Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro's Second Quarter 2024 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Emilio Gnecco, CFO; and Mr. Renato Pereira, Sugar, Ethanol and Energy VP; and Mrs. Victoria Cabello, Investor Relations Officer. 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 factors 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 2024 Second Quarter Results Conference. Before going into the highlights of each business, I would like to make some comments on our shareholders' distribution. As of this date, we have exceeded in $16 million our minimum distribution policy. So far, we invested $51.4 million to repurchase 5.2 million shares, equal to 4.9% of the company's equity and also committed $35 million in cash dividends with the first installment being already paid. Furthermore, our Board of Directors approved the renewal of our buyback program which enable us to repurchase up to an additional 5% of the company's equity up to year-end. Consequently, we expect to continue allocating cash in share repurchases during the second half of the year. This clearly shows our commitment towards sharing results with our shareholders, while we continue investing in growth projects with attractive IRRs and maintaining our debt levels. Now moving on to results. Consolidated adjusted EBITDA during the quarter reached $140 million, 3% higher year-over-year, whereas year-to-date, amounted to $230 million. That is 2% higher than last year. Starting with our Sugar, Ethanol and Energy business, the investments done in expansion planting are paying off. Given the good cane availability, we have crushed more, produced more while our unitary costs remained unchanged. Despite the lower than average rainfall received, having ample cane availability has become a competitive advantage for us. Although sugar continues to be the best product, ethanol prices are also recovering. Still so, the lower-than-expected yields and the year-over-year decrease in selling prices were the main drivers towards the decline in adjusted EBITDA generation for these reasons. In our Farming business, adjusted EBITDA generation almost doubled during the first semester versus prior year. This was possible, thanks to our decision to expand our rice footprint…

Thank you, Mariano. Good morning, everyone. Let's start on Page 4 with a summary of our consolidated financial results. Gross sales totaled $398 million during the second quarter, while on an accumulated basis, it reached $651 million. Although volumes sold for most of our products represented a significant year-over-year increase, results were partially offset by lower prices for some of the commodities that we produce. That being said, adjusted EBITDA reached $140 million during the quarter, whereas year-to-date, it stood at $230 million. Higher results during the quarter were driven by the sale of La Pecuaria farm booked within our Crops segment as well as to an outperformance of our Dairy segment. This, in turn, partially offset the lower results in our rice and sugar, ethanol and energy operations. Now please turn to Slide 5. Regarding our production figures in the bottom right chart, we can see that crushing volumes in our Sugar, Ethanol and Energy business were up 21% versus the same period of last year. Higher crushing translates into higher volume and better dilution of fixed costs. In our Farming division, the increase in the production of grains was explained by a significant recovery in yields on normal weather conditions during the development of our crops as well as to higher planted area. Let's move to Slide 7 with the operational performance of Sugar, Ethanol and Energy business. Crushing volumes amounted to 4 million tons during the quarter and 6.1 million tons on an accumulated basis. The increase in crushing was mainly driven by greater sugarcane availability thanks to our expansion planting activities and higher effective milling days due to the dry weather experienced year-to-date. Regarding productivity, TRS per hectare remain in line versus the prior year despite presenting a slight decrease in yields. In terms of mix,…

[Operator Instructions] Our first question comes from [indiscernible] with Itau BBA.

It's only one actually. You guys have been carrying this higher level of ethanol inventory as discussed here, and the strategy to benefit from higher prices in the future is very clear I think. But I would like to hear more about the expected time to deploy these volumes into the market. So just wondering if you guys could please share your most updated thoughts on the ethanol price curve perhaps from the perspective of parity to gasoline prices and the lateral that makes the company more comfortable to clearly -- to accelerate sales, maybe the expected timing for parity reaching this level? That's it from my side.

Bruno, thank you for your question. I think here Renato can address your question in detail. Renato?

Thank you for your question. We are positive regarding ethanol price. The hydrous demand has been very strong, actually 5% higher than the same period of last year. Demand is reaching almost 2 billion liters of hydrous per month. And the parity rates at the pump is still at 67%, which benefits the consumption of hydrous ethanol. Also, the off season is expected to be much longer than last year. So lower supply during this period. So if you take the hydrous stock to use right now, it's 1 month lower than the same period of last year. So we think the only way to curb demand is through prices. So prices has to surpass the 7% parity rate that we think is going to happen in the next months. It's difficult to predict exactly when. But in the next month, that's going to be -- I think that is going to be the case. So we have an upside of around 10% of the current prices. Remember that the current price in dollar terms are 12% higher than the same period of last year, and 25% higher than the beginning of the year.

[Operator Instructions] Our next question comes from Isabella Simonato with Bank of America Merrill Lynch.

So I have a question also on Sugar and Ethanol, but more focused on Sugar because I think there are several moving parts at this point and the price has been quite volatile. So I would like to hear more of your thoughts on the sugar price outlook, at least for the remainder of the year. And in light of that and what Renato just said about ethanol, right, how should we think about the mix towards the end of the season between sugar and ethanol. And my second question is on rice, right? We're definitely seeing rice prices at high level, seasonally weaker in the last quarter, but I was wondering also if we -- if you remain optimistic about rice for the remainder of the season and if there's any outlook for 2025 as well.

Okay. Thank you for your question, Isabella. I will let Renato answer your question -- the follow-up question on prices of sugar and mix. So Renato, can you take that part of the question and then I will take the rice prices question.

Thank you for the questions, Isabella. So we remain positive with sugar price for the short term. The low levels of world sugar stocks per load -- the level of stocks, actually, it's one of the lowest in the last 10 years. Also, the supply of sugar is very dependent on the Brazilian crop -- and Brazil is facing a difficult year terms of weather. So the weather is very dry. And there were like a cold front that hit some parts of Brazil not helping the yield situation. Also, the mix is disappointing. Everyone was expecting the mix to reach 52% this year. And it seems to be that is not going to -- seems that's not going to be possible. It should be more close to 50%. So we believe that we will have some opportunities to hedge our production -- the remaining production of this year and next year at higher prices. And also, we have been focused on producing added value VHP bagged sugar, which is -- there is a 10% premium over the conventional VHP, the price of the bagged VHP. [Foreign Language] since we have the tax rebate program, we also -- we always have a floor to change the mix towards ethanol. The floor today is around $0.18 per pound. So if the price of sugar goes below this number, we will be changing the mix. We don't think that's going to be the case, but that's the floor. And today, we have our 7% of the current estimated production hedged at a price of $0.231 per pound.

Thank you, Renato. Is it clear, Isabella, on the sugar and ethanol?

Sure, yes.

Okay. If that's okay, I take the rice prices. Here, it is important to understand that when we consider our own rice prices, this is a component that includes high value-added product. And we are producing different varieties, as we've been explaining since the beginning where we developed a whole Rice business where we sell different varieties to different clients. So we are specializing our own production, and we are producing what every client needs. So we are always going to take a different in price in respect of the average price or the commodity price or the U.S. price that sometimes we follow as a general price. So that is important to understand the increase when we compare the price of last year with the price of this year in a per ton basis. So making that clarification, the general view is that the whole region in South America, we continue to have reasonable prices for all this year. And then for the following campaign, it will depend on the crop harvest in South America. Crop harvest in South America last year and the previous year was relatively low. And this year, it will depend on the planting that we are starting in a few days. So whatever happens in next year campaign will affect next year prices. So it's too early to talk about future prices in the longer term. But in the short term, we are very confident on today's level of prices.

[Operator Instructions] This concludes the -- sorry. We have another question from Thiago Duarte.

Yes, a quick one on our side here. Just if Renato could talk a little bit about cash production costs for the year. Crushing is at a very strong pace as you guys show. There is expectations of growth in the crushing volume throughout the year. And we had previously expectations that production costs could come down as a result of a combination of currency, lower input costs and obviously, the operational leverage that your business should be capable of generating. So just if we should expect something different in terms of year-over-year production costs in the second half of the year relative to what we saw in the first half of the year in the Sugarcane business. That will be all.

Thank you, Thiago. Renato?

Thank you for your questions, Thiago. Regarding the production cost, there are some components that are decreasing such as fertilizers, freight and leasing rates. And some components that are increasing, such as salaries, according to the inflation; third-party services in diesel -- third-party services just because of the diesel. And the yields should be slightly lower than the one that we obtained last year because of the -- especially because of the dry weather. And the milling is slightly higher because we have -- as Mariano mentioned, planting and focusing a lot in our -- expanding our plantation. And also because we acquired some opportunistic third-party sugarcane. If you take all those factors into the equation, we think that our costs in real should be very similar to the one that we had last year.

I think we lost Renato, but just to finish, the cost in real is similar to the previous year. So including the devaluation of the real, the cost in dollars, that is how we measure and how we express, slightly lower than what it was last year.

Our next question comes from Julia Rizzo with Morgan Stanley.

I would like to touch on the outlook for sugar production in Brazil and sugar prices. A lot have been said about the dry weather and how that will affect the market. Can you explain me what needs to happen? Because so far, sugar production and crushing across the board in Brazil has been really strong. How much yields or TRS has to decline in order to affect the expectation of sugar production in Brazil and for have an effect on global prices.

Thank you, Julia, for your question. Renato, are you back?

Yes. Can you hear me?

Yes, perfectly well.

Julia, we think that there are 2 main points that are going to affect sugar production. First is the yield. I think the yield is going to start to decline from now on in the center south of Brazil. Actually, the number that was just published from July was about 10% lower than the same period of last year. And the weather remains very dry and there are some -- a cold front that hit part of the sugarcane areas of Brazil causing some damage, something very -- not very intense, but not helping the situation, which is already pressured because of the dry weather. The first part of the year, the yields were higher because there are a lot of [Foreign Language] that was crushed and 18 months sugarcane. That's not the case anymore. So now we are going to see a lot of reduction in yields from now on. And also the production mix, I think the mix is disappointing. Everyone is trying to maximize sugar. I think the initial expectation was that Brazil would reach 52% of sugar mix. Up to now, the mix is 49%. So probably the mix is going to finish the year close to 50%, 2% lower than initially thought, and it will lose in the mix around 2 million tons of sugar.

And Renato, on the dry weather, can you give me a color on where is this? And when -- is it close to your region? Should we expect also the [indiscernible] to face perhaps on this year or in 2025, a decline in crushing in yields as well.

Yes. So we start the year with a very good outlook of sugarcane mainly because of the rains that we received in the last quarter of last year. But then the weather changed and the weather became very, very dry. Actually, from January to the end of July, we received a 38% lower rains than historical average. That's why our yields are under pressure right now. We expect this year we're going to finish the year with a yield slightly lower than last year, but we are going to crush more sugarcane because of the plantation and because of the third-party sugarcane that we have been acquiring. For next year, I think it's too early to say anything. We still think that we are going to crush a little bit more than we are going to crush this year.

[Operator Instructions] This concludes today's question-and-answer session. At this time, I would like to turn the floor back to Mr. Mariano Bosch for any closing remarks.

Thank you for everyone to participate and hope to continue seeing you in our upcoming events.

Thank you. This does conclude today's presentation. You may disconnect at this time, and have a nice day.