Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro's First Quarter 2019 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Juan Ignacio Galleano, 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 section. 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, it depends 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 would like to 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 2019 first quarter results conference. As you may have seen in our release, we continue delivering strong financial and operational results while we complete the final development of our growth plan.

In such a complex and changing global context these achievements are the result of our focus to increase efficiencies in our production, which in turn translates into a reduction of cost. As we always stress out, we find all these sustainable way to be the low cost producer and generate stable and effective returns throughout the commodity cycle.

In our Sugar, Ethanol & Energy business, we continue to maximize ethanol production in order to profit from higher relative prices. During the quarter, literally all the TRS produced was delivered through ethanol, considering that we traded at more than 20% average premium to sugar during the quarter.

This represents a clear competitive advantage compared to the other player. At the same time, and thanks to the ongoing industrial enhancement, we expect production mix to reach as higher 80% ethanol for the whole year. Servicing and crushing operations are moving forward as expected.

Given the current moisture conditions of the plantation as a consequence of the low rainfall, we have slightly reduced the crushing pace in order to give the cane more time to develop and therefore enrich in TRS content. Assuming normal weather conditions going forward, we expect to crush around the 12 million tons targeted.

This will result not only in further cost dilution, but also higher energy production. In this quarter, we recorded 73 kilowatt hour per ton crushed. As for our expansion project, sugarcane availability is the critical factor, especially for our non-stop harvest system.

We have successfully secured over 90% of the total hectares need to fully supply the 3 million tons of growth of crushing capacity. More importantly, terms and conditions were maintained, and in some places even improved. Moving to our Farming and Land Transformation business, it is all set to be a strong performing year.

Starting with crops, at the end of April 2019, harvest operations are well underway. Crops are delivering good results with above-expected yields. We have already up and running our brand new rain handling and conditioning facility that will allow us to maximize our efficiency.

Weather conditions for peanuts were favorable, and we expect to generate strong financial results considering that after the acquisition of the processing facility, we will be not only saving [indiscernible] agreement, but also getting higher selling price. Regarding our dairy operation, we continue delivering strong operational results.

Cow productivity continues to be extremely high, even factoring for the new operational challenges that arise as we populate our third free-stall facility. Going downstream, processing activities are fully underway and generating strong results. Our production flexibility enables us to maximize returns based on relative profitability.

Most of our production is devoted to the local market since current market conditions dictate that better margins can be achieved in the domestic market versus export. In our rice business, all the enhancements we have been attaining over the last couple of years are paying off.

The mills are operating very efficiently, and processing 50% more [indiscernible] than last year. This coupled with our commercial effort to segment the market to increase selling prices explain the better financial performance of the business. As a summary, so far this has been a very good start of the year.

We believe we are on the right track to conclude another fiscal year generating attractive returns. Now, Charlie will go through the numbers of the quarter..

Thank you, Mariano. Good morning, everyone. Let's start on page four with a brief analysis on the rains in Mato Grosso do Sul. As you can see on the top chart weather has been dry over the last month, indeed rains reached 510 millimeters in the first quarter of 2019, 30% lower compared to same period of last year.

As a result, we decided to fine-tune our harvest scheduled in order to maximize cane productivity throughout the year. Specifically we slowed down the pace of crushing during the first quarter, explaining the 11% decrease in crushing activities.

We expect that this strategy will allow the cane to further grow and benefit from normalized rains during March and April. It's worth noting that even though total rains were 30% lower year-over-year, effective milling days remain unchanged. This is fully explained by the frequency and the distribution of the rains.

Please turn to page five, where I would like to highlight our agricultural productivity. In spite of dry weather during summer months, sugarcane yields during the quarter reached 92 tons per hectare, significantly above the five-year average yield for Brazil's Center South region.

This is the result of ongoing focus on enhancing sugarcane quality and agricultural performance. Yields fell 14.3% compared to our yields in the first quarter of 2018 as a result of average rainfall during November of 2017 through February 2018.

In terms of sugar contents, TRS during the quarter reached [indiscernible] tons in line with the same period of last year. The combination of these two effects resulted in TRS production per hectare of 9.9 ton, 15% lower year-over-year. Let's move ahead to slide six, where I would like to discuss our production mix.

As you can see on the top left chart, during the first quarter of 2019, anhydrous and hydrous ethanol in Mato Grosso do Sul traded at an average price of $0.167 and $0.154 per pound sugar equivalent, which represents a 22% and 24% premium to sugar respectively.

Production during the quarter was fully devoted to ethanol, indeed 97% of the extracted sugarcane juice was shifted to ethanol an all-time record this high degree in flexibility constitutes one of our most important competitive advantages, since it allow us to make a more efficient use of our fixed assets.

As a result of this strategy, ethanol accounted for 87% of the total first quarter 2019 EBIDTA generation in the sugar ethanol and energy business while sugar accounted for 4%, this is a significant competitive advantage since it enables us to maximize returns by selling the product with the highest marginal contribution.

Let's please turn to slide seven, where I would like to discuss quarterly sales.

As you can see on the top left chart ethanol sales volume increased by 19.2% compared to the first quarter of 2018, lower crushing volumes were fully offset by the 11.4% increase in the alcoholic mix coupled with larger inventory carried from the previous quarter, average selling prices measured in U.S.

dollar however fell to $0.124 per pound, 20.5% lower year-over-year as a result of the depreciation of the Brazilian real. All-in-all net sales reached $62.8 million marking a 6.1% reduction. In the case of energy, selling volumes reached 115,000 megawatt hour marking a 60% increase as you can see on the mid-left chart.

This was related to our commercial strategy to export as much energy as possible to the [indiscernible] during the first quarter of 2019 to capture high energy prices, co-generation efficiency during the quarter reached 73 kilowatt hour per ton crushed, average selling prices measured in dollars reached in $73 per megawatt hour marking a 30% increase compared to the same period of last year.

Given that hydroelectric energy accounts for almost 60% of the Brazilian energy metrics, energy prices are very much correlated to rains, in this line, dry weather acted as a catalyst for prices, sugar sales volume were 32,000 tons 41.2% lower than the first quarter of 2018, average net selling prices reached $0.151 per pound 7% lower compared to the first quarter of 2018, lower prices as primarily explained by global supply and demand dynamics, as a result net sales reached 10.7 million 45% lower compared to the first quarter of 2018.

Finally to conclude with the sugar ethanol and energy business please turn to slide 8, where I would like to discuss financial performance, as shown on the left chart total production cost excluding depreciation and amortization reached $0.086 per pound, 6.7% lower year-over-year, this was mainly explained by enhanced average agricultural efficiencies that contributed to reduced harvest cost, lower industrial cost obtained from vessel operational efficiencies, lower cane depreciation partially offset by lower crushing volume, unit cost measured in U.S.

dollars, were further reduced by the year-over-year depreciation of the Brazilian real. Lower cost of production however were fully offset by the $26.3 million difference registered from mark-to-market of our commodity hedge position, this mainly explains the 35% lower adjusted EBIDTA compared to the first quarter of 2018.

I would now like to move on to the farming business. Please direct your attention to slide 10.

During the second-half of 2018, we began our planting activities for the 2018 and 2019 harvest year, planting activities continued throughout early 2019 and as of the mid of May we have seeded a total of 232,000 hectares, owned croppable area reached 113,500 hectare 9.1% or 114,000 hectares lower compared to the previous season, this is mainly explained by the sale of Rio de Janeiro and Conquista farms during the second quarter of 2018.

This area which varies in size on the basis of return on invested capital has increased by 19.8% reaching 86,400 hectares. Let's move to page 11, where I would like to walk you through the financial performance of our farming and land transformation businesses.

Adjusted EBIDTA in the farming and land transformation businesses was $31.9 million $13.1 million or 70% higher year-over-year the improvement in financial performance is primarily explained by the higher margins in our rice and dairy businesses.

In the case of the rice business higher margins were explained by cost dilution following the depreciation of the Argentine peso, higher selling volumes [indiscernible] stock from the previous quarter coupled with enhanced agricultural and industrial efficiencies.

Regarding our dairy business, higher selling volumes and average prices were responsible for the increase in financial performance, indeed as a result of the shortage of milk use due to weather related issues prices increased enhancing margins, our combined system was not affected allowing us to fully profit from higher prices.

Lastly during January 2019 we completed the sale of Alto Alegre farm located in Tocatins for $16.8 million to be paid in seven installments, this transaction generated an EBIDTA of $9.4 million. Let's move to page 12, where I would like to walk you through our land transformation business.

As previously mentioned during January 2019 we completed the sale of Alto Alegre farm located in Tocatins, Brazil, the aggregate selling price reached $16.8 million for a total of 6,080 hectares for which 3,065 are croppable.

I would like to highlight that the farm was sold at the 33% premium to the latest Cushman & Wakefield independent farm land appraisal, over the last 12 years we have been able to generate gains of over $00 million by strategically selling at least one of our fully mature farms per year, monetizing a portion of our land transformation gains allow us redeploy the capital into higher yielding activities enabling us to continue growing and enhancing shareholder value.

Let's now turn to page 14, which shows the evolution of Adecoagro's consolidated operational and financial performance.

Net sales in the first quarter of 2019 reached $154 million 4% higher year-over-year this is mainly explained by the combination of higher sales on the rice and crop businesses as a result higher selling volume, partially offset by lower sugar and ethanol selling volume coupled with lower sugar and ethanol prices measured in U.S. dollars.

Adjusted EBIDTA totaled $58.3 million marking a 6% decrease compared to same period of last year. As previously explained the good performance of our crops and rice businesses were primarily the result of enhance agricultural and industrial efficiencies coupled with lower production cost measured in U.S.

dollars, this positive result were more than offset in our sugar ethanol and energy business mainly driven by the $26 million lower gains registered from the mark-to-market of our commodity hedge position coupled with lower crushing volume.

To conclude, please turn to slide 15 to take a look at our net debt position, as you may see on the left chart, our gross indebtedness as of March 31, 2019 stands at $886 million while net debt stands at $729 million 13% higher year-over-year, the increase was mainly driven by higher investments in our farming businesses, specifically the acquisition of industrial facility both dairy and peanuts, which were mainly financed with cash from operation, net debt ratio reached 2.34 times 6.8% higher year-over-year, I would like to mention that our debt was structured is a long run with an average maturity of over six years.

Thank you very much for your time. We are now open to questions..

Thank you. The floor is now open for questions. [Operator Instructions] The first question today comes from Roberto Browne with Morgan Stanley. Please go ahead..

Hi, good morning. Thank you for the question. My first one actually is on the smaller businesses that are gaining more importance.

So I just wanted to understand what can be recurring level of EBIDTA in a year from rice and dairy? In rice it will be interesting to know how much of the EBIDTA in this quarter came from the actual higher processing capacity and how much from the sales of inventory that came from last year.

And in dairy, if possible to get an update on how the Sancor acquisition is evolving the turnaround of the assets, and what we can expect on that division as well? And my other question would be on CapEx, the first quarter was a bit more intensive than we expected, so just wanted to get an update on your expectation for the year? Thank you..

Hi, Roberto, thank you for your question. Number one, on rice, that was your question, how much of the EBITDA coming from last -- from the previous year and how much for the specific quarter. As we mentioned in the fourth quarter of '18, we reduced EBITDA of rice. And we were selling part of the stocks in the first quarter.

So I would say that half of the EBITDA is coming from the previous year and the other half has been generated during this quarter. As we have mentioned, all this enhancement that we have been doing on the rice operation is making us more profitable on this segment and consistently more profitable.

So, we should continue to expect an improvement quarter-by-quarter in this specific segment of rice where we are some of kind of optimistic or it is going doing well. Then on your second question in terms of the dairy operation, as we explained in our five-year plan, we have our production operation.

And in terms of the production, we are doubling our production capacity. So if you look at our numbers in 2017, we can expect to double the situation once we finish our five-year plan. If you remember, in '17 we made $12 million of EBITDA in the dairy segment.

So, we can expect in '21 or '22 when this is finished, to double that EBITDA capacity generation so that we would be talking about in $24 million or $25 million of EBITDA coming from the production only and that is line with what we share at the [indiscernible].

Then we have these plants that we just acquired, and as we explained in our previous call, we expect to generate one in full capacity on our expected capacity these $10 million to $12 million of EBITDA that is for 2021. How are we doing today on that projection? We are taking over the plant at a better situation than what we originally expected.

We are being able to control cost that was our first focus very, very well. And we are also obtaining this flexibility that we expressed or was part of our strategy to be able to either export or use the milk -- further the processed milk for the domestic market.

So as you know, we have these two plants where one of the plants is the center of the [indiscernible] that is mainly to produce powder milk and cheese where powder milk is mainly for export, and cheese is both export or domestic market, and the other plant in Chivilcoy near the main [indiscernible] center of Buenos Aires that is devoted to fluid milk.

Today, in the month of May, we are maximizing the domestic market within our flexibility; we originally thought that because of the weakness of the peso in Argentina we were going to be more export driven. But the domestic markets are paying more, so we are maximizing the domestic market and getting a premium.

So today the month of May, we are going to be positive EBITDA. This is the first month that we will be fully -- we are not reaching our expected capacity, we are processing 400,000 liters per day while we expect to go to 1 million liters per day. So with only 40% of what we are expecting, we are already at EBITDA positive.

So, these are clear good news in terms of all our strategy on the dairy business. So, as I can just -- as I just explained the overall dairy segment is becoming relevant and will become relevant as part of these five year plan expansion as we explained before.

Then finally, on the third part of your question that is CapEx or that we are doing heavy CapEx during this first quarter is as we expect this part of this CapEx on the closing of these two daily plans were expected for the end of last quarter, we ended up closing at the beginning of this year.

So that's why the expected -- the CapEx is higher to what some people expected, but not to what we're expecting. So, it's clear that we are exactly in line to what we were projecting. So, in terms of CapEx, what we are doing is pretty much in line with all our five-year plan..

Very clear. Thanks, Mariano..

Thank you..

The next question comes from Fernanda Cunha with Citibank. Please go ahead..

Hi, good morning everyone. So I think I will ask two questions.

The first one is follow-up of Roberto's question on the CapEx, as far as I recall, the CapEx for the year is $250 million but what suppliers the amount of maintenance CapEx spent in this quarter, you spent around $90 million on maintenance capital in the first quarter, well last year for the full-year you always spent $150 million, so can we expect any run over in maintenance CapEx by the next quarter we should reduce that drastically.

I'm just wondering whether we should maintain the budget of $250 million of CapEx budgets, second question on this point is if you're maintaining a CapEx of $250 million for this year, in order for you to achieve net debt to EBITDA return, EBITDA will need to grow at least around 10%, this number is wide and also times can you talk about capital allocation and shareholders return and the third question for you, I have one more.

Can you comment how much was the cost accounts recurring effect quarter –- year-over-year sorry, we asked this first quarter the devaluation effect for cost account funds, so I'm just wondering there is 6.7% drop, how much of that will be on recurring basis based on your -- improvement efficiency? Thanks a lot..

Hi, Fernanda, thank you for your questions. Charlie will answer your first and your second question regarding the CapEx and the net debt to EBITDA..

Hi, Fernanda. Regarding maintenance CapEx, we are still forecasting our $110 million, $115 million for the 2019 year, you know that seasonality impacts more in the first four, five months of the year.

Basically on the sugar and ethanol business, we do all the maintenance of the boilers and the industry during the first four months and this fiscal year we explained the release because of drier weather than normal, we are pushing forward the sugarcane crush into the year.

So taking advantage of more days that we are not working to advance capital funds, expenses on maintenance CapEx, that's why you see a higher figure in this first quarter compared to 2019. And to finalize the answer of your question, we continue to forecast the $240 million, $250 million of maintenance CapEx and expansion CapEx for this fiscal year..

Thank you, Charlie. If those two first questions are clear, then I'm going to ask Renato to answer the cost of the sugarcane..

The other question I had on CapEx was around whether it seems strong EBITDA growth for you to maintain net debt to EBITDA levels, so can you comment on how can we expect shareholders returns for this year in terms of dividend and share buybacks? And if I may just on your comment you said maintenance CapEx EBITDA is around 110 million to 120 million, can you explain what drove down year-over-year maintenance CapEx? Thanks..

Well, basically, Fernanda, maintenance CapEx you know is 90% related to our sugar and ethanol business and to say that 96%, 97% of all these expenses are in domestic in Brazilian Reais, as we've been seeing some devaluation of the local currency while we show the maintenance CapEx this year compared to last first quarter of 2018, there is a dilution in terms of U.S.

dollar. That is what explains mainly the difference in reduction..

Okay. So I'm going to pass over to Renato to answer the cost of the sugarcane and what we can expect of the cost of producing the sugar..

Sorry, and the net debt is something different, the other part on the net debt to EBITDA levels, can you comment on that and add anything?.

Yes. Actually if you look at the net debt as of the end of the first quarter from a seasonality point of view, it's a quarter where we have the most level of leverage as a consequence of having the crops most of them at the field.

So not being able to harvest because of the seasonality we start the more, the highest speed is in the second quarter for corn and soy mainly and peanuts. So that requires working capital, so we're not being harvesting, sending, and collecting.

Then you have also to consider that, this is the quarter where we have the lowest price of sugarcane crushing as we said and the highest maintenance CapEx expenses concentrated in the first four to five months particularly during this first quarter of 2019, we have to add the cash that we spent for the acquisition of the two processing plants which also implies additional working capital as we are selling the already value added products produced into the market and the payment of the acquisition of the peanuts processing plant together with a significant increase on the peanuts crop area that move from 6,000 to 10,000 hectares.

All of this obviously is within our five year plans, Mariano was explaining. So although we're presenting today at 2.3 times net debt to EBITDA ratio, we expect that we will be finishing the end of the year at levels of around two times..

Okay..

Is it okay, Fernanda?.

Yes, that is great..

Okay, so now we go to the expected cost of production on our sugarcane products..

Regarding the cash production costs, we expect a cash cost net of energy between $0.09 and $0.095 per pound..

Okay, thanks a lot guys..

Okay, thank you..

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

Hi, good morning. Good morning, Mariano, Charlie, Renato. Good morning everybody. I have two quick questions actually on the sugar and ethanol energy business.

The first one is it's actually very clear why you delayed the crushing phase in the first quarter and if I understood correctly, you still expect –- you still have the same expectation forward the full-year crushing volumes in spite of the delayed in the first quarter.

So actually just if you could remind us what is your expectation for the full-year crushing volumes and your expectation for next year, you complete the vast majority of the CapEx for the expansion of the MMU.

And the second question is regarding mix, I mean just like the rest of the industry Adecoagro also focused on increasing the production of ethanol at expensive sugar last year, we've seen over the past few months an increase in oil prices globally, ethanol is proving to be very resilient in the beginning of the crop as we look into prices of the last few weeks, so my question to you would be whether you still expect to increase the sugar blend or the recent movements would suggest that you could still see a maximization of ethanol output as expensive sugar in this year, so that will be my two questions.

Thank you..

Thank you, Thiago. Good question. I'm going to ask Renato to elaborate more on those questions..

Hi, Thiago. As it was mentioned by Charlie, it didn't choose low crushing fees, what is taken to development of our sugarcane foods which improve the sugarcane outlook for the rest of the year and increased our economics in the first quarter. The delay represents only three effective crushing days which can be easily eliminated.

Therefore considering normal weather from now on, we should be crushing about 12 million tons in the whole year and for next year, we expect to crush 12.5 to 12.7 million tons of sugarcane.

Regarding the mix, considering the PIS got increased in the coming months and speeding up the crushing pace, it's very difficult to maintain the same ethanol mix of the first quarter.

However we are positive that we will achieve an ethanol mix of about 80% in the year, it represents an increase of 5% compared to last year and it's much higher than the Brazilian average of 64%, and we are –- I think this is very good news because we are very positive with ethanol view in this and we are very concerted with this view because of the combination of the higher market share increasing order cycle demand and is stagnant production should lead to [indiscernible] in 2019 in our view it depends will need to stay above 2018 levels to curb demands and will consequently lead to higher prices and better profitability.

In addition a more positive oil scenario already led to increase gasoline in more than 25% since January, helping to support our positive view..

Thank you, Renato, very helpful. And then just if I could a follow-up question on your crushing numbers. So you said next year you could expect to be crushing between 12.5 to 12.7 tons if I understood correctly….

Yes, this is correct but it's still too early to say a number because it depends a lot….

Yes on the planting we're doing pretty well that's why we are so optimistic on our future production..

Perfectly, yes my follow-up question was just going to be on your nominal crushing capacity, I mean I have in mind that after the completion of the Brownfield expansion, we should be working with something closer to 13 million tons as a nominal crushing capacity, so just want to make sure is that looking two years ahead or three years ahead, you still see this number as feasible, I see you're going to be –- you expect to be coming very close to that next year but just to make sure we are working with the right crushing curve here?.

Yes, this is the right number for month of growth and then you have to add one million tons of [indiscernible] agri. So the total is going to be 14 million tons that is going to be reached in 2022..

Great, thank you..

And it's going to be [ph] according to the amount of sugarcane or the availability of the sugarcane that is a key factor that we are planting today..

Thanks..

Thank you..

Thank you, Thiago..

[Operator Instructions] The next question comes from Gustavo Allevato with Banco Santander. Please go ahead..

Hi, guys. Just a follow-up on previous question, I didn't get the answer exactly.

So what's the size of that should be done by end of the year, and can we expect the company to allow the dividend policy? Eventually, the second-half given the investment cycle is almost concluded, so it'd be very helpful if you could give us some color on these two topics. Thank you..

Thank you, Gustavo. As Charlie mentioned, around the two times EBITDA is what we expect by the end of the year. That is also within our target. That is what we expect. As regarding the dividend policy, we clearly explained last quarter that on top of the five-year plan we don't have any specific plan to continue with a heavy investment.

So, we plan to return money to shareholders once we have the free cash flow positive that is not going to be in 2019. It's going be very well-expressed in 2021, and 2020 is the year where we turn into cash flow positive.

So, in the second-half of this year, we are currently discussing within our management on board, what is going to be our policy and how do we turn this capital to shareholders? So, by the end of this year, we can be talking to the market on how we see that we are going to be distributing this cash to our shareholders, but we need to have this clarity of 2020 and how we moved into the 2021, where the numbers are very clear to be free cash flow positive..

Very clear. Thank you, guys..

The next question is a follow-up from a Roberto Browne with Morgan Stanley. Please go ahead..

Yes, thank you for taking my other question. I just wanted to understand is the fact that you have no hedges for sugar for this crop is more related to your ethanol mix, or it's more strategic in terms of waiting for a recovery in your view on prices? Thank you..

Sorry, Roberto, just to clarify, you're asking about the hedges of 2019 or 2020, for the next year or for this year?.

For this year, and for the '19, '20….

Okay, this year we have 60% already hit that has been previously hedged, that is for 2019, a harvest that is happening. For 2020 harvest we already have 10% already hedged at $0.14..

Okay, I just see in the release that for the '19-'20 harvest, at least as of the close of the quarter there was nothing hedged, right? So, now I understand you advanced a little bit..

Yes, that's right..

Good.

And the effect that there's not much volume hedges really related to the focus on ethanol, right, since you are going to be doing such -- a strong ethanol mix, it doesn't make sense to invest too much in sugar, and that could be a risk depending on also on whether you're in the agricultural youth [ph], right?.

Yes, Roberto, you are right in what you're saying. Also, I would like Marcelo Sanchez to share our view on sugar prices specifically..

Hi, Roberto. Just to clarify the hedges, we have the case 2019 60% already at the level of prices of $14.70, and we have hedged as of today 10% of 2020 at $0.14 per pound level.

Regarding the sugar price view, we expect it to fade within a range of $0.11 and $0.13 per pound for the short-term, and this is because of sugar prices rally [indiscernible] will be switching into sugar production increasing the global surplus compression and prices.

On the other hand, the downside potential should be relatively limited as funds are holding a very larger position on the [indiscernible] monsoon in Asia to carry the interest in increasing their position much further. For the medium-term in the Q4, we are more price-friendly, the perspective of lower crops in India, Thailand, and European Union.

We [indiscernible] and creating a more favorable environment for sugar prices. That's the way that we are looking at the market as of today..

Very clear. Thank you, Mariano and Marcelo..

Thanks, Roberto..

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..

As you have seen in our report, we have had a good start of the year. We have a lot of challenging projects ahead that will continue to contribute to our growth and enhance our production efficiency. Before we close the call, I would like to reiterate my gratitude to all the operational and management teams.

It is thanks to their daily efforts and hard work that we have become one of the lowest cost producers in the entire world. While at the same time generate a practice of sustainable margins for our shareholders. Thank you for your support and confidence. Look forward to seeing you in the upcoming IR event..

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