Adecoagro S.A.

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to ADECO Agro's 3rd Quarter 2023 Results Conference Call. Today with us we have Mr. Mariano Bosch, CEO, Mr. Emilio Nieco, CFO, Mr. Renato Junqueira Pereira, Sugar, Ethanol and Energy VP, and Mrs. Victoria Cabello, Investor Relations Officer. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer section. At that time, further instructions will be given. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of ADECO Agros management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of ADECO Agro and could cause results to differ materially from those expressed in such forward-looking statements. Now, I'll turn the conference over to Mr. Mariano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning and thank you for joining ADECO Agro's 2023 Third Quarter Results Conference. As you may have seen in the report, we are presenting very good operational and financial results. Our adjusted EBITDA during the quarter was $155 million, 27% higher compared to last year. We are very enthusiastic about how our sugar ethanol and energy business continues to perform. Last quarter, I mentioned some of the work we started doing a few years ago to enhance the productivity of our sugarcane plantation. I mentioned innovative techniques like pre-sprouted seedling and its reproduction in our own bio factory. the incorporation of state-of-the-art farming equipment, the use of drones and artificial intelligence, biological pesticides, et cetera, et cetera. During this quarter, we saw the results of our work. For example, we achieved record-crushing volume of 4.5 million tons. The quantity and quality of our sugarcane plantation is in an excellent shape. with a TRS content per hectare over 30% higher year over year. With this sugar cane, we produced a record volume of sugar. Indeed, we focused on solving minor bottlenecks in our sugar kitchen and were able to produce sugar above our nominal capacity, increasing our already large flexibility. And this came at a time when sugar commanded a premium over hydroxethanol of more than 50%. We remain with our hedges open and very well positioned to continue taking advantage of these price opportunities. Brazil is the most efficient country in the world in the production of sugar, and we own one of the most efficient operations in Brazil, and therefore in the world. The region of Mato Grosso do Sul, where our cluster is located, allows us to mill all the year round, maximizing our milling time while at the same time diluting our costs. We are very proud of our operational teams for the constant search of efficiencies and opportunities to expand our production. Now let's move into our farming business in Argentina and Uruguay. As you already know, this year we experienced the worst drought in history. This had an impact in our results. But during the year, we focus on strengthening efficiencies across all of our operations, finding saving opportunities to mitigate the impact. In the crop business, our results were significantly affected by the drought, as we mentioned in the past releases. But this is now behind us. We are starting fresh with the 23-24 campaign. All of our teams are fully focused on planting activities, which are being conducted under excellent conditions. El Niño weather event that we have been talking about for the past months is now here and has improved soil humidity across all of our productive regions. We are in an excellent situation to maximize yields in all our crops and go back to normalized EBITDA levels for this segment. In the case of our rice business, we are achieving even better results than last year. A big part of this was thanks to the decision we made last year to set a foot in Uruguay by acquiring rice mills. This offered greater sustainability to our operations and provided us with more commercial tools. We are entering into new markets offering clients customized varieties of high-quality rice developed in our own seed unit and full product traceability. This better mix of higher value-added products is allowing us to book premium on top of the high global price prices. In terms of the 23-24 campaign, water reservoirs recovered thanks to the range received, So we have the necessary water levels to secure a successful campaign. So far, we have already planted 80% of our plan. In our daily business, we are achieving results in line with last year. The impact of the drought was mainly seen in higher costs of feed. However, we were able to mitigate this with the record high productivity levels in our fully populated fruit stores. Also, having the flexibility to sell into the domestic and export market and switch production from one to the other was key during this month of lower powder milk prices. Regarding our land portfolio, During the quarter, we sold the farm in Argentina for more than 20% above our independent appraiser and with a very attractive IRR. A quick note on ESG. As we always say, since inception, we have been focused on developing sustainable production models in the interiors of the countries where we operate. Part of the work we have been doing with our ESG committee is to better communicate how we create value from an economical, environmental and social point of view under a robust corporate governance model. We are proud to see that our work is paying off and ESG rating agencies like Sustainalytics rank us among the leading players in our industry. In the meantime, we continue making progress in our operations. For example, in our production of biomethane, which we are already using to power more than 130 vehicles, replacing diesel consumption. Finally, in terms of distribution, we are complying with our policy, always maintaining our debt levels below two times EBITDA. Next week, On November 24th, we will be paying the second installment of our cash dividend. This represents an annual dividend of $35 million or 33 cents per share. On top of the $24 million we have already invested in share repurchases this year. To conclude, I want to thank our team. It is because of your hard work and effort that despite the very challenging start of the year, we are managing to end it with a very positive outlook ahead. Thank you to our shareholders for your continued support. Now I will let Emilio walk you through the numbers of the work.

So I don't make any noise, but if you need anything, I'm here. Okay.