Adecoagro S.A. (AGRO) Cash Flow Statement

The company's operating cash flow consistently dwarfs its net income, a pattern that appears driven by the add-back of significant non-cash depreciation and biological asset adjustments under IAS 41. For instance, in 2026Q2, $125.0M of operating cash flow was generated from just $18.2M of net income, with D&A of $105.9M being a major reconciling item. This indicates that the reported net loss or thin profit is not reflective of the underlying cash-generating ability of the industrial and farming assets, but investors must scrutinize the quality and sustainability of these non-cash adjustments.

The FCF margin has swung from -51.0% to 28.3%, a pattern that aligns with the agricultural cycle where Q1 typically sees heavy working capital outflows and capex, while Q4 and Q2 often show strong cash generation. The negative FCF in 2026Q1 (-$89.9M) was exacerbated by a large acquisition outflow of $396.3M, demonstrating how strategic investments can temporarily overwhelm operational cash generation. This volatility makes it challenging to assess a normalized FCF run-rate without adjusting for these cyclical and episodic factors.

Capex has remained substantial, ranging from $34.5M to $94.0M per quarter, with the CapEx/Rev ratio spiking to 35.9% in 2024Q1. This level of investment appears to be a mix of maintenance capex for the industrial mills and growth capex for land development and potential expansions. The significant D&A figures, often exceeding $70M per quarter, suggest that a large portion of this spending is required just to replace depreciating assets, indicating high capital intensity that pressures free cash flow conversion.

The working capital dynamics are highly erratic, with large negative changes (cash outflows) in Q1 periods (e.g., -$119.6M in 2024Q1, -$97.6M in 2026Q1) likely corresponding to pre-harvest inventory and input purchases. Conversely, positive changes in Q4 and Q2 suggest the collection of receivables and sale of inventory. This pattern indicates that Adecoagro's cash flow is heavily influenced by the timing of its agricultural cycle, and the magnitude of these swings can obscure the underlying operational cash generation in any single quarter.

The company's primary use of cash has been for acquisitions, most notably the $396.3M outflow in 2026Q1 and a $580.1M outflow in 2025Q4, indicating an active land or asset acquisition strategy. Dividend payments are regular but small, typically around $17.5M per quarter when paid, and share repurchases have been minimal and sporadic. This allocation pattern suggests management is reinvesting cash flow into expanding the asset base, particularly in land transformation, rather than returning capital to shareholders, which aligns with the long-term value creation thesis but offers limited near-term cash yield.