• Net Income: BRL97.5 million for the first quarter.
• Adjusted EBITDA: BRL170 million from operational revenues.
• Revenue from Farm Sales: BRL199 million, including BRL192 million from the Alto Taquari Farm sale.
• Sugarcane Harvest: 1.6 million tonnes harvested.
• Area Sold: 2,694 hectares at BRL525 million.
• Sugarcane Productivity: Average TCH of 85 tons, slightly above budget.
• Planted Surface: Expected to finish the harvest with about 180,000 hectares.
• Debt: BRL737 million with a net debt of about BRL550 million.
• Dividends: BRL1.96 per share to be paid on November 14.
• Receivables: BRL891.8 million of receivables per sale near the farm.

• Warning! GuruFocus has detected 11 Warning Signs with LND.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Brasilagro - Cia Bras de Prop Agricolas (NYSE:LND) reported a net income of BRL97.5 million for the first quarter of the 2024/2025 harvest year.
• The company successfully harvested 1.6 million tonnes and started soy plantations, indicating operational progress.
• Sales from the Alto Taquari Farm contributed significantly to the company's revenue, with BRL525 million from 2,694 hectares sold.
• The company has shown resilience in both agricultural and real estate results, reinforcing its dedication to delivering results in both sectors.
• Brasilagro has a strong cash position with BRL900 million in receivables, providing financial stability and flexibility.

Negative Points

• The company faced commercial challenges due to price reversals and initial instability in the rain period, causing delays in soy plantations.
• Soy and cotton prices have been lower, impacting the company's revenue from these commodities.
• The company experienced a delay in planting due to climate conditions, which could potentially affect future yields.
• There is a significant challenge in the corn market due to liquidity issues in contracts, affecting operationalization.
• High interest rates have increased the cost of capital, potentially impacting future investments and expansions.

Q & A Highlights

Q: Can you explain the drivers behind the decision to increase the planting area and the expected profitability for the second harvest of corn? A: The decision was influenced by improved corn prices and internal consumption for ethanol production, making corn more competitive. The planting was delayed due to weather, but this should not affect productivity, only the timing of yields. The expectation is for a better contribution margin due to these factors. - Andre Guillaumon, CEO

Q: What is your outlook for sugarcane productivity given recent droughts and current weather conditions? A: The drought has affected productivity, but recent rains could improve conditions. However, the overall expectation is for productivity to remain at historical levels, with potential challenges in renewing sugarcane fields due to increased capital costs. - Andre Guillaumon, CEO

Q: How do you view the global political situation's impact on soy prices, and will it affect the expansion of planting areas? A: While geopolitical tensions could benefit Brazilian soy premiums, the impact is moderated by current high supply levels. Expansion of planting areas is more influenced by crop contribution margins than capital costs, with regular expansions expected. - Andre Guillaumon, CEO

Q: How is the market for land sales affected by current commodity prices and interest rates? A: The market has cooled due to high interest rates, but reinvestment remains attractive due to Brazil's tax system. Land prices are more affected by productivity and commodity prices than interest rates, with opportunities arising from strategic expansions. - Andre Guillaumon, CEO

Q: What were the main factors behind the 26% reduction in sugarcane production costs compared to last year? A: The reduction was driven by lower prices for seeds, fertilizers, and logistics, as well as a decrease in diesel costs. These factors combined to significantly lower production costs. - Gustavo Javier Lopez, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.