Brasilagro Brazilian Agric Real Estate Co Sponsored ADR (Brazil)

Brazil Agro. Good morning, everyone. Here once again for the results call Brazil Agro. I'm here with André Gouliment and Gustavo. Today we will be representing the complete numbers of the year. For those who are following us, our accounting number starts year, goes from July to July. So today we are reporting on the fourth harvest of the Year 25 for those who are following us in English. We have simultaneous translation in English. Thank you so much. I'm going to pass the floor to André. Thank you, Ana Paula. Thank you to everyone. It is a pleasure once again to be with you to talk a little bit about how our year was. was a year with a lot of challenges a lot of volatility in the financial aspect i would like to make a parenthesis i remember in the past when we were discussing the budget of the year with the company's board the dollar was at 480 and we went up to 530 at the middle of the way we saw the exchange rate going to 640 and now it's at 540 so that shows the magnitude of volatility that we worked with during the year and we're going to be showing you some numbers on how we worked to mitigate these volatilities So let us begin telling you about the numbers and results of the company. And there are new things, there are things that we want to share with you. First, I think the net revenue of the company was able to reach 1.2 billion this year, with an adjusted EBITDA of 267 million. and a net income at the end of the exercise of 138 million reais, that later we'll go into the details. Gustavo will show you the comparison of EBITDA year over year. The difference is not very large, but when we look at the difference of financial costs and what we will show during the presentation, Next slide, please.

Well, here there's a parenthesis.

I always like to open a parenthesis. The focus of the company is operational and for real estate. Sometimes you might be surprised with the news that Brazil Agro is selling farms. Of course, we are going to sell farms. That is our business. And for those who do not understand this business, shouldn't even be making these kind of comments. It's important that everyone... realizes that selling farms is part of our DNA, and we will be doing it when the market is good. When it is bad, we will always be selling farms. That is an intrinsic characteristic of how we remunerate our shareholders, is how we sell our assets. And this is the top numbers of how we've been selling properties, 240 million properties. with revenue from sales of farms, 120 million, which is something that we had done previously. You know very well we mark transactions only when we deliver the title. We sold in Alto do Caguari 1,700 hectares, in which remain 140 hectares. which we delivered at the end of this exercise after we finalized all of the sugarcane area and then that's when we finalize that transaction this was a year that i think we need to celebrate from the real estate point of view everybody has been seeing the difficulties that there has been more loss of liquidity in the sector, but there is a ponderation here when we always talk about the diversification of cultures and regions. It's not only true for mitigation of operational and commercial risks, it's also true for the mitigation of our real estate risks. And what I am bringing from the sales that we did from the Fazenda Pashut to Tres Merezas, we saw a sector of grains with more repressed margins and other sectors with and we saw a recovery of cattle raising over the year. And once it recovered, we brought liquidity for an asset of cattle raising that we had in Bahia, and it was very assertive in recovering that liquidity. It was an asset that we required in the past for 10 million reais, and we sold it now at the nominal value of 140 million reais. We invested in it at the present moment of the transaction. It was accounted in our audit of 30 million reais with all of the investments that we had made and the investments that had been amortized. So what I want to highlight here is that selling the farms are part of our DNA. We will always be doing this. That is important. and here I just wanted to make that very clear of how efficient we are in capturing other activities that are standing out and still carrying out the sails with other activities. The square on the next side, reinforcing once again our DNA, is where we bring The challenge when we would talk to the analysts with everyone that would accompany us, how difficult it was for us to calculate the EBITDA. Me and Gustavo were able to do it, but the difficulty is forcing the sales. So I think better than forecasting is the history. It's the history that we have is the best forecast. So productive budgeting. we will add proactivity so we look at the history of productivity for the last five years and we brought this methodology so we could share with you we bring the history of the sale of the company in the last four years we sold 1.9 billion reais in uh companies an average of 380 million reais per year that's what the company knows how to do and it will continue to do that and then over the years showing below the transactions and the nominal values of each one with a tier of every D investment. Next slide, please. So continuing in this chapter, this real estate chapter, which is fundamental to the company for all of the investors that are following us, it's one of the important things for them, we this year do not recurrently evaluate the farms we do it with the third parties and we are bringing to you firsthand the evaluation that was made by deloitte which is our evaluator for many years already year over year so here in this graph we have an evaluation that is very important and on the square below it shows the evaluation of the lines of the company and what is The valuation of Deloitte reached 3.5 billion reais in our assets. The square above, we set up these two squares on the right and on top to show the capacity that the company has of adding value and the transformation of areas. When we look at the valuation of the portfolio in the past, it was 3,500. So then people asked me, oh, and after it was 3,500, then in the middle we sold 550 million in funds. So that's... is the real capacity that we have to bring returns to the shareholders so you might ask me but on that how does this portfolio appreciate year over year or every two years well it's because of our intrinsic activity which is to add value mature the land bring in new operations where the abita is changing that area so the important points in the last few years there was an important maturing of our areas there were massive investments that we are accompanying irrigation an area that we had in berea without any irrigation that was representing 150 sacks when we add irrigation it has us an important leap in value and we are finalizing this in hoja geo plantation so part of this important gain is a reflection of this investment of this added value, and most of this comes from our capacity of maturing the portfolio. So I think what this is showing, and we always like to draw attention to this, I always play around and say that we want to be drivers and not the passengers of the vector of motivation. So we are going to bet... on the value that will value more than inflation. What we like to do, we put management, we put resources. do not only have the basal appreciation, the appreciation that we see that is the fruit of the work of the entire transformation team of the company. Next slide, please. Now a little bit more about the results, and I think this cooperates with the numbers that Gustavo will present to you. I would say that it was a year of stability. We are seeing the peak of soy now in the next few months, much more. connected not to Chicago but in function of what we are seeing in terms of recovery of the internal bases. You know this much better than me what's happening in terms of the war and the non-import of China and this production having its origin in Brazil has strengthened a lot of the bases in the last few months. and that just cooperates with our strategy when gustavo showed the indebtedness when we collected the harvest in the month of february march and april we started the harvest and accelerated it as much as possible because over the harvest it was very negative it went to 20 points negative but we made a decision once again that was very assertive we said we're going to hold for all of the stability the geopolitical stability that we had we had a good part of the harvest stuck in chicago also the exchange rate was stuck so we also had the basis so we did it in a financial account to carry the stock to the second semester and we had to do an account of how much the base would be to pay for the financial cost we did that and it was worthwhile and i think we'll have bigger upsides and in fact the reality of the market today shows that this strategy was assertive the base kept on going up we were able to sell we didn't sell everything it's important to highlight that but we started to sell when we understood that it was but we ended up selling bases of up to 600 positive points. It used to be less 20 in February and March. So in average, we were able to have a better basis of what we had at the moment of the harvest. We would be operating in at 80 points, 90 points in average. When in the past, we had a basis of minus 20, minus 30. So once again, the company is very agile in this commercial market. business of soy for corn it's an average we'll show you how things are going and cotton as well we will see how the company behaved with had the recovery of Livestock, there was a punctual drop when the tariff came in, when the recovery of ethanol that was very connected, basically. I think there are two important factors here. There is a harvest of sugarcane that is lower. We see in all of the expectations there was a harvest where everybody was talking about $660 million. Today they're talking about 680 tons. And besides that, the increase of the mixture of ethanol and gasoline, leaving 26 to 30, which will generate additional demand of 1.6, 1.5 in the market. That makes ethanol heat up, and we will show you how we preposition in that as well. Sugar is walking... a little bit on the side. And now the next slide. Anazoa is mad at me when we run up, because we need to talk about how much the input came in, because I'm sure somebody will ask me this question soon in the sequence, but I need to show you how in this business of ours, the challenge is working with a margin of contribution, and this is what we're bringing here. that's the phosphated cost. We were monitoring this, and these balls that are here within the line, I asked for these balls to be here, but they look smaller. Next time we'll have a larger ball. But the balls that were within the line is the moment where the company made the decision of making an acquisition. So on the first graph, we can show that there was phosphated