Mariano Bosch - CEO Charlie Hughes - CFO Hernan Walker - IR Manager Marcelo Sanchez - CCO.

Rodrigo Coelho - Bradesco Thiago Duarte - BTG Rodrigo Mugaburu - Morgan Stanley Federico Rey - Raymond James.

Good morning ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro's Fourth Quarter 2014 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Hernan Walker, Investor Relations Manager.

We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given.

[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 everyone, and thank you for joining our call. Today we are reporting the operating results of the 2014 fiscal year. As you may have noted we had a great year. Adjusted EBITDA reached $215 million, that's 20% higher than 2013 and 50% higher than 2012. Our sugar, ethanol and energy business had a very good performance during the year.

Our mills crushed at full capacity milling 7.2 million tons of sugarcane. As we always say, the energy piece of our sugar, ethanol business is one of the keys of our success. Co-generation represents an important part of our profitability and cash generation.

Indeed during this year we exported more than 62 kilowatt hour per ton of sugarcane crushed, one of the highest ratios in the industry, and yet we believe there is still room to continue improving. During 2014, we planted an area of 36,000 hectares of sugarcane, a record of our industry.

All the planting efforts over the last four years allowed us to crush at full capacity during 2014 and hopefully put us very close to full capacity during 2015 in line with the expansion of our Cluster's milling capacity.

In this token, we are happy to announce that the construction of the second phase of Ivinhema mill is essentially finished on time and on budget.

Adding 3 million tons of crushing capacity completed our 9 million ton cluster in Mato Grosso do Sul generating additional efficiencies and synergies which we believe will allow us to become one of the lowest cost producers of sugar, ethanol and energy.

With the completion of these milestones, we finalized a seven year period of heavy CapEx investments that will commence to deliver attractive results while we continue enhancing efficiencies.

In the farming business, we concluded the 2014 fiscal year with significant improvements in our crops, rice, and dairy segments which enhanced our EBIT generation. Our land transformation business once again delivered excellent results. We are now fully focused on the new 2014, 2015 season. Crops are looking excellent in the field.

Harvest has started and we'll continue during the first and second quarters while we will face the challenging managing logistics efficiently. During 2015, we will place our main focus in execution and increase the efficiencies in each one of our value chains in order to enhance cash flow and generate attractive returns for our shareholders.

Now, I would like to ask Charlie to walk you through the main operating and financial highlights for the quarter. Charlie, please go ahead..

Good morning everyone. I would like to walk you through a few slides that reflect the main operational and financial highlights of the year. Let's turn to slide four, where I would like to start by discussing our sugar, ethanol and energy business.

If we take a look at the chart on the left, you can see that during the fourth quarter of 2014 our mills crushed a total of 2.3 million tons of sugarcane, 31% higher than the fourth quarter of 2013.

On a full-year basis, crushing volumes reached 7.2 million tons, 12% higher year-over-year, and allowing us to reach full utilization of nominal crushing capacity.

The increase in milling was driven primarily by, first, our focus in 2013 and 2014 of expanding our share compensation; second, a higher milling efficiency per hour resulting in an 8.7% increase in daily crushing volumes; third, average weather conditions throughout the year which allowed us to accelerate the harvesting pace; and fourth, a 12.5% and 3.1% respective increase in sugarcane yields and TRS content.

Let's turn to the next slide to explain the increase in milling efficiency. The graph on the top of slide five shows monthly rainfalls at our cluster in Mato Grosso do Sul compared to the historical average.

Rains during 2014 were mainly in line with the historical average, except for the month of July, September and November, in which excess rains caused some delays and harvest disruptions. Nonetheless, as you can see in the chart below, our sugarcane milling per day reached an average of 38.7 thousand tons, 8.7% higher than 2013.

This is directly related to improvements and enhancements achieved in our sugarcane harvest, transport and delivery operations.

Some specific examples are the use of combined simulators to train new employees which has resulted in significant improvements in tons harvested for a combine per day, the implementation of GPS devices in every tractor, truck and combine has allowed us to manage harvest logistics more efficiently resulting in cost savings.

We will now turn to Slide 6, where I would like to discuss our planting activities. As you can see in the chart on the left, as of December 31, 2014, our sugarcane plantation reached 124,000 hectares, representing a 25% growth over 2013.

If we take a look at the chart on the right, you can see that our sugarcane planting pace has grown at an average of 39% over the last four years.

During 2013 and 2014 combined, we planted a total of 62,000 hectares, which will allow us to supply our cluster with sufficient sugarcane to crush almost at full capacity during 2015 and at full capacity during 2016. I'd like to highlight that in sugar, ethanol and energy business, over 85% of total cost are fixed.

Therefore, every marginal ton crushed has a high contribution in profitability. This has been the driver behind our strategy of aggressively expanding our sugarcane plantation. Please turn to page seven, where I would like to discuss the productive indicators related to our sugarcane production.

The first graph on the left shows that sugarcane yields during the quarter reached 80.8 tons per hectare, marking a 13% increase over 2013 yields; TRS or sugar content shown in the middle chart also increased by 3% to 130.5 kilograms per ton. As a result of these two variables combined, TRS content per hectare increased by 16% year-over-year.

The increase in sugarcane yield is primarily explained by improvements in our agricultural operations and the strengthening of our teams.

Some examples of these improvements include, first, extending the sugarcane growth cycle in between harvest, or in other words, harvesting each hectare of sugarcane at the optimum time; second, enhanced space management controls which reduce pest incidents by 50%; third, efficient fertilization utilization, such as increasing limestone applications to the sugarcane [indiscernible]; and fourth, reducing sugarcane losses on harvest by improving the quality of harvest operation.

The increase in TRS can be explained by a better selection of sugarcane varieties and then efficient use of sugarcane ripeners. We believe that there is still room to continue improving and enhancing our operations through the training of our employees and our focus on execution in each stage of the production cycle.

Let's move to Slide 8 of the presentation, where I would like to discuss our sugar operation. The graph on the top left shows that sugar production during the quarter increased by 23% to 413.7 thousand tons, primarily enhanced by an increase in crushing volumes. I would like to point out that sugar prices continued their downward trend during 2014.

VHP prices remain under pressure, primarily driven by high global stocks. On September 19, 2014, sugar prices hit $0.135 per pound for the first time since April 2009, but quickly rebounded back up to $0.17 in early October, driven by concerns over the Brazilian crop.

During November and December, prices continued falling, reaching $0.145 by the end of the year. If you take a look at the graph on the top right, you will see that our realized prices during the year were on average 12% lower year-over-year, falling from $408 per ton in 2013 to $359 per ton in 2014.

Despite the falling prices, sugar net sales reached a $173.8 million, 31% higher than 2013. Sales growth was driven by a 45% increase in volumes sold as served in the chart -- in the bottom left chart, subsequent to our 38% decrease in inventories as seen in the chart on the bottom right.

If you could please turn to Slide 9, I will proceed to discuss our ethanol operation. The chart on the top left shows that ethanol production during the year reached 299.8 thousand cubic meters, 12% above 2013, primarily resulting from higher crushing volumes.

Throughout the year, Brazilian domestic hydros ethanol prices in reais traded at an average of 7% and 6.6% above 2013, resulting from a smaller crop, higher domestic demand and higher gasoline prices. However, in dollars, ethanol prices traded 4.9% and 5.2% below 2013, primarily as a result of the devaluation of the Brazilian real.

However, if you take a look at the chart on the top right, you can see that our realized ethanol prices during the year fell by 11% from $557 per cubit meter in 2013 to $495 per cubic meter in 2014.

In addition to the currency devaluation, net prices were affected by a 37% increase in hydro's sales volumes, which is subject to a higher ICMS tax and hydro's ethanol. In spite of the falling prices, ethanol net sales reached $146.2 million, 8% over 2013.

As observed in the chart in the one on left, this growth was primarily explained by a 21% increase in sales volumes and partially offset by a slight increase in inventories, which reached 76.4000 cubic meters as observed in the chart in the bottom right.

As we did last year, the increase in inventories is a result of the execution of our commercial strategy to carry ethanol into the off season in order to capture higher expected prices. Let's turn to Slide 10 of the presentation, where I would like to discuss our energy operation.

Since was started this project in 2006, we considered the energy business to be a very important component of our cash generation. Each of our mills has been equipped with the state-of-the-art high pressure steam boilers and efficient turbo generators. Each mill is also connected to the local power grid.

As you may see in the top left chart, during 2014, we exported a record of 61.6 kilowatt hours per ton of sugarcane crushed, 32% higher than in 2013, and exceeded our target of 60 kilowatt per ton.

Despite having one of the highest cogeneration ratios in the Brazilian industry, we believe that there is still potential to increase the ratio by 10% to 15%. I would like to explain why energy is such an important component of our strategy and a significant part of the returns in the sector.

As you may see in the top right chart, the cogeneration business has very low incremental costs. Cash costs are mainly related to transmission cost and taxes, which are already deducted from sales. Therefore, cash margins are highly attracted standing at 97%.

In the two bottom slides we can see the relevance that energy has in the sugar, ethanol and energy segment from profitability and production cost point of view. In the bottom left, you can see that over one-third of the EBITDA margin generated by the sugar, ethanol and energy business is being contributed by energy.

The share of energy is significantly more important considering cash generation. We can also think of cogeneration as a source of income used to reduce a portion of cost of production. On the bottom right chart, we have transformed the cash margins generated by co-gen in to cents per pound of sugar equivalent.

Cash margins from cogeneration represents a US$0.029 reduction from our cash cost. Please turn to Slide 11, where you can see that the increase in our co-gen efficiency ratio drove co-gen exports during the year to 442.7 thousands megawatt hour, 30% higher than the previous year.

Moving on to market prices, I would like to stress that hydro power in Brazil accounts for 70% of the country's electricity supply. Reservoirs tend to be depleted during the dry winter and later refilled in the rainy season between December and March.

However, since most Southeast and Midwest of Brazil experienced below average rainfall between November 2013 and March 2014, water levels in Brazil's hydro-electric reservoirs were not able to be replenished. Furthermore, rains during 2014 remained below historical averages. Thus, not helping fill up the reservoirs.

If you take a look at the graph on the top right, you will see that during the quarter reservoirs in the southeast and Midwest of the country were on average 41% lower than 2013. As a result, as you may see in the bottom left chart, energy spot prices have been trading very close to the seeding price of R$822.8 per megawatt hour.

In October, November and December of 2014, spot prices were 198%, 143% and 107% respectively above the same period of 2013. We have been able to capture this increase in spot prices during the year since only 70% of our land energy is currently committed to long term contracts. Water levels during 2015 continued at very low levels.

Therefore, we expect prices to continue at attractive levels. The higher efficiency ratios and higher export volumes coupled with a 65% increase in realized prices drove net energy sales during 2014 to $58.7 million, more than doubled of that achieved in 2013.

Please turn to Slide 12, where I would like to analyze the financial performance of our sugar, ethanol and energy business. If we take a look at the graph on the top chart, you can see that on an aggregate basis, net sales for the quarter reached $142 million, 31% above the fourth quarter of 2014.

Adjusted EBITDA reached a quarterly record of $59.4 million, 68% higher than the fourth quarter of 2014. Adjusted EBITDA margin increased from 33% in 2013 to 42% in 2014.

The improved performance in the fourth quarter of 2014 was primarily driven by; one, increasing milling; two, the increasing cogeneration ratio; three, higher sugarcane yields and TRS content; four, an increase in sugar, ethanol and energy sales volumes; five, an increase in energy and ethanol realized prices; and six, enhanced production efficiencies and operational leverage in our cluster, which diluted our sugarcane production costs.

Operating and financial performance was offset by a decrease in sugar and ethanol prices in dollar terms, and the execution of ethanol carry strategy, which postponed sales to future quarters. Moving to the bottom chart, on a year-to-date basis, sales reached $379 million, marking a 27% increase over the same period of 2013.

Adjusted EBITDA in turn reached a $153.5 million, 33% higher than the same period of the previous year with an adjusted EBITDA margin of 41%. Let's turn to Slide 13 where I would like to highlight the construction of the second phase of Ivinhema mill is essentially completed adding 3 million tons of crushing capacity to our Cluster.

Ivinhema began crushing on March 16, with a capacity of 20,000 tons of sugarcane per day and after some final adjustments and fine tuning with reach full capacity of 25,000 tons per day by mid April. I would now like to move on to the farming business.

Please direct your attention to Slide 15, where I'll discuss farming production and planted area evolution. The top chart shows our farming production evolution. As of September 30, 2014, we completed the 2013, 2014 harvest year.

A total of 219,300 hectares were harvested producing a total of 848,800 tons of diversified crops marking a 21% increase over the 2012 and '13 season. The increase in production was a result of a slightly larger harvest area and then increasing yields in the majority of our crops.

As you may see, production has gradually increased since the 2002 and '03 season driven by our land transformation and sustainable production model. As the bottom chart shows, farming planted area has gradually increased since the 2002 and '03 season. Planting activities for the 2014 and 2015 harvest year begins during mid-June.

Our planting plan for the season includes an area of 229,300 hectares marking a 5% increase over the 2013 and '14 season. As of January 31 2015, 225,300 hectares have been successfully planted and we're fully focused on completing the remaining area on schedule.

Let's turn to Slide 16, where I will discuss the financial performance for our farming business. Adjusted EBIT for the farming business in the fourth quarter of 2014, was negative $16.7 million, $31.9 million lower than the fourth quarter of 2013.

The negative results are primarily explained by an $11 million loss from the mark-to-market of our commodity derivative hedge positions driven by the rebounding commodity prices during the fourth quarter of 2014, and second $3.6 million non-cash loss generated by the fair value of 2014 and '15 rice crop.

On a consolidated basis, adjusted EBIT for 2014 remain inline with 2013 reaching $52.6 million mainly explained by enhance operational and financial performance in our crops, rice, and dairy segments. The crops segment financial performance was enhanced by an increase in production volumes mainly driven by one, higher wheat corn and soybean yields.

Two, lower production costs in dollar terms resulting from the devaluation of the Argentine peso, and three, increased operational performance and cost management.

In the rice segment adjusted EBIT increased by 34% driven by one, an increase in margins per hectare resulting from lower production costs explained by the implementation of zero level farming technology and the devaluation of the Argentine peso, which reduced our peso denominated cost measured in dollar terms.

Two, our 3.8% increase in planted area and three our 4.2% increase in average prices. Adjusted EBIT was slightly offset by a 7.1% decrease in sales volumes, which lead to a 3.2% decrease in gross sales. In our dairy segment, adjusted EBIT in 2014 reached $7 million, 20% lower than 2013.

Improved operational and productive performance was offset by one, a 3.6% decrease in raw material prices from $0.40 per liter to $0.38 per liter and two the sale of La Lacteo milk processing facility in the second quarter of 2013, which generated an extraordinary gain of $1.8 million.

Therefore, adjusted for sale of La Lacteo, adjusted EBIT in 2014 was fairly in line with same period of the previous year. Turning to Slide 17, I would like to discuss the mark-to-market impact related to our soybean and corn hedge position. During the third quarter of 2014, our soya and corn positions generated at $16.6 million gain.

However as you may see in the charts, the soybean May 2015 and corn July 2015 futures contracts which we used to hedge our crops have shown a significant rebound since the third quarter of 2014 driven by strong demand and logistical constraints during the U.S. harvest.

As a result during the fourth quarter of 2014, the mark-to-market of the hedge position resulted in an $11 million loss partially offsetting the gain generated as of September 2014.

As of December 31, 2014 we had a 192,000 tons of soybean hedged at $11.7 per bushel and 198,000 tons of corn hedged at $0.573 per bushel, through December 2014 crop prices have continued falling, measured at today’s prices the mark-to-market gain of our position has increased by $8 million.

Moving on to Page 18, I would like to focus on the weather conditions and crops status related to the 2014 and 2015 crop which we will harvest between March and June. The chart shows the monthly evolution of rains in our farms in the humid pampas region.

As you may see in the chart rainfalls between October 2014 and January 2015 have been above the historical average providing very humidity conditions during the flowering of the crops and allowing crops to develop normally. There are four as of today the conditions of the crops are very good potentially leading to above average yields.

However the main challenge or risk today will be being able to efficiently harvest, store and transport the crops in a scenario with above average rains at harvest. Our agricultural and logistic teams have been trained and stressed and farm routes have been improved in order to minimize any type of harvest disruptions.

Please turn to Slide 20 where we can see Adecoagro’s consolidated financial performance during 2014. Net sales reached $694 million, 11.2% higher than 2013, as a result of the increased productivity in our crop yields in 2014 and the expansion of our cluster in Mato Grosso do Sul.

Consolidated adjusted EBITDA grew to $215.5 million, 19% higher than 2013 as explained throughout the presentation.

Consolidated adjusted EBITDA margin also expanded from 29% in 2013 to 31% in 2014 assuming our ongoing business and the asset base we have today, we expect adjusted EBITDA will continue expanding over the next three years as each of our businesses is consolidated achieving the targeted operational and financial metrics.

If we return to Page 21, you can see that over the last five years, we have developed between $180 million and $320 million of CapEx per year in order to complete the growth plan that we laid out back in 2010.

This included the construction of two free stalled area facilities a rice processing facility, the transformation of land for rice and crops and the construction of the sugar, ethanol and energy cluster in Mato Grosso do Sul.

This growth plan has been delivered on time and on budget and will be completed next month through the completion of the Ivinhema Mill. Therefore consolidated CapEx spending is expected to slowdown in 2015 as we complete the Ivinhema Mill in Mato Grosso do Sul and is expected to reach between $160 million and $180 million.

As of today no major growth CapEx cost being committed for 2016, therefore it will consist primarily on the maintainers of the sugar, ethanol and energy business.

I would like to turn to Page 22 to take a look at our net debt, as you can see in the top left chart, Adecoagro’s gross indebtedness as of the end of 2014 was $698.5 million, 6% higher compared to December 2013.

Outstanding debt related to our farming business stands at $87.1 million as of December 31, 2014 decreasing 28% or $34.1 million year-over-year. The decrease reflects the cancellation of debt as loans matured during the end of the harvest.

In the sugar and ethanol business debt increased by 14% or $72.5 million year-over-year primarily to finance the construction of the second phase of the Ivinhema mill. Cash and equivalents as of December 31 2014, stood at $113.8 million, 51% lower year-over-year explained by the amortization of debt in the sugar business.

In terms of the maturity profile of our debt, I’d like to point out that 70% of our debt is in the long term and is composed mainly of loans from multinational banks such as the BNDES and the Inter-American Development Bank. The 30% of short term debt is mainly the portion of long term debt that matures each year.

I would also like to highlight that 52% of our debt is in Brazilian Reais with an average interest rate of 6.4%, 46% is in U.S dollars with an average rate of 5.5% and 2% is in Argentinean pesos with a rate of 15.

To conclude, we will move on to Page 23, where I would like to discuss the impact of the facts on our business given the recent devaluation of the Reais. I would first like to walk you through the effect of the Brazilian Reais on our sugar, ethanol and energy business. In terms of our costs including maintenance CapEx a 100% are denominated in Reais.

In terms of revenues, ethanol and energy savings are denominated in Reais. In the case of the sugar as of today 80% of our 2015 production is hedge in dollars and we have non-hedge the effects. Therefore the devaluation of the Reais would have neutral impact on our adjusted EBITDA.

However, since maintenance CapEx and a portion of interest expenses are denominating in Reais, the impact in cash flow is positive. I would now like to walk you through our farming business in Argentina and the effect of our depreciation of the Argentinean peso.

In terms of our costs, 50% are denominated in dollars, mainly related to seeds, fertilizers and certain other chemicals and 50% in Argentinean pesos consisting of labor, fuel and taxes. In terms of revenues over 85% of our commodities are exported in dollars and the remaining 50% consist mainly of rice and dairy sales in the domestic market.

Assuming the devaluation of the Argentinean peso currency, the impact on adjusted EBITDA and cash flow would be highly positive. Thank you very much for your time. We are now open to questions..

[Operator Instructions] Our first question comes from Rodrigo Coelho with Bradesco. Please go ahead..

Hi, good morning everyone. Good afternoon. My question is regarding the inventory levels of grains in the end of 2014, we noted that inventories increased materially like 3, 4 or double for some grains.

Could you elaborate a little bit about what was the rationale for this strategy, was this a consequence of higher productivity in the crops or if you expect what is the outlook of prices that you expect going forward for mainly soybean and corn. Thank you..

Hi, Rodrigo this is Mariano, I’m going to please ask Marcelo Sanchez to answer your question.

Marcelo?.

Hi, Rodrigo, the increasing inventories that you're seeing at the end of last year mainly corn and wheat that was scheduled to be shipped during January and the first half of February and that was already sold by then. That's the reason why, I mean it's only the [physical] [ph] that you see in the position..

Okay, thank you. And could you just - you mentioned about your strategy regarding the depreciation of currency both in Brazil and Argentina.

Are you carrying any hedging position for any of this currency especially for the Brazilian real or no?.

Charlie, can you answer that question please?.

Yes hi Rodrigo, we haven't hedged any real or Argentinean peso, so we're fully opened..

Perfect. Thanks a lot, congratulations on the results..

Thank you, Rodrigo..

The next question comes from Thiago Duarte with BTG. Please go ahead..

Hi, everybody, thanks for taking the question. Couple of questions on my side. First on the farming business in Argentina, I noticed that you had a favorable weather so far. And you put in the release that the development of the crops so far has been positive.

Can you quantify a little bit what the impact you expect to be in terms of yields either in Argentina and therefore what type of profitability and I believe an improvement in profitability you might be seeing. Of course we have prices coming down in dollar terms, but as you noticed as you mentioned before there is a positive effect from the currency.

So there are few moving parts here, but I’m particularly curious about the yields and how you see that translating in terms of profitability that would be my first question?.

Hi, Thiago, this is Mariano. It's a good question, not easy to answer, we just started the harvest and as you know from when you start harvesting until you finish, there is a long way to go still and we’re focused there.

So we cannot be very precise in the answer, but we can easily say that we would have - we most probably have more yields because the corps are really, really nice. But although we have hedged, we do have lower commodity prices here.

So I don’t think that the more yields are going to be enough to offset a 100% of that lowering price that we are seeing..

Okay, that's clear. And my second question now moving to sugar and ethanol, you’re about to finish the phase of expansioning the Ivinhema mill, it was a great project we pretty much followed the entire process.

Can you comment a little bit of what you believe can be in terms of profitability and in terms of efficiency? Is there anything there that you believe can be better or worse than you originally estimated? And in the end of the day what I’m trying to understand is, what you believe considering as you said the energy prices in Brazil remain very high.

And what you believe your total cost of production or cash cost of production is effectively going to be this year and next year considering the co-generation in the Ivinhema?.

Thiago, yes, of course you've been following all these projects and following it closely and we’re very, very optimistic on how this project is doing. Of course we were planning to be in a good position, but it’s becoming to be real.

We do have a very high expectation on how efficient we can be here, because every time we spend time in the mill, we realize that we still have more opportunities to continue improving.

Our co-gen and I mentioned that at the beginning of the call, our co-generation efficiency and that is measured as a megawatts per hour; megawatt hour per ton of sugarcane being crushed, it is a very important ratio. And when we compare the 62 that we have with the rest of the industry, that's a huge difference.

So, that makes us very efficient as Charlie was then pointing it out. Also you can see the sugarcane is looking much better and the yield that we are obtaining on the sugarcane are much better.

On top of that, we are increasing the season, we have already started in both mills and in a couple of days, we will be fully - full speed with both mills with all the second phase of Ivinhema finished. And so we're extending the harvesting season, extending the harvesting season means being much more efficient with all our costs.

Today with a 100% mechanized, a 100% of our cost - almost 100% of our costs are fixed. So extending the harvest is being something that is being great and specifically for this region.

On top of that, we continue to see that we can have more leases and more land and we can continue to be more efficient on our leases in that whole area, because we’re only competing with breeding cattle.

So that’s why we still believe we’re going to be very efficient in this specific place, and we don’t know what’s that real place where we can reach in terms of a cash cost but we’re going to be for sure within the lowest, lowest cost producers of sugar, ethanol and electricity.

Today if you run the numbers, we’re talking about cash costs around 26 cents of real per liter..

Thank you very much..

The next question comes from Rodrigo Mugaburu with Morgan Stanley. Please go ahead..

Hi thanks. [Indiscernible] how conditions had evolved for rice since December, I'm trying to understand if conditions improve we could see a reversion of this $3.6 million you adjusted due to biological assets.

And then my second question is on CapEx, on the 2015 numbers that you’re including there is there anything budgeted for land acquisition or M&A in Brazil. Thanks..

Hi Rodrigo thank you for your question. Regarding the rice - thank you for the question, in the previous answer to Thiago, regarding farming I was talking about the crops, now in terms of rice, the crops have excess water, and so the crops were not so good or what we’re harvesting is someway below what we harvested last year.

So that's why you've seen that a biological assets. That may improve but not a lot, we’re in a mill for a harvest or finishing the harvest and we should be inline.

What we’re improving there is most of the efficiencies and on the sale side, so we do expect rice in general to be inline the results of a rice inline to last year, because prices are offsetting somewhere in this lower yields that is regarding rice.

On the CapEx projection that we just mentioned, we're not including there any new acquisition, we're not including anything that is not being committed yet..

Okay. Thanks..

The next comes from Federico Rey from Raymond James. Please go ahead..

Okay, good morning everybody. Thank you for taking my questions. Please could you comment just a little bit on the prices of land both in Argentina and Brazil. And what's your plans or conditions in term of farm sales? Thanks..

We believe that prices of land are always related to their returns of that land.

So today in the region in Brazil, we don’t see clear reasons for the prices of land to change a lot because returns are inline to what the - to what they were in someway below because of lower commodity prices and partially offset by a weakened currencies in every country. So we don’t see many changes in terms of today prices of land.

In Argentina in particular, it may change because a different expectations on how returns of land could change if there are changes in the policies in Argentina. So that's why for Argentina it's more uncertain.

And regarding our strategy on sales, our strategy continues to be exactly the same that when we find someone, when we do a projection for a farm, where someone pays a price for that farm, where our projection give up low return, we make decision to sell that farm and we are located to something that where we can obtain a higher return on investment.

That's continue to be our strategy, the same that has been in the last seven or eight years..

Okay. Thank you very much..

[Operator Instructions] As we have no further questions, this concludes the question-and-answer section. At this time, I would like to turn the floor back to Mr. Bosch for any closing remarks..

So after several years of hard work and diligent investments, we have built a state-of-the-art cluster of 9 million tons of crushing capacity that has already started its milling season. As highlighted before, our crops and our sugarcane are in excellent conditions. So we believe we have a very promising year ahead of us.

And during 2014, our main focus will consist of executing our strategy and deliver results and attractive returns for our shareholders. Thank you for following the call..

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