Brasilagro Companhia Brasileira de Propriedades Agricolas
BOVESPA:AGRO3
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
23.09
28.2
|
| Price Target |
|
We'll email you a reminder when the closing price reaches BRL.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Brasilagro Companhia Brasileira de Propriedades Agricolas
You don't have any saved screeners yet
Good afternoon. Welcome everyone to BrasilAgro's Conference Call concerning the earnings of Q4 and full year 2018. We have with us Mr. André Guillaumon, CEO; and Mr. Gustavo Lopez, Administrative Officer and Investor Relations Officer.
We inform that the presentation is 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 on the Internet at www.brasil-agro.com, where you'll find also the supporting slides and PowerPoint presentation.
Before continuing, we'd like to clarify that any declarations that may be made during this conference call concerning the business perspectives of BrasilAgro, projections and operational goals, financial goals are based on assumptions of the company's board and on the 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 will differ materially from those expressed in these considerations.
Now, I'd like to pass the floor to Mr. André Guillaumon, CEO, who will begin the presentation. Sir, you have the floor.
Good afternoon. It's a great pleasure to be part of you again and celebrate with the folks of our work here and bring to you very positive news in a market that was very incompetent to manage, but we're very optimistic with the company's proposal, our strategy, our objectives for the year and the company. These results show the commitment on the part of us to deliver the results. It's a year we'd like to say that company is now in a new era, a new cycle for operational results and this places us a new level. And I am sure that you were following us or recognizing our work. And this work -- our work will be intensified. These results will be better [indiscernible] and with more foreseeability in our strategy in the past we mentioned, we would work for the company to have follow this path. So I thank you all for your participation and lets go to the numbers and also what happens in the -- during the year.
First, we'll begin our chat. I will begin on things where we talk about the highlights and basically we have a net revenue of BRL 296.7 million, net profit in BRL 126.3 million, adjusted EBITDA 134.7 million. And on the right side, we have 2 important events that contributed for the results and some more detail. Basically, it was a year the delivery of operational results was very robust and also with delivery in real estate results. We have the sale of 10,740 hectares for BRL 244.1 million. Here, I'd like to mention the fact this net profit, net income BRL 126.3 million and adjusted EBITDA, they don't include the sale of the second part in the Jatobá. It doesn't the second sale. It's an important farm, BRL 164 million. It will be recorded in Q1 next year as a result of the delivery and payments that were made in July. So the consistent delivery of results. One sale of real estate at Araucária Farm and does not include the second sale. In accounting terms, we have already mentioned to you now as of Q1, we will include and it should bring the generation of results of BRL 95 million to BRL 97 million because it is linked to future prices of soybean. So we may have a small barrier. And with this, this generates trust in the recurring delivery of results, positive results in 2017, 2018 also positive. So for 2019, we have a sale of BRL 96 million, BRL 97 million. We have lot of operational assets, very complex year, which is due to the challenges. We have monetary challenges, exchange rate challenges. But we're now much better than the industry in 2018. We won't stop, we will continue generating, also wealth for the shareholders. So let's work to continue and make more sales. Another fact that helps us during the last [ audio gap ]
First, the CRA. The issuance of CRA. For us, it was an initiative in the debt market. We hadn't made an operation of this size and issue of ARC interest rates dropped recently. The credits, we always had abundant offer of credits. And so when the company didn't have such a great need, it was the time to begin to do this type of operation to also make -- have a longer-term debt and thus you have a better foreseeability. You know that there is a concern with the timing of the disbursements. So this makes our debts a long-term debt lengthens and also here we'd like to stress that company does not issue ARC or CRA to buy assets. Our purchase of assets is linked to another capital, not the CRA, the ARC. So if we make an acquisition with CRA, we will not have the best opportunities. We will always sell farms and property when we believe it's a good business, not when we need money to pay debt. So this is important to highlight the issuance of ARC. It will allow us to help us generate more value for our shareholders, whether it's not used for the acquisition of assets.
Well, 2017, 2018 harvest, 134,000 tons of grains, 1.8 million tons of sugarcane and 21,000 heads of cattle. So we have delivered important results for us concerning decreasing volatility and increasing area of transformation.
Now please let's go on to Page 3, where we talk about the scenario. The price of soybean, you are following this as well as us. We're always following these prices. We had an instability due to a price or a commercial war between the U.S. and China. Thus the prices of commodities in Chicago dropped strongly. During the last month, we had a strong drop and with impact, it concerns us the current -- not the current harvest, because the China is buying from South America. Argentina had a climate problem. So the prices in the spot market compensated this drop in Chicago. So we have soybean 2017, '18, we traded soybean at 200-250 points. When you look at Chicago, we would go back to the prices like BRL 10 million, BRL 10.5 million as we had. So we had a concern. You are seeing the freight, the problems we have with freight. This has limited the acceleration of the future market for soybean.
Our combination, we are monitoring our contribution margin. We're not only monitoring prices of commodities. The market will be challenging in the next year. And apart from all these challenges of Chicago, we have the challenge of elections in Brazil and this has caused volatility. We knew that exchange rate in Chicago have impacts, and we're alert to capture the opportunities that will arise.
Now Page #4, our scenario of historical farmland prices. The market is stable, very stable. I always show that real assets farmlands is a very safe haven. We had important conditions since 2015 to generate revenue. So farmland continues to be very stable. It's a very interesting asset for investors, because it is resilient in times of crisis. It's a safe asset. It generates an important profitability with security, with safety. So the changes in the last 12 months here, we can see on the right, there was a small variance. You can see 1% to 2% variance in the price of farmland, and this -- and we say that our business is safe, our assets are safe.
Going on to Page 5. Here, we detailed the 2 sales. Here, I would like to say once again, Jatobá -- the sale of Jatobá will be recorded in Q1 next year. It did not contribute for this result that we announced. And here at Araucária, sale in May 2018, 956 hectares and we have acquired this part for BRL 10.7 million. This is a purchase at Araucária and 1,208 bags per hectare. So here we see the value of the transaction. This represented to us an internal return rate of 16.5%.
The second highlight was the sale of Jatobá Farm, and this contributed for our strategy to diversify risks in the state of Bahia. So we have the strategy to mitigate the production and also lease. So this helped a lot last year. We already mentioned, we made a small sale to one of these lessees and then another important sale, not to a lessee but other large producers helped us to get -- to have liquidity and an appreciation. We did an important sale of a large asset in Bahia, 9,784 hectares, of which 7,485 hectares are arable land. And the value -- the acquisition value BRL 10.1 million and 285 bags per hectare production, nominal value of BRL 177.9 million. So this has a return rate of 14%.
You might ask us, some rates dropped because it's a long-term investment to generate an internal return rate of 20%, 22%, rapid investments. We had assets that were short term and interesting. Now an undertaking like this one bought and having recurring return rate of 14% is a very good -- interesting return rate. And if you look at the time frame, we're analyzing.
Well, going on to Page 6, this is a new slide. You're not used to seeing this slide. But here, we included this slide to explain to you who are investing in the company, showing the recurrence of our sales. Here what we would like to highlight the total amount. We made divestments of BRL 766 million sales. I used this slide to compare our capacity to generate value. The company began with an IPO of BRL 566 million. We invested BRL 766 million. Later on, you will see we have a portfolio that is worth BRL 1.4 billion, so the real capacity to generate value. Apart from this in the recurring sales, in this period, we had payments of dividends higher in excess of BRL 170 million. In other words, it is a generation of value that is superior higher than BRL 1 billion. So we were questioned, how can I foresee? Here it's very clear. When I want to analyze, we managers, we have a yearly goal for sales. We try to have a sales goal, and this is followed by the management counsel. We have a challenging goal to sell assets every year. So what we mean? What we're trying to say, the recurrence of sales in the last 5 years was higher than BRL 102 million. So if you want to analyze the recurrence, so this is one way. Basically, are we going to sell BRL 102 million? No. This year, we sold BRL 240 million and BRL 177 million. So there will be a fluctuation from one year to another. But if we look at a longer period, you will see that there is a good foreseeability of results. Adding to this, everything we have done, the changes in operational management of the company, investments in the future to add more value. So all of this allows us to say that this results of BRL 126 million should be even higher in the next few years with our sales strategy of BRL 100 million and also with robust operational results like we had this year. This graph also shows the return rate on investments.
Well, I believe Slide #7 summarizes the company. The company is more mature. In the company, those who are following our history, it is a new company, 12 years in the market. But this illustrates the result that we're bringing to you are some of effort, work, correct strategy, effort and also a mature portfolio. The graph, the bar chart on the left shows the amount of land that was not developed and what we developed to become arable land, what is being developed. And the last graph, where we have 38%, 29% and 33%. This shows our current picture. What does it mean? When you look at this graph, what does it mean? It means the following. We have a large portfolio ready developed that can capture real estate gains. So we have an expressive amount of assets that we can monetize. The second in yellow represents what is being developed. So this shows a more balanced company. This balance of 38% of ready assets developed land versus 8% we had in the past. In the past, it was difficult to get operational results and also real estate results when you had assets all under development. So today's picture, everyone asks us what is the ideal company? The ideal company is to have 30%, 40%, 30%. 30% of our portfolio ready for sale. Because apart from being ready for sale, it's generating results. 40% of the portfolio areas that are open, being cultivated for a few years and also we have the other graph that shows how we guarantee the sustainability of our business. So this is what we would like to stress to show that the consequence of our results and they will become more recurring, because we have a greater balance between developed land, under developed and mature, developing and to be developed. This balance is a combination of strategies -- a clear strategy and we want to maintain it this way.
While the graph on the right transferred land development, so we consider here, for example, São José is 100% ready. We have other areas under transformation, especially in Chaparral, in Araucária, we have a developed area in a place where land prices are very good. Jatobá also developing the last hectares. So in the next few quarters, we should record investments in transformation of areas that will be ready. We're showing here what is in progress. So we have these 2,000 hectares, for example, opened in Paraguay. And in the next harvest, we will have good numbers.
Going on to Page 8. As I mentioned previously, we made a new evaluation of our portfolio. So it's an independent evaluation done by Deloitte, and we are looking at the capacity to generate value through transformation. Here, I'd like to highlight that this is from June 30. So the sale of Jatobá is not included in these assets. So this market valuation of June 30, our portfolio would be -- was worth BRL 1.478 billion. So what happens now? In Q1 of next year, we will record the sale of Jatobá and here we will have BRL 1.3 billion after recording the sale of Jatobá.
Thank you once again. We look at the history. We began the company with a capitalization of BRL 186 million. We already paid dividends worth more than BRL 170 million and new portfolio of BRL 1.4 billion that can generate important assets and important value to us. All the sales that we presented on Slide 6, they were always done at either at market value or above. 11 sales that are shown there, all of them were sold at values above the valuation of Deloitte. So this allows us to say that Deloitte's evaluation, all the sales that were recorded were made -- all the sales were made at amounts superior to those evaluated by Deloitte's.
Here, Page 9 highlights planted circuits, an important change. And here I say, planted area. So we already talked about the acquisition of São José. São José is an asset BRL 100 million and it brought to us an operational area of 125,000 hectares, part of it is ours, part is leased and it has given us recurring results. Last year, it contributed with almost BRL 50 million and result in this year an important gain Gustavo will mention. So we are now on a -- the company is on a new level of operational results and these more robust results with the portfolio we have, should generate positive gains in the next few years.
Now -- so the highlights of this increase of 15% of planted area, 102,000 hectares. So it has a distribution, 32,000 hectares sugarcane, 34,000, soybean, the rest we have an important area that is for cattle raising pasture and this is a tool for us of transformation, and we still have 16,000 leasing to third parties, which is part of our strategy to mitigate volatility and so to bring potential buyers to our land.
Well, on the right, we see the numbers. We already mentioned before, 1.8 million tons of sugarcane, 134.3 tons of grains and 20,900 heads of cattle.
And I would like to say that company is not in cattle raising to be a large cattle-raising company. We want a tool to transform the land to allow us to generate important transformation value and avoid the volatility. So what we'll see now? With the sale of Jatobá, most of this cattle-raising land will migrate to other types of plantations. So they will be occupied by plantations of soybean. So cattle generate an important revenue with low volatility. When we plant soybean during the first year, you may have 300, 400 bags per hectare. And cattle raising, we know we won't have a great loss. And therefore, in Jatobá, cattle raising was very gratifying in Jatobá, BRL 160 per hectare with cattle raising. So it guarantees the appreciation of the assets through transformation and we avoided volatility. So this is our strategy.
On Page 10, we have a summary and later on we will have more about this. Here, this is the productivity in grains. So we have total amounts of soybean, here it's important to see. I'd like to stress we had a productivity of 3,500 that allows us to be amongst the best farmers in SĂŁo Paulo -- in Brazil, sorry. And we have areas that are in their first, second, third year. And all of this is included in the 3,500. If we exclude the areas that were transformed recently, we would be close to 3.7 tons. This is important. So we must generate value in transformation, and we have more and more possibilities, tools to stabilize these operational results, as a result of what we showed. So we have a good percentage of arable land. So we'd like to stress, Paraguay, once again, was a good surprise. Paraguay helps us with almost 3,300. When we look at these numbers, it is much more profitable because the cost of production is much lower than in Brazil due to the lower need for fertilizer and since it's on the border with few tests, so the cost of production is much lower and very profitable our operation in Paraguay. So here I'd like to highlight the following: a transformation company where we have an important part of our portfolio that are not developed so and with these productivities. So this is the highlight.
On Page 11, here we have 2 graphs. So we have the first one productivity and cattle raising, livestock. So here, those who are cattle raisers, here we have GNG 420 grams per day. So we're going on later to plant soybean here and gain a weight of 160 kilograms per hectare.
On the lower table, we see productivity of sugarcane. So here we have recurrence of those who are following us for a long time. We see a drop in the average productivity due to the acquisition of São José, where we had sugarcane that had productivity problems. So this productivity in the next few years, we should reach the levels we had in the Midwest. So we could show to you isolated numbers. So they're very close to what we had in previous years. And as a company, we have a lower level due to São José. So it was a positive year for grains and not that much for sugarcane. As I said, the rain in summer stopped a little earlier. We had less rain. And most of the sector is talking about reductions in productivity around 12% to 20% per ton of sugarcane per hectare. So we have almost 40%, 45% of the sugarcane harvested. We should finalize with a reduction of 3% to 4%. But on the other hand, we're seeing this year an increase in the sugar contents. So in the mix, the level of revenue, profitability doesn't change much in sugarcane. We're talking about 2 to 3 points per hectare and 3% to 4% reduction in productivity. But why doesn't it change, you may say? Because the cost of production is mostly in harvesting and transportation. Since we have more sugar per ton, we say that things should be roughly equal. These were the highlights.
Another great challenge on Page 12. Here we see the closing of the harvest results. We see soybean being sold at 10.39. Today, here another highlights. We're always monitoring the contribution margin and not price. So we have 54% of the harvest sold and this at a price of 9.79 at an average exchange rate of 3.73. Because when we calculate the costs, we also close deals. So we work with these 2 things together: sale and costs. In terms of profitability per hectare, we should expect a revenue that is fairly similar to the previous year. You have an exchange rate that is higher -- a little higher in reals. So if we had reals per bag, the price is 6% higher than the previous harvest. Great challenge in the sector.
When we look at the graph on the right, we see that almost 70% of the sale wasn't done physically. We are using sales in the future, and we have a risk of 17% based on the dynamics we have with the issue of freight. So there is no consensus after the trucker strike. So we don't have a clear price for the next harvest. We are always using tools to help us guarantee the price. And later on, we will have the physical sales. Let's hope that Chicago or the exchange rates will settle down and then we will be more aggressive in sales. So this is the summary.
This is a year that brought many challenges. It's a challenging year for all the companies in agrobusiness for the reasons we already mentioned, freight, Chicago and also the disputes between the U.S. and China. So we have to be very alert, not only for production and sales. So this is very important.
Now I'd like to pass the floor to Gustavo, and he will talk about the results of the harvest.
Thank you, André. Good afternoon. Thank you for participating. And now, let's talk about the numbers, the actions that we have carried out. Here on Page 13, we would like to present to you some numbers, the strong results we are delivering. Here, we excluded the sales. We included Paraguay. We have an EBITDA of BRL 90 million. And production of grains, as already mentioned, the actions we have carried out. Cattle raising activity that decreased since volatility, inclusion of mature developed areas and also leasing of lands. Here, we have a graph where we show the participation of the leased areas. 22,000 hectares of sugarcane, 7,000 of grain and the company's objectives are to continue to have leased areas in grains and cattle raising to counteract the risk we have in the year. These activities are different from what's happened in the past. They allow us to have an operational results and a positive cash flow and thus we don't have to deliver -- thus, we don't have to sell farms to deliver results. 150 million total production here, 50% is sugarcane, 50% grains, especially soybean. And for us, it was a year with much higher profitability than we had because of the harvest problems in Argentina and higher price of soybean in Brazil, we were able to capture these results. So it was a different year. And sugarcane in São José has changed the company's operational level. Then we have expenses with sales BRL 45 million, appreciation in developing areas, shifting total EBITDA of BRL 90 million.
Now on Page 14, reminding you that as of this quarter, we're beginning to present EBITDA with the new accounting standards. So we get to the same results. But we decided to adopt best practices. We closed an adjusted EBITDA, as you can see here, BRL 94 million. And there is a participation in EBITDA that is contaminated a little by the farm we have in Paraguay. An adjusted EBITDA here, we are seeing an increase of 217% in relation to last year adjusted EBITDA. The change was 217%. Last year, we had problems to pay all the fixed costs. And with all the changes that we made, we were able to have a very positive EBITDA. So here BRL 134 million, we have the sale of the farm. Having said this, we see the profit of BRL 126 million. Here we have interest. Also these -- here we have some effects that we already explained previously on February 9. And now, we have a new company called [indiscernible], we received all the assets and liabilities. And with the combination of business, we have 100% control of this company in all the assets and liabilities we already informed. And we are showing here the adjusted EBITDA.
Additionally, also we had a process. We had 2 effects in the interest rates and repeating, you can see the difference in the EBITDA. We understand that from now on with these areas with sugarcane that are leased and the portfolio we have, we should expect that the operational results will continue this way or improve with the leasing of the areas.
Page 15. Well, once again, operational results of Paraguay are consolidated in the results of Brazil. They are included. In 2018, we see a gross profit of BRL 47 million, and this is due to more revenue, more soybean sold and also more sugarcane sold, as you can see. And now expenses with sales -- sale, more tons, expenses -- administrative expenses, we see that as of 2017, we began to consolidate these expenses, including the expenses from Paraguay. We also see financial results here. Last year, we generated an important revenue and we have taxes here, a result of BRL 126 million, 363% higher than the previous year's in real based earnings per share. Here, balance sheet on the next page, so here we have the costs in Brazil and in Paraguay. Here, we see an increase in cash due to the inclusion of the ARC, CRA, accounts receivable, the increase. Here, we see the difference between short term and long term due to the receivables, sale of grains BRL 70 million through sale. This is corn and soybean, BRL 70 million to be sold. So within the circulating assets BRL 372 million, here we see we have circulating assets 13% higher. And the liabilities, we have an increase in liabilities because we had to make some investments in São José. And for sugarcane and soybean, this gave us a good cash generation. We understand that we have great possibility of capturing even better results. We're investing in irrigation to have an irrigated farm. We are renewing the sugarcane plantations 4,000 hectares per year, and this generates an important need for cash for investments. And we also decided to use the ARC or CRA. So here, we see the liabilities from BRL 203 million to BRL 157 million, 29.3%. Here, the ARC, also total liabilities BRL 200 million. Last year, BRL 58 million, 276%. Total liabilities, BRL 423 million to BRL 215 million. Capital, you can see here we have shares in treasury, BRL 35 million. BRL 164 million, this includes dividends that we will propose, profits reserves and operations we had in the past with other joint ventures, BRL 38 million. So total equity, 755,864,000.
On the next page, a quick summary of debt, ARC and the objective. We have greater flexibility in short-term capital. On the table on the right -- on the graph on the right, we can see BRL 133.8 million in cash, total debt BRL 276 million, BRL 70 million in the short term less than 1 year. And in 1 or 2 years, we see BRL 21 million; BRL 143 million between 3 and 5 years; and BRL 40 million after 5 years. So this is the financing for sugarcane.
Page 18, our proposal for dividend, net profit of BRL 126 million; reserves 5%, BRL 6.3 million; dividends, mandatory, compulsory BRL 30 million; and our suggestion to approve additional dividends of BRL 10.9 million; proposed dividends, BRL 41 million, we will propose.
Now we have appropriation of reserves, BRL 90 million thereof, and we'd like to stress the return that we're offering is 5.4%, the yield. And we have noticed, as mentioned, our history in the last few years, distributing BRL 170 million and including these amounts. And we had the results that we mentioned.
Next, Page 19. We always try to follow the net asset value. And here, André already mentioned these points. Looking here, BrasilAgro's equity is BRL 755 million. And here we see the CapEx, BRL 1.4 billion NAV to BRL 24.03 per share and [ 60 ], so we see here the market cap and so 67%, an excellent business.
And finally, what we'd like to show on the next page, Page 20 comprise of shares AGRO3, BRL 14.36 and the trend that we see in the market -- in the stock market. So we'd like to begin the Q&A session. So we would like to compliment all the team at headquarters, in the farms and are always in line with our objective. We thank you very much. And we'd like to begin the Q&A session.
So now we'd like to begin the Q&A session only for investors and analysts.
[Operator Instructions] Our first question comes from Mr. Duarte Thiago from BTG Pactual.
First question concerning the price of land in Brazil. When we look at the reports of S&P, we see that appraisal was low recently. When you look at the quarter, you see an appraisal of 12.6% by Deloitte. I believe that these values make sense, looking also at productivity during the last year. I'd like to hear from you the reason for the difference between the data in the market S&P and the ones you presented. And with this scenario, productivity, profitability and price of S&P lower in the last few months, we should have good opportunities to buy land in the near future. And also the sale of land to foreigners. Has this affected the negotiations on your side?
Excellent, 2 excellent questions. These are questions, it would be pleasure to talk about them for hours. Well, the first question, yes, it's worthwhile talking about this. The -- our properties, they appreciate due to market appreciation. And as you said, this was small appreciation. But the great driver for our assets to appreciate is through the transformation, the development of the land. So transformation this year was not very intense, excluding Paraguay. What we call Paraguay in our areas that makes levels of maturity with productivity, industry that makes the land more valuable. When we look at a portfolio that is mature, we would have an appreciation that is similar to that of the S&P report. So that is the strategy of the company, transform the land, develop the land by making it arable and thus this year becomes mature. So when we look at the portfolio in the graph, we have 28% of the properties being developed. So year-after-year, so the appraisal comes from this year. And it -- the appreciation is not in the mature. It's in the land that is being developed, where productivity is rising thus being more valuable, so this is the important part. This is a characteristic that we won't have in the company. The company has the capacity to generate value by developing the land, transforming the land. While trying to answer your second question, I'd like to answer the question as a manager. The second is not for me.
Yes, we have worked. We are working on this issue of sales to foreigners. Class entities are working on this global associations because we always say our concern is not a restriction to foreigners, because the country needs capital. So I see this with a lot of optimism, and we have talked to politicians and others. So I believe that after this turbulence of the elections, we may have some positive answers in these scenarios. And we had meetings with the legal department of the government look for us to cattle raising. We see a favorable environment for investments from abroad. So -- but we're waiting for the election of the new President in order because we have right now government with more than 84% rejection. So if we look at what was approved, roughly nothing was approved by Congress. Now linking this with the sale of land and liquidity, we'd like to stress that the sale of land to foreigners represents very little of the sale of land in general. In our scenario, what helps the market are the aggressive margins and also in the last year in the state of Bahia. When you have an interest in production margin and profitability, then -- so does this remove liquidity? This issue of foreigners in some areas, when you have very large assets, maybe it would. But if you divide, like Jatobá, we see that this is the right path. The Brazilian land market works the following way, producers selling to producers. I believe that more than 99% of the transactions are from one producer selling to another producer. What challenges us, we are an anti-cyclic company. When the producer has profitability, I want to sell. When they don't have profitability, I want to buy. So answering the second question. If we understand that the market will remain with lower profitability, this will generate purchases. If the profitability is high, we will sell. We will always be an anti-cyclic company. Hope I understood your question. Thank you. Good afternoon.
[Operator Instructions] Since there are no more questions, I'd like to pass the floor to Mr. André Guillaumon for his final comments.
Well, thank you very much for this opportunity to have this transparent chat. We thank you for your trust in our business, in our company and our management. And we thank you, we thank the team. As Gustavo said, the results we are delivering is due to an enormous effort on the part of our team. And I would like to highlight we mentioned this. We were certified as an excellent place to work, our company. So this shows that we're on the right track in people management. Well, it was a great pleasure to know that this result is due to many actions carried out, aggressive sales, also good people management, people committed to deliver results. Once again, you can count on us. In the next year, we are here to have recurring results and more important results. We have an important result in real estate. We will do better in 2019 to continue to have the results we had this year. Our strategy, I hope, was clear to you and through our Investor Relations department, Ana Paula and Elisa, they're always ready to clarify any points that you may have. Any questions, feel free to contact them and if you want to understand better about the business, more about the business, feel free to get in touch with us. Thank you very much, and have a good afternoon.
The conference call of BrasilAgro for the earnings of Q4 and 2018 full year is ended. We thank you all for your participation. Wish you a good afternoon.