Julio Piza - Chief Executive Officer.

Rodrigo Mugaburu - Morgan Stanley.

Good afternoon. Welcome everyone to BrasilAgro’s First Quarter 2016 Results Conference Call. Today’s live webcast and presentation may be accessed through BrasilAgro’s website at www.brasil-agro.com. We would like to inform you that this event is recorded and all participants will be in a listen-only mode during the company’s presentation.

After BrasilAgro’s remarks, there will be a question-and-answer session for analysts only. 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 BrasilAgro management and on information currently available to the company.

They involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand that conditions related to the macroeconomic scenario, industry and other factors could also cause results to differ materially from those expressed in such forward-looking statements.

Now, I’ll turn the conference over to Mr. Julio Piza, Chief Executive Officer. Sir, you may begin your conference..

Hi, everyone. Thanks for joining us today. We are here to discuss our results for the first quarter 2016, which we can see here through the presentation. On page two, we have the highlights. Net revenues of R$67 million; net income 44, adjusted EBITDA a little bit over R$10 million. We estimate 6,000 hectares of land to we transformed during the year.

Estimated planted area of 64,000 hectares. We have some adjustments going forward. We just approved dividend of roughly R$1.4 per share. And also we registered one of the farms headquartered and has finalized the whole process and resistivity couple a years ago.

So, before we go into the operational referrals on page three where we got the liquidity little bit of the market scenario for the price and here we have the evolution of soybean prices both in dollars and also in reais.

You can see that since last year -- a year ago, roughly year and a half ago, once the CBOT prices have started to come down, we have an appreciation of the dollar or depreciations of the reais and the fourth thing is the coupling, between the price of soybeans in Chicago and the products of soybeans in reais, Brazilian reais.

And the fourth, we're maintaining reais levels throughout in the last three or four years pretty much the same levels. Of course, there's an implication in cost from a revenue perspective and cost perspective, we probably drive within reais all add up very effective level comfort the high levels we have in 2012-2013.

And then of course, as an insight going to continue on page four on land prices. Land prices have somewhat stabilized over the last quarters or so, and 36 gram is now correction in May 2013 hour rate and as we’ve been discussing in the last few months. Overall prices are stable.

Liquidity has come down, not many deals going on and we expect some adjustments in some regions fairly are just down or will be continue to be the same. Most likely land EBITDA [ph] will decrease in value. We have revenue percentage to keep on increasing planted area.

And mainly because the prices also, the cost and not so much because of the pressure of dollar and also credit is relevant [ph] and therefore the market averted to the volatile areas. We discussed four working capital [indiscernible], so we expect some adjustments, especially on low significant scenarios.

On page five, that’s our land development evolution. We’ll have to see how the company holds overtime and if we go back to first year 2007-2008 annual development, it is 8,000 hectares on an accumulative version we're reaching over 115,000 hectares of land developed. So, this is what we did, so we're very happy some of these [indiscernible] going on.

Of course, we're mindset of the environment leading and the potential opportunities in terms of capital allocation, so we're being careful from the manufacturing developing right now and we believe they do sound opportunity before capital allocation, but we are very power-focused development in the last three years and should be [indiscernible] going forward.

And you have to be mindful of that. On page six, Harvest forecast for the year. Here we understand we had [indiscernible] are decreasing the monofactor standard. As you all know, we sold a large farm, so it's come expected so this will happen.

I’m sorry [indiscernible] to happen on the short-term this kind of volatility in terms of planted area and productivity, but as the company keeps up the volatility and buy new properties, this number will grow up again. Page seven.

Here we actually comment a little bit on sugarcane and as we're approaching the end of the discussion with you, so we have appeared on the left what happened in the first nine months of the year. We increased a lot our product mainly because we had new harvest 4,000 hectares of which [indiscernible] production.

So, we are increasing a lot of total production and with this total that we're keeping very high yields in terms of new hectares that we have not planted ourselves. We bought the sugar [indiscernible] increased average term of the year. We have few maintaining a very high productivity, so if we have like that.

Some of this couple standard in the first quarter, also have a significant growth and also maintaining very high yield over 95 tons of hectares, which is way above average, way above São Paulo average.

On page eight, our hedge position, we had roughly 65% of soybean fixed for next year and prices are down at current levels 9.20 and also the exchange rate basically for reais to dollars. So that combination delivers an attractive price for us and now we've accounted on the way they are on the financial results.

We're really well prepared for the year in terms of expected margins.

On page nine, EBITDA and adjusted EBITDA, of over number results what it was this year we try to offer our asset management yield on EBITDA, so try to actually look at this and understand from an operational perspective what was the cash flow generated in the business and that's what we do.

And the main adjustment that we do as we remove all of the biological assets [indiscernible] that are now relative to the quarters and also other thing that is financial results that we have an operational counter for, we put it back into the EBITDA.

As we told, we had [indiscernible] on fixed soybean and that is its financial position generated a negative impact and also we saw that pricing at a higher level at the higher price, we have that negative financial results EBITDA [indiscernible] product growth.

So, when we look into this quarter was 10.4 versus 5.4 last year and an important explanation here is sugarcane we are producing more and have more hectares and that is really the explanation for this. So, pretty happy this time the year already at a positive EBITDA for [indiscernible] positive side.

Page 10, income statement, the operational side as we said [indiscernible] also have an important financial results here. And main explanation for that is that back in June when we collected money from selling the big farm [indiscernible], we decided that our main U.S.

if something happened that we would make us loose our purchase power and everything that we have to purchase are the lands or chemicals or fertilizers or working capital for development for capital expenditure and therefore, we decided to have an important part of the cash swap into dollar, so we could protect our purchase power going forward.

And that of course, we did significant financial results for us, not in regard of course of the cash that we have now coming forward also generated increased good financial results for the next [indiscernible].

Of course an important part of this has been our cash reservoir, we have block hours back in June, we took [indiscernible] for the campaign for now that is of the import already market dollar back for now all of its financial results is going to -- in to having these next lower cost of goods sold last year.

So we have an important part of our working capital already discussed in terms of cost and a reais very attractive cost and an important part of our soybean at a various factors. So, we’re expecting to have some [indiscernible] to margins for next year.

On page 11, our balance sheet, as we end this year, capabilities that the encash that is the main impacts we have here. Also I would like to mention page 12, we just had our Shareholder’s Meeting and we had small change in our Board of Directors. We continue to have 44% of our members independent.

So, -- including [indiscernible], this class is not required by the credit. And also before we approved the payment amount of dividends. So, and it’s the result of a very good year for us as we mentioned before. So, in a nutshell, that’s what we have to say. So, let’s move to Q&A..

Thank you. The floor is now open for questions. [Operator Instructions] Our first question comes from Mr. Rodrigo Mugaburu from Morgan Stanley. You may proceed..

Hi, Julio. Two questions. One, on the sugarcane, this part of our strategy looking forward that could see more and more area lease for sugarcane or just opportunity because we do what's close to call categories? And then the second question, regarding mainly on the land bill what’s the situation right now in the Congress [ph]? Thanks..

Rodrigo, I didn’t understand your first question. I will answer the second and then please if you could repeat the first one. And the second one, it’s a very difficult days in the Congress right now about the new growth have been discussed directly from changes. We're not sure, how this whole thing will turn out to be, but it's looking good.

We're confident we're going to have important changes, but definitely we will make [indiscernible]. So, we’re confident we're going to have developments..

Great. My first question was related to the sugarcane lease area. I was wondering if looking forward it's part of the strategy to increase more and more lease rent per sugarcane plantation or this we just an opportunity because we are close to Alto Taquari and Alto Araguaia..

The second question, thanks for that. I will tell lying on both accounts. It was definitely an opportunity because of well closer to reforms we already have. We saw very simple model managerial structure changes to that, so we’re pleased with the lot -- in these figures. But not only that I said that is something that the company is beneficiary.

We have experience in the last seven years, but sugarcane has a much lower volatility for us than other products and therefore we have that volatility as well and so all the step that we go to the New York, Chile contributing soybean, and [indiscernible] ramping our productivity, but sugarcane has to deal with that productivity.

So, the bulk of very operational profitability capabilities with sugarcane [indiscernible] very interesting entry point for the spot price. So, it allows us all this capability created and more hectare of sugarcane. So, I’m optimistic in that specific, but also I would expect that to add more hectare of sugarcane in the near future..

Great. Thank you very much. Great year..

[Operator Instructions] I'll turn over to Mr. Julio Piza. Mr. Piza, you may give your final considerations now..

Thanks everyone. I think we asked for a very good year, it started pretty well, on the right foot as we tend to go. The company is well prepared on this capital structure and operational side. So, we’re looking forward to a great year. And as we have a very strong balance sheet, we’re looking forward to some growth opportunities.

So, I would say that operational now cannot sought and now it’s time to look into growth. So, thank you very much for joining us today. And see you again in three months. Thank you..

Thank you. This concludes today’s BrasilAgro’s first quarter 2016 results conference call. You may disconnect your lines at this time..