Servicios Agropecuarios San Diego, S.A.

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What it is

The company’s main activity is to acquire and lease real-estate assets — farms — located on the Southern Coast of Guatemala dedicated principally to sugarcane cultivation; those farms are leased on a long-term basis (30 years). Think of it as a listed agricultural landlord: its tenants grow the cane, manage the fields and bear all the crop risk; Agrosandiego simply collects the rent.

The farms include Finca Mercedes, located at km 1.1 on highway CA-2 in the municipality of Guanagazapa, Escuintla, covering 319.61 hectares and valued at US$3,332,842 in 2014. Finca Lorena covers 369.39 hectares, valued in 2014 at US$4,731,151, generating a fixed annual rent.

The company books its farms as investment properties on its balance sheet at fair value — total property assets of Q84.6 million (≈US$11.1 million at current rates) at end-2020, our calculation from audited statements.

Who owns it

At 31 December 2018, the common share capital was held by two individual shareholders and one Panamanian company, Santa Luisa International Group Inc. Santa Luisa is the controlling entity and has issued a formal commitment to backstop the preferred share redemption if the company cannot fund it from operations, per the prospectus on file with the RMVM.

Servicios Agropecuarios San Diego does not form part of any group of entities or any financial group in the Guatemalan regulatory sense — it is a standalone vehicle. The individual names of the two common shareholders and their precise ownership percentages are not published in available RMVM or BVN filings; Guatemalan Decreto 34-96 requires prospectus disclosure of shareholder structure but does not mandate ongoing publication of precise individual stakes beyond the prospectus date.

Who runs it

The company has an Administration Council; the board posts are occupied as follows — though the prospectus excerpt in available RMVM filings names the board structure without detailing the current president’s name in searchable text. Named board members visible in publicly available filings include Silvia Melania Rosales Flores (Treasurer) and Vilma Michelle Hernández López (Secretary).

Not published: the name of the current board president or general manager does not appear in any RMVM financial-statement filing, BVN listing document, or prospectus update retrieved from the regulator’s site (rmvm.gob.gt) or the Bolsa de Valores Nacional. The 2019 prospectus update on file mentions the Administration Council’s structure but its text is not parsed by available sources.

The money, in plain words

Agrosandiego earns its money in exactly one way: annual rental income from the farms — Q4,829,879 in 2016, Q5,984,633 in 2017, and Q7,269,578 in 2018, rising to Q6,027,699 (≈US$791,000) in 2020 per audited statements. Of every quetzal of rent collected, about 82 cents reaches operating profit — an operating margin of 81.8% — because costs are almost entirely fixed administrative expenses and the amortisation of lease contracts; our calculation from RMVM-filed audited statements.

Reported net profit in 2020 was Q6,166,441 (≈US$809,000), slightly exceeding rental revenue, because investment income and fair-value movements on the investment properties added to operating profit. Total assets stood at Q161.5 million (≈US$21.2 million), of which nearly all is farmland and lease rights — our calculation.

Cash on hand was Q10.3 million (≈US$1.35 million), enough to cover more than two years of preferred dividends at the 2020 payout rate; our calculation.

What it is doing now

The farms remain leased exclusively to Ingenio San Diego, S.A., a sugar mill founded in 1887 and one of the most important companies in the production and export of sugar globally. The company’s single strategic move since listing — expanding its preferred-share programme — was completed with a second block in 2017; the first block was registered with the RMVM on 23 June 2015 and the second block on 1 September 2017.

In September 2022, the company registered a change of commercial address to 13 Calle 2-60, Zona 10, Nivel 11, Edificio Topacio Azul, Guatemala City — the most recent material administrative act in available public filings. No acquisition, disposal, refinancing, or leadership change has been disclosed in RMVM or BVN filings since that date that is accessible through available primary sources.

What to watch

• Lease renewal risk: All farms are leased to San Diego S.A. under 30-year contracts registered in the General Property Registry, with a “forced-contract” clause operative for the seven years of the share issuance. The contractual floor beyond that window depends entirely on the continued health of Ingenio San Diego.
• Preferred share redemption: There is a risk that redemption commitments may not be honoured at maturity; to mitigate this, controlling entity Santa Luisa International Group Inc. has issued a unilateral declaration of intent to backstop the redemption of preferred shares if needed.
• Disclosure gaps: The most recent audited statements publicly available on the RMVM site cover the year to 31 December 2020. No 2021, 2022, 2023 or 2024 financial statements are accessible through available primary sources, leaving investors with a four-year data gap.
• Single-tenant concentration: One hundred percent of revenue comes from one lessee — Ingenio San Diego. Any financial stress at that mill flows directly to Agrosandiego’s ability to pay its quarterly preferred dividend.

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This is news, not investment advice.