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00:09 Good afternoon. Welcome everyone to BrasilAgro’s Q1 twenty twenty two results conference call. Today, I'm here with Mr. Andre Guillaumon, CEO; and Mr. Gustavo Lopez, Administrative Officer and Investor Relations Officer.

The company’s year begins on July 1, so that is why we are reporting Q1, the three months that ended on September 30, twenty twenty one. 00:41 Well, this transmission is being recorded.

It is transmitted at our website and also on YouTube and here we’re talking about estimates and decorations concerning the business perspectives of the company’s, projections, operational goals based on our... Now, I would like to pass the floor to Mr. Andre, to begin our presentation..

01:12 Ana, thank you. Thank you, Gustavo to all of you who are here in our conference calls. It’s a great pleasure to be sharing with your good news.

Even before I arrived, I asked the team, where are we going to have our bar? We're raising the bar of the results during this quarter would are the same as the ones that we would celebrate as the year's results. So, the company's on a new level. We have a better prepared company in terms of real estate and operations.

It is a company that is totally different today. 01:54 So, we will begin with the highlights of our quarter. And then as usual, we will be open to have our Q and A? Well, those who are sharing, let's begin with the first slide. Okay. The highlights that we bring here for Q one, as Ana reminded us very well, this is Q1, which began on July one.

We had a net revenue of three seventy eight million in this period, we had a net profit of one hundred and seven point nine million and an adjusted EBITDA of one hundred and ninety point six million. 02:40 The estimate for the harvest that we are ending, the numbers two point six million tons of grains, cotton and sugarcane.

A hundred and sixty eight thousand hectares in production. And now, we have the excellent news that we gave in the last meetings of the company concerning the general assembly on October twenty seventh. The approval for a record dividend payments. Two sixty million in dividends for the previous year, two point sixty two per share.

03:26 So, always bringing to the investor, last year was a great investment if we consider the appraisal of our shares and also the size of the dividend that we are paying, it will represent approximately nine percent this year, nine percent. 03:48 Next slide. Well in the highlights, in the last call, or the call before last, we said, we are sellers.

We are working on purchases too. In the last call, we already had these two transactions in progress. The negotiations in progress. Entering Q1, we finalized the sale of these two farms.

04:23 I'd like to remind you, last year, when we talk about two sixty million in dividends they are linked to an excellent operational results last year and a small part of this came from the sale of farms, real estate, here we already have relevant results from the sale of real estate.

The first sale is Rio do Meio, those who have been with us for a short time, this came from the acquisition that we made from. 04:59 We acquired two farms you domain checking and we're selling a third. This farm has approximately eight thousand hectares and we're selling two thousand eight hundred. We acquired this recently January twenty twenty.

The value of the transaction, the NAV, this one-third of the farm represents the value of the whole acquisition of the farm. 05:30 So, this shows the potential and of value generation that the company has in terms of real estate results.

The second sale, the most important sale of the company higher volume, five and eighty nine million reais, and also, we told the market about a farm that we acquired in the past in twenty zero six, two thousand and six worth ten thousand per hector and now we're selling at a hundred and fifty hundred and sixty thousand per hector.

06:12 And I would like to mention two fundamental points for you. This sale will be recorded both of first Sale Rio do Meio and the second will be recorded in our accounting during the next quarter and the sale of Alto do Taquari has a different recording, different posting.

We sold two thousand seven hundred hectares, and this sale of two thousand seven hundred hectors we will record in two moments. 06:47 When we deliver, we will deliver one thousand five hundred hectares, initially, and we will record this part. This result on the fifteen hundred hectors.

What will we do with the other twelve hundred hectares? We will continue exploring. It has sugarcane. We will continue until the harvest of twenty twenty three, and then, we will deliver the second part, and then we will record the sale. So, this is how we do our accounting. 07:25 Next slide, please. Well, what I'd like to say here, two points.

First, the company's capacity to increase its operational areas even being a very efficient company in terms of the sale of real estate.

So, if we look year after year, we have a growth of ten percent of the cultivated area of planted area, and this comes from our own land, leased land, development of land, but shows to you investors those who follow us the capacity to increase more and more operational results in an efficient way and in a safe way.

08:07 The graph also, this side shows the breakdown of the types of crops. I'd like to call your attention, basically, in the harvest twenty one and twenty two, we are increasing the calculated area of winter crop for corn, corn winter crop. Later on, we will talk about prices.

So, we see an optimistic scenario for winter corn, and also more and more maintaining products that have more added value, maintaining the areas with beans. Well, here, we have a summary, we will grow in production. 08:57 Here we see twenty twenty one and what we're estimating for twenty twenty two harvest.

Soybean had an important increase from a hundred and seventy three thousand ten to hundred ninety six thousand tons. Winter corn, the most important leap, some areas we're intensifying the planting of corn because of the prices that you are following. So, corn winter crop, here we see also in other areas in by year for example.

And here we see an overlap of winter, corn, and corn. And here we can continue seeing the numbers. 09:50 We have the crop. We had some drought it and in the northeast. So, the winter crop has an increase, but it does not refer to the area. It refers to a recovery or maintenance of our normal results.

When we look year after year, when we look total growth in production, we went from two eighty seven to three hundred ninety eight thousand tons, last call. 10:25 Well, this is a thermometer, this is a new slide, Ana Paula prepared this. It's very good to show, first on the graph below. Here, the graph below represents the ideal window for planting.

This is a picture of the company. We'd like to remind you that these numbers are from Friday. So, we can see here the amount planted, also another point. We have operations in Mato Grosso. Part of the plant with Soybean is into Northeast. It is a window that is different from Mato Grosso. 11:11 Hence there, we are also seeing the results from.

So, we will continue and we can see here the results soybean, corn, cotton, and beans in the harvest twenty twenty one, twenty twenty two. We can also see here twenty twenty one and twenty two harvest year in cattle raising. We can see your cattle heads, pasture and ADG. So, beans, we have some of the results already in. 12:29 Next please.

Well, here, sugarcane. I would like to say that we have, we see a great evolution in the number. You can see here the production in thousands of tons and the number of hectares for sugarcane than the harvest area and the number of tons. Here we see the difference between the estimates, and the actual numbers for sugarcane.

14:02 Sugarcane was not affected by the drought. We have irrigation through our agreement with. And in the case of the Midwest, it is not irrigated, but the risk is much smaller.

So, when we looked at BrasilAgro and Brazil and Sugarcane, we have almost five hundred and eighty five hundred ninety, which is, and we see the harvest at the end of now with five hundred and twenty thousand tons. 14:34 The company had a drought. So, here we see the generation of results, bringing a lot of results from real estate sales.

So, what did we do here? So, during a time of spectacular prices, we have to maximize our re-inventory. We had an inventory of cattle. Had a low price last year.

We had a good strategy to decrease the volume to be more aggressive in sales, generating results, and apart from all of this, we generated spectacular results in the business units when we closed on June thirty, and this is a big churn now.

15:57 The twenty twenty – we had a GMD, the highest in history, maybe part of this comes from a lower level when you. So, with less pressure in the pasture land and GMD had again, we gained five hundred grams at GMD very similar to the mark that we're estimating now, the closing with zero seventy.

This is what places the company as an excellent producer sugarcane, excellent producer of beef and other, also with the crops.

16:41 Here, what I'd like to stress is the company's capacity, resilience of the company to move this inventory, capture the good prices, and the last double – the last slide shows that cattle raising in the company is being done with a lot of operational results and good techniques. 17:03 Next slide, please.

Well, here we're talking about the current harvest. And here, I'd like to repeat this. We're always with a good contribution margin what we expect for hector.

So, we have a moral obligation to make progress every time we have a good contribution margin, and depending on the price of sale, we're always looking at contribution margins, the difference of between sale and costs on this date. 17:43 We can see the amount of corn sold at a price of sixty six ninety six. Most of the corn production is winter crop.

So here, we have a mix of prices between corn into Northeast, then in the Midwest. So, we have fifty percent of the next harvest. When we look this in comparison with last year, with the same mix, fifty reais and now sixty seven reais. At the bottom, we see soybean. 18:23 We're also making progress in soybeans.

Here we can see the main figures, revenues from operations when we look at the future and the exchange rates. Closing at five point fifty seven reais per dollar, a little higher than the previous harvest when we had five point fifty one reais per dollar.

This will help us with an even more robust result this year because we have prices that are higher than last year for the grains.

19:07 The last line is cotton, where we have progress, an important progress, sixty eight percent in sales in relation to the previous harvest, actually in relation to this harvest with a price of one hundred and sixty three reais.

When we look at the price of the previous, it was at a hundred and eight reais, and you will see, we also intensified the area with cotton this year. We had an important increase due to what we can see in terms of margin for cotton.

19:45 Next slide? Well, here, I'd like to pass the floor to Gustavo to talk about the numbers, and then we will be back..

19:58 Thank you, Andre. Good afternoon. Well, here we're showing the main numbers of the quarter. As Ana mentioned, and our – this is the year until two thirty next year and here what we can see an increase of eighty three percent in net revenue of the company.

We see a net profit one hundred and zero seven million reais, forty three percent above last year, and it's important to stress. And the increase in price for corn, soybean, and especially in sugarcane is what leveraged all these results.

20:53 It's important to mention that during this quarter, we harvested almost one million tons of sugarcane, and we should expect results that will continue to come in from sugarcane and our expectation is that the price increases will continue leveraging or improving the operational results.

When we look at adjusted EBITDA, and this shows the performance and here we include derivatives as Andre mentioned in the previous page. 21:48 So, we see hundred and ninety million reais. Last year, we had a sale and this year, we're expecting for next quarter to record the sale of Rio do Meio Farm and parts of the second pharma, as Andre mentioned.

22:19 On the next page, here, the highlights is three hundred ninety million reais. We see adjusted EBITDA here last year. Here, we see the price of sugarcane, which almost doubled. Last year, we had sixty eight reais per kilogram.

Now, it's a hundred and thirty, hundred thirty five reminding you that there is an expectation in the market to close at hundred ninety six, hundred ninety five, and we have a premium of twenty percent of the contract with São José. 23:08 The weight of sugarcane this year from sugarcane will be much higher than before.

Reminding here in the case of soybean and cotton, we're selling the inventory of the harvest that we collected recently.

And with prices, in soybean forty five percent higher, and in the case of corn thirty two percent, So, we reinforced, we're expecting an EBITDA that will be very similar to that of June thirty last two, but the impact in the price of sugarcane will provoke a significant increase.

24:02 On the next page, we can see here the companies numbers, we continue with a year-end report that is stable, strong. We see here assets, four point one percent, also, and the company's cash on September 30, it had an increase in relation to June thirty because we're selling the inventory of soybean and corn.

It's important to say that accounts receivable short-term, long-term four hundred million reais, due to the sale of farms, here we're including receivables of the use farms that we sold and we will record in the next quarter.

25:03 We see also property for investment, the company's farms, one billion reais, and we see cash total indebtedness and we will see more details on the next page.

Well, here we see in terms of short-term, three hundred and twenty five million reais, short-term debt, long-term three hundred million reais, total six hundred and twenty six million reais. Five percent lower than on June thirtieth.

Here, one objective we had in the past that we mentioned to you to have a longer debt, two hundred and forty million, we have for five years and three hundred million reais, which is what we need to plant as the company's operation. 26:07 So, this, we are working to renew these debts.

When we consider the gross debts, adjusted gross debt or net gross debt in net gross debt, we see it's negative that we expect to make some investments, especially that's in purchasing farms.

Transformation of areas that we have in the land bank and we will be very careful with the company's cash, but during these times of volatility, we know, but we're trying instruments to maintain the company's numbers, the company's debt at reasonable levels.

Here we have the cost eight point five percent, if we consider the future curves and interest rates.

27:18 On the next page? Here, this is, we'd like to say that the general assembly approved the payment of two hundred sixty million reais in dividends, we will pay on the tenth after tomorrow, November tenth, after tomorrow, and here I'd like to stress that although we don't have a clear dividend policy, the objective of the company is to have a dividend yield of five five point three percent.

So, this is what we will have as goal. 28:09 On the next page, we will see net asset value, three point two million reais. Here, this is the cost. These are the numbers; these numbers reflect the cost. The value of the property of the company with an internal evaluation, lower than that of Deloitte’s evaluation.

Deloitte had said, three point four billion reais. We also always consider our evaluation. We see that the net value of the company four point three, four point four billion reais, and with the number of shares, forty two point seventy five, forty two point seventy five reais per share.

29:06 So, once again, we'd like to talk about the great potential for upside and we invite you to continue to invest in our company. 29:21 On the next page, the last slide, we see an evolution of the stock market. And our share AGRO3 on November fourth. Here we show the performance of the company.

So, this is the market is booming for agro business and the company too with positive results. So, we believe that our company is excellent to opportunity for investments. 30:04 We thank you for participating, and now we will go on to the Q and A session..

30:17 This first question Carlos.

What is the difference between NAV and price of shares?.

31:00 Sixty eight percent..

31:01 Do you see opportunities to buy back shares?.

31:10 Carlos, of course. We have an important gap, but we have worked to increase the shareholder base to increase the free float of the company. I'd like to remind you before the pre follow on, we traded one to two million and since the follow on, twenty five to thirty million are being traded every day.

We monitor this and when we believe this will make sense, yes, we will approve that through the council of the company, the company's council today. 31:58 We consider the evaluation of the property as if it were worth one point five billion and we know we have a portfolio of three point four billion.

So, we are now having the farms that are the cheapest in the Brazilian market where we're looking to see if there are opportunities to launch a new program, maybe not with such high volumes, but we might buy back shares to show to the market that the value of the shares..

32:39 Also, Carlos, the resources that we're raising with the sale of farms, how will we use these resources? Will it be used to pay dividends, the sale of farms?.

32:54 Carlos, a good question. It's important to stress the company in the sale of farms. We have a lower cost of capital than the producer. So, we can finance the transaction. So, in purchases, we're more aggressive with cash purchases because we have a cost of capital that makes sense. So, I would say to you that first, it's important to stress.

These sales were made with a duration of two point five in one transaction, two point nine in the other, approximately two point five, two point six, so the revenue from these transactions, I'd like to stress the Taquari was made in two times. It will be recorded into two instances.

33:57 We should record three thirty million during this year and the remainder, the five hundred ninety million only in twenty twenty four and the sale of Rio do Meio should also be recorded during this year, but it is also sold in installments. So, , we buy with down payments cash and we sell in installments. This will give us a result.

Gustavo showed us, how we're showing the results of Q one with higher prices, better results, and different from last year rate Carlos. 34:41 Last year, we had very few sales of real estate in the company's results. So, the company will be aggressive once again due to the results we will have and all we see.

With good opportunities, we will buy farms without good opportunities or limited opportunities will be – we will be aggressive in distributing in – so dividends to our shareholders. But we should have an even more robust result in last year. Thank you, Carlos..

35:15 We also had a question from Damian in line with the previous question, concerning the buyback of shares. So, I believe we have already answered, now Credit Suisse. He says congratulations for the results, and many concerns in relation to the price of fertilizer that went up during the last month.

So, do you have delays in the delivery of fertilizer for this harvest?.

35:54 Oh, I was in this week. I came back on Saturday. It's a pity that it is not lively, we were there. We went to visit large areas of the region. We were very happy with what we saw. So, we had operations left. We went to look at new areas for acquisitions and you did not go with me.

36:16 We’re always inviting you to come – to go with us to Shingo, but going back to your question, we are following the price of fertilizer. I believe it's very important to see the results. How things are happening. The fertilizer industry phosphate or nitrogen, most of it is born from natural gas, you produce natural gas. I also said this.

36:50 So, you have to produce also from Nitrogen Urea. And with Nitrogen, Urea or ammonia and natural gas, this is the raw material for phosphate based for life. So, being frank, we don't believe in the price drop for fertilizers in the next six months.

Why six months? Because we are now at a time of greater consumption of natural gas in the world, due to the winter in the Northern hemisphere. So, in December, January, we have the highest consumption of natural gas for heating homes. 37:35 So, we have a competitor. This always happens every year. So, and now we have very high prices for natural gas.

You can see the prices, the price of natural gas, but in Europe too, the price of natural gas went up two hundred eight percent in the last six months. So, it's fundamental to see this industry in this way. The fertilizer industry on a global level has raw materials.

38:06 I know that many potassium plants will begin producing, phosphate plants will begin producing. And in terms of nitrogen, we have this great concern with gas, which has a direct effect.

So, the way we see it Victor, there will be an impact, an important impact for Brazil in terms of the second crop, the winter crop, same for BrasilAgro, we’re projecting this in our numbers, an important impact for the second crop. 38:40 For the previous one, we have all the fertilizer bots.

So, we have a crop with the previous prices, but they will go up. It's important to see when we look at the price of last year, the price of sales for this harvest, we're expecting very positive margins for us. The great question in the market, it is what will happen in the future from now on.

We're looking at fertilizer, but also agro chemicals with increases in U.S. currency. 39:17 We're talking about increases in dollars, ten percent to fifteen percent depending on the chemical. So, it's a – we have to be careful.

There are many consequences for the increase in – of prices in chemicals, fertilizer is based on the increase in the price of natural gas. So, this is for the Harvest twenty two twenty three, we're monitoring.

We're already monitoring this Victor and as I always say, when we believe that there is something to do, we are making decisions, fertilizer, nothing yet, but agro chemicals, yes. We have already, we already have a strategy. 40:06 In terms of logistics, no problems until now. Gustavo reminded us, we put pressure for delivery until now, no problems.

No lack of fertilizer. All our fertilizers for this, that was planted from October to December is already in our properties. Winter crop, we bought most of it, there is partner in nitrogen to buy, but phosphate. I was looking this week, and I said why so much fertilizer here? Why, and they said no, this is the fertilizer for the winter crop.

We're receiving fertilizer for the winter crop..

40:54 Well, in line with Victor’s question. . As concerning, the cost of production, the company's estimates for twenty one, twenty two show important increases in the cost for the main crops. Please comment on how you expect this will impact the profitability this year and now we know the price of commodities is favorable.

Do you believe there will be a risk for this harvest or next?.

41:29 I believe Andre has already answered these questions..

41:36 And the next question, Investments. First, he says congratulations for the results. Thank you. I believe you have the harvest for soybean and the winter crop for corn. I believe you have bought the fertilizer.

How about the future fertilizer for twenty two, twenty three, have you bought the fertilizer? What is your vision concerning the fertilizer market? Andre has already answered all these questions from Leonardo..

42:12 And the next question, I believe that in this question, I'd like to say, this is it. We have two concerns. We have the sugarcane harvest that begins in April, May with nitrogen fertilizer. Our perspective as we said, the base industry, the base raw material is natural gas.

We don't believe in a drop in natural gas, especially now with the cold season in the northern hemisphere.

42:48 The way we see it, after winter in the Northern hemisphere with more natural gas available at the end of the first semester next year beginning of the second semester twenty twenty two, we can expect a drop in the price of fertilizers, especially nitrogen and phosphate..

43:12 The next question,. Congratulations for the results.

Could you tell us more about rainfall in the various farms?.

43:27 thank you for the question. It's a great pleasure to talk to you. I would say the following. This year, the behavior is much better than last year. You can see, you follow us not only the company, but all the market information. Mato Grosso who, as I said, is finishing the planting. Last year, we had a lot of problems the state of Mato Grosso.

During the planting season, a lot of complexity you heard me talking about replanting in Mato Grosso in the present in the company or even in other companies, no one is talking about this year because it's not happening. 44:12 The climate is well with a good window, a good distribution.

And the good news is that the region in Maputo, also has good rainfall. Rainfall, began a little earlier. We have a lot of soybean planted in , by year two, things that we know that's historically, these are regions. We have rainfall in Maputo in November, and this year already in October. So, in terms of Brazil, when we talk about the situation.

This is it. Now, in the long-term things are positive. 44:57 We have a year that is running, and this allows us a good distribution of rainfall in Maputo within average in the Midwest, and we're always concerned with the south of Brazil. When did we talk about the south of Brazil, so, talking about BrasilAgro, our concern this year is Paraguay.

Paraguay, we had good rain, but we know that we begin to plant and in the end of November, we have good rainfall, but we're always looking at the climate in Paraguay, the rainfall in Paraguay. 45:41 We reduced the exposure in Paraguay to new areas. Areas where we have coverage, where we have been working for a long time, we will continue.

We will continue planting, respecting and planting in a defensive way. But we're concerned with Paraguay, and we're also concerned with the south of Brazil and also, Argentina’s should also be concerned with our climate. 46:13 In Bolivia, the climate is normal. We began fifteen days ago, the second harvest for soybean.

The winter crop for soybean is more representative than the previous. So, we're beginning and the rainfall in Bolivia is within the average. 46:36 In April, May we had a little bit of stress, but now, rainfall is normal in Bolivia, there we have a lot of sugarcane, so popular in a nutshell. The company is doing very well.

All of Brazil, Midwest and upwards and we have a concern with Paraguay and the south of Brazil. The forecast for the year is good in these regions with the exception of the South and Paraguay..

47:11 Well, the next question comes from.

Bearing in mind, the taxes on dividends, do you intend to anticipate dividends for twenty twenty one, twenty twenty two, the government intends to charge income tax?.

47:32 We have no forecast, but we're looking at the reforms from the government. We’re prepared. The company is prepared for this taxation of dividends as the government wants to do. This received a lot of attention when we saw the tax reform being prepared. The company is prepared.

If this actually happens, if this reduces the profitability for the investors. We're looking at the tax reform..

48:13 Well, the next question comes from.

Concerning fertilizers and chemicals, how much was spent in twenty twenty one? And what is the cost for twenty twenty two?.

48:34 Well, here we can talk about percentages without looking at each product. Gustavo, help me with the numbers..

48:51 Now, last year, we had a cost of production in soybean, two thousand six hundred to two thousand eight hundred depending on the regions. This year, three thousand two hundred to three thousand four hundred. These are, there are different farms, regions where you have differences, but this is it. 49:14 In the case of corn, help me with corn.

Four thousand three thousand eight hundred reais. Last year, two thousand eight hundred. Corn, it has a higher cost. It uses more fertilizer. And it also uses more fertilizer with nitrogen. These were the ones that have the highest price increases. 49:42 So, content suffers twice.

Now, in relation to agro chemicals, in the harvest twenty twenty one, twenty twenty two, we had no, we had no expressive differences in U.S. dollars. We have problems with the exchange rate. When I mentioned previously an increase, ten to fifteen percent in dollars. This is for the harvest twenty twenty two, twenty twenty three.

This is a forecast for the next harvest, not this harvest that we're planting now. 50:18 We're talking about twenty twenty two, twenty twenty three, we're estimating a possible increase in the price of agro chemicals due to many points.

Natural gas, environmental restrictions, ocean freight that had high increases and we know that the chemical molecules in Brazil. The finished products are imported in containers, so ocean freight and this issue of containers lack of containers that you see, lack of containers that came from China to America for fourteen hundred dollars.

Now, eighteen, twenty thousand dollars. So, we begin to have important increases. I'm sure that industry will raise their prices for us..

51:12 As Andre agree mentioned, in the harvest twenty twenty and twenty twenty one, we had approximately an increase roughly fifteen percent to twenty percent in soybean and thirty percent in corn. For the next, also, twenty three, twenty five percent per soybean increase, why? Because we able to buy an advance, we also made payments when the U.S.

currency was around five reais to a dollar. Now, we have the winter crop. 51:58 We took more time to buy this in. We're expecting an increase of seventy percent in relation to last year. Why are we making this decision? Last year, in Shingo we had an expectation of sales, thirty five, thirty six reais per bag.

Today, we’re selling and in an anticipated way, around sixty sixty five reais per bag. So, in terms of margins, they are similar or even better than the increase of the price of fertilizer..

52:39 Also, in relation to production costs, a question from concerning the price of inputs for sugarcane, greater, rise?.

52:52 I will answer this. So, last year, this year, we began to include the cost of leasing in sugarcane,. If you few purchased this effect, which was not considered last year, the increase is weather very similar to the other crops, thirty percent, around thirty percent.

Later on, I can give you the details, but approximately, a thousand reais more in the production price of sugarcane, due to the leasing rental of the farms..

53:29 The next question.

Does the company have a hedging policy for contribution margin? The hedge is done at costs or you hedge a hundred percent?.

53:48 I had a colleague in , had the same name. I had a colleague in answering you. We do hedging. We're always monitoring the total revenue of the products, and the contribution margin, we monitor the cost and revenue. So, when the number that we showed, almost fifty seven percent in soybean, that is not the cost.

It's fifty percent of the volume of soybean produced in the case of corn, fifty six, the expected volume cotton, it's the total volume of cotton expected in relation to our budget, the best expectation of productivity. 54:42 So, hedging for us is total volume projected.

What is important to? We have also receivables from farms, which is important for the company and the receivables from farms are also in bags of soybeans. So, all the receivables that mature in that year, they become part of the P&L of soybean to be sold. The producer can pay us based on soybean.

So, we consider the receivables from farms of the year in our analysis of derivatives. 55:25 And this analysis is also done every quarter by Gustavo based on future perspectives of receivables.

So, answering your question, we look at the number that you saw as a result of the estimates of production, and the point see foresees that we will be able to sell up to fifty percent of the harvest when we plan. Then we monitor, the evolution of the crop, and we can get to eighty percent at the time of harvest, sale of eighty percent.

So, we're very strict in following this policy..

56:13 said that he is from. Thank you. I had a great friend who graduated with me. Some questions concerning the markets of land, the price of land. What does the company think in terms of acquisition of new areas, new sales? There is a question from , then we have.

Questions on the price of land, and we're seeing the growth of almost a hundred percent in the price of that.

Do you believe that these higher prices will continue for land?.

57:09 Well,. First, let's talk about how we think about this. We only see that we have to be an anti-cyclical company, whenever anyone wants to sell we buy, whenever anyone wants to buy, we whenever wants to sell we buy. So, we buy the assets that are ready. The farms that is producing sugarcane or producing soybean.

57:38 They are very similar to what you asked. This area due to the price of increase in commodities, also the price of land winter. When you look at the other areas, pasture, our areas to be transformed, we also see price increases, but not as strong as the soybean areas. Soybean areas are multiples of the bag of soybean.

If a bag of soybean is worth seventy, it's a multiple. If it's worth hundred and fifty, it x times one hundred and fifty. That's the first point. 58:18 So, we believe that the price of land will be on a new level because we're not going to talk about soybean where it's seventy eighty.

Soybean, when it – and you are much more smarter than we are, we believe that in the long term, we should have soybean around eleven dollars. We're talking about a balance as a result of tax adjustments, but the price should converge to a balance that should come to a balance. 58:57 In terms of acquisition, we're very active.

We have spent, we have travelled a lot. We have many things in the radar with difference in we're also selling at higher numbers than three years ago. We should have an efficient allocation. We are doing everything to guarantee this profitability. 59:27 We have to be very good at buying and transforming the land.

And with these new levels, and the size of the land, we should be able to transform land more quickly and be able to guarantee good returns for investors. It's an excellent question. Prices have changed for purchase and sale. As I said, we're always buying farms that are not ready that are not generating this interesting float with commodities.

We always buy land that needs development, needs CapEx management, human capital to transform these areas. 60:09 So, there will always be opportunities this is a very large market. We must have disciplined resilience to do what we have done during the last fifteen years with a lot of resilience. Lot of discipline.

So, this is the message we have to all of you..

60:28 Thank you, Andre. Question for purchase of land, I believe Andre has answered. Now, we have two questions from John Wayne and concerning sugarcane. Do you believe that the prices of sugarcane should continue at high levels due to ethanol for decarbonization? How do you see this scenario? And question in relation to sugarcane.

He wants a guidance in relation to sugarcane for the next harvest, whether they will continue at current levels?.

61:15 Well, two excellent questions. I'd like to spend all afternoon. First John, first, we have we have a clean energy ethanol. Not only ethanol as a source to substitute fossil fuels, but ethanol, also for hybrid cars.

We believe that if we migrate to an auto industry to that wants a decarbonize, decarbonization we need a metrics that will generate fuel for electric cars. So, we believe a lot that ethanol becomes fundamental. What I'd like to say to, John, Brazil was a country that's approved. Right now, in decarbonization a new program which is.

It's a government program. 62:26 view is a state program that is here to be another source of revenue for producers of ethanol and to compensate the industry that produces fossil fuels. So, I'm sure that ethanol will be more and more relevant. I get sad when I see the world working for a more balances situation.

And company saying, oh now, it's better to buy gasoline instead of ethanol. 63:06 We have to decide what we want. Do we want less emissions than ethanol will be important in this industry in the next few years? question is very good. Why is it good, because sugarcane is a crop with annual cycles? It is.

So, the effects that we have in a harvest, they continue until the next harvest. So, why do I say they continue? We had two large important effects in sugarcane and Brazilian production. 63:47 We have the first, the intensity of the drought.

So, we had rainfall that stopped earlier, and we had important results and the second, we had a second when we had severe cold in the south. The drought is known. It hurts, but if the next year we have rainfall within the average you can recover.

64:21 The great problem is that when we have cold weather, when it happened in July, August, we have most of the sugarcane already harvested and planted, which is for the next harvest. So, you can imagine the planted usage reserves to and suddenly comes the cold and it has to begin again.

So, our experience when this happens for any reasons, due to fire or cold or we have an important drop because the plan to use its energy. 65:03 So, I would say to you, next year, two scenarios. One optimistic, one pessimistic, and this is not from us. It's not from Andre or Gustavo.

This is the pessimistic one, it is five hundred thirty million tons and the optimistic five fifty due to these problems with frost and everything. 65:26 So, if you ask me, I believe in a year, a favorable price is for sugarcane.

For Brazilian production, we have to look, it's important to look outside Brazil, the production of sugar in India, especially in India, we’re having a recovery, a modest recovery in the production of sugar in India. And you can see this with the prices of pound per sugar in New York.

65:57 I don't remember having seen sugarcane at twenty one cents like we had a few months ago. So, the scenario for next since it's a annual comp, the impact we have this year will continue next year. We will have low inventories of raw material, and that puts pressure on the price during the next year..

66:28 Well, the next question comes from as announced in the summit of COP26 last year, Brazil signed a treaty, an agreement for deforestation ending deforestation by twenty thirty.

How will this affect our company?.

66:55 Anthony, good afternoon. It's a great pleasure to talk to you. I believe it's important to understand what they proposed. Brazil, I believe what Brazil signed is our obligation, zero deforestation, illegal deforestation by twenty thirty. This is what they signed. 67:19 In other words, to zero illegal deforestation in Brazil.

We're talking about illegal deforestation. Okay. Let's look at us, independent whether it's legal or illegal. We have few areas in our pipeline to be transformed, and all of them are Savannah lands being transformed, in the that are being transformed, and we have the best expectations to finish this development by twenty twenty five.

67:58 So, the legal deforestation, yes, is what Brazil signed, and every time we see these commitments, and they become a reality for companies like ours, companies that have governance, companies that respect the environment that have management, I believe it's even more decisive for us to take action.

So, the great – one problem in Brazil is that there is illegal, not in agro business. I would say. illegal deforestation in the Amazon that is illegal. Government areas, Indian reservations..

68:57 Thank you, Andre. Question for. Concerning, can you talk about the technology projects in the field? How can 5G help? We will stay here until tomorrow. So, I'll ask Andre to be – we have another question..

69:22 Victor excellent question. As Ana said, I love this topic. I will give you some numbers from. Brazil with investments of four thousand five hundred antennas. Today, Brazil has a coverage of 5G seventy to twenty percent.

With four thousand five hundred new antennas, we will take 5G coverage to fifty percent of the agricultural that with fifteen thousand antennas, which is not a very high investment. We take coverage of 5G around eighty percent of the areas in production in Brazil. 70:05 I'll give you a number, and I’ll share with you a number from.

This first coverage around fifty percent of the Brazilian cultural area, that would be fifty, another fifty, sixty billion reais from agriculture. If we can take this to eighty percent, the estimates and of course, we're talking about technology. 70:38 We can get to numbers upwards of a hundred and ten billion reais generated to add to our GDP.

So, Gustavo and I are leading projects. The company has some units where we have coverage, not all the farm, but not only five g. Also, other technologies. Biological connectivity, linked to five g, innovation of many things, many tools, grounds for monitoring, many things that are being done in agro business.

And this will represent a new green revolution that agro business can bring..

71:28 The next question I'm , concerning the measurement of ESG policies in Brazil, environment, social and governance..

71:46 I'm telling you, we, here in the company, we feel at ease to talk about ESG. I will look at the three letters, when we talk about the governance we’re the first company in agro business to be listed in. The elite companies in the stock market. The only one also listed in New York. 72:14 Also, plus with more governance, even the SOX legislation.

So, when we look inside, we were born this way. It's in our DNA. When you talk about social, for being in boundaries, we did a lot of this. 72:35 We made many investments in social programs. When you take SAP to these regions, you have to train people, invest resources, and the company has invested a lot in social programs.

72:50 We created the BrasilAgro institute, Ana Paula is the Director of the Institute. We invest one point five percent to two percent of our results in projects with focus on education in the regions where we are present.

When we talk about the environment, the company had the capacity and the efficiency to manage the assets it has to transform more than hundred and thirty five thousand hectares. You can see this is linked to conservation, preservation. 73:27 We have thousands of hectares of protected areas.

And this, the environmental, these are the actions in the environment to preserve bio diversity. So, I would say that agro business has everything to lead other sectors in terms of ESG..

73:58 Well, we'd like to close. Once again, thank you for participating Andre, Gustavo, and we will see you again in the next quarter. Thank you..

74:09 Thank you, Ana. Thank you, Gustavo. Thank you participants who are with us with many questions. We had the greatest number of questions, very good questions, intelligent questions focused on our business model. 74:28 Thank you for your attention.

Once again, count on our team, team of people who are showing the results of the team, which has been doing good work committed with the results of the coming company committed with the investors to the investors, we will continue, continue this way delivering resilient results. Thank you. We wish you a good afternoon..