BrasilAgro - Companhia Brasileira de Propriedades Agrícolas Q2 FY2023 earnings call

Financial Highlights

• Net revenue: R$484 million
• Net income: R$29 million
• Adjusted EBITDA: R$124 million
• Sold approximately 900 hectares in Rio do Meio for R$62.4 million

Operational Highlights

• Finished planting grains and cotton by December 30; began soybean harvest in Mato Grosso with good productivity
• Addressed seasonality and sustainability: Conducted first greenhouse gas inventory, social projects helped over 18,000 people focusing on education, and governance with approval of transactions and audit committee setup

Investments

• Invested over R$85 million in technology projects, bio inputs, and infrastructure, expanding seed production and irrigation

Net revenue was R$484 million, net income was R$29 million, and adjusted EBITDA was R$124 million. For sugarcane, there was a drop in production due to factors like fire and lower productivity. Soybean had a super harvest in Brazil but was impacted by inventory and price factors. Corn saw higher prices but also increased costs. Cotton experienced strengthening premiums. Sugarcane contributed to a drop in volume and revenue, while soybean and corn had mixed performances based on prices and costs.

Forward-Looking Statements

• Expect margins to return to historical levels as fertilizer prices normalize
• Anticipate continued sales of farmland due to good liquidity in the market
• Monitoring hedging opportunities, especially in soybean and cotton, with favorable estimates for upcoming harvests
• Expects exchange rate to be around R$4.9 to R$5 per dollar

Risks

• Seasonality impacts on production and pricing
• Volatility in commodity prices (cotton, sugar)
• Logistical challenges affecting sales and freight costs
• Dependence on weather conditions (La Niña/El Niño) impacting productivity

Q: Concerning sugarcane operation results, cost per hectare projection, and land sale opportunities A: Cost per hectare projection still under review; expecting productivity recovery with irrigation investments. High liquidity in Brazilian agriculture presents opportunities for land sales Q: Perspectives on historical profit recovery, margins of main products A: Expect margins to return to historical levels; soybean and corn have different margin outlooks, with sugarcane linked to ethanol and sugar market dynamics Q: Vision on sugar and ethanol prices A: Ethanol has growing production and exports, but sugar prices are affected by climate fluctuations in other producing regions Q: Dividends, share buyback, and liquidity A: Focus on returning value to shareholders via dividends; no immediate plans for share buyback but open to review if conditions change