EX-99.2 3 ex992fs06302022.htm EX-99.2

Document

Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of June 30, 2022 and for the six and three-month periods ended June 30, 2022 and 2021

Legal information

Denomination: Adecoagro S.A.

Legal address: Vertigo Naos Building, 6, Rue Eugène Ruppert, L-2453, Luxembourg

Company activity: Agricultural and agro-industrial

Date of registration: June 11, 2010

Expiration of company charter: No term defined

Number of register (RCS Luxembourg): B153.681

Issued Capital Stock: 111,381,815 common shares (Note 21)

Outstanding Capital Stock: 111,080,828 common shares

Treasury Shares: 300,987 common shares

F - 1

Adecoagro S.A.

Condensed Consolidated Interim Statements of Income

for the six-month and three-month periods ended June 30, 2022 and 2021

(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			2022						2021						2022						2021
						(unaudited)
Sales of goods and services rendered			4			590,037						464,561						383,673						289,769
Cost of goods sold and services rendered			5			(477,381)						(338,801)						(307,077)						(213,619)
Initial recognition and changes in fair value of biological assets and agricultural produce			15			132,864						112,450						48,811						37,172
Changes in net realizable value of agricultural produce after harvest						(18,716)						(8,806)						(17,891)						(5,135)
Margin on manufacturing and agricultural activities before operating expenses						226,804						229,404						107,516						108,187
General and administrative expenses			6			(41,281)						(31,095)						(22,546)						(16,338)
Selling expenses			6			(62,523)						(50,046)						(38,137)						(30,730)
Other operating income/(expense), net			8			212						(12,150)						13,588						(6,366)
Bargain purchase gain			20			12,365						—						12,365						—
Profit from operations						135,577						136,113						72,786						54,753
Finance income			9			28,463						23,425						(27,843)						22,363
Finance costs			9			(79,001)						(74,628)						(47,355)						(23,424)
Other financial results - Net gain / (loss) of inflation effects on the monetary items			9			17,276						3,637						10,010						6,582
Financial results, net			9			(33,262)						(47,566)						(65,188)						5,521
Profit before income tax						102,315						88,547						7,598						60,274
Income tax (expense) / benefit			10			(19,031)						(53,546)						10,513						(44,608)
Profit for the period						83,284						35,001						18,111						15,666
Attributable to:
Equity holders of the parent						82,344						35,079						19,087						16,865
Non-controlling interest						940						(78)						(976)						(1,199)
Earnings per share attributable to the equity holders of the parent during the period:
Basic earnings per share						0.744						0.300						0.169						0.144
Diluted earnings per share						0.741						0.299						0.168						0.143

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

F- 2

Adecoagro S.A.

Condensed Consolidated Interim Statements of Comprehensive Income

for the six-month and three-month periods ended June 30, 2022 and 2021

(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,
			2022						2021						2022						2021
			(unaudited)
Profit for the Period			83,284						35,001						18,111						15,666
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations			92,079						76,370						(12,245)						81,176
Cash flow hedge, net of tax (Note 2)			12,826						19,864						8,099						19,927
Items that will not be reclassified to profit or loss:
Revaluation surplus net of tax			(52,965)						(90,821)						(13,261)						(79,851)
Other comprehensive income / (loss)			51,940						5,413						(17,407)						21,252
Total comprehensive income for the period			135,224						40,414						704						36,918
Attributable to:
Equity holders of the parent			133,758						42,646						1,477						40,293
Non-controlling interest			1,466						(2,232)						(773)						(3,375)

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

F- 3

Adecoagro S.A.

Condensed Consolidated Interim Statements of Financial Position

as of June 30, 2022 and December 31, 2021

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

						June 30,						December 31,
			Note			2022						2021
						(unaudited)
ASSETS
Non-Current Assets
Property, plant and equipment			11			1,550,369						1,422,623
Right of use assets			12			358,026						260,776
Investment property			13			32,132						32,132
Intangible assets			14			35,083						31,337
Biological assets			15			24,739						19,355
Deferred income tax assets			10			8,659						10,321
Trade and other receivables, net			17			42,227						42,231
Derivative financial instruments			16			5,439						757
Other assets						1,625						1,071
Total Non-Current Assets						2,058,299						1,820,603
Current Assets
Biological assets			15			150,585						175,823
Inventories			18			393,016						239,524
Trade and other receivables, net			17			224,550						145,849
Derivative financial instruments			16			195						828
Other assets						—						8
Cash and cash equivalents			19			188,351						199,766
Total Current Assets						956,697						761,798
TOTAL ASSETS						3,014,996						2,582,401
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital			21			167,073						183,573
Share premium			21			811,666						851,060
Cumulative translation adjustment						(458,916)						(514,609)
Equity-settled compensation						14,621						16,073
Cash flow hedge						(48,107)						(60,932)
Other reserves						119,114						106,172
Treasury shares						(455)						(16,909)
Revaluation surplus						272,878						289,982
Reserve from the sale of non-controlling interests in subsidiaries						41,574						41,574
Retained earnings						184,318						115,735
Equity attributable to equity holders of the parent						1,103,766						1,011,719
Non-controlling interest						37,577						36,111
TOTAL SHAREHOLDERS EQUITY						1,141,343						1,047,830
LIABILITIES
Non-Current Liabilities
Trade and other payables			23			13,472						284
Borrowings			24			748,888						705,487
Lease liabilities			25			270,666						201,718
Deferred income tax liabilities			10			286,590						265,848
Payroll and social security liabilities			26			1,057						1,243
Derivatives financial instruments			16			85						—
Provisions for other liabilities			27			2,846						2,565
Total Non-Current Liabilities						1,323,604						1,177,145
Current Liabilities
Trade and other payables			23			193,840						168,746
Current income tax liabilities						3,085						1,625
Payroll and social security liabilities			26			25,844						25,051
Borrowings			24			269,418						112,164
Lease liabilities			25			56,595						45,136
Derivative financial instruments			16			788						1,283
Provisions for other liabilities			27			479						3,421
Total Current Liabilities						550,049						357,426
TOTAL LIABILITIES						1,873,653						1,534,571
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES						3,014,996						2,582,401

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

F- 4

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2022 and 2021

(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 21)			Share Premium			Cumulative Translation Adjustment			Equity-settled Compensation			Cash flow hedge			Other reserves			Treasury shares			Revaluation surplus			Reserve from the sale of non-controlling interests in subsidiaries			Retained Earnings			Subtotal			Non-Controlling Interest			Total Shareholders’ Equity
Balance at January 1, 2021						183,573			902,815			(555,044)			14,795			(90,689)			83,406			(7,630)			343,570			41,574			8,671			925,041			38,683						963,724
Loss for the period						—			—			—			—			—			—			—			—			—			35,079			35,079			(78)						35,001
Other comprehensive income:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations						—			—			39,203			—			—			—			—			33,295			—			—			72,498			3,872						76,370
Cash flow hedge (*)						—			—			—			—			19,863			—			—			—			—			—			19,863			1						19,864
Revaluation of surplus (**)						—			—			—			—			—			—			—			(84,794)			—			—			(84,794)			(6,027)						(90,821)
Other comprehensive income for the period						—			—			39,203			—			19,863			—			—			(51,499)			—			—			7,567			(2,154)						5,413
Total comprehensive income for the period						—			—			39,203			—			19,863			—			—			(51,499)			—			35,079			42,646			(2,232)						40,414
Reserves for the benefit of government grants (1)						—			—			—			—			—			10,500			—			—			—			(10,500)			—			—						—
- Restricted shares and restricted units (Note 21):
Value of employee services						—			—			—			3,069			—			—			—			—			—			—			3,069			—						3,069
Vested						—			3,594			—			(4,142)			—			734			262			—			—			—			448			—						448
Forfeited						—			—			—			—			—			2			(2)			—			—			—			—			—						—
Granted						—			—			—			—			—			(1,592)			1,592			—			—			—			—			—						—
-Purchase of own shares (Note 21)						—			(16,876)			—			—			—			—			(3,340)			—			—			—			(20,216)			—						(20,216)
Balance at June 30, 2021 (unaudited)						183,573			889,533			(515,841)			13,722			(70,826)			93,050			(9,118)			292,071			41,574			33,250			950,988			36,451						987,439

(*) Net of 2,667 of Income tax.

(**) Net of 25,922 of Income tax.

(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy business).

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

F- 5

Adecoagro S.A.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

for the six-month periods ended June 30, 2022 and 2021 (continued)

(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 21)						Share Premium			Cumulative Translation Adjustment			Equity-settled Compensation			Cash flow hedge			Other reserves			Treasury shares			Revaluation surplus			Reserve from the sale of non-controlling interests in subsidiaries			Retained Earnings			Subtotal			Non-Controlling Interest			Total Shareholders’ Equity
Balance at January 1, 2022						183,573						851,060			(514,609)			16,073			(60,932)			106,172			(16,909)			289,982			41,574			115,735			1,011,719			36,111			1,047,830
Profit for the period						—						—			—			—			—						—			—			—			82,344			82,344			940			83,284
Other comprehensive loss:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations						—						—			55,693			—			—			—			—			32,138			—			—			87,831			4,248			92,079
Cash flow hedge (*)						—						—			—			—			12,825			—			—			—			—			—			12,825			1			12,826
- Items that will not be reclassified to profit or loss:
Revaluation surplus (**)						—						—			—			—			—			—			—			(49,242)			—			—			(49,242)			(3,723)			(52,965)
Other comprehensive income for the period						—						—			55,693			—			12,825			—			—			(17,104)			—			—			51,414			526			51,940
Total comprehensive income for the period						—						—			55,693			—			12,825			—			—			(17,104)			—			82,344			133,758			1,466			135,224
- Reduction of issued share capital of the company (Note 21):						(16,500)						—			—			—			—			—			16,500			—			—			—			—			—			—
- Reserves for the benefit of government grants (1)						—						—			—			—			—			13,761			—			—			—			(13,761)			—			—			—
- Employee share options (Note 21):
Exercised						—						2,432			—			(778)			—			—			470			—			—			—			2,124			—			2,124
- Restricted shares and restricted units (Note 22):
Value of employee services						—						—			—			3,392			—			—			—			—			—			—			3,392			—			3,392
Vested						—						4,647			—			(4,066)			—			1,243			—			—			—			—			1,824			—			1,824
Forfeited						—						—			—			—			—			39			(39)			—			—			—			—			—			—
Granted						—						—			—			—			—			(2,101)			2,101			—			—			—			—			—			—
- Purchase of own shares (Note 21)						—						(11,473)			—			—			—			—			(2,578)			—			—			—			(14,051)			—			(14,051)
- Dividends to shareholders (Note 21)						—						(35,000)			—			—			—			—			—			—			—			—			(35,000)			—			(35,000)
Balance at June 30, 2022 (unaudited)						167,073						811,666			(458,916)			14,621			(48,107)			119,114			(455)			272,878			41,574			184,318			1,103,766			37,577			1,141,343

(*) Net of 9,407 of Income tax.

(**) Net of 28,003 of Income tax.

(1) Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values in our Sugar, ethanol and energy

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

F- 6

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2022 and 2021

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

			Note			June 30, 2022						June 30, 2021
						(unaudited)
Cash flows from operating activities:
Profit for the period						83,284						35,001
Adjustments for:
Income tax expense			10			19,031						53,546
Depreciation of property, plant and equipment			11			77,474						74,761
Amortization of intangible assets			14			927						735
Depreciation of right of use assets			12			28,562						22,980
Loss / (gain) from disposal of other property items			8			(1,119)						268
Bargain purchase gain			20			(12,365)						—
Net loss from the Fair value adjustment of Investment properties			13			3,753						2,957
Equity settled share-based compensation granted			7			4,251						2,732
(Gain) / loss from derivative financial instruments			8, 9			(313)						10,080
Interest, finance cost related to lease liabilities and other financial expense, net			9			48,774						43,600
Initial recognition and changes in fair value of non harvested biological assets (unrealized)						(69,471)						(14,928)
Changes in net realizable value of agricultural produce after harvest (unrealized)						5,719						2,766
Provision and allowances						158						933
Net gain of inflation effects on the monetary items			9			(17,276)						(3,637)
Foreign exchange gains, net			9			(25,019)						(20,115)
Cash flow hedge – transfer from equity			9			26,363						26,575
Subtotal						172,733						238,254
Changes in operating assets and liabilities:
Increase in trade and other receivables						(70,471)						(59,018)
Increase in inventories						(83,543)						(139,857)
Decrease in biological assets						111,475						90,338
(Increase) / decrease in other assets						(674)						9
(Increase) in derivative financial instruments						(5,003)						(24,029)
Decrease in trade and other payables						(74,379)						(28,220)
Decrease / (increase) in payroll and social security liabilities						414						(467)
(Decrease) / increase in provisions for other liabilities						(279)						212
Net cash generated from operating activities before taxes paid						50,273						77,222
Income tax paid						(2,101)						(648)
Net cash generated from operating activities			(a)			48,172						76,574

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

F- 7

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2022 and 2021 (continued)

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

			Note			June 30, 2022						June 30, 2021
						(unaudited)
Cash flows from investing activities:
Acquisition of a business, net of cash and cash equivalents acquired			20			1,179						—
Purchases of property, plant and equipment			11			(126,113)						(101,863)
Purchases of cattle and non-current biological assets						(7,321)						(2,284)
Purchases of intangible assets			14			(1,480)						(995)
Interest received and others						1,322						1,050
Proceeds from sale of property, plant and equipment						623						1,969
Proceeds from sale of farmlands and other assets			27			9,879						8,089
Net cash used in investing activities			(b)			(121,911)						(94,034)
Cash flows from financing activities:
Proceeds from equity settled share-based compensation exercise						2,124						—
Proceeds from long-term borrowings						37,150						—
Payments of long-term borrowings						(13,464)						(92,792)
Proceeds from short-term borrowings						176,186						184,948
Payment of short-term borrowings						(29,082)						(139,611)
Proceeds of derivatives financial instruments						58						359
Lease payments						(55,517)						(36,541)
Interest paid			(c)			(18,139)						(22,337)
Prepayment related expenses						—						(3,068)
Purchase of own shares						(14,051)						(20,216)
Dividends paid to non-controlling interest						—						(12)
Dividends to shareholders			21			(17,500)						—
Net cash used in financing activities			(d)			67,765						(129,270)
Net decrease in cash and cash equivalents						(5,974)						(146,730)
Cash and cash equivalents at beginning of period			19			199,766						336,282
Effect of exchange rate changes and inflation on cash and cash equivalents			(e)			(5,441)						(4,387)
Cash and cash equivalents at end of period			19			188,351						185,165

For non-cash transactions related to Acquisition of subsidiaries of Viterra in Argentina and Uruguay see Note 20

(a) Includes (12,264) and (16,542) of the combine effect of IAS 29 and IAS 21 of the Argentine subsidiaries for June 30, 2022 and 2021, respectively.

(b) Includes (2,624) and 2,055 of the combine effect of IAS 29 and IAS 21 of the Argentine subsidiaries for June 30, 2022 and 2021, respectively.

(c) Includes 135 and 2,620 of the combine effect of IAS 29 and IAS 21 of the Argentine subsidiaries for June 30, 2022 and 2021, respectively.

(d) Includes 16,636 and 17,885 of the combine effect of IAS 29 and IAS 21 of the Argentine subsidiaries for June 30, 2022 and 2021, respectively.

(e) Includes (1,748) and (3,398) of the combine effect of IAS 29 and IAS 21 of the Argentine subsidiaries for June 30, 2022 and 2021, respectively.

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

F- 8

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

(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 the Group’s ultimate parent company and 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 three reportable segments, which are described in detail in Note 3 to these condensed consolidated interim financial statements.

Adecoagro is a public company listed in the New York Stock Exchange as a foreign registered company under the symbol of AGRO.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on August 9, 2022.

2.    Financial risk management

Risk management principles and processes

The Group is 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 2 to the annual financial statements. There have been no significant changes to the Group's exposure and risk management principles and processes since December 31, 2021 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 month period ended June 30, 2022. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.

In Argentina, past economic events forced the government to impose certain restrictions in the exchange markets, such as:

–Dividends payments to non residents.

–Set specific deadlines to enter and settle exports

–Prior authorization of the BCRA for the formation of external assets for companies

–Prior authorization of the BCRA for the payment of debts related to companies abroad

–Deferral of payment of certain public debt instruments.

–Fuel price control

–Some restrictions to exports

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

F- 9

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

2.    Financial risk management (continued)

•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, 2022. All amounts are shown in US dollars.

			June 30, 2022
			(unaudited)
			Functional currency
Net monetary position (Liability)/ Asset			Argentine Peso			Brazilian Reais			Uruguayan Peso			US Dollar			Total
Argentine Peso			(141,253)			—			—			—			(141,253)
Brazilian Reais			—			(465,119)			—			—			(465,119)
US Dollar			(262,940)			(344,717)			31,802			(16,563)			(592,418)
Uruguayan Peso			—			—			(566)			—			(566)
Total			(404,193)			(809,836)			31,236			(16,563)			(1,199,356)

The Group’s analysis shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the US dollar. The Group estimated that, other factors being constant, a 10% appreciation of the US dollar against the respective functional currencies for the period ended June 30, 2022 would have decreased the Group’s Profit before income tax for the period. A 10% depreciation of the US dollar against the functional currencies would have an equal and opposite effect on the income statement.

A portion of this effect would be recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future sales in US dollars (see Hedge Accounting - Cash Flow Hedge below for details).

			June 30, 2022
			(unaudited)
			Functional currency
Net monetary position			Argentine Peso			Brazilian Reais			Uruguayan Peso						Total
US Dollar			(26,294)			(34,472)			3,180						(59,242)
(Decrease) or increase in Profit before income tax			(26,294)			(34,472)			3,180						(59,242)

Hedge Accounting - Cash flow hedge

Effective July 1, 2013, the Group formally documented and designated cash flow hedging relationships to hedge the foreign exchange rate risk of a portion of its highly probable future sales in US dollars using a portion of its borrowings denominated in US dollars, currency forwards and foreign currency floating-to-fixed interest rate swaps.

The Group expects that the cash flows will occur and affect profit or loss between 2022 and 2024.

For the period ended June 30, 2022, a loss before income tax of US$ 7,042 was recognized in other comprehensive income and a loss of US$ 26,629 was reclassified from equity to profit or loss within “Financial results, net”.

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

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

2.    Financial risk management (continued)

•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 at June 30, 2022 (all amounts are shown in US dollars):

			June 30, 2022
			(unaudited)
			Functional currency
Rate per currency denomination			Argentine Peso						Brazilian Reais						Uruguayan Peso						US Dollar						Total
Fixed rate:
Argentine Peso			110,507						—						—						—						110,507
Brazilian Reais			—						8,858						—						—						8,858
US Dollar			191,659						384,140						21,002						89,609						686,410
Subtotal Fixed-rate borrowings			302,166						392,998						21,002						89,609						805,775
Variable rate:
Brazilian Reais			—						192,480						—						—						192,480
US Dollar			19,280						771						—						—						20,051
Subtotal Variable-rate borrowings			19,280						193,251						—						—						212,531
Total borrowings as per analysis			321,446						586,249						21,002						89,609						1,018,306

At June 30, 2022, if interest rates on floating-rate borrowings had been 1% higher (or lower) with all other variables held constant, Profit before income tax for the period would decrease as follows:

			June 30, 2022
			(unaudited)
			Functional currency
Rate per currency denomination			Argentine Peso			Brazilian Reais			Total
Variable rate:
Brazilian Reais			—			(1,925)			(1,925)
US Dollar			(193)			(8)			(201)
Decrease in profit before income tax			(193)			(1,933)			(2,126)

•Credit risk

As of June 30, 2022, seven banks accounted for more than 80% of the total cash deposited (Credit Suisse, J.P. Morgan, Banco do Brasil, Banco Santander, Hsbc, Banco Bradesco and Itaú).

•Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2022:

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

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

2.    Financial risk management (continued)

§ Futures / Options

						June 30, 2022
Type of						Quantities (thousands) (**)						Notional						Market						Profit / (Loss) (*)
derivative contract												amount						Value Asset/ (Liability)
																		(unaudited)						(unaudited)
Futures:
Sale
Corn						(2)						(624)						(82)						82
Soybean						9						2,657						(231)						231
Wheat						17						4,994						114						(114)
Sugar						44						17,613						(475)						(567)
Total						68						24,640						(674)						(368)

(*) Included in line "Gain / (Loss) from commodity derivative financial instruments" Note 8.

(**) All quantities expressed in tons except otherwise indicated.

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

▪Other derivative financial instruments

Floating-to-fixed interest rate swaps

In April 2022 the Group's subsidiary in Brazil, Usina Monte Alegre entered into a R$ 20 million loan with Itaú BBA. The loan bears interest at a fixed rate of 13,23% p.a. At the same moment and with the same bank, the Company entered into a swap operation, with the intention to effectively convert the fixed interest rate into a variable interest rate denominated in CDI (an interbank floating interest rate in Reais), plus a fixed rate of 1,29% a.a. The swap matures according to the due date of the loan, in March 24, 2024 and resulted in a recognition of a loss of US$ 90 thousand in 2022.

As of June 30, 2022, the Group has foreign currency agreements.

During the period ended on June 30, 2022, the Group entered into several currency forward contracts in order to hedge the fluctuation of the U.S. Dollar against Euro for a total notional amount of US$ 0.85 million. The currency forward contracts maturity date is September 2022. The outstanding contracts resulted in the recognition of a gain amounting to US$ 0.02 million in 2022.

During the period ended on June 30, 2022, 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$ 1.8 million. Those contracts entered in 2022 had maturity dates between July and August 2022. The outstanding contracts resulted in the recognition of a gain of US$ 0.06 million in the period ended June 30, 2022.

In December 2020 the Group's subsidiary in Brazil, Adecoagro Vale do Ivinhema entered into a interest rate swap operation with Itaú BBA in an aggregate amount of US$ 400 million. In these operation Adecoagro Vale do Ivinhema receives IPCA (Extended National Consumer Price Index) plus 4,24% per year, and pays CDI (an interbank floating interest rate in Reais) plus 1,85% per year. This swap expires semiannually until December, 2026. This swap expires semiannually until December, 2026. This contract resulted in a recognition of a gain of US$ 1.8 million in 2022 ( loss of US$ 280 thousand in 2021).

Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

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

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

3.    Segment information

IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM evaluates the business based on the differences in the nature of its operations, products and services. The amount reported for each segment item is the measure reported to the CODM for these purposes.

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

•The Group’s ‘Farming’ line of business is further comprised of three reportable segments:

§    The Group’s ‘Crops’ Segment consists of planting, harvesting, sale and processing grains, oilseeds and fibers (including wheat, corn, soybeans, cotton, sunflowers and peanuts, among others), and to a lesser extent the provision of grain warehousing/conditioning, handling and drying services to third parties, and the purchase and sale of crops produced by third parties. Each underlying crop in the Crops segment does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several factors, some of them out of the Group´s control. Management is focused on the long-term performance of the productive land, and to that extent, the performance is assessed considering the aggregated combination, if any, of crops planted in the land. A single manager is responsible for the management of operating activity of all crops rather than for each individual crop.

§    The Group’s ‘Rice’ Segment consists of planting, harvesting, processing and marketing rice;

§    The Group’s ‘Dairy’ Segment consists of producing, processing and marketing raw milk and industrialized products, including UHT, cheese and powder milk among others;;

§    The Group’s ‘All Other Segments’ column consists of the aggregation of the remaining non-reportable operating segments, which do not meet the quantitative thresholds for disclosure and for which the Group's management does not consider them to be significance Coffee and Cattle.

•The Group’s ‘Sugar, Ethanol and Energy’ Segment consists of cultivating sugarcane which is processed in owned sugar mills, transformed into ethanol, sugar and electricity and marketed;

•The Group’s ‘Land Transformation’ Segment comprises the (i) identification and acquisition of underdeveloped and undermanaged farmland businesses; and (ii) realization of value through the strategic disposition of assets (generating profits).

Certain other activities of a holding function nature not allocable to the segments are disclosed ‘Corporate’ segment.

Total segment assets and liabilities are measured in a manner consistent with that of the consolidated financial statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the asset.

Effective July 1, 2018, the Group applied IAS 29 “Financial Reporting in Hyperinflationary Economies” (“IAS 29”) to its operations in Argentina. IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy be adjusted for the effects of changes in the general price index and be expressed in terms of the current unit of measurement at the closing date of the reporting period (“inflation accounting”). In order to determine whether an economy is classified as hyperinflationary, IAS 29 sets forth a series of factors to be considered, including whether the amount of cumulative inflation nears or exceeds a threshold of 100 %. Accordingly, Argentina has been classified as a hyperinflationary economy under the terms of IAS 29 from July 1, 2018.

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

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

3.    Segment information (continued)

According to IAS 29, all Argentine Peso-denominated non-monetary items in the statement of financial position are adjusted by applying a general price index from the date they were initially recognized to the end of the reporting period. Likewise, all Argentine Peso-denominated items in the statement of income should be expressed in terms of the measuring unit current at the end of the reporting period, consequently, income statement items are adjusted by applying a general price index on a monthly basis from the dates they were initially recognized in the financial statements to the end of the reporting period. This process is called “re-measurement”.

Once the re-measurement process is completed, all Argentine Peso denominated accounts are translated into U.S. Dollars, the Group’s reporting currency, applying the guidelines in IAS 21 “The Effects of Changes in Foreign Exchange Rates”(“IAS 21”). IAS 21 requires that amounts be translated at the closing rate at the date of the most recent statement of financial position. This process is called “translation”.

The re-measurement and translation processes are applied on a monthly basis until year-end. Due to this process, the re-measured and translated results of operations for a given month are subject to change until year-end, affecting comparison and analysis.

Following the adoption of IAS 29 to the Argentine operations of the Group, management revised the information reviewed by the CODM. Accordingly, as from July 1, 2018, (commencement of hyper-inflation accounting in Argentina), the information provided to the CODM departs from the application of IAS 29 and IAS 21 re-measurement and translation processes as follows. The segment results of the Argentinean operations for each reporting period were adjusted for inflation and translated into the Group’s reporting currency using the reporting period average exchange rate. The translated amounts were not subsequently re-measured and translated in accordance with the IAS 29 and IAS 21 procedures outlined above. From January 1, 2018 through June 30, 2018, the Group’s segment results were still based on the IFRS measurement principles adopted until June 30, 2018.

In order to evaluate the economic performance of businesses on a monthly basis, results of operations in Argentina are based on monthly data that have been adjusted for inflation and converted into the average exchange rate of the U.S. Dollar each month. These already converted figures are subsequently not readjusted and reconverted as described above under IAS 29 and IAS 21. It should be noted that this translation methodology for evaluating segment information is the same that the company uses to translate results of operation from its other subsidiaries from other countries that have not been designated hyperinflationary economies because it allows for a more accurate analysis of the economic performance of its business as a whole.

The Group’s CODM believes that the exclusion of the re-measurement and translation processes from the segment reporting structure allows for a more useful presentation and facilitates period-to-period comparison and performance analysis.

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

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

3.    Segment information (continued)

The following tables show a reconciliation of each reportable segment for the six-month period ended June 30, 2022 and 2021, as per the information reviewed by the CODM and the reportable segment measured in accordance with IAS 29 and IAS 21 as per the consolidated financial statements.

June 30, 2022			Crops																		Rice																		Dairy
			Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income
Sales of goods sold and services rendered			131,632						479						132,111						79,956						517						80,473						116,847						1,284						118,131
Cost of goods and services rendered			(127,016)						(308)						(127,324)						(68,492)						(620)						(69,112)						(102,879)						(1,026)						(103,905)
Initial recognition and changes in fair value of biological assets and agricultural produce			55,733						930						56,663						14,819						435						15,254						12,557						132						12,689
Gain from changes in net realizable value of agricultural produce after harvest			(18,037)						257						(17,780)						(2)						—						(2)						—						—						—
Margin on Manufacturing and Agricultural Activities Before Operating Expenses			42,312						1,358						43,670						26,281						332						26,613						26,525						390						26,915
General and administrative expenses			(8,118)						(138)						(8,256)						(5,509)						(106)						(5,615)						(3,753)						(71)						(3,824)
Selling expenses			(13,385)						(166)						(13,551)						(12,976)						(162)						(13,138)						(13,314)						(284)						(13,598)
Other operating income, net			(111)						(707)						(818)						557						(13)						544						(112)						(1)						(113)
Bargain purchase gain			—						—						—						12,443						(78)						12,365						—						—						—
Profit from Operations Before Financing and Taxation			20,698						347						21,045						8,353						51						8,404						9,346						34						9,380
Depreciation of Property, plant and equipment and amortization of Intangible assets			(3,740)						(55)						(3,795)						(4,756)						(100)						(4,856)						(4,859)						(107)						(4,966)

June 30, 2022			All other segments																																				Corporate																		Total
			Total segment reporting						Adjustment						Total as per statement of income																								Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income
Sales of goods sold and services rendered			1,875						15						1,890																								—						—						—						587,742						2,295						590,037
Cost of goods and services rendered			(1,483)						(7)						(1,490)																								—						—						—						(475,420)						(1,961)						(477,381)
Initial recognition and changes in fair value of biological assets and agricultural produce			348						5						353																								—						—						—						131,362						1,502						132,864
Gain from changes in net realizable value of agricultural produce after harvest			—						—						—																								—						—						—						(18,973)						257						(18,716)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses			740						13						753																								—						—						—						224,711						2,093						226,804
General and administrative expenses			(120)						(2)						(122)																								(12,775)						(178)						(12,953)						(40,780)						(501)						(41,281)
Selling expenses			(95)						(1)						(96)																								(59)						(7)						(66)						(61,903)						(620)						(62,523)
Other operating income, net			(3,648)						(113)						(3,761)																								17						17						34						1,023						(811)						212
Bargain purchase gain			—						—						—																								—						—						—						12,443						(78)						12,365
Profit from Operations Before Financing and Taxation			(3,123)						(103)						(3,226)																								(12,817)						(168)						(12,985)						135,494						83						135,577
Depreciation of Property, plant and equipment and amortization of Intangible assets			(116)						(3)						(119)																								(432)						(9)						(441)						(78,127)						(274)						(78,401)
Net loss from Fair value adjustment of Investment property			(3,641)						(112)						(3,753)																								—						—						—						(3,641)						(112)						(3,753)

Sugar, Ethanol and Energy and Land Transformation segments have not been reconciled due to the lack of differences.

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

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

3.    Segment information (continued)

June 30, 2021			Crops																		Rice																		Dairy
			Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income
Sales of goods sold and services rendered			86,828						1,774						88,602						58,814						816						59,630						73,485						1,714						75,199
Cost of goods and services rendered			(76,730)						(1,375)						(78,105)						(47,016)						(436)						(47,452)						(62,238)						(1,290)						(63,528)
Initial recognition and changes in fair value of biological assets and agricultural produce			38,848						2,094						40,942						34,408						2,077						36,485						7,362						211						7,573
Gain from changes in net realizable value of agricultural produce after harvest			(7,015)						(264)						(7,279)						—						—						—						—						—						—
Margin on Manufacturing and Agricultural Activities Before Operating Expenses			41,931						2,229						44,160						46,206						2,457						48,663						18,609						635						19,244
General and administrative expenses			(3,926)						(152)						(4,078)						(4,077)						(164)						(4,241)						(2,479)						(105)						(2,584)
Selling expenses			(7,358)						(237)						(7,595)						(8,156)						(241)						(8,397)						(7,572)						(370)						(7,942)
Other operating income, net			566						(82)						484						201						13						214						(94)						(6)						(100)
Profit from Operations Before Financing and Taxation			31,213						1,758						32,971						34,174						2,065						36,239						8,464						154						8,618
Depreciation of Property, plant and equipment and amortization of Intangible assets			(2,964)						(127)						(3,091)						(3,761)						(157)						(3,918)						(3,612)						(151)						(3,763)

June 30, 2021			All other segments																		Land transformation																		Corporate																		Total
			Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income						Total segment reporting						Adjustment						Total as per statement of income
Sales of goods sold and services rendered			853						31						884						—						—						—						—						—						—						460,226						4,335						464,561
Cost of goods and services rendered			(597)						(21)						(618)						—						—						—						—						—						—						(335,679)						(3,122)						(338,801)
Initial recognition and changes in fair value of biological assets and agricultural produce			(408)						3						(405)						—						—						—						—						—						—						108,065						4,385						112,450
Gain from changes in net realizable value of agricultural produce after harvest			—						—						—						—						—						—						—						—						—						(8,542)						(264)						(8,806)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses			(152)						13						(139)						—						—						—						—						—						—						224,070						5,334						229,404
General and administrative expenses			(60)						(4)						(64)						—						—						—						(9,739)						(427)						(10,166)						(30,243)						(852)						(31,095)
Selling expenses			(65)						(3)						(68)						—						—						—						(105)						(4)						(109)						(49,191)						(855)						(50,046)
Other operating income, net			(2,986)						(86)						(3,072)						4,731						—						4,731						(174)						(12)						(186)						(11,977)						(173)						(12,150)
Profit from Operations Before Financing and Taxation			(3,263)						(80)						(3,343)						4,731						—						4,731						(10,018)						(443)						(10,461)						132,659						3,454						136,113
Depreciation of Property, plant and equipment and amortization of Intangible assets			(64)						(4)						(68)						—						—						—						(265)						(10)						(275)						(75,047)						(449)						(75,496)
Net gain from Fair value adjustment of Investment property			(2,878)						(79)						(2,957)						—						—						—						—						—						—						(2,878)						(79)						(2,957)

Sugar, Ethanol and Energy and Land Transformation segment have not been reconciled due to the lack of differences.

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

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

3.    Segment information (continued)

Segment analysis for the six-month period ended June 30, 2022 (unaudited)

			Farming																														Sugar, Ethanol and Energy						Land Transformation						Corporate						Total
			Crops						Rice						Dairy						All Other Segments						Farming subtotal
Sales of goods and services rendered			131,632						79,956						116,847						1,875						330,310						257,432						—						—						587,742
Cost of goods sold and services rendered			(127,016)						(68,492)						(102,879)						(1,483)						(299,870)						(175,550)						—						—						(475,420)
Initial recognition and changes in fair value of biological assets and agricultural produce			55,733						14,819						12,557						348						83,457						47,905						—						—						131,362
Changes in net realizable value of agricultural produce after harvest			(18,037)						(2)						—						—						(18,039)						(934)						—						—						(18,973)
Margin on manufacturing and agricultural activities before operating expenses			42,312						26,281						26,525						740						95,858						128,853						—						—						224,711
General and administrative expenses			(8,118)						(5,509)						(3,753)						(120)						(17,500)						(10,505)						—						(12,775)						(40,780)
Selling expenses			(13,385)						(12,976)						(13,314)						(95)						(39,770)						(22,074)						—						(59)						(61,903)
Other operating income / (loss), net			(111)						557						(112)						(3,648)						(3,314)						1,138						3,182						17						1,023
Bargain purchase gain			—						12,443						—						—						12,443						—						—						—						12,443
Profit / (loss) from operations before financing and taxation			20,698						20,796						9,346						(3,123)						47,717						97,412						3,182						(12,817)						135,494
Depreciation of Property, plant and equipment and amortization of Intangible assets			(3,740)						(4,756)						(4,859)						(116)						(13,471)						(64,224)						—						(432)						(78,127)
Net loss from Fair value adjustment of Investment property			—						—						—						(3,641)						(3,641)						—						—						—						(3,641)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)			30,742						9,100						(1,743)						551						38,650						30,821						—						—						69,471
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)			24,991						5,719						14,300						(203)						44,807						17,084						—						—						61,891
Changes in net realizable value of agricultural produce after harvest (unrealized)			(5,719)						—						—						—						(5,719)						—						—						—						(5,719)
Changes in net realizable value of agricultural produce after harvest (realized)			(12,318)						(2)						—						—						(12,320)						(934)						—						—						(13,254)
Farmlands and farmland improvements, net			447,696						147,969						2,285						56,288						654,238						73,369						—						—						727,607
Machinery, equipment, building and facilities, and other fixed assets, net			54,515						35,379						108,392						1,719						200,005						194,428						—						—						394,433
Bearer plants, net			1,017						—						—						—						1,017						333,661						—						—						334,678
Work in progress			4,813						50,563						15,254						1,908						72,538						21,113						—						—						93,651
Right of use asset			10,415						3,744						1,084						—						15,243						341,692						—						1,091						358,026
Investment property			—						—						—						32,132						32,132						—						—						—						32,132
Goodwill			7,900						1,094						5,204						—						14,198						4,169						—						—						18,367
Biological assets			32,766						11,231						24,454						10,190						78,641						96,683						—						—						175,324
Finished goods			67,828						18,664						9,230						—						95,722						69,001						—						—						164,723
Raw materials, Stocks held by third parties and others			83,889						77,200						25,059						2,472						188,620						39,673						—						—						228,293
Total segment assets			710,839						345,844						190,962						104,709						1,352,354						1,173,789						—						1,091						2,527,234
Borrowings			63,719						65,347						164,618						—						293,684						586,248						—						138,374						1,018,306
Lease liabilities			10,375						3,576						891						—						14,842						311,573						—						846						327,261
Total segment liabilities			74,094						68,923						165,509						—						308,526						897,821						—						139,220						1,345,567

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

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

3.    Segment information (continued)

Segment analysis for the six-month period ended June 30, 2021 (unaudited)

			Farming																														Sugar, Ethanol and Energy						Land Transformation						Corporate						Total
			Crops						Rice						Dairy						All Other Segments						Farming subtotal
Sales of goods and services rendered			86,828						58,814						73,485						853						219,980						240,246						—						—						460,226
Cost of goods sold and services rendered			(76,730)						(47,016)						(62,238)						(597)						(186,581)						(149,098)						—						—						(335,679)
Initial recognition and changes in fair value of biological assets and agricultural produce			38,848						34,408						7,362						(408)						80,210						27,855						—						—						108,065
Changes in net realizable value of agricultural produce after harvest			(7,015)						—						—						—						(7,015)						(1,527)						—						—						(8,542)
Margin on manufacturing and agricultural activities before operating expenses			41,931						46,206						18,609						(152)						106,594						117,476						—						—						224,070
General and administrative expenses			(3,926)						(4,077)						(2,479)						(60)						(10,542)						(9,962)						—						(9,739)						(30,243)
Selling expenses			(7,359)						(8,156)						(7,572)						(65)						(23,152)						(25,934)						—						(105)						(49,191)
Other operating income / (loss), net			566						201						(94)						(2,986)						(2,313)						(14,221)						4,731						(174)						(11,977)
Profit / (loss) from operations before financing and taxation			31,212						34,174						8,464						(3,263)						70,587						67,359						4,731						(10,018)						132,659
Depreciation of Property, plant and equipment and amortization of Intangible assets			(2,964)						(3,761)						(3,612)						(64)						(10,401)						(64,381)						—						(265)						(75,047)
Net gain from Fair value adjustment of Investment property			—						—						—						(2,878)						(2,878)						—						—						—						(2,878)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)			19,520						22,186						(2,871)						442						39,277						(24,349)						—						—						14,928
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)			19,328						12,222						10,233						(850)						40,933						52,204						—						—						93,137
Changes in net realizable value of agricultural produce after harvest (unrealized)			(2,766)						—						—						—						(2,766)						—						—						—						(2,766)
Changes in net realizable value of agricultural produce after harvest (realized)			(4,249)						—						—						—						(4,249)						(1,527)						—						—						(5,776)
As of December 31, 2021:
Farmlands and farmland improvements, net			448,608						146,795						2,143						56,315						653,861						73,979						—						—						727,840
Machinery, equipment, building and facilities, and other fixed assets, net			47,122						29,543						81,516						1,641						159,822						158,611						—						—						318,433
Bearer plants, net			892						—						—						—						892						294,090						—						—						294,982
Work in progress			3,444						33,200						27,341						1,496						65,481						15,887						—						—						81,368
Right of use assets			13,005						3,361						930						—						17,296						243,469						—						11						260,776
Investment property			—						—						—						32,132						32,132						—						—						—						32,132
Goodwill			7,074						979						4,660						—						12,713						3,913						—						—						16,626
Biological assets			54,886						42,729						18,979						7,257						123,851						71,327						—						—						195,178
Finished goods			37,225						5,015						15,157						—						57,397						80,857						—						—						138,254
Raw materials, Stocks held by third parties and others			42,253						14,797						10,416						579						68,045						33,225						—						—						101,270
Total segment assets			654,509						276,419						161,142						99,420						1,191,490						975,358						—						11						2,166,859
Borrowings			31,755						34,230						62,061						—						128,046						524,461						—						165,144						817,651
Lease liabilities			14,106						4,157						924						—						19,187						227,585						—						82						246,854
Total segment liabilities			45,861						38,387						62,985						—						147,233						752,046						—						165,226						1,064,505

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

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

4.    Sales

						June 30, 2022						June 30, 2021
						(unaudited)
Sales of manufactured products and services rendered:
Ethanol						197,702						117,204
Sugar (*)						28,296						97,064
Energy						13,639						17,609
Peanut						29,263						20,508
Sunflower						6,974						4,132
Rice						73,724						56,814
Fluid milk (UHT)						36,967						25,383
Powder milk						48,363						25,739
Other dairy products						17,755						12,031
Services						3,740						3,038
Rental income						423						284
Others						16,800						3,468
						473,646						383,274
Sales of agricultural produce and biological assets:
Soybean						50,387						40,249
Corn						31,363						18,857
Wheat						11,135						6,950
Rice						2,111						—
Sunflower						4,468						3,725
Barley						3,380						881
Milk						7,358						6,954
Cattle						1,490						618
Cattle for dairy						3,872						1,856
Others						827						1,197
						116,391						81,287
Total sales						590,037						464,561

(*) Includes sales tons of sugar, rice and powder milk produced by third parties for an amount of US$ 30.5 million, respectively.

Commitments to sell commodities at a future date

The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn 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$ 79.3 million as of June 30, 2022 (June 30, 2021: US$ 103 million) comprised primarily of 7,043 lts of ethanol (US$ 5.73 million), 337,493 mwh of energy (US$ 18.94 million), 61,412 tons of sugar (US$ 25.03 million), 63 tons of soybean (US$ 5.69 million), 78 tons of corn (US$ 19.75 million) and 10 tons of wheat (US$ 2.54 million) which expire between July 2022 and December 2022.

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)

5.    Cost of goods sold and services rendered

As of June 30, 2022:

			June 30, 2022
			Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Finished goods at the beginning of 2022 (Note 18)			37,225						5,015						15,157						—						80,857						138,254
Cost of production of manufactured products (Note 6)			28,027						81,025						88,885						—						160,003						357,940
Purchases			17,023						77						2,078						—						752						19,930
Acquisition of subsidiaries			—						8,316						—						—						—						8,316
Agricultural produce			178,966						2,207						7,381						1,490						11,571						201,615
Transfer to raw material			(56,363)						(6,766)						—						—						—						(63,129)
Direct agricultural selling expenses			12,982						—						—						—						—						12,982
Tax recoveries (i)			—						—						—						—						(12,632)						(12,632)
Changes in net realizable value of agricultural produce after harvest			(17,780)						(2)						—						—						(934)						(18,716)
Finished goods as of June 30, 2022 (Note 18)			(67,828)						(18,664)						(9,230)						—						(69,001)						(164,723)
Exchange differences			(4,928)						(2,096)						(366)						—						4,934						(2,456)
Cost of goods sold and services rendered, and direct agricultural selling expenses period			127,324						69,112						103,905						1,490						175,550						477,381

(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.

As of June 30, 2021:

			June 30, 2021
			Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Finished goods at the beginning of 2021			30,267						5,970						6,489						—						34,315						77,041
Cost of production of manufactured products (Note 6)			19,577						62,332						60,597						—						181,115						323,621
Purchases			2,718						417						—						—						2,083						5,218
Agricultural produce			127,594						—						8,810						618						10,825						147,847
Transfer to raw material			(48,980)						(6,452)						—						—						—						(55,432)
Direct agricultural selling expenses			7,997						—						—						—						—						7,997
Tax recoveries (i)			—						—						—						—						(8,776)						(8,776)
Changes in net realizable value of agricultural produce after harvest			(7,279)						—						—						—						(1,527)						(8,806)
Finished goods as of June 30, 2021			(54,084)						(12,407)						(10,280)						—						(70,821)						(147,592)
Exchange differences			295						(2,408)						(2,088)						—						1,884						(2,317)
Cost of goods sold and services rendered, and direct agricultural selling expenses period			78,105						47,452						63,528						618						149,098						338,801

(i): Correspond to the presumed credit of ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) over the sale values.

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

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

6.    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:

Expenses by nature for the six-months period ended June 30, 2022:

						Cost of production of manufactured products (Note 5)																																				General and Administrative Expenses						Selling Expenses						Total
						Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Salaries, social security expenses and employee benefits						2,057						5,547						5,752						—						14,077						27,433						17,260						4,406						49,099
Raw materials and consumables						171						527						17,649						—						7,531						25,878						—						—						25,878
Depreciation and amortization						2,195						1,686						2,039						—						44,481						50,401						8,144						693						59,238
Depreciation of right-of-use assets						—						57						323						—						3,378						3,758						5,393						32						9,183
Fuel, lubricants and others						136						127						946						—						14,455						15,664						300						139						16,103
Maintenance and repairs						858						1,061						988						—						7,688						10,595						988						466						12,049
Freights						94						8,287						1,311						—						64						9,756						—						20,265						30,021
Export taxes / selling taxes						—						—						—						—						—						—						—						23,350						23,350
Export expenses						—						—						—						—						—						—						—						7,530						7,530
Contractors and services						592						692						301						—						2,310						3,895						—						—						3,895
Energy transmission						—						—						—						—						—						—						—						1,158						1,158
Energy power						834						1,722						1,603						—						394						4,553						177						48						4,778
Professional fees						22						41						62						—						274						399						4,288						235						4,922
Other taxes						15						60						56						—						234						365						762						42						1,169
Contingencies						—						—						—						—						—						—						411						—						411
Lease expense and similar arrangements						111						341						96						—						—						548						657						127						1,332
Third parties raw materials						1,727						7,573						33,453						—						2,131						44,884						—						—						44,884
Others						760						1,771						1,015						—						1,682						5,228						2,901						4,032						12,161
Subtotal						9,572						29,492						65,594						—						98,699						203,357						41,281						62,523						307,161
Own agricultural produce consumed						18,455						51,533						23,291						—						61,304						154,583						—						—						154,583
Total						28,027						81,025						88,885						—						160,003						357,940						41,281						62,523						461,744

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

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

6.    Expenses by nature (continued)

Expenses by nature for six-month period ended June 30, 2021:

			Cost of production of manufactured products (Note 5)																																				General and Administrative Expenses						Selling Expenses						Total
			Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Salaries, social security expenses and employee benefits			1,451						3,051						3,990						—						12,890						21,382						13,812						3,202						38,396
Raw materials and consumables			245						161						8,185						—						4,784						13,375						—						—						13,375
Depreciation and amortization			1,734						1,123						1,584						—						47,161						51,602						6,852						604						59,058
Depreciation of right-of-use assets			—						46						277						—						2,493						2,816						2,651						23						5,490
Fuel, lubricants and others			164						41						598						—						11,551						12,354						349						108						12,811
Maintenance and repairs			544						782						677						—						7,435						9,438						770						377						10,585
Freights			136						8,059						954						—						234						9,383						—						17,560						26,943
Export taxes / selling taxes			—						—						—						—						—						—						—						17,530						17,530
Export expenses			—						—						—						—						—						—						—						4,470						4,470
Contractors and services			594						120						27						—						3,411						4,152						—						—						4,152
Energy transmission			—						—						—						—						—						—						—						1,122						1,122
Energy power			506						713						1,015						—						364						2,598						149						40						2,787
Professional fees			29						39						60						—						334						462						3,643						537						4,642
Other taxes			11						47						42						—						935						1,035						442						30						1,507
Contingencies			—						—						—						—						—						—						713						—						713
Lease expense and similar arrangements			61						116						103						—						—						280						538						95						913
Third parties raw materials			2,797						2,455						23,870						—						3,669						32,791						—						—						32,791
Tax recoveries			—						—						—						—						(650)						(650)						—						—						(650)
Others			347						2,101						1,112						—						1,619						5,179						1,176						4,348						10,703
Subtotal			8,619						18,854						42,494						—						96,230						166,197						31,095						50,046						247,338
Own agricultural produce consumed			10,958						43,478						18,103						—						84,885						157,424						—						—						157,424
Total			19,577						62,332						60,597						—						181,115						323,621						31,095						50,046						404,762

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

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

7.    Salaries and social security expenses

			June 30, 2022						June 30, 2021
			(unaudited)
Wages and salaries			61,140						48,626
Social security costs			20,015						16,224
Equity-settled share-based compensation			4,251						2,732
			85,406						67,582

8.    Other operating income / (expense), net

			June 30, 2022						June 30, 2021
			(unaudited)
(Loss) from commodity derivative financial instruments			(2,994)						(13,317)
Gain /(loss) from disposal of other property items			1,119						(268)
Net (loss) from fair value adjustment of Investment property			(3,753)						(2,957)
Others			5,840						4,392
			212						(12,150)

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

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

9.    Financial results, net

			June 30, 2022						June 30, 2021
			(unaudited)
Finance income:
- Interest income			1,414						1,094
- Foreign exchange gain,net			25,019						20,115
- Gain from interest rate/foreign exchange rate derivative financial instruments			1,936						1,892
- Other income			94						324
Finance income			28,463						23,425
Finance costs:
- Interest expense			(29,768)						(29,539)
- Finance cost related to lease liabilities			(16,406)						(9,964)
- Cash flow hedge – transfer from equity			(26,363)						(26,575)
- Taxes			(2,198)						(2,102)
- Borrowings prepayment related expenses - Brazilian subsidiaries			—						(3,063)
- Other expenses			(4,266)						(3,385)
Finance costs			(79,001)						(74,628)
Other financial results - Net gain of inflation effects on the monetary items			17,276						3,637
Total financial results, net			(33,262)						(47,566)

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

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

10.    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, 2022						June 30, 2021
			(unaudited)
Current income tax			(4,394)						(2,701)
Deferred income tax			(14,637)						(50,845)
Income tax (expense)			(19,031)						(53,546)

In June, 2021, the Argentine Government introduced new changes in the income tax, establishing increasing rates, which starts in 25% and reach 35% for income tax gains over Pesos 50 million (0.5 million USD). This new scheme is applicable for the year 2021 onwards.

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

			June 30, 2022						June 30, 2021
			(unaudited)
Beginning of period liability			(255,527)						(162,556)
Exchange differences			(28,061)						(19,322)
Effect of fair value valuation for farmlands			28,232						(25,922)
Acquisition of subsidiary (Note 20)			(1,818)						—
Tax charge relating to cash flow hedge (i)			(6,603)						2,667
Others			483						597
Income tax (expense)			(14,637)						(50,845)
End of period liability			(277,931)						(255,381)

(i)It relates to the amount reclassified of US$8,645 gain and US$740 gain from equity to profit and loss for the six-month period ended June 30, 2022 and 2021, respectively.

Tax Inflation Adjustment in Argentina

Laws 27,430, 27,468 and 27,541 introduced several amendments to the income tax inflation adjustments provided by the Income Tax Law. According to these provisions, and effective as from fiscal years beginning on or after January 1, 2018, the inflation adjustment procedure set out in Title VI of the Income Tax Law shall be applicable in fiscal years in which the variation of IPC price index, accumulated in the 36 months immediately preceding the end of the relevant fiscal year, is higher than 100%. As from its effectiveness, this procedure is applicable because the variation of the IPC reached the prescribed limits.

However, Section 39 of Law No. 24,073 suspended the application of the provisions of Title VI of the Income Tax Law relating to the income tax inflation adjustment since April 1, 1992 to certain items, such as, fixed assets, inventory, and tax loss carryforwards, among others.

After the economic crisis of 2002, many taxpayers began to question the legality of the provisions suspending the income tax inflation adjustment. Also, the Argentine Supreme Court of Justice issued its verdict in the "Candy" case July 3, 2009 in which it stated that particularly for fiscal year 2002 and considering the serious state of disturbance of that year, the taxpayer could demonstrate that not applying the income tax inflation adjustment resulted in confiscatory income tax rates.

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

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

10.    Taxation (continued)

More recently, the Argentine Supreme Court of Justice applied a similar criterion to the 2010, 2011, 2012 and 2014 fiscal years in the cases brought by “Distribuidora Gas del Centro” (10/14/14, 06/02/15, 10/04/16 and 06/25/19), among others, enabling the application of income tax inflation adjustment for periods not affected by a severe economic crisis such as 2002.

The Company believes that the lack of application of the income tax inflation adjustment is confiscatory. Accordingly, based on the precedents and the opinion of external and internal tax advisors, the Company has adjusted all items for inflation including those suspended by Section 39 of Law 24, 073 as described above. The net effect of the inflation adjustment resulted in a deferred tax asset of US$ 39.2 million.

The application of local tax laws require interpretation, and accordingly involves the application of judgement and is open to challenge by the relevant tax authorities. This gives rise to a level of uncertainty. Provisions for uncertain tax positions are established in accordance with IFRIC 23 based on an assessment of the range of likely tax outcomes in open years and reflecting the strength of technical arguments. Amounts are provided for individual tax uncertainties based on management’s assessment of whether the most likely amount or an expected amount based on a probability weighted methodology is the more appropriate predicter of amounts that the Company is ultimately expected to settle. When making this assessment, the Company utilizes specialist in-house tax knowledge and experience and takes into consideration specialist tax advice from third party advisers on specific items. The Company has not provided any amount in this case based on its belief that it has solid arguments to support its position.

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, 2022						June 30, 2021
			(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries			(32,209)						(28,883)
Non-deductible items			(537)						(850)
Effect of the changes in the statutory income tax rate in Argentina			(126)						(17,999)
Non-taxable income			10,876						6,421
Tax losses where no deferred tax asset was recognized			(41)						—
Effect of IAS 29 on Argentina´s Shareholder´s equity and deferred income tax.			(10,654)						(11,790)
Utilization of previously unrecognized tax			10,658						—
Others			3,002						(445)
Income tax (expense)			(19,031)						(53,546)

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

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

11.    Property, plant and equipment

Changes in the Group’s property, plant and equipment for the six-month periods ended June 30, 2022 and 2021 were as follows:

			Farmlands						Farmland improvements						Buildings and facilities						Machinery, equipment, furniture and Fittings						Bearer plants						Others						Work in progress						Total
Six-month period ended June 30, 2021
Opening net book amount.			694,166						21,585						177,604						95,905						304,829						6,463						57,740						1,358,292
Exchange differences			64,932						1,192						15,494						(22,863)						44,415						5,872						(1,430)						107,612
Additions			—						151						7,128						33,642						37,498						1,686						18,612						98,717
Revaluation surplus			(64,929)						—						—						—						—						—						—						(64,929)
Transfer from investment property			3,641						—						—						—						—						—						—						3,641
Transfers			—						151						2,782						1,642						—						7						(4,582)						—
Disposals			—						(7)						(3)						(2,034)						—						(35)						(42)						(2,121)
Reclassification to non-income tax credits (*)			—						—						—						(215)						—						—						—						(215)
Depreciation			—						(1,644)						(11,260)						(32,578)						(28,381)						(898)						—						(74,761)
Closing net book amount			697,810						21,428						191,745						73,499						358,361						13,095						70,298						1,426,236
At June 30, 2021 (unaudited)
Cost			697,810						45,765						405,067						753,616						758,429						32,719						70,298						2,763,704
Accumulated depreciation			—						(24,337)						(213,322)						(680,117)						(400,068)						(19,624)						—						(1,337,468)
Net book amount			697,810						21,428						191,745						73,499						358,361						13,095						70,298						1,426,236
Six-month period ended June 30, 2022
Opening net book amount			711,261						16,579						207,679						83,183						294,982						27,571						81,368						1,422,623
Exchange differences			80,313						1,370						27,883						(3,744)						15,797						8,713						8,140						138,472
Additions			—						—						9,243						42,269						49,951						942						24,667						127,072
Revaluation surplus			(81,195)						—						—						—						—						—						—						(81,195)
Acquisition of subsidiaries (Note 20)			481						—						21,026						—						—						—						—						21,507
Transfers			—						—						13,079						7,632						—						(187)						(20,524)						—
Disposals			—						—						(1)						(565)						—						(35)						—						(601)
Reclassification to non-income tax credits (*)			—						—						—						(35)						—						—						—						(35)
Depreciation			—						(1,202)						(13,617)						(35,412)						(26,052)						(1,191)						—						(77,474)
Closing net book amount			710,860						16,747						265,292						93,328						334,678						35,813						93,651						1,550,369
At June 30, 2022 (unaudited)
Cost			710,860						43,808						506,423						848,750						796,510						57,845						93,651						3,057,847
Accumulated depreciation			—						(27,061)						(241,131)						(755,422)						(461,832)						(22,032)						—						(1,507,478)
Net book amount			710,860						16,747						265,292						93,328						334,678						35,813						93,651						1,550,369

(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of June 30, 2022, ICMS tax credits were reclassified to trade and other receivables.

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)

11.    Property, plant and equipment (continued)

For all Farmlands with a total valuation of US$ 710 million as of June 30, 2022, the valuation was determined using sales Comparison Approach prepared by an independent expert. Sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare. (Level 3). The Group estimated that, other factors being constant, a 10% reduction on the Sales price for the period ended June 30, 2022 would have reduced the value of the Farmlands on US$ 71 million, which would impact, net of its tax effect on the "Revaluation surplus" item in the statement of Changes in Shareholders' Equity.

Depreciation charges are included in “Cost of production of Biological Assets”, “Cost of production of manufactures products”, “General and administrative expenses”, “Selling expenses” and capitalized in “Property, plant and equipment” for the six-month periods ended June 30, 2022 and 2021.

As of June 30, 2022, borrowing costs of US$ 1,496 (June 30, 2021: US$ 1,165) 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$ 129,344 as of June 30, 2022 (June 30, 2021: U$S 456,959)

12.    Right of use assets

Changes in the Group’s right of use assets for the six-month periods ended June 30, 2022 and 2021 were as follows:

			Agricultural partnership (*)						Others						Total
			(unaudited)
Six-month period ended June 30, 2021
Opening net book amount			192,271						17,423						209,694
Exchange differences			14,947						1,586						16,533
Additions and re-measurement			55,225						1,027						56,252
Depreciation			(18,990)						(3,990)						(22,980)
Closing net book amount			243,453						16,046						259,499
Six-month period ended June 30, 2022
Opening net book amount			235,970						24,806						260,776
Exchange differences			11,845						1,805						13,650
Additions and re-measurement			106,785						5,377						112,162
Depreciation			(23,999)						(4,563)						(28,562)
Closing net book amount			330,601						27,425						358,026

(*) Agricultural partnership has an average of 6 years duration.

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

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

13.    Investment property

Changes in the Group’s investment property for the six-month periods ended June 30, 2022 and 2021 were as follows:

						June 30, 2022						June 30, 2021
						(unaudited)
Beginning of the period						32,132						31,179
(Loss) from fair value adjustment (Note 8)						(3,753)						(2,957)
Reclassification to property, plant and equipment						—						(3,641)
Exchange differences						3,753						3,172
End of the period						32,132						27,753
Cost						32,132						27,753
Net book amount						32,132						27,753

For all Investment properties with a total valuation of US$ 32.1 million as of June 30, 2022, the valuation was determined using Sales Comparison Approach prepared by an independent expert. Sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare. (Level 3). The increase /decrease in the fair value is recognized in the Statement of income under the line item "Other operating income, net". There were no changes of the valuation techniques during June 30, 2022 and 2020. The Group estimated that, other factors being constant, a 10% reduction on the Sales price for the period ended June 30, 2022 would have reduced the value of the Investment properties on US$ 3.2 million, which would impact the line item "Net loss from fair value adjustment ".

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

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

14.    Intangible assets

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2022 and 2021 were as follows:

						Goodwill						Software						Trademarks						Others						Total
Six-month period ended June 30, 2021
Opening net book amount						14,482						5,264						7,150						34						26,930
Exchange differences						1,210						459						608						2						2,279
Additions						—						882						—						60						942
Amortization charge (i)						—						(543)						(163)						(29)						(735)
Closing net book amount						15,692						6,062						7,595						67						29,416
At June 30, 2021 (unaudited)
Cost						15,692						13,140						9,726						503						39,061
Accumulated amortization						—						(7,078)						(2,131)						(436)						(9,645)
Net book amount						15,692						6,062						7,595						67						29,416
Six-month period ended June 30, 2022
Opening net book amount						16,626						6,485						8,191						35						31,337
Exchange differences						1,741						678						820						3						3,242
Additions						—						725						—						706						1,431
Amortization charge (i)						—						(681)						(214)						(32)						(927)
Closing net book amount						18,367						7,207						8,797						712						35,083
At June 30, 2022 (unaudited)
Cost						18,367						15,620						11,345						1,219						46,551
Accumulated amortization						—						(8,413)						(2,548)						(507)						(11,468)
Net book amount						18,367						7,207						8,797						712						35,083

(i) Amortization charges are included in “General and administrative expenses” and “Selling expenses” for the period ended June 30, 2022 and 2021, respectively.

The Group conducts an impairment test annually or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. The last impairment test of goodwill was performed as of September 30, 2021.

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

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

15.    Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2022 and 2021 were as follows:

			June 30, 2022
			Crops (i)						Rice (i)						Dairy						All other segments						Sugarcane (i)						Total
Beginning of the year			54,886						42,729						18,979						7,257						71,327						195,178
Increase due to purchases			—						—						—						1,957						—						1,957
Acquisition of subsidiaries (Note 20)			—						1,676						—						—						—						1,676
Initial recognition and changes in fair value of biological assets			56,663						15,254						12,689						353						47,905						132,864
Decrease due to harvest / disposals			(178,966)						(79,002)						(39,002)						(1,985)						(76,559)						(375,514)
Costs incurred during the period			93,768						25,584						29,572						1,760						50,484						201,168
Exchange differences			6,415						4,990						2,216						848						3,526						17,995
End of the period (unaudited)			32,766						11,231						24,454						10,190						96,683						175,324

			June 30, 2021
			Crops (i)						Rice (i)						Dairy						All other segments						Sugarcane (i)						Total
Beginning of the year			43,787						29,062						12,933						4,703						75,208						165,693
Increase due to purchases			—						—						—						1,036						—						1,036
Initial recognition and changes in fair value of biological assets			40,942						36,485						7,573						(405)						27,855						112,450
Decrease due to harvest / disposals			(127,594)						(88,445)						(27,767)						(914)						(98,122)						(342,842)
Costs incurred during the period			63,284						26,593						21,421						727						44,233						156,258
Exchange differences			4,246						2,957						1,316						479						3,721						12,719
End of the period (unaudited)			24,665						6,652						15,476						5,626						52,895						105,314

(i)Biological assets that are measured at fair value within level 3 of the hierarchy.

The discounted cash flow valuation technique and the significant unobservable inputs used to calculate the fair value of these biological assets are consistent with those of the audited annual financial statements for the year ended December 31, 2021 described in Note 16. Please see Level 3 definition in Note 16 of these condensed consolidated interim financial statements.

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

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

15.    Biological assets (continued)

Cost of production as of June 30, 2022:

			June 30, 2022
			(unaudited)
			Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Salaries, social security expenses and employee benefits			2,422						4,857						3,929						426						5,155						16,789
Depreciation and amortization			—						—						—						—						1,708						1,708
Depreciation of right-of-use assets			—						—						—						—						19,085						19,085
Fertilizers, agrochemicals and seeds			25,935						1,793						—						—						15,825						43,553
Fuel, lubricants and others			412						603						688						32						1,901						3,636
Maintenance and repairs			858						3,289						1,741						218						1,112						7,218
Freights			3,236						248						93						99						—						3,676
Contractors and services			25,443						11,677						—						2						4,881						42,003
Feeding expenses			—						—						11,567						281						—						11,848
Veterinary expenses			—						—						1,870						138						—						2,008
Energy power			18						2,111						666						4						—						2,799
Professional fees			95						160						75						2						225						557
Other taxes			661						76						8						54						92						891
Lease expense and similar arrangements			32,782						249						—						2						—						33,033
Others			1,906						521						329						49						500						3,305
Subtotal			93,768						25,584						20,966						1,307						50,484						192,109
Own agricultural produce consumed			—						—						8,606						453						—						9,059
Total			93,768						25,584						29,572						1,760						50,484						201,168

Cost of production as of June 30, 2021:

			June 30, 2021
			(unaudited)
			Crops						Rice						Dairy						All other segments						Sugar, Ethanol and Energy						Total
Salaries, social security expenses and employee benefits			1,630						3,935						2,570						299						4,533						12,967
Depreciation and amortization			—						—						—						—						1,686						1,686
Depreciation of right-of-use assets			—						—						—						—						15,941						15,941
Fertilizers, agrochemicals and seeds			15,920						764						—						—						15,990						32,674
Fuel, lubricants and others			291						687						442						23						1,237						2,680
Maintenance and repairs			465						3,387						1,235						157						863						6,107
Freights			2,410						443						66						29						—						2,948
Contractors and services			21,079						15,398						—						—						3,399						39,876
Feeding expenses			—						—						8,578						52						—						8,630
Veterinary expenses			—						—						1,608						117						—						1,725
Energy power			17						1,007						526						3						—						1,553
Professional fees			63						109						20						4						180						376
Other taxes			618						77						5						27						29						756
Lease expense and similar arrangements			19,969						84						—						—						—						20,053
Others			822						702						346						16						375						2,261
Subtotal			63,284						26,593						15,396						727						44,233						150,233
Own agricultural produce consumed			—						—						6,025						—						—						6,025
Total			63,284						26,593						21,421						727						44,233						156,258

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

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

15.    Biological assets (continued)

Biological assets as of June 30, 2022 and December 31, 2021 were as follows:

			June 30, 2022						December 31, 2021
			(unaudited)
Non-current
Cattle for dairy production			23,830						18,428
Breeding cattle			730						707
Other cattle			179						220
			24,739						19,355
Current
Breeding cattle			9,281						6,330
Other cattle			624						551
Sown land – crops			32,766						54,886
Sown land – rice			11,231						42,729
Sown land – sugarcane			96,683						71,327
			150,585						175,823
Total biological assets			175,324						195,178

16.    Financial instruments

As of June 30, 2022, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial instruments.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. The financial instruments the Group has allocated to this level mainly comprise crop futures and options traded on the stock market. In the case of securities, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.

Derivatives not traded on the stock market allocated to Level 2 are valued using models based on observable market data. For this, the Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The financial instruments the Group has allocated to this level mainly comprise interest-rate swaps and foreign-currency interest-rate swaps.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group does not have financial instruments allocated to this level for any of the periods presented.

There were no transfer between any levels during the period.

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

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

16.    Financial instruments (continued)

The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of June 30, 2022 and their allocation to the fair value hierarchy:

			2022
			Level 1						Level 2						Total
Assets
Derivative financial instruments			173						5,461						5,634
Total assets			173						5,461						5,634
Liabilities
Derivative financial instruments			(788)						(85)						(873)
Total liabilities			(788)						(85)						(873)

When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for this purpose, details of which may be obtained from the following table:

Class

Pricing Method

Parameters

Pricing Model

Level

Total

Futures

Quoted price

-

-

1

(674)

NDF

Quoted price

Swap curve

Present value method

2

22

NDF

Quoted price

Money market interest-rate curve

Present value method

2

59

Interest-rate swaps

Theoretical price

Money market interest-rate curve.

Present value method

2

5,354

4,761

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

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

17.    Trade and other receivables, net

			June 30, 2022						December 31, 2021
			(unaudited)
Non current
Advances to suppliers			3,963						952
Income tax credits			7,208						6,862
Non-income tax credits (i)			17,361						19,156
Judicial deposits			1,772						1,674
Receivable from disposal of subsidiary			8,082						9,830
Other receivables			3,841						3,757
Non current portion			42,227						42,231
Current
Trade receivables			94,631						63,726
Less: Allowance for trade receivables			(4,698)						(3,023)
Trade receivables – net			89,933						60,703
Prepaid expenses			9,183						9,405
Advance to suppliers			52,196						19,074
Income tax credits			2,108						1,846
Non-income tax credits (i)			41,842						29,414
Receivable from disposal of subsidiary			14,298						17,259
Cash collateral			74						21
Other receivables			14,916						8,127
Subtotal			134,617						85,146
Current portion			224,550						145,849
Total trade and other receivables, net			266,777						188,080

(i) Includes US$ 35 for the six-month period ended June 30, 2022 reclassified from property, plant and equipment (for the year ended December 31, 2021: US$ 303).

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- 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)

17.    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, 2022						December 31, 2021
			(unaudited)
Currency
US Dollar			118,171						62,604
Argentine Peso			72,545						55,260
Uruguayan Peso			—						460
Brazilian Reais			76,061						69,756
			266,777						188,080

As of June 30, 2022 trade receivables of US$ 21,403 (December 31, 2021: US$ 11.224) were past due but not impaired. The ageing analysis of these receivables indicates that US$ 759 and US$ 717 are over 6 months in June 30, 2022 and December 31, 2021, respectively.

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.

18.    Inventories

			June 30, 2022						December 31, 2021
			(unaudited)
Raw materials			228,293						101,270
Finished goods (Note 5) (i)			164,723						138,254
			393,016						239,524

(i) Finished goods of Crops reportable segment are valued at fair value.

19.    Cash and cash equivalents

			June 30, 2022						December 31, 2021
			(unaudited)
Cash at bank and on hand			97,246						152,721
Short-term bank deposits			91,105						47,045
			188,351						199,766

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

F- 36

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

20.    Acquisition

Acquisition of subsidiaries of Viterra in Argentina and Uruguay

On May 3, 2022, (the “Closing Date”) the Group, through certain subsidiaries consummated the acquisition of the rice operations in Uruguay and Argentina of the Viterra Group, comprising a 100% ownership of Molinos Libres S.A. (Argentina), Viterra Uruguay S.A. (Uruguay) and Paso Dragón S.A. (Uruguay). Paso Dragón S.A. has a 12% equity investment in Galofer S.A. (Uruguay). The transaction also includes the acquisition of certain leasing agreements. All of the acquired subsidiaries form part of the Rice Business Segment.

The terms and conditions of the agreement contemplate the payment, subject to adjustments, of a purchase price of approximately US$ 17.7 million payable in three annual installments and the assumption of the existing financial debt for an amount of US$ 17.9 million. At Closing Date, the Company paid the first installments of US$ 2.0 million and US$ 8 million of the assumed debt.

In addition, the agreement provides for a cash contingent payment of US$ 778 thousands, which will be payable only if certain conditions are met.

The Company has made a preliminary allocation of the estimated purchase price to the identifiable assets acquired and liabilities assumed based on their fair values at acquisition date. The Company has made significant assumptions and estimates in determining the preliminary estimated purchase price, including the contingent payment and the preliminary allocation of the estimated purchase price in these consolidated interim financial statements. The acquisition accounting is dependent upon certain valuations and other studies that have yet to progress to a stage where there is sufficient information for a definitive measurement. Therefore, these preliminary estimates and assumptions are subject to change during the measurement period as the Company finalizes the valuations of the net intangible and tangible assets. The final allocation may include changes to (1) the fair values of property, plant and equipment, (2) the recognized amounts of contingencies and liabilities and (3) assets and liabilities, as more information becomes available.

These final valuations may change significantly from the preliminary estimates. Differences between these preliminary estimates and the final acquisition accounting could have a material impact on these consolidated interim financial statements and the Company´s consolidated future results of operations and financial position. The Company expects to finalize the purchase price allocation during the third quarter ended September 30, 2022.

As the fair value of the identifiable net assets acquired was greater than the total consideration paid, negative goodwill arises on the acquisition. The negative goodwill is recognized as “Bargain purchase gain” in the income statement for the six months ended June 30, 2022 reflecting the opportunity to acquire the rice operations in Argentina and Uruguay from an outgoing market player.

The following table summarizes the estimated preliminary purchase price:

Purchase consideration:
Amount paid in cash						1,993
Amounts to be paid in installments (*)						15,100
Total purchase consideration						17,093
Fair value of net assets acquired						29,536
Bargain purchase gain over the total purchase consideration						12,443

(*) Amounts to be paid in installments were discounted at present value as of the date of acquisition at a 6.5% discount rate.

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

F- 37

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

20.    Acquisition (continued)

The preliminary estimates assets and liabilities at the date of acquisition are as follows:

Cash and cash equivalents			3,172
Trade and other receivables			22,371
Inventories			51,318
Biological assets			1,675
Property, plant and equipment			21,478
Total Assets			100,014
Trade and other payables			(47,568)
Payroll and other liabilities			(908)
Borrowings			(20,257)
Deferred income tax liabilities			(1,745)
Total Liabilities			(70,478)
Fair value of Net Assets Acquired			29,536

The Company used a replacement cost method or a market approach, as appropriate, to measure the fair value of property, plant and equipment.

All other net tangible assets were valued at their respective carrying amounts, as the Company believes that these amounts approximate their current fair values.

A decrease in the fair value of assets acquired, or an increase in the fair value of liabilities assumed, from those preliminary valuations would result in a dollar-for-dollar corresponding decrease in the “Bargain purchase gain”.

Acquisition-related costs of USD 193 thousands are included in General and administrative expenses in the Condensed Consolidated Interim Statement of Income.

The following table summarizes the sales of goods and services rendered and profit from operations of the subsidiaries acquired included in the consolidated interim statements of income for the six-month and three-month periods ended June 30, 2022 as from the date of acquisition:

						Period from the date of acquisition to June 30, 2022
Sales of goods and service rendered						11,675
Profit from operations						585

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

F- 38

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

21.    Shareholder´s contribution

						Number of shares (thousands)						Share capital and share premium
At January 1, 2021						122,382						1,086,388
Restricted shares vested						—						3,594
Purchase of own shares						—						(16,876)
At June 30, 2021						122,382						1,073,106
At January 1, 2022						122,382						1,034,633
Reduction of issued share capital of the company						(11,000)						(16,500)
Employee share options exercised (Note 22)						—						2,432
Restricted share vested						—						4,647
Purchase of own shares						—						(11,473)
Dividends to shareholders						—						(35,000)
At June 30, 2022						111,382						978,739

Decision of the Extraordinary General Shareholders’ meeting

On April 20, 2022 the extraordinary general meeting of the shareholders of the Company resolved to reduce the issued share capital of the Company by an amount of $16,500,000 by the cancellation of 11,000,000 shares with a nominal value of $1.50 each held in treasury by the Company so that, as from April 20, 2022, our issued share capital amounts to $167,072,722.50, represented by 111,381,815 shares in issue (of which 300,987 are treasury shares) with a nominal value of $1.50 each.

Share Repurchase Program

On September 12, 2013, the Board of Directors of the Company authorized a share repurchase program for up to 5% of its outstanding shares. The repurchase program has been renewed by the Board of Directors after each 12-month period. On August 10, 2021, the Board of Directors approved the renewal of the Program and extension of the term for an additional twelve-month period ending on September 23, 2022.

Repurchases of shares under the program may be made from time to time (i) in open market transactions in compliance with the trading conditions of Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, and applicable rules and regulations; and (ii) through privately negotiated transactions. The share repurchase program does not require Adecoagro to acquire any specific number or amount of shares and may be modified, suspended, reinstated or terminated at any time in the Company’s discretion and without prior notice. The size and the timing of repurchases will depend upon market conditions, applicable legal requirements and other factors.

As of June 30, 2022, the Company repurchased an aggregate of 19,084,538 shares under the program, of which 7,857,422 have been utilized to cover the exercise and granted of the Company’s employee stock option plan and restricted stock plan and 11 millions share were reduced from capital. During the six-month periods ended June 30, 2022 and 2021 the Company repurchased shares for an amount of 1,718,458 and 2,226,347 respectively. The outstanding treasury shares as of June 30, 2022 totaled 300,987.

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

F- 39

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

21.    Shareholder´s contribution (continued)

Dividend distribution

On April 20, 2022 the general meeting of the shareholders of the Company resolved the payment of an annual dividend of USD 35 million to be paid to outstanding shares in two installments in May and November. The first payment, of USD 17.5 million (0.1572 per share) was made on May 17th, and the second installment will be made in November 2022.

22.    Equity-settled share-based payments

The Group has set a “2004 Incentive Option Plan” (“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 Restricted Share and Restricted Stock Unit Plan” (referred to as “Restricted Share Plan”) under which the Group grants restricted shares, or restricted stock units to senior and medium management and key employees of the Group’s subsidiaries.

(a)Option Schemes

No expense was accrued for both periods under the Options Schemes.

As of June 30, 2022, 313,582 options (June 30, 2021: nil) were exercised, and nil options (June 30, 2021: nil) were forfeited, and nil options were expired (June 30, 2021: nil).

(b)Restricted Share and Restricted Stock Unit Plan

As of June 30, 2022, the Group recognized compensation expense US$ 5.4 million related to the restricted shares granted under the Restricted Share Plan (June 30, 2021: US$ 2.9 million). For the six-month period ended June 30, 2022, 1,398,391 Restricted Shares were granted (June 30, 2021: 1,061,349), 828,690 were vested (June 30, 2021: 643,860), and 11,559 Restricted shares were forfeited (June 30, 2021: 1,286).

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

F- 40

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

23.    Trade and other payables

			June 30, 2022						December 31, 2021
			(unaudited)
Non-current
Trade payables			1,593						—
Payable from acquisition of subsidiary (Note 20)			11,564						—
Other payables			315						284
			13,472						284
Current
Trade payables			157,750						151,979
Advances from customers			2,375						8,705
Taxes payable			7,620						6,866
Dividends to shareholders (Note 21)			17,500						—
Payables from acquisition of subsidiaries (Note 20)			2,898						—
Other payables			5,697						1,196
			193,840						168,746
Total trade and other payables			207,312						169,030

The fair values of current trade and other payables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other payables 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- 41

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

24.    Borrowings

			June 30, 2022						December 31, 2021
			(unaudited)
Non-current
Senior Notes (*)			497,678						497,455
Bank borrowings (*)			251,210						208,032
			748,888						705,487
Current
Senior Notes (*)			8,250						8,250
Bank overdrafts			89,090						11,768
Bank borrowings (*)			172,078						92,146
			269,418						112,164
Total borrowings			1,018,306						817,651

(*) As of June 30, 2022, the Group was in compliance with the related financial covenants under the respective loan agreements.

As of June 30, 2022, total bank borrowings include collateralized liabilities of US$ 50,694 (December 31, 2021: US$ 70,221). These loans are mainly collateralized by property, plant and equipment, sugarcane plantations, sugar export contracts and shares of certain subsidiaries of the Group.

Notes 2027

On September 21, 2017, the Company issued senior notes (the “Notes”) for US$ 500 million, at an annual nominal rate of 6%. The Notes will mature on September 21, 2027. Interest on the Notes are payable semi-annually in arrears on March 21 and September 21 of each year. The total proceeds nets of expenses was US$ 496.5 million.

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of our current and future subsidiaries, currently: Adeco Agropecuaria S.A., Adecoagro Brasil Participações S.A., Adecoagro Vale do Ivinhema S.A., Pilagá S.A. and Usina Monte Alegre Ltda. are the only Subsidiary Guarantors.

The Notes contain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among other restrictions.

Loan with International Finance Corporation (IFC)

In June 2020, our Argentine subsidiaries, Adeco Agropecuaria , Pilaga and L3N S.A. entered into a US$100 million loan agreement with International Finance Corporation (IFC), member of the World Bank Group. The loan's tenor is eight years, including a two-year grace period, with a rate of LIBOR + 4%. In October 2020, US$ 22 million has been received.

The loan contains customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among other restrictions.

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

F- 42

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

24.    Borrowings (continued)

The maturity of the Group's borrowings and the Group's exposure to fixed and variable interest rates is as follows:

			June 30, 2022						December 31, 2021
			(unaudited)
Fixed rate:
Less than 1 year			256,597						104,349
Between 1 and 2 years			38,454						12,503
Between 2 and 3 years			10,823						12,500
Between 3 and 4 years			2,223						—
More than 5 years			497,678						497,455
			805,775						626,807
Variable rate:
Less than 1 year			12,821						7,815
Between 1 and 2 years			3,627						5,075
Between 2 and 3 years			33,874						31,754
Between 3 and 4 years			32,611						29,255
Between 4 and 5 years			79,667						71,045
More than 5 years			49,931						45,900
			212,531						190,844
			1,018,306						817,651

The breakdown of the Group´s borrowing by currency is included in Note 2 - Interest rate risk.

The carrying amount of short-term borrowings is approximate its fair value due to the short-term maturity. Long term borrowings subject to variable rate approximate their fair value. The fair value of long-term subject to fix rate do not significant differ from their fair value. The fair value (level 2) of the senior notes equals US$ 459 million, 91.84% of the nominal amount.

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

F- 43

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

25.    Lease liabilities

			June 30, 2022						December 31, 2021
			(unaudited)
Lease liabilities
Non-current			270,666						201,718
Current			56,595						45,136
			327,261						246,854

The maturity of the Group's lease liabilities is as follows:

			June 30, 2022						December 31, 2021
			(unaudited)
Less than 1 year			56,595						45,136
Between 1 and 2 years			27,123						44,847
Between 2 and 3 years			53,343						38,745
Between 3 and 4 years			44,457						30,085
Between 4 and 5 years			36,183						24,072
More than 5 years			109,560						63,969
			327,261						246,854

26.    Payroll and social security liabilities

			June 30, 2022						December 31, 2021
			(unaudited)
Non-current
Social security payable			1,057						1,243
			1,057						1,243
Current
Salaries payable			6,894						2,617
Social security payable			4,057						3,499
Provision for vacations			8,624						8,136
Provision for bonuses			6,269						10,799
			25,844						25,051
Total payroll and social security liabilities			26,901						26,294

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

F- 44

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

27.    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, 2021.

28.    Related-party transactions

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

Related party

Relationship

Description of transaction

Loss included in the statement of income

Balance payable

June 30, 2022

June 30, 2021

June 30, 2022

December 31, 2021

(unaudited)

(unaudited)

(unaudited)

Directors and senior management

Employment

Compensation selected employees

(5,679)

(3,753)

(14,746)

(16,198)

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

F- 45

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

29.    Basis of preparation and presentation

The information presented in the accompanying condensed consolidated interim financial statements (“interim financial statements”) as of June 30, 2022 and for the six-months ended June 30, 2022 and 2021 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, 2022, results of operations and cash flows for the six-month periods ended June 30, 2022 and 2021. All such adjustments are of a normal recurring nature. In preparing these accompanying 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 interim financial statements have been prepared in accordance with International Accounting Standard 34 (IAS 34), ‘Interim financial reporting’ as issued by the International Accounting Standards Board (IASB) and they should be read in conjunction with the annual financial statements for the year ended December 31, 2021, which have been prepared in accordance with IFRSs.

Certain new accounting standards and interpretations are mandatory since January 1, 2022. These standards did not have any material impact on the Company's consolidated financial statements.

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2021.

Business combinations — purchase price allocation

Complementing Note 32.a to our Consolidated Financial statements as of December 31, 2021 (Scope of consolidation – Subsidiaries), when describing the acquisition method for a business combination, it is necessary to state that: The excess of consideration over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the consideration is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of income under the line item “Bargain purchase gain”.

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 August, with the exception of wheat, which is harvested from December to January. Peanut is harvested from April to May, and sales are executed with higher intensity during the third quarter of the year. Cotton is a unique in that while it is typically harvested from June to August, it requires processing which takes about two to three months to complete. Sales in our Dairy business segment tend to be more stable. However, milk production is generally higher during the fourth quarter, when the weather is more suitable for production. Although our Sugar, Ethanol and Electricity cluster is currently operating under a "non-stop" or "continuous" harvest and without stopping during traditional off-season, the rest of the sector in Brazil is still primarily operating with large off-season periods from December/January to March/April. The result of large off-season periods is fluctuations in our sugar and ethanol sales and in our inventories, usually peaking in December to take advantage of higher prices during the traditional off-season period (i.e., January through April). As a result of the above factors, there may be significant variations in our financial results from one quarter to another. In addition, our 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.

30.    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, 2021 described in Note 32.

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

F- 46

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements

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

31.    Information related to COVID-19 pandemic

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in China and started spreading to the rest of the world in early 2020. The COVID-19 virus has impacted economic activity worldwide and has posed the risk that Adecoagro or its employees, contractors, suppliers, customers and other business partners may be prevented from conducting certain business activities for an indefinite period of time, including due to shutdowns mandated by governmental authorities or otherwise adopted by companies as a preventive measure.

Both in Argentine and Brazil, governments adopted social distancing measures, and shutdowns, that affected economic activities. In our case, activities pursued by our Argentine subsidiaries, related to agricultural production, distribution and commercialization, were exempted from the Mandatory Isolation Regime for being considered “essential” activities. Also our activities in Brazil have no restrictions. Thus, the activity of the Company has not suffered any severe effect.

As of the date of this report, impulsed by the vaccination path, almost all restrictions were lifted.

The Company is closely monitoring the situation and taking all necessary measures at its disposal to preserve human life and its operation.

The Company has enacted prevention and action protocols tailored for each facility and activity, in addition to constituting crises committees to monitor the Company’s response to the pandemic.

Measures taken include but are not limited to: (i) body temperature controls at entrances of each facility and other critical check points, (ii) mandatory distancing in the workplace, (iii) maximum limit of people in the conferences rooms, lunch room and vehicles (iv) sanitary barriers, (v) special protective attire and masks, (vi) mandatory quarantines for those who have been in contact with travelers or with symptomatic persons, (vii) training programs and information about how to prevent the risks of transmission of COVID-19, (viii) hired an infectious disease specialist to further assess on site. Additionally, remote work has been guaranteed for the duration of the pandemic for employees based in central offices, and a rotation scheme has been implemented for administrative employees based in the farms or industrial facilities.

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

F- 47