Slc Agricola Sa S/Adr

Good morning everyone, welcome to the video conference for the disclosure of the results of the fourth quarter of 2025 of SLC Agrícola. My name is André Vasconcelos, I am the manager of financial planning and relationships with investors. Here with me are our CEO, Aurélio Pavinato, and our CFO and IRO, Ivo Brum. It is a privilege to be with you this morning. We inform you that this video conference is being recorded and will be available on the company's website, where you will find the respective presentation. I highlight that for those who need simultaneous translation, we have this tool available on Zoom, the globe icon, with the interpretation description located in the lower center of the screen. Ao selecioná-lo, escolha o seu idioma de preferência, português ou inglês. Para aqueles que ouvirão a videoconferência em inglês, há a opção de silenciar o áudio original em português, clicando em Multi Original Áudio. For the Q&A, question and answer session, we advise that your questions be sent via the Q&A icon at the bottom of your screen. By default, your names will be announced so that you can ask your question live. At this moment, a request to activate your microphone... We highlight that the information contained in this presentation and any statements that may be made during the videoconference, relating to business perspectives, projections and operational and financial goals of the Agricultural SLC, constitute beliefs and premises of the company's administration, as well as information currently available. Future considerations are not performance guarantees, they involve risks, uncertainties and premises, as they refer to future events and, therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operational factors can affect the future performance of the agricultural SLC and lead to results that differ materially from those expressed in such future considerations. Now I would like to give the floor to our CEO, Aurélio Pavinato, to begin our presentation. Pavinato, please proceed.

Thank you, André. Good morning everyone. Welcome to the SLC Agricola's video conference. referring to the fourth quarter of 2025, we thank the presence of our shareholders, analysts and other participants. Today we will present the main operational, financial and strategic highlights of the period, which reflect another year of consistent execution of our sustainable growth strategy and value generation. Let's go to slide 4, where we will comment on the cotton market. In the year 2025, the price of cotton entered the period close to US$ 0.65 per pound. reflecting a market environment still under pressure by the global fundamentals of supply and demand. For the 24-25 harvest, the Department of Agriculture of the United States estimates a global consumption of approximately 20 million sows, while global production is projected at about 118.5 million sows. resulting in a slight global deficit. Brazil remains consolidated as the world leader in cotton exports, responding to approximately one-third of global trade, supported by structural gains in productivity, competitiveness and international recognition of fiber quality. In line with this scenario, SLC Agrícola reached a record of historical exports in 2025, with 369 thousand tons exported, the largest exporter in Brazil, demonstrating our strong operational capacity and competitiveness in the global market. For Safra, 25, 26, the expectation of a slight global surplus, which maintains an environment that is still challenging for prices, but with foundations that can evolve according to the recovery of the world economy. In summary, cotton presented a moderate year, with stable foundations and prospects for improvement in the medium term. Let's go to slide 5, please, to talk about soy. In soy, international prices have shown significant fluctuations throughout the year, influenced by the increase in harvest in South America and expectations for the North American crop. In the domestic market, part of this pressure was compensated by positive prizes and by trade. The area planted in Brazil grew approximately 2%, totaling 48.4 million hectares, according to Conab data. the Department of Agriculture of the United States projects a surplus supply of approximately 3 million tons only, one of the lowest positive sales in recent years. The year was positive in terms of volume and exports, although challenging in relation to prices, demanding commercial discipline and focus on operational efficiency. Let's move on to slide 6 to talk about corn. In 2025, the corn market had a different dynamic between internal and external markets, with emphasis on strong domestic demand, driven by the growth of the corn ethanol industry. Despite short-term negative movements, prices found important levels of support in the internal market. In the global scenario, the balance between supply and demand indicated production higher than consumption, at about 11 million tons. Corn presented a year of healthy balance, with less dependence on the external market and increasing relevance of domestic consumption. Let's go to slide 8 to talk about our operational performance in the 24-25 crop. The crop presented consistent operational performance. In soy, we achieved an average productivity of 3,961 kg per hectare. Within our expectation, growth of 21% in relation to kilos of plum per hectare of cotton and 8,304 kilos of corn per hectare, this being the last historical record for the company. I pass the word to colleague Ivo Brun to comment on our financial performance. Ivo, please proceed.

Thank you, Mr. Vinato, good morning everyone. We can move on to slide 10, where we bring some highlights of our results demonstration. The liquid revenue ended the year at R$ 8.6 billion, with a highlight for the volume and revenue record, reflecting the best productivity of the 24-25 harvest compared to the 23-24 harvest, especially for corn. In addition to the valuation of corn prices, cotton prices and cattle and cattle prices. In the period, we registered the adjusted EBITDA of R$ 2.6 billion, with a margin of 31.2%, a liquid profit of R$ 565 million, growth of 17%. The cash generation was negative, at R$ 929 million, which reflects our investment cycle, which totaled R$ 1.3 billion per year. Among them, we can cite R$ 329 million of the last portion of the acquisition of the minority participation of SSLendicum, R$ 362 million for the acquisition of the Paladino farm and another R$ 383 million for the first portion of the acquisition of Cirente Sacro. In addition, in 2025, we will pay R$ 641 million in dividends, R$ 241 million related to the 2024 exercise, and R$ 400 million related to the anticipated payment of dividends and JCP of the 2025 exercise. We can now move on to slide 11, where we present the position of our indebtedness. Even in the face of a robust cycle of investments and a consistent dividend distribution policy, we ended the exercise with a adjusted liquid debt of R$ 5.2 billion, maintaining a controlled leverage in relation between adjusted debt and EBITDA of 1.97 times, which shows the company's financial discipline and solid balance. In slide 12, We have the debt profile, the evolution of the debt profile with 78% of the debt in the long term and an average period of 1,168 days. There was an important evolution when compared to 2024, where there was 69% of the debt in the long term. This movement reinforces the solidity of the balance and increases the ability to finance growth with discipline. In terms of investments made in 2025, in slide 13, we presented the breakdown between maintenance and growth. In the accumulated year, 68% of CAPEX was directed to investments in expansion, totaling R$ 1.2 billion, showing the company's lack of structured growth and increased production capacity. in Minas Gerais, in addition to investments in works, warehouses, machines, agricultural implements and soil correction, which increase efficiency and productivity in the long term. CAPEX maintenance amounts to 32% of the total, adding up to R$ 556 million, reinforcing CLC's agricultural commitment to the preservation of assets, operational continuity and business sustainability. Additionally, there was also an increase of R$ 342 million in the immobilized company due to the acquisition of Silent Agro, which also refers to expansion capex. We can move on to slide 14, where we will present the results of 2025 for the seed product. In 2025, the total volume distributed of seeds reached 61,400,000 big bags, reflecting a growth of 12,000. 12,464 big bags to intercompany operations and 17,238 big bags to internal consumption, evidencing the robustness and diversification of the business model. At Soja Semente, we ended the period practically in line with the goal, 0.6% below the initial estimate and with an expressive growth of 13.8% compared to the previous year. Relevant result considering a more complex and competitive market environment. In seed cotton, the performance was 10.5% below the target, The market is still in the development phase, but it continues as a strategic opportunity in the medium and long term within our portfolio. In line with the growth strategy and greater margin capture, we have advanced consistently in the expansion of direct sales channels to third parties, which was reflected in an increase of 5.7% in the volume earned for this audience. In addition, we strengthen our regional presence and increase participation in the market. Let's move on to slide 15, to talk about the distribution of the controller's liquid profit. The proposal of the administration ratifies the distribution of the controller's adjusted liquid profit. The company has already distributed, in 2025, in advance, R$ 400 million in dividends and interest on its own capital. This distribution corresponds to a dividend yield of 5.6% and a 76% payout. showing the company's commitment to the consistent remuneration of shareholders, even in a year of strong expansion in investments. I return the floor to Pavinato, who will present the prospects for the 2526 and 2627 phases.

Thank you, Ivo. In slide 17, we demonstrated the evolution of the planted area of the 25-26 crop, the current crop. We advanced consistently in the expansion of the planted area, growth of 14% in the 25-26 crop, totaling 837,000 hectares, in line with our asset-light growth strategy. Let's go to slide 18 to verify the status of the current crop. In soy, until March 6, 54% of the area had already been harvested. The expectation is to complete the harvest with productivity of 4,036 kg per hectare, in line with our initial project and the company's historical record. The first and second harvest cotton is 100% planted.

The first harvest is found in...

The plantation ended within the ideal window, historically ideal, after daily adjustments to alternative crops, keeping the expectation of achieving our project. In the second harvest of corn, the plantation started in the second half of January and until March 6, 72% of the area of 158,000 hectares had already been planted. The forecast is to complete the corn planting by mid-March, with the productivity estimate in line with our initial project. For seeds, the sales estimate for 2026 is 72,000 big bags of soybean seeds, growth of 28% in relation to 2025 and 6,208 big bags of seed cotton, also with a growth of 8% compared to the previous year. We can move on to slide 19, where we present the current position of SAFRA 25-26. We are already well-radiated, ensuring greater predictability in a more volatile market environment and all SAFRA inputs have already been purchased. In soy, considering the commitments taken, we reached 75% of estimated protected production. In cotton, we fixed 81% of production, while in corn we locked 44%, in addition to the realization of a exchange rate aligned to the sale of commodities, mitigating price and exchange risks. For SAFRA 26-27, we advance in an anticipated way in the consumption strategy, with the acquisition of 100% of phosphated fertilizers and 16% of agricultural defensive fertilizers, reinforcing our focus on the exchange rate, cost efficiency and margin preservation. In the face of the ongoing geopolitical conflicts and the decision-making in the United States, we understand that the moment requires caution and discipline, especially in the management of risks and in the allocation of capital. Now we can go to slide 20, where we bring information about our irrigation projects. Irrigation follows as one of the main strategic growth vectors of the company. Currently, we have 19,000 hectares irrigated, with potential for expansion to 53,000 hectares in the coming years. An initiative that relevantly expands productivity predictability, profitability per hectare and asset valuation. In line with this strategy, we made an association with investment funds in participations under the management of BTG, which strengthened our capital structure and accelerated the expansion of the irrigated area in Bahia. The partnership has already enabled the entry of R$ 974 million in 2025 and partially in 2026, and we have an additional R$ 60 million that will enter the second half of 2026. These resources will be directed to the implementation of 28,000 additional hectares in the Piratini and Paladino farms. In the Piratini farm, the project is already in operation and should reach 13,204 hectares irrigated by 2026. In the Paladino farm, the irrigation will be incorporated from the initial phase of the asset development, covering 14,730 hectares, with implementation scheduled between 2028 and 2030. according to obtaining the necessary licenses. This initiative reinforces our asset-light model, anticipates the economic value of assets, reduces climate risks and expands the potential for the generation of cash and the devaluation of land in the long term, in complete alignment with the

in terms of ISD and awards.

The ISD agenda was fully integrated into the corporate strategy. The company signed strategic partnerships for regenerative agriculture and carbon credits, advanced in circular economy and concluded, in partnership with Fluere, the largest automated operation of the purification of greenhouse gas emissions of Brazilian agribusiness. monitoring 100% of the area operated by SLC Agrícola. And finally, we share in slide 22 some highlights in terms of ISD and awards. In 2025, we were widely recognized for our practices and results, with a highlight for the Sustainable Farming Award, the gold seal of the Brazilian GHG Protocol program, the Best Award from ISG, from Exame magazine, and the MESC Award from SLC Sementes. We also received the recognition of the Great Place to Work Brazil, in addition to the awards of Best Professional in Relations with Investors and Best DRI Practice, Small Middle Cap, granted by the APIMEC award. In addition, the Agricultural Agency led the institutional investor ranking in 2025 in the agribusiness and small-cap categories, winning first place in all categories evaluated by the Latin American Executive Team. strengthening our position of reference in governance, strategy and relationship with the market. We thank everyone for their presence and at this moment we open for the Q&A session. André.

Now we will start the Q&A, remembering that to ask questions, we request that they be sent via the Q&A icon at the bottom of your screen. According to the dynamics, your names will be announced so that you can ask your question live. At this moment, a request to activate your microphone and camera will appear on the screen. If you do not want to open your microphone or camera, please write without microphone and camera at the end of the question so that I can read it out loud. Our first question is from Mr. Gabriel Barra. from CIT. So, Gabriel, please, you can ask your first question, opening your camera and your audio. Gabriel, are you with us? Let's move on to our second question. It comes from Ms. Isabella Simonato, from Bank of America. Isabella, please open your audio and video and ask your question.

Hello, guys. Good morning. Thank you for taking my questions. I have two here on my side. First, to try to understand the possible impacts of the conflict in the Middle East on the company. First of all, we have seen a rise in the price of oil in the fertilizers due to logistics disruptions. In this scenario, I want to understand how you see this outlook impacting grain prices and how this can impact SLC. It seems to me that the company is more focused on a possible upside in the conflict, since a large part of the costs of this harvest have already been formed and the company has already been able to advance in the inputs for the next harvest. And I want to understand if does it make sense to expect this possible increase in grain prices to be a little late, given what Pavinato presented, given the expectation of stock growth in the 25-26 period for the main crops? And the second question is still a little about the conflict. I imagine that the conflict is also impacting the petrochemical sector due to the supply of raw materials, mainly in the Asia region and in the Middle East. In this scenario, I wanted to understand how you see the dynamics of cotton, considering that we could have a drop in the competitiveness of polyester. If you could comment a little on the subject.

That's it. Thank you, guys. Good morning, Gabriel. Thank you for the question. You took the topics that are very strong in the market today, the issue of war and the reflections that it is causing. So, Gabriel, the summary, high oil is good for agricultural commodities. And that's why we had this positive effect in terms of evolution in prices, especially in soy, already a small recovery in the price of corn. It has this effect... Why is it good for agricultural commodities? Today, agricultural commodities are food suppliers. Around 100 million tons, the oil of this soy is intended for biofuels. As oil rose by more than 40%, so did soy oil, which also rose by 41% during this period. So it is an impulsor of demand for agricultural products as a source of energy, just as corn ethanol ends up being a source of energy. That's why the summary we make that high oil, high energy, ends up being positive for the market of agricultural commodities. So this is a positive effect. Specifically in the cotton culture, to talk later about the issue of inputs, in the cotton culture, the first impression that the war, that all this conflict can generate some cooling in demand, But at the same time, the great competitor of our cotton is polyester, and polyester was 40 cents per pound. Polyester went up to 54 cents per pound. So, this rise in the price of polyester is a sustainer of the price of cotton and the competition between the two fibers happens due to a question of manufacturing cost. So, really, this change in the price of oil and the price of polyester should give sustenance to the price of cotton, even generating motivation for increase in cotton prices. So, in summary, our reading that this war, that this high energy, in summary, will be positive for the agricultural commodity market, just as it was in past events when we had a high energy cost. The negative side is the cost of production. All the fabrication of agricultural inputs, especially nitrogen, is the most affected. It has a direct effect on the ore production that Iran produces, although the volume that Iran produces of ore is insignificant in the international market of nitrogen. The world produces and consumes 115 million tons of nitrogen. Iran produces 3.15 million tons only, and it exports 1.35 million tons of nitrogen. In other words, Iran's DNA exports represent 1.2% of global consumption. In addition, in an event like this, of significant elevation of fertilizer prices,

At the moment it will suffer more.

70% of fertilizer consumption happens in the North Hemisphere and they are buying now, they are planting, they will plant now, in the next few months. So this short-term effect is happening and will happen over the North Hemisphere. That's why we are with tranquility, in fact, facing this moment of oscillations, but with a vision, with a more positive perspective than a negative one.

Great, thank you very much, it was clear.

Thank you, Barra. Let's now move on to the next question for Ms. Isabella Simonato from Bank of America. Isabela, please, you can ask your question, open your camera and your audio.

Hi, good morning everyone, can you hear me?

Listening well.

Good morning, Pavinato, Ivo, André, thank you for the call. I think it's still a bit in the grain market discussion, I think this is really the topic. Starting first with cotton, I think when we look at the preliminary data of the USDA for the next harvest, I think we are reaching a very low level of consumption stocks, and in fact, this more depressed supply has not made so much price, it really looks like a demand story. My question is, what is your reading of this number? Can we start to have a recomposition of cotton price in function of this more tight supply and demand or not? We really need to see levels of purchase, levels of consumption, in fact, changing the level a little bit for the price to go up. I'm talking about isolating a little the oil value of the account. And my second question is also about the US stock market that is going to start. I think we obviously see preliminary data from the USDA, but maybe a little bit, what is your market reading? even due to this recent rally of fertilizers, if there is something that the American needs to buy and that this can generate an area planted a little smaller than expected, even a rotation of corn to soy more accentuated, I think it is already expected that there is this migration, but how this should behave, and at the same time how you see China as a buyer of American soy, which I think is quite relevant for the soy dynamics for the next 12 months. So, at the end of the day, I think that taking into account the effect, perhaps, of war and cost pressure, how are you seeing the supply and demand of soy, thinking mainly in the African-American sector?

Thank you. Thank you, Isabela, for the question. In recent years, the demand for cotton has been stable. Production has also been stable, that's why supply and demand are balanced. cotton prices over the last few years have yielded more for a matter of competition with polyester. Polyester has been falling from the price of 50 to 40 cents per pound, and as I mentioned earlier, this return in the price of polyester is supporting cotton prices. In addition, this low price of cotton, below 70 cents per pound, demotivated the cotton crop in the main producing countries. The US cotton area in the last two years fell from 12.7 to 11.2. In India, it fell from 12.7 to 11.2 million hectares. In the United States, it fell from 4.1 to 3.8 million hectares. In Australia, the soil is planted according to the water available. In recent years, they have planted around 600,000 to 650,000 hectares, totally for export, directly with Brazil. And now they have planted only 470 hectares this year. thousand hectares. So, this low price of cotton in the last two years, it demotivated the cotton crop in the main countries that compete with Brazil. Brazil, for our competitiveness, for our high productivity, Brazil continued to expand in the past years, this current year that Brazil, when it dropped from 70 cents, Brazil also made an adjustment in the planted area, and reduced the planted area by 5% this year. So, these reductions in the planted area that have happened in the world and in Brazil, including in the current market, are generating a lower supply of cotton. And then, considering this perspective of polyester getting more expensive, we have already felt in the last few months now a slightly more consistent demand for cotton. In addition, the entire chain of the textile industry is working from hand to mouth, that is, the stock level in the chain is very low. So who is stocking the product today is the producer, especially the Brazilian. And this, in a certain way, in any positive price reaction, generates a demand rush. So that's why we are higher with the price of cotton than stable or low, based on this scenario that is being faced. So this is the cotton scenario. In relation to the American crop, the rally of fertilizers now, and the strong rally today is nitrogen. Nitrogen has changed in price, it went up to double today.

And cotton.

So what will happen now in the American plantation? They will have to reduce the corn area, reduce the cotton area and plant more soy. This is the logic with this question of the high cost of corn production with this price of nitrogen. So there will be an adjustment in the question of the planted area of these crops over the next few months and in a way generating that balance whenever it happens between soy and corn in the international market, adjusting supply, adjusting demand, but the positive point is that we have a corn with a low international stock level. Passage stock of 23%, the normal is 27%. We have a soy with a high stock, above the normal stock of 27%, which today is at 30%. The American will plant more soy, will offer more soy. it will generate this balance between the price of soy, but soy has a consistent demand for biofuels, more expensive energy, so it generates demand for soy, it will generate demand for corn and there will be no supply of corn, corn will have a smaller supply, the corn stock in the world is already tight, right? So it's this scenario that we are in, the two cultures every year increase demand, increase demand, so if the cost is high, the producer will not plant anymore and will not offer anymore, So there has to be a price that motivates the producer to plant. In this market dynamics, as I said in the previous question, it is comfortable that this dynamic of the expensive energy market will be favorable for our business and not unfavorable as one might think. High cost, high consumption, this will be bad for the SLC business. No, high energy is good for the SLC business. Especially this issue of polyester rising in price and competing with cotton. China imports its 112 million tons of soy, it will continue to import more from Brazil, more from the United States, it doesn't make much difference. provoca uma oscilação maior nos prêmios brasileiros, se ela importa mais fortemente do Brasil, e pressão sobre os prêmios americanos, mas o americano também vai consumir mais soja. O Trump, apesar de não ser favorável ao ISD, ele é favorável ao produtor americano. Por isso que ele aprovou o mandato para consumir mais biocombustível nos Estados Unidos. Então esse ano deverá consumir mais soja para biocombustível nos Estados Unidos, ainda mais agora com petróleo caro. So we don't have the supply chain of soy at a global level, it will be balanced. What really matters is the supply and demand at a global level, and this displacement from one country to another happens according to... But China has Brazil as its main supplier, right? In other words, the United States will manage it. This is the summary we make in relation to China and the United States.

Excellent, thank you.

Thank you, Isabela. Our next question comes from Mr. Thiago Duarte, from BTG Pactual. Thiago, please, you can ask your question.

Hello, good morning everyone. André, Pavinato, Ivo, it's a pleasure to talk to you. Two quick questions on my side. The first, given this issue, especially of nitrogen, Pavinato, can you remind us what you understand to be a deadline? for you to start acquiring nitrogen, imagining that this situation will extend for a few more months, thinking about the 26th, 27th harvest, but for us to remember a little the calendar, the situation we lived back there in the war in Europe, in Ukraine, which I think can be similar to what we are starting to see now. And then my second question, And now, talking less about SLC and more about how you see the rest of the industry in Brazil, you mentioned well in your last answer, your statement, how Brazil this year has already reduced the cotton area as prices have fallen. And our perception, looking at soy in particular, is that the margins of the medium producers in Brazil, which again is not the case of SLC, but of the medium producer, they start to get very tight, looking at the price today, the exchange rate and the costs are drawing to 26, 27. I would like to hear from you if you understand, the soy area grows every year for a long time, the planted area. If you understand that we can see, for the next crop, in soy, something like we saw in cotton, or do you understand that the soy discussion, because of the corn crop, is a different discussion? I would like to understand more how you think that Brazil's supply responds to the margin levels that the industry in the aggregate is starting to see now.

Thank you. Perfect, Tiago. Thank you for the questions. Nitrogen we use in cotton and in corn. We start using nitrogen in December. In December, in the farms that plant the saffron cotton earlier. That is, we have a deadline to buy this nitrogen, at most at the beginning of September. And that's part of the volume. Most of the volume is used in the second saffron, the second cotton saffron and the second corn saffron. So we're both going to use the nitrogen there in February of next year. So it would take a few more months to buy. So we can make a partial purchase of this nitrogen. So we have time to buy this nitrogen. And within a logic that the war will not last in the long term, the same that perpetuates, as it happened with Ukraine, its effects do not last in the long term. The logic is that there will be this adjustment in the DNA sources over the next few months. we can buy with a lower price than it is today, and we can also compensate, even if it costs a little more nitrogen for the next harvest, we can compensate with a little higher commodity prices, and then it ends up compensating and we are able to maintain the level of profitability. About the sector, Thiago, really, our reading, when I look at the history of costs, the history of prices, and in the case of Brazil, the history of the price of soy, which is the great culture, it is practically stable in the last three years. Soy stays there between R$ 100 and R$ 120 per bag. And regardless of the exchange rate, regardless of the price of Chicago, there is not much of that. So we have a stable price for three years and with a cost that has gone up. When you look at the sector as a whole, the current crop, 25, 26, the fertilizers in the current crop cost more for the sector than the previous cost. So, in theory, this year's cost is greater than last year's cost and this generates pressure on the margins. then the corn is really entering as a culture that is generating a benefit to the producer and that is sustaining his cash flow. That is why, in a way, it is surprising how the producer is able to continue expanding the planted area, even in this scenario of tight margins. And maybe one of the explanations is this level of cash generation that the corn is providing. flying through the Brazilian center-west, we see today expansions of areas, areas being developed, new areas. So, the area planted with soy in the coming harvest, it should not fall, it should stay the same or grow. Some marginal areas may be abandoned, but we will have additions in some new areas. So Brazil is being a resilient supplier in terms of soybean supply. But maybe growing a little is not enough in a global demand that grows 10, 15 million tons per year. So, to stay a year, two years, without growing plantain in Brazil, we will have a shortage of supply, not to mention any eventual drought in any country. We are now living two years of very good yields in Brazil, very good yields in the United States, So, in the middle of this path, it may happen a drought in some country that causes a disruption in supply. But, daily expansion in the coming years is necessary to maintain supply. And if there is no daily expansion, a very small expansion, it starts to generate a deficit instead of a surplus, as has happened in recent years. And that motivates prices to improve.

Excellent, Favinato. Thank you.

Thanks, Thiago.

Thank you, Thiago. Our next question comes from Victor, from UBS. Victor, please, you can ask your question.

Good morning, Pavinato, Ivo, André. Thank you for taking my questions. My first question, even expanding on the previous discussions made regarding the price of fertilizer, is if you could share with us how you are thinking about the cost per hectare for 26, 27, in relation to the current rate, given what we are seeing so far in relation to the price of inputs. And my second question is about capital allocation, with the liquid and EBITDA debt ending the year of 2025 below two times, I would like to understand if the priority for this year of 2026 is to continue to leverage, or if the distribution, effectively a distribution of results for the highest shareholder, new acquisitions or expansion projects, are at the table at this level of leverage. These are the two, thank you.

I'll let Ivo answer these, Victor.

Well, Victor, about the issue of fertilizers and the costs for the next harvest, the current harvest is defined by the costs, right? We already bought 100% of fertilizers, so this one has no more impact, we already announced an increase of 9% compared to the previous year. In relation to the next harvest, as Covenato commented, now is not the time to buy, it is the moment that we are in a market stress, we have an expectation to keep the prices in the current status. Why? Because the exchange on one side decreases, that is, we have a valuation of the real and in this way we end up we have to wait a little, the cabinet completed, we have until September to buy a piece of the urea, so there's still time for us to do that. Regarding the other point, Obviously, this year we are growing 100,000 hectares, so we have new areas, new people, so there are a lot of things for us to acculturate in our team, and I would tell you that the expectation is to reduce the leverage, this is the initial project, This is the initial project and we will, if we have the opportunity to grow, obviously we will evaluate, but always looking carefully at this issue of leverage.

Perfect, it was very clear, thank you.

Just to complement the fertilizer, the phosphorus, the phosphorus normally represents 50% of the package of our fertilizers that we already bought for the next harvest. and we bought at a price per nutrient point below the current SAP. So this is very important information as well. So SAP is a good example.

Of course. Thank you, Paginato.

Thank you, Victor. Now our next question comes from Mr. Gustavo Troiano from Banco Itaú. Gustavo, please open your audio and ask your question.

Good morning, Pavinato, Ivo, André. Thank you for taking my question. The first point I wanted to explore with you, yesterday we saw a news and a lot of noise in the market of a big player suspending the export of soy to China. I wanted to get your view, if you believe that this is something punctual or if you have seen other players with this same posture. And the second point, we saw here in the daily update, the increase of other cultures, I wanted to confirm with you if it was a matter of, just to confirm my understanding, if it was a matter of allocation of mix in function of the window, or understand if there was any culture there that you increased directionally the area by virtue of image, or some more positive vision looking at the medium and long term, eventually eucalyptus, in short, take a little of this vision of the mix. These are my points, thank you.

Thank you, Gustavo, for the questions. What I said earlier about China, if it doesn't import from one country, it will import from another. China has this dynamic of the market. If a country does not export to China, it will export to other countries. This dynamic of the market of grains and soy, especially, ends up not generating a great effect on commodity pricing. On the issue of the cultures, we had the initial planning. This year there was a delay in the rains in some farms, especially in Maranhão. So we ended up not being able to plant the soy early to make the second harvest, and we ended up reducing the soy, in this case, and making the cotton harvest. And also in Mato Grosso there were some farms that rained later this year. So that's why there was this small reduction in the cotton area, in relation to the initial prohibition. So we make these decisions on a regular basis, farm to farm, at that moment, on February 5th, February 10th, I'm going to plant cotton or I'm going to plant corn. We account for the margin of contribution in that farm, how much margin of contribution, and then decide to plant one crop or plant another. This fine adjustment always happens, depending on the evolution of the crop and the margin of contribution of each crop.

Thank you, Gustavo. Our next question is from Pedro Fonseca, from XP. Pedro, please open your audio.

Hi guys, I think I'm the one who asked the last question, Pedro from XP, I don't know if it changed the time.

Sorry Pedro, I always called you Gustavo.

I think I'm going to run over here because it looks like I'm going to demote, I apologize.

Sorry Gustavo. Gustavo, so please, you can ask your question, Gustavo from Itaú. Okay, so let's move on to Larissa Perez from JP Morgan. Larissa, please, you can ask your question.

Hi guys, good morning. Can you hear me okay? All the time, yes. Thank you, thank you for the space. I have two quick questions. First about the climate, I wanted to hear a little about you, about the year-end. We have seen the probability of the year-end increasing from the second semester. If you could remind us how your productivity usually behaves in the year-end and how this could impact your results in 2026, I think it would be great. And my second point, maybe it's a follow-up to Pedro's question. We have been talking a lot with investors about corn ethanol growth here in Brazil. And I wanted to understand how the SLC can benefit from this corn ethanol growth. If you could remind us how much percent of the corn you produce goes to ethanol, it would be great. And if eventually you would consider planting biomass for the sector or even investing in a corn ethanol plant. I think those are my two points. Thank you.

Well Larissa, El Niño historically causes excess rain in the south of Brazil and less rain in the north center of Brazil. So for us it has a negative effect in terms of water supply, especially in the northeast region of Brazil. Today we have a much more mature system, with much more irrigation now in Bahia, which is the region where we suffered the most when El Ninho happened. So today we are much more resilient to face El Ninho. that is, the northeast, the center-west, it oscillates, there are years of El Niño that suffers a little, there are years that it does not suffer, in relation to the issue of rain, right? So this is the summary. The forecast for the next harvest is a weak El Niño, so far it is marking, for it to be El Niño, the water has to be half a degree warmer, and the forecast is that it stays there until a degree warmer, The strong El Niño is when it is two degrees, two and a half degrees hotter than the Pacific water in the equatorial region. So this is the current forecast, this can change over the months, but this is the current scenario for the next harvest. Corn ethanol, we provide a large volume, more than half of our corn production has gone to ethanol consumption. So, really, the corn market is a consistent demandant. It is a demandant that buys futures. We like to sell futures, so we end up selling a lot of corn for ethanol. We are in the regions where the ethanol industries are. We are in Maranhão, where the Impasa has the industry. We are in Mato Grosso, where several companies have the ethanol industry. So today we are a great supplier of corn for ethanol and this helps in liquidity and helps in pricing too. So really the demand for ethanol is helping in this corn market dynamic in Brazil and making the corn culture a more predictable culture, more consistent demand, future sales and a more fair pricing, I would say.

Thank you guys, it was super clear.

Thank you, Larissa. Now let's go to our last question, from Julia Riso, from Morgan Stanley. Julia, please, you can ask your question.

Hi guys, how are you? Thank you for taking my question here. I wanted to do some follow-ups because Pavinato's audio in some questions, I think it's from Isa, he ended up cutting here for me. So I'm sorry if I want you to repeat, but I wanted to talk a little about the expectation for the American crop given the current situation of fertilizers. In the sense, some questions here, how much do you think the cost of production for the corn producer goes up there in the United States, given the issue of ore? Is there a risk of supply, of them not having fertilizers, and how much this could cause a daily shift from corn to soy, and its consequences in terms of price, or destruction of demand for fertilizers, given their experiences in other crises. So, it's a little bit of this perspective for the African-American and the increase in cost of corn, given the current situation. The other question, if I can make a follow-up here going to the local market, is the impact of diesel currently in the current supply. Given the situation of the war, we are already seeing the price of diesel rise in some places, we have the issue of imports that are in difficulty. If you see this as how much diesel represents the costs of the current saffron, how this could affect the cost-benefit, and the dynamics of the Brazilian saffron itself, more on a question of its reflections at a global level. Then for Ivo, I think... Hi, can you hear me?

Repeat the last question because it's cut for us here.

It would be diesel. Diesel, how it could affect the costs of the current market and even not only in the SLC, but at the Brazilian level, its consequences. And the third, if I may, for Ivo, the question of the expected CAPEX for this year and how much you imagine of cash flow for yields, given the size of the area, the change in the mix and prices that are on the market.

Perfect. The expectation is that there will be, again this year in the United States, an increase in the soy planted area and a reduction in the corn planted area. The size of this adjustment, Julia, will depend now on the next few weeks, right? How much the American producer will replace. The fertilizer today, When you look at the fertilizer package, today it is 50% more expensive than the historical standard. Take a historical average of the last 12 years of fertilizer prices, and the price that is today is 50% higher. And pulled by nitrogen, which is 100% higher. So really, the American producer will do the math and will decide which crop to plant, but the logic is to plant a much larger area of soy, maybe 1 million, 2 million more hectares of soy, and reduce this corn area. When it happened, right after the pandemic, that the fertilizer prices were very high, the reduction in worldwide fertilizer consumption reduced 10% the consumption of phosphorus, reduced 15% the consumption of potassium, reduced 3% the consumption of nitrogen. So, especially the fossil... Cut.

Cut for you too.

High prices, sorry, cut for you?

Cut.

So, the demand for fertilizers is sensitive to high prices. When prices are very high, as is the nitrogen now, it ends up adjusting the demand a little bit according to these high prices. But nitrogen is not so sensitive because nitrogen is a nutrient that does not have stock in the soil. every year to be used. The phosphorus and potassium that is stored in the soil is more sensitive to high prices. In the crisis of 2021, consumption in the following year reduced 10% of phosphorus and 15% of potassium worldwide. So there was an adjustment in demand due to very high prices, which will happen again if prices go up, prices go up more in the case of phosphorus and potassium. Well, diesel in Brazil will suffer the consequences of the increase in the international price. So the price in dollars has gone up, in Brazil there is the exchange that is growing, it ends up compensating a little bit for the rise in the international price, but today or tomorrow Petrobras will have to adjust the prices Obviously, it's the year of the election, there's the whole political question behind it, the adjustment of fuel prices... Sorry, I'm thinking more now, because we've seen news that there's a lack of diesel in some places for Safra, or that the distributors are selling very expensive diesel. We're not yet feeling this effect directly in our operation. We're not yet feeling this effect in our operation.

We have contracts with distributors.

Contracts with distributors. So, we are not feeling this effect in our operation, Júlio.

Ivo, CapEx. CapEx, Júlia, what we have... Historically, we have spent R$ 1 billion in CapEx between maintenance and expansion. Half of it is maintenance, this year we have an investment in irrigation, we are also finishing a gold mine in Piauí, so it should stay within this history. And about the rents, we... You cut it. Ivo, sorry, the rent stopped last year we spent 450 million more or less with rents, as we increase the planted area and basically with rents we should reach the range of about 500 million of rent in the 25-26 season rents including with machines and collectibles etc., it should be in this range

Can you remind me of the diesel at the total production cost?

The specific diesel? Yes, the fuel. We use it in several items. I would have to look at the detail. It's not very representative. 3, 4%.

3, 4% of the production cost. 4% of the production cost.

But we already have the soy harvest almost finished. We're just talking about the lack of corn and cotton. So we have to ponder this a lot.

And planting, right? You are still planting, right?

Concluding, concluding. Concluding, right? Concluding, right? Certainly, there is no impact of diesel prices at the end of planting.

Wonderful, guys, thank you very much.

All right.

Bom, a videoconferência de resultados referente ao quarto trimestre de 2025 da SLC Agrícola está encerrada. O Departamento de Relações com Investidores está à disposição para responder quaisquer perguntas e sanar quaisquer dúvidas. Muito obrigado aos participantes e tenham um bom dia.