Group 1 - The recommendation for BrasilAgro (NYSE: LND) shares has been upgraded from Hold to Buy, indicating a positive outlook for the company [1] - The ongoing Trade War between the United States and China is expected to create favorable conditions for BrasilAgro, potentially benefiting its operations and market position [1]

Group 1 - The core investment strategy of Quipus Capital focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - Quipus Capital emphasizes understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations from Quipus Capital will be holds, indicating a cautious approach to investment opportunities [1] Group 2 - The articles produced by Quipus Capital aim to provide important information for future investors and introduce a healthy skepticism in a generally bullish market [1] - The author of the articles does not hold any stock or derivative positions in the companies mentioned and has no plans to initiate such positions in the near future [2] - The articles express the author's personal opinions and are not intended as professional investment advice [3]

Group 1 - BrasilAgro (NYSE: LND) reported improved margins in core crops, particularly soybeans from inventory carry and sugarcane due to price improvements [1] - The company completed the sale of one of its assets, indicating strategic operational decisions [1] Group 2 - The focus of Quipus Capital is on long-only investments, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The approach emphasizes understanding the long-term earnings potential of companies and the competitive dynamics within their industries [1]

Financial Data and Key Metrics Changes - The company reported a net income of BRL 97.5 million for the first quarter [4] - Adjusted EBITDA reached BRL 170 million, influenced by operational revenues from the sale of the Alto Taquari Farm [36] - Total operational net revenue was BRL 325 million, with significant contributions from soy and sugarcane [38][44] Business Line Data and Key Metrics Changes - The company harvested 1.6 million tonnes of crops, with soy plantations starting later than usual due to weather conditions [6][9] - Sugarcane productivity was slightly above expectations, with an average TCH of 85 tons [18][20] - Cotton prices experienced a significant drop, but the company managed to maintain a good margin on sales [42][53] Market Data and Key Metrics Changes - Soy prices remained stable, while corn prices increased due to higher internal demand for ethanol production [10][41] - The company sold 40% of its soy at a price of R$11.46, which is considered favorable [22] - The exchange rate volatility has been a challenge, but the company has managed to leverage it for better pricing [23] Company Strategy and Development Direction - The company aims to diversify its crop production and is focusing on increasing the value of its agricultural areas [12] - There is a strategic shift towards more profitable crops, with an emphasis on managing costs effectively [39][91] - The company is also exploring opportunities in the land market, despite a cooling in demand due to higher interest rates [96][98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by climate conditions but expressed confidence in the company's resilience [3][7] - The outlook for sugarcane production remains cautious, with expectations of stable prices influenced by market dynamics [78][80] - The company is optimistic about the potential for improved corn production due to favorable market conditions [70][72] Other Important Information - The company has a total receivable of R$900 million, with over 9 million bags of soy to be received [29] - Dividends of BRL 1.96 per share are scheduled to be paid on November 14 [58] - The company emphasizes the importance of employee satisfaction and sustainability in its operations [60][61] Q&A Session Summary Question: What are the drivers behind the increase in area and expectations for corn profitability? - Management noted that the delay in planting due to weather conditions does not indicate low productivity but rather a shift in operational windows, which could lead to better margins for corn [64][66][70] Question: What is the outlook for sugarcane productivity given recent drought conditions? - Management indicated that while drought has affected productivity, recent rains could improve yields, but overall expectations remain cautious for the next harvest [75][78] Question: How does the global political situation affect soy prices and market dynamics? - Management highlighted that geopolitical tensions could benefit Brazilian soy exports, but the overall impact on prices may be moderated due to higher supply levels [88][90] Question: What is the company's perspective on the land market amidst changing commodity prices? - Management acknowledged a cooling in land sales due to higher interest rates but emphasized that productive frustrations have a more significant impact on land prices than commodity prices [96][98]

RESULTS PRESENTATION 1Q25 André Guillaumon CEO Gustavo Lopez CFO & IRO brasilagro Ana Paula Zerbinati IR and Capital Market Head 1Q25 EARNINGS CALLS PORTUGUÊS | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|------------------------------------------------------------------------------------------------------- ...

Financial Performance - The company's net revenue for the year ended June 30, 2024, was R$771.1 million, a decrease from R$903.4 million for the year ended June 30, 2023[198]. - Grains accounted for 53.3% of the company's operating net revenue for the year ended June 30, 2024, down from 64.1% in the previous year[203]. - The company planted 95,193 hectares of grains during the 2023/2024 crop year across its farms in Brazil, Bolivia, and Paraguay[203]. Currency and Economic Factors - On June 30, 2024, the exchange rate for reais into U.S. dollars was R$5.5589 to US$1.00, compared to R$4.8192 on June 30, 2023, indicating a depreciation of the real[8]. - Fluctuations in the value of the Brazilian real against the U.S. dollar could significantly impact the company's export revenue and operating costs[77]. - The selling rate of the real fluctuates widely, impacting the U.S. dollar amounts received by holders of American Depositary Shares (ADSs) upon conversion of dividends[9]. - Brazilian GDP growth rates were 4.6% in 2021, 2.9% in 2022, and 2.5% in 2023, with a cumulative growth of 2.5% in the first half of 2024[139]. - Inflation rates in Brazil were 17.8% in 2021, 5.5% in 2022, and 4.62% in 2023, with cumulative inflation of 2.85% in the first half of 2024[145]. - The SELIC interest rate was 10.50% per year as of June 30, 2024[145]. - Economic conditions in the United States and other emerging markets may negatively impact the Brazilian economy and the market for Brazilian securities[150]. - An increase in U.S. interest rates may reduce global liquidity and adversely affect the price of the company's common shares[151]. Business Strategy and Operations - The company’s business strategy relies on acquiring agricultural properties at attractive prices, developing them profitably, and selling them for profit in the medium to long term[24]. - The company’s strategy relies on acquiring underdeveloped agricultural properties and applying modern agricultural technologies to enhance their value[61]. - The company engages in short-term contractual arrangements with third-party contractors for various production services, enhancing agility in market adaptation[199]. - The company focuses on high value-added crops such as soybean, corn, and sugarcane, alongside cattle raising, to generate cash flow and capital gains[197]. Customer Concentration and Revenue Risks - In the year ended June 30, 2024, three customers accounted for 43.5% of the company's revenue, with two responsible for 41.1% in the grain/cotton segment and one for 56.8% in the sugarcane segment[50]. - The concentration of the customer base increases the risk of adverse effects if any major customer defaults or is lost[52]. - In the year ended June 30, 2023, three customers accounted for 45.8% of the company's revenue, with one responsible for 63.1% in the sugarcane segment and two for 42.0% in the grains/cotton segment[51]. Regulatory and Compliance Risks - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, including auditor attestation[16]. - The company is subject to Brazilian Law No. 5,709/71, which imposes restrictions on land acquisition by foreign entities, potentially limiting business development[28]. - The company must comply with Brazil's LGPD, which establishes rules for the collection and processing of personal data, with potential penalties for non-compliance[131][132]. - The company is subject to extensive environmental regulations, and non-compliance could result in substantial fines and operational interruptions[58]. Market and Competitive Environment - The company faces increased competition for suitable agricultural properties, leading to higher acquisition costs and potential inability to acquire properties on attractive terms[27]. - The company faces significant domestic and international competition, with many competitors having larger financial resources and subsidies not available in Brazil[117]. - The company is exposed to risks from geopolitical tensions, which may affect global growth and investor interest in Brazilian assets, potentially impacting share prices and capital market access[98]. Operational Challenges - The company faces risks related to global economic disruptions, including conflicts that may affect commodity markets and raw material costs[19]. - The company’s ability to execute its business strategy may be adversely affected by factors such as failure to acquire properties at attractive prices and operational challenges[24]. - The company is highly dependent on third-party contractors for agricultural property development and machinery, which poses risks to quality and efficiency[54]. - The company faces joint liability for environmental damages caused by third-party contractors, which could lead to significant costs if held liable[55]. - The company may encounter challenges in implementing investment projects, including delays and higher-than-expected costs[62]. Investment and Capital Structure - The company increased its capital stock by R$3,064.36 through the issuance of 306,436 new common shares, raising the total capital stock to R$1,587,984,600.71[180]. - The company has made investments in farmland in Bolivia and Paraguay and is considering further international expansion, subject to various economic and political risks[121][122]. - The company has a policy of applying for financing with government development banks to support its investment strategy[181]. Property and Asset Management - BrasilAgro has acquired 18 agricultural properties across seven Brazilian states, totaling 320,990 hectares, with 214,920 hectares being arable[179]. - As of now, BrasilAgro holds 271,016 hectares, including 69,984 hectares leased, after selling a total of 119,996 hectares[179]. - The company’s agricultural properties are illiquid and volatile, affecting its ability to sell properties profitably and timely[39]. - BrasilAgro's agricultural properties are subject to annual appraisals to estimate fair market value based on development level and agricultural potential[192]. - The company leases 11,900 hectares of its agricultural properties to third parties as of June 30, 2024[200]. - The company’s leases generally last between three to ten years, with lessees having a right of first refusal to purchase the leased farms[201]. Supply Chain and Input Costs - Fertilizers and agrochemicals account for approximately 30% of total production costs for the 2023/2024 harvest year, exposing the company to risks from price increases and supply shortages[96]. - The ongoing conflict between Russia and Ukraine has disrupted supply chains, leading to significant uncertainty regarding the availability and pricing of fertilizers, which may adversely affect operations[103]. - The company relies on suppliers for raw materials, and any delays in delivery could adversely affect planting and harvesting operations[101]. - The lack of transportation, storage, and processing infrastructure in Brazil poses significant challenges for the agricultural sector, affecting overall business operations[113]. Forward-Looking Statements and Risks - The company undertakes no obligation to publicly update any forward-looking statements, which involve risks and uncertainties[20]. - The company may face challenges in raising additional capital due to uncertain future profitability and political and economic conditions in Brazil, which could restrict operational flexibility[83]. - Changes in government policies regarding biofuels may adversely affect commodity prices and the company's financial condition[56]. - The prohibition of glyphosate, a widely used herbicide, could significantly impact production costs and margins if it were to be enforced[112]. - The Brazilian government's measures to control inflation, including high interest rates, may restrict credit availability and slow economic growth[146]. - As of June 30, 2024, certain loans are subject to interest rate fluctuations, which could adversely affect the company's ability to meet financial obligations[147].

Core Viewpoint - BrasilAgro is facing challenges in the agribusiness sector due to volatility, adverse weather conditions, and falling commodity prices, which have impacted its earnings and dividend sustainability [2][4][10] Company Overview - BrasilAgro operates in the acquisition, development, exploration, and commercialization of rural properties in Brazil and other Latin American countries [1] - The company has historically achieved attractive rates of return on rural property transactions, particularly benefiting from high agricultural commodity prices in 2022 [1] Financial Performance - In Q4 of the 23/24 harvest year, BrasilAgro reported net revenue of R$519 million, a decrease of 23% year-over-year, and EBITDA of R$263 million, down 28% compared to Q4 2023 [6] - The operating margin for the quarter was negative 3%, influenced by lower production volumes and falling commodity prices [4][6] - Net income from operations fell by approximately 16% year-over-year to R$226.87 million [7] Dividend Distribution - Despite the challenges, BrasilAgro maintained a decent dividend distribution, proposing to distribute around R$155 million, supported by R$770 million in receivables from farm sales [7][8] - The company has a history of paying generous yields, with a five-year average of 9.5% and a current yield of around 6% [7] Strategic Outlook - The company may shift its real estate strategy to acquire land, which could introduce risks and affect dividend distributions [2][9] - BrasilAgro's net asset value (NAV) is R$3.5 billion, indicating an intrinsic value of approximately R$34.5 per share, significantly higher than the current market price of $4.78, suggesting undervaluation [10] Market Conditions - The agribusiness sector is under pressure due to low commodity prices, which has hindered BrasilAgro's ability to acquire land during strategic periods [10] - The company is optimistic about the 24/25 harvest year, anticipating more favorable weather and reduced costs for crops [6]

Financial Data and Key Metrics Changes - The company reported a net revenue of R$1.1 billion and a net profit of R$227 million for the year, with an adjusted EBITDA of R$279 million [3][19] - Proposed dividends for shareholders amount to R$155 million, reflecting the company's ability to generate returns [3][26] Business Line Data and Key Metrics Changes - The company produced over 2.3 million tons of agricultural products, with significant progress in irrigation strategies [4][10] - The sale of Chaparral Farm, which was a significant asset, demonstrated the company's resilience in the real estate market [4][6] Market Data and Key Metrics Changes - Commodity prices showed a decline, with soybean prices dropping from R$190 to R$130, while corn prices also decreased [9][20] - The price of ethanol increased, positively impacting the company's results for the upcoming year [9] Company Strategy and Development Direction - The company emphasizes a combined strategy of real estate and operational results, which has proven successful [2][14] - There is a focus on diversifying crop production and improving operational efficiency through irrigation and technology [5][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the agro business due to climate conditions but expressed optimism for a more stable climate in the upcoming year [10][31] - The company is prepared for a challenging market environment ahead, with strategies in place to navigate potential difficulties [45] Other Important Information - The company has a strong balance sheet with low leverage and significant receivables from farm sales, indicating financial stability [25][26] - The company plans to continue paying dividends despite the challenging year, reflecting confidence in its financial health [26][27] Q&A Session Summary Question: What productivity growth is expected for soybean and corn? - Management indicated that productivity gains are anticipated due to normalization in climate and land development, with expectations of reaching historical levels [29][31] Question: How much of the cost drop is attributed to seeds, fertilizers, and herbicides? - A drop of 15% to 16% in agrochemical prices and 8% to 10% in seed prices was noted, with some reductions in fertilizer costs as well [30] Question: What is the company's hedge position for soybean and corn? - The company is monitoring market conditions closely and is optimistic about capturing better prices through hedging strategies [37][39] Question: What are the perspectives for purchasing more farms? - Management expressed interest in acquiring more farms but indicated that prices need to drop further before making significant purchases [42][43]

RESULTS PRESENTATION André Guillaumon 4Q24 | 2024 CEO Gustavo Lopez CFO & IRO Ana Paula Zerbinati IR and Capital Market Head brasilagro 4Q24 | 2024 RESULTS VIDEOCONFERENCE PORTUGUÊS | --- | --- | --- | |-----------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company reported R$552 million in net revenue, a negative net income of R$6 million, and an adjusted EBITDA of R$16 million for the quarter [4][38] - For the nine months of 2024, the company accumulated R$6 million in losses compared to R$25 million to R$26 million in the same period last year [38] Business Line Data and Key Metrics Changes - The company harvested 66,000 hectares of soybeans, totaling 202.2 thousand tons across Brazil, Paraguay, and Bolivia [4] - There was a significant reduction in soybean yields due to decreased acreage and adverse weather conditions, particularly in Paraguay [22][18] - The company sold 8,800 hectares of the Chaparral farm for R$364 million, indicating a valuation of R$1.9 billion for the entire farm [8] Market Data and Key Metrics Changes - The company noted a significant reduction in commodity prices over the past two years, with corn prices decreasing by 44% [38][23] - The average price for soybeans was reported at R$1,305 per bushel, with an exchange rate of BRL/USD at 5.31 [58] Company Strategy and Development Direction - The company is focusing on improving its commodity mix by leasing lands for sugarcane production and selling off less productive assets [10][5] - The management emphasized a balanced approach to land sales and acquisitions, aiming for operational efficiency and capital cost effectiveness [50][54] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to adverse weather affecting planting and yields, particularly in central Brazil [20][19] - The company remains optimistic about future profitability, citing a resilient business model and strategic adjustments to market conditions [19][30] Other Important Information - The company has a total debt of R$770 million, with cash on hand reported at R$247 million [46] - The company is actively involved in community support efforts, including a campaign to collect supplies for affected populations in Rio Grande do Sul [25][101] Q&A Session Summary Question: What are the current triggers for farm sales and capital allocation plans? - Management highlighted the resilience of the company and its strategy to generate results through both agricultural operations and land sales, indicating a balanced approach to capital allocation [49][50] Question: Can we expect lower costs for the last quarter considering input purchases? - Management confirmed that 100% of inputs for the current season have been purchased, and a decrease in costs is expected for the next season due to lower fertilizer prices [55][56] Question: Is this a good time for new acquisitions? - Management stated that while they are looking for good deals, there are currently no acquisitions in the pipeline, but they remain open to opportunities as market conditions change [92][90]