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Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to SLC AgrĂcola's First Quarter 2020 Earnings Conference Call. Today, we have with us Mr. Aurelio Pavinato, CEO; and Mr. Ivo Marcon Brum, CFO and Investor Relations Officer. We would like to inform you that this event is being recorded. [Operator Instructions]
Also, today's live webcast, both audio and slide show, may be accessed through SLC AgrĂcola's website at www.slcagricola.com.br, in the Investor Relations section by clicking on the banner Webcast 4Q20. The following presentation is also available to download on the webcast platform.
The following information is available in thousands of Brazilian reals and in IFRS, except otherwise indicated. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of SLC AgrĂcola management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.
Investors should understand the general economic conditions, industry conditions and other operating factors could also affect the future results of the company and could cause results to differ materially from those expressed to such forward-looking statements.
Now I will turn the conference over to Mr. Aurelio Pavinato, CEO. You may proceed.
Good morning, and thank you for participating in SLC AgrĂcola's earnings conference call for the fourth quarter and fiscal year of 2020. Let's turn to Slide 3, please.
2020 will remain an unforgettable year in which the world was stunned by a pandemic that brought major impacts on our lives. But it also led to many opportunities for reinventing and innovating what we do. At SLC, we are delivering another year of results with many challenges surmounted and entering 2021 even stronger. Our business and employees proved the resilience and transformed 2020 into another successful year.
I will start by presenting the main deliveries in the 4 pillars of our current strategy. Let's turn to Slide 4, please. For the third straight year, we achieved new records in our soybean yields, which have widened even further our gap over the average soybean yields in Brazil and the world.
Our cotton yields was below the national average for the '19/'20 crop year. But as we commented in our earnings release, our production costs were more competitive at 3.7% under the national average, enabling us to deliver lower unitary costs.
On corn, our yield was 34% better than national average. As you can see on Slide 5, our growth strategy remains focused on cotton and soybean seeds, which maximize our return per hectare planted and supporting differentiation in pricing.
As part of our asset-light business model, Slide 6 show details on the planned business combination with Terra Santa, which we was announced in the Material Fact on November 26 last year. The deal will let us expand our planted area by around 30%, while capturing synergies and economies of scale. We are now in the final due diligence phase according to the plan, and we are optimistic with the success of the operation.
We can go to Slide 7 now to increase the visibility of our goals and actions on ESG topics. We incorporate into our quarterly earnings release a special section on the top. In the second quarter, we -- last year, we talked about creating value through the 6 capitals, our main goals and our governance structure. And in the third quarter last year, we included information on 2 of our 3 main action fronts, water and biodiversity, climate change and soil. And now in the third quarter, we are detailing our work on stakeholder relations front.
Moving on, Slide 8 shows some of the awards we've received over the year and which confirm the success of our strategy and the strength of our team. We were chosen as the Best Company in Agribusiness in the 2020 ranking of Institutional Investor magazine. We were elected one of the country's 150 Best Companies in ranking compiled by Great Place to Work in partnership with the Época magazine. Recognized one of the Best Companies in People Management in the Valor Carreira ranking of the newspaper Valor Econômico, and their consulting firm, Mercer. Winner of the Transparency Trophy 2020 in the 24th ANEFAC – FIPECAFI Awards.
Now on Slide 9, I will talk about innovation. Firstly, it's important to highlight the ongoing digital transformation at our company. We are intensifying our investment in technology and innovation and getting our people ready for the opportunities created by our growing adoption of new technological solutions.
In 2020, we expanded our aspiration in innovation based on renewing our business with a long-term strategy. We created SLC Ventures to explore the opportunities in corporate venture capital and in corporate venture building, led by our organization's assets.
Let's go now to our outlook for the market on 11, where I will comment briefly on the price of our main products in 2020 and in this first few months of '21. In general, we can say that the dollar price for cotton, soybean and corn are already at a higher level than in the pre-pandemic periods.
The first quarter of 2020 was marked by a recovery in cotton prices in the international and Brazilian markets. This scenario of downward revisions in production forecasts in the United States, where unfavorable weather reduced the country's cotton crop by approximately 20% in relation to initial estimates, was another key catalyst for the structural changes in cotton prices in New York over the last year.
The shortfall in U.S. production, combined with the expectation of a stable global fiber consumption, which points to the global supply-demand balance ending the current cycle with a deficit of approximately 2.9 million bales, according to USDA estimates, has been an important factor for sustaining fiber prices.
Soybean spot prices quoted in -- on the Chicago Board of Trade and the prices paid for the grain based on the Paranaguá/CEPEA reference maintained their upward path during the fourth quarter of 2020. In a period marked by the resilience and subsequent increases in prices for the soybean complex in Chicago, the prices for soy and soy meal ended the period from January '20 to January '21 with a cumulative gain of over 40 -- 45%.
The recovery of imports by China, driven by domestic demand in the country, has been the main factor sustaining prices, especially after the past cycle marked by the U.S.-China trade war and African Swine Flu, which contributed to the scenario of depressed prices for the commodity in the international market in 2019.
Corn spot prices on Chicago Board of Trade were volatile over 2020. After falling in April, prices paced at a strong recovery in both international and local markets. The period of the sharpest increases in corn prices was the last quarter of the last year.
Global demand in the 2021 crop year shows the outstrip supply by 11.8 million tons. The acceleration of the corn crop's trends and the persistence of the global [ decrease ] in supply and demand should become a significant factor sustaining future corn prices in the international market.
I will now pass the call over to my colleague, Ivo Brum, our CFO and IRO, will go over our financial results in 2020.
Thank you, Pavinato. Good morning, everyone. Let's go to Slide 13, which presents some highlights from our income statement.
In 2020, net revenue surpassed for the first time, the mark of the BRL 3 billion growing by 22%, driven mainly by the combination of higher-priced invoices for soybean and corn and the higher volume of cotton invoiced. Adjusted EBITDA also set a new record of BRL 960 million, with adjusted EBITDA margin expanding 2.8 percentage points to 31%. This performance is due in large part of the higher price for the soybean and corn invoiced.
Note that because of the adoption of IFRS 16, lease costs were excluded from adjusted EBITDA calculation. A total of BRL 129 million was paid for the leases in 2020 compared to BRL 78.9 million in 2019. Net income for the year was BRL 510 million with a margin of 16.5%, representing growing of 74% on 2019, considering only the result from agricultural operations.
Let's go now to Slide 14, which shows how 2020 marked another year of positive free cash flow of BRL 415 million, supported by the strong generation of the cash from operation and efficient management of working capital needs. The amount was increased by receivables related to the sales of properties in the total amount of BRL 42 million.
To conclude, Slide 16 presents our debt position. The strong free cash flow enabled a reduction in debt balance sheet of BRL 260 million and the payment of dividends and interest on equity in the total amount of BRL 179 million over the year. Also, you can see adjusted net debt ended 2020 at BRL 708 million, decreasing by 27% from end of 2019. The company ended the year with a very comfortable net debt to adjusted EBITDA ratio of 0.74x.
Consistent with our strategic pillar of stewardship in ESG, another important milestone was our first issue of green bonds in the form of agribusiness receivable notes with a second-party opinion in the amount of BRL 480 million. The notes are due in 2025 and all proceeds will be used in eligible projects approved by -- included in the Digital Agriculture, Low Carbon and Soil Conservation and Green Fertilizers program.
I will now pass the call back over to Pavinato for his comments on the outlook for 2020 and '21/'22 crop years.
Thank you, Ivo. Let's go now to Slide 17. As of March 8, 48% of our soybean crop for 2021 had been harvested, which had its operation in the state of Mato Grosso already concluded. Based on this, we are maintaining our yield estimate for this crop year of 3,755 kilograms per hectare, which is 4.1% above the budget yield for the previous crop year. The cotton and corn crops [ have been ] planted and presents excellent production potential.
Moreover, as you can see on Slide 18, we made good progress on selling production for the crop year, [ phasing ] on the favorable momentum for prices, especially considering the weak Brazilian real. Looking a bit further ahead, we already have begun to plant the '21/'22 crop year, including input purchase, where we had [ a gain in part on the ] reduction in dollar price compared to the previous crop year and the consequent forward sales of the commodities, in line with our hedge policy.
Considering the good potential of the crops, the formation of costs and the sale prices, we expect to maintain margins in high levels in 2021 and 2022.
Thank you. And now we are available for answer any questions.
[Operator Instructions] As there are no questions, we would like to thank you and this concludes today's presentation. You may disconnect your line at this time, and have a nice day.