Julio Piza
Analyst · Morgan Stanley. You may proceed
Hi, everyone. Thanks for joining us today. We are here to discuss our results for the first quarter 2016, which we can see here through the presentation. On page two, we have the highlights. Net revenues of R$67 million; net income 44, adjusted EBITDA a little bit over R$10 million. We estimate 6,000 hectares of land to we transformed during the year. Estimated planted area of 64,000 hectares. We have some adjustments going forward. We just approved dividend of roughly R$1.4 per share. And also we registered one of the farms headquartered and has finalized the whole process and resistivity couple a years ago. So, before we go into the operational referrals on page three where we got the liquidity little bit of the market scenario for the price and here we have the evolution of soybean prices both in dollars and also in reais. You can see that since last year -- a year ago, roughly year and a half ago, once the CBOT prices have started to come down, we have an appreciation of the dollar or depreciations of the reais and the fourth thing is the coupling, between the price of soybeans in Chicago and the products of soybeans in reais, Brazilian reais. And the fourth, we're maintaining reais levels throughout in the last three or four years pretty much the same levels. Of course, there's an implication in cost from a revenue perspective and cost perspective, we probably drive within reais all add up very effective level comfort the high levels we have in 2012-2013. And then of course, as an insight going to continue on page four on land prices. Land prices have somewhat stabilized over the last quarters or so, and 36 gram is now correction in May 2013 hour rate and as we’ve been discussing in the last few months. Overall prices are stable. Liquidity has come down, not many deals going on and we expect some adjustments in some regions fairly are just down or will be continue to be the same. Most likely land EBITDA [ph] will decrease in value. We have revenue percentage to keep on increasing planted area. And mainly because the prices also, the cost and not so much because of the pressure of dollar and also credit is relevant [ph] and therefore the market averted to the volatile areas. We discussed four working capital [indiscernible], so we expect some adjustments, especially on low significant scenarios. On page five, that’s our land development evolution. We’ll have to see how the company holds overtime and if we go back to first year 2007-2008 annual development, it is 8,000 hectares on an accumulative version we're reaching over 115,000 hectares of land developed. So, this is what we did, so we're very happy some of these [indiscernible] going on. Of course, we're mindset of the environment leading and the potential opportunities in terms of capital allocation, so we're being careful from the manufacturing developing right now and we believe they do sound opportunity before capital allocation, but we are very power-focused development in the last three years and should be [indiscernible] going forward. And you have to be mindful of that. On page six, Harvest forecast for the year. Here we understand we had [indiscernible] are decreasing the monofactor standard. As you all know, we sold a large farm, so it's come expected so this will happen. I’m sorry [indiscernible] to happen on the short-term this kind of volatility in terms of planted area and productivity, but as the company keeps up the volatility and buy new properties, this number will grow up again. Page seven. Here we actually comment a little bit on sugarcane and as we're approaching the end of the discussion with you, so we have appeared on the left what happened in the first nine months of the year. We increased a lot our product mainly because we had new harvest 4,000 hectares of which [indiscernible] production. So, we are increasing a lot of total production and with this total that we're keeping very high yields in terms of new hectares that we have not planted ourselves. We bought the sugar [indiscernible] increased average term of the year. We have few maintaining a very high productivity, so if we have like that. Some of this couple standard in the first quarter, also have a significant growth and also maintaining very high yield over 95 tons of hectares, which is way above average, way above São Paulo average. On page eight, our hedge position, we had roughly 65% of soybean fixed for next year and prices are down at current levels 9.20 and also the exchange rate basically for reais to dollars. So that combination delivers an attractive price for us and now we've accounted on the way they are on the financial results. We're really well prepared for the year in terms of expected margins. On page nine, EBITDA and adjusted EBITDA, of over number results what it was this year we try to offer our asset management yield on EBITDA, so try to actually look at this and understand from an operational perspective what was the cash flow generated in the business and that's what we do. And the main adjustment that we do as we remove all of the biological assets [indiscernible] that are now relative to the quarters and also other thing that is financial results that we have an operational counter for, we put it back into the EBITDA. As we told, we had [indiscernible] on fixed soybean and that is its financial position generated a negative impact and also we saw that pricing at a higher level at the higher price, we have that negative financial results EBITDA [indiscernible] product growth. So, when we look into this quarter was 10.4 versus 5.4 last year and an important explanation here is sugarcane we are producing more and have more hectares and that is really the explanation for this. So, pretty happy this time the year already at a positive EBITDA for [indiscernible] positive side. Page 10, income statement, the operational side as we said [indiscernible] also have an important financial results here. And main explanation for that is that back in June when we collected money from selling the big farm [indiscernible], we decided that our main U.S. if something happened that we would make us loose our purchase power and everything that we have to purchase are the lands or chemicals or fertilizers or working capital for development for capital expenditure and therefore, we decided to have an important part of the cash swap into dollar, so we could protect our purchase power going forward. And that of course, we did significant financial results for us, not in regard of course of the cash that we have now coming forward also generated increased good financial results for the next [indiscernible]. Of course an important part of this has been our cash reservoir, we have block hours back in June, we took [indiscernible] for the campaign for now that is of the import already market dollar back for now all of its financial results is going to -- in to having these next lower cost of goods sold last year. So we have an important part of our working capital already discussed in terms of cost and a reais very attractive cost and an important part of our soybean at a various factors. So, we’re expecting to have some [indiscernible] to margins for next year. On page 11, our balance sheet, as we end this year, capabilities that the encash that is the main impacts we have here. Also I would like to mention page 12, we just had our Shareholder’s Meeting and we had small change in our Board of Directors. We continue to have 44% of our members independent. So, -- including [indiscernible], this class is not required by the credit. And also before we approved the payment amount of dividends. So, and it’s the result of a very good year for us as we mentioned before. So, in a nutshell, that’s what we have to say. So, let’s move to Q&A.
