Good afternoon to all. We're here once again for the earnings of BrasilAgro Q1 2022-2023. Just to clarify for those who are beginning to follow us that fiscal year goes from June to June every year. So today, we will be talking about the first 3 months of the harvest '22-'23. I have here Mr. Andre Guillaumon, our CEO; and Gustavo Lopez, our CFO. Okay, you have the floor, Andre. Before that, I'd like to mention concerning Q&A. Okay, Andre, have the floor.

Thank you, Ana. Thank you, Gustavo. And I would like to thank all the participants who are always with us following the results of the company, believing in the company. So this is Q1. We hope this year will be more calm than the previous two with pandemic restrictions, higher costs. It’s a year that is, we are seeing this year as very positive for Agro in Brazil. And as Ana said, it’s our first quarter. As I always say, while there's a lot to see, but we already see some trends, and we will clarify this during our chat today. So as always, feel free to ask questions, to participate this forum. We wanted to have participation. Okay, let's go to the presentation. This is the first highlight, the first slide. And as always, we have the highlights. We have financial highlights, operational and real estate. In terms of finance, the company closes the quarter were BRL 299.8 million, net profit BRL 42 million, adjusted EBITDA BRL 107 million. Later on, we will give you more details. We know that last year, we had spectacular results. In terms of operations, 1.7 million tons of sugarcane. We began planting soybean. We have 38% of soybean is already planted, especially in Mato Grosso and Goias. The climate has been stable. And in terms of real estate, like we say, our companies in the market, we're buying and selling all the time, identifying business opportunities that will bring profitability for our investor. So in this quarter, we'd like -- we had two movements. And so we had a purchase and a sale. We purchased Fazenda Panamby. Later on, we will give you more details. And yesterday night, we announced the first sale, a fraction of our operation in Paraguay. Well, let's talk…

Thank you, Andre. Thank you. I'd like to thank all those participating. This is the Q1. We always said that last year was a spectacular year in terms of cost and price. And now we will explain this effect. Andre mentioned during this quarter we had the following of the company, the harvest of sugarcane. When you compare a quarter with another, the production of sugarcane was similar. Sales were similar. And now we will see margin. Last year, when we sold sugarcane, we had an average of BRL 1.3 per kilogram. Entering this quarter, as you know, the government policy, they gave tax exemptions, ICMS, and this made ethanol a little less competitive. And with this, we sold at BRL 1.10. So we had an impact on the price. On the other hand, Andre mentioned we are working with a fertilizer that is more expensive. CCT also is more relevant. So all of this provokes a drop in the margins. Later, we will try to show that the margins continue being very good when we compare with historical averages. The second effect that we will see here during -- in the first quarter in 2022, we had 70,000 tons of soybeans and 40,000 tons of corn. And this year, we tried a different strategy. We tried to sell most of the soybean and corn in the first semester of this year. And we had 25,000 tons of soybean and 60,000 tons of corn. So we can look at net revenue of the company, BRL 378 million, first 3 months of last year, then we will show tons and prices. Here, we have a summary and we see the impact of 21%, a drop of 21% when we compare with last year. We will see that we have a sale…

Thank you, Andre. Thank you, Gustavo. We have here Pedro from XP and Henrique from BTG to ask questions.

My first question is about the allocation of capital. Considering this outlook, more difficulty in buying farms. And as you mentioned, results should continue to be above historical levels. Talk to us about allocation of capital, dividends. Can we expect a dividend yield more in line with history 6%, 7%? Or can we expect something in line with the last year close to 10%? That's my first question. And the second point, whether you could give us more details about the sale of the farm. It had an attractive yield, but it seemed very small, small sale. Can you explain the strategy of the company behind the sale? Wouldn't it make sense to sell more? Or can we expect more sales of this size later on?

Pedro, thank you for the questions. We could spend a long time talking about these 2 questions. Okay, let me try. First, our challenge is to be an anti-cyclic company. We have to sell farms when everyone is buying and buy farms when everyone is selling. This is the magic of our business. It's simple, but difficult to execute. We love these simple things that are complex in their execution. You are right in saying that and I've been reinforcing this, we should sell more because of the liquidity in the market. The company will continue being a seller and a buying company when we see good opportunities to generate value for the shareholders. In a certain way, we will continue with turning the portfolio. We have an amount that we believe it's important to sell every year, and this brings stability of results. So going back a little, we didn't talk about this number, the BRL 520 million in profit that we had in the middle of the year. BRL 300 million comes from operations and BRL 240 million comes from real estate sales. And this is what we intend to do. We're balancing operational results with the sale of real estate. If this happens and this is what we want, the company continues being an important payer of dividends. In terms of policy, we're in the Novo Mercado distribution of 25% of the net profit to shareholders. But in a recurring way, we have been paying more. And I have no doubt that the day we need to buy large assets, we will say, okay, let's invest because shareholders know our capacity to generate value for them. So I believe this is a point that I'd like to stress and clarify the point concerning dividends. The second point is very good question. Why did you sell a small amount of land? It's small, linked to a leasing operation for the buyer. We believe that this sale will not stop here. We will continue selling with other fractions like this one. These are new regions, Pedro. When you have a large company producing in the region, they say, "Oh, it's because it's a large company." If you -- why small? When you have small farmers producing, it's produce good. Some people say, "Oh, it produced -- the production is good because it's a large company." Well, this fraction, a small amount of land is aimed at bringing new entrepreneurs to the region. When I talked about the sale, I talked about the sale of Jatoba. Very similar, both sales. In the Jatoba farm, we sold initially 600 hectares then. So also very important sale that shows that the assets appreciated and the company's capacity to generate value a sale, like you said, a small sale, but with the return rate that is high. Andre, why didn't we sell more?

This is a driver that doesn't depend on us. We work actively to sell. But whether it's going to be a small amount or a big amount, we sell. We're analyzing proposals of larger sales and the focus is to reach 3,000 to 3,500 per hectare. Remember that we paid $280 for this land. And today, we're selling at $603,000. So I'm not worried because it's small, but the company had the right strategy. This asset has liquidity. And even more, when you have liquidity for small, you have liquidity for the large. The opposite is not true. When you have liquidity only for large clients due to logistics, efficiency and other things, you don't have efficiency to sell to small farmers. So selling to small farmers doesn't worry me. Selling only to large farmers worries me. So I believe that the second point, we're very optimistic with cotton and will be an important crop because it has high fertility. And cotton, cotton crop to be consolidated in a region, it generates real estate value. So adding up everything, a small sale, but this doesn't worry us. It's because when you have small sales, you also have large, the opposite no. Did I answer your question?

While answering Pedro, Andrea answered two questions that came in writing concerning dividends. Since our results was smaller than expected. So we have answered the question on dividends. There is another question, whether we will have a distribution of dividends this year because of the sale? So now I'll pass the floor to Henrique from BTG for his question.

My question is a follow-up in terms of capital allocation. I'd like you to focus on growth. We saw the company in the last few years, consolidated its business model. And now with strong numbers when we have the impression that the space for appraisal of NAV seems slower. Now the commodity stabilized. So I'd like to hear from you what are the main opportunities and priorities of the company for growth in the next few years? And buying more land? What is the strategy or leasing land or verticalizing? So what are the main priorities from now on?

Well, a good question, Henrique. Thank you once again for participating. I will begin talking about where we're looking. What you said makes sense. There's a stability in the price of commodities. But you should remember that the company has part of its portfolio in the case of Paraguay, we have transformation. This will attach value to the land. When we look at Brazil, you have a few assets to be transformed, but we still have the ramp up. The growth in yield of areas that were transformed in Fazenda . And I would say to you, even if you stabilize the price of commodities, you have an important value. For example, when you have an area in the Savannah, it's called 100 -- it's worth 100 bags. The next year, it's going to be worth the cost of CapEx plus year. Then cost of CapEx and to premiums until it stabilizes, and it gets to 350 bags, like in Bahia, 354,000 bags. So this is important. In spite of the speed of transformation being slower because most areas were already transformed, there is still a large part of the portfolio appreciating in value. This is important to highlight. Now where are we headed? More and more, we're showing the company being -- having recurring results. As I mentioned about this harvest, we added 10,000 hectares that were leased. Only 1,000 are being included in this harvest. So 8,000, 9,000 will be included in the next harvest. In regions where we have a giant where we have a giant potential to have a second crop. So what do we have? We have value generation in the appreciation of the portfolio. We have also new areas with leasing that we leased, and we will continue working to -- by balancing crops.…

Now we have some questions in writing. The first came in is all concerning a point that Gustavo mentioned. So concerning the creation of our auditing committee, he wants to know if this will have an impact. Is there any impact with creating the audit committee?

Well, you know me. I'm an agronomist, but I learned quickly to. Let me tell you about the committee. The committee is something that the SEC in Brazil asked us. So we prepared the committee. Initially, we had a feeling that the audit committee would substitute of the attributes of the fiscal council, but we maintained the fiscal council with its attributes. And now we have an audit committee made up of independent and counselors of the company that will follow with a different -- they will act differently from the council, the fiscal council. So I'd like to share with you. The council is analyzing if the numbers are well calculated. The auditing committee goes further to see if the process is performing well. This is -- I see that this can help the company. It will -- it shows that we're in tune with the capital markets and this -- and we were always this way. We were the first to participate -- every time we have a transaction, we have an assembly. I learned a phrase from a lawyer. And he said, it's not enough to be, you have to show that you are. So this will show transparency, governance and the zeal we have with small investors, minority investors. It shouldn't change the company's life because the company's life is to identify assets, buy assets, invest and then sell. So this -- they will be reviewing things to guarantee that we're efficient with no risks generating transparency in the governance for all investors in the company. So it's -- the SEC that our CBM demands this, and I believe it will improve things.

Just to supplement, the company had the fiscal council. We had a fiscal council. They had the same attributes as the auditing committee. The main difference between the fiscal committee and the auditing committee is in internal controls. We have this department in the company, and they report not to the management. So this is the main change that we see. So we understood that the fiscal council, it was kind of -- the fiscal council was temporary. It was requested by the minority shareholders. So now the fiscal council will analyze the company's accounts, the numbers, and they will collaborate with the hiring of auditors, also approving and reviewing the increase in capital and the auditing committee begins to look at internal controls. So that's the idea that's the change.

We have Rodrigo asking a question. Rodrigo?

A follow-up question on irrigation. Andre, does it make sense to buy the equipment or to rent the irrigation equipment?

Before Andre answers, I'll include a question from Antonio to talk more about the new irrigated areas. Brazil and Cosan are becoming very strong in irrigation. So he'd like to hear more about this.

Well, I'll begin with the second question. It's important for us to separate. I saw that our colleague mentioned Cosan. We're talking about 2 large irrigation projects. We have an important irrigation project in sugarcane. And this one in Bahia, which is more focused -- it is focused on the production of grains and cotton. Okay. In the case of sugarcane, we're in regions that are marginal and not Cornbelt. And even in the regions that we follow the mid-south, it has gone through instabilities in terms of drought. The logic that everyone is looking at for irrigation is to have more stability. Yesterday, I was in a chat session and people were talking about an increase in the last few years in the productivity of soybean, cotton, corn and in sugarcane. Our production, we got to 600 million tons, 530. If this year is good, it will be 570, 580. So the sugarcane sector with more credibility, and we have this, and more foreseeability with the demand of biofuels and the price of sugar, which seems that it changed, the sector is trying to increase productivity. And this productivity goes through attenuating the lack of rainfall. You must attenuate the lack of rainfall. The first question, thank you, Rodrigo. Good question. We're always looking at these aspects. Initially, we made a very good operation. We leased irrigation equipment. So we always look the operator who is offering leasing. We analyze if it's worth the cost and we look at the cost we know that subsidized lines are a few. So we always have to compare. When you look at leasing, it's very advantageous. It's a great advantage. The company supplies equipment and we pay an amount per millimeter irrigated. There's a minimum amount. We adopted this. We have one…

Okay. We have a question from Filipe. Okay, Filipe, I will read your question. Next time, please. We want you to say the question. Since you have a more challenging climate in Argentina, will grains really benefit in the short term? How do you see the climate in Paraguay after a challenging year, I will correct after a few challenging years in Paraguay? And the third, which regions are the focus for acquisition? I mentioned on the border. But is there any region where you are more interested?

Yes. Grains. Yes. As I always say, we there's -- we will see many things. We do a follow-up. We have the Argentine market, and we look at the climate in Argentina. Yes, your question is very pertinent. There is, yes. We are worried the plantation of the first crop in Argentina is late. This changed and affects -- this affects the choice of crops. But as I said, if we have a lending and reinforcing or losing strength, it's better, and this will improve things in the south and in Argentina. So what is happening is we have worse -- the situation is worse in Argentina in relation to Brazil. We know that most of the productivity, Filippi, or the potential of production happens when you have a good installation when you have lack of rainfall and variances, this will cause a drop, and this may affect productivity in the future. Now it's like we say the game begins in day 0. Paraguay, we believe it improved a lot. When we look at forecasts, we have 2 metrologists that follow us, plus a climate company, 3 meteorologists writing reports all the time. We -- it's good to remind you, when we talk about long term, these are mathematical models, but there was a forecast of a small summer in January-February, and this is decreasing. It hasn't disappeared. But when you look initially, 35 days with summer, today '20. And we know that with the fertility of the soil in Paraguay, this facilitates things a lot. Third question, Paraguay grains -- okay regions, which regions will we focus on? Well, regions where there is value, normally on the border, but we already bought areas in the beginning. We bought areas that were not near the border. Well, situation was different. We had a decapitalized agriculture and with more leverage. So we have focused a lot on these regions. We talked about pasture. We're trying to balance more the productivity in Paraguay through leases and in more stable areas like we did in Bolivia last year with new leasing operations, we leased lab. So we're looking at this. We're looking at the geographic diversity and also the balance between your land and leased land. So our focus is areas where we can unleash value.

What is the forecast for next year in terms of cash, investments and sales?

Well, I will begin, Gustavo can help me. In terms of sale, I mentioned this. The company has a goal for us to sell a part of the portfolio every year. So when people ask me, I say we will try. If you say I want to foresee, look at the results of the last 5 years, we will try to do something similar. Of course, we're understanding that we are more sellers. We can be more aggressive in sales. And if you sell an area that is appreciated, we will look for another that is an opportunity. So we sold some mature areas, and we substituted them for new areas, Panamby and other operations. So in the end, the company grew in production land. So the company grew. This is what we're always looking at. If you look at the average in the last 5 years, it will give you a good idea. We look at these opportunities all the time. Investments, let's talk about investments now. Investment, we have approved by the administration council. This includes everything. New areas in some regions, transformation of soil, investments in irrigation, investments in technology, investments in geoprocessing. We have dedicated a lot of time for this. Gustavo is leading connectivity projects in some of our units to have 100% Internet. We have Internet of things. At the farms, this has been important. So this year, we should have a CapEx with structuring -- restructuring of various transformation from pasture land to grains, increase in fertility to buy cotton and smaller projects with irrigation. So we have approximately BRL 100,000 in CapEx. So sale, same average CapEx, BRL 100 million approximately. And cash flow I gave you the number, sale less CapEx and operational results, you know how our cash will behave. Gustavo, would you like to comment?

I believe that it's important to share how we think. We work with a budget, operational budget, as Andre mentioned, we sell farms, and we see 34% goes to our partner, the government, 85% for shareholders and 35%-30%, we say for investment. Andre mentioned restructuring of various planting sugarcane infrastructure. And as I mentioned during the presentation of the results, last year, we had an EBITDA BRL 400 million. Today, 60% of this value. And these are our expectations for cash generation. So normally we make a payment equivalent to 35% down payment. And this year, we have BRL 140 million, BRL 150 million to receive from the sale of farms. So it's -- we're going to have a positive cash generation year. And the amount approved was BRL 130 million. Part has the irrigation, part does not have. So in general terms, in terms of cash flow, we're very positive.

One last question to close. From Douglas Rebeiro, please comment on the difference between book value and internal evaluations of the same assets and price discovery of sales?

Okay. We have worked a lot on this. We work every year on this. How we evaluate? Every 2 years, we use outside auditors and every year, internal evaluation. This is an internal valuation. We look at the multiples when we look at the price attributed to our property, we always do the following. The asset, you don't sell it or better, the best way to sell assets is in installments. That's when we capture the best profitability. When you sell it in installments and the market for land in Brazil is always in installments. Those who pay cash will get an important discount. If they get an important discount, we don't want to be the sellers. We have agricultural land where the payment is made in installments. This is important. When we evaluate all our areas, we analyze maturity and multiples. For example, soybean, when we talk about the Central area in Brazil, we have a multiple of bags per hectare. If you look at our evaluation year after year, you will see an appreciation. You will see x million. And then next year, more bags of soybean. I was talking the other day with investors. If we have a vision that is more optimistic or pessimistic for commodity, we will attribute more or less value to the portfolio because, as I say, you pay and then if you have a more optimistic vision for soybean, you will have a larger flow. And when you bring it to present value, it will generate more value. So the logic is where you place soybean. I would even like to have a price of $14 in the next 5 years. No one here can validate or believe in something like this. So we have a vision of medium and long term…

Andre, just to supplement the property, we have a possibility to opt between the cost and market value. And in the past, when we began this discussion internally, this was a point that we considered to make this decision, especially because there's a great subjectivity in terms of how you price the soybean in the future. So today, what should we do internally or externally to understand if we need an impairment. If the value is lower than our cost, then we should recognize this loss. But it's difficult. Normally, our portfolio includes farms that we bought at $1,200, $1,500 per hectare. The transformation cost to 2,500 on average, and there is no farm that is sold below this amount. So the best way to price recognized result is when we sell because before an investor could question, we could distribute dividends. Because of this result due to the variance in the price of land. We thought the best way would be to record the cost and recognize the gains, the profit when we sell. Andre mentioned all these -- all the farms were booked at -- in this way.

Well, thank you, Andre, Gustavo, for your time. We had a little more than 1.5 hours. The year is beginning, a very good audience. Thank you to all who participate and ask questions. We're making progress with more transparency, and it's important to have your questions, your feedback. I will pass the floor to Andre, we want to close and we will meet again in the next results.

Thank you, Ana. Thank you for the team, Daisy, Camilla, and thank you to all the participants. We have to thank this beautiful public, these people who trust in the company's management. And here, we are committed. We have worked more and more on this. And I say once again, so we work on people, sustainability in the near term and long term. The company this year was won a prize, one of the 5 best companies to work in agribusiness, in our segment, midsize companies. This shows that we're on the right track, working with the right people and with this engagement for consistent delivery of results. As Ana said, the year is beginning, it seems that we will have a better climate than last year, especially in Paraguay, in the middle of Brazil, too, sugarcane, with more rain. This will help the production of sugarcane. So farmers or businessmen are always optimistic, but we're realistic because we're always looking at processes, strategies and people working on these pillars all the time. This is our commitment, not only my but all the managers and also you who trust in us in managing your resources. Thank you very much. The questions we were not able to answer, please get in touch with Ana in Investor Relations, and we will answer them. And if you want to talk to us, we're available. Thank you.