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BrasilAgro(LND) - 2024 Q3 - Earnings Call Transcript
LNDBrasilAgro(LND)2024-05-11 18:38

Financial Data and Key Metrics Changes - The company reported R552millioninnetrevenue,anegativenetincomeofR552 million in net revenue, a negative net income of R6 million, and an adjusted EBITDA of R16millionforthequarter[4][38]−Fortheninemonthsof2024,thecompanyaccumulatedR16 million for the quarter [4][38] - For the nine months of 2024, the company accumulated R6 million in losses compared to R25milliontoR25 million to R26 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 R364million,indicatingavaluationofR364 million, indicating a valuation of R1.9 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 R1,305perbushel,withanexchangerateofBRL/USDat5.31[58]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusingonimprovingitscommoditymixbyleasinglandsforsugarcaneproductionandsellingofflessproductiveassets[10][5]−Themanagementemphasizedabalancedapproachtolandsalesandacquisitions,aimingforoperationalefficiencyandcapitalcosteffectiveness[50][54]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgedchallengesduetoadverseweatheraffectingplantingandyields,particularlyincentralBrazil[20][19]−Thecompanyremainsoptimisticaboutfutureprofitability,citingaresilientbusinessmodelandstrategicadjustmentstomarketconditions[19][30]OtherImportantInformation−ThecompanyhasatotaldebtofR1,305 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 R770 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]