AGRO - Earnings call transcript Q2 2022

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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 Second Quarter 2022 Results Conference Call. Today with us we have Mr. Mariano Bosch, CEO, and Mr. CFO. Hughes, Boero Charlie to all that a participants Company’s during like being listen-only event recorded the and will presentation. inform would this you is mode We be in remarks a Company’s After will completed, be the question-and-answer are section. there this be further will At time, given. instructions let available proceeding, that mention to the the Before based management and Forward-Looking of and Company. assumptions Instructions] Adecoagro’s are on on me [Operator Statements beliefs information currently or on may relate risks, occur to because future circumstances uncertainties, that therefore and involve future. may They the they depend not in and events assumptions also Investors differ industry should and understand conditions expressed and that to the Forward-Looking general from materially economic other conditions, operating future such factors affect results in Adecoagro, of results those could cause Statements. could

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

Mariano Bosch

you Good joining morning conference. of at results quarter XXXX thank for and second Adecoagro

results a policy. Before the going update distribution of into on our the quarter, brief

distribute the this the was milestone installment and have the you flow year. and of XX% the the XXXX, in to know, In buyback Adecoagro we of previous May, in via the first we As net out operations that a generated $XX.X marked history made of second minimum cash year, of we it dividend will dividend We in installment. paid for our November committed a million, from payment. as cash we time first pay and

We approximately $XX and repurchased continue year. announced, totaling per a buying As of program seven-months our dividend At million, million. under than buyback $XX shares first million during of $X.XX to the this will more time, shares amount share. X.X distribution the same the we cash

business. a and of like I highlights would to operations, energy start sugar with Now going into the ethanol the

of production by During commercial our to the And even sell tanks started ethanol, when quarter, the levels, the was ethanol Two clear tanks which this than our quarter EBITDA increasing day-to-day prices and peak our tanks costs. hit most prices. strategy, enabled higher this. with our of full XX% up and April at to of Ethan sold our XX% ended One, examples year-over-year, we of production. in us an went we despite adjusted sugar,

product secured in June, ethanol. capacity in and content required quarter, reached sub of spread share. of industrial anhydrous premium in exported more possible Exports Europe, The It generate production the the our own regarding flexibility outlet our sales are and our input as in average it And and to our million have ethanol dropped, prices the we an the trading $X production degree high And more catalog high also region. asset XX% carbon part our vinasse. domestic we divert achieved for of produce Second, used the XX%. us bio because were fertilizers so fields. have production, sugar the produce Vinasse far, product is to credits, our for ethanol certifications necessary to when in prices that premium low a per reach alcoholic main we $XX the that of TRS because we able also was of is as Europe. allowed during grades at of to to ethanol and Maximizing to commitments biogas. to our and our we

the from to in credits. make these million expect sales We of $XX carbon XXXX, only

crushing year cane terms slowly the because of secure volume, wanted in started As to you know, availability. we

which at tons. year, accelerating pace remains reach forecast We to million the XX crushing are for roughly unchanged now our our

fully year-end, we We first from to our over enough recovered into until into storage frost have of Agricultural entering semester availability. productivity And also XXXX capacity the event. cane production the entered second with good carry with are indicators the if year needed.

times activities crop of in harvesting solid X.X commodity of and overall farming campaign. Adjusted business, XXXX-XX EBITDA low time, to businesses performance dollar as year, moving In the a tons production. way business and higher where totaling which including This in season inflationary costs. million cost finished, more increasing operational previous higher only costs At by It the in instance, logistics yields, same the and compared the our the over an important environment rice to high led to to we achieve the terms, pressured of increase as is is agricultural for second were farming costs. the rice our reduction, are strategy of margins, global crops peanuts, yields. lower terms efficiencies are even and profits, Now, prices the well presented discipline results XXXX our rice, practically case ever. in was focusing there related our circumstances. year-over-year cost captured current of inputs partially when lower driven the producers prices mixed being of of on corn during a sustainable and constant These and than to the

that our over jobs report. providing I we reinforced opportunities our we There, founded first audited to where integrated published to commitment XXXX XX-years, in past X,XXX regions since we our Adecoagro, three were. pillars Now, we three the report there sustainability mention concluding, like before over the would weeks-ago, created ESG together with

When educational to well Today levels, the average. the where outperform to levels the below arrive Brazil’s we do cities contributed score. say their and Grosso regions improving Mato operate. educational I’m proud we towards national Angélica both also to that Sul We Ivinhema of

tools how region. From view, we trainings agri the business provide We jobs carbon are fix in amounts offering women them such with of of promoting XXX,XXX in under the a of over production working on soil. to model huge an environmental that hectares also of tractors the get necessary will point development as sustainable manage which farmland and to operate in by

now have to into a stakeholders our by are of to ahead. the I ESG examples together In To These we terms of be it required self-generated built over opportunities being to continue total is of and make the have overseen just energy, company our strategy. few Committee my XX% integrated work contractors the is about renewable the for which the doing, sure of conception energy. energy we proud reiterate all work employees, gratitude past their to I’m commitment. over hard excited XX-years the Company’s and overall conclude, and want been

the will I through Charlie Now go let quarter. of numbers the

Charlie Boero Hughes

Thank Mariano. Good morning, you, everyone.

a analysis page on the Mato do start with Grosso Sul. Let’s brief four on

dry to March short tables, top recover our above to and XXXX Better higher during cluster our of and the and than receiving allowed turn, take continue the April first higher of in average event. rainfall year, to continue the to the advantage pace enabled impact the second X% XXXX us quarter implantation last were a on average. from availability XX-year constructive during of during seen year scenario. crushing increase As period cane the of and price XXX.X% of rainfall same start After the

our Let’s to Slide like move ahead X, sugarcane would discuss crushing. where I to

XX.X% to crushing indicators see quarter, to that crushing activities volume only it lower the a namely quarters year. starting the areas the tons following activities growth next. we compared us lower in reach limited X.X On as This of concentrated the year-to-date to and second of up basis, volume make allowed than increase as Nevertheless, was the area, crushing million the crushing the last to fact were X% and sugarcane amounted fully tons harvested we lower which volume start for for same potential. on During first expect our the last will Thanks X.X productivity of compensate million our with year. reach period last of expected, harvesting quarter, explained a year. line late with dynamics by reform mostly slow in XX.X% to

XXXX, marked to X.X productivity. pace million to where a would new accelerated and crushed in walk you X, For our our monthly our tons of we cluster. through I instance, Page like Please July we crushing in agricultural turn record

which the a weather are reduction expecting, content in we in to sugarcane hectare were TRS reductions, These per during resulted production XX drop XXXX’s adverse lower by lagging tons fully impact compared the per As XX.X% the per of year, on while conditions. explained quarter presented time. were of XX.X% period kilograms XX.X% hectare XXX reaching to last same TRS yields

the XX optimal growth half hector kilograms below stage. time, per of of per reached a its and reached of most Sugarcane the mark during tons first the came reduction year year-over-year As yields area XX.X% was XXX respectively. while harvested TRS content X%

new reform for high capture enabled Our yielding maximize mostly to plant available us strategy leverage ethanol areas potential continue to to and grow, greater cane season of prices. to production area attractive and with harvest next harvesting areas allow

as our XX and hydrous discuss prices Let’s price to quarter compared since premiumsXX% XXXX. per to we quarter product I allow premium. as equivalent ethanol us most TRS our ethanol much to second to prices. in TRS the advantages, ethanol pound traded Side make relative relative assets total profit of XX% of XX% of sugar competitive To our of we average it the like much to anhydrous of In XX.X% ethanol diverted a price flexibility our and use respectively. the to and to where premium of diverted further the of fixed more higher the would production of move of XX.X% to an XX% as profit our in both Thus, X, advantage higher important and anhydrous enterprise efficient one from as Year-to-date, previous during from ahead our to was take compared report production constitutes year. trading ethanol XXXX, XX.XX XX% This mix. second to degree high

inventories ethanol ethanol were which reduction start crushing higher of than XX% a of was as and We volume, attractive to capture sugar. able the high XXXX. sugar the to this average was XX% this thanks the case lower the offset year, higher our consequence prices, production both in of Although and case were of by of in In in at prices.

where and to discuss Slide like to Let’s please volumes average I selling would prices X, selling product. by our turn

increase per prices. sugar, a peak In market sell our lower sales, our in up selling XXX,XXX by flexibility and lower prices. decrease of volumes lower decrease over X.XX commercial cubic In reported XX.X% export domestic average sold of order our driven can it XX.X% clearing decision crushing off which you energy, the markets. to tanks partially or as see in to the as strategy in mix, a on our consequence volume, year-over-year benefit to pound. upset to by which XX.X% average by increased hydrous higher over and from well XX.X% out higher carryover by and to meters, to sales. case the prices chart, to prices commercial prices was in mostly As there the volume XX.X% expected gas left of lower selling ethanol selling Thanks were at volumes were and higher offset a selling lower the as relative fully carry were in to selling by increase driven average both as bio of production to due The crushing and

that our XXX,XXX operations times in Regarding have of carbon to credits, efficiency and CBios. rank among an industry, we price right previous in than me ethanol. let the credits the sold the sustainability time year you we per you at every we $XX.XX average higher remind issue the CBios, highest X.X sustain carbon sell to Year-to-date, the

record Page at drop as you period to semester, XXX as to mid-July. XX.X an we sales. compared in per in per a I of cleared scenario to by the during cents where CBios We end XXXX Brazil. sale million quarter driven effectively at are of the stock increase sales our average high prices in XX.X% average beginning $XX it revenues mostly concentrated Higher this equivalent. clearing of a XXX,XXX in conducted amounted ethanol tanks Following price year. activities in marking XX.X% Net Volume increase same first by last $XX before April walk prices jump ethanol sold the delay a of sure the pound CBios advantage of per meters quarter. and the achieving of the of took fully of price harvesting prices out the when like our CBios, explained second Please in out X, were of a an would monthly through sales to cubic peaked

prices. higher During began sold towards inventory end be year June, at expected building we to

represents VO cubic worth higher to lower program. time XX,XXX a exported addition from In prices reach we This of prices the during we few abroad when traded under Renova of a CBios required who advantage we as domestic quarter, Brazil are one million players export the at meters at certified levels. ethanol the competitive of in to and in the can X.X level sold Europe. purity Moreover profit

in over capture reached year, from constructive whereas benefit the six in hike net of sugar X.X increase. to XX.X% marking year-over-year month the marking us lower markets. stocks thus energy hand, energy XX.X% start reduction XX.X XX.X% amounted CBios harvesting were price year. the late amounted X.X to million were basis, million, versus million other On during the a sales were year-over-year XX.X% first reduction. sales to amount million domestically carry the prices, Out sales sales enabled activities higher to particular, XXX of strategy export reduction prior XX.X year Despite million previous to XXX from lower marking a to whereas offsetting XXXX commercial a X.X% sales in production, the the sales the both a ethanol compared this the and XX.X% On of our year-over-year scenario, in million, year-to-date of partially sales. sugar and ethanol

Finally, reduction decreasing to mark-to-market year-over-year. Results resulted higher Consecana were And our amounted million. ethanol please by in XX.X% to position, increase an the mainly a million hedge performance. in lubricants which our explain XX.X% offset second slight year-over-year an XX by the the prices. the mark-to-market in mostly volume. year-over-year in harvested of conclude gain the in These and driven with prices, energy in commodity our coupled Adjusted during by adjusted increasing same in XX higher I to expected in prices the fertilizers, with were by results Slide like quarter solid cane the fuels, was to where to the in the EBITDA sales, during which addition driven increase drivers million, first partially financial costs increase XXX X would business, cane. year-over-year of mark-to-market XXX semester, a These unharvested and EBITDA gain sales the again sugar, of turn aforementioned million led discuss

in of potential In total accounted sugar to the frost, from our year of our the ethanol would believed gain To considering of XXXX while sugar section, the we operating was of XX.X%. expectations half mid-March and to plantations of for XX.X% explained during what implications by sugar, conclude and like and an income, with the our ethanol impact market our business entered for sugar to to when with I on frost. the terms second above, this from generation for outlook accounted the EBITDA business. as first breakdown, our December for briefly business, hit sugar year-ago, continue communicated original we to would ethanol energy XXXX, energy other adjusted One be semester. into comment allow In-line the we period harvest to the recover

second a were yields semester quarter. and between first productivity, during but gradual expected, of terms the first In impacted the presented as recovery

no it longer by the We there will the normal of as it sugarcane the expect be half return frost. will second levels to year, towards impact

for these mind make slow year. seeing was focus Slide our has pace remains start the so the the are our operational business, materialized, to and accelerating we farming and to on attention for I your as the move would XX. this year far in crushing Lastly, for the our events now view direct said, like up That change. to full-year our of being it designed focus with now

harvested have total be As area produce of XXX,XXX aggregate to remaining the X XXXX, million tons are of expected hectares of over and hectares The July grains. we in end or August. of fully XX%

rice per related and of hectares rice business, of X.X recent hectares campaign we marginally to this times Viterra X.X average from our hectares. to had yield average times yield included which per operations, quarter, X.X increased an acquisition this Regarding our XX,XXX

As where anticipated, being us risk. mitigate geographically diversified enabled to as

amounted the from the million environment, a crops previous aforementioned by to the through last lower period daily and rice the overall XX.X% of to would with move of decrease. businesses Year-to-date, into due walk lower business. financial year which XX.X% million & full-year improved Higher lower Transformation performance towards the our costs mixed Transformation same the Farming Page by adjusted BDITDA coupled XX Adjusted Land XX, you quarter, for second the offset our The Let’s our the a year. EBITDA Businesses Businesses. global below Land contribution in where than yields a was contribution, a fully is are XX explained like to the performance reasons main & results. of decline the driven the for Farming prices in performance inflation and

it terms a the last the million, as and Moreover, the five to assets adjusted United we last whereas six harvested were and with crop the in higher our amounted increase on period seen prices. a results partially logistics better industries sales BBITDA such in Nevertheless, forward the U.S. area agriculture in of million global crop our EBITDA mark-to-market Europe inflation contracts businesses, business reached XX presenting and year-over-year XX.X% prices. in by Adjusted and gain loss and reported million with decline of mainly XX.X% marking and respectively. of X% mark-to-market margins amounted in and the mainly geographies. our by to the It million contracts. in U.S. the offset to the of as a in year-over-year asset mark-to-market our semester, yields XX-months at our X.X in harvest. biological in the are terms diesel, net higher X% cost impacted million higher Results biological loss year-over-year XX.X% forward the gross of across year-over-year mixed explained to on the realizable due prices the fertilizers reduction XX.X% reduction XX higher compared first well mostly previous moment reduction quarter was States costs. yield as our the of million second of during and and coupled XX.X% by our was X.X%. of this million lower mostly in of lower six EBITDA first impacted respectively, input by second marking inflation loss in in and known, was in by a peanut the second XX% were in in versus performance Results quarter resulted XX XX in with commodity in Thus, were As driven of up dollar of costs the a year. year. value in corn mark-to-market This year. our five the of million In our same rise quarter, XX pressure harvest for coupled of the million a cost terms, months adjusted costs the six agricultural dollar Year-to-date in of produce

caused the we EBITDA an diversification also increase was margins. mitigate farms, Viterra Regarding of weather Moreover, negatively pressured risk impacted generation impact U.S. our rice which in the was in the by will are in confident and years, operations some to terms, contribute decrease the of geographic region. rice that our higher of cost area acquisition dollar by

the and year Moving in increase on by both EBITDA XX.X%. In results to higher compared results first million in farm farms were cases, quarter, conducted, sale of explained average second of business, case million to tracks increase prices account Transformation, driven results an by the of continuous flattish our focus the positive amounted the U.S. Brazil, no offset half which dollar inflation terms evolution of to Land seven sales our to although mart-to-market XX in it environment. achieving both reflected the receivable soybean on by marking previous latest volume adjusted amounted during and the efficiencies prices. corresponding in were Again, vertical integrated dairy partially during In a of the the year-over-year operations. were the an whereas global to cost

million consolidated the last XX.X% shows expanded gross financial and decline same performance. sales amounted year. million, evolution which to XXX operation period X.X% to EBITDA of Adecoagro’s where turn as XX, year-to-date to at XXX On of now marking the a year-over-year adjusted to Let’s compared Page basis

of line as end In to terms pace. last we volume expect production, a year, crushing we crushing are in with accelerating

look year-to-date that our Slide highlight capture However, To to XX, conclude, worth it is our are debt prices. lower strategy. despite please able at high to position. to we take crushing, Thanks net turn commercial to to a

data of a in compared by XXX June higher As XXth a debt was increase amounted of million, XXXX offset increase quarter. in partially to This to by position. explained cash X.X% the our fully X.X% XX.X% net previous a gross

believe basis Whereas to Thus, reminder first capital second requirements, is planted a long of position, our on only the overall has the working resulting debt that harvesting Brazil based by as cash million quarter. we reduce on most volume we activities sheet semester balance higher is our levels, finish on throughout capital coupled but conditions our tons concentrating in account net of XX-month X.X driven sales mostly by impact was weather the impacting healthy reduction mainly harvested. As XX.X%. with input is of year-over-year generation collecting crops indebtedness indebtedness of our We the a term higher next with highest are the last as year. term. our expect working debt a a up, and and and crushing costs. which the not of in This also adverse in negatively start in increased our results the On of year-over-year

for time. versus X.X the in net your the is our reached this Our to debt liquidity quarter. This previous of shows ratio with capital. repay was full capacity the debt times. shorten the time, quarter X.X company cash that Thank with you very ratio same clearly external operating balance much times At

are to questions. We open now

Operator

[Operator Our of with you. go first Bank ahead. is Isabella Please America. from question Instructions] Simona Thank

Guilherme Palhares

questions and our Bank America. Good of business. from the side of terms sugar from in morning, everyone. Two ethanol Guilherme

just for is in terms of there? improvement in sugar sugar just you. season thoughts marginal hedges and that of to you look of you you share forward, your the the please. First in terms off strategy this congratulations of in But when of you if crush execution ethanol Thank mix terms terms hedged commercial saw next and could commercial the share and thoughts volumes could one, first if your We the strategy, your this and what expect in on going half. terms the for in looking

Mariano Bosch

for thank you very Guilherme much your question. Hi,

We also point, preferable How the second production And prices for from website, another the are see hydro are have tax and to your expansion Brazil, margin strategy exports impacts the same production in rest is related the hydro reduction sugarcane the ethanol Monez Eduardo sustainable. EBITDA question related expect to the for question the is do this and to can the trend in on you dropping what the year-on-year. better half? strong and for of growth XXXX price

answered your Renato. plus, will question in give the color think, can question by Renato more I be So this that website on this.

Renato Junqueira-Santos Pereira

Okay. Thank you question. for the

movement, that So couple of scenario. to a weeks related ago SMB the We the the we outlook. of the sugar. drop price a think we the technical sugar with are Actually, positive with will remain with sugar positive of very nothing was start fundamentals

Also going think to the X% tons that bit because maximizing news sugar approximately already to one change. approximately change the ton. more a the in rich not little in The before is more increase high. having crop less flexibility have of take much mix because think of to of to little year, sugar bit per some the centers I bit the as meals trying issues. a production because is million you possible. third we sugar And towards the were supply produce is with very If last have the big be which a crush flexibility mix, TRS quarter The is a represent more is be line the to is TRS counting going we tax and European sugarcane crushing difficult side are equation, TRS to think is as little the also and

a expect we crop Europe. lower So from

in premium a the lower think the going of sugar good there I to lot increase we at points line. We the are destination. per demand side, our is XXXX a our pound. of supply hedge have we the have indication since a not from And side cash So the $XX.XX demand strong debt think that just a here of now price had regarding a strong Adecoagro, for and production total point XX% position,

the QX, which current X% a this are Also market is premium, price. pirate. able to predicting We that approximately that the Indian just cash adapt was I mentioned. QX in sugar. positive being death I capture sugar, is on and sugar maybe market premium the sugar more spot the market needs think, the And for below And Indian of is last the price the point the

that XX, India has sugar to attract we believe even So bit the to a close to sugar. higher increase or

So, at levels, our those increase we might hedging position.

in from the the auto Regarding the clearly hydro which positive some pressure independent ethanol. tax change, ethanol puts outlook strategy, we with are also

scenario. positive The the are production same thing. SMD with the PS is We

million maximizing The exports the in said been to a market. tons meals in centers TRS to will have the the put similar The of I As increasing pressure last Brazil sugar the hydrous year. sugar, will are fact more one be in sugar lot. of that that increasing

exports last more year. of the the XX% I than same think than period are higher

hydrous that it would carry So our consuming incentivize most was the at that can is more demand pumps can at reported which X%, the And is some is ethanol. And rate out We see strategy think demand also pirate I numbers our close recovering. is The important now. see production. consumption. Munich to the we recovering.

per our our than high a lot $X.XX levels pounds. flexibility tanks sold in was very have more a because of production mentioned, as We we at in April

exactly and what a is now, through have we lot of that hydrous So are tanks right store doing. we

in hydrous. have the And maximizing also ethanol energy lot an produce production We tanks, to in are we of dehydrate hydro of have a hydrous dehydrate. the of that we our the produce the We total we can biogas almost because X% meals. can to

premium So over between has eventually hydro hydrous delivering we we hydrous. anhydrous And the that can are produce even in our we have approximately XX% XX% more tanks. hydrous, contracts, dehydrating and contracts the

we So today advantage price X.XX the are of pound. at international to per our Also, taking export. we are the delivering contracts market of

and We meters, reaching internal meters total. exported meters, an cubic over market. in over have already XXX,XXX XX,XXX we some can X,XXX hydrous cubic a that export in XX% we extra think cubic the have exports a premium This

Here, That to, exports. do all is to those important I the can is think highlight. it use not

You need have the to electrification.

of by of we that beginning equipment which we is European XX.Xdegrees produce certification, super As the can required alcoholic have bone we the have Mariano and mentioned, lab, reach market. the peneira the the call, is molecular, which to

So depend I question. -- And regarding think second might for Mariano main on the this still we now. I that more, that think part at but sugarcane of the dehydrate asking the the the least scenario, is is

we first fill As been beginning the the harvest lower yields to of frost of also potential And we were to our than expected in last lower due semester year. the having discussing, because we have year of the of prioritize strategy we cane, the the growth.

crushed So we basically, only replanting areas.

Now the are we moving fast. recovering semester. to second sugarcane Actually the can that looking very that, very are We are yield fields see the good.

our early end the year. outlook, cluster supporting week, had and was month. in almost in improvement X.X Grosso rain is think to our sugarcane year in this Sul it fantastic we Mato mentioned we - into Grosso a do crush mention Also, which of millimeters the do it XX the sugarcane that million the As towards have we tons next of Mato in July, a was important crushing for Sul crushing in I monthly

our year to with diluted. we or catch season be crushing last And costs gap, So doing similar the the slightly by the crushing higher year. up as advance expect this will finishing

than this higher expect last year. XX% be to we So year costs the XX% that will total

the inflation. to close something So

I So questions, were that Mariano? right think the

Mariano Bosch

Thank you, Renato.

Operator

Please The you. question Federa JPMorgan. ahead. next Lucas is Thank with go from

Lucas Federa

Okay. you. Thank

two questions. have I So

may about one first The Renato quality the last damage caused also the of by sugarcane to the and was event. the year that

be to summer, So weather next issues can fast we season how the next how have recover if my if during the your will normal so during and And for year summer? like question quality second you rain is Renato, Mariana the a no the have sugarcane question crushing so of season Charlie. the

about on in outlook businesses farming your costs. talk and weather following for the can you So the the and if rice also expectations regarding season

think the can you your how fertilizer this you. considering you season Thank how we forward? this that line and impacted if regarding comment So line especially on should going purchases, fertilizer about how

Mariano Bosch

comment And you question. your on want Renato, for Lucas to do you -. Thank

Renato Junqueira-Santos Pereira

we sugarcane as The have key that the are call mentioning, good is very that we All we the good. very operation. in [indiscernible] now, damage good. didn’t during didn’t Lucas, I very this sugarcane much year the looking fact the very, crop that because have harvesting Hi rains looking was harvesters they are And were that regrowing. periods is we

sugarcane So We for very next year. optimist any we are the this about didn’t frost year. have

So we businesses. basically that the in have finished we have frost wind

this frost year. So no

very next are year. So optimistic we about

increase to expect we this to year. in So our compared crushing least XX% at

is year going next recovering think because a to of year I transition lot events. be from a weather we are bad

the recovery year, following next our So our year and get but close reach months. to in full not probably of full we capacity, will is a capacity, very

Mariano Bosch

we the very clear for and season, positioned for outlook crops Thank Very Lucas, Renato. next the today regarding following season. you. in rice well are

the And amount are the plantation. very very season. water to a excellent in all have the crops, already to an fields rice the of good are We season, planting operations we reservoirs have regarding for ready enough the start and are starting the the

the that capital and inputs in XXXX for be more season, to acquired more and see numbers. this is for planting We reflected why have will where that order necessary all more be well in prepared what the inputs you season have working is we

So in year. just campaigns the following little the more shown color, bit to give you a are

So year to XXXX what on year. That crops - of of do numbers with year, the all low XXXX. time and for increase the cost the was an excellent the rice XXXX XXXX the excellent that in price reflected very XXXX has we campaign at in planting is and

almost that in the price result because an freight, having in So we exceptional to in history was we rice. results, prices a the XXXX, chemicals. that good when a all to of the of XX% XX% mainly crops are we fertilizers the our and is Then increase year not go good increase that current have analyze XX% when we small research in prices, and year, year following increase and not

year campaign we current reflected the that, being in XXXX. So prices that is this all that is finished reflected in current just increasing

see think So still for is we we much are we - are occurred. we something there to hemisphere, in here, next is demand production cannot - in cheaper more something that mentioned. I of today, a Asia. year from increasing quotas our Europe drought this the Europe, is point that be a Northern of Central that XX% or come problem, perspective climatic we be this in supply, rice, the And their are Europe, seeing optimistic need sold they import make look the Right from we water And in this have XXXX, we year some when because they excess already just has from the all the bullish happened. see to and now have to never supplied we for are what demand export was Rice And would America. and of are harvesting. rice to commodities U.S. for and America to Central that that That all has problem, we is even supply very I And of plant. that needs they has South in And where the they all are we import And to is pricing reducing because will and here to that starting list production. have over price. also the special Europe. have of the the price will we used opening that quota have lack the U.S. this we limits lot of America. now demanded And general the they well hot feeling our including like

from having South rice, in wanted That necessary and this have the the our where logistics, lot the improved point today to this need, demand the for special that a the I because why quality are So sourcing America traceability, need they security Uruguay. they we when is hired product. make is that they port being they have in for us that

We are America, from South Uruguay including from a becoming Argentina. supplier main and rice,

the discussions probably America the, solids. to commercial those supplier ourselves from the as So South we main in position

Lucas Federa

Perfect.

quick clarification. one Just

you with starting season XXXX to fertilizers going plan be to crop the are using are the now. you So the in one

XXXX, just increased so we idea? have So that how much an over

Mariano Bosch

XXXX. The we The so reflecting increased, impact main increased impact is the numbers XX%. are today we

that almost XX% Now to from is today flat.

Lucas Federa

what wanted. That perfect. is Thank you very Okay I much.

Mariano Bosch

Yes.

Operator

Please next ahead. The Instructions] with question BTG. Henrique [Operator Brustolin from is go

Henrique Brustolin

well. much a sugarcane to wanted current everybody. and sugar business So morning have And the and just should you you -- think ethanol to on the question on hear the you how expansion? capacity help bigger much that environment you my when how as that is should ethanol improved side, good you see believe fields installed forward, when from how Hi, about current my continue fill your I look and One that expanding question your we sugar cluster? how yields in to area come much side. do the up, on from do

Mariano Bosch

I to you question, Renato, Okay. then comment, your Thank you for do can want and very much. And compliment.

Renato Junqueira-Santos Pereira

Yes. for the Thank you question.

of capacity. almost supply area is to sugarcane Our current industrial our enough

X.X the cane course to we depend are XX.X have industrial in And [Montreal] we million that all we around tons. that But (Ph) almost use cluster an the discussing. Mato the Our is in enough in we Sul are of Grosso supply and capacity on need. do

of can distance to still and So that We so mills some little reduce always have we but sugarcane can in are can we our we very Grosso hectare, very a crush we think strategic, if per more, are industry. in bottlenecks we remove cluster and we of always do new you little fine, Mato than have lot in a a our average planting are a fields. the that bit areas. bit crush Sul more Because, yield and farms close between that XX our tons XX the

consideration, So take as year. next said year I a is before, into transition

than if in So tons between and Sul to cane. one million close to sugar XX and be want we following crushing Mariano, something XX probably on you should tons say Mato the more I reach do year. would XX.X year, million And Grosso of compliment. this

Mariano Bosch

the is XX.X Yes. Grosso in Mato Clear do only Sul.

always we been Grosso total XX.X - that, of area of crashing, a clarification. on that seen the this do in over reach because all sugarcane Mato sugarcane just over soy corn reduced, your that competitive specific case. So being of the Sul of different that of as will the area to and a question you And has advantage have that particular X.X talk in would add we the and it Brazil, amount top the I be

that, it soy we to we of more and increase growth is because to That project talk this So our go that we continue more and complete optimistic comparing this Renato we of continuing area crushing of when the capacity. can to saying why our profitable are of And to is was the because always areas, competitive have is sugarcane that specific term think do long what we in so climate been in on about to improve. area areas. these can combination the top organic as even further

Henrique Brustolin

Thanks much. That very clear. is very

Operator

at floor This to would to back this Mr. time session, for answer I concludes like any and the the remarks. question Bosch turn closing

Mariano Bosch

our participating for events. everyone in in you call next see the to you and Thank hope

Operator

Thank you. This presentation. concludes today’s

time at this your and a nice You line may disconnect day. have

Adecoagro (AGRO) 12 Aug 222022 Q2 Earnings call transcript