Good afternoon. Welcome, everyone, to BrasilAgro's First Quarter 2020 Results Conference Call. Today, with us, we have Mr. André Guillaumon, CEO; and Mr. Gustavo Lopez, Administrative Officer, Investor Relations Officer. Today's live webcast and presentation may be accessed through BrasilAgro's website at www.brasil-agro.com.We would like to inform you that this event is recorded. [Operator Instructions]. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of BrasilAgro management and on information currently available to the company. They involve risks and uncertainties because they relate to future events and, therefore, depend on circumstances that may or may not occur.Investors should understand that conditions related to macroeconomic scenario, industry and other factors could also cause results to differ materially from those expressed in such forward-looking statements.Now I will turn the floor over to Mr. André Guillaumon, Chief Executive Officer, who will make the presentation. Sir, you may begin. André Guillaumon: Good afternoon, everyone. Once again, it's a pleasure to have you all here, at this moment, to share our results of the first quarter that starts -- this year starting now. We are in a difficult time in terms of market and weather, so it's good to share our expectations with us and talk about our results in this first quarter, and we are always available to answer your questions.So I would like to start by saying that on Page 2, we have a summary of our performance in this first quarter. It has been a robust quarter, and we'll compare it to the first quarter of last year.Let's start by highlighting that we had a net revenue of BRL185 million in the first quarter. And the net income of -- net income of BRL40.6 million. The adjusted EBITDA of BRL57.4 million. The revenue from sales of…

Thank you very much. Thank you, all that are attending this call. As of July this year, and here, we're going to show the financial performance. On Page 9, we have EBITDA. Then we have the net income, minus interest, taxes and depreciation. We always accompany the characteristics of our business. Because here, we exclude the assets in the first quarter of this year, we've had an adjusted EBITDA of BRL57.9. And for this year, we had a combination of operations and real estate.Last year, we had a significant sale of most of Jatobá, 9 large number of hectares, which amount us to have some gain in reais. This year, we -- there's 2 sales that André had mentioned at the beginning of presentations, and we have booked one of them, which is the other part of Jatobá that has arose -- has given us a gain, and the other sale that we had commented on is the one that we're going to record or book in the next quarter.On the next page, we are removing these results from real estate sales or property sales. And here, we see that we have BRL40 million of adjusted income versus BRL5 million compared to last year. And here, you have sugarcane with an increase as well as the price at BRL0.09 better than last year. And we have agreements in sugarcane, we sold an inventory of soybeans and corn especially as a result of the sale of farm.So since the incorporation of new lease areas, the company had a real estate or property results that is higher than in last year. Now we have an operating result, the cash generation, an opportunity to work better with our assets. Now on Page 11, you can see on revenues, the revenues from sales of…

[Operator Instructions]. Our first question comes from Luciana Carvalho from Banco do Brasil.

My question is that Bahia has improved in terms of liquidity, could you give us an overview of the main areas, the main regions where you operate? How do you see this increase in productivity and liquidity? And what do you expect for the year in terms of real estate performance? André Guillaumon: Luciana, that's an excellent question. I would like to give you our view in terms of real estate and property deals for you. Every month, we, as a company, have a very aggressive goal in terms of sales of portfolio when everybody wants to buy, we want to sell. So we have to be against the market trends, right? This is a huge challenge. We have to act in an anti-cyclical way.But being very specific about your question in the regions where we operate, I didn't talk about Bahia because, except for last year and the second crop, but speaking since 2013 to 2017 crop, Bahia had very hard crop in terms of productivity. We know that buyers of farms in Brazil are the farmers themselves. So when they have profitability even due to a tax issue. The best way is to purchase more farm, more land. So Bahia had a very low liquidity period in 3 or 4 years of uncertainty in productivity. So the demand was suppressed. And now the demand went back to levels that we consider normal, and this demand for liquidity comes -- and in terms of a ramp-up. So it's starting to go up. If you have 2 or 3 more productive years in Brazil, the market will increase even more there in terms of demand.So other regions such as Mato Grosso, in which we have farms. These are areas with a lot of stability in production. We have had worked…

Next question is from [indiscernible].

I have a question about the payment of dividends on the 14th, it's based on the share positions on what day? André Guillaumon: Well, this is the question everybody is asking, right? The good news is that we're paying dividends pre -- before the holiday. Also, the holiday's on November 15, and the 14th we're paying, so you all have your pockets full of money. But since we had shareholders' meeting on October 16, the shareholding position for each shareholder on the date of the shareholders' meeting, which is October 16, which is BRL0.93 will be distributed or be paid to the holders of shares on the date of the shareholders' meeting, October 16.

Okay. The next question comes from [indiscernible].

I know you've talked about sale of business. Would you give us another driver in terms of reais for this year, next year? And how will you distribute these funds that will be collected, interim dividends, repurchased shares? André Guillaumon: Okay, that's an excellent question. First, if I give you too much guidance, the people from Investor Relations will kill me later on. But every month, we, at the company, have a very aggressive goal in terms of selling farms. So if you stop and look historically, what we could have in this medium term. We can't look at real estate sales on a single year.If you look at the horizon of 3 years in the company, we should be selling between 8% to 10% of the -- our asset value per year. So in a year, when you have a much better result, you will have a more sales deficits that are called significant in years, and that varies year-on-year.We always say that share is a good share in terms of return. When you look at the medium-term horizon. You can't look in a single moment. The real estate driver is -- works with peaks when you look at 2 or 3 years, you can look at this sale moments and the purchase moment. If you look -- if you take a picture of a single period, that maybe not representative of the average.But this wouldn't be guidance of reality. At the budget level, we try to get at least BRL70 million in results from sales of farms, but BRL70 million, how much land will it sell? That depends on the prices. In our business model, in our proposal -- proposed budget for the year, we propose an income from sales of BRL300 million. This is what we're going to work in order to achieve. BRL70 million in results with sales, I'm sorry.And that's the operating income we're talking about. In the first quarter, we -- in the first half of the year, we were very profitable in terms of -- due to the sugarcane price, and we're also optimistic for the year-end and next year.

How will you use those funds? Will you purchase -- repurchase shares? Will you pay special dividends, buy more farm? André Guillaumon: Okay. They're recurring dividend, that's important to generate to investors that have a certainty that dividends will pay on a recurrent basis. Payment of dividends or payment distribution of income will be lower when you -- will be higher when you have less projects to invest on. When we understand that we have good projects with a good profitability and projects we must invest in, then we'll allot a good part of our income to those projects.When we understand that these profitability is smaller due to some reasons, then we can pay higher dividends. I would say that we'll use those dividend -- the income will be distributed in 3 pillars. One pillar is new investment, new acquisitions, we must continue to buy. Like I always say, supermarkets need to be supplied with products in our shelves, which are farms. We'll also invest in transformation. So part of our results from sales, we accelerate new operations with increasing return for our investors. And the third driver is your asking dividend so the combination of the 3 pillars or drivers.I cannot tell exactly how much for each, if we think that there is an asset with a high profitability for the coming years, we'll invest part of our income in that. If we don't think it's going to be so profitable, then we invest somewhere else.So overall, the idea is to pay 25%. So If -- from our income, if you want to make a calculation. This is a good guidance of BRL70 million. And then you can calculate what we have delivered so far. But our obligation is to pay 25% of our income, net income in dividends as it is mandatory.Our obligation and willingness is to increasingly overcome the 25% level that is a requirement by law and civilians. But it's, like I told you, a combination of 3 pillars, dividends, profitability of new assets, pricing and transformation and opening of new areas.

The next question from Victor Saragiotto from Crédit Suisse.

I have three questions. First one is about the soybean productivity. The productivity isn't dropping a bit from 50 to 49 bags per hectare. On the other hand, you had an effect of sale of land, maybe the new leased lands that are coming and the mature lands that were sold maybe had an impact on productivity. If you could give us some guidance about mature land, that would be helpful.Also, in general, you had a cost increase of 6% to 7% in the second crop, what was the driver of this cost increase? Was that a exchange rate, maybe did you see prices increasing in dollars?And the last question is about the acquisition of AGRO5. We took a look at their website, their focus seems to be on the sale of machines and tools. What was the rationale behind this acquisition? Do you have a plan of entering the marketplace of selling agricultural product? What are the next steps and the rationale behind that sale? André Guillaumon: Victor, as usual, you have such -- tons of information coming from you. Great. Well, the good news is that we're just finished the planting, and you're invited to come visit us. Well, first question about productivity. It's important to highlight that there has been a reduction from a 50 to 49, and that's an important driver. This is the average productivity of the company. We have first year, second year and third year areas. And year-on-year, there is a divestment in some areas. So from these 14,000 hectares that were sold and less production had the highest productivity those are the areas that were mature, and we are divesting.But I would tell you that the mature areas have a productivity between 57 and 60 bags, some areas, even higher than that.…

Okay. One more question. We saw all this development of the cotton area that the guidance is that you will pay more than -- slightly over 2,000 hectares. Maybe the drop in cotton prices has reduced contribution margins and maybe change their plans, but the price of cotton, as it is now, should we see the company growing 500 hectares per year? Or do you plan on growing more in cotton specifically? André Guillaumon: Excellent question. Let me give you some view on the market, what we see in the cotton prices is a reflex of increasing production. The war of prices in China are cotton imported more than 420 tons of cotton. So you know a lot about the cotton plant growers in Mato Grosso. 2,300,000, and now we are closing 2,830,000 tons of cotton in this crop. So it's a very significant growth in the last two years.There was an increase in the production of 40% to 50% in two years. And the domestic market, which is -- a domestic market, we continue strong -- we continue flat. It's been the same amount for 5 years of these 2.8 million, 700,000 stays here and 2.1 million goes to the international market.Last year from 2.3 million, only 1.6 million went in international markets. So the amount that stays domestically is the same. So we see important reductions in the margin. It's important to say that we're not a large cotton player, but we see a lot of value in the other things that are generated. In addition to being a profitable crop. It is -- it brings stability. It is to be expected to -- it is to expect that we make more investments in cotton looking at the indirect. It provides important liquidity for assets. It's good for soybean. Part of soybean has lower production costs that will be planted in the cotton area. So yes, you should expect us to grow the cotton crop. We understand that a mature land to produce cotton is a land that has already experienced that ramp-up curve, then we should sell it.So why did we plant in cotton because as I mentioned to Luciana, we had a suppressed liquidity in Bahia, our land became mature, and we're trying to bring liquidity and margin, but it is also to be expected that when we start growing some products, we must understand the product better and then grow in leased areas. We have leased areas in which we could plant cotton and increase the growing capital -- I'm sorry, paying more -- planting more cotton.We should be very transparent with you that part of the land that we are transforming. We don't have to wait 8 to 10 years to plant cotton. We want to sell them before that. But when you have a suppressed demand for liquidity, such as in Bahia or a larger portfolio of leased areas, then cotton is good for profitable performance in such assets.

[Operator Instructions]. Since there are no further questions, I turn the floor over to Mr. André Guillaumon for his final remarks. André Guillaumon: Thank you all very much. It was great to have you. I'm very happy when you have a call with so many questions and participation. I -- all the managers and officers of the company are highly committed to this higher purpose, which is to produce food with responsibility. We've been working on that. We're active with that purpose, the purpose of responsibility, which means taking care of food with responsibility and also acting responsibly. It is to expect that the company will continue to grow, consolidating its results and acting strongly on our purpose to produce food in a sustainable way in coming years. Thank you all very much, and have a good day.

The conference call of BrasilAgro has now ended. We thank you all for attending, and have a good afternoon.