Earnings Release

3Q24 | 9M24

Conference Call

May 09, 2024

Portuguese

(with simultaneous translation into English)

10 a.m (Brasília Time)

09 a.m (NY Time)

Click here to participate

EARNINGS RELEASE

----------------------------------------------------------------------------------------------------------------------------------------------------------------

São Paulo, May 8, 2024 - BrasilAgro (B3: AGRO3) (NYSE: LND) announces its consolidated results for the quarter and nine-monthperiods ended March 31, 2024 ("3Q24") and ("9M24"). The consolidated information is prepared in accordance with the International Financial Reporting Standards (IFRS).

Financial Highlights

----------------------------------------------------------------------------------------------------------------------------------------------------------------

(R$ thousand)

3Q24

3Q23

Change

9M24

9M23

Change

Revenues from Operations

121.781

190.690

-36%

540.762

645.714

-16%

Revenues from Farm Sales

-

-

n.a.

4.724

17.500

-73%

Net Sales Revenue

121.781

190.690

-36%

545.486

663.214

-18%

Variation in the fair value of biological assets

11.186

58.507

-81%

7.380

72.467

-90%

Net Revenue¹

132.967

249.197

-47%

552.866

735.681

-25%

Adjusted EBITDA from Operations

5.609

44.175

-87%

11.694

150.947

-92%

Adjusted EBITDA Margin from Operations (%)

5%

23%

-18 p.p.

2%

23%

-21 p.p.

Adjusted EBITDA²

5.609

44.175

-87%

16.418

168.447

-90%

Adjusted EBITDA Margin (%)

4%

18%

-14 p.p.

3%

23%

-20 p.p.

Net Income from Operations

(30.147)

(3.293)

n.a

(10.708)

8.328

n.a.

Net Operating Margin (%)

-25%

-2%

-23 p.p.

-2%

1%

-3 p.p.

Net Income

(30.147)

(3.293)

n.a.

(5.984)

25.828

n.a.

Net Income Margin (%)

-23%

-1%

-22 p.p.

-1%

4%

-5 p.p.

  • Net Revenue: Considers the change in fair value of biological assets and agricultural product and Impairment.
  • Adjusted EBITDA was calculated by excluding biological assets in progress (sugarcane and grains planted) and adjusted for the harvest's derivative results and depreciation expenses, including depreciation of fixed assets of the farms, developed areas and permanent crops.

Operational Highlights

----------------------------------------------------------------------------------------------------------------------------------------------------------------

Planted Area (ha)

23/24 Harvest

23/24 Harvest

Chg.

estimated

projected

(%)

Soybean

74.996

70.612

-6%

Corn

8.911

3.592

-60%

Corn - 2nd Crop

17.712

9.425

-47%

Beans

4.692

7.315

56%

Beans - 2nd Crop

1.889

4.247

n.a.

Cotton

3.584

4.238

18%

Cotton - 2nd Crop

3.490

2.891

-17%

Ratoon Cane

22.856

24.801

9%

Plant Cane

2.902

4.542

57%

Pasture

15.374

15.374

0%

Others

29.284

24.281

-17%

Total

185.691

171.320

-8%

Production per product (tons)

23/24 Harvest

23/24 Harvest

Chg.

estimated

projected

(%)

Soybean

248.471

202.793

-18%

Corn

60.853

19.601

-68%

Corn - 2nd Crop

102.566

61.180

-40%

Beans

5.631

8.264

47%

Beans - 2nd Crop

2.221

5.023

n.a.

Cotton

13.546

14.069

4%

Cotton - 2nd Crop

12.740

12.740

0%

Total

446.028

323.669

-27%

1

3Q24

Hedge Position

----------------------------------------------------------------------------------------------------------------------------------------------------------------

Hedge Position - FX

1Q24

2Q24

3Q24

Change

3Q24

2Q24x3Q24

Soybeans

23/24

23/24

23/24

23/24

24/25

%

41%

65%

83%

18 p.p.

25%

R$/USD

5,33

5,33

5,31

-0,38%

5,45

Cotton

%

100%

100%

100%

0 p.p.

30%

c/lb

5,53

5,58

5,61

0,54%

5,41

Farm Sale Receivables

%

55%

55%

91%

36 p.p.

37%

R$/USD

5,44

5,39

5,43

0,74%

5,36

Hedge Position - Commodity

1Q24

2Q24

3Q24

Change

3Q24

2Q24x3Q24

Soybeans

23/24

23/24

23/24

23/24

24/25

%

49%

58%

80%

22 p.p.

17%

USD/bu

13,12

13,19

13,05

-1%

12,48

Cotton

%

72%

72%

87%

15 p.p.

1%

c/lb

82,50

82,50

82,28

-0,27%

82,5

Farm Sale Receivables

%

60%

56%

90%

34 p.p.

20%

USD/bu

13,51

13,39

12,93

-3%

12,37

Corn

%

45%

26%

55%

-29 p.p.

-

R$/sc

47,02

42,53

42,99

1%

-

Ethanol

%

4%

3%

3%

0 p.p.

8%

R$/m3

2.800

2.800

2.800

n.a

2.457

Total recoverable sugars

%

10%

10%

10%

0 p.p.

-

R$/kg ATR

1,08

1,08

1,08

n.a

-

Status of Input Acquisitions

----------------------------------------------------------------------------------------------------------------------------------------------------------------

Input - 2023/24 Harvest

1Q24

2Q24

3Q24

apr/24

% Purchased

Nitrogenous

3%

80%

95%

100%

Potassium chloride

88%

88%

98%

100%

Phosphates

85%

85%

98%

100%

NPK - Formulated

37%

98%

100%

100%

Defensives

60%

70%

90%

95%

Input - 2024/25 Harvest

1Q24

2Q24

3Q24

apr/24

% Purchased

Potassium chloride

-

-

-

85%

Defensives

-

-

-

10%

2

3Q24

MESSAGE FROM MANAGEMENT

-------------------------------------------------------------------

The third quarter of the 2023/24 crop year (January to March 2024) is characterized by the harvest of Brazilian grains, especially soybean. According to a report by Conab published on April 12, a decrease in Brazil's total grain production is already noticeable due to adverse weather conditions, which resulted in low rainfall and above-average temperatures in the main producing regions, causing planting delays and productivity losses.

We ended the first nine months of the 2023/2024 crop year with Net Loss of R$6.0 million and Adjusted EBITDA of R$16.4 million, reflecting Net Revenue of R$545.5 million, which includes R$4.7 million from the sale of farms and R$540.8 million from the sale of agricultural products.

Regarding operational performance, we felt a significant impact compared to initial estimates, primarily explained by: (i) the reduction in planted area, reflecting the decrease in the planted area of corn due to a decrease in corn prices and adverse weather conditions during the planting window in some regions; and (ii) the drop in prices of major commodities, resulting in reduced margins across all crops.

This impact was mitigated by the result from derivatives, where we captured an average price above the market, as demonstrated in the current hedge position, and by our commercial strategy of delaying the sale of soybean production in the face of negative premium prices at the beginning of the harvest. This strategy proved to be successful with the recent increase in premium prices.

On March 26, we announced the sale of 12,335 hectares (8,796 arable hectares) of the Chaparral Farm in Bahia. This transaction marks the first sale of a fraction of the farm, which was acquired in 2007. So far, R$125.0 million have been invested in acquiring and developing the property. The nominal value of the sale was R$364.5 million (~R$41,435/arable ha), with an expected Internal Rate of Return (IRR) in Brazilian real of 15.0%. The gain from the sale will be booked next quarter.

Still on the real estate strategy, we announced the lease of a little over 7,000 hectares for producing sugarcane in the state of São Paulo, one of the main sugarcane energy hubs in the country. As part of a revenue diversification move, this operation will enable the Company to enter the sugar production market.

Despite the challenges faced throughout the year, such as adverse weather conditions and fluctuations in commodity prices, our combined operational and real estate business strategy resulted in strong value generation. We remain focused on maximizing returns for our shareholders by operating efficiently in both business fronts.

André Guillaumon, BrasilAgro CEO

3

3Q24

REAL ESTATE PERFORMANCE

--------------------------------------------------------------------

Subsequent events

Sale of Farm

CHAPARRAL FARM: On March 26, we announced the sale of 12,335 hectares (8,796 arable hectares) of Chaparral Farm, a rural property located in Correntina, Bahia. The sale value corresponded to 350 bags of soybean per arable hectare or R$364.5 million (~R$41,435/arable ha), at an expected Internal Rate of Return (IRR) in Brazilian real of 15.0%.

This transaction marks the first sale of a fraction of the Chaparral Farm, which was acquired in November 2007. So far, R$125.0 million have been invested in acquiring and developing the property. The total area of the property was 37,182 hectares (26,444 arable ha), which, after the sale, now stands at 24,847 hectares (17,648 arable ha).

Chaparral Farm

Unit

Sale

Legal Reserve Area and Permanent Preservation Area

ha

3.539

Arable Area

ha

8.796

Total Area

ha

12.335

Book V alue (acquisition +CAPEX)

R$ mm

(33,9)

Book V alue (acquisition +CAPEX)

R$/ha

(3.863)

Nominal Sale V alue

R$ mm

364,5

Nominal Sale V alue

R$/ha

41.435

IRR R$

%

15%

IRR U$

%

8%

4

3Q24

Lease

Alto da Serra Farm: In March, we announced the lease of over 7,000 hectares to produce sugarcane as part of diversifying our revenue. The farm, located in Brotas in the interior region of São Paulo, will enable the Company to enter the sugar production market.

This operation marks the Company's entry in the state of São Paulo, one of the main sugarcane energy hubs in the country. Possession of the farm will occur gradually. In 2024, 5,060 hectares and the rest will be leased by 2029.

We are confident that the expertise of our team, combined with the potential of the Brotas region, will produce tremendously successful results.

5

3Q24

Property Portfolio

The Company's property portfolio comprises 266,211 hectares across six Brazilian states, as well as Paraguay and Bolivia.

LOCATION

TOTAL AREA (ha)

ARABLE AREA (ha)

Owned

Leased

Owned

Leased

Brazil

132.397

59.092

89.421

59.092

Bahia

73.906

-

52.346

-

Maranhão

17.566

15.000

10.137

15.000

Mato Grosso

12.224

30.623

6.188

30.623

Minas Gerais

24.212

-

17.846

-

Piauí

4.489

13.469

2.904

13.469

São Paulo

-

5.060

-

5.060

Bolivia

9.875

1.065

7.925

1.065

Paraguay

58.722

-

33.555

-

Total

200.994

65.217

130.901

65.217

Total (Owned + Leased)

266.211

196.118

The current mix of the production area, which includes owned and leased land, enables greater flexibility in portfolio management and reduces volatility in operating cash flow.

22/23

Participation (%)

23/24

Participation (%)

Owned

217.737

78%

200.994

76%

Leased

60.157

22%

65.217

24%

Total Area

277.894

100%

266.211

100%

Owned

142.899

70%

130.901

67%

Leased

60.157

30%

65.217

33%

Total Arable Area

203.056

100%

196.118

100%

6

3Q24

OPERATIONAL PERFORMANCE

---------------------------------------------------------------------------------------------------------------------------------------------------------------

The table below shows the projected area in the 2023/2024 crop year by region.

Culture

BA

MA

MT

PI

SP

Brazil

Bolivia

Paraguay

Total

Ratoon Cane

-

14.500

4.899

-

3.710

23.109

1.693

-

24.801

Plant Cane

-

2.572

778

-

813

4.163

380

-

4.542

Soybean

13.709

7.159

26.651

14.215

-

61.735

3.014

5.863

70.613

Corn

397

-

-

1.944

-

2.341

498

753

3.592

Corn 2nd Crop

-

1.075

8.350

-

-

9.425

-

-

9.425

Bean

7.315

-

-

-

-

7.315

-

-

7.315

Cotton

2.058

-

-

-

-

2.058

-

2.180

4.238

Cotton 2nd Crop

862

-

2.029

-

-

2.891

-

-

2.891

Others

19.630

-

875

-

-

20.505

609

3.167

24.281

Agricultural Total

43.971

25.306

43.582

16.159

4.523

133.542

6.194

11.964

155.946

Pasture

10.519

-

700

-

-

11.219

-

4.155

15.374

Grand Total

54.490

25.306

44.282

16.159

4.523

144.760

6.194

16.119

171.320

As announced previously, due to high volatility in corn prices, which pressured margins, we changed the planted area mix for the 23/24 crop year in relation to initial projections. We plan a 8% reduction in the total planted area compared to the initial estimate.

Compared to the previous quarter, the planted area decreased by 3,000 hectares due to the weather in Paraguay. We were affected by the lack of rainfall, which adversely impacted planting, especially of corn and soybeans, within the ideal window.

We completed the planting of grains and advanced approximately 70% in the planting of sugarcane.

Area in Production by Crop 23/24

Area in Production by Property 23/24

Harvest

Harvest

(projected)

(projected)

14%

4%

41%

9%

171.320

41%

171.320

52%

hectares

hectares

17%

7% 8%

7%

Soybeans

Corn and Corn 2nd Crop

Owned Area Operated by BrasilAgro

Bean 2nd Crop

Sugarcane

Leased to third parties

Pasture

Cotton

Leased Area Operated by BrasilAgro

Other

7

3Q24

Status of Operations

The table below shows the planting and harvest status for the Company's crops.

1Q

2Q

3Q

4Q

Jul

Ago

Set

Out

Nov

Dez

Jan

Fev

Mar

Abr

Mai

Jun

Soybeans

Planting

Crop

Corn

Planting

Crop

Corn 2nd Crop

Crop

Planting

Beans

Planting

Crop

Beans 2nd Crop

Planting

Crop

Cotton

Crop

Planting

Cotton 2nd Crop

Crop

Sugarcane

Crop

Crop

Planting Status

100% Planted

100% Planted

100% Planted

100% Planted

Harvest Status

95% Harvested

28% Harvested

100% Harvested

0% Harvested

Grains and Cotton

Production per product (tons)

22/23 Harvest

23/24 Harvest

Change

23/24 Harvest

Change

Realized

Estimated

(%)

Projected

(%)

Soybean

204.606

248.471

21%

202.793

-18%

Corn

53.700

60.853

13%

19.601

-68%

Corn - 2nd Crop

69.628

102.566

47%

61.180

-40%

Beans

2.057

5.631

n.a.

8.264

47%

Beans - 2nd Crop

1.957

2.221

13%

5.023

n.a.

Cotton

13.345

13.546

2%

14.069

4%

Cotton - 2nd Crop

8.795

12.740

45%

12.740

0%

Total

354.088

446.028

26%

323.669

-27%

We updated the projected production of grains and cotton in the 23/24 crop year to 324,000 tons, a reduction of 27% from the initial estimate, due to the reduction in planted area and lower yield of some crops.

8

3Q24

The reduction in planted area can be explained by: (i) the high volatility in corn prices, resulting in a change in product mix and a decrease in corn planted area (first and second crop) by 9,200 hectares; and (ii) weather conditions during the ideal planting window, leading to areas of corn and soybeans not being planted in Bahia and Paraguay.

The reduction in tons produced is mainly explained by: (i) the decrease in planted area, which represents approximately 95,000 tons; (ii) weather conditions; and (iii) crop management during crop development.

Paraguayan crops were the most affected by weather conditions; the lack of rain significantly impacted corn and soybean yields. As for cotton, rainfall forecasts are favorable and yield could be in line with estimates.

Sugarcane

Sugarcane Harvest Year Result

2023 Harvest Estimated

2023 Harvest Realized

Change

2024 Harvest Estimated

Change

(Apr/01 to Dec/31)

(Apr/01 to Dec/31)

(%)

(Apr/01 to Dec/31)

(%)

Tons harvested

2.121.691

1.975.027

-7%

2.076.046

5%

Hectares harvested

25.178

24.951

-1%

24.801

-1%

TCH - Harvest tons per hectares

84,27

79,16

-6%

83,71

6%

For the 2024 crop, we have started operations in São Paulo, one of the main sugarcane energy hubs in Brazil. Sugarcane cultivated in the area will be used by a local mill that produces sugar and ethanol and we will be compensated for a mix of ethanol and sugar, which will provide us with greater assurance and predictability.

Overall weather forecasts in Brazil are favorable and we are optimistic about recovering TCH, which could reach 83.71 tons harvested per hectare, with total production of 2.0 million tons.

In Mato Grosso, we completed planting within the optimum window, with good moisture levels ensuring germination. In Maranhão, we had significant rainfall in March and April, which provided favorable conditions for planting. However, in São Paulo, planting has been delayed due to excessive rain and humidity.

In Bolivia, adverse weather conditions, characterized by lower rainfall and high temperatures between September and December, impacted the Company's operations. Although rainfall resumed in March and April, the sugarcane fields are still underdeveloped in comparison with previous years.

In April, we began harvest in Brazil, with favorable weather conditions contributing to well-developed sugarcane fields with high productivity potential.

Cattle Raising

22/23 Harvest

23/24 Harvest

Change

23/24 Harvest

Change

Cattle Raising

Realized

Realized

Estimated

(%)

(%)

(until mar/31)

Hectares

16.080

15.374

-4%

15.219

-1%

Number of heads

21.652

20.164

-7%

19.108

-5%

Meat production (kg)

2.572.377

2.918.317

13%

1.415.982

-51%

Weight Gain per Day

0,61

0,56

-9%

0,43

-22%

Weight Gain per hectare

160

190

19%

93

-51%

9

3Q24

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

BrasilAgro - Companhia Brasileira de Propriedades Agrícolas published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 21:43:38 UTC.