BrasilAgro - Companhia Brasileira de Propriedades Agrícolas Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
September 4, 2024

There are 1 speakers on the call.

Operator

Good morning to all. We're here for our call at the end of the year for 2023, '20 '20 '4. As you know our year goes from June to July and we're here to talk about Q4 and closing of the year. I'm here with Andrea, our CEO and Gustavo, our CFO.

Operator

For those who are following us in English, the presentation is available in the chat. At the end, we will have a Q and A session. So you can make your question by audio or send via chat. Thank you. Good morning.

Operator

And now I pass the floor to Andre. Thank you, Ana. Good morning to all of you. It's a great pleasure once again to be with you with our annual results. We will comment about the year, the problems, the great objectives.

Operator

It was a very challenging year for agro business. Once again, I reinforce that the combined strategy of the company with real estate and operations has been a winning strategy. The company's capacity, the resilience, company has to deliver combined results both operational and real estate results. The great highlight of the year was this and we will talk a little about production. We will talk about climate many things here with you.

Operator

But what I would like to really stress is that the company in fact consistently has been delivering its strategy through operations and real estate results. This has been done during the years with a lot of capacity and has brought good returns to our shareholders investors. So I would like to begin. Let's begin with the first page and where we see here the highlights of 2024. It's a financial highlight, 1,100,000,000.0 in net revenue.

Operator

We have a net profit for the year €227,000,000 and adjusted EBITDA. I always like to show this line €279,000,000 and dividends that will be proposed for the shareholders assembly around BRL155 million. All these numbers show a little of what we have said. It's a company that has the ability, the capacity to combine a real estate strategy with operation strategy enabling us to generate this result and enabling us to really pay dividends to the shareholders that trust the company's management. In terms of real estate, sale of real estate we sold Chaparral Farm a very important sale and we showed us the resilience of Brazilian agro business.

Operator

A lot of people asked us in the previous calls, will the company be able to sell farms with a drop in the market? And I said the company is resilient. The company is using this resilience and to make an important sale of a farm that we haven't sold yet. We sold an important piece of this farm 30% of the area but we still have 70%. So those who it's a farm that is worth more than $1,000,000,000 And the third we talk a little about operational results more than 2,300,000 tons of production.

Operator

You know we have been saying in the calls we're making progress with the strategy two farms in Bahia with irrigation and we have been continuing with this. We implemented another 600 hectares of irrigation and next year another 900 hectares that will be irrigated. This brings stability to this to these farms. The company is always after new technologies. It's not only a land development company, it's a company that is a good operator and we cannot be distant from connectivity.

Operator

All of this we believe will bring us excellent results. So it's this is data from Embranepe that has 10% of the GDP with artificial intelligence. So we're implementing this in the main units. And one important point to highlight, you all know how much logistics has cost in our business and the company finalized. We were able to build a silo in Piawi Fazen Avarunda Farm.

Operator

It has already received many products this year. This gives us flexibility in terms of freight logistics and harvest in this unit and in the close by units. These highlights this picture of the company shows the company's ability to combine operating results and sale of real estate. When we talk about real estate, I brought here the main highlights of the year. The sale of Chaparral Farm 12 Thousand 3 Hundred And 30 5 hectares, 8,796 useful planted area, sixty four million and three fifty banks of, soybean per hectare.

Operator

It's an asset that has been in the company since 02/2007. So such a high return this shows the company's capacity to generate value to the shareholders and how much value this farm generated. I was remembering the other day we paid BRL40 million and today we sold a third for BRL365 million. So you all know this, you know that the company does this very well. The second pillar we brought here something that we have been saying for a long time that companies need to balance the relationship and the production of ethanol.

Operator

The company always grew. We're a company that plants sugarcane for more than seventeen years and we had most of our production of sugarcane aimed at ethanol. In the past there was a great need. More recently you all know you have been following the market and other companies of sugar and ethanol that the relationship has changed. And since we have focused on ethanol, we were hurt a little and we as management work to correct this to place in the production of sugarcane units that may not only produce ethanol, but also sugar thus improving the mix.

Operator

This is an important progress, very important and we won't stop. Certainly, it enables us, it helps us with a large player of the market, one of the largest players of the market. And then we're playing this game of production of sugarcane aiming at producing sugar and not ethanol. More recently, we finalized during the last month the operation, the purchase of Novo Horizonte. Novo Horizonte was an agricultural company that had operations in the region of Primavera Do Leste.

Operator

The highlight here it's a region that has a great value. The farm is very mature where we have irrigated land. 17% of this unit has irrigation and we were able we bought this company that came brought to us equipment, irrigation equipment all the structure of the company. We will begin a new unit with operations with stable production of farm that will bring us great results in terms of diversification with cotton. So it's an asset that is now in a difficult year.

Operator

So we're showing this highlight the company's ability to capture real estate opportunities even in times where price of commodities are dropping. Well, here when we talk about price of commodities, this shows the price of commodities and how they are behaving. We saw in the last year soybean. This is always in the Port Of Paragua from 190 to 130 corn also dropped a little less but it dropped. So content that had a certain stability we had an important impact at the end.

Operator

This shows once again the strength of combining the sale of real estate farms and operations. Now we saw that ethanol, the price of ethanol went up. It had a small benefit on this result because it became a few months ago. It will benefit the company's result in the next year ethanol thus taking, sugarcane to historic levels of contribution. Here a summary of what we produced.

Operator

So the production of soybean as I said, it's time to show what we did, where we have things to change, corrections. We had a smaller production than we had expected and this is due to three units and one that really was affected was the operation in Paraguay. We had a very difficult year in terms of we had more than forty five days of drought. This affected soybean and cotton in this unit. And two new units, Mato Grosso, Fazenda Panambi and Regalit, these are units that are being converted from pasture land to arable land.

Operator

This is the effect. Of course, you will ask me, the council asks me, the investors ask me, the company is much well, much better prepared in these units in relation to the last. They were conversion land. We're converting from cattle raising to arable rent. This year now they are ready and this will allow us to attenuate all the beginning effects.

Operator

So this year climate conditions, the forecasts are better, but we know the problems we had in the state of Mato Grosso in the past. Here we show and the highlight that I stress is the actual versus what we had planned in Paraguay. The yellow line shows the average during the last few years. You can see that here in summer we were below the historical levels in Paraguay. When we look at the harvest 2023, '20 '20 '4, when we look at production of sugarcane we had 1,975,000 tons harvested area.

Operator

Here we'd like to highlight that this has a new project. It was affected very shortly. There will be a strong harvest in the second semester. Tch in the harvest twenty twenty three-twenty twenty four we're estimating 83.7. We have a growing relationship with the previous harvest.

Operator

In the past we suffered a fire in Sao Jose that affected productivity. We have been recovering this sugarcane planted land and we will close the harvest with a productivity of 83 cattle. We always say that for us it's only a transition raising cattle. Use it only for some time. We will never buy farms for cattle raising.

Operator

We buy farms that have cattle raising but can become, arable land. So pasture land is practically the same. And due to everything that happened the beginning of the rainy season, you know that the rainy season November to March is when you have a lot of grass for cattle raising. November and December, we had less rain and this affected pasture land, but with the GMD that is still attractive four ninety grams per day. While reinforcing once again the company's ability to sell farms to lease to buy and with you we have shown growth So harvest after harvest although we sold 8,700 hectares the company is still growing in the company will continue growing in 2024, '20 '20 '5 in terms of planted area.

Operator

We're close to 178,000 hectares. The important thing I'd like to highlight when we look at the graph on the right, the diversity in crops. This is helping the company. Remember many years ago this pie chart had only two colors. It was sugarcane and soybean only.

Operator

And now we see a great diversity. There's a learning curve, but it shows what we have been saying. The importance of being able to explore these units with the maximum they can produce diversity in crops and this makes them profitable. So the graph on the right leased land, we see the land that we leased from land we leased to third parties and the cultivated area. And once again I reinforce the company's strategy is the combination of two businesses.

Operator

We believe in leasing to bring stability to allow us to be even more aggressive in transforming areas and also we believe in our own land that brings us a drop in the cost of capital. So the strategy of combining leasing with our own land no doubt will show as a winning strategy because it brings stability in production. And on the other hand our own land will bring us the ability and capacity to get cheaper capital for the working capital of the company. Well next slide. Inputs, I believe you have been following these the inputs.

Operator

I said that we were in the alligators mouth cost dropping. The cost goes up as we say using an elevator and it comes down step by step. So once again, we have a drop in the cost of production. Reminding you when we talk of let's talk about soybean. We had 5,000.

Operator

We dropped to 4,504 and now 3,904. We believe in this that there will be the need to drop this cost, so we can expand the area and increase production. What we show beside this is the relationship between the products potassium close to historical prices nitrogenated you know there are ups and downs. It has a lot to do with winter and phosphate that went up in the last few months and we're alert. The graph the numbers on top shows what we have bought chloride 83% bought phosphate 80% bought NPK 95% bought and defensive 70%.

Operator

So everything for summer has been bought. Now there's the harvest in winter and annual crops. Nitrogenated when you look at it 65% bought because sugarcane needs fertilizer during the year. But we believe that these numbers will converge. Well, here we show our hedge position.

Operator

It's not only producing. We have to and buy sell farm, but also sell all these products, this production. So on the first graph, we show the behavior of the price in harvest 2323, '20 '20 '4, very competitive price. We closed soybean at $0.01 $2.08 $1 So this has already been harvested. Most of it was already sold.

Operator

There's only a part for the We're looking at the exchange rate during the whole year. If we take a picture now in the last few months we saw a higher price in the dollar and this is the change in the graph beside it. This is the harvest twenty fourtwenty five. The company has 17% already sold. We have some derivatives and here we have more of the effect of the exchange rate.

Operator

Especially in the last month forty five days we saw what happened to the exchange rate. On the right patent price of 82.2 per pound New York and in U. S. With an exchange rate of BRL5.57 a very good sale 19% sold at 82 very different from what we have today in terms of prices and an exchange rate of BRL5.41 to $1 Also we have receivables from the sale of farms. You know that we report almost BRL $770,000,000 in receivables.

Operator

These are all linked to commodities. So here we show how we sold during 2024 at the price of Chicago Twelve Point Two Seven Dollars and the exchange rate the same. Now the harvest 2025, we have 21% sold at $12.37 And here we see what we see above a better exchange rate. Now corn small volume, we're very optimistic because we have other factors helping the price especially the production of ethanol and corn from some regions and the second graph is ethanol. So we saw in the harvest 24%, twenty five % a great recovery in the last few months.

Operator

We believe we will have more recovery. We have a part sold 25% and some end sold here and derivatives. These are derivatives that we're beginning to operate. Why? Because now we have production of sugar.

Operator

Well, these were the highlights. And now I'll pass the floor to Gustavo, our CFO and he will show the company's numbers. Thank you, Andre. Good morning to all who are with us here with earnings our conference call we're reporting twelve months from July 1 to June 30 the whole year. And here we're showing a profit BRL 2 and 26,900,000.0.

Operator

And we see that we had a net margin a little higher than last year. And as Andre mentioned now with the sale that we made in the state of Bahia Chaparral Farm which brought to us BRL248 million in gains selling this farm. And we also see although adjusted operational EBITDA was well under the number it should have been if we worked with historical averages we that we obtained in previous harvest especially in soybean and sugarcane which are the engines of the EBITDA generation of the company. But when we look at adjusted EBITDA $179,000,000 this 25% EBITDA margin is for this is due to this factor the sale of the farm. When we look on the right in the center we're showing what we build, company's revenue, unit prices that we were able and unit costs, we can notice that we didn't have great variation in relation to the tonnage that we sold during this period.

Operator

In soybean, we have a little less sales, especially because we made the decision to accumulate more the inventory of soybean and remembering that the premiums in the previous quarter were well below. And although we had positive derivatives and an exchange rate that was close to market value, we still had difficulty to validate prices that would make these margins more attractive. So we saw here corn that we also sold in the same amount during this period remembering that we had the second crop. We decreased the second crop because margins were low. We will see the performance on the next page.

Operator

But in sugarcane, we had a production that was a little better. In the past, we had difficulty in Sao Josef Farm due to the fire. We had a fire in 5,000 hectares and now we're recovering its potential. And content as Andre mentioned is a highlight beans too. We began to diversify more and we will show this learning curve to the company.

Operator

When we look at prices, all of them, we see a drop around 20% soybean, sugarcane and cotton, a little more in cotton and corn. And this was a factor to avoid producing the land we had for this. The unit cost we see that there was a drop in the price of fertilizer, but it did not compensate the drop of the price that destroyed margins when we compare with historical margins. At the bottom, we have a graph of the main crops. We see soybean and cotton, sugarcane too.

Operator

Here we understand that there is potential to recover. Later we will explain the expected margin for this type of crop and the sale of farms. Last year we had we sold more last year especially our Aucaria farm and Rio De Mayo farm which was a small part and also the sale of Jatoba Farm which generated a sale result of BRL100 million more. But as Andre mentioned, the highlight here with the combined in a year that is very difficult in terms of margins Although we have a hedge policy to get better prices still, we had excellent harvest of soybean in Argentina, Brazil and in The U. S.

Operator

Too. So this put pressure on inventories and this put pressure on the price which dropped. Sugarcane too last year we had a full harvest for Brazil. This year we see better prices coming, but this pressure on price really was the cause that the operational EBITDA in the company which should have been normal was not normal. Now on the next page.

Operator

Here this is to show these margins. Historical margins in soybean, cotton and corn, we see a drop of 30%. In the case of soybean here 166,000 tons although we have results margin was 16%. Although we had results with derivatives Andre showed values that were much higher than the price of Chicago. But we see that this led us to have a price that was much lower than the prices we had last year.

Operator

So when we look at another product that is important for us that we sell which is sugarcane, we also see how the price per ton two years ago it was BRL200 per ton. It's being sold at BRL133 per ton. With this we reached BRL8 million, a margin of 12% very low contribution. And if we look at historical margins, if soybean had a margin of BRL 140,000,000 to 150,000,000 for sugarcane we estimated BRL 80,000,000 to BRL 100,000,000 and we see how the this price impact had a strong pressure. Other crops, corn, such a large volume that we produced and we didn't see a price recovery, we sold and this generated a negative result.

Operator

Beans is a culture that we began to diversify. And cotton, the highlight as of the implementation of some services with irrigation, we begin to have a technical knowledge that is better and we're trying to intensify the surface with the irrigation by diversifying the crops. On the next slide, we will see operational EBITDA last year BRL190 million to BRL100 million this year BRL31 million. We have also inventory to sell and we're taking this to the next semester. But here I'd like to highlight as I mentioned, we understand that with margins to what we have seen in terms of historical prices, we should have an EBITDA of BRL200 million and an operational EBITDA.

Operator

But as we showed great difficulties in terms of price led the company to not reach the numbers it wanted. Next semester we we still have some inventory. We will be selling it the next semester and this EBITDA will have an effect in the next fiscal year tax year. Here indebtedness, we have a highlight. We have spectacular numbers when we look at asset and liabilities very well balanced and a company that is not leveraged, no leverage.

Operator

We see here in terms of short and long term BRL $680,000,000 and the difference in relation to last year, the debentures that we issued during December to implement 4,500 hectares of irrigation in Bahia. When we look at the debt and the company's cash $2.00 €9,000,000 5 20 million euros net debt reminding you that we have $770,000,000 reais in receivables from farms that are not considered here, which shows that the company has a net a negative debt. So a highlight is the composition of this debt. We have 100% of the CDI index very low interest rates and we were able to lengthen the terms especially to transform land and to buy irrigation. This is a non recurrent, but in the short term we have debts at low interest rates, which allow us to help the company's cost and also have working capital BRL500 million, BRL600 million.

Operator

And with this we can be a little more efficient in the capital structure. In the next slide to show as Andre mentioned, the company likes to pay dividends every year. We saw that the year was very challenging, but we understood that this dividend does not compromise the financial situation of the company. As we saw on the previous page, we have BRL770 million in receivables from the sale of farms. And apart from this minimum dividend 25%, the company decided voted yesterday to distribute a proposal to distribute additional dividends and this dividend proposed is around BRL155 million.

Operator

Next slide. As we always say, this is the value of the company shares. When we look at the price that is trading close to the net assets of the company when we consider the value of the properties, the farms, the valuation of the farms, we have a net asset value of BRL 34,000,000, 30 5 million. And we understand that there is a great potential for the price of the shares to go up apart from the payment of dividends. Now we'd like to begin the Q and A session.

Operator

Thank you very much for being with us. Thank you, Gustavo. Thank you, Andre. Before we go on to the questions, I'd like to invite all the participants on September 19. We will have BrasilAgro Day, a very interesting event for the first time.

Operator

We will be in one of our farms. So if you have the opportunity to participate, it will be very interesting this day. So please if you have registered yourself we have limited, seats. Now Pedro from XP your question. Hello, Andre, Gustavo, Ana.

Operator

Nice to talk to you. I'd like to ask some questions. The first on the guidance of productivity that you're projecting a growth for soybean and corn from forty seven fifty four bags of soybean. My question, how can we quantify this gain in productivity with normalization in the climate and the normal due to land development? Last year was very different with climate problems.

Operator

This year it seems to be a normal year, but you have the gains from land development and also the sale of Chaparral that had a higher productivity. So please what can we expect from a more normal climate? And my second question is about the drop in costs 10% in soybean, corn too and the main categories how much comes how much of the drop comes from seeds, also fertilizers herbicides? Thank you. Excellent question Pedro.

Operator

We could spend all afternoon, but let's try to summarize this. I will begin from the end. First, the drop in prices, what we're seeing. What we're seeing a drop around 15% to 16%, the price of agrochemicals. And this drop, we're not talking about real terms.

Operator

It's a reduction in dollars. So we have 15%, sixteen % price of agrochemicals. In soybean, it represents BRL650 per hectare. So we have also a drop this year in the price of fertilizers in the case of potassium, in the case of phosphate, no. So we didn't have a great drop in the price of phosphate.

Operator

And the price of seeds, we began to see a small drop in seeds. Many new biotechnologies and we saw here a drop around 8% to 10% in the price of seeds in general. So chloride, it drops to $400 phosphate 700 agrochemicals 15% to 16% and seeds 10%. I'm always talking about the first harvest. The corn seeds we don't we haven't bought yet in the second for the second crop and we will wait more.

Operator

The first question is complex. I will have to give you some names and units to help you. What is climate and what is maturity? That was your question. Paraguay, I would say to you that is maturity.

Operator

It's basically climate. We believe that not that we're going to have a full year. We always use a methodology in units to foresee production based on the average of the last five years. This year was very bad. And this year average productivity that's the picture of the climate.

Operator

Since we're seeing we have expectations of a weak La Nina and almost going to a neutral year in general. That's the picture. So theoretically a neutral year with especially in a neutral year the climate should become more normal. In Brazil you know very well we have a great concentration in the Northeast. In years of La Nina it's worse.

Operator

So we're estimating that with this weak La Nina in a neutral year we should have a productivity within historical levels. Well, Paraguay now let's talk about maturity. What happened in the last two years in the company? We included the Panambi farm, Regaletto farm, Sao Domingos farm operations that came from pasture and were converted to grains. These conversion areas, when you do the conversion, you have a lot of work to do.

Operator

And then many times you it takes long. So we where we will have direct planting, we estimate that we will go back to a second year where 45, 40 eight bags in this like a normal second year. So in the case of maturity, we have been developing what we had to develop, but the percentage is still low. Now because we had a lot of progress in Bahia, we have some in Araujo Tingue and some areas in Chaparral. So we should have a piece of this that is maturity based on maturity.

Operator

I'm going to give you an idea. I would tell you say to you that the performance stabilizing because Paraguay has a great effect. This increment from I would say to you that 40%, forty five % will be Paraguay in a normal situation. The others 35%, forty %, these operations in Mato Grosso will become more mature. And I would say around '10 to '15 is the maturity organic maturity of the company's areas, Chaparral, Rojadinho, Serra Grande and the operations in Piawi.

Operator

So a numerical analysis would be this 40%, forty five % climate, 40%, forty five % maturity of the areas in Mato Grosso and 10% to 15% maturity of the portfolio as a whole. Now we have some questions. Of some investors in writing. Antonio Lopez, one of the analysts, they mentioned in their report that we had no impact due to the fires. You're correct Antonio.

Operator

So what actions do we have to decrease fires? Antonio, it's very sad what we had in the last few months in the state of Sao Paulo. Those who went there saw this. It's not only sugarcane that was burned. A lot of parks, reserves and forests were burned down too.

Operator

So if you go to Ribeiro Preto, by car you will see the effect of these fires. This year apart from having an operation in Sao Paulo. Although we didn't have big fires in Sao Paulo, in the case of Maranhao II, some very small areas To this morning, I was in a call talking to the people who produce sugarcane. We were seeing a September next September with high temperatures. And most not Sao Paulo, but in general, the fires sometimes happen due to external fire and internal fire.

Operator

So let's talk about internal fires. For example, a machine with a leak, have for hydraulic oil working at a temperature of 190 degrees. So if a hose has a problem, it starts a fire. So what have we done? We have worked hard with all the machines in terms of kits for fires like an airbag.

Operator

An airbag with extinguishers, it activates an airbag and sets off an extinguisher on the whole machine. We're being very careful when machines have to stop. We remove excess straw. Another thing we have done in the case of internal fire, the number of fire trucks together with the harvesters. For example, in Saint Joseph, we have 12 water trucks, an operation of fifteen, sixteen hectares.

Operator

There's one water truck for each 1,000 hectares. So there's an important cost there extinguish fires, but we're alert to this based on what we already saw as long as it's not a criminal fire. There's another origin of fire, which is from outside the fire that begins in another area and comes to your area. So we have a team to satellite, by radar. So what have we done?

Operator

We have a team of remote sensing. They monitor. They go to the manager and say, look, there's a small beginning of a fire six kilometers from your unit. Send someone to inspect to see the winds. So we have an active search to find these fires before they arrive in our units.

Operator

So we look at this and we monitor this. So it depends on how fast you act many times. So we're doing this constantly. Another that we do, especially in the state of Maranhao, our unit is in a region where we have a policy to increase awareness. And so we're helping the communities to increase awareness for fires.

Operator

Some companies will be hurt bad, reached 60,000 hectares of sugarcane. There's a very great concern with September, but we're trying our best to avoid these fires. Thank you, Antonio. Pedro has another question. Thank you.

Operator

Andre, I always like to talk about this to you with you. Today the company's hedge for soybean and corn, is there space to increase this? Do you see any trigger in the medium and long term to increase the hedge? So in order to capture a better price, what do you see in the near and medium term? Also there's a question from Carlos Antonio.

Operator

He's comparing our hedge position with the same date last year, which is below. Are you betting in the recovery on the recovery? Andre will explain. Well, that's the 1,000,000 question, the crystal ball. But when we look at this, what do we see?

Operator

Yes, the main basis is offer and demand. We have a lot of we have very we have less demand. I'm talking about soybean. So U. S.

Operator

Production, 25,000,000 tons in The U. S, Brazil with good perspectives, but what are we doing? We saw here a drop in Chicago prices. We believed in a drop in basis and we saw an important recovery in Brazil of the basis. You all know that soybean has three components dollar, exchange rates, premium and Chicago.

Operator

We saw an important recovery in premium in the last few months both for spot Chicago Ten, but we're selling physical soybean with a premium above 100 points. This means we were right. We couldn't do this in the past. We believe that Chicago would drop and Chicago and Brazilian premium to be an important player. One affects the other.

Operator

Chicago drops since we're an important player. Chicago goes up and premium should drop. Since we bet no one bet on a soybean of $10 Otherwise, we would have sold more when it was worth $12 No one thought it would go so low. So in the next harvest, answering Carlos' question, we have 17%, eighteen %. We'd like to highlight that most of this is done with derivatives and these contracts accumulate until May.

Operator

So the sold the part that is sold will be greater in these contracts around $11.75 So they will continue accumulating. These are derivatives that accumulate on a daily basis. And we're seeing an important recovery in premium. We had a negative premium for the next harvest and we can seize positive premiums already. What makes sense today, the feeling we have and what we're seeing is that it may make sense to really sell everything, especially with this exchange rate, higher exchange rate in Brazil.

Operator

So we're looking at this. If you ask me the picture that we have today, soybean a little lower than last year, but not that lower. We worked last year with BRL 123,000,000 and today this soybean is around BRL 115,000,000, 1 hundred and 17 million in today's picture. We're alert. We believe many things will happen still.

Operator

As we say, there's the whole harvest in South America, also climate problems. And the fundamental thing, we're also looking at geopolitical issues around the world, elections in The U. S, many factors on the table, the company will do its best. We're going to try to capture volatility. So we're going to try to have a better average price.

Operator

So in our Brazilian harvest, we're in September, we have the beginning of the harvest to close and answer better Pedro's first question on corn. Corn, we have a much lower harvest. Last year was 130,000,000 tons. Today, it's 115,000,000 tons. And we see an important demand and recovery of ethanol prices.

Operator

Another factor that is not less important, the devaluation of the Brazilian currency helps connectivity, helps also the exports of Brazilian meat. I'm trying to give you an idea to see how we're working and monitoring things. Thank you. Very clear Andre. Thank you.

Operator

We have a last question from an investor Pedro Lopez concerning our real estate strategy. He congratulates the sale of Chaparral Farm and the challenging year in operations. He wants to know perspectives for purchase of farms. So how is the funnel of is there space to buy more farms? Pedro, thank you.

Operator

This well, very good question. Yes, you're right. I always say to you that we're the company that is at when everyone is buying, we're selling. When everyone is selling, we buy. What you said is correct.

Operator

The resilience of the price of land, a bad year, two bad years aren't going to affect the price. For example, if the bag of soybean went from 170 to 120, you have a drop in the price of bags, but many people still selling land in with currency, selling in reais and not in bags of soybean. I like to show this. We had more in sometimes we're selling more, sometimes we're buying more. So now we're looking at a lot of opportunities, but we still believe that the price has to drop a little more.

Operator

I would like to say we will continue delivering margins and returns that are similar. And there's another reason like I explained. In the past, we bought land very cheaply. We had important gains, but you needed environmental license. We had there was a learning curve and large areas.

Operator

So this is changing right now. So now most of the time we're buying pasture land that you can convert much more rapidly. You don't need licensing like the other cases. An area like this reaches maturity much faster than in Savannah. So it reaches maturity.

Operator

So I would say we're alert to offers. There are some opportunities. When there are opportunities, I'm sure that all investors will help us to buy more land. But I still think that we need to wait a little for a drop in price. Another point, so like I said, transformation of pasture into arable land.

Operator

And the non we had cases where in the past that we waited for studies, environmental studies of five years. So today, we don't need these complex environmental studies. So things are faster today. And another point, size of the portfolio is smaller. These are farms that you can convert in a faster way.

Operator

Farmers, farms that we bought last year, we have already converted to arable land like Chaparral. Thank you for your the congratulation. Chaparral, we've been developing for fifteen years this. So I would say that the company will continue looking for opportunities and looking for profitability through stressed assets or because we will convert more pasture land or the absence of environmental licenses. We will work to deliver profitability to you.

Operator

Thank you, Andre. Thank you. If you need any other clarification, please get in touch with Investor Relations. We have another challenging year ahead of us less because of climate, but with more challenging in terms of the market. But we're prepared for this year.

Operator

Thank you and we will meet again.

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Key Takeaways

  • The company delivered a strong combined real estate and operational performance with €1.1 billion in net revenue, €227 million in net profit, €279 million in adjusted EBITDA, and proposed BRL 155 million in dividends.
  • Real estate resilience was demonstrated by selling 30 % of Chaparral Farm for BRL 365 million—highlighting the ability to monetize assets despite commodity price pressures.
  • Commodity price declines—soybean margins down ~30 % and sugarcane prices falling from BRL 200 to BRL 133 per ton—crushed operational EBITDA to BRL 100 million versus a historical run rate of ~BRL 200 million.
  • Investments in irrigation and technology continue, with 600 ha added in Bahia this year (and 900 ha next year), deployment of AI-based connectivity, and a new silo in Piauí to improve logistics flexibility.
  • Strategic diversification advanced via the Novo Horizonte acquisition—bringing irrigated land, cotton operations, and a shift in sugarcane mix toward sugar to stabilize margins.
AI Generated. May Contain Errors.
Earnings Conference Call
BrasilAgro - Companhia Brasileira de Propriedades Agrícolas Q4 2024
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