AGRO 20-F Report ended Dec. 31, 2019

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•	our business prospects and future results of operations;

•	weather and other natural phenomena;

•	the length and severity of the recent novel coronavirus (COVID-19) outbreak;

•	developments in, or changes to, the laws, regulations and governmental policies governing our business, including limitations on ownership of farmland by foreign entities in certain jurisdiction in which we operate, environmental laws and regulations;

•	the implementation of our business strategy;

•	our plans relating to acquisitions, joint ventures, strategic alliances or divestitures;

•	the implementation of our financing strategy and capital expenditure plan;

•	the maintenance of our relationships with customers;

•	the competitive nature of the industries in which we operate;

•	the cost and availability of financing;

•	future demand for the commodities we produce;

•	international prices for commodities;

•	the condition of our land holdings;

•	the development of the logistics and infrastructure for transportation of our products in the countries where we operate;

•	the performance of the South American and world economies;

•	the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan Peso compared to other currencies; and

•	the factors discussed under the section entitled “Risk Factors” in this annual report.

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•	References to the terms “Adecoagro S.A.”, “Adecoagro”, “we”, “us”, “our”, “Company”; and “our company” refer to, Adecoagro S.A., a corporation organized under the form of a société anonyme under the laws of the Grand Duchy of Luxembourg, and its subsidiaries.

•	References to “IFH” and “IFH LP” mean the former International Farmland Holdings, LP, a limited partnership (previously IFH LP and International Farmland Holdings, LLC, or IFH LLC).

•	References to “Adecoagro LP” mean Adecoagro, LP SCS, a limited partnership organized under the form of a société comandite simple under the laws of the Grand Duchy of Luxembourg (previously Adecoagro LP and Adecoagro, LLC).

•	References to “$,” “US$,” “U.S. dollars” and “dollars” are to U.S. dollars.

•	References to “Argentine Pesos,” “Pesos” or “Ps.” are to Argentine Pesos, the official currency of Argentina.

•	References to “Brazilian Real,” “Real,” “Reais” or “R$” are to the Brazilian Real, the official currency of Brazil.

•	Unless stated otherwise, references to “sales” are to the consolidated sales of manufactured products and services rendered plus sales of agricultural produce and biological assets.

•	References to “IFRS” are International Financial Reporting Standards issued by the International Accounting Standards Board (“IASB”) and the interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), together “IFRS.”

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•	Monetary assets and liabilities which are carried at current amounts at the balance sheet date are not restated because they are already expressed in terms of the monetary unit current at the balance sheet date.

•	Non-monetary assets and liabilities which are not carried at current amounts at the balance sheet date, and components of shareholders' equity are adjusted by applying the applicable price index.

•	All items in the income statement are restated by applying the applicable price index.

•	The effect of inflation on the Company’s net monetary position is included in the income statement, in "Other financial results" .

•	The ongoing application of the re-translation of comparative amounts to closing exchanges rates under IAS 21 and the hyperinflation adjustments required by IAS 29 will lead to an additional difference on top of the difference arising out of the adoption of hyperinflation accounting.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBITDA and Adjusted Consolidated EBITDA and the reconciliation in the table below.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

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(1)	See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

(2)	This corresponds to an equity line item in our consolidated statements of financial position. See “Presentation of Financial and Other Information” for the definitions of Adjusted Segment EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA.

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•	prevailing world commodity prices, which historically have been subject to significant fluctuations over relatively short periods of time, depending on worldwide demand and supply;

•	changes in the agricultural subsidy levels of certain important producers (mainly the U.S. and the European Union (“E.U.”) and the adoption of other government policies affecting industry market conditions and prices;

•	changes to trade barriers of certain important consumer markets (including China, India, the U.S. and the E.U.) and the adoption of other governmental policies affecting industry market conditions and prices;

•	changes in government policies for biofuels;

•	disruptions in commodity markets caused by global events, including the impact of the COVID-19 pandemic;

•	world inventory levels, i.e., the supply of commodities carried over from year to year;

•	climatic conditions and natural disasters in areas where agricultural products are cultivated;

•	the production capacity of our competitors; and

•	demand for and supply of competing commodities and substitutes.

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•	labor laws and wage increases;

•	economic growth;

•	abrupt currency fluctuations;

•	high levels of inflation;

•	exchange and capital control policies;

•	high interest rates;

•	liquidity of domestic capital and lending markets;

•	inconsistent fiscal and monetary policy;

•	liquidity and solvency of the financial system;

•	limitations on ownership of rural land by foreigners;

•	developments in trade negotiations through the World Trade Organization or other international organizations;

•	environmental regulations;

•	tax laws, including royalties and the effect of tax laws on distributions from our subsidiaries;

•	changes in governmental economic or tax policies;

•	restrictions on repatriation of investments and on the transfer of funds abroad;

•	expropriations or nationalizations;

•	import/export restrictions or other laws and policies affecting foreign trade and investment;

•	increase in public expenses affecting the economy and fiscal deficits;

•	price controls or price fixing regulations;

•	restrictions on land acquisition or use or agricultural commodity production; and

•	other political, social and economic developments, including political, social or economic instability, in or affecting the country where each business is based.

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Law of Social Solidarity and Productive Reactivation : On December 23, 2019, Law No. 27,541 Social Solidarity and Productive Reactivation was published in the Official Gazette (the “Solidarity Law”). The Solidarity Law declared a public emergency in economic, financial, fiscal, administrative, social security, tariff, energy, health and social matters and granted the Executive Branch with broad powers in many aspects related to the public emergency. The Solidarity Law and related regulations adopted on on December 27, 2019 by Decree No. 99/2019, introduced important foreign exchange restrictions and tax modifications, among other provisions related to sovereign debt, energy and social security. Decree No. 99/2019 provided measures regarding employer contributions, applicable rates for foreign goods and provided that, digital services will be taxed at a 8% , and the acquisition services abroad and passenger transport services destined outside the country at 30%. The Solidarity Law delegated in the Executive powers from Congress to determine the export duty rates of exports of all goods and determines different caps for different products. Most agricultural goods have a cap of 15% export duties rate or less (currently, most of them are set between 5%-12%) except for soybean products which are mostly set at a 33% export duty rate.

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Price Control Program : On January 7, 2020, the government relaunched the so-called Programa Precios Cuidados , a voluntary price control program, whose goal is to foster consumption and establish reference prices for households products with the highest consumption.. Initially, 310 products were included within Programa Precios Cuidados and public officials stated that the prices of the products included within the program were to be reduced by 8% on

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Maximum prices and supply obligations : In connection with the coronavirus (COVID-19) sanitary emergency, on March 20, 2020, the Federal Government issued general regulations (applicable to most producers) imposing a temporary obligation (in principle, during the following 60 days) to (i) sell products at the maximum prices established as of March 6, 2020; and (ii) increase the production up to the facilities’ full capacity (see “ — The measures taken or to be implemented by the Argentine government in response to the COVID-19 pandemic may have an adverse effect on our business and operations — Maximum Prices and Supply Obligations”).

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Law of Sustainability of Public Debt issued under Foreign Law : On February 13, 2020, Law No. 27,544 of Sustainability of Public Debt issued under Foreign Law was published in the Official Gazette, granting powers to the Ministry of Economy to carry out the restructuring of the public sovereign debt governed by foreign law. Likewise, the law authorizes the Ministry of Economy to issue new public securities to modify the maturity profile of interest and capital amortizations, as well as determine terms and procedures for issuance, and appoint institutions or financial advisors for the restructuring process (see " — The economy of Argentina may be affected by its government’s limited access to financing from international markets and the result of failure to pay its debt obligations and the current debt restructuring process”).

•	Tax Reform Law : See “ — Changes in the Argentine tax laws may adversely affect the results of our operations, financial condition and cash flows -“.

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Supermarket Shelves Law . On March 17, 2020, Supermarkets’ Shelves Law No. 27,545 was published in the Official Gazette. This law provides rules and restrictions for the display of products in certain commercialization centers’ shelves and also provides certain conditions that must be fulfilled in the commercial relationship between the commercialization centers and their suppliers, including compliance with the good commercial practices’ code which is also created by the law.

•	Coronavirus measures . The Argentine government has taken and continues taking measures in response to the COVID-19 pandemic (see “ — The measures taken or to be implemented by the Argentine government in response to the COVID-19 pandemic may have an adverse effect on our business and operations").

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(i)	to contain or delay the spread of COVID-19, the Brazilian Ministry of Health, as well as several state and municipal authorities have adopted or recommended social distancing measures, which may ultimately result in severe fines/penalties;

(ii)

in March 2020, the Brazilian government created a Crisis Committee to Monitor the Impacts of COVID-19 in Brazil. Since then, it has announced several measures (tax or otherwise) to adress the effects of COVID-19 in Brazil. Likewise, the Brazilian Congress is currently discussing several measures to increase the Brazilian government’s revenues, such as imposing new taxes, revoking tax benefits and increasing the rates of current taxes, including the following:

◦	creating a new tax as a Compulsory Loan ( “Empréstimo Compulsório”) that would be imposed on companies whose net equity exceeds the amount to be established by law. A compulsory loan is a refundable federal tax that can be established in case of war or public calamity. The terms of this new tax are not yet clear, so we cannot predict the possible impacts on us; and

◦	revoke the tax exemption granted to dividend distributions paid by Brazilian companies, which could affect the return of our investments, as well as of our shareholders.

(iii)	States and municipalities may also revoke tax benefits and/or increase the rates of current taxes to increase its revenues. See “ — We receive certain tax benefits from Brazilian Tax Authorities which we cannot assure will be maintained or renewed;” and

(iv)	the Brazilian Congress is currently discussing a Bill which, if approved, will impose mandatory and temporary postponement the term of rural leases on certain situations, preventing lessors from terminating such agreements and filing for repossession of the leased land.

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•	economic and social instability;

•	increase in interest rates;

•	exchange controls and restrictions on remittances abroad;

•	restrictions and taxes on agricultural exports;

•	exchange rate fluctuations;

•	inflation;

•	volatility and liquidity in domestic capital and credit markets;

•	expansion or contraction of the Brazilian economy, as measured by GDP growth rates;

•	allegations of corruption against political parties, elected officials or other public officials, including allegations made in relation to the “Car Wash Operation” ( Operação Lava-Jato) investigation;

•	government measures aimed at controlling the COVID-19 outbreak;

•	government policies related to our sector;

•	fiscal or monetary policy and amendments to tax legislation; and

•	other political, diplomatic, social or economic developments in or affecting Brazil.

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•	the judgment of the U.S. court is final and duly enforceable ( exécutoire ) in the United States;

•	the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was established in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

•	the U.S. court has applied to the dispute the substantive law which would have been applied by Luxembourg courts;

•	the judgment was granted following proceedings where the counterparty had the opportunity to appear, and if it appeared, to present a defense;

•	the U.S. court has acted in accordance with its own procedural laws; and

•	the judgment of the U.S. court does not contravene Luxembourg international public policy.

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•	one of the largest owners of productive farmland in South America, with more than 190,000 owned productive hectares as of December 31, 2019 (excluding legal land reserves pursuant to local regulations and other land reserves) located in Argentina, Brazil and Uruguay, producing a wide range of agricultural products;

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•	a leading producer of grains and oilseeds in South America. During the 2018/2019 harvest year, we harvested 181,461 hectares (including 86,307 leased hectares and 31,127 second crop hectares) and produced 652,169 tons of grains, including soybeans, corn, wheat, sunflower, peanut and cotton, among others;

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one of the largest fully integrated producers of rough (unprocessed) rice in the world, planting 39,308 hectares (including 1,700 leased hectares) and producing 239,779 tons during the 2018/19 harvest year, which accounted for 22% of the total Argentine production according to the Confederacion de Molinos Arroceros del Mercosur (“Conmasur”). We are also a large processor and exporter of white rice (processed) in Argentina, accounting for 19% of total white rice production capacity in Argentina and 47% of total Argentine white rice exports during 2019 (33% of total paddy basis), according to Camara de Industriales Arroceros de Entre Ríos (Federacion de Entidades Arroceras);

•	a leading dairy producer in South America in terms of our cutting-edge technology, productivity per cow and grain conversion efficiencies, producing 120.1 million liters of raw milk during 2019, adding value in our processing facilities and a leading retailer of dairy products, including two popular brands, “Las Tres Niñas” and “Angelita.”

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a growing producer of sugar and ethanol in Brazil, where we currently own three sugar and ethanol mills, with an aggregate installed capacity of 14.2 million tons per year and full cogeneration capacity (the generation of electricity from sugarcane bagasse, the fiber portion of sugarcane that remains after the extraction of sugarcane juice) of 232 MW as of December 31, 2019 . Our operation is highly integrated, meaning that 96% of the sugarcane crushed at our mills is supplied from our own plantations. As of December 31, 2019, our sugarcane plantation consisted of 166,041 hectares; and

•	one of the leading companies in South America involved in the acquisition and transformation of undermanaged land to more productive uses, generating higher cash yields. During the last thirteen fiscal years, we have consistently sold a portion of our fully mature farmland every year. In aggregate, we have sold close to 97,500 hectares generating capital gains of approximately $240 million .

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Crop business : We produce a wide range of agricultural commodities including soybeans, corn, wheat, sunflower, peanut and cotton, among others. In Argentina, our farming activities are conducted mainly in the Argentine humid pampas region, where agro-ecological conditions are optimal for low-cost production. Since 2004, we have expanded our operations throughout the center-west region of Uruguay and the western part of the state of Bahia, Brazil, as well as in the northern region of Argentina. During the 2018/2019 harvest year, we planted approximately 185,807 hectares of crops, including second harvests, producing 649,108 tons of grains, including soybeans, wheat, corn, sunflower, cotton and peanut among others. We also planted an additional 5,828 hectares where we produced over 212,500 tons of forage that we used for cow feed in our dairy operation. During the current 2019/20 harvest year, we planted approximately 194,518 hectares of crops, including second harvest, and also planted an additional 6,338 hectares of forage. As part of the crops business, in 2019 we completed the acquisition of one peanut processing facility which produces raw and blanched peanut mostly sold in the export market; and we became full owners of one sunflower processing facility producing confectionary and bakery sunflower.

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Rice business : We own a fully-integrated rice operation in Argentina. We produce irrigated rice in the northeast provinces of Argentina, where the availability of water, sunlight, and fertile soil results in one of the most ideal regions in the world for producing rice at low cost. We believe that we are one of the largest producers of rough (unprocessed) rice in Argentina, producing 239,779 tons during the 2018/2019 harvest year, which accounted for 22% of the total Argentine production according to Conmasur. We own three rice mills that process our own production, as well as rice purchased from third parties. We produce different types of white and brown rice that are sold both in the domestic Argentine retail market under our own brand; and exported. During the current 2019/20 harvest year, we planted 41,544 hectares of rice.

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Dairy business : We believe that we are a leading dairy producer in South America in terms of our utilization of cutting-edge technology, productivity per cow and grain conversion efficiencies. Through the production of raw milk, we are able to transform forage and grains into value-added animal protein. Our free-stall dairies in Argentina allow us to optimize our use of resources (land, dairy cow feed and capital), increase our productivity and maximize the conversion of forage and grain into raw milk. We produced 120.1 million liters of raw milk during 2019, with a daily average of 9,066 milking cows, delivering an average of 36.3 liters of milk per cow per day. On October, 2017 we completed the construction of our first bio-digestor with 1.4MWH of installed capacity. The facility generates electricity by burning biogas extracted from the effluents produced by our milking cows. In addition to increasing revenues and securing our energy requirements, this facility enhances the sustainability of our free-stall dairy operation by reducing greenhouse gas emissions, improving the effluent management and concentrating valuable nutrients which are applied back to the fields. In 2019 we acquired two milk processing facilities which produce UHT and UP milk, milk powder and semi-hard cheese with flexibility to sell into both the domestic and export market based on relative profitability. During 2019 our facilities produced 69 million liters of fluid milk, over 1,500 tons of semi-hard cheese and over 7,700 tons of milk powder.

•	All Other Segments business : Our all other segments business consists of leasing pasture land to cattle farmers in Argentina. We lease over 13,546 hectares of pasture land which is not suitable for crop production to third party cattle farmers.

(1)	Includes soybeans, corn, wheat, sunflower and cotton, among others.

(2)	Sales of processed rice, including rough rice purchased from third parties and processed in our facilities.

(3)	All Other Segments encompasses our remaining interests in the beef Cattle and Coffee businesses. Our beef cattle business consists of over 55 thousand hectares of pasture land that is not suitable for crop production and as a result is leased to third parties for cattle grazing activities.

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(4)	Crop production does not include 212,650 tons , 120,221 tons and 155,300 tons, of forage produced in the 2018/2019 , 2017/2018 and 2016/2017 harvest years, respectively.

(5)	Expressed in tons of rough rice produced on owned and leased farms . As of December 31, 2019, the 2019/20 harvest year of rice harvest had not begun.

(6)	Raw milk produced at our dairy farms.

(7)	Includes 5,828 hectares, 6,010 hectares, and 5,177 hectares, used for the production of forage during the 2018/2019 , 2017/2018 and 2016/2017 harvest years, respectively.

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Unique and strategic asset base. We own strategically located farmland and agro-industrial assets in Argentina, Brazil and Uruguay. We engage in continuous improvement of our operations and practices, resulting in the reduction of operating costs and an increase in productivity, ultimately enhancing the value of our properties and generating capital gains. Our operations also benefit from strategically located industrial facilities throughout Argentina and Brazil, increasing operating efficiencies and reducing operating and logistical costs. We are vertically integrated where economics and returns are attractive, where the efficiency of our primary operation is significantly enhanced, or where lack of a competitive market results in the absence of a transparent price determination mechanism. Our diversified asset base creates valuable synergies and economies of scale, including (i) the ability to transfer the technologies and best practices that we have developed across our business lines, (ii) the ability to apply value-adding land transformation strategies to farmland in connection with our farming and sugarcane operations, and (iii) a greater ability to negotiate more favorable terms with our suppliers and customers.

•	Low-cost production leveraging agro-ecological competitive advantages. Each of the commodity products we grow is produced in regions where agro-ecological conditions provide competitive advantages and which, through the implementation of our efficient and sustainable production model, allow us to become one of the lowest cost producers.

•	Our grain and oilseed production is based in the Argentine humid pampas region where soil fertility, regular rainfalls, temperate climate, availability of land and proximity to ports contribute to the reduced use of fertilizers and agrochemicals, high productivity and stable yields and efficient logistics, ultimately resulting in one of the lowest costs per ton of grain produced and delivered.

•	Our rice operation is located in the northeast provinces of Argentina, one of the best rice farming regions in the world due to plentiful sunlight, abundant availability of water for low cost irrigation and large potential for expansion.

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Our dairy operation is situated in the Argentine humid pampas region, where cow feed (grains, oilseeds and forage) is efficiently and abundantly produced at a low cost and climate and sanitary conditions are optimal for cow comfort, which enhances productivity, cow reproduction rates and milk quality. Additionally we recently acquired two milk processing facilities strategically located. Our Morteros facility is located in the northeast of Córdoba province, an important milk production basin in Argentina. Our Chivilcoy facility is situated north of Buenos Aires province, approximately 250km away from Adecoagro’s freestalls and 160 km from Buenos Aires, the country’s main consumption market.

•	We produce sugarcane in the center-south region of Brazil, where the combination of soil and climate result in high sugarcane productivity and quality, resulting in one of the lowest production costs in the world, significantly lower than other major sugar producing regions, including India, China, the United States, the United Kingdom, France and Germany.

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Standardized and scalable agribusiness model applying technological innovation. We have consistently used innovative production techniques to ensure that we are at the forefront of technological improvements and environmental sustainability standards in our industry. We are implementing an agribusiness model that consists of specializing our workforce and defining standard protocols to track crop development and control production variables, thereby enhancing management decision-making. We further optimize our agribusiness model through the effective implementation and constant adaptation of a portfolio of advanced agricultural and information technologies and best practices tailored to each region in which we operate and commodity we produce, allowing us to improve our crop yields, reduce operating costs and maximize margins in a sustainable manner.

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In our farming business, we use “no-till” technology as the cornerstone of our crop production and have been able to implement this technique in areas within our production regions where it had not been used before. Furthermore, we also utilize crop rotation, second harvests, integrated pest management, balanced fertilization, water management and mechanization. Additionally, we use the innovative silo bag storage method, utilizing large polyethylene bags with a capacity of 180-200 tons which can be left on the field for 12 months, resulting in low-cost, scalable and flexible storage on the field during harvest, which we believe allows us to expand our crop storage capacity at a low cost, generate important logistic and freight savings by moving our production in the off-season when freight fares are lower, and time the entry of our production into the market at optimal price points. See “ — Operations and Principal Activities-Farming-Storage and Conditioning.”

•	In our dairy business, we believe that we were the first company in South America to implement the “free-stall” production system, resulting in more efficient conversion of feed to raw milk and higher production rates per cow compared to our peers in the region.

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In our sugar, ethanol and energy business, our sugarcane cluster, constituted by the Ivinhema and Angélica mills (i) has a highly mechanized planting and harvesting operation, which has increased our sugarcane production, reduced our operating costs and contributed to environmental sustainability by eliminating the need to burn the sugarcane before harvest; (ii) has the capacity to use all the bagasse (a by-product of the sugar and ethanol production process) that is produced, with almost no incremental cost, to cogenerate 216 MW y of clean and renewable energy; (iii) has the capacity of processing 55,200 tons of sugarcane per day and (iv) has the ability to recycle by-products such as filter cake and vinasse by using them as fertilizers in our sugarcane fields, as well as recycling water and other effluents, generating important savings in input costs and protecting the environment.

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Unique diversification model to mitigate cash flow volatility. We pursue a unique multi-tier diversification strategy to reduce our exposure to production and market fluctuations that may impact our cash flow and operating results. We seek geographic diversification by spreading our portfolio of farmland and agro-industrial assets across different regions of Argentina, Brazil and Uruguay, thereby lowering our risk exposure to weather-related losses and contributing to stable cash flows. Additionally, we produce a variety of products including soybeans, corn, wheat, sunflower, cotton, barley, sorghum, rice, raw milk, sugar, ethanol and energy, which lowers our risk exposure to potentially depressed market conditions of any specific product. Moreover, through vertical integration in the rice, dairy, sugar, ethanol and energy businesses, we process and transform a portion of our agricultural commodities into branded retail products, reducing our commodity price risk and our reliance on the standard market distribution channels for unprocessed products. Finally, our commercial committee defines our commercial policies based on market fundamentals and the consideration of logistical and production data to develop a customized sale/hedge risk management strategy for each product.

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Expertise in acquiring farmland with transformation and appreciation potential. Since our inception in 2002, we have executed transactions for the purchase and disposition of land for over $740 million and sold close to 97,500 hectares of developed land, generating capital gains of approximately $240 million . We believe we have a superior track record and have positioned ourselves as a key player in the land business in South America. Our business development team has gained extensive expertise in evaluating and acquiring farmland throughout South America and has a solid understanding of the productivity potential of each region and of the potential for land transformation and appreciation. To date, we have analyzed over 11 million hectares of farmland spread throughout the regions in which we operate and other productive regions in the world. We have developed a methodology to assess farmland and to appraise its potential value with a high degree of accuracy and efficiency by using information generated through sophisticated technology, including satellite images, rain and temperature records, soil analyses, and topography and drainage maps. Our management team has gained extensive experience in transforming and maximizing the appreciation potential of our land portfolio through the implementation of our agribusiness techniques described above. We also have an extensive track record of rotating our asset portfolio to generate capital gains and monetize the transformation and appreciation generated through our land transformation activities and agricultural operations.

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Experienced management team, knowledgeable employees. Our people are our most important asset. We have an experienced senior management team with an average of more than 20 years of experience working in our sector and a solid track record of implementing and executing large scale growth projects such as land transformations, greenfield developments of industrial plants, and integrating acquisitions within our organization. Recruiting technically qualified employees at each of our farms and operating sites is a main focus of our senior management and a key to our success.

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Expand our farming business through organic growth , leasing and strategic acquisitions. We will continue to seek opportunities for organic growth, target attractive acquisition and leasing opportunities and strive to maximize operating synergies and achieve economies of scale in each of our three main farming business areas (crops, rice and dairy). We believe that the execution risk associated with these projects is not expected to be significant as we are investing in existing operations that are highly efficient. Also our expected results do not rely exclusively on rising commodity prices, which we expect to remain constant at current levels.

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Consolidate our sugar and ethanol cluster in the state of Mato Grosso do Sul, Brazil. Our main strategy for our sugar and ethanol business is to consolidate our cluster in Mato Grosso do Sul, Brazil, by ramping up production in our Ivinhema and Angelica mills, which as of December 2019 reached a nominal capacity of 14.2 million tons per year. See “ — Sugar, Ethanol and Energy-Our Mills.” The consolidation of the cluster will generate important synergies, operating efficiencies and economies of scale such as (i) a reduction in the average distance from the sugarcane fields to the mills, generating important savings in sugarcane transportation expenses; (ii) one centralized management team, reducing total administration cost per ton of sugarcane milled; and (iii) a large sugarcane plantation supplying two mills, allowing for non-stop harvesting. We believe that our sugarcane cluster in Mato Grosso do Sul will allow us to become one of the most efficient and low

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Further increase our operating efficiencies while maintaining a diversified portfolio. We intend to continue to focus on improving the efficiency of our operations and maintaining a low-cost structure to increase our profitability and protect our cash flows from commodity price cycle risk. We seek to maintain our low-cost platform by (i) making additional investments in advanced technologies, including those related to agricultural, industrial and logistical processes and information technology, (ii) improving our economies of scale through organic growth, strategic acquisitions, and more efficient production methods, and (iii) fully utilizing our resources to increase our production margins. In addition, we intend to mitigate commodity price cycle risk and minimize our exposure to weather related losses by (i) maintaining a diversified product mix and vertically integrating production of certain commodities and (ii) geographically diversifying the locations of our farms.

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Continue to implement our land transformation strategy. We plan to continue to enhance the value of our owned farmland and future land acquisitions by making them suitable for more profitable agricultural activities, thereby seeking to maximize the return on our invested capital in our land assets. In addition, we expect to continue rotating our land portfolio through strategic dispositions of certain properties in order to realize and monetize the transformation and appreciation value created by our land transformation activities. We also plan to leverage our knowledge and experience in land asset- management to identify superior buying and selling opportunities.

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(1)

As of the date of this annual report, the harvest of soybean, corn, sunflower, cotton and rice pertaining to the 2018/2019 harvest year is ongoing. The only crop which has been almost fully harvested in the current 2019/20 harvest year is wheat, with a total production of 71,644 tons. Crop production does not include 212,650 tons , 120,221 tons and 155,300 tons, of forage produced in the 2018/2019 , 2017/2018 and 2016/2017 harvest years, respectively.

(2)	Expressed in tons of rough rice.

(3)	Raw milk produced.

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•	It is a clean and renewable energy;

•	It complements hydropower, the main source of Brazilian energy, as it is generated during the sugarcane harvest period (April to December) when water reservoirs are at their lowest level;

•	It requires a short period of time to start operations; and

•	It requires only a small investment in transmission lines when plants are located close to consumer centers.

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Undeveloped land (savannahs and natural grasslands): This is the most drastic transformation phase since it demands both physical and chemical transformation of the soil. First, the land is mechanically cleared to remove native vegetation. The soil is then mechanically leveled for agricultural operations: in the case of land being transformed for rice production, this process involves heavy land movements and systematization required for irrigation and drainage channels, roads and bridges. In the case of land destined for sugarcane plantations, land movements will also be necessary for the construction of terraces to prevent the excess of water runoff. Certain soils must be chemically treated and corrected by incorporating nutrients such as limestone, gypsum and phosphorous, as is the case of the Brazilian ‘Cerrado’. Soil correction is not required in Argentina or Uruguay due to the natural fertility of the soil. Pesticides and fertilizers are then applied to the soil in preparation for planting. In the case of land destined for crop production (grains and oilseeds), soybean, which is sometimes referred to as a colonizing crop, is usually planted during the first years due to its resistance to pests, weeds and extreme weather and soil conditions. Thereafter, the land will enter into a crop rotation scheme to reduce the incidence of plague and disease and to balance soil nutrients. In the case erof rice and sugar cane, which are produced in a monoculture system, there is no colonizing crop or rotation involved. Intensive plague and weed controls and additional soil correction will take place during these first three to five years. Land productivity or yields, measured in tons of soybean or other crops per hectare, will be initially low and will gradually increase year by year. During the first five to seven years, the yields will increase at high and sustained rates. After the seventh year we consider the land developed as yield volatility is reduced and growth is only achievable at marginal rates. Since our inception in 2002, we have put into production about 70 thousand hectares of undeveloped land into productive croppable land.

•	Undermanaged or underutilized farmland (cultivated pastures and poorly managed agriculture): This transformation process is lighter than the one described above since it does not require the initial mechanical clearing of vegetation or land leveling. Only in the case of land being prepared for rice production will leveling be required for efficient flood-

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Ongoing transformation of croppable land: The application of efficient and sustainable crop production technologies and best practices such as “no-till”, crop rotations, integrated pest and weed management and balanced fertilization, among others, incrementally increases soil quality and land productivity over time, maximizing return on invested capital and increasing the land value of our properties. Our entire farmland portfolio is constantly undergoing this phase of land transformation.

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(1)	Classification of wheat and soybean seeds.

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•	Initial recognition and changes in the fair value of biological assets and agricultural produce in respect of unharvested biological assets undergoing biological transformation;

•	Changes in net realizable value of agricultural produce for inventory carried at its net realizable value; and

•	Sales of manufactured products and agricultural produce to third parties.

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(1)	During 2017, the Argentine Goverment introduced changes in the income tax. The increase in the volume of milk sold is mainly explained by an increase of 18.5% of fluid milk production in our own free-stalls, due to a 19.6%

(2)	The income tax rate will be reduced to 30% for the years 2018 to 2020, and to 25% from 2021 onwards. A new tax on dividends is created with a rate of 7% for the years 2018 to 2020, and 13% from 2021 onwards.

(3)	Including the Social Contribution on Net Profit (CSLL).

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–	Production cycles;

–	Production area in hectares;

–	Estimated crop and rice yields;

–	Estimated sucrose content (Total Recoverable Sugar or TRS) for sugarcane;

–	Estimated costs of harvesting and other costs to be incurred until the crops and rice reach maturity (mainly costs of pesticides, herbicides and spraying);

–	Estimated transportation costs;

–	Market prices; and

–	Discount rates.

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The Company’s ‘Crops’ segment consists of planting, harvesting and sale of grains, oilseeds and fibers (including wheat, corn, soybeans, cotton and sunflowers, 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 this 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 Company´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 Company’s ‘Rice’ segment consists of planting, harvesting, processing and marketing of rice;

•	The Company’s ‘Dairy’ segment consists of the production and sale of raw milk; and industrialized products, including UHT, cheese and powder milk among others.

•	The Company’s ‘All other segments’ segment consists of the aggregation of the remaining non-reportable operating segments, which do not meet the quantitative thresholds for disclosure and for which the Company’s management does not consider them to be of continuing significance, namely, Coffee and Cattle.

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(1)	Includes soybean, soybean oil and soybean meal.

(2)	Includes sorghum and chia.

(3)	Includes barley, rye, oats and chickpea.

(4)	Includes seeds and farming services.

(5)	Accumulated adjustment of Hyperinflation accounting translation for our Crops segment sales.

(6)	Sales of processed rice including rough rice purchased from third parties and processed in our own facilities, rice seeds and services.

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(7)	Includes sales of energy from our biodigester, which produces biogas from effluents of our cows.

(8)	All other segments include our cattle business which primarily consists of leasing land to a third party based on the price of beef. See “Item 4. Information on the Company-B. Business Overview-Cattle Business”.

(9)	Includes operating leases and other services.

(10)	Represents capital gains from the sale of land.

(11)	The table reflects the production in respect of harvest years as of December 31.

(12)	Crop production does not include 212,650 tons and 128,151 tons of forage produced as of December 31, in the 2018/2019 and 2017/2018 harvest years, respectively.

(13)	Expressed in tons of rough rice produced on owned and leased farms. The rough rice we produce, along with additional rough rice we purchase from third parties, is ultimately processed and constitutes the product sold in respect of the rice business.

(14)	Includes rough rice purchased from third parties and processed in our own facilities. Expressed in tons of rough rice (1 ton of processed rice is approximately equivalent to 1.6 tons of rough rice).

(15)	Raw milk produced at our dairy farms.

(16)	Own and third parties raw milk processed in our industrial facilities of Morteros and Chivilcoy.

(17)	Represents the planting plan for 2019/2020 campaign. As of December 31, 2019, 80.4% of the planting plan is seeded.

(18)	Includes hectares planted in the second harvest.

(19)	Does not include potential croppable areas being evaluated for transformation and does not include forage area.

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A $54.1 million increase in our Dairy segment mainly caused by (i) a 128.2% increase in volume of dairy products sold such as UHT milk, powder milk, cheese, etc, measured in liters of fluid milk equivalent, from 89.5 million liters in 2018 to 204.2 million liters in 2019, (ii) a 39.3% increase in average milk selling prices, from $0.28 per liter of fluid milk equivalent in 2018 to $0.39 per liter in 2019, mainly explained by sales of manufactured products from our new industrial facilities in Morteros and Chivilcoy; and (iii) the negative impact of $3.5 million effect of hyperinflation accounting and translation in respect of Argentine operations in 2018 compared to the negative impact of $0.9 million in 2019.

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A $20.8 million increase in our Sugar, Ethanol and Energy segment, mainly due to: (i) a 5.5% increase in the volume of sugar and ethanol sold, measured in TRS(*), from 1,562.0 thousand tons during 2018 to 1,648.0 in 2019; and (ii) a 34.7% higher volume of energy sold due to a 26.7% increase in cogeneration efficiency, from 62.1 KWh per ton in 2018 to 78.7 KWh per ton in 2019 due to the burning of a stockpile of bagasse that was carried over from 2018 and to the burning of woodchips acquired to third parties, coupled with higher commercialization of third parties energy, from 72.1 MWh during 2018 to 173.1 MWh 2019.

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(1)	On average, one metric ton of sugarcane contains 140 kilograms of TRS. While a mill can produce either sugar or ethanol, the TRS input requirements differ between these two products. On average, 1.045 kilograms of TRS equivalent are required to produce 1.0 kilogram of sugar, while the amount of TRS required to produce 1 liter of ethanol is 1.691 kilograms

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A $11.0 million increase in our Crops segment mainly driven by (i) a 72.9% increase in the volume of corn sold, from 238.2 thousand tons in 2018 to 411.8 thousand tons in 2019, driven by (a) higher yields, from 4.9 tons per hectare during 2018 to 6.5 tons per hectare in 2019; and (b) an increase in inventories of 26.4 thousand tons in 2018, compared to a decrease in inventories of 39.7 thousand tons in 2019, (ii) an increase in volume of peanut sold, from 10.5 thousand tons, of which 6.2 thousand are processed by third parties, to 30.5 thousand tons of industrialized peanut in 2019 from our new processing

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(1)	Includes sorghum and popcorn.

(2)	Includes barley, rye, oats and chickpea.

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A $5.8 million increase in our Rice segment, mainly explained by (i) a 5.3% increase in the volume of white rice sold, from 182.1 thousand tons in 2018 to 191.7 thousand tons in 2019; and (ii) a negative impact of $4.6 million effect of hyperinflation accounting and translation for our Argentine operations in 2018 compared to a negative impact of $1.0 million in 2019. The increase in volume of white rice sold is mainly explained by, (a) an increase in inventories of 13.9 thousand tons in 2018, compared to a decrease in inventories of 6.6 thousand tons in 2019; and (b) a 5.6% increase of rough rice processed, from 168.5 thousand in 2018, to 178.0 thousand increase in 2019.

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a $48.6 million increase in our Dairy segment, explained by increase in volume of processed milk sold by our new industrial facilities in Morteros and Chivilcoy, compared to no processed milk during 2018, coupled with the effect of hyperinflation accounting and translation for our Argentine operations, from positive impact of $3.6 million effect in 2018 compared to a positive impact of $0.8 million during the same period in 2019.

•	a $12.0 million increase in our Sugar, Ethanol and Energy segment, mainly due to the 5.5% increase in the volume

•	a $1.0 million decrease in our Rice segment, mainly due to (i) 6.9% lower unitary cost in dollar terms due to the depreciation of the Argentine Peso, coupled with efficiency gains in industrial performance. This was partially offset by a 5.4% increase in the volume of white rice sold.

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•	A $34.0 million increase in our Sugar, Ethanol and Energy segment from a loss of $20.9 million in 2018 (of which $37.8 million were unrealized losses) to a gain of $13.1 million during the same period in 2019 (which includes $0.9 million of unrealized losses). This increase was mainly due to:

–	A $36.9 million increase in the recognition at fair value less cost to sell of non-harvested sugarcane, from a loss of $37.8 million in 2018 to a loss of $0.9 million in 2019, mainly generated by a decrease in projected sugar prices during 2018, compared to an increase in projected sugar prices in 2019, coupled with increase in sugarcane area.

–	A $2.9 million decrease in the recognition at fair value less cost to sell of harvested sugarcane, from a gain of $16.9 million during 2018 to a gain of $14.0 million in 2019 due to the decrease in sugarcane yields.

•	a $8.0 million increase in our Dairy segment, mainly due to the increase in the recognition at fair value less cost to sell of fluid milk, from $5.5 million in 2018 (of which $7.9 million were realized) to $13.5 million in 2019 (of which $17.7 million were realized), mainly due to:

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A $9.8 million increase in the recognition at fair value less cost to sell of realized production, from $7.9 million during 2018 to $17.7 million in 2019, mainly due to (i) a 19.6% increase in milking cows, from 7,581 average heads in 2018 to 9,066 average heads in 2019 as we are completing capacity of our third free-stall; and (ii) higher milk selling prices, from 0.28 dollar per liter in 2018 to 0.31 dollar per liter in 2019.

–	A negative impact of $1.8 million effect of hyperinflation accounting and translation for our Argentine operations during 2018 compared to a negative impact of $0.2 million in 2019.

–	A $3.4 million decrease in the recognition at fair value less cost to sell of unrealized production, from a loss of $0.6 million in 2018 to a loss of $4.0 million in the same period in 2019, mainly due to a 73.5% higher depreciation of the Argentine Peso during 2018, compared to the same period in 2019, which impacts on the valuation of the cow herd.

•	A $8.1 million increase in our Rice segment, from $4.1 million during 2018 to $12.2 million in 2019. This increase is due to:

–	A negative impact of $4.8 million effect of hyperinflation accounting and translation for our Argentine operations during 2018, compared to a negative impact of $1.0 million in 2019.

–	A $2.6 million increase in the recognition at fair value less cost to sell of non-harvested rice, from a loss of $3.9 million in 2018 to a loss of $1.3 million in 2019, mainly explained by higher projected prices.

–	A $1.7 million increase in the recognition at fair value less cost to sell of harvested rice at the point of harvest, from $12.8 million in 2018 (of which $9.1 million were realized) to $14.5 million during the same period in 2019 (of which $12.7 million were realized), mainly explained by lower costs in dollar terms, due to the Argentine Peso real depreciation during the last year

•	A $1.0 million increase in our Crops segment from $28.7 million during 2018 (of which $28.2 million were realized) to $29.7 million in 2019 (of which $24.2 million were realized). This increase is primarily due to:

–	A negative impact of $7.8 million effect of hyperinflation accounting and translation for our Argentine operations during 2018 compared to a negative impact of $0.5 million during the same period in 2019.

–	The recognition at fair value less cost to sell of non-harvested crops, increased $4.4 million, from a loss of $2.2 million in 2018 to a gain of $2.2 million in 2019, mainly due to favorable weather conditions in the humid pampas which increased expected yields for corn.

–	A decrease of $10.5 million in the recognition at fair value less cost to sell of harvested crops at the point of harvest, from $38.6 million in 2018 to $28.1 million in the same period in 2019, mainly due to lower local commodities prices at the

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a $7.3 million increase in our Crops segment due to (i) export taxes paid from export sales of peanut in 2019 compared to null exports taxes of peanut in 2018, (ii) a 7.1% increase in total segment sales; and (iii) the effect of hyperinflation accounting and translation for our Argentine operations, from positive impact of $0.5 million effect during 2018 compared to a positive impact of $0.1 million in 2019.

•	a $6.5 million increase in the Rice segment, due to the increase in white rice sales by 5.3%, coupled with a higher mix of sales destined to export market which has higher selling expenses due to export taxes in Argentina since September 2018,

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•	a $5.3 million increase in the Dairy segment due to higher exports of powder milk, from 16.8 thousand liters equivalent during 2018 to 40.8 thousand liters equivalent in 2019, coupled with higher freight costs of our milk destined to internal market from processing facilities to distribution centers of wholesalers.

•	a $2.3 million decrease in the Sugar, Ethanol and Energy segment, due to the decrease in sugar VHP exports, from 311.9 thousand tons in 2018, to 179.2 thousand tons in 2019, partially offset by the increase in ethanol and energy sales in the domestic market.

•	• a $48.2 million decrease in our Sugar, Ethanol & Energy segment mainly explained by the mark-to-market effect of our sugar hedge positions. The $48.4 million in 2018 is explained by the decrease in prices, which generated a positive effect in our sugar hedge positions.

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a $34.9 million decrease in Land Transformation segment due to $36.2 million received in connection with the sale of "Rio de Janeiro" and "Conquista" farms, located in Brazil, for a total consideration of $53.0 million for 9,300 croppable hectares during 2018, to $1.4 million for the sale of "Alto Alegre" farm, located in Brazil, for a total consideration of $16.8 million for 6,080 hectares in 2019. The lower result generated by "Alto Alegre" farm sale in 2019 compared to previous year, is mainly explained by the increase in our farmlands valuation after its revaluation in September, 2018 (See "—Revaluation Model for farmlands (IAS 16/IAS40)").

•	a $13.8 million decrease in All Other Segments related to lower net gains from the fair value adjustment of Investment property, composed of own farms under lease agreements (i.e. beef cattle farms).

•	a $8.5 million decrease in our Crops segment due to the mark-to-market effect of our soybean and corn hedge positions.

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Sales decreased $99.7 million in our Sugar, Ethanol and Energy segment, mainly due to: (i) 23.5% lower prices of sugar, from $371.6 per ton in 2017 to $284.3 per ton in 2018; (ii) a 8.3% decrease in the price of ethanol, from $549.6 per cubic meter in 2017 to $503.8 per cubic meter in 2018; (iii) a 13.2% decrease in the volume of energy sold, from 860.8 MWh in 2017 to 747.2 MWh in 2018; and (iv) a 2.5% decrease in the volume of sugar and ethanol sold, measured in TRS (Total Recoverable Sugar), from 1.60 million tons in 2017 to 1.56 million tons in 2018. The decrease in volume of sugar and ethanol sold was due to inventories build-up, of 48.8 thousand tons measured in TRS during 2018 compared to an inventories sell-off of 36.4 thousand tons measured in TRS in 2017. This was partially offset by a 11.8% increase year-over-year in sugarcane milled, from 10.2 million tons during 2017 to 11.4 million tons in 2018 due to (i) a 2.7% increase in milling per hour from 2,074 tons per hour in 2017 to 2,130 tons per hour in 2018 due to enhancements and investments at industrial level in concordance with the long term plan of the company; (ii) increase in effective milling days from 221 days in 2017, to 231 days in 2018, due to adequate weather conditions; and (iii) a 4.9% increase in sugarcane yields, from 85.1 tons per hectare in 2017 to 89.3 tons per hectare in 2018, that ensured cane availability.

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(1)	On average, one metric ton of sugarcane contains 140 kilograms of TRS. While a mill can produce either sugar or ethanol, the TRS input requirements differ between these two products. On average, 1.045 kilograms of TRS equivalent are required to produce 1.0 kilogram of sugar, while the amount of TRS required to produce 1 liter of ethanol is 1.691 kilograms

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Sales decreased $41.8 million in our Crops segment mainly driven by: (i) a $9.1 million effect of hyperinflation accounting and translation in 2018 for our Argentine operations; (ii) a 6.5% decrease in the volume of soybean sold, from 282.5 thousand tons in 2017 to 264.1 thousand tons in 2018; and (iii) a 59.5% decrease in the volume of corn sold, from 599.1 thousand tons in 2017 to 242.5 thousand tons in 2018. The decrease in the volume of soybean and corn sold was mainly driven by lower yields, from 2.7 tons per hectare in 2017 to 2.1 tons per hectare in 2018 for soybean and from 5.4 tons per hectare in 2017 to 4.2 tons per hectare in 2018 for corn. Variation in yields was caused by dry weather conditions during January and March of 2018, which is the critical period for water requirement and development of the crops, affecting mainly north and center regions of Argentina, and Uruguay. This decrease was partially offset by (i) higher sales volumes of wheat, from 103.6 thousand tons in 2017 to 174.5 thousand tons in 2018; (ii) higher prices of soybean, from $302.7 per ton in 2017 to $318.9 per ton in 2018 due to higher proportion of FOB sales; (iii) higher prices of corn, from $143.9 per ton in 2017, to $159.3 per ton in 2018; and (iv) greater selling prices of wheat, from $161.5 per ton in 2017 to $187.4 per ton in 2018.

(1)	Includes sorghum, popcorn and peanut.

(2)	Includes barley

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Sales decreased $7.8 million in our Dairy segment mainly caused by (i) a $3.5 million effect of hyperinflation accounting and translation in 2018 for our Argentine operations; (ii) a 20% decrease in fluid milk prices from $0.35 per liter in 2017 to $0.28 per liter in 2018 due to sharp depreciation of the Argentine peso; and (iii) 0.4 thousand tons of powder milk stock build-up during 2018. This decrease was partially offset by (a) higher milk production volumes, from 93.2 million liters in 2017 to 101.3 million liters in 2018 and (b) the $1.8 million derived from electricity sales during 2018 compared to no sales in 2017 as we started to deliver energy from the new bio-digester that transforms effluents from our free stalls into renewal electricity. Higher milk production was due to 8.8% increase in milking cows from 6,967 cows in 2017 to 7,581 cows in 2018, as we finished the construction of our third free stall and started populating it since September 2018.

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Sales increased $8.9 million in our Rice segment, mainly due to (i) a 29.6% increase in the volume of white rice sold, from 140.5 thousand tons during 2017 to 182.1 thousand tons in 2018; and (ii) a 8.8% increase in the sale of by products, from $17.1 million during 2017 to $18.6 million in 2018. The increase in the volume of white rice sold is mainly due to (a) a 16.9% increase in rice yields, from 5.9 tons per hectare during 2017 to 6.9 tons per hectare in 2018, and (b) a 10.2% increase in industrial efficiency and rice quality, which allowed us to transform 1.77 tons of rough rice into 1 ton of white rice during 2017, and 1.59 tons of rough rice into 1 ton of white rice in 2018. The increase in volumes sold were partially offset by (i) a reduction in average selling prices from $493.8 per ton in 2017 to $447.3 per ton in 2018; and (ii) a $4.6 million effect of hyperinflation accounting and translation in 2018 for our Argentine operations.

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•	a $112.9 million decrease in our Sugar, Ethanol and Energy segment, mainly due to: (i) the 2.6% decrease in the volume

•	a $39.4 million decrease in our Crops segment mainly due to the decrease in Sales of Goods and Services Rendered.

•	a $8.9 million decrease in our Dairy segment mainly due to the decrease in Sales of Goods and Services Rendered.

•	a $3.9 million increase in our Rice segment, mainly due to the 29.6% increase in volume sold, partially offset by 18.6% lower unitary costs, from $506.1 per ton in 2017 to $411.8 per ton in 2018, due to higher yields and depreciation of the Argentine Peso, coupled with effect of hyperinflation accounting and translation in 2018 for our Argentine operations.

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•	A $44.6 million decrease in our Sugar, Ethanol and Energy segment from a gain of $23.8 million in 2017 (of which $2.9 million were unrealized gains) to a loss of $20.9 million during 2018 (which includes $37.8 million of unrealized losses). This decrease was mainly due to:

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a $6.3 million decrease in our Dairy segment    , mainly due to the decrease in the recognition at fair value less cost to sell of fluid milk, from $11.8 million in 2017 (of which $9.9 million were realized) to $5.5 million in 2018 (of which $7.9 million were realized), mainly due to (i) 18.3% lower fluid milk prices; and (ii) a $4.0 million lower cow valuation due to effect of hyperinflation accounting and translation in 2018 for our Argentine operations. This decrease was partially offset by the 8.8% increase in milking cows from an average of 6,967 heads in 2017, to an average of 7,581 heads in 2018, which are used to populate free-stall #3.

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a $6.1 million decrease in our Rice segment, from $10.2 million during 2017 (of which $ 4.9 million were realized) to $4.1 million in 2018 (of which $9.1 million were realized), due to (i) a decrease of $4.8 million caused by effect of hyperinflation accounting and translation in 2018 for our Argentine operations; and (ii) lower recognition at fair value less cost to sell of non-harvested rice, from a gain of $3.7 million in 2017 to a loss of $3.9 million in 2018, mainly explained by normalization of expected yields in comparison with exceptional weather conditions for rice harvest during 2017/2018.

•	A $11.5 million increase in our Crops segment from $17.2 million in 2017 (of which $4.4 million were unrealized) to $28.7 million during 2018 (of which $8.2 million were unrealized). This increase is primarily due to:

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•	a $4.2 million decrease in the Sugar, Ethanol and Energy segment, due to the decrease in sales of sugar and ethanol by 2.6% measured in TRS, coupled with depreciation of the Brazilian Real in 2018.

•	a $2.1 million decrease in our Crops segment, due to (i) a 16.6% decrease in total segment sales; (ii) no direct exports realized during 2018, compared to 83.7 thousand tons of corn exported in 2017, which generated $0.7 million fobbing costs; and (iii) by effect of hyperinflation accounting and translation in 2018 for our Argentine operations.

•	$0.8 million increase in our Rice segment, due to a 29.6% increase in white rice sales, partially offset by effect of hyperinflation accounting and translation in 2018 for our Argentine operations.

•	a $36.2 million increase in our Land Transformation segment due to the sale of the "Rio de Janeiro" and "Conquista" farms, located in Brazil, for a total consideration of $53.0 million for 9,300 croppable hectares.

•	a $17.9 million increase in our Sugar, Ethanol & Energy segment mainly explained by the mark-to-market effect of our sugar hedge positions.

•	a $9.1 million increase in all other segments related to net gains from the fair value adjustment of investment property, composed of farms under lease agreements, coupled with $2.7 million increase by the effect of hyperinflation accounting

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•	our ability to generate cash flows from our operations;

•	the level of our outstanding indebtedness and the interest that we are obligated to pay on such outstanding indebtedness;

•	our capital expenditure requirements, which consist primarily of investments in new farmland, in our operations, in equipment and plant facilities and maintenance costs; and

•	our working capital requirements.

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(1)	The Company plans to partially rollover its short term debt using new available lines of credit, or on using operating cash flow to cancel such debt.

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(1)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; and (iii) liens over the Ivinhema mill and equipment.

(2)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; and (iii) liens over the Ivinhema mill and equipment.

(3)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; (iii) liens over the Ivinhema mill and equipment; and (iv) long term power purchase agreements (PPA).

(4)	Collateralized by (i) liens over the Ivinhema mill and equipment; and (ii) power sales contracts.

(5)	Collateralized by sales contracts.

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a.	execute any acts or contracts on our behalf aimed at fulfilling our corporate purpose, including those for which a special power of attorney is required;

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b.	carry out any transactions;

c.	agree, establish, authorize and regulate our operations, services and expenses;

d.	delegate special tasks to directors, regulate the formation and operation of committees and fix the remuneration and compensation of expenses of advisors and/or staff with special duties, with a charge to overhead;

e.	appoint, suspend or remove agents or employees, establish their duties, remuneration, and bonuses and grant them the powers that it deems advisable;

f.	grant signature authorization to directors and officers, grant general or special powers of attorney, including those to prosecute;

g.

call regular and special shareholders’ meetings and establish agendas, submit for the shareholders’ approval our inventory, annual report, balance sheet, statement of income and exhibits, propose depreciation, amortization and reserves that it deems advisable, establish the amount of gains and losses, propose the distribution of earnings and submit all this to the shareholders’ meeting for consideration and resolution;

h.	fix the date for the payment of dividends established by the shareholders’ meeting and make their payment; and

i.	make decisions relating to the issuance, subscription or payment of shares pursuant to our articles of incorporation and decision of the regular or special shareholders’ meetings.

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(1)	The address of Al Gharrafa Investment Company is C/O Intertrust Corporate Services (Cayman) Limited, 190 Elgin Street, George Town, Grand Cayman, KY1-9005, Cayman Islands.

(2)	The address of Stichting Pensioenfonds Zorg en Welzijn is P.O. BOX 4001 NL-3700 KA Zeist The Netherlands.

(3)	The address of Route One Investment LP is 1 Letterman Drive, Building D, Suite 200, San Francisco, CA 94129, United States.

(4)	The address of EMS Capital LP is 767 Fifth Avenue 46th floor, New York, NY 10153.

(5)	The address of Brandes Investment Partners LP is 11988 El Camino Real, Suite 600, PO Box 919048, San Diego, CA 92130-9048, United States.

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the prior authorization of the general meeting of shareholders (at the quorum and majority for ordinary resolutions), which authorization sets forth the terms and conditions of the proposed repurchase and in particular the maximum number of shares to be repurchased, the duration of the period for which the authorization is given (which may not exceed five years) and, in the case of repurchase for consideration, the minimum and maximum consideration per share, must have been obtained;

•	the repurchase may not reduce our net assets on a non-consolidated basis to a level below the aggregate of the issued share capital and the reserves that we must maintain pursuant to Luxembourg law or its articles of incorporation; and

•	only fully paid up shares may be repurchased.

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•	US$ 50,000,000 or more, in which case a quarterly statement must be filed in advance at each quarter, in addition to the annual statement (which may in turn complement and/or ratify the quarterly statements).

•	Between US$ 10,000,000 and US$ 50,000,000, in which case only an annual statement must be filed.

•	Between US$ 1,000,000 and US$ 10,000,000, in which case only an annual statement must be filed, with an option to use a simplified version of the statement.

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•	insurance companies;

•	tax-exempt organizations (including private foundations);

•	brokers or dealers in securities or currencies and traders in securities that elect to mark to market;

•	banks and financial institutions;

•	partnerships or other pass-through entities (or a person holding our common shares through a partnership or other pass-through entity or arrangement treated as such);

•	real estate investment trusts and regulated investment companies;

•	companies that accumulate earnings to avoid U.S. federal income tax;

•	persons who acquire common shares through the exercise of employee share options or other compensation: arrangements;

•	persons liable for alternative minimum tax;

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•	S corporations;

•	accrual-method taxpayers subject to special tax accounting rules under Section 451(b) of the Code;

•	holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar or that hold shares through non-U.S. brokers of other non-U.S. intermediaries;

•	certain former U.S. citizens or residents or U.S. expatriates;

•	holders that hold our common shares as part of a hedge, straddle or conversion or other integrated transaction;

•	holders that purchase or sell our common shares as part of a wash sale for U.S. federal income tax purposes; or

•	holders that own, directly, indirectly, or constructively, 10% or more of the total combined voting power or value of our common shares.

•	an individual who is a citizen or resident of the United States;

•	a corporation, or any other entity taxable as a corporation, created or organized in or under the laws of the United States or any State thereof, including the District of Columbia;

•	an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

•	a trust (a) if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or (b) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.

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•	the common shares are readily tradable on an established securities market in the United States or (b) we are eligible for benefits of the income tax treaty between Luxembourg and the United States (the “Treaty”);

•	we are not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC;

•	the U.S. Holder holds the common shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements;

•	the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property.

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(1)	“Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our consolidated financial statements and internal control over financial reporting of the Company, the statutory financial statements of the Company and its subsidiaries, and any other audit services required for the SEC or other regulatory filings.

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Item 17.	Financial Statements

Item 18.	Financial Statements.

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Item 19.	Exhibits

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1.	General information

2.	Financial risk management

–	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

•	Exchange rate risk

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•	Raw material price risk

•	End-product price risk

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•	Liquidity risk

•	Interest rate risk

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•	Credit risk

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•	Capital risk management

•	Derivative financial instruments

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▪	Futures/ options

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▪	Foreign currency floating-to-fixed interest rate swap

▪	Currency forward

▪	Euro-bob price swap

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3.	Segment information

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4.	Sales

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5.	Cost of goods sold and services rendered

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6.	Expenses by nature

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7.	Salaries and social security expenses

(i)	Includes US$ 32,714 , US$ 32,636 and US$ 41,172 , capitalized in Property, Plant and Equipment for the years 2019 , 2018 and 2017 , respectively.

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8.	Other operating income, net

9.	Financial results, net

10.	Taxation

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11.	Earnings per share

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12.	Property, plant and equipment

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15.	Intangible assets

(i)	Amortization charges are included in “General and administrative expenses” and “Selling expenses” for the years ended December 31, 2019 and 2018 , respectively. There were no impairment charges for any of the years presented (see Note 32 (a)).

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16.	Biological assets

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(i)	Classified as bearer and mature biological assets.

(ii)	Classified as consumable and immature biological assets.

(iii)	Classified as consumable and mature biological assets.

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17.	Investments in joint ventures

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18.	Financial instruments by category

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(i)	Included in “Financial Results, net” in the consolidated statement of income.

(ii)	Included in “Other operating income, net” and “Financial Results, net” in the consolidated statement of income.

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19.	Trade and other receivables, net

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20.	Inventories

21.	Cash and cash equivalents

22.	Disposals and acquisitions

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(1)	Treasury shares were used to settle these options and units.

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24.	Equity-settled share-based payments

(a)	Option Schemes

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(b)	Restricted Stock Unit Plan

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25.	Legal and other reserves

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26.	Trade and other payables

27.	Borrowings

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(1)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; and (iii) liens over the Ivinhema mill and equipment.

(2)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; and (iii) liens over the Ivinhema mill and equipment.

(3)	Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree mortgage of the Sapálio farm; (iii) liens over the Ivinhema mill and equipment; and (iv) long term power purchase agreements (PPA).

(4)	Collateralized by (i) liens over the Ivinhema mill and equipment; and (ii) power sales contracts.

(5)	Collateralized by sales contracts.

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30.	Provisions for other liabilities

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31.	Disclosure of leases and similar arrangements

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33.	Related-party transactions

(i)	It includes US$ 8 million of a loan that accruing a 3% interest rate per year with the final maturity in 2022.

(ii)	Since February 2019, Girasoles del Plata S.A. (formerly CHS Agro S.A.) is fully part of the Group.

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34.	Critical accounting estimates and judgments

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35.1	Basis of preparation and presentation

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•	The value of the initial measurement of the lease liability;

•	Any lease payments made at or before the commencement date, less any lease incentives; and

•	Any initial direct costs incurred by the lessee; and

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•	Variable lease payments that depend on an index or rate, initially measured using the index or rate as of the commencement date;

•	Amounts expected to be payable by the lessee under residual value guarantees;

•	The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

•	Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease;

•	Fixed payments, less any lease incentives receivable;

•	Increasing the carrying amount to reflect interest on the lease liability;

•	Reducing the carrying amount to reflect lease payments made; and

•	Re-measuring the carrying amount to reflect any reassessment or lease modifications.

35.2	Scope of consolidation

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35.3	Segment reporting

•	assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

•	income and expenses for each statement of income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

•	all resulting exchange differences are recognized as a separate component of equity.

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35.5	Property, plant and equipment

35.7	Leases

35.8	Goodwill

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35.9	Other intangible assets

35.11	Biological assets

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•	Growing crops includng rice:

•	Growing herd and cattle:

•	Sugarcane:

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35.12	Inventories

35.14	Derivative financial instruments and hedging activities

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35.15	Trade and other receivables and trade and other payables

35.16	Cash and cash equivalents

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35.17	Borrowings

35.18	Provisions

35.20	Current and deferred income tax

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35.22	Farmlands sales

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35.23	Assets held for sale and discontinued operations

35.24	Earnings per share

35.25	Equity-settled share-based payments

35.26	Research and development

36.	Subsequent events