Brasilagro Companhia Brasileira de Propriedades Agricolas

BOVESPA:AGRO3

Earnings Call Transcript 2019-Q2

[Operator]

Good afternoon. Welcome to the conference call of BrasilAgro concerning the results for Q2 2019. We will have with us Mr. André Guillaumon, CEO; and Mr. Gustavo Lopez, Administrative Officer and Investor Relations Officer.

We inform that the presentation is being recorded. [Operator Instructions] Next, we will begin the Q&A session exclusively for investors and analysts when further instructions will be supplied. [Operator Instructions] The audio is being presented simultaneously via the Internet at the address www.brazil-agro.com, where the presentation is available.

Before proceeding, we would like to clarify that any declaration that may be made during this conference call concerning the business perspectives of BrasilAgro, projections and operational financial goals are based on assumptions of the company's board and also on information currently available. They involve risks and uncertainties, because they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operational factors may affect the future performance of BrasilAgro and lead to results that may differ materially from those expressed in these considerations about the future.

Now we would like to pass the floor to Mr. André Guillaumon, Chief Executive Officer, who will begin the presentation. Please, Mr. André, you may proceed.

[André Guillaumon, executive]

Thank you. Good afternoon. Once again, it's a pleasure to have this channel open with you to talk about our results for Q2 2019, which has been for us in a certain way for the whole sector a very challenging year. We will comment on this later. But we trust in the company's strategy and in the solid delivery of results.

I would like to go on to Page 1, the page with the highlights. In the highlights, we had in the closing for the calendar year and we ended with approximately 1,800,000 tons of sugarcane. Another event that we concluded finishing the planting of grains for the second time in the company. Also, we planted cottonseeds in the Chaparral property and following our strategy of real estate results together with operational results.

In Q1, we sold the Jatobá property. And in the second the small sale, but for us, very important, another sale of land -- farmland, our assets in Alto Taquari, Mato Grosso, an BRL 8 million sale -- BRL 8 million, 103 hectares.

Total net revenue BRL 370 million (sic) [ BRL 360.3 million ]. Net income accumulated BRL 136.10 million and adjusted EBITDA BRL 153 million. These are robust numbers. And surely, we will give you details. You will see the combination of the company's strategy in having the results of the -- of real estate results and operational results.

Now going on to page -- the next page. Here we have the great challenge of all the companies in this sector with agro industry. So we had a year with a lot of volatility, a year that began with a lot of uncertainty. We'd like to stress the price of soybean is a commodity that is important for many companies, and also it affects the market of inputs. So a very challenging year.

And I say once again -- I repeat once again, the great objective of the company is to be always monitoring the margin per hectare, which is a combination of cost and revenue from the sale of soybean.

Well, it is a year that brings enormous challenges. We began the year with an uncertainty. We had a good window for planting in Brazil. This was -- so we were very -- we did very well in planting. And then some uncertainties from foreign markets and also challenges in Brazil that we include in this basket of challenges for the year. I'm sure you have followed this. The great change in expectations in production in the Brazilian soybean harvest, it's a great challenge. Later on, we will detail more how we are capturing the opportunities that may arise, thus overcoming the challenges. There is an important impact in this commodity, which is freight -- the freight prices. As you know, there was a freight price that was made by the government. This brought a lot of uncertainty in the sector. And finally, the great discussion, the war between U.S. -- commercial war between U.S. and China affecting commodities. But we believe it's a challenging year. Companies are working in a very cautious way in terms of sales. So we have these uncertainties, and we have some uncertainties in December in the state of Mato Grosso, in January in Mapito and also in the Midwest, which will add a little more pepper or discussion to the issues involving the commodities.

Now going on to farmland prices. We have here -- we had an appreciation. We always insist on saying that farmland is a safe asset. We have regions in the Midwest with appreciation. Prices of farmland went up 4% in the Midwest. We'd like to say that in this region, we will talk about a sale we made, which brings a lot of robustness to our business. We believe as a company that all the structural changes that are being made in Brazil, bringing more legal security or reducing interest rates, so farmland will definitely be a good business in the next few years. Now sale of property, the next page, here we detail specifically this last sale made and recorded in this quarter. We sold Alto Taquari. It's a small sale, but very important. This was an asset that we had not yet -- we hadn't sold any part of this asset. It has sugarcane. It is producing sugarcane. And this enables us to continue selling land in this property. 103 hectares, acquisition price BRL 1.2 million. And we made a nominal sale with 1,100 bags of soybean per hectare equivalent to BRL 8 million generating to the company. With this divestment, 22.3%.

So our strategy, both for growth and also operational results must be followed by real estate results at the time of the sale. We're always thinking of delivering operational results and real estate results. So when we have an opportunity, we will be there selling and monetizing these properties for the company.

On Page 4, estimates for the harvest, here are some highlights. The great highlight is this graph on the left of the page, please, where we have an important increase. We went from 102,800 hectares and now 134,700 hectares. So this we already mentioned in previous calls, due to the incorporation through partnerships. And you have a good cash flow for the company in the state of Mato Grosso, where we know that the volatility is lower, and this asset put with the company earning new level of production for soybean. We'd like to stress here that this increase of approximately 23,600 hectares, this increase, the company was very conservative because of the time when we bought this asset.

So now we have -- we were able to have all the planting of seeds in the ideal months, in the ideal window and being cautious. The company made decisions in the first year not to plant 100% of the second harvest. So I would say that we have a buffer for next year. So with a well-structured operation and with all the structure ready, yes, we will have -- we will include another 8,000 to 10,000 hectares of harvest in the next harvest. And this is what will happen due to this inclusion of this part of the asset of the property.

Now I'd like to mention some other highlights, not only in Mato Grosso, but all the farmland properties, we were able to plant the seeds in the ideal months in Brazil and Paraguay. Also, Paraguay has ended the planting season. The window, there is December 20th -- December, January. And we finished planting on January 20 in Brazil too, as you have followed, and we reported this in our news.

The drought in January affected some of the company's properties, especially in Mapito, but this drought had a difference. It happened in the month when you have strong growth of the plants. So the drought did not come at the time of flowering. So no doubt, there will be some impact, because when you plant in a large area, what we do is we plant a little early, [ then ] at the time a little less. So the first soybean we plant, these were affected a little in the region of Mapito. So I believe the combination and diversification of the portfolio of the company, until now we believe with an increase in some regions with productivity above our budget, we should be close to our budgeted soybean harvest.

Corn. Corn is -- you have to plant in a certain time. We planted a little earlier. And so it had an impact, because we did this in January, and we might have a small reduction in the yield. Our exposure to corn is very small in the company. We have 1,000 -- 1,300, 1,400 hectares in Bahia. So although the impact is important, it is an impact that can be compensated if soybean gives us a yield a little higher than our expectation. This is what we had to say.

The second point, cotton. We planted cotton in Chaparral Farm. It was planted during the ideal -- in the ideal time. Now we spent the last 22 days in a period that we call vegetative. So the impact is very small in production. So we hope that this will deliver our budgeted amounts in this farm. Another point I'd like to highlight, the production of sugarcane. Our estimates, 2.2 million, we will stress later on the production 1.8 million, as I said, in the previous slide. Then we will see the increase, which we're constantly monitoring. This -- we invested a lot in sugarcane plantations in the last few years. We did the same last year. Large services were planted with sugarcane, and they will produce a harvest in 2019, giving us the higher productivity. So you'll follow not only BrasilAgro, but other companies, other players in the sector. And you saw that we had a winter -- we had a dry crop of sugarcane in winter. This may bring an impact next year, but part of this impact may be compensated by the increase in productivity due to the new areas we have.

So this drought also brought some adversity, a very complicated year in terms of the control of burned areas. We do not burn sugarcane and -- but there is a risk of fires in sugarcane plantation. We had one fire in Mato Grosso and the other in Maranhão. These fires affected in their majority areas that had already been harvested, and some fires affected in October and November the sugarcane before the harvest. Every time you have a fire, you have to resize the harvest and intensify the harvesting of the sugarcane that was suffered fire. So this was one of the reasons why we will have this reduction, a reduction that we had 2.7 linked to this phenomena of fires.

I believe that the company's numbers are better than the rest of the properties in the Midwest. We saw some impact. If we look at the Midsouth like Ribeirão Preto, São José do Rio Preto, 8% to 12% losses. But we are below that. We're monitoring and we're working to have smaller impact in our results. These areas, for example, we added fertilizer to have less impact during the next harvest.

Another highlight, 250,000 tons of grain. 250,000 represents 153,000 tons of soybean, one part corn, and also the second harvest of corn, which is planted in Mato Grosso. So we began the harvest. We -- in Xingu, we have 15% to 20% already harvested, and after that, we're planting this area. That is the second campaign, as we call it a good culture, and with the good rain we had in Mato Grosso in the second week of January.

In cattle raising also, we use this in the new areas of the company. So this is being used in a very robust way. I believe and I say that cattle raising is a tool for us. We know we have volatility in cattle raising too, not for operational results, but for -- but by taking cattle raising areas and transforming into grain plantation areas. We did this in Jatobá in Q1. Part of the cattle raising area, the pasture is being converted to plantations with grain. We will give you more details about this in the slide on cattle raising.

Slide #5, the results of the harvest. Reduction of productivity, that was expected, 60 to 68 here we'd like to stress. We know you follow us. You saw the productivity of the company, 80, 85 tons. So this reduction, 60 to 68, is due to São José Partnership IV, which is an important operation. And when we began to manage the sugarcane plantation, it had a very low productivity. We are increasing the productivity every year, renewing the sugarcane plantation. This is the main highlights on this page that we would like to comment.

Next, Page 5, results of the sugarcane planting. Basically, I call your attention to 2 numbers, please. Reduction of productivity that we mentioned. This reduction in productivity in the revenue line, this was attenuated. Although there was a reduction of tons of sugarcane per hectare, although we had a reduction, we had an increase in revenue. Half of this increase came from the price and part by increasing the concentration. This is a characteristic of the plant. With a more difficult winter, you have an increase in the concentration of sugar in the sugarcane. So you have less volume, but a better sugarcane and sucrose or sugar. So when we look at the expected billing, it was within -- the revenue of the company was higher than that of last year, 4.6%, although we had a reduction in tonnage, approximately 2.7% less in tonnage and 4.6% higher in revenue.

So this is the result. Here, I'd like to highlight a reduction from BRL 49 million to BRL 35 million. [ This comes ] . We talked about this many times. The new operation in -- with sugarcane in the state of Maranhão in the north of the country. During the first year, we worked, and this year, we began to have the need to improve. So 2017, 2018, BRL 49 million, and this without adding fertilizer. This year, we added fertilizer, and it went to BRL 35 million, which is around 1,300, 1,400 per hectare in treated farmland.

So what can you expect in terms of results with this productivity? This result is here once again BRL 44 million, BRL 45 million, as you can see. And with the renovation with fertilizer, we include depreciation, around BRL 8 million to BRL 9 million, which will bring this result to BRL 35 million, BRL 36 million for the future years.

Now there is a project. We are increasing productivity every year. We increase the productivity every year. And for cash effect, for cash generation, we may consider this number, BRL 40 million, BRL 45 million in sugarcane in this project. And for accounting purposes, we discount the depreciation.

Page 6, the results of cattle raising. As I said, this is a tool for transformation. We have important numbers with cattle raising now. When we look at cattle raising -- and here we need to clarify, cattle raising is -- has 2 seasons, the dry season and the rainy season. When we show, when we present to you our numbers for the first semester, it's a number most of the months, June, July, September, October. You have a little pasture, because it's the end of the dry season. Then in November, the pasture is -- becomes better with the rainy season. So the numbers of Q1, Q2 for cattle raising is still not strong, but it includes only 1 month with a lot of good pasture, December. So in January, February and March, we will have a better pasture with the rainy season and important gains due to the better pasture. Here, our numbers were -- our estimates, 2,956 kilograms of beef. Here I mentioned this already with the sale of the Jatobá Farm, we decided to convert some areas that were being used for pasture to soybean plantation. Thus we will have less areas with pasture at the end of this year. So this way, we're maintaining our inventory of cattle. We won't have to sell part of them, and we are not increasing. So we may expect a reduction between 200 kilograms per year -- 200,000. And this is more of a real estate decision than operational. We're having a lot of liquidity in this farmland, so it makes sense to sell the farmland.

Well, going on to Page 7. We have the hedge position on February 1. As I mentioned previously, it was -- it has been actually a year with many challenges for all the companies in this sector. Since we began a harvest with great uncertainty in sugarcane -- also, this year we had elections, and thus we had a good position in U.S. dollars. We were able to monetize this because of the election year. Today, we have a production covered by hedge, 63.4% in soybean with hedge, 7,500 tons of soybean with hedge. And we also have hedge in the exchange rate, 71.6% with an average exchange rate of BRL 4.05 to 1 dollar. This was in October and November, and we captured part of this volatility.

Yes, it's a challenging year, as I said. There are important impacts in freight. In the previous call, you asked about freight prices. We're open to clarify any points today. To clarify, when we made our budget, we began in July. We were working with the numbers of May. And then there were the problems -- at the time, we didn't have the problems between U.S. and China. We had not had also the truck drivers' strike. So the company today, when preparing a budget, there's more difficulty. Today, we have 2% to 3% below the budget. And our budget was soybean at 10.20 and exchange rate of BRL 3.7 to 1 dollar. We -- so then we have the problems. Today, we have this combination, and with the tool that we use, we have 2% to 3%.

I believe strongly that, as I said before, this great volatility that happened in December, January, there are expectations for smaller -- lower harvest in Brazil. There is data from soybean, talking about 12 million to 14 million tons less in the Brazilian harvest, an extra challenge. But this might allow us to capture a better premium in the soybean that hasn't been sold yet. Our strategy -- most of this was already done, was already sold. And our strategy in the -- where we have storage areas, we are holding on to inventory. So we brought to you numbers. The freight we had in the budget, the freight to the ports, BRL 200, BRL 197 in freight. Today, the same freight is BRL 250. Freight went up. This is a challenging impact, the increase in freight prices. We're trying to mitigate this with other operations with hedging for soybean.

Well, I'd like to pass the floor to Gustavo. Gustavo will clarify the numbers of -- including adjusted EBITDA. Thank you very much.

[Gustavo Lopez, executive]

Thank you, André. I'd like to thank you all for being with us. Good afternoon.

Now Page 8, company's EBITDA. When we see the 6 months in 2019, we have the results here, as you can see, expenses. And also we have financial revenues, we see the impact here. Taxes due to the sale of the farm and the operations during this semester, BRL 24 million, that's the impact. Depreciation and amortization of sugarcane in each one of the units where we develop, BRL 19.7 million and BRL 175 million against BRL 59 million in the previous year.

So we may highlight that we noticed that in the 6 months of 2018, the company had an operational EBITDA that was positive. As a consequence of the second part of the sugarcane harvest, the second part of the harvest for sugarcane in the 6 months of 2018 and '19, we have 1.3 million tons of sugarcane delivered. And this generated a result here, as you can see, that it is superior to the BRL 44 million of last year.

André mentioned we had received these sugarcane plantations, then which -- this already had irrigation. This year, the main difference in relation to last year, the results from real estate, BRL 106 million, we are recording this in the first semester; and also the sale of Jatobá Farm, which generates this result, BRL 175 million in EBITDA. Nevertheless, we always try to improve the management. So we excluded the effect of gains and losses due to the inventory information. We have the soybean in Mato Grosso. We are estimating the productivity, the cost and calculating the fair price and also 26,000 hectares of sugarcane that are producing this amount, this value. In the 6 months, gave us a result of BRL 28.7 million. And we're adding the results -- part of the results we had and the part that is still open due to the commercial strategy that André mentioned, holding back soybean and where we have storage facilities.

We want to guarantee margin, and this represents BRL 5.8 million that we're adding, and we're getting to an adjusted EBITDA of BRL 156 million, which is the best we have in terms of cash position for the company. Last year, adding the effects, we had BRL 61.5 million in this account, which shows that the company, independent of the sale of farmland, we can deliver operational result.

Page 9, we see the results for 6 months. BRL 136 million, the results for 6 months. We can notice that in gross profit, BRL 176 million, I mentioned that BRL 149 million are due to operational result, real estate BRL 28 million and BRL 149 million actual results and BRL 28 million results that we expect from soybean in Mato Grosso and the 26,000 hectares of sugarcane in the Midwest and Maranhão.

Also, administrative and financial expenses, sales expenses of BRL 220 million. The results -- financial results $4 million. And the results before taxes, BRL 160 million, BRL 24 million in income tax, a profit of BRL 136 million. We'd like to highlight operational result, BRL 141 million and BRL 106 million from real estate, sale of real estate and BRL 36 million from sugarcane delivered and 5,065,000 tons we had in inventory that we sold during this semester, BRL 4 million.

Our farms that are leased to third parties. Administrative expenses, we see an increase with payroll, employees. And the reason for this increase in payroll is long-term incentives that we increased last year. And within financial results, we have BRL 4 million of results. And to highlight the cost of debt, BRL 2.5 million per semester. We have results with derivatives, BRL 14 million positive. And also results from derivatives to be received for the time being, they have a negative amount, BRL 6 million. So we have here 174,000 tons bags of soybean to receive, to be paid in accounts receivable.

So we -- in all the quarters, we are giving you our best expectations in terms of price and also the exchange rate, premiums. So this has had a positive impact. And this quarter, a negative impact, as we can see in the financial results, the first column in Q2 '19.

Page 10, we have here equity. I believe that within total assets, we can see a growth, 9.5%. We see that the main highlight, the increase in receivables due to the sale of farms -- farmland. We increased due to the sale, Alto Taquari and Jatobá. And also here we have accounts receivable and also investments in cash in Xingu. We remind you here we have property for investments. All the properties are recorded at cost price in Paraguay at fair price. We see a liability here, BRL 20 million. And we highlight we have accumulated as -- accumulated profits here in this line.

Also, it's important to stress, we have in the treasury 3,000 shares representing BRL 35 million. Page 11, we see our debt position. The net debt here, EBITDA BRL 153 million. And here is the schedule for amortization, most of the debt is to be paid between 2 and 5 years and more than 5 years.

Net assets -- net asset value within the market value. Here we have a net amount, BRL 1.6 billion, BRL 27.8 per share. I believe that we can see a table, where here we have BRL 892 million. We add the market value of the land. This is an internal number. The actual value is higher, at BRL 552 million. As I mentioned, BRL 100 million, Paraguay, this refers to Paraguay at fair value and the different investments made in Brazil at cost -- recorded at cost value. So we get to BRL 27.81 per share, and they are being traded very close to BRL 15.52 per share.

Next page, we see the price of the shares of BrasilAgro in the stock market. As André mentioned, we -- Brazil is becoming a very sought after market. Brazil is a very popular market now, and our shares also reflect this. We believe that we have a positive cash generation with expressive sale of real estate. And we have a company that has very little debt. So it's an excellent -- we are an excellent opportunity for investing -- for investment.

So thank you very much. And now we'd like to begin the Q&A session. Thank you.

[Operator]

[Operator Instructions] The first question comes from Mr. Ian Miller from Crédit Suisse.

[Ian Miller, analyst]

Let's please talk about the liquidity, liquidity and the market for farmland. Do you expect the sale of farmland to foreigners? What is your vision about the price of grains due to the trade war between U.S. and China? And we know that there was a drought. So do you believe the price of soybean will rise again with more exports from Brazil?

[André Guillaumon, executive]

Yes, excellent questions. Yes, we -- 2 questions. We could talk about them all afternoon. So the first topic, liquidity of farmland, sale to foreigners. I'd like to mention some points. Yes, liquidity is a consequence of good margin for the producer and legal security. This is a year when margins are maintained or with a small drop in relation to the last year, and this may bring liquidity to farmers. Now in terms of selling to foreigners, the new government is making an effort to make structural reforms. We have an active agenda through our association. At the end of the year, we requested a project that government has been regulating other sectors. We'd like to stress the restriction to foreigners was in the hospital sector. They removed this at the end of the year. The government deregulated the issue of foreign owners in airlines. The government allowed more investments from foreigners in airlines. So I believe we have a law also coming up in our sector. I believe the government will concentrate its first efforts -- the first efforts on the part of the government will be the structural reforms. And if we were the government, we would do the same, especially social security and retirement programs, where they will work on this during the first semester. After these reforms, social security, retirement, then other reforms as -- that they are calling secondary, but are important for us, should come this year, but after the first semester. This is our vision. We have now a government that is totally different, a Ministry of Agriculture with people who know about this topic and the importance of this topic, thus bringing legal security for investors. So that's our answer for land. Now the trade war between U.S. and China, soybean. If we look at this, what happened when this trade war began between U.S. and China? It began in the second semester of last year. China aimed -- began to import from Brazil and we had a premium in Brazil. We arrived at 280 points. This was not expected. So there was a premium in Brazil. We had 2 things that I would mention in terms of the trade war that were catalysts that influenced this. First, in terms of demand, we -- the Chinese government announced a drop in imports from 98 million to 89 million, and the Chinese economy is closed. It's difficult to see if this was due to a pest among pigs or substituting the food. Also, we had a very good harvest in the U.S. at that time, Argentina also with 54 million. And we had Brazil still maintaining production figures at 120 million tons. This combination of factors would generate an extra 25 million tons in the market, an oversupply. But what happened? The Brazilian inventory went almost to 0. We began -- we -- and this decreased -- we had to buy soybean from the U.S., and this decreased the premium. So there was a reduction in production in Brazil. So in terms of -- so everything became balanced with the reduction, let's say, 12 million to 15 million tons less in Brazil. This is an important volume. This happened to Argentina last year, and Argentina lost production 16 million tons. So we believe -- I believe most of the insecurity comes from the freight. Companies had a lot of losses due to the freight's price list from the government. These things can be solved rapidly, because the impact is very great. They should be solved. And the market coming back, I believe companies will be able to see how freight prices will behave. This combination of more security in terms of freight prices with a reduction in production in South America is a positive driver to strengthen premiums in Brazil. Because China will buy -- if they don't solve the trade war with U.S., they will buy again from Brazil. They will find a smaller inventory in Brazil, in South America. We never saw this before. The inventory in CONAVI will be negative. I never saw a negative inventory, but the government announces a negative amount. So they expect we will -- and the harvest was negative. And if they solve the trade war, then we would have less premium, but this will strengthen the price in Chicago. If the price remains at 45, 55, it's still above the historical amounts of 30 points. So the question you asked is the 1 million dollar question. No one has a crystal ball to tell you exactly how things will come out, but we follow the market. And due to the numbers we see, we form an opinion. As you can see, the company is always monitoring this. We -- hence -- this issue of strengthening prices in Chicago prices, these one depends on the other. So when Chicago is higher, the premium drops. So we're always monitoring this. I believe that the new fact is a reduction in production in Brazil. No one expected this. And this may really help the market.

[Gustavo Lopez, executive]

And I'd like to supplement what André said. For us, one depends on the other. When we began to prepare the budget, we had Chicago prices, we had an exchange rate of BRL 3.7 to 1 dollar. And after all of these months, after all the volatility in the exchange rate, Chicago, today we have 35 Chicago 3.91 exchange rate, and we were working with 55 points. So when you see this combination of factors, we're getting to a price that is similar to that of the budget with a good margin. But truly what is having an impact in a negative way to us is freight prices -- internal freight prices. The freight price list issued by the government brought a lot of uncertainty. It's -- when you try to close a contract due to -- when you need cash or -- then you see that this impact is high. And as I mentioned last year, we had on average BRL 197 per ton, taking the grain per ton to the port to export the grain. So this obliges the company to rethink its logistics because of freight prices. Sometimes we store the grain when we can to get a better freight price after the harvest season. So it is a great challenge for us, at least for the companies in Brazil, to see how we're going to deal with this cost, freight. Thank you, Ian.

[Operator]

Our next question comes from Mr. Pedro Soares, BTG Pactual Bank. Mr. Pedro left the queue. [Operator Instructions] Since there are no more questions, I'd like to pass the floor to Mr. André Guillaumon for his final comments. Well, I believe we have a question, I believe, from Mr. Caio, Mr. Caio Greiner, BTG Pactual Bank.

[Pedro Soares, analyst]

We had a problem in the -- our telephone line. My question has to do with the sale of farmland. You have a goal of BRL 150 million a year. And with the sale in the first semester, you are already close to BRL 150 million. Do you believe there will be less sales? And you said you will wait to see the reforms, this will make the market -- the farmland more attractive after the reforms. Or do you intend to be aggressive in selling land even before the reforms? The second question, in the release, you mentioned a loss of approximately 16% in corn. How much did this represent in soybean in Maranhão and Mapitoba? You mentioned that due to the better productivity in Mato Grosso, the impact will be smaller. But if you exclude Mato Grosso, what would be the impact?

[Unknown Executive]

Pedro, thank you. 2 challenging questions. Sale of farmlands is a goal that all the executives have. Our goal is BRL 70 million to BRL 80 million. We sold more than this. But the issue is we will make decisions to sell if we believe we have good deals. We're working actively toward this. And you can expect that we might have good opportunities. We're working hard on this. We are working on some of these projects, because the liquidity is uncertain. I work to appreciate the value of the farmland, but I have to search. If we have good opportunities, we will sell. If we look at the historical average, we've been selling BRL 100 million and BRL 200 million and BRL 300 million a year. Some years, we will sell BRL 150 million, some less, but on average, around BRL [ 103 ] million. You can be sure that we continue looking for good deals. If you find them, we will sell more this year. Now it's a year when we should announce purchases also. So we're looking for opportunities to purchase land. We're working on both things, do new sales and new purchases, in this semester that began in January. So we're working on these 2. Now your second question concerning the reduction in the Mapito and Mapitoba, I would like to say that most of our production in this region are areas in transformation. So we have a conservative -- a very conservative budget. I will talk about our expectations and the region's expectations in the region. As a company, our expectation is not to have an important drop in this area in soybean. As I said, as these were new areas, we have -- we had a very conservative budget, and these were new areas that we planted. Our expectation for this region is to deliver a little above the conservative budget of the company. That's our expectation, because the budget was conservative. It won't be like 2018. It won't be a spectacular year, whereby you had a spectacular production. And our operations, we had Chaparral more than 60 bags of soybean. We don't expect to have this. But the budget was not 60, it was more conservative. We believe that in these regions, we will deliver the budget or a little over the budget, because we were very conservative in the budget. Now in terms of the region, we should expect reductions in production in these regions. Now I'm talking about producers in general. So we should expect the reduction of 12% in the state of Maranhão between 12% and 15% in the state of Piauí. State of Bahia, it's a little early to talk about numbers. I believe it should behave like it did last year, 15% to 20% less than last year, which had a spectacular harvest, sold 63 bags. So this year, we should have 55 bags per hectare in Bahia, down from 63 bags last year. So we are always conservative in our budget to generate little volatility, little impact on the results. So this is the number. I would tell you that our soybean -- our estimate for soybean, 156,000 tons, the best number we have. With everything I mentioned, we have today a clear vision of maintaining this number of the budget or small fluctuations, maybe negative or positive. It's still early for Bahia -- for the state of Bahia, the harvest is in February/March. And February should be better. So I believe we will have a positive impact. Now if we have a dry -- drier season in February, we might have a small loss. But we will be also having a harvest in Xingu, and there is a positive expectation that this region will give us 2%, 3% above the budget. So it's important, you're following the market. Mato Grosso, we have the North and South. In the South, the region of Taquara. In the South of the state of Mato Grosso, these regions had suffered an impact due to the drought in December and January. Now Mato Grosso in the North and Araguaia in the North, I believe they should be closer to our budget. Recently, [indiscernible] gave us the numbers for Mato Grosso, reducing production from 32.6 tons to 31.9 . So 1.6% reduction according to the authorities, and this is especially in the South. Now answering your question, the company should expect low volatility, but in Mapitoba, there we should have a drop between 12% to 15%.

[Operator]

[Operator Instructions] Since there are no more questions, I'd like to pass the floor to Mr. André Guillaumon for his final comments.

[André Guillaumon, executive]

Well, thank you very much for being with us during this hour. Yes, I would like to say it's a challenging year. We're working hard. Everyone is working hard in the company to deliver solid [ constant ] results. I believe once again, I reinforce that we have a good strategy. The company's strategy never changed. We always have the same goals. And we believe in this combination of sale of land and operations. And we will be working on this, working more and more on these 2 pillars to have a balanced results with these 2 pillars. We believe that this is a winning strategy in the medium and long term.

Thank you very much. Investor Relations area is always available for any clarification. We are available. Once again, thank you very much. It was a great pleasure to be with you. Thank you.

[Operator]

Well, this concludes BrasilAgro's conference call. We thank you all for your participation. We wish you a good afternoon.