Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome you, everyone, to Adecoagro's Third 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. [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, uncertainties and assumptions because they relate to future events, and 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 results of Adecoagro and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Mr. Mariano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning, and thank you for joining Adecoagro's 2020 Third Quarter Results Conference. The company has been performing really well despite the pandemic. All our operations are working under very strict protocols to guarantee the safety of our people and contractors. We are seeing signs of partial economic recovery, but we cannot relax since the pandemic is far from over. Moving on to the results of our businesses. In our Sugar, Ethanol & Energy business, the strategy we adopted during the second quarter of 2020 to slow down our crushing pace in light of the pandemic allowed us to transfer sugar cane into the second semester of the year and benefit from better price outlook. As a consequence of the greater cane availability, during the third quarter, we were able to maximize our crushing pace, reaching 4.4 million tons, a record high for the quarter, and at the same time, capture higher prices of sugar and ethanol. Also in this quarter, we diverted 44% of the TRS content to sugar production compared with 13% during the same period of last year. This 30% increase shows the high flexibility of our assets, a very important competitive advantage, especially under sudden changes in the market outlook of our products. Our flexibility was also seen in our ability to increase our mix of anhydrous ethanol to profit from its high prices and recovered demand. In fact, during the third quarter, 41% of the ethanol produced was anhydrous compared to the 31% produced in the same period last 2019. We are proud to announce that we were the first company to start commercializing carbon credits under the RenovaBio program. So far, we have sold 245,000 at an average price of BRL 41 per CBio. We are optimistic about the development and increasing liquidity of…

Thank you, Mariano. Good morning, everyone. Let's start on Page 4 with a brief analysis on the rains in Mato Grosso do Sul. As seen on the top charts, rains in our cluster during the third quarter of 2020 were only 4.7% below the 10-year average but almost 2.5x higher compared to the third quarter of 2019. The increased rainfall was concentrated in a handful of days rather than being distributed throughout the quarter, which enabled us to rapidly resume crushing activities, as it can be seen in the following slide. I would like to briefly comment on the weather in the Central South region of Brazil. The region which accounts for approximately 85% of Brazilian sugarcane production has been experiencing dry weather for a prolonged period of time. We believe that this will result in a longer-than-anticipated interharvest period and will lead to a tight supply and demand scenario by year-end, which, in turn, will put pressure on prices. It's worth highlighting that we will continue to crush cane year-round and produce both sugar and ethanol during the interharvest period. This is because we are based in a region that has a different weather dynamic and because we operate under a continuous harvest model. Let's continue with Slide 5, where I would like to discuss our sugarcane crushing. During the third quarter of 2020, a total of 4.4 million tons of sugarcane were crushed, 19.1% or 700,000 tons higher than the same period of last year. Indeed, during July, we reached a record of 1.7 million tons of sugarcane crushed. The increase in crushing was favored by greater cane availability, following our decision to temporarily slow down our crushing pace during the second quarter of 2020 in light of the COVID-19 pandemic, and advantageous weather to carry out harvesting…

[Operator Instructions] The first question is from Guilherme Palhares of Bank of America.

I do want to touch bases on your commodity hedging. We do see the company accelerating its volumes hedged as well as prices for the 2021 harvest season and for the next one as well. So if you could provide some color on what is your rationale here? And do you expect to continue production to be leaning towards sugar rather than ethanol in the coming crops as well?

Thank you, Guilherme, for your question. I'm going to -- this is Mariano, and I'm going to take your question. First of all, I would like to mention that we have a hedging policy. This hedging policy contemplate how our crops evolve and so how our production of the different commodities that we produce evolve. And according to that evolution is that we start hedging the future production. That's how, what is contemplated in our hedging policy. This hedging policy has maximum or minimum levels in which we move according to our different views. Today, we have a clear view on all the different commodities that we are producing that is a bullish view. So according to this bullish view, that we can discuss in each one of the commodities that is basically related to the supply and demand, is that we are hedging on the lower levels of this policy that we currently have. That's the general strategy that we are taking in each one of these commodities. Particularly between sugar and ethanol, today, the sugar is paying more than ethanol, and that's why we are maximizing sugar. And also within ethanol, the anhydrous ethanol is what's paying more, and that's why we are maximizing the anhydrous in the ethanol side. I don't know if -- I don't know, Guilherme, if your answer is -- if your question is answered? Or do you want more clarification?

No, that's very clear.

[Operator Instructions] The next question is from Santhosh Seshadri of HSBC.

So my question is basically on your capital allocation policy. You have been emphasizing on return of cash to shareholders in the previous calls. So can you provide some color on how you are planning to execute that? Are you thinking of any minimum threshold levels? And since you're expecting positive cash flow by the end of this year, is there any possibility of distributing dividends from current year profits?

Thank you for your question. And here, I would like to mention that, as we've been talking, most of the relevant CapEx of our 5-year plan has already been done. In 2020, our expansion CapEx is less than half than in 2019, and this trend will continue for 2021. So as I mentioned in the introduction, despite of the pandemic, this 2020 will become a free cash flow positive for the first year since we started with this investment. So this is a turning point, and it makes the beginning of a path where we start to generate free cash flow on a structural way, as you were saying. So this combination of increasing results and decreasing CapEx would [indiscernible] we start -- or we continue to commit ourselves to return capital to shareholders. So in 2021, going directly to your expectations and assuming normal weather conditions and current commodity prices, we will be in a position to start returning some cash to our shareholders on the second half of this coming year.

This concludes our question-and-answer session. At this time, I would like to turn the floor back to Mr. Bosch for any closing remarks.

So before ending the call, I just wanted to thank you all again for joining. This COVID-19 pandemic has introduced additional challenges to our businesses and even to our lives. The company, and I mean the people who make Adecoagro, has proved to be up to the level of the circumstances. And we feel absolutely proud of the way we have handled the current situation, which, as I said before, is far from over. Our operations are in great shape to fulfill our strategy even in such a complex environment. The market outlook is looking promising and expect obtaining attractive results in the short term. Hope you all stay safe and sound. And in the case we don't see you or speak, we wish you all a very nice and healthy end of the year. Thank you.

Thank you. This concludes today's presentation. You may now disconnect your line at this time, and have a nice day.