Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro's First Quarter 2020 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Juan Ignacio Galleano, Investor Relations Manager. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the Company's presentation. After the Company's remarks are completed, there will be a question-and-answer session. At that time further instructions will be given. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Adecoagro's management and on information currently available to the Company. They involve risks and uncertainties and assumptions because they relate to future events, therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future of Adecoagro, and could cause results to differ materially from those expressed in such forward-looking statements. At this time, I'd like to turn the conference call over to Mariano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning and thank you for joining Adecoagro's results conference. Before entering into the analysis of the results of the first quarter of 2020, I would like to firstly use this opportunity to inform you about how our company has been developing under the current conditions. Coronavirus COVID-19 disease has spread across the world at a tremendous speed affecting the health of general population, and in particular those who are vulnerable, such circumstances that led to the countries to impose sooner or later mandatory lockdowns and the closing of borders. In these difficult times, our number one concern is the safety of our people. That is why very early on, we constituted a special committee, which outlined an action plan to preserve the health of our employees and guarantee hygienic and safe working conditions in all of our facilities. Safety measures and protocols have been specially designed for each activity and have been quickly activated. An intense educational and communication program was put together which contributed to the awareness of the current situation and development of new habits. We are proud of the commitment of our people and their trust with Adecoagro's approach to pandemic and a testimony of it is their willingness to come to work every. We believe this joint effort and team spirit will help us overcome this tough situation. We, food and energy producers are part of the selected group of companies that have not stopped the breaking in those jurisdictions where total lockdown is imposed. The activities we carry out are considered essential and because of this, all of our operations are running without any disruption. In our farming business, the price of commodities has been impacted with soy and corn experiencing a fall, while rice and peanuts, which are the crops in which we…

Thank you, Mariano, good morning everyone. As Mariano mentioned, the safety of our people is our main concern. I would like to take a brief moment to walk you through some of the measures we adopted as well as activating safety measures and protocols tailored for each activity, we have adopted general measures across all our facilities, which include body temperature controls, mandatory social distancing in the workplace, reduction of maximum capacity at lunch and dining rooms, transportation cars, increased sanitary barriers and periodic clothes changing and cleaning, set aside risk groups, home office for corporate office employees, monitory quarantine for travelers and those who have close contact with travelers and/or symptomatic persons and develop an intense capacitation and communication program including local authorities. Now let's move to Page 5 with a brief analysis on the rains in Mato Grosso do Sul. As seen on the top charts, rains in our cluster in Mato Grosso do Sul during the three month period of 2020, we are 12.7% below the same period of last year and 28.4% below the 10 year average. The distribution of rainfalls however was not even throughout the quarter. January was particularly humid with no registered rains above the 10 year average level. The beginning of the milling activities in Mato Grosso was delayed until mid-February compared to milling for the first quarter of 2019 and third day of January due to availability caused by the adverse weather conditions hit our platform in 2019. The fact that production stops were continues and program also allowed us to capitalize more costs during the winter harvest period. As can be seen in the bottom left chart, the delay milling activities resulted in a 48.9% year-over-year reduction in total days and at 21.5% reduction in effective milling days. However, in…

Thank you. The floor is now open for questions. [Operator Instructions] And our first question comes from Isabella Simonato from Bank of America. Please go ahead with your question.

Thank you. Good morning, Mariano. Good morning, Charlie. Thank you for taking my questions. I'm sorry. I joined the call a little bit late. So I'm not sure if you comment about what I'm going to ask. But regarding the $40 million in cost that you mentioned you, you are planning to save, right. Can you explain a little bit, where are the sources of savings? And do you think these will be permanent or at some point those will be reinvested again, I'm in the business and that's pretty much it?

-- : I'm going to take your question and answer it. In most of this $40 million, I think that we are in some way delaying a part of the CapEx, this is planting. So in order to reach the 30 million tons at some point in the 5 year plan, we will need to plant these additional factors then there are some industrial things in order to do more ethanol in our plants, that's what we are delaying today So, some of these things are delayed. Then there are some others that are continue to improve and think that we are improvement that we are finding, because in this $40 million we are not taking into account nothing of the devaluation. Then you have another $40 million or $50 million that come through the cost savings that comes mainly from the devaluation. That's basically a answer on your question.

[Operator Instructions] And our next question comes from Lucas Ferreira from JP Morgan. Please go ahead with your question.

My first question is in Argentina, if you have had any disruptions in terms of logistics for all your businesses doing the quarantine, if you guys saw any impact of the sort. And then in Brazil, with this current effects of almost a six, if you can update us, what could be the -- your best expectation of your cost of production in cents per pound for -- considering only, right, including OpEx. And also in Brazil, if you can comment quickly on the updated mix you're expecting for the quarter. Obviously, you're going to be producing much more sugar, and the expected working capital commitment for these movements towards more sugar.

Okay. Thank you, Lucas for your questions. So number one, in Argentina. In Argentina, today and as we speak, we are harvesting in optimum conditions. All our plants are performing at top productivity, maximum productivity. So, we are having no issue at all in terms of operations as of today. And of course we solved many issues, there were many local mayors of different towns that were afraid that, that have issues. But as I mentioned at the beginning and then Charlie enforce again, we took a measures to take care of the safety of the people, and so they realized that we were more, even more careful than what was required. So, that's why people feel safe, and because of this, we were able to operate in a 100% all the different levels of the operation. So I would say that, that Argentina today is operating at, its the best possible. And on top of that the harvest is being good, so we are collecting well. So as of today, there hasn't been an issue in any of our people, nor the surrounding towns around our operation. So that's the answer for the third part of your question. Then in Brazil, that you ask different things. First of all, in terms of FX, what the impact of the FX, the cost of production as we mentioned, there is an important saving there that is around the $50 million and saving because of the improvement of their costs are on the operational side, and that is a $100 in reals. On the CapEx part, that is most in the reals, on the renewal also in reals. So, I would say that 90% or 95% of our costs are in reals, so that's why they impact these in terms of dollar…

[Operator Instructions] And our next question comes from Fernanda Cunha from Citibank. Please go ahead with your question.

Hi, good morning, everyone. Thank you for taking my questions. I just had a follow-up with what was mentioned in the presentation, if I understood correctly, you're going to postpone part of it CapEx extension in the sugar, ethanol business to the end of those crop or for next crop year. So I'm just wondering if you could give us -- if we're maintaining the initial guidance of the question rates for this year, which I recall correctly was around 11.7. If there's any change on that, and how are you looking at roughly, what's the age of your sugarcane crop? And if you see any downside risk in case you delayed some of the CapEx in treatment and implanting for this year? Thank you.

Sorry. I had some difficulties on hearing the question. Can you repeat for me?

Sir, can you hear me well, now? Can you hear me well, now?

Yes, I can hear you well now.

Okay, good. So I just have a follow-up on the presentation. You mentioned that there could be some delays or postponement in terms of the CapEx, the extension CapEx in the sugar, ethanol business, right. I'm just wondering if we should see any changes in the currency rates for this year. And also if you could tell us, if you see any downside risks in some of your sugarcane age, if you could let us know how much it is right now, and if you see any downside risk on that? Thank you.

Okay. Yes, excellent. Thank you. Now, I will try to understand. These are the weekly decisions that we are taking. So, on this CapEx savings, it is something that we are expecting to lose, some of them we have already done or we are already doing. And then, we are expecting to continue doing in terms of sugarcane plantation. So, depending on how the market evolves and how the price of Ethanol evolves, that would change because planting cane means something that we are doing everyday and every week. As of today, we are projecting that with these prices, we will be delaying some of our planting expansion and some of the renewals. We are looking at every field and we know where we can have one more year or not depending on the field and what's the return on that specific placed. So, the decisions that we take every week is what ends up being the final number that occurs at the end of the year or what we are expecting today to happen. So having said this, I would say to be more precise that we are projecting this year 11 million tons of total crashing, compared to the 11.7 that we were projecting before as you were asking. And for next year as we are delaying this year, we are projecting more or less in line with what we were projecting before. So, that's why we are moving something from this year to the following year. Then for the following year that is 2022, we are delaying -- we are not planting during the same year, that's basically what we are projecting with this. So, instead of reaching the $30 million in 2022, we may reach the million tons -- sorry, in 2023 that's conceptually what we are doing today is delaying a little bit the maximum capacity of a sugarcane milling for the two years from now.

Treat. Thanks. Good color. Can you let us know what the age of your sugarcane?

Yes. I don't have that number by -- I'm not sure Renato is in the in the line, but…

Yes, I am in the line, Mariano.

Okay. Can you answer that, please?

Fernanda, we have crushed all the sugarcane in the beginning of the year. Of course, those sugarcanes are the ones that have less potential to further development. So that, if you compare to last year, the use of those 15 16 -- sugarcane is approximately same. Also, this year the age of the total sugarcane is younger than less than year considering the planting that we had done last year. So, it's something that we do just in the first quarter to give more time to the cane that have more potential to growth, and we're going to be crushing better sugarcane in the coming quarters.

Our next question comes from Lucas Ferreira from JP Morgan. Please go ahead with your question.

Hey, guys. If I may just a follow up moving on just to clarify something. This -- the plan of crushing $11 million tons likely less than the previous expectation, is this because you guys are leaving some sugarcane to be crush for next year in field due to the maybe lower ethanol demands and lower profitability in ethanol or not just because you see less availability of cane due to lower planting, just to clarify?

Lucas, considering the last year below average rainfall in Mato Grosso do Sul, our situation of cane at the beginning of the year, it was not the ideal. So for this reason, we had this load down the crushing at the beginning of the year to give more time to the sugarcane to develop to be crushed in the coming quarters. And then by doing that, we are going to have more sugarcane for the remaining part of the year, and also next year. So we're going to have a better continuous harvest next year compared to this year to the current one. And the only thing that we have changed and then the balance has changed as well is the fact that we are planting less sugarcane this year. So we're planting 8,000 hectors less sugarcane as a part of the cash saving program. So from these 8,000 hectors, 5,000 hectors is related to maintaining, planting and 3,000 hectors related to expansion planting.

And ladies and gentlemen, at this point we've reached the end of today's question-and-answer session. At this time, I'd like to turn the floor back over to Mr. Bosch for any closing remarks.

Now, once again, I just want to thank our teams for being fully committed. We are confident that we are in a good position to go through these difficult times. And I would also like to take the opportunity to thank our shareholders for being committed with our story and always providing support. So hope to see you all shortly. Take care.

Ladies and gentlemen, thank you. That concludes today's presentation. You may now disconnect your lines. Have a nice day.