$Adecoagro (AGRO.US)$It is a Luxembourg company that was lis...

Over the past 5 years, gross margin has risen from 25% to 43%, while the return on net assets has fluctuated around 0, and suddenly reached 13.5% in 2021.

Revenue fluctuated in the first 4 years and suddenly increased by 37.5% in 2021. Operating profit declined sharply in the previous 2 years and grew rapidly in the past 3 years, but net profit was almost nil in the first 4 years, reaching 131 million in 2021 alone.

The income statement shows that the cost of selling securities was over 100 million in the previous 4 years, and only dropped to 54 million in 2021. However, interest expenses reached 22% of operating profit in 2021, which is a heavy burden.

Revenue increased 27% in the first two quarters of 2022, but operating profit declined 8.1%, and net profit increased 15.6%. The increase in net profit was mainly due to the sudden drop in the cost of selling securities to zero. However, interest expenses have reached 27% of operating profit, which is a very bad trend.

The balance ratio has not changed much in the past 5 years; it has basically remained around 60%. Inventories increased 131 million dollars in 2021, which is just the same as net profit for that year, which is just a coincidence.

Long-term loans amounted to $749 million, accounting for 68% of net assets of $1,104 million. The leverage ratio is not that low.

Currently, the price-earnings ratio is 8, and the price-earnings ratio is TTM 5.7. Considering that net profit in 2021 is the highest in recent years, the agricultural products sector has a typical cyclical pattern, and sustainability still needs to be observed.