Adecoagro S.A. Price & Performance (AGRO)

Mariano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning and thank you for joining Adecoagro twenty twenty four fourth quarter results conference. Consolidated adjusted EBITDA during the quarter reached $103,000,000 and amounted $444,000,000 in 2024. Starting with our businesses, in Argentina and Uruguay, both our rice and dairy operations presented record results. This was possible thanks to the investments made throughout the years to increase production, and consolidate our asset base. While being efficient in every stage of the value chain. Moreover, vertical integration enabled us to cater both the export and domestic markets with our large product portfolio. Profiting from higher selling prices. In spite of the challenging year, for our crops operations, we continue to deliver results thanks to our continuous focus on being the local producer. Now we are undergoing harvesting activities for our twenty twenty four-twenty twenty five campaign in rice, we have already harvested over 50% of the planted area with yields above the previous year. On the other hand, we foresee an improvement in crops productivity versus prior season. Despite the uneven weather dynamics seen on our farms during summertime. Now let's move into our sugar, ethanol and energy business. As anticipated, not only did we achieve a new crushing record, [indiscernible] but also a sugar mix and consequently a new record in total sugar produced.

Thanks to our commercial strategy, we sold our production at attractive prices. While we continue to carry over ethanol stocks waiting for the fair bit timing to clear out the tanks. Which indeed has arrived. Although the weather has been bright, we are currently crushing and supplying the market with our products thanks to our continuous harvest model and the investment carried out to increase the size of our sugarcane plantation. A brief comment on shareholder distribution. During 2024, we distributed $102,000,000 between dividends and share buybacks. Dollars 32,000,000 more than our distribution policy. This was done without compromising our debt commitments nor disattending our growth projects. Such as the cane expansion and the production of biomethan in Brazil, or the development of our rice and dairy operations in Argentina and Uruguay. For this year, based on the $161,000,000 in net cash from operations presented we should be distributing at least $64,000,000 via combination of dividends and buybacks. Before passing the word to Emilio, a brief comment on ESG. As we grow the company, we are also growing our presence in the communities where our operations are located [indiscernible] by looking for new talents to complement our businesses needs and to strengthen our culture.

Key actions implemented include [indiscernible] which we train them in how to operate agriculture and industrial machinery. Aiming to consider them for hiring when employment opportunities arise. Furthermore, through our leadership program, we identified employees with potential in order to prepare them for leadership positions. To conclude, I would like to reiterate my gratitude to all our teams. Although we faced some challenges through the year, we were able to achieve these results thanks to their hard work and dedication. Thank you to our shareholders for your continued support. Now, I will let Emilio walk you through the numbers of the quarter.

Thank you, Mariano. Good morning, everyone. Let's start on Page four, with a summary of our consolidated financial results. Gross sales totaled $368,000,000 during the fourth quarter, while on an annual basis, they reached almost $1,500,000,000 Despite the quarterly drop in sales, annual revenues were 2% higher year on over year on greater volumes sold Given the overall increase in production, which in turn fully offset the lower prices for some of the commodities Adjusted EBITDA reached $103,000,000 during the quarter, making an 8% year over year increase whereas for the full year, it amounted to $444,000,000 During the year, we achieved record results in our rice and dairy segments and marked operational records in our sugar, ethanol and energy business. However, results were negatively impacted by a year over year loss in the mark to market of our biological assets in our sugar, ethanol and energy business [indiscernible] coupled with an uneven year over year comparison in our crop segment due to farm sales conducted throughout both periods. Now please turn to Slide five. As you can see, on the upper right chart, we generated $161,000,000 on net cash from operations in 2024. Despite the challenges faced, cash generation across our businesses prevailed thanks to our focus on efficiencies and low cost production, together with the investments made throughout the past years.

Regarding our production figures, in the bottom right chart, we can see that crushing volumes in our sugar, ethanol and energy business were up 2% versus 2023 making a new record. Higher crushing translates into higher volume and better dilution of fixed costs. In our Farming division, the increase in the production of grains was explained by a significant recovery in yields after having experienced better weather conditions throughout our latest harvest season. Let's move to Slide seven with the operational performance of our sugar, ethanol and energy business. Total crushing volume reached 12,800,000 tons during 2024. A record for our mills. Although on a quarterly basis, our crushing was down 12% compared to the same period of last year. This new achievement was possible thanks to greater sugarcane availability given our expansion planting activities and third party cane. This in turn enabled us to mitigate the reduction in yields driven by lower than average rainfalls received throughout the year. In terms of mix, we continue to maximize sugar production given its attractive premium over ethanol This resulted in a sugar mix and volume production of 52.2%. And eight thirty two thousand tons respectively. Marking new records for our mills.

Within our ethanol production, we are maximizing the production of hydrocethanol, as demand for this type of ethanol has been significantly increasing and gaining market share offering the better margin. If required, we can dehydrate our ethanol at any time. Let's please turn to Slide eight, where we describe sales conducted throughout the periods. Net sales amounted to $178,000,000 during the quarter, making a 22% year over year decrease. Whereas on a full year basis, they reached $680,000,000 in line with the previous year. As you can see, on the top left chart, the increase in our annual volume sold of sugar was fully offset by the decline in prices. As explained in prior releases, global sugar prices have come down versus the record levels seen during 2023. Nevertheless, when considering the gains related to our commodity derivative financial instruments, within our other operating income line our average selling price for the year stood at $0.226 per pound compared to $0.232 per pound in 2023. Regarding our ethanol sales, prices have been recovering month over month on strong domestic consumption due to the low parity at the pump versus gasoline. Even though this in U. S. Dollar terms continued to be below the previous year due to the depreciation of the Brazilian real.

Consequently, we continue holding on to our ethanol inventories by year end. To profit from higher expected prices. Our stocks [indiscernible] 31% our twenty twenty four ethanol production. Moving on to energy. Throughout the fourth quarter, we used our stored bag gas to produce energy to profit from the hike in spot prices explained by lower water reservoir levels. This in turn enabled us to book sales at BRL418 per megawatt hour during the peak of the demand. On an annual basis, lower prices and a weaker Brazilian real fully offset the increase in energy exported. Regarding carbon credits, we sold annually over 600,000 CEVAOs at an average price of $14 per civellos making a total of $9,000,000 in net sales. On the following slide, we explain our cash cost. Total cash cost reflects on a cash basis how much it costs us to produce one pound of sugar and ethanol in sugar and equipment. On a per unit basis, our cash costs amounted to $0.127 per pound of sugar equivalent 8% lower than in the prior year. This is mainly explained by first a 53% year over year increase in tax recovery due to higher ethanol sales conducted. Second, a lower maintenance CapEx on lower renewal area and third, the depreciation of the Brazilian real which positively impacted our cost structure.

Cash costs by the year over year increase in TRS equivalent produced which in turn enable us to better dilute our costs. All our efforts are devoted to further enhance efficiencies to continue reducing as we continue ramping up operations in our cluster, cash costs will continue its downward trend. Please go to Page 10 where we would like to present the financial performance of the sugar, ethanol and energy business. Adjusted EBITDA amounted to $105,000,000 during the fourth quarter and $364,000,000 on an annual basis. Despite presenting a year over year gains in the mark to market of our commodity hedge position, our annual results were mainly offset by year over year losses in the mark to market of our biological assets on lower consequent prices on harvested cane. Finally, to conclude with the sugar ethanol and energy business, please turn to Slide 11, where we would like to briefly talk about the current outlook. Despite the dry weather experience throughout 2024, we are currently one of the few players in Brazil crushing and producing sugar in ethanol. Being able to crush cane year round even during the traditional inter harvest period is one of our main competitive advantages.

We expect a slower crushing pace during the first semester of the year as we undergo harvesting activities in cane with a limited growth potential. While we allow areas with greater potential, to continue growing to be harvested during the second half with much better productivity. Therefore, we focused a slight increase in our annual crushing figure versus twenty twenty four. Assuming whether evolving normally. From a commercial point of view, the world's supply of sugar continues to depend Brazil's production. [indiscernible] is still recovering from last year's adverse weather conditions. Consequently, we still see some upside to current spot prices reason why we only have hedged 31% of our twenty twenty five sugar production. In the case of ethanol, demand continues strong given the low priority at the pump versus gasoline. Resulting in a recovery in prices given the limited new supply and low stock to use ratio. Our commercial strategy to carry over inventories is paying off as we are clearing out our tanks under a much more profitable price scenario. Now we would like to move on to the farming business. Please go to Slide 13. For the new campaign, we have completed planting activities [indiscernible] 300,000 hectares under good soil moisture conditions representing a 9% increase in planted area compared to the previous campaign.

Despite the combination of high temperatures and lower than average rainfalls experienced by the beginning of twenty twenty five, precipitations received by the January and throughout February enable our crop production to continue with its normal course of development. As of today, most of our crops are undergoing its steel definition phase So the evolution of the weather during the upcoming weeks will be key. We expect yields for most of our crops to be in line with historical levels. While for our rice segment, we are focusing a significant recovery in yields due to good weather conditions and water availability during its yield definition stage. In dairy, we continue enhancing efficiencies in our free stalls. Which are already at full capacity. At the industry level we are working on product development for the domestic and export markets, while expanding our presence across the different price tiers with our consumer product brands. On the following Page 14, we present the financial performance of our farming business. Adjusted EBITDA for the farming business totaled $4,000,000 during the quarter. Whereas on an annual basis, it amounted to $103,000,000 in line with the previous year. Starting with our Crops segment, adjusted EBITDA amounted to negative $3,000,000 in the fourth quarter while on an annual basis, it reached $19,000,000 Excluding the farm sales conducted in both 2024 and 2023, adjusted EBITDA for crops amounted to $4,000,000 in 2024 compared to the negative $3,000,000 in 2023.

Although the segment performed better than the previous year, as we saw a significant year over year recovery in production, results were negatively impacted by lower international prices for our main products as well as by higher costs in U. S. Dollar terms and lower than expected corn yields due to the impact of Cytoplasm. Moving on to RISE, adjusted EBITDA reached $50,000,000 for the full year. Making a new record for this segment. Results were driven by year over year gains reported in the mark to market of our biological assets on higher prices and higher pronto area. Focusing on the quarterly figures, adjusted EBITDA stood at negative $1,000,000 due to the higher costs in U. S. Dollar terms and declining the price of our carryover stocks which negatively impacted results. Lastly, adjusted EBITDA in our dairy segment totaled $8,000,000 during the period. Whereas on an annual basis, it's reached record results with $34,000,000 in adjusted EBITDA generation. Results by higher sales on higher prices as we improved the mix of higher value added products and maximize the production of fluid milk for the domestic market. Let's now turn to Page 16 where we would like to present our capital allocation strategy.

Throughout 2024, we distributed $102,000,000 $32,000,000 more than the minimum stated our distribution policy marking a 9.4% distribution yield. This was executed via cash dividends in the amount of $35,000,000 coupled with a repurchase of $67,000,000 in shares equal to 6.2% of the company's equity. In 2024, we generated $161,000,000 of net cash from operations. Consequently, our minimum distribution amounts to $64,000,000 during 2025. Year to date, we have already repurchased $10,000,000 in shares which represents approximately 1.1% of the company's equity. Please turn to Page 17, for a broader view of our debt position. Net debt amounted to $522,000,000 in line with the previous year. Throughout the year, we have diligently reduced our gross debt and cash in the most efficient manner while looking for opportunities to finance our operations at the lowest cost. Consequently, our liquidity ratio reached 4.5x versus 2.8x in the prior year showing the company's full capacity to repay short term debt with its cash balances while our net leverage ratio stood at 1.2 times. As shown in our financial figures, this was achieved without disattending our distribution policy and growth projects. On the following slide, we describe our CapEx program. In 2024, we invested $104,000,000 in expansion projects.

In Brazil, expansion CapEx was mostly allocated to increase our sugarcane plantation size during the year we were able to secure more area at attractive lease rates as our cluster is based in a region where there is plenty of land availability and low competition for land. In our farming business, our main CapEx program consisted of the development of croppable area for rice production. The third and last installment of Rice Mills acquisition in Argentina and Uruguay the expansion of our drying and storage capacity in our Paso Dragon Rice Mill The Construction Of A New Warehouse For Our Dairy Products At Our Chivilco dairy processing facility among our other projects. Before we conclude, our earnings presentation and open the call to questions, I would like to address recent developments concerning Tata's proposal to acquire majority stake in Adecoagro. Which we announced in recent press releases. On February 14, 2025, our Board received an unsolicited non binding proposal from Tetha Investments to acquire outstanding common shares of $12.41 per share. Aiming to increase their holdings to 51%. That currently holds approximately 20.2% of our shares as per their last public filing on February 25. Our Board convened on February 16 to discuss this proposal.

Engaged legal and financial advisors to evaluate the proposal's terms and whether they align with the best interests of our shareholders and the company. Subsequently, we entered into discussions with Teta and signed an exclusivity letter to facilitate further negotiations. While these discussions are ongoing, there's no assurance that we will reach to a definite Libya agreement or complete a transaction. Having said this, please note that due to legal restrictions we will not be able to comment further or answer questions on the Teta proposal. Thank you very much for your time. We will now open the call to questions.

Thank you. The floor is now open for questions. Please write it down in the Q and A section We do ask that when you pose your question that you pick up your headset to provide optimum sound quality. Please hold while we poll for questions. Our first question comes from Gustavo Trojellano with Itau BBA.

Good morning, everyone.

Thanks for taking my question. Actually, there are two points that I'd like to explore with you guys. The first one in the earnings release and earlier in the call you mentioned potential upside for spot prices on sugar. So it would be nice to hear from you what you think are the main triggers for a positive price action on sugar specifically and what are the milestones section going forward? That is a bit my first question. And the second one in regards to farming and crops, recently we had lots of discussions on the import tariffs between The U. S. And some other players. So just wanted to hear from you basically your updated thoughts on the potential spillover impacts for your business, and how you were seeing these potential changes in global trade affecting Adecco Agra's operations at the end of the day?

Gustavo, thank you for your question. Renato will answer on our sugar prices view. And then I will take the other part of the question. Renato?

Hi, Gustavo. Thank you for your question. We are positive with the S and D scenario of sugar. There were some disappoint crops the North Hemisphere especially in China and Pakistan, So there is an increasing dependence of the Brazilian production in the short term. And it seems that the Brazilian center south crop the next crop that starts in April going to be smaller than last year, This is a consequence of a difficult first semester that probably is going to have. As a consequence of the drought. And the fires in the sugarcane areas of last year, The weather in the Central South region in February starting in February, is very dry. And the temperature is very high now. Which is affecting sugarcane [indiscernible] And also the sugarcane area is a bit lower than last year. Due to a higher replanting area that occurred last year. So considering this scenario, Brazil will have to keep maximizing sugar and sugar you have to be traded at an attractive premium over ethanol. So our strategy since we have the tax [indiscernible] so we have €0.18 per pound get close to the ethanol parrot So our strategy is gradually increase our heads if a price moves higher than $0.19 per pound.

Today, we have 31% of our production hedged at $0.27 per pound.

Thank you, Renato. And regarding your questions, about farming or crops prices, We think that for soy and corn basically, that is only a portion of our sales when we talk about the farming. And a relatively small portion. We do see benefit for the South American soy and corn production because of the tariffs. And or because of this world that is going on. So that's a benefit for the South American production, and you can see that on the basis that have already improved. And we believe that that will continue to happen and will be even more stronger. But furthermore, for us, it's very relevant what's going on on rice and daily also. Rice and dairy production, we compete in some places with some U. S. Rice and because of some specific type of rice that we are producing. And so we also see a benefit there with these we are entering to some new markets in Central America, etcetera. So we are taking some benefits of today's prices in these products also.

That's super clear, guys. Thank you very much.

Thank you, Ottao.

Our next question comes from Mathias Enfield with UBS.

Good morning, Maria, Emilio, Renato, Victoria. Thank you for your time.

Look, my first question, I understand that that you can comment a lot, but I do have to ask given the mid term implications and uncertainty that the Tether offer brings for the company. I want to ask on the on the offer itself. If you could provide a bit more visibility on when you expect to have a bit more clarity or to be able to communicate a bit more visibility to the market, particularly on in terms of timing, when do you expect the next steps to advance? And how these discussions have changed management's near term priority on time allocation and how that has become a focus for for management for the company. At this time? And then my second question on sugarcane crushing. I mean, you mentioned that there's a slight potential for increasing sugarcane volumes for 2025. My question is more on the raising crushing more. If it's this is just weather related, or if or the other hand, if we had great weather if you would have been able to reach the 14,000,000 tonnes already, And also thinking about third party gain, if there's a potential to maintain a higher third party keying level to improve crushing, perhaps a bit more optimistic than the message for slightly raising for 2025.

Those are my two questions. Thank you.

Okay. Thank you, Madelos. I'm going to start for this for your second part of the question. I'm going to ask Renato to answer that question, and I will complement if necessary. Renato?

Hi, Matias. Last year, weather was very dry. Actually, it was 32% lower than the historical our range is was 32% lower than historical average. [indiscernible] their record of 12,800,000 tons We have two advanced in the sugarcane that would be crushed in the first quarter of this year. Consequently, we will have a very slow less intensive quarter in terms of crushing. The first quarter of this year. Now we are selecting sugarcane with lower potential to growth to be harvest now. To leave the sugarcane that has more potential to grow to be crushed later on this year. We think that in the second semester situation, we will improve as we will be crushing a lot of eighteen months sugarcane that was planted last year the situation in the second semester should improve Of course, depending on the weather, from now on. So if you consider all those factors we have sugarcane to crush something close to 13,000,000 tons of sugarcane. The problem that we are going to have a very slow beginning So I think the challenge will be the crushing pace from April to December. And regarding the the third party sugarcane question, half of the third party sugarcane is contracted is a recurrent sugarcane.

So we will be crushing this year as well. The other half was an opportunistic acquisition that we did last year from mills that have industrial problems in our region. So they were not able to crush total sugarcane that they had. But we believe that considering normal weather this year, we don't need to acquire additional sugarcane. We have our own sugarcane to be crushed But if you don't add it deteriorate, you always be looking at the best alternative to maximize our crushing. In the first quarter, that we need more sugarcane, don't have 35 sugarcane to be acquired.

Thank you, Renato. Just to complement, as Emilio was saying at the beginning, we've been having in the last eighteen months 30% less rain than average. So the the climate is playing or the dry weather is playing against the overall availability of cane. Just to summarize what Renato just expressed in all details. Then going to the second part of to your first question, sorry, Emilio will comment on this.

Yes, Matos, thank you for your question. And apologize, but the company does not intend to comment further on market speculation or disclose any developments until it otherwise seems further disclosure is appropriate or required. There's no assurance that we will reach to definitely agreements or complete a transaction. Nevertheless, we continue operating under absolute normal conditions and always focus on delivering results and creating value to our shareholders.

Okay. Thanks for the questions.

Once again, or click on raise hand for audio questions. Please hold while we poll for questions. Our next question comes from Isabela Simone Ato with Bank of America.

Hi, good morning, everyone. Thank you for taking my question. I wanted to follow-up a little bit on the dynamics of prices of sugar netter, but more specifically, on ethanol because you guys mentioned in the release you believe parity will go back to 70%. If you could just elaborate a little bit more on which context and timing for that And if it's mostly due to the fact that Brazil will crush less, maximize sugar. But I mean, how you guys are looking to the supply and demand of ethanol since we haven't seen the parity reaching that level for more than a year now? Thank you.

Thank you, Sabela. Renato will comment on this question. Renato?

Hi, Isabel. The demand for ethanol is still very high. So the monthly demand for ethanol is is 3,000,000,000 liters of ethanol. If you take only hydro it's close to 2,000,000,000 liters of Hydros. [indiscernible] [indiscernible] but it's almost at 70%. Today, it's at 68%. The current inventories are sufficient to one point eight months of consumption compared to two point two months less a year in the same period. So the situation is tighter. As a consequence, price are higher year over year if you're taking terms, it's 32% higher than the same period of last year. And depending on the delay in the new crop, it seems that it's going to be difficult to have a high crushing volumes in March. I think the price can go even higher and surpass the 7% part So our strategy now is to keep selling our Eta now at current price, which is which is good. We expect to sell everything that we have in our tanks by the end of the first quarter. And just remember that we are still producing ethanol because of the continuous harvest production model. We are having a less intensive ore in terms of crushing, but it's still [indiscernible] But I mean, when we look at the beginning, of the season, right now in April and May, do you think this is still possible parity holds on even given the seasonality and and the fact that we have a big concentration of methanol production in the short term.

I think the fact that the next [indiscernible] could be smaller and more sugar oriented I think the consensus that the Central South crop is going to be 600,000,000 tonnes with 52% sugar mix. If you take into account this reduced 2,700,000,000 liters of ethanol if you compare to last year. And then we have the increase in the plant that should be announced soon. Which add more 1,000,000,000 liters of ethanol in demand. Plus the auto cycle So if you take it all in consideration, this is much more important than the increase of the supply that came from the corn ethanol which is approximately 1,500,000,000 liters. I think the scenario for ethanol for next season is very positive. And I think the priority rate should be higher than the ones that we saw last year.

Isabella, but having said this, but having said this, we are selling as Roberto said before, we are selling the current stocks, all our current stocks are being sold now. So in the middle of the season, the price would probably go down comparing to today, but in average, we are expecting what Renato just explained very clear, That's clear. Thank you.

Our next question comes from Larissa Perez with JPMorgan. Thank you for taking my question. I would like to ask Renato if he could give us some color on his expectations of margins on the sugar and ethanol division and ethanol division 2025, especially if you could elaborate a bit more on key cost components beyond sugarcane, that would be great. Thank you. [indiscernible] We think that the production costs should be very similar to the one that we have last year. In [indiscernible] If you consider in dollar terms, think it's going to be a bit lower than it was last year, I would say, 5% lower I think there are some components that are slightly increasing and other that are slightly decreasing. The chains are not very relevant. I'd say that the labor is going to increase according to to inflation. Leasing is going to the consequent part of the leasing is going to increase as a consequence of pellet ethanol price. But in the other hand, there are some crop protection inputs that are decreasing. So if you take the balance of everything, should be similar in AIS and a bit lower in in dollar terms.

That's clear. Thank you.

Well, or click on raise hand for audio questions. Please hold while we poll for questions. Our next question comes from Giulia Rizzo with Morgan Stanley.

Morning. Thank you for taking my question. I would like to make a follow-up on the production cost. This year, a meaningful decline and one of the reasons you mentioned in your initial comments was the higher sales of ethanol. With to have some tax credits. Is it can you elaborate a little bit further? Is that that production cost was made because you sold a lot of ethanol? Or is it made with the combined production because you were holding even though you're selling a lot. But how would be the the production cost with the tax credits like normalized for the production mix. Is that clear with my question? To make the idea is to understand what will be the recurring production cost with the mix of 52% sugar and 48% ethanol.

Thank you, Giulia, for your question. Renato, do you want to answer?

Hi, Giulia. If I understood correctly your question, I'm not sure if I got your point, but the mix of this year should be similar to the mix of last year because we are still maximizing sugar So we expect a mix close to 52% So we don't see change in the tax credits affecting our costs So considering this scenario with similar mix and tax, costs in the eyes is going to be similar and in dollar a bit lower than last year.

Yes, okay. So I think the answered my question. My question is that more related how you manage to calculate your production costs if you get the credits taking in consideration the amount of the volumes that you sell during the year, because sometimes you have some inventories carry over from one year to the other. If you take into consideration how much of ethanol you produce?

No, no, the ethanol that we sell during the year. That's the way that we do the calculation.

Okay. So you sold more ethanol in 2024, a lot more than in 2025, right? Yes. Because we're holding inventories that kind of a helped And for the next year, you expect to sell the same amount of ethanol I think it's going to be about the same amount, but we have to wait to see the dynamics of the market.

Okay. Thank you. And also on the production cost, I have a follow-up because one of the things that I noticed was expansion in the harvest area. And also in the expansion area. For a long time, I wasn't seeing you growing like this. Can you go over a little bit of how are the costs of those expansions in terms of leases, agriculture, and in connection to that, what is the outlook for CapEx? For this year?

Yes. We were able to lease some strategic farms in our region. We improve our average distance the distance from the sugarcane to the mill the average of the soil quality and also the topography of the areas, so very strategic farms Those farms were farms that they have a higher quality, so we need to put less inputs and now those farms used to be grains. So it's cheaper to plant sugarcane there So we expect to have an improvement our planting cost in the next years that is going to be reflected planting of of these areas. And so that's why we increased the expansion planting. Regarding the replanting, despite the dry weather that negatively impact the sugarcane yields, the status of our sugarcane was very good in terms of nutrition, leg and weed control. So there are some areas that we fought that would be good to put some more fertilizer and have another harvest because weather was very bad. But the treatment of the sugarcane was good. So the sugarcane conditions are okay. Of course, it needs water. So that's why we decide to treat those areas crush it again.

But what was the plantation cost or the expansion cost of this new area and the outlook for CapEx given the increase in the area? And how can we translate that in milling?

The planting costs of of those areas in this region is about BRL13000 per hectare. Which I would say is like 15% lower than areas that we were leasing some years ago.

Thank you.

Thank you. This does concludes the question and answer section. At this time, I would like to turn the floor back to Mr. Bosch for any closing remarks.

I just want to thank you all for your continued support and we hope to see you in our upcoming events.

Thank you. This concludes today's presentation. You