant and equipment of the Group.

16.

Borrowings


	June 30, 2012		December 31, 2011
	(unaudited)
Non-current
Syndicated loan (*)		10,000		10,000
BNDES loan (*)		44,425		52,627
IDB facility (*)		61,667		69,401
Banco do Brazil Loan (*)		35,563		23,070
ABC Brazil Loan		10,992		1,350
Other bank borrowings		42,625		46,882
Obligations under finance leases		551		79

		205,823		203,409

Current
Bank overdrafts		1,280		6,735
Syndicated loan (*)		10,420		10,112
BNDES loan (*)		9,692		10,396
IDB facility (*)		14,752		8,349
Banco do Brazil Loan (*)		21,986		2,836
ABC Brazil Loan		16,128		2,397
Rabobank Loan		17,189		2,205
Pine Bank Loan		23,826		11,428
Other bank borrowings		114,867		102,719
Obligations under finance leases		329		119

		230,469		157,296

Total borrowings		436,292		360,705

(*)	The Group was in compliance with the related covenants under the respective loan agreements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 29

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

16.

Borrowings (continued)

As of June 30, 2012, total bank borrowings include collateralized liabilities of US$ 371,556 (December 31, 2011: US$ 297,472). These loans are mainly collateralized by property, plant and equipment and shares of certain subsidiaries of the Group.

The maturity of the Group’s borrowings (excluding obligations under finance leases) and the Group’s exposure to fixed and variable interest rates is as follows:


	June 30, 2012		December 31, 2011
	(unaudited)
Fixed rate:
Less than 1 year		83,380		70,007
Between 1 and 2 years		14,503		25,554
Between 2 and 3 years		11,604		12,426
Between 3 and 4 years		10,206		8,902
Between 4 and 5 years		8,837		7,551
More than 5 years		20,621		22,866

		149,151		147,306

Variable rate:
Less than 1 year		146,760		87,170
Between 1 and 2 years		39,247		40,353
Between 2 and 3 years		38,021		24,756
Between 3 and 4 years		32,877		23,507
Between 4 and 5 years		21,629		23,369
More than 5 years		7,727		14,046

		286,261		213,201

		435,412		360,507

The carrying amounts of the Group’s borrowings are denominated in the following currencies (expressed in US dollars):


	June 30, 2012		December 31, 2011
	(unaudited)
Currency
Argentine Peso		6,322		6,739
US Dollar		260,549		199,657
Uruguayan Peso		29		—
Brazilian Reais		169,392		154,309

		436,292		360,705

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 30

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

17.

Taxation

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Current income tax		(1,070	)		(13,436	)
Deferred income tax		7,945			682

Income tax benefit / (charge)		6,875			(12,754	)

There has been no change in the statutory tax rates in the countries where the Group operates since December 31, 2011.

The gross movement on the deferred income tax account is as follows:


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Beginning of period		55,908			44,032
Exchange differences		(1,556	)		(5,176	)
IPO deductible expenses directly charged to equity		—			(1,252	)
Disposal of subsidiary (Note 26)		(78	)		—
Income tax benefit		(7,945	)		(682	)

End of period		46,329			36,922

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries		(8,653	)		14,577
Non-deductible items		1,328			1,030
Unused tax losses, net		(15	)		(2,569	)
Others		465			(284	)

Income tax (benefit) / charge		(6,875	)		12,754

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 31

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

18.

Payroll and social security liabilities


	June 30, 2012		December 31, 2011
	(unaudited)
Non-current
Social security payable		1,298		1,431

		1,298		1,431

Current
Salaries payable		7,388		3,174
Social security payable		3,138		2,758
Provision for vacations		7,464		7,100
Provision for bonuses		2,174		3,978

		20,164		17,010

Total payroll and social security liabilities		21,462		18,441

19.

Provisions for other liabilities

The Group is subject to several laws, regulations and business practices of the countries where it operates. In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have been no material changes to claimed amounts and current proceedings since December 31, 2011.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 32

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

20.

Sales


	June 30, 2012		June 30, 2011
	(unaudited)		(unaudited)
Sales of manufactured products and services rendered:
Ethanol		59,431		52,988
Sugar		37,232		42,900
Rice		39,716		33,444
Energy		7,721		13,011
Operating leases		2,676		2,364
Coffee		—		713
Services		855		597
Others		21		161

		147,652		146,178

Sales of agricultural produce and biological assets:
Soybean		47,880		39,237
Cattle for dairy production		810		701
Other cattle		265		511
Corn		25,757		18,729
Cotton		3,592		787
Milk		8,509		8,262
Wheat		19,757		9,497
Coffee		827		3,204
Sunflower		6,169		6,055
Barley		3,103		570
Seeds		794		35
Sorghum		244		946
Others		277		159

		117,984		88,693

Total sales		265,636		234,871

Commitments to sell commodities at a future date

The Group entered into contracts to sell non financial instruments, mainly, sugar, soybean, corn and coffee through sales forward contracts. Those contracts are held for purposes of delivery the non financial instrument in accordance with the Group’s expected sales. Accordingly, as the own use exception criteria are met, those contracts are not recorded as derivatives.

The notional amount of these contracts is US$ 76.8 million as of June 30, 2012 (2011: US$ 75.1 million) comprised primarily 53,834 of tons of sugar (US$ 27.8 million), 35,906 tons of soybean (US$ 13.2 million), 69,098 tons of corn (US$ 13.7 million) and 19,500 tons of ethanol (US$ 13.8 million) which expire between July 2012 and July 2013.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 33

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

21.

Expenses by nature

The following table provides the additional disclosure required on the nature of expenses and their relationship to the function within the Group:


	June 30, 2012		June 30, 2011
	(unaudited)		(unaudited)
Cost of agricultural produce and biological assets sold		107,660		79,890
Raw materials and consumables used in manufacturing activities		73,442		62,330
Services		9,666		8,453
Salaries and social security expenses (Note 22)		33,472		29,245
Depreciation and amortization		21,404		13,988
Taxes (*)		3,095		883
Maintenance and repairs		7,663		4,911
Lease expense and similar arrangements (**)		1,717		1,192
Freights		6,639		14,227
Export taxes / selling taxes		10,856		11,806
Fuel and lubricants		3,278		3,891
Others		11,096		11,545

Total expenses by nature		289,988		242,361

(*)	Excludes export taxes and selling taxes.

(**)	Relates to various cancellable operating lease agreements for office and machinery equipment.

For the six-month period ended June 30, 2012, an amount of US$ 115,845 is included as “Cost of manufactured products sold and services rendered” (June 30, 2011: US$ 96,086); an amount of US$ 117,984 is included as “Cost of agricultural produce sold and direct agricultural selling expenses” (June 30, 2011: US$ 88,693); an amount of US$ 28,171 is included in “General and administrative expenses” (June 30, 2011: US$ 33,508); and an amount of US$ 27,988 is included in “Selling expenses” as described above (June 30, 2011: US$ 24,074).

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 34

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

22.

Salaries and social security expenses


	June 30, 2012		June 30, 2011
	(unaudited)		(unaudited)
Wages and salaries		24,330		21,967
Social security costs		7,274		6,124
Equity-settled share-based compensation		1,868		1,154

		33,472		29,245

Number of employees		6,669		5,852

23.

Other operating income, net


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Gain from commodity derivative financial instruments		1,262			3,649
Loss from onerous contracts — forwards		(1,731	)		(5,632	)
Gain from disposal of subsidiary		7,963			—
(Loss) / Gain from disposal of other property items		(385	)		335
Others		1,252			1,344

		8,361			(304	)

24.

Financial results, net


	June 30, 2012			June 30, 2011
	(unaudited)			(unaudited)
Finance income:
— Interest income		6,200			2,468
— Foreign exchange gains, net		—			713
— Gain from interest rate/foreign exchange rate derivative financial instruments		—			9,812
— Other income		770			618

Finance income		6,970			13,611

Finance costs:
— Interest expense		(11,835	)		(17,135	)
— Foreign exchange losses, net		(13,271	)		—
— Loss from interest rate/foreign exchange rate derivative financial instruments		(9,213	)		—
— Taxes		(2,470	)		(2,292	)
— Other expenses		(1,811	)		(5,227	)

Finance costs		(38,600	)		(24,654	)

Total financial results, net		(31,630	)		(11,043	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 35

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

25.

Related-party transactions

The following is a summary of the balances and transactions with related parties:


Related party	Relationship	Description of transaction	Income (loss) included in the statement of income						Balance receivable (payable)
Related party	Relationship	Description of transaction	June 30, 2012			June 30, 2011			June 30, 2012			December 31, 2011
			(unaudited)			(unaudited)			(unaudited)
Grupo La Lácteo	Joint venture	Sales of goods		4,903			8,262			—			—
		Purchases of goods		(48	)		—			—			—
		Interest income		295			—			—			—
		Receivables from related parties (Note 10)		—			—			1,311			4,909
Mario Jorge de Lemos Vieira/ Cia Agropecuaria Monte Alegre/ Alfenas Agricola Ltda/ Marcelo Weyland Barbosa Vieira/ Paulo Albert Weyland Vieira	(i)	Cost of manufactured products sold and services rendered (ii)		(1,123	)		—			—			—
		Receivables from related parties (Note 10)		—			—			1,719			—
		Payables (Note 15)		—			—			—			(318	)

Ospraie	(i)	Consent fee (iii)		—			(3,000	)		—			—

Management and selected employees	Employment	Compensation selected employees		(3,543	)		(3,146	)		(15,655	)		(15,306	)

(i)	Shareholder of the Company.

(ii)	Relates to agriculture partnership agreements (“parceria”).

(iii)

One-time cost related to the agreement entered into with Ospraie to waive certain rights following the completion of initial public offering.

26.

Disposal of subsidiary

In June 2012, the Group completed the sale of Agrícola Ganadera San José, a wholly owned subsidiary for a sale price of US$ 9.3 million. This subsidiary was mainly comprised of farmland businesses. This transaction resulted in a net gain of US$ 8 million included under the line item “Other operating income, net” in the statement of income. The Group received US$ 5 million in cash in July 2012 and the balance will be received in two equal installments plus interest in June 2013 and 2014.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

F - 36