AGRO - Earnings call transcript Q1 2021

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Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro’s First Quarter 2021 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Relations Investor Galleano, Ignacio Manager. Juan to We is mode that event you recorded would during and presentation. listen-only like being in all this be inform participants company’s will question-and-answer are will company’s completed, the remarks be After a session. there [Operator Instructions] that are information Adecoagro’s on based currently of me available beliefs assumptions company. and forward-looking and statements the management proceeding, Before let mention on to the in therefore, or assumptions, They they relate occur and uncertainties may events, may that and because future. depend risks, circumstances involve future on the not to Investors future should statements. economic forward-looking those general results conditions, industry factors could from conditions operating such understand that Adecoagro cause and also results could materially in other affect and differ the to expressed of

you may your turn begin conference Now, Mr. I’ll Mariano Bosch, the conference. to over Bosch, Mr. CEO.

Mariano Bosch

Adecoagro’s quarter for And conference. results morning. you thank Good XXXX first joining

of year As results. high you and the almost months the operational release, may investments an of year. new our record a the EBITDA driving in have that delivering three are it. for we we strong continue achieved did and seen and success Adjusted first marked XX% our EBITDA results financial of project last increase generation the we as prove compared to cash The

advantages, invested have and sustainability capital of our generating $XXX returns allowed have the scenarios. face efficiency During of to investments and improved all competitive five us position years, to on over projects our that the past enhanced we million all invested in be across approximately different businesses are XX%. better our These operations,

was the is now environment on price our able results are being from strategy efficiencies improved we that higher our important commitment our reason generate we reconciliation local thanks focus also challenging scenario of despite in this of of why solid as XXXX a our benefit it and is to to achieved as the and the Just producers. It investment and team, results.

of was and products Ethanol our Ethanol make crushing Sugar increase sugarcane our have prices. our A plantation, vice can means fact the we expand mills competitive a to to that one every crash investment high basis, to Energy our of production. a producing advantages under changing year businesses. versa. a of us This weekly capacity we record and the first and performance aspect non-stop our business, of Moving high which model. In is operate of Achieving dilute round, at to is of to sugarcane this we the the thanks which Sugar, maximize volume It and on need harvest Sugar capture allows inter-harvest fixed very we the even or possible, the during the to we enhance good three costs is relevant period. first the months system crushed year. efficiencies Actually, to stage quarter, of on a switch for flexibility continuous and given Ethanol from We a the environment. decisions products traditional our

the a provide will ton year, and prices. higher when believe currently are throughout to healthy to ago we capture maximizing Sugar two competition TRS support that production the maximizing see both will it were weeks we prices. premium at this example, trading Ethanol is For per Sugar a Sugar, for we to since Ethanol We that

Before on the like moving other in brief on weather to I comment would a make the to businesses, Brazil.

for Center a month. dry region weather past South been the the As has you know, experiencing

in with costs same of business result focus the business, a than to A its sugarcane we and sustainability special of key as to do carried full like means our the adjusted variable our we time outperform than to our coordinate integrated the In product Throughout operations. more Mato This turnaround in segment the more Rice that is our of work and of based example first vertically channels. delivery was our which team our almost chain. improve clear normal quarter. as productivity EBITDA. sold our our on quality, With out rice last team region. ton, different throughout Grosso enabled obtaining value less which of EBITDA. us investments time insist to passion As the operation. the rough possible work surrounding Once is years, of again, at only thanks a past people. This dedication specific the minimize in to mills, would quality approach Central Transformation has dynamics, we the weather figures I put production few are go be the and which through a logistics with commercial that doubled to businesses, is to prepared grain per current Farming better different experienced we year the efficient a Land Sul, to weather efficiency the drier throughout we the doubling bigger a humid this spirit They do high innovative this implication mind, and our and the and the the every

offer delivering the even free-stall. other and was vertically we to us continue things, export populate operational integrated with EBITDA to undergoing quality generation. market. This and and customers this domestic indicators, of our allows we importance a products evidences, among as investment operations harvesting the key and activities our Moving in businesses, In milk in results. strong integrate maximize our the forecast. which are facilities of yields fully diversifying us productivity higher operations, segment, with our Dairy sunflower In our into currently enables four we value-added our to results high This to to volume Crop in peanut our higher our process, line crops drive our improving

became As first the XXXX. past free mentioned since last we cash positive in flow year, our time release, for

cash flow are the reached in years. we is debt generation the we results that structured. the in adequate will and increase and us upcoming that Moreover, think its five-year continue are that of levels we to our stages, have front confident is Now well final in the plan

we XXXX mark will the our of like already for we a and program. buyback year see, point have through cash Just started in generation. a our XXXX when can start marked to is it doing us turning This you shareholders. as priority, distributing cash terms

have of X.X As we would our Day XXXX, To these reflect already million October a to we for success. with on during past journey to had of communicated be plan. will embarking shares. five-year represented complete a This today, that company. condition to it challenge we repurchased a we able But take that the we Investor market investment moment huge the conclude, to have years. In I our like the

the of presenting very and It translate Now, today. proud which would reiterate gratitude results we like the are achievements, thanks is into to team. our all we my I management operational are attractive their and effort the generating to we in are producers for our entire that sustainable and all hard we daily one work world shareholders. of crop margins lowest are the and of to

Now through you the I will numbers walk the Charlie let quarter. of

Charlie Boero Hughes

Mariano. Good everyone. morning, Thank you,

move to Grosso on do Rains analysis page let’s brief with a four, Sul. Now the in Mato

XX-year and Precipitations but top were registered XX-year during period the the do throughout period As average charts, during Sul were the the higher were registered level. in rains XXXX XX.X% Grosso quarter the doubling cluster in last our average. Mato rains same XX.X% than the year of of three-month January, but seen on than especially higher the concentrated

bottom-left milling distribution frequency chart, rainfall As our a in in XX.X% can the seen be activities, and crushing caused day. in leading the of to interruptions decrease per

readily results to good increase an opposed were reduce our However, XX% strategic which because during year. days. achieve activities by million cane quarter these availability in thanks to an crushing to increase our total decision our and first milling to XX.X% We fully able in to XXXX, we of as this was resulted teams milling higher available cluster, restart activities in offset early in because, were days our and of pace had milling last start effective the

As like to XXX,XXX a page would of you I sugarcane crushing now quarter agricultural higher result same our walk first tonnes jump compared Please of or where last of the five, tonnes volume period during reached X.X to million XXXX, productivity. this, to of XX.X% year. through the

while the highest observed continue XX.X% two a tonne, the of weather tonnes, low impact the the being prices quarter, of the productivity period the hectare year. combination year-over-year tonnes sugarcane to aim the of conditions. the The same for hectors Ethanol TRS quarter, yields year-over-year. reached XX kilograms securing adopted production During our from in during by of potential, harvest cane X.X and rest We mindful with compared recover of during by availability year. XX.X% effects per maximize marking to and growing resulted of these with explained The hectare, respectively, high quarter per last first the content sugarcane that increase, per with XX.X% strategy of allowing XXXX higher reached is potential we of XXX the TRS XXXX, the the thus capturing adverse of gap

Let’s our where discuss like to mix. move to slide I production six, would ahead

As which X.X% context, Sugar on you per efforts traded per hydrous were XXXX, at when traded XX.X% at specific at few maximizing In first respectively. of In and this of can the to a see our a pound, Ethanol, for left production, average all days, a premium. focused $XX.X pound in quarter anhydrous chart. the top and premium traded and on Sugar $XX.X Ethanol except

the quality for quarter the worth TRS during marginal of as I the of the chart, month pointing the that like contribution. good important content first on first Ethanol as a mix Sugar fixed us this content, times more the highest the produced efficient during Ethanol allowing achieved period of of since advantages, favors It the quarter seen last most that one the XX sell to record of much to TRS XXXX, Despite as production compared our right first As diverted producing prices. XX% XXXX, of great volume the constitutes Sugar, during degree would of high and Sugar in observed crushing the can as year, production to is to high mark be first the out year, to increased our our usually resulting year-over-year of of less and use TRS of the we to year, the a make and higher. top with mix quarter product same the the assets alcoholic of X% capture it us a insist competitive flexibility allows of Ethanol. compared consequence

quarter the in of EBITDA considering accounted business, for for and accounted of Ethanol income, Sugar while Ethanol operating the Energy other the Sugar, During XX% total generation first year, XX%.

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

quarter the to you our from benefit but to commercial higher sales Ethanol income to quarter representing in equivalent continuation volumes measured increased year-over-year. This and price a the line. briefly pound measured top volume the XX% reduction. on first the average explained RenovaBio XX.X% us to year-over-year of see registered sold $XX.X mainly additional U.S. prices. our sugar last decision in expected the net credits can the is compared in chart, sales dollars, X.X% standing to selling and year. million, reals curry thus that lower by me increase enabled compared decreased revenue stream program As slower reached $XX.X left same under capture XXXX Allow the by out was Ethanol per All-in-all, at operating to carbon Ethanol Ethanol period point during an other

XX.X% XXXX. quarter per increase increase average by increase prices, a dollars, than standing Average as year. of in XX.X% volumes. the net million, during both which last same a This Sugar volumes CBios driven selling price million, and times lower Sugar selling a at of hour, In reached higher per to to the as pound sold $X In we $XX.X megawatt quarter BRLXX.X compared of over CBio. CBio, X compared the in XX.X% to quarter totaled reached well period almost at measured was were implying per hour increase. reached of times reals, Overall, the sales megawatt an marking selling the quarter per $XX.X in XXX,XXX decrease of during XXX,XXX an lower, XXXX. of first XX.X% the first case $X.X average in prices sales X equivalent Energy, fact, $XX.X year-over-year during

greater Our highest with maximize sale strategy quarter. Sugar available capture to crushing the production volume the during a for the to coupled resulted prices in observed Sugar increasing volumes,

not of average tonnes this of Sugar only an capturing exported Sugar. organic produced we our we to in efficient but add addition, over model UMA XX.X% in a In VHP place, highly mill price cluster over In UMA. premium X,XXX also to continue have way, value certificate

financial eight year. of slide $XX.X, turn Finally, to to XXXX higher the Energy a to performance. first period would Ethanol conclude same quarter discuss with like to Adjusted of EBITDA and last where business compared the XX.X% was Sugar, I please during

the a to the a Brazilian of harvested the increase net the million and the sales, on reduction and while the our led increasing to attention prices. This slide derived explained to now the balance mark-to-market volume, level by, been would realized at will in our derived higher mark-to-market the a addition move cash loss business, $XX a your I become quarters. already to from has measured consequence direct the and XX. margin, by depreciation as per offset of In please of attained hence upcoming was crushing $XX.X is positions of partially by efficiencies was from which commodity hedge the Farming pound in like industry gain farm of million real the cents sugarcane, cost and higher

the on our last over XXX,XXX by system, margins harvesting during increase diversification year, is the and quarter crop are led We year. X.X% in than to an intensive the XXXX is activities pointing good which season. out are planting this achieved two rotation worth increase previous have activities and and strengthen it during completed higher planted a slower harvest a higher way that Harvesting registered reaching fit for area, to Argentina harvest of our crops the offer mainly rains into strategy. in compared same period peanuts progress hectors, the March well and XXXX This driven sunflower

been impact on no assumed since with yields. However, have harvesting activities

and value a business, yields increase move This to to operations. year-over-year sales than harvesting during achieved $XX.X used in every focusing to the throughout logistics we to goals, in to This generated selling variable and a chain million to and the traceability higher and attributable In by, investments corn, the adjusted to by, despite per tonne, efficient Land produce, mainly increase prices, genetics reduce quarter a $XX.X performance in rain selling yields the businesses. the gross harvested first XX, mark-to-market the reduction sales in the and average a on carrying productivity firm of first for in we EBITDA on efficiencies business an more period or and yields quarter. Rice million, driven staple. driven of out the lower reached prices of volumes, the the commodity by of the Let’s as from times a which It mostly prices, higher centric last costs increase and three mainly million mark-to-market continuous EBITDA our explained efficiency by lower an business line, adjusted in XXXX, successfully walk diversifying the able price the through by offset higher XX.X% milk of achieving an $X.X financial soybean $XX.X Farming Farming results as on industrial average especially the levels stage value achieve and of to more product EBITDA efficiencies The and of increased at in EBITDA higher gross led adjusted our showing selling a at Transformation minimize achieve vertically in I where the business agricultural of of cost improve The by like $X.X driven due synergies Transformation X and was partially would by efficiencies improve Dairy the in mainly volume, over selling to costs our EBITDA you account The our fully focus X have increase be level, XX.X% in $XX.X price. increase higher explained businesses in $XX.X were our vertically registered efficiencies progress higher and and first year-over-year, and biological the increase to year-over-year. in quality page Farming increasing by partially Adjusted a which tool the reduction XX.X% derived every focused million was increase on years in by of export was by XX.X% on XXXX. than higher a quarter same the of adjusted million generated benefits commercial higher view, of during were sales own by per integrated offset enhance and volume. coupled a our these $X slower offset depreciation to productivity key bigger, costs compared cost having with times million, assets, achieving the market million customer of our explained million, our gross increase a generated lower and an this $XX.X to of operations the level. tonne. due The our gain an able Crops The XXXX, past Land and by an was working asset We integrated lower year. which XX.X% and chain. a Argentine of portfolio, main in decrease area, to the of in And U.S. led the $X biological increase million the we was of dilution million dollars. enhanced peso, to a because in increase which quarter

in Brazil, soybean businesses the by adjusted latest in explained prices. increase receivable to which million the the by corresponding impacted account an was of sales positively farms $X.X of Transformation Land EBITDA an gain mark-to-market in Our the of registered

year, in record of performance. commodity first three which Adecoagro prices, totaled months quarter page businesses. results financial of a these the our and the to We rally year. we achieved In financial out $XXX thanks XX, new Adjusted solid the the both capitalized XX.X% the EBITDA high since evolution results across investments higher from to marking of last same now first and operational all of consolidated achieve were to carried XXXX shows the to an operational period able XXXX, high Let’s for and point view. the of turn we on compared million,

to net returns. offering turn To these generation projected, a our we debt position. look cash have our take As are EBITDA at investments please XX driving attractive conclude, to and been slide

bottom-left crops the are second the of has seasonality year. of period, XX, see, decrease in million in you this point only $XXX our offset cost position. concentrated fact explained by planted as cash our the the XX, working This reached view, debt during quarter higher a amount small that the chart, our in and the all by XX% in is a As generation harvested highest requirements, XXXX. a cash are sold. may net million, semester reduction The December From of and was since $XX of X.X% fully but gross incurred, debt most March compared the XXXX, capital to first of is crops

especially to and well by The higher first Ethanol. we Crops, inventories reduce stocks On harvesting in the the and from led a throughout as X.X% we by debt. accounts the debt planted cows businesses, the decrease increase our explained Rice receivables to the was in carry Sugar net cash area also mostly in Sugar Energy X time. the our Sugar, is basis, continue to prices, with in levels, as Dairy increase indebtedness, inventories As is also quarter and third XXXX, value the based was invested with as same a order increasing a last of higher company due show Ethanol in expected cash business. XX.X% divided second in the sheet without to milking of and expect strategy than the the very by and be of X.XX liquidity during greater Net debt quarter balance during This capacity to in line decrease overall our debt driven the ratio maximization commercial the terms the not We above the the benefit capital. by our which and reached than quarter in capital adequate position. the working year-over-year of quarter consider debt but raising year. most calculated XXXX on our reached debt time, external ratio marketable equivalents fourth full you X.XX repay of to XX.X% times, long-term At any debt. times quarter short-term short-term lower plus much of position cash which and and only balance for Thank healthy in on your first quarter,

We questions. are now to open

Operator

Instructions] [Operator you. Duarte question go from Today’s Pactual. Please Thank first ahead. Thiago comes BTG with

Thiago Duarte

I’ll with have Good Mariano. Hello. the -- Good three start try I and Energy Sugar and morning, Charlie. for be segment. call. to I’ll Thanks Ethanol morning, the brief questions. to brief.

that mentioned on you I be the across shouldn’t been opening poor there’s remarks, your know that Center-South. concerns the As in Brazilian affected, levels yields growing rainfall cane affecting

You clusters which as weren’t great. already is mentioned affected, core that

will production feedstock crop. So reason it production affect the availability. this output why in Sugar be will Brazil, because of Ethanol and sacrifice in your that I Sugar you asking Center-South to one wanted in so I the ongoing suspect industry lower this by of is continue will Center-South Brazil on that in to Sugar general hear the think The how maximize views output that the I’m Ethanol

your second capital hear scenario we how to allocation. to wanted mix? to and related of should to this expect question in Adecoagro I is So terms react The [ph] views production

environment, five-year out on year, very this the phasing headed flow of better So coming based to the free looks your from like investment prices cash commodity you’re good current plan. it a generation and

for a aiming attractive whether in if and cash the a expansion very share the finally, should quarter with distribution room you able yields see the and And across are So we contribution us distribution or target good that on your capacity how out executing business, ratio be opportunities to dividends that ideal business third buybacks terms between progress business very of been this and question particular, see you come my been have beyond Rice well. stronger dividend and please investment can the capital of terms good in you cash allocation remind have prices or in you the round leverage unit? as you what’s you just another policy of in showing and a Rice investments? is So should from

So comment bit you can in outlook those the you a the little so pricing going Thank and the particular of terms in outlook you much. margins, on forward? of how see sustainability

Mariano Bosch

questions. you, first Thiago, the I year a in outlook and this for very Renato on for Thank and question strategy much And ask your on want is to how more the affecting general take color your give our to first -- will and Ethanol and there climate this. I Sugar

Renato, So, Thiago. you can answer

Renato Junqueira-Santos Pereira

Thiago. you for Thank the question. Hi,

think which Center-South the TRS will it’s clear everyone but the was Brazil, imagined. less in becoming that weather have than I

I saying drop about XX% analysts produced. in think most are a TRS of the

recovering from tonnes is to needs in So that Ethanol it’s also market, and X% XX the million it’s the increasing million -- equivalent. market year, should not has supply -- TRS that that the Brazil clear tonnes of be approximately sugar X% this I of enough world think supply that equivalent it’s Ethanol Brazil X.X to becoming increasingly

think the be So two Sugar, years, twp that to trading from the close products, last tariffs. the Ethanol, we different will

more Sugar Ethanol. So last we much saw paying than year

TRS opposite. year the we This lot a be to a I think healthy from of that it tonnes we exactly are So same the there XX before from million Sugar and think, Ethanol the seen competition almost to Sugar, was and Ethanol. will year switch

see that So both products will that’s prices. a have be why will -- we good

be before, strategy the a this of at product weekly is profitable Our scenario to to to moment. as as particular Mariano the needs taking in basis, flexible that that change as more turn in is mentioned possible or advantage

Just pound hydrous hydrous pound. today then reference, multiples to and $X.XX equivalent in $X.XX is as a sugar per of per

maximizing So Ethanol. are now we

Mariano Bosch

Clear, Sugar that the else Ethanol? Is and okay? Thiago, anything Renato. on

Thiago Duarte

Oh! That’s okay. That’s okay.

Mariano Bosch

Okay.

Thiago Duarte

-- trading parity, going -- be the Brazil the how to would are to at was consensus be there’s industry we output Center-South Adecoagro, a behave, maximization industry follow-up whole believes going thinks whether but products two Sugar Not from or maximization to won’t -- diverted Sugar is there from mix TRS be whether to more because thinks was you strategy, the which there’s will of the the be Ethanol. going the the of you general. the going in in clear and to My of -- the

Renato Junqueira-Santos Pereira

I Thiago. didn’t understand your question,

before, think in in players that similar years, mentioned but southern we but a last the those the will hedging. most their bit much parity Center-South, closer is the of be even very in the two as not As in advanced than Center-South part little since we different,

are are the Sugar as they at think today. when maximizing I least parts very close are we

that So we Brazil. produce try projections is tonnes XX think they that the most everyone will The that and correct. expecting we million they are believe are Center-South to from

Mariano Bosch

Okay. Thank you, Renato.

Thiago Duarte

Thank you, Renato.

Mariano Bosch

general Then to the that question third or go you be Just second This to and Sugar rest. the compared I to the complement, that’s in continue to open on to price, Thiago. is why has our asked. strategy will

is has several specific third investment the team This again, it’s been in On opportunity very we’ve technology here. This question question planters, an and is for Rice the operation. a for on that the system that Thank done. pursuing and is years. hectares of been example, that applied being is the we a something rate we’re change that the as dedicated. very continue means XX,XXX can for There of operation has full strategy something a Rice we very how that amazing sustain. Then is job out planted the lot irrigation to that this at plan. the of you been whole That point whole done has efficient to to

makes water also. every where efficient different flows the of place on furthermore applied of technology terms Things connecting, a in Internet have of more all not sustainable We us move, more only economic, are to this

through every learning it. on this go So solid, execute improving that is we people the is because is this improvement and going to continuous team knows how to on is there, all more more continue a to operation team the year expect more, is

the how is different very is There the eight that all make a we on five we team did Then, commercial logistic together. to logistic or So different are three the come investments part, are the are all harvesting. most mills, this relevant, to huge things these part challenge. is but thing where places these or relevant up working farms a

that able we the that is different to the segregate eight this achieve of were the varieties we the quality even this able varieties, of here with projecting. different in rice, top these, all So are what being it’s over years, movement, the better to On we and last buyer world. to were all able the best we than segregation clients reach are different of

need So is clients specific their variety that which they specific knowing different brands. for are the these

So creating over we seed on. is with of all very something or very, these good of clients going traceability full that the that is product that includes a relationships all our are the world, the the

that’s see So see we’ve have very been we the okay, near commitment, the of that all the and historical in two look optimistic years, not but business. they prices. results regarding being business overall very is on last this improving are why going the applied these how technology results --the We they Rice been years we prices and Rice sustainable. what’s they years we are rice, three general five than the high at better this the when what ago, are And of even in

just because to I I have [ph] the what position So, continue the user are increase we mentioning. in are we lowest what can was -- copper overall, of prices and

and below X been It’s be in capital the thank for on ratio willing to -- spend explaining second and about opportunity Then a we’ve business about years order business. be question are we’ve clear all EBITDA. a three you asking leverage we question what is in our the and what never to there always would lot the on that to we specific time with the in becoming allocation But relevant us. this think it your shareholders. talking have. results our been for that times want of distributing goes the the details So about that that is it That’s last we Rice finally, of saying

are We clearly there.

that seen over -- this. well that indeed also are a the of terms there of Charlie in presentation We terms explained very explaining just in you’ve that structured so the

comfortable in it’s of very terms we that that, are So today. clear

clear to distribute being are of this growth a And -- the in distribute be is that so mentioned the year flow policy. saying going project? became XXXX this try cash shareholder. generated could shareholders. free are are part we’ve where and I was much And what more as potential currently how introduction, a with As we cash with XXXX our we with a first year to of are or we we to this where our distributing capital structure been that are and is part positive. the thinking distribution to discussing CapEx priority the we a cash

are we’ve on as that been We saying. working

the of We are that process. in middle

and distribution point interest, a this the the talk maintenance the operating distribution are with some cash free flow. up CapEx, a taxes the year come working of percentage the about of will free needs. is we the cash operations the So capital after policy. the is operating we’ll policy, discounting The that cash What generating flow

that the is in the and -- Sugar Rice, in not been money of amount profiting we the only all Ethanol before in in of that crops increasing are in the also business, course, and mentioning worth for Dairy. did, investment we the that we’ve and as So

or see a things So buybacks in synergy, businesses from to our Vinasse the distributed are dividend we we the is portion currently all That of we generated, methane will discussion of happening of Then the we are will being things that biomethane opportunities a a are example combination. to that a one one that the operating, that continue are see cash continue is the or more undertaking. through operations, is that each this small be our with sustainable. growth that a I collecting in in us makes plant. Sugar Ethanol and biomethane we mention they improvement that or

We are are need. are this. a able trying with we approved we trucks where move to them we project We some order concentrating involved in -- be in to

before, shareholders. interesting very will synergies of the is to current distribute operation, So and within our to occur. we are cash first are mentioned that priority there with are this like I with so continue that generating our But as projects part the that

Thiago Duarte

Thank for Mariano, detailed you you. answers. helpful. Very thank much your so

Operator

from question Please Ferreira Lucas next JP go Morgan. with our today And comes ahead.

Lucas Ferreira

you me? Can hear

Mariano Bosch

Yes. Perfectly well.

Lucas Ferreira

Okay.

questions. for Sorry. follow Thiago Hi, guys. questions ups are somehow My

The about if briefly talk first one itself. you can the CapEx

guys efficiency more probably, projects have, cash, in So pipeline, assume some you I company maybe the projects. with the generating

So next Argentina. how free the in the if expansion flow and this specifically, a more be color? CapEx about us to give year, guys cash be generated can big talking the second CapEx I’m year, you can And about the question,

any strong very Argentina i.e. generated projections also you but should a you the -- bio at that the guys in guys don’t the first to you any or if not don’t EBITDA want very here, suppose the in much, And guidance, in I change I formation, good a markets Argentina. make looking have forecasts XXXX. in asset So year quarter

mistaken, have Argentina. million if to So million you over $XXX debt not $XXX still in in

low in So you years. next Argentina given of of generating lot but should a very business in that couple CapEx, cash be this consumes

done? you fully the So in beyond guys will Argentina? are more be and in So debt? Yeah. generating generation future done paying with the debts, So be what that be can specifically when planning the what to cash

my these questions. Thank are two you. So

Mariano Bosch

Thank Lucas question. for your you,

what First XX% what of last asking, been these were changes we’ve continue a significant achieved. above in all, projects CapEx we All we be year. to that the there. terms seen overall line expect to that you’ve you are CapEx growing that see We mentioning -- a with in projects don’t of have

is continue within to do things. more are we what or the less same So

businesses we project small to undertaking. specific are see of continue that We in one each very the

XXXX. what we -- what line So till in is you’ve general, we’ve with happen seen in in now had

expect the Uruguay So always Then time. to should and Argentina good Argentina, being the line. in the the so generating about are generated we countries we of altogether, two same now, at moving to continue is business returns. in you that think part yes, for And

having of also of see the on in interesting or peanuts in same a Dairy the thing CapEx is, rice small the case the and case case in business. the We I are mentioned, can of sunflower you in and the a as also overall crops

to growing and we’ve business. with already So in Sugar line there Ethanol they invest in doing less been are or we that things as a are more and what continue

whole similar Brazil generating. company. the is So And amount that think terms terms Argentina the of on in and we in money of the debt of are debt, as

more So line sometimes that we but are much debt the you efficient, be. that’s total where to have In be order to want in with we have general, we it intercompany case. only in to our depth very analyze

Lucas Ferreira

you. Thank

Operator

Palhares question Guilherme from Please And today our ahead. go America. next Bank of with comes

Guilherme Palhares

our my Good now. in terms of so fertilizers business, of questions. you costs rallying that from costs taking reading morning, Thank first see side probably everyone. Questions for agricultural the good the we right are

hector? for that could you the thoughts season. you you could questions. that about season well you expect remaining and Ethanol you could business Thank as per the persist of cost terms expecting share question gains at That be achieved second you for that should is in are the the actually the the company other the if capacity greater the a you. of is this yields as the for better some productivity If company first pursuing season two utilization? talk it is the will on Sugar and So And next what expect quarter, looking

Mariano Bosch

and can the milling in and I capacity. your about we Hi, on agriculture then cost expect more yields general, Guilherme. Thank would Renato details and Sugar talk you. part what -- Ethanol our and the of will take then and

year are of there also of our a cost overall all being of are by see the But as general of that as than margins are by cost in cost in an transportation things we the in we increasing that sales -- the line can costs, costs single are operations. the the increasing. with our improving the the our continue in In more way increase different general. you are price some you offset increase. but in of expect to increasing. agriculture are relevant that, Part one the sell can rest number. in and improving, of terms overall the cost and improvements go million And is will as we of could is be and is costs on on detail are There And point. to of Sugar more the then that expected that that the Ethanol, having are in Renato of ask That our our fertilizers the overall. cost for I every yield the increasing are what But mentioned, oil increasing

Renato Junqueira-Santos Pereira

Okay.

year regions the this much a it has pattern So mentioned, weather different as than Center-South. growth the other in

the in year. general January millimeters we Even semester last of in the have rains Argos. XXX this good second had Actually millimeters. we had year, XXX of we So

good. March the for we last the crushing was we became first outlook very cane have after the the in had in weather quarter why So that records in of beginning rain first the the The drier was March. That’s quarter.

huge view mill in dry that is regions operator. is think similar is to by we now, expect I the Alegre, going more than In weather the Remember the that are in TRS from the the the forecasted. the our higher redaction Center-South. our in the approximately we other if XXX partially kilometers So that persist weather X% be offset to a will content we sugarcane. have Today TRS

with lack more of suffering it’s the So rains.

reduction to XX%. expect and huge we a have between So X%

be processing higher you yields, lower and did XX% together, put X% last to we than TRS TRS If we out those probably year. variable more will

Guilherme Palhares

you. Okay. Perfect. Thank

Operator

concludes back gentlemen, any question-and-answer [Operator remarks. Instructions] session. the I’d to ladies for And Mr. time, to like floor Bosch closing turn this At and this the

Mariano Bosch

for continue buyback a excellent our shareholders structural an in position to in good are so to we already doing generate to program are And way to closing are because throughout scenario. our during that during outstanding the we across the outlook unbeatable the joining believe all promising distributing take Before market to such we the again, to operations that you thank to my is the made continuous position we our only we conference. want job of call, I to results reiterate strategic But possible are the plan operating of last support. financial looking couple of more coming we and for investments The we and advantage favorable all like years. that gratitude produce in is years. products doing our teams their would this Last, and an shareholders our of I an

our see events. thank you upcoming So you and in

Operator

concludes call. you. conference you all today’s thank Thank presentation. today’s attending for This We

have wonderful and now may day. a You disconnect lines your

Mariano Bosch	Chief Executive Officer
Charlie Boero Hughes	Chief Financial Officer
Juan Ignacio Galleano	Investor Relations Manager
Renato Junqueira-Santos Pereira	Director, Sugar and Ethanol Operations
Thiago Duarte	BTG Pactual
Lucas Ferreira	JP Morgan
Guilherme Palhares	Bank of America

Adecoagro (AGRO) 14 May 212021 Q1 Earnings call transcript