BrasilAgro - Companhia Brasileira de Propriedades Agrícolas Q1 FY2023 earnings call

• Financial highlights: Net revenue BRL 299.8M, net profit BRL 42M, adjusted EBITDA BRL 107M in the quarter. • Operational highlights: Produced 1.7 million tons of sugarcane; began planting soybean with 38% planted in Mato Grosso and Goias; stable climate. • Real estate: Purchased Fazenda Panamby, a 10,800-hectare farm in Mato Grosso with potential for second crop; made a sale in Paraguay, similar to Jatoba farm sale with high return. • Fertilizer strategy: Purchased fertilizer in advance, with prices of fertilizers like phosphate dropping; 91% of inputs already bought, 84% delivered. • Climate impact: La Nina weakening, favorable for Brazilian agriculture, with longer rainy season aiding sugarcane harvest. • Livestock: Transforming pasture land to agricultural land, monitoring profitability; close GMD average gain 600 grams, first 3 months 350 grams. • Crop sales and hedging: Soybean 57% sold, corn 20% sold, cotton 45.94% hedged, ethanol 33% hedged.

Financial highlights: The company closed the quarter with net revenue of BRL 299.8 million, net profit BRL 42 million, and adjusted EBITDA BRL 107 million. Operational highlights: 1.7 million tons of sugarcane produced; 38% of soybean planted in Mato Grosso and Goias; stable climate. Real estate: Purchased Fazenda Panamby (10,800 hectares, 5,400 hectares agricultural land, cost BRL 285.6 million) and made a sale in Paraguay. Product segments: Sugarcane harvest and sales similar to previous quarter; soybean 38% planted; cotton affected by global economic scenario; ethanol less competitive due to gasoline tax changes, this harvest producing more sugar than ethanol; fertilizers purchased in advance, prices dropped.

• The company aims to sell part of its portfolio annually for stable results, balancing operational results with real estate sales. •看好棉花作物，认为其具有高肥力，将是重要作物。•关注灌溉项目等增长机会，预计未来几年通过资产增值、租赁土地扩张、作物多样化实现增长，例如在巴伊亚的灌溉项目、巴拉圭的租赁业务等。

• Global economic recession, interest rate changes affecting cotton and other crops. • Fertilizer price volatility and supply issues. • Climate challenges in Argentina impacting grain production. • Internal governance change due to SEC requiring creation of an audit committee, bringing changes in internal controls and oversight.

Q: About capital allocation and asset sales, can we expect dividend yield in line with history or closer to last year? And why sell a small amount of farm?

A: Gustavo and Andre responded that the company is anti-cyclic, sells when others buy and buys when others sell, will continue selling with fractions like the Paraguay sale to bring new entrepreneurs, and the small sale is part of a strategy to reach good per-hectare returns.

Q: What are the main opportunities and priorities for growth in the next few years?

A: Andre mentioned opportunities include value generation from portfolio appreciation, expansion of leased land, diversification of crops, and verticalization in irrigation projects in Bahia and Maranhao.

Q: About irrigation, does it make sense to buy or rent equipment?

A: Andre said they lease irrigation equipment initially, analyzing cost-effectiveness, and see leasing as advantageous with minimum payment per millimeter irrigated, and also consider internal capital for long-term projects.

Q: Comment on the difference between book value and internal evaluations of assets and price discovery of sales?

A: Andre and Gustavo explained that the company evaluates assets by maturity and multiples, recognizes gains when selling, books farms at cost, and sees the best way to price is through installment sales and realistic valuation based on commodity price expectations.