Brasilagro Brazilian Agric Real Estate Co Sponsored ADR (Brazil)

We are here for our conference call for results presentation for another semester. First six months, 2024. Thank you for participating. Thank you for waiting. We're a little late. It's always good to remember that our year at Brasilagro goes from July to June. So... We will be covering the first six months ended December 31st, first six months. On the next slide, we have instructions. If you wish to ask questions, the presentation in English is available in the chat. And to hear a simultaneous translation, please click on the interpretation icon. Now I will pass the floor to Andrei, and we will begin our call. Thank you. Thank you, Ana. I would like to thank all the participants once again who are with us, investors, analysts, all those who follow us, and thank you. We will try to go over the presentation quickly to leave a lot of time, as much time as we can for the Q&A session. which is very good for both sides. I would like to begin with the highlights of the first six months. Six months, $424 million in revenue, net income $24 million, net revenue $424 million. Then operational, we will give you data in detail. You know it's been a challenging year in terms of production. We will say how we did, how things came out. and how we're making progress in the harvest, the delivery of 2 million tons of sugar cane, once again being strong as a large producer of sugar cane. So it's going to be a very productive call. Next, please. Next slide. Well, here I'd like to call your attention. When we look at our CAGR, our growth was 3%. But what I'd like to call your attention to is that in the last years, in spite of being a company that sold a lot of land, we were able to continue to grow the planted area. So we see we had important operations and we have been able to maintain the planted area. So we will work. We expect the CAGR 8 to 10% a year. We are going to work for this, but in the last few years, due to price and everything else, we were more sellers and we had good prices to sell land. We leased some land, but it's important to say that it's a growth series. and now we sold a lot of land in the last few years. The graph or the pie charts here on the right show the breakdown of our crops, the cultures, those who have been following us for a long time. You can see that things are changing. We must have a better revenue in some crops, but when we looked at the first pie chart a few years ago, most of it had two crops, sugarcane and soybean, and the rest we called others. And now we see a much heterogeneous distribution, the pie chart on the right, many other crops, cultures. So this makes sense when we talk about agriculture, we have to diversify because we need geographic diversification and climate diversification. We've been saying this for a long time. We're always after alternative crops, those that will generate more value on that soil and thus also increasing the value of the land. The graph on the right shows us the distribution of our land and leased land, our own land and leased land, showing our strategy in our 4060, leased land, our own land, or half and half of our own land, and we have some, also some land leased to third parties. This is a test drive for buyers, showing that our strategy has been to diversify crops operations, and this has been very important for our operational results, and much even more important for real estate results. A farm that begins to really plant cotton begins to call the attention of buyers. So that's how we have worked. Next slide, please. Well, I'd like to tell you about the year. You know very well, especially on Brazil Agro Day, we made an announcement that we would We would plant less corn in second crop corn. We had contribution margins that were very bad. If you plant to lose money, we don't need that. We plant to make money or at least avoid losing money. And so we made an important reduction in corn even before planting. Then there was a small drop Also, after beginning the planting, soybean, for example, began later than in the last few years, and this would not help the second crop of corn. We saw that the break-even was difficult for corn. We reduced the planted herb. There was a small drop in soybean, especially in the new lands, especially in Bahia, when we saw that the planting window was going to December, we cut down on planting. We're very rigorous in the planting window. So, there was a small drop in soybean, and part of this reduction in soybean went to beans, first crop, then part of corn went to beans. If you look at the bottom, beans had 7 000 and now almost 12 000. there was an important growth in beans and it's a product that we have worked a lot for the domestic market and also beans for exports so this graph shows what we said in the previous slide diversification of crops and the map on the right is a picture of rainfall, and you can see the challenge that it was to plant this year. Well, when we look at the total number, there's an important drop of 17%, but it's based mostly on corn. Corn, when we look at soybean, we have an expected drop of 6%, and this drop gentlemen, ladies and gentlemen, is due to the reduction of the area, not reduction in productivity. Corn also, we see this large drop due to the area. It's not due to productivity. We believe that since we planted corn in a restricted window, we believe we will have a very positive harvest in corn. and also the second crop was planted in a good window. So this shows basically the reduction in tonnage produced and a product that produces a lot of tons per hectare like corn. So it doesn't mean a big drop in contribution margin since this crop had a very negative price. Very negative result. Here's sugar cane. In the semester, Gustavo will go into detail about this. We see an important difference when we look at the numbers on the right, and this is linked to the drop to price. We began sugar cane with 110, 112. We ended the harvest at 90 cents. Our sugar cane goes to ethanol, and this has been the challenge of the company. to grow in areas where we can have ethanol and also sugarcane for sugar production. But semester after semester we see more deliveries, less than 180,000, and what we see is the important difference in the price of sugarcane. We maintained the productivity. There was a small improvement year after year. Important gains in the level. We know that we have new areas where new areas with sugarcane were making adjustments and we see an improvement year after year. This has been very resilient inside the company. Here, cattle raising, this drought, in October, November that had a strong impact on planting in the central region of Brazil. So this hindered past pastures. This was bad for pastures. And when we looked, the rainfall has begun in all our cattle raising units as of December 10th. rainfall is back after December 10th, so most of this number as we show here is a picture of December 30th will change. There is a great difference between estimated and actual until now, but reminding you that the impact was especially in November and December, lack of rainfall. Now we have favorable pasture, and we will close this gap in GMT. Inventory, we maintain very similar, a small drop in inventory. This is due to the farm that we leased in Xingu. We were selling and transforming areas, so a drop in inventory comes from that. The pasture area is very, And GMD, which is the average daily gain in weight, we hope this will be converted closer to the estimated numbers. Well, here you are following us, what has been happening in commodities, in the last few months, and soybean more recently now, in the last month especially, soybean went from 182 years ago to 117. And then we will show you the strategy, what calls our attention in spite of the drop in price, We will talk about this later. A good liquidity of real estate. So, we're very optimistic. Soon, we will have good news for you in terms of sale of land, sale of farms, and we will bring you real estate good news for purchase and sale. If you look at the cycle of commodity prices and the sale cycle of the company, when you have high commodity prices we sell more when we have low prices in commodities we buy more land so this is our strategy you will see that we have many transactions selling farms when we have high prices and then we buy land when the prices are low when when you work with agriculture this is the name of the game so we have to have capacity resilience to surf on these moments and to be a company like ours. Well here, a picture, I believe in the previous call, we talked about this, our cost was not that low and the price dropped, so we see these graphs showing the stability now in prices of potassium chloride and phosphated fertilizer. Urea had some fluctuation in the prices, but an important trend we see here with lower prices when we look at phosphated products. 2023, we had a cost before the war, 1950, and because of the war, and now 500. harvest that is planted when you look at chloride 720 we paid last year and before that the price was 1200 in 2223 and now chloride 624 and even more drops in prices 604 for 2023 2024 we're beginning to buy chloride with lower prices for the next So an important drop in fertilizer prices, especially potassium chloride. Phosphorus also has a drop. Nitrogenated products, this is something that calls our attention. This is the fertilizer that has a lot of fluctuation, but we're trying to buy at the right time. We know that our demand for nitrogenated products product is linear. The great demand is for sugarcane, and this is during the months of harvest. Here we see historical relationships and converging. There are things that historically we believe can go down, phosphated products, phosphated products, are still high, chloride has dropped a lot, so below historical levels, and nitrogenated fluctuating. Well, here the previous harvest, this harvest, and this will really be explained by Gustavo, when we look at the first Here, soybean, we sold 100% at 1440, and the exchange rate was 547. In this harvest, we were aggressive, doing what we thought made sense. We sold 60% in the past, 60% sold in the past, so this that is sold, sold at 13.20%. and with an exchange rate that is very favorable. When we look at this spot, we have a little more favorable 533 in the exchange rate. It's important to say that we expect a drop in prices year after year because we have another 40% to be sold. And there's this challenge of basis points. knowing that basis depends on ports, depends on countries. We're trying to optimize basis. In the case of cotton on the right, last year we made sales at 87.50 with an exchange rate of 5.65%. This year we have a price, 72% has already been sold at 82.50, and we have an exchange rate of 558 reais to a dollar. Cotton was sold, we sold more cotton than soybean. We had, there was more volatility in the past, and we were able to have a good exchange rate. receivables from the sale of farms this is very important the sale of farms receivables we have a lot of receivables transactions ready main especially alto taquari the sale of this farm this is important to monitor and we are working on this so we have almost 60 closed at an exchange rate of 539. Corn is the great challenge. We saw the prices. This is a crop where we're optimistic. We know the importance of this harvest. This can strengthen basis and the price of corn in a short period of time. has been a challenge for us due to what you have been following in terms of prices. Many of you follow also the prices of ethanol and sugar. It has been a challenge, and we begin to see signs of improvements for the next harvest. Because of this drought we had, we didn't have a super harvest in Brazil. In ethanol, we have a challenge, the Brazilian harvest. The year before last, we produced 530, 540,000 tons, and we went to a harvest of more than 600. This is an expressive amount. There is a policy on the part of Petrobras and also reduction in taxes that compromise the price of ethanol. Well, Gustavo, I'd like to pass the floor to you to give details about the numbers. Thank you, Andrei. Good morning. Good morning to all the participants. Well, let's begin with the main numbers of the semester. reminding you that we begin on July 1st, we end on June 30th. Soon during this semester, the company sells the harvest, soybean, cotton, corn and beans, and we also deliver 65% of the harvest of sugarcane also during these six months. Andrei showed a graph, and we saw how the price of soybean and meat had a drop in prices. For example, a bag of soybean, 187 reais at the beginning of the year. Right now, 115, 120 reais, a great drop. a drop of more than 35%. Also, corn was 25%, price of ethanol also 25%. In the case of soybean, a product that we had defined with a strategy of 53,000 tons to sell during this period, This strategy was made in this way because we saw the drop in price, especially due to the record harvest in Brazil, logistics, freight prices. Soybean was competing, the logistics was competing with corn. So we saw that this was putting pressure on the price. The exchange rate was dropping. So with the prices we have seen in our hedge, the premium was under pressure with drops in prices. And since the cost of this harvest was more expensive than the previous harvest because of fertilizer, price of fertilizer and so forth. We had an operational margin that was lower than the historical levels. So we thought the best would be to wait until the second semester to sell. And the results of this scenario, we see net revenue 424 million Reais, 12% less. And as I said, we sold more products and we were not able to capture better prices in all these products. And this has a result in the adjusted EBITDA of the company during this semester, 8 million last year, 124. and we will show you the harvest, the behavior of the inventory. Last year, 2023, we thought of using the same strategy as the one we used this year, and we were able to capture better prices. Now, for ethanol, it was not different. As Andrei said, Prices are lower, also government policies. The price of gasoline also affects the price of ethanol. Ethanol is always 30% cheaper than gasoline, and the EBITDA margin was also affected, dropped, and later I will show you this effect. Net profit, 24 million Reais. And why is it similar to last year? For example, we have receivables from the sale of farms, 5.5 million bags of soybean to receive, and this appraised, there was a positive price, 49 million, and result from derivatives. during this period receivables from farms also 24 million reais for the next quarter we will begin to have the sale of these 200 000 tons of soybean that andre mentioned cotton and the new harvest of sugar cane so the real results will happen as of the next two quarters. In the next slide, we can see here, this is what we were trying to show, the results of the harvest, soybean and corn. On the right, on top we have soybean, at the bottom, corn and we can see the results of the harvest 22 23 20 22 23 and as we said the margins began to drop in the previous year we had 21 percent contribution margin for soybean and we had a great drop the price of soybean but through derivatives we were able to compensate this drop and we were able to have a unit price that was that was 2% lower than the previous year so this This was in the unit cost. We see what happened in 21, 22, and also in the harvest 22, 23, what we mentioned. Price of fertilizer, phosphates, and other products, seeds also. Prices went up and gave us this low margin. Now, in the case of corn, the contribution margin of 12%, also, there is an impact on the price, but through derivatives, we were able to manage. And the unit costs hadn't suffered so much variance because last year, the production of corn, the second crop in 21-22, We bought the fertilizers a little before planting with the increase in prices. Now, it's important to look. I'd like to highlight the columns in the middle. We see soybean, 53,000 tons. We understood that we could capture better premiums. This did not happen. This did not happen, so the products that we delivered, we had a negative premium, and this resulted in 23% drop in prices, so it was not as good as the previous harvest, where we had 35,000 tons of inventory, and we were able to capture very positive premiums last year, 30 million reais better in our results. In the case of corn, I mentioned the pressure that existed in the first and second crops, two good crops, especially in the region. where we have the farms producing second crop in Mato Grosso, state of Mato Grosso, Xingu. This generated a pressure. Here, we can't store. We had to sell at prices 39% lower than the previous year. we were able to decrease a little the impact. We had derivatives that are June 30 last year. When we saw that the future in the short term would have lower prices, we thought it would be the right time to sell our inventory and thus, during the first semester, we obtained negative results of 23 million Reais. Also, when we see the semester last year and this impacts Evita, we see that 114,000 tons generated a result of 36 million Reais and we sold with a loss of 14 million reais during this semester why because with the derivatives we left them to get better results here when we see soybean and corn 66 million reais in results generated during this period and this year we're talking about seven million reais negative here we see sugar cane on this slide as andre mentioned two million tons sold this was built we see here the impact of the price andre showed the results, lower planting area, an important drop in revenue, and here we see in the case of a different cost, Andrea showed the drop in the price of fertilizers. We buy fertilizer as we harvest, so we were able to surf on Better prices. Price of fuel is very relevant for us. In the previous harvest, we had 6 reais and 50 cents for fuel. Today, we're talking about lower prices in fuel. Although we have a stabilized production, the margin last year, 26%, dropped to 17%. generating a difference in results 75 million 38 million less on the next slide showing our calculation of adjusted EBITDA beginning with net profit without sale of farms during this period we had small amounts These were recordings, postings of the sale of, but not very relevant. Here we excluded interest, taxes, we included depreciation, and we removed all the effects, and we added the results of derivatives that have to do not with the sale of grains, because of the sale of farms, which is based on bags of grain. And here we remind you that last year we had 66 million reais from grains, 40 million, 46 million from sugarcane, and this year these amounts were consumed by administrative expenses. On the right, we have the breakdown. We talked about 40% sugar cane, 40% soybean. We know that now with the increase in the planted area that we have with grains, so We can see here that during this semester, the result comes specially from sugarcane, 65%, and last year, this inventory also generated an important result, and this year, corn gave us a negative result, and soybean represented 7 million reais. Now the debts, the company's debts, we have 743 million reais in debt, cash 241. This is when we have low cash because we have most of the costs already paid for, and revenue will come after March. In March, we begin to sell the products. And in March, we begin to sell the inventory. Net debt, 416 million Reais. Reminding you that we have receivables from the sale of farms. 5.5 million bags of corn, and the cost of debt, 4.9 CDI. Recently, we issued debentures for an irrigation project, more than 4,000 hectares in Arrojadinho Farm, and we understand that in the short term, These 240 million in debt is a small amount, the ideal to finance our costs. But with very high costs, we thought it would be better to work with our own capital and use loans only for fertilizers. 350 million Reais working capital, The rest is services and other costs, but we're very comfortable in terms of the payment terms. The first CRA that we issued for farms are practically all invested, and now We are beginning this project with 4,000 hectares, 1,000 we have already finished to implement irrigation, and this will result in cash flow to pay these debts without any problem. On the next here, we have some projects we're working on, the efforts we have made, In the last two years, we always mention for those who are in our meetings that the company has been working with SAP as the main ERP. We use SAP. We're implementing this in verticals. We're implementing this software. And this is helping us to control all our processes in terms of production, transactions. But we understood that it would be interesting to have a better integration with SAP because management was becoming complex. So we tried to simplify this process through some implementation. And we began the integration of SAP. We're using now another software too called AgroBit. It's a partner of SAP. SAP recommends to work with AgroBit to have this integration. So what we're doing here is to make all the management to obtain gains in efficiency in agricultural production. So we began to digitalize all these field operations, and this allows us to plan operations, integrate this with machinery and meteorology to have more efficiency. Now, what is interesting in this product is that by accumulating data from different harvests and through artificial intelligence, through this algorithm, that the system supplies, we are able to make, it makes recommendations for us to work in a preventive way or corrective way to avoid losses. So we began this process, it'll be in three steps. The first is digitalization, it's ready. There's a second to integrate machinery irrigation equipment we have this software working and a third phase using the formulas we will be able to look at gas emissions this is a long-term project but We will have focus on this because we believe this will help us to increase productivity and have a better idea of our assets. The next slide, the next project, sorry, connectivity, the next project is connectivity, although AgroBit can work

with cell phones and internet.

For us it's interesting if we're able to connect this to other tools we already have. So we're working with some softwares that also control machinery. Reminding you, we don't have our own equipment. We work with, we outsource the equipment, these companies, supply services, planting, harvesting. We're investing to have telemetry so we can increase our efficiency, even outsourcing. On San Jose and Chaparral farms, these farms, are very important for cash generation in the company. And we hired the services of TIM and Claro. These are telcos. And one part was already implemented with a shared investment with the mill. that produces ethanol on that farm, and in the other, we have a system where CLADO has been investing, the telco is investing, and we amortize this with monthly payments for services. Now, what we want is to continue increasing the efficiency in cash generation. Here we have a high volume of operations, consumption of inputs, especially fuel. We hope to have an improvement in the efficiency of the use of fuel. And last year we had a problem in San Jose Farm, so we saw the importance of having the whole farm connected and remote monitoring to increase efficiency. So I believe it's a project we will continue. When we finish implementing this at Chaparral, we will implement this in other farms where it makes sense. Finally, bio plants to strengthen biological activity we installed two new plants we already had two now we added one in Shingu farm where we produce soybean corn second crop for corn San Jose also where we have sugarcane, soybean and corn. We began and we ran some tests with some bugs that are a threat and gave us problems with the quality of the product. We had a positive result with these biopharms and we began to use this in other crops. and the result was very good, so it became more relevant. The company has 18 million Reais in terms of cost with insecticides and herbicides, we And we're investing in biological also products, herbicides and pesticides for the next harvest. Here, this is to show the behavior of our shares, Agro 3. And now we'd like to begin the Q&A session. Thank you. Thank you, Gustavo. Thank you, Andrei. Well, I will pass the floor to Pedro from XP for the first question. Good morning. Can you hear me? Good morning, Andrei, Gustavo, Ana. It's a great pleasure to talk to you again. I'd like to ask a first question concerning mix in the current harvest there was an important change in mix. Andrei talked about this due to the climate. And at the same time, with the follow-up that we do of contribution margins, sugarcane is becoming attractive now. So, looking at the next harvest, what can we think of in terms of mix? Does it make sense to use the same strategy? As last year or more sugar cane. And the second point, sale of land. We talked recently about this. Recent. Andre has said.

I'd like to understand.

For example, there's a drop in prices. and return. So, if you can give us more color about this. Price of land on Brazil Agro Day, Andrei said that the price was 45,000 per hectare. Do you have more information now? Pedro, as always, good questions. We could talk hours about this mix okay let's see mix we begin to see the relevance of the other mixes what can we expect in the next few years all these crops present a challenge in terms of market channels so we begin to see the growth of the company and beans in a sustainable way because where we have been working in the beans markets for five years, but it's in its infancy. This will become stronger. Beans will become stronger. Cotton, as you said, cotton this year, if the productivity is right, we will have a profitable crop when you compare with other grains. In the next few years, I believe the company will plant more cotton, strengthen the mix, And in the case of sugar cane, Pedro, there is no doubt that we will grow in sugar cane in the next few months and next year. We will grow the production of sugar cane. Well, this is the mix. Price of land. Price of land, you're right in saying that the increase in R&J, I always say that It's an agribusiness. Communication is very efficient. This is a typical example. This increase in RJ. If you look at Brazilian farms, these are smart people. Brazilian farmers They work, for example, they're producing soybean. So they use soybean to buy. We saw more people visiting because they want to do with land what they're doing with inputs. They want barter. We always sold land and received in bags of being of soybean so commodities the price of commodity will affect the farmers but remember that in the last few years we had a very positive contribution margin so the farmers those those who got loans at very high prices from the banks they're having troubles but these are not our clients. Our clients are the large producers that grow every year because of the tax efficiencies they have and they also have had important productivity gains. I'm convinced, I'm convinced that we will have important transactions in terms of sales. We will have important sales this year and the company will show once again that the our strategy of production plus real sale of real estate is the best so the market continues in terms of price of land this is an important point so mature land the price will fluctuate according to the price of soybean. If the bag of soybeans has gone down, this land is worth less because of drop in prices. Now you should look that our portfolio has an important part coming from land. We're generating value transforming land into arable land if we were a company of mature land we would suffer more with the price of fluctuations because we depend on this but in our case we have a large part of land and then we have land becoming more mature pasture land that now is planted area with grains we have land becoming more and more mature land that last year was not fertile this year is fertile is ready for cotton so things change so the good thing about this and it's important for you to see The profile, the portfolio of the company, we're not sitting waiting for commodity prices. Of course, when prices go up, we sell more. When the price goes down, we buy land. That's what we've been doing for the last 17 years. So, quickly, I talked about our mix in crops. Liquidity, I believe in liquidity. Still, and the third point, a lot of attention in the company's portfolio, which is changing after a year. We're changing. Very clear, André. Thank you. Thank you, Pedro. Now I will pass the floor to Enrique, BTG Pactual Bank. Good morning, Andrei, Gustavo, Ana. I have two questions. The first concerning land, just to clarify some points. First, in terms of price, so you don't see relevance changes in number of bags, only price of commodity. and can you comment about land how you see the opportunities for buying farms in the past you sold a lot you said there are good opportunities to sell land this year but do you believe it's the right time to buy farms beginning now or do you believe you will continue selling and not buying? And the other point is on price, especially soybean. What is your expectation of prices for the rest of the year?

So, possibly

We will have a better harvest. How do you believe prices will be during the rest of the year and 24-25? Thank you. Yes, you are right. You are right. There will be a drop in multiples. in the number of bags of grain for hectares. If we don't, the land, the land, the seller that didn't need to sell, not those who need, the sellers who didn't need to sell, they're not even talking about bags of, bags of soybean. Now they're asking for money, millions. Yes, if this continues, they will have to go back to number of bags per hectare. I don't see a reduction in multiples, especially with the drop in prices. To have a reduction in multiples, you need five years with drop in price. So, if the margin continues to drop next year, then, so it's not time yet to represent a drop in number of bags per hectare as a way to calculate the value. Acquisitions, I always say it's important It's important to have these price changes. Agribusiness will continue being responsible for our GDP. It will grow. Agribusiness will grow in Brazil. Now we have a drop because it was so strong that Everyone thought they could make easy money. This is a very specific business which has its needs. So sometimes we will have a drop and this will make some people leave this market, especially the speculators will leave. and now this those who are speculators will leave and now we will have farmers who plants and every year they have 30 35 percent a bit the margin so I'm thinking of soybean when I said 30-35. A bit the margin will go back to 30-35. What will change? Maybe the size of the check they had. So, in the last few years, we had farmers making money. They will continue expanding prices. This is the great challenge. What do we need to understand to see offer and demand and threats and opportunities? Offer, Argentina, for example, they were going to produce 50, they produced 25 this year, they will go back to 50. Brazil last year, 160 million tons, we had 12% drop. So in Brazil this year, last year, if we didn't have the drought in the south, we would have more than 170 million tons. And on the other hand, in Riki, we see demand smaller in China. So when we look at recovery in Argentina, Paraguay, Bolivia with the same levels, and Brazil 150, 149 million tons. So, last year, the world produced 290 million tons, this year, 315. So, a great offer, with lower demand in china growth of one percent but it's important no one wants the worst but there's a lot of geopolitical tension in the world after the pandemic we saw this today there is a great concern in the scenario US and China this can change the this can help Brazil this can help Brazil so if relations get worse between US and China this helps Brazil and Brazil the problem is not Chicago its basis is that is decreasing the profitability if the basis was even or 30 positive or 40 as it was historically we would have a positive contribution margin a very good one it is positive but it would be very good so our vision of price we understand that the space for chicago to recover This would need good news in terms of U.S. production. The production in South America is one, two or three million tons less in South America isn't going to change the price in Chicago. We have to look at the production in the U.S. For Brazilian second semester, we will have elections in the second semester in Brazil. This may strengthen the basis. It's important to say that this is the positive trend that I see. The negative trend that I see, we have producers, farmers are selling less. On one hand, things help us, and on the other, low farm selling, and the farmer now has a more difficult situation. If this scenario changes, things will come back quickly. Otherwise, we would be worried with farmer situations in the second semester. So what is sold is sold. 60% is sold. What we're seeing today is we see the basis. When you look at the basis screen, you see a drop, but we begin to see points where there is fluctuation. Last week, we made an operation in Bahia. The day before yesterday, too, in the Midwest. You get trades. that have lineup of shifts, the need to form contracts, and then we're grasping these opportunities that come up. Very clear. Thank you. Thank you, Enrique. Well, now the questions in writing about real estate. A question from Antonio Vilhena. The revenue from the sale of land is important for Brasilacra. So, what do you expect in the next quarters? But André cannot give you guidance. And the next from Alexandre Asafi, two comments. on operations outside Brazil. Do you expect to go into new countries? What is your strategy for expansion outside Brazil? Yes, let me tell you. When we prepare the company's budget, annual budget, we have operational EBITDA, everything we said until now, soybean, beans, cotton, cattle raisin. And we prepare a budget also of real estate results. So the sale of land has goals, discipline, sale of farms. And we prepared a budget this year too. The current liquidity is important. I have no doubts that we're working And yes, we will reach our goals for real estate. The company will show that we use these two strategies, and this differentiates us, sets us apart from the others. So there will be sale, there's important liquidity in some farms, and we're working to close these deals in the next few months. Who asked about real estate? You can be sure, Antonio, you can be sure, Antonio, the company will deliver the two results, operational and sale of farms, real estate. Because it's part of the company's objective to deliver this. Both acquisitions and also leasing and sale. The second question, international expansion. When we talk about international expansion, Andrei, so will you have liquidity with adverse conditions? This shows the strength of Brazil. where the company should concentrate. So, we begin to see a lot of liquidity in Paraguay. This didn't exist in the past. Paraguay was, in the last six months, our farms in Paraguay had many visitors, many visitors. It has liquidity. Now I'll explain why. Paraguay, we were the first company to plant in Chaco, in Paraguay. I'm talking about seven, eight years ago. So we were the first company to plant there. In this harvest, we're planting 242,000 hectares. Ten years ago was zero in the Chaco. They planted very little there, only cooperatives planted some corn to make cattle feed. We saw this going to 240,000 hectares in total, not hours, in total. Chaco in Paraguay, apart from this growth, 242,000 hectares we have a little over 50,000 in cotton. Cotton has been growing strongly in Paraguay, and you know, those who know the price of land know, that cotton helps the liquidity in hectares in sale of land. We're planting a lot of cotton. We planted the year before last. We began with 800 hectares, then 2,000, now 2,500 hectares of cotton in Paraguay. Very good for cotton. An absurd natural fertility. Paraguay has very fertile land. I don't know I don't know any other place in the world where you can plant without fertilizers. Only Paraguay, you can plant cotton without fertilizer. So we're looking at liquidity. Bolivia, no. Bolivia, no. Doesn't have this liquidity, as in Paraguay. We made a small sale of land in Paraguay. and we will continue selling land in Paraguay soon. Soon, international expansion is focused on these two countries. When we went to these countries, we looked at profitability. Profitability was high, but no liquidity. Today, we see in the case of Paraguay, an important increase in liquidity because of the development like i say for example so eat like a house when things around the house get better the price goes up so we're planting cotton in paraguay it the the We have, so we're using biotechnology and this will, Paraguay will be producing soon cotton with the same quality of fiber as in Brazil because of their good soil. Okay, thank you. We have one more question from Caio Araújo. Can you hear us, Caio? Well. Let's continue with the other questions that came in writing concerning expansion. You are being able to maintain the planted area even with the sales. Are you leasing land? Easy answer. Both. Both. We have an important growth in leased land. We're leasing land to plants. But looking at long-term leasing, these are long-term leases, we see a great chance. Since it's long-term lease, this is a way to buy. When it's a small lease, short lease, it's difficult to capture, it's difficult to buy the land. So, sometimes, in our case, we have long-term leases, looking at everything, to have leases to grow in the long term, and much of these leases, the commercial part, is linked and has the possibility of renewal. We have leases with this growth 12 or 15 years. Most of them are 12, 15-year leases, long-term, and always with our creativity to renew these leases. And we've been able to do this. In the case of a farm in Piauí, we were able to extend the lease, renew this, renew the lease for another 12 years. So it's a lease. It's not a volatile lease that we lose in a year. So we like long-term leases. although this will require CAPEX to transform land. We know how to do this. So if you lease mature land, we would have a thousand competitors. In the way we work developing land, we have less competitors and we can differentiate ourselves. Now, concerning expansion, we have expanded our own land. Brazil is almost finalizing the land that we transformed from pasture to arable land. The year before last, we bought Panambi Farm, 6,000 hectares of transformations. We transformed the whole farm. It's all transformed for planting. So, answering your question, yes, the growth comes from leases, long-term leases, not three-year leases, long-term leases. This allows us to say that we will have sustainable growth. So concerning our own lands, we're finalizing the development of Chaparral Farm, other areas in Arrojadinho, actually not finalizing. We have a portfolio to develop land in Paraguay. In Paraguay, we have a lot of land to develop. But answering your question in a numerical way, what we did in purchases and acquisitions last year represented a growth of 23, 25,000 hectares. We also sold. So we added 23 to 25,000 hectares of new land Of these, I would say that 60% came from long-term leases and 40% from transformation of pasture land to arable land. So, this is how we did. Well, we have some questions on storage. From Antonio Lopez, our strategy for storage of grains to get better prices, to minimize the impact of cycles, apart from irrigation, are we investing in storage to generate value to farms? What is your vision knowing that storage is a bottleneck in agribusiness and what is our capacity of storage, storage capacity? A lot of questions. Okay. First, the company is investing in storage this year.

If next week,

Next week, we will have inaugurations. We have an operation in Piauí, an investment that we made at the end of last year. We're finalizing now. It's a farm that begins to harvest on February 20, so we have a new plant being inaugurated with high processing capacity. capacity and low storage capacity. This is our vision of storage. We understand that the plants we will build, we have plans, we discussed this because it involves CAPEX, but we have, we need to improve processing in Mato Grosso. So we're looking at this, we're finalizing the plans, The company just built a plant for processing in Piauí, and certainly we should have projects in other units too. These plants, these storage facilities demand a lot of capex, demand time, and we should be building more than one per year. because it has risks, high investment and risks. You need a lot of attention to all the external factors, accidents, building a silo is very, is difficult. We're looking at this, answering the second part of the question, not with focus on storage. Our focus is on processing. processing, to make mix, and storage less. We have a plant in Piauí and storage there, 10,000 tons in Piauí, 40,000, 50,000 tons, similar to Chaparral in Chaparral Farm, 80,000, 70,000 tons a year. and static 20,000 tons storage and processing 7080. And you can use also other types of storage, like bags. So, this is our vision. We will continue. It depends on the need. Most of the time, These plans help us to save on freight, transportation, logistics. So, we look at priorities where we have greater gains in logistics and less. And that helps us decide where to invest. So, depending on the capex and gains in logistics the company's strategy storage capacity we should have a storage capacity static static storage not processing store storage where grains come in and wait so static capacity in the case of soybean 35 40% of our production. So we have a static capacity, 35, 40% of the soybean we have. Processing capacity is much higher. Why do other companies have more storage? We have an important concentration of production. In Mapituba, where you can harvest and ship after harvesting. So, this happens in Mato Grosso. In the state of Mato Grosso, you need more storage and more processing too. So I don't know if I forgot something. I showed our strategy. This is the storage strategy. We are always alert to this. And as I said, to Enrique, we look at many points. We have large volumes. And if the If you have 20,000, 30,000 tons stored, once we sell with one farm, we can fill half a ship. The strategy now is to use these 40% of static storage to get a recovery in the basis in the second semester. Thank you, André. Next question from Daniel Rocha who asked, I'd like to know more about the hedge operations for soybean that was stored for sale. How much of the drop in price came from each part? You had an increase in the sale of beans. What is the perspective of profit for beans and also profitability of sugarcane? We will have to be here until tomorrow. Okay, Daniel. Okay, Gustavo will help me. He's looking at the quarter. Okay, so one part of the question, yes, yes, we decreased corn, we planted more beans because of margin, we planted cotton too, so sesame, so for example, we reduced the corn A small part went to cotton and another went to beans. So, beans has a seasonal price. We look at domestic price and export market. Beans has seasonality in price, much more inside Brazil than outside. So, our strategy, our is to export more, where you have price in dollars, and the exports of beans. In the domestic market, you have smaller clients, less liquidity in exports, you have greater liquidity, counterparts, large trades. In the case of India, So we're optimistic with price due to the international scenario and the domestic scenario. So this drought that happened in December, January affected the production of beans in Brazil. So when we decided to migrate to beans, it was 250 reais a bag. In the last few months, the price went to 400. We won't get to sell at this price, but we're very optimistic. In the case of sugarcane, we see sugarcane. We're thinking of a contribution margin due to the lower cost of fertilizer. because in cotton you have the cost of service. We had a great inflation in services for sugar cane because you have labor and this we believe will take longer to drop. But we have an important drop in the price of inputs for sugarcane, and we want to go back to have 3,500 ebita per hectare. This is what we expect in the future. In the case of soybean, what we showed in terms of reduction, maybe Gustavo can talk about the quarter. The question asked us about the drop in price, the part coming from Chicago and the part based on basis. I believe it's important to mention how our policy, our hedge position, and normally we sell using Chicago and dollar basis. We don't have a market yet for coverage. So this is how we work here. I can look at what will happen with the harvest now. We have 60% of soybean is already sold with Chicago. we have a type of exchange rate, 5.3 reais to a dollar, that's the exchange rate. Today, we have 80-100 points of drop, and this impacts the bag of soybeans. So, we estimated Soybean at 123 reais per bag. Today it's 115. There was a drop. 115, 116. And especially basis. When we look at what happened last year, between planting and harvesting, I can go to 80%. Why do we sell only this? Because if we have a quality... a quality problem or less productivity. We don't want to sell everything and then pay penalties. So, the 50,000 tons production, 200,000, 20% we did not sell, we waited, and you saw the graph where he had a drop to 117. We were never able to recover this price. We thought there would be a floor, but this didn't happen. And the small gain that we had in derivatives helped us. So that's it. In terms of Last year, if you look at Chicago and US dollar, in the case of premium, the first sales that we made, 80,000, 90,000 tons, we had a positive premium. So, after the super harvest was confirmed, there was a drop for the second semester. Yes. Thank you. I will pass the floor to Andrei for his final comments. And I'd like to thank all the participants. Once again, we had many participants, excellent questions. We were not able to answer all. Some I will answer by chat. If you have more questions, I and my team, Camila, Daisy, Adriana, we're here to answer the question. We wish you all a good holiday, carnival. Thank you, Ana. Thank you to all who helped us to prepare this. And I'd like to help thank the participants. So you can continue trusting in the work done by the company, the resilience in delivering results both in operations and sale of land. So today Gustavo showed, I'd like to highlight where a company of transformation of land In the first years, productivity of soybean is a little lower, but we use a lot of technology to help us get better results and also sale of land. Irrigation projects are important. We're investing in some units, one in Bahia, Rojadinho, irrigation, but we have also in Rio do Meio another project for irrigation. we will have more irrigation projects in the state of Bahia. It's an important place. We see a migration of cultures that challenge. For example, we have to use irrigation for cotton, never for corn. So, irrigation is good for cotton and this can bring us good operational results and good gains in these irrigated land, making the land more expensive. Thank you to all in listening our call. We're available for any questions you may have. Okay. Thank you very much. And congratulations to the team who has worked in a resilient way to deliver consistent results to you. Thank you. And as Anna said, have a nice holiday, carnival. And everyone says Brazil begins after carnival. Not for us, but so good holidays. And let's come back with new energy next week. Thank you. Bye-bye.