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DATE

Tuesday, Aug. 19, 2025 at 10 a.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Mariano Bosch

Chief Financial Officer — Emilio Gnecco

Head of Sugar, Ethanol, and Energy — Renato Junqueira Pereira

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RISKS

Adjusted EBITDAdeclined 60% year-over-year in both the quarter and year-to-date, driven by losses in biological assets, lower crop and rice prices, and higher US dollar costs in Q2 2025 and year-to-date, as explicitly noted by management.

Crushing volumein the sugar, ethanol, and energy business was 20% lower year-over-year due to fewer effective milling days and a slower processing pace, as stated in the financial discussion.

Crop yieldsand margins remained under pressure, with the average yield falling below initial expectations and historical averages for the 2024-2025 harvest season, and margins were affected by lower peanut prices.

Net debtamounted to $699 million at the end of Q2 2025. This represented an 11% year-over-year increase. The net leverage ratio stood at 2.3x, one turn higher than the same period last year.

TAKEAWAYS

Sales-- Sales totaled $392 million in the second quarter of 2025, and reached $716 million on a cumulative basis through the second quarter of 2025, with higher volumes offsetting lower product prices.

Adjusted EBITDA-- Adjusted EBITDA was $55 million in the second quarter of 2025, and $91 million year-to-date through Q2 2025, declining 60% year-over-year in both the second quarter and year-to-date.

Sugar, ethanol, and energy crushing-- 3.4 million tons were processed in Q2 2025.

Farming production-- Total production in the farming business increased 12% year-over-year, driven by higher planted area and record rice productivity.

Ethanol sales-- 320,000 cubic meters of ethanol were sold year-to-date through the second quarter of 2025, at an average net price of R$2,700 per cubic meter. The average net selling price for ethanol was 18% higher year-over-year.

Carbon credits-- 390,000 CBios sold at $10 each.

Debt issuance-- $500 million bond issued post-quarter, with a 7-year tenor and 7.5% coupon on the $500 million bond issued after Q2 2025, partially used to tender $150 million of 2027 senior notes.

Shareholder distribution-- $45 million in shareholder distributions year-to-date, including $35 million in dividends approved as of this date, and $10 million in share repurchases covering 1.1% of equity.

Leased area reduction-- Management confirmed a decrease of approximately 30%, or 20,000-35,000 hectares, in leased crop area for the upcoming campaign to improve margins.

Bitcoin mining pilot-- A memorandum of understanding with Tether considers using up to 5% of Mato Grosso do Sul energy output for Bitcoin mining, described as a test with the aim of targeting prices “above $80 per megawatt hour.”

SUMMARY

Management reinforced its strategic focus on operational flexibility and cost control to mitigate volatility from commodity prices and weather impacts, emphasizing the diversification of crops, geographies, and production mix as integral to company resilience. The operational flexibility allowedAdecoagro(AGRO -9.78%) to maximize margins by switching between sugar and ethanol based on prevailing market conditions, with a stated commercial strategy to profit from attractive ethanol prices and maintain unhedged exposure on a portion of 2025 sugar production, as discussed in the Q2 2025 earnings call. The company highlighted the Democratic Republic of Tether’s entry as a significant shareholder, noting its support of a disciplined capital allocation policy and an organic growth focus, while exploring a pilot in Bitcoin mining through a memorandum of understanding to potentially monetize surplus energy.

Management expressed confidence in achieving flat year-over-year sugarcane crushing volumes for full-year 2025, attributed to accelerated processing and improved cane availability in the second half.

Renato Junqueira Pereira stated, "in July, we crushed more than 1.5 million tons of sugarcane. And we have been crushing a lot in August as well. Actually, we reached our daily record last week."

Margins in the farming business were partially offset by premium pricing from customized genetics, and reduced leased area to control costs.

No additional hedging commitments for 2026 sugar were in place at the time of the call, while 5% of next year's production was hedged at $0.178 per pound, with timing for future hedges contingent on further market developments.

The company’s net leverage ratio increased by one full turn year-over-year to 2.3x in Q2 2025, extending the weighted average maturity of debt from 2.5 years to 4.5 years following the recent bond issuance.

INDUSTRY GLOSSARY

CBios: Brazilian carbon credit certificates issued under the RenovaBio program, traded by biofuel producers and fuel distributors to meet decarbonization targets.

TRS (Total Recoverable Sugar): Metric used in the sugarcane industry indicating the yield of sugar from a given volume of cane, factoring overall sugar content and extraction efficiency.

VHP (Very High Polarization) Sugar: A raw sugar grade with high sucrose content used primarily for export and industrial refinement.

Hydrous ethanol: An ethanol blend containing about 95% ethanol and 5% water, widely used as automotive fuel in Brazil.

E30 mandate: Brazilian government requirement mandating gasoline blends to contain 30% ethanol, impacting sector demand dynamics.

Full Conference Call Transcript

Mariano Bosch: Good morning and thank you for joining Adecoagro S.A.'s 2025 Second Quarter Results Conference. Consolidated adjusted EBITDA during the quarter reached $55 million while year-to-date amounted to $91 million. From the very beginning, we know that commodity prices and weather risks are inherent risks in our space. Therefore, through the years, we set our minds on becoming the lowest cost producer while also diversifying our operations across geographies and products. We understood that this combination along with the investment made to consolidate our asset base would act as a natural hedge against these events and enable us to continue delivering results to our shareholders.

These are the years when our sustainable production models are truly put to the test, together with our efforts in enhancing day-to-day efficiencies in order to overcome challenging scenarios like this one. In our sugar, ethanol, and energy business in Brazil, weather has not been good to us. We experienced extreme dry weather and even a cold front in June in our operation. Despite this, our strategy of increasing year after year the size of our plantation to secure cane availability enables us to have our crushing forecast in line with the previous year.

The same goes with the investment made to have a larger operational flexibility to produce both sugar and ethanol, and storage capacity which today grant us commercial flexibility to switch between products to always get the better margin and to stop production if needed. Going to our farming business in Argentina and Uruguay, we are focusing on the efficiencies in every stage of the value chain. In rice, prices have significantly come down, but our work on seed genetics allows us to offer customized rice varieties at premium prices and cut into new markets, which in turn enables us to partially offset the drop in global prices.

In dairy, thanks to our growing market presence, we are increasing the processing volumes in our industries while we continue working on expanding our product portfolio to access new destinations. In the case of crops, we are finalizing a very challenging campaign in terms of prices and costs. Now our focus is on the upcoming season, where our main goal is to improve the margins of each of our crops. As a consequence, we are reducing our leased area by approximately 30%. Before passing the word to Emilio, a brief comment on the memorandum of understanding that we signed with Tether. We are analyzing the possibility of using a portion of our energy production for Bitcoin mining.

We are excited about the potential innovative project as it proves how cutting-edge technology and the agribusiness industry can join forces to maximize the value of our assets and production. Lastly, an update on sustainability. In mid-May, we published our 2024 integrated report in which we explain how in our sector, sustainability is fully aligned with profitability. I would like to express my gratitude to all the people across Adecoagro S.A. These are the moments where our hard work and commitment ends up making the difference and allows us to be the lowest cost producers at all times.

I am convinced that we have the right people and that we are following the right strategy to generate good returns and value for our shareholders. Now I will let Emilio walk you through the numbers of the quarter.

Emilio Gnecco: Thank you, Mariano. Good morning, everyone. Please turn to page four with a summary of our consolidated financial results. Sales totaled $392 million during the second quarter while on an accumulated basis, they reached $716 million. Higher volumes sold across all our operations more than offset the lower prices seen for most of our products on a year-to-date basis. Adjusted EBITDA marked a 60% year-over-year decline in both periods, reaching $55 million during the quarter and $91 million year-to-date. Lower results were mainly explained by losses in our biological assets in line with our sugar, ethanol, and energy businesses on lower production as well as in our crops and rice operations on lower prices.

In addition, results were also negatively impacted by higher costs in US dollar terms in our farming division together with one-off expenses incurred by the company in connection with Tether's tender offer. Now please turn to slide five. Regarding our production figures, on the bottom right chart, we can see that crushing volume in our sugar, ethanol, and energy business was 20% lower year-over-year due to a combination of less effective milling days during the second quarter and a selective slower milling pace adopted during the first months of the year.

On the other hand, total production in our farming business reported a 12% year-over-year increase explained by higher planted area as well as a record productivity in our rice operations. In the case of crops, harvesting activities are almost complete for the 2024-2025 season and the average yield obtained was below our initial expectations. We will describe this in more detail during the presentation. Let's move to Slide seven with the operational performance of our sugar, ethanol, and energy business. After experiencing below-average rainfall during 2024 and early 2025, precipitations received during April aided our sugarcane yields.

Nevertheless, the distribution of rains led to a reduction in effective milling days and consequently, a decrease in our crushing volumes during the quarter, which totaled 3.4 million tons. Although productivity indicators remain below the prior year due to the lagging effect of the dry weather explained before, this saw a significant improvement versus the 2025 as anticipated. On a year-to-date basis, we have already crushed 4.9 million tons of cane, 20% less than the same period of last year. This was due to a selective slower crushing done in early 2025 focused on cane with limited growth potential, and a rainy second quarter that consequently slowed down our crushing pace.

In terms of mix, we continue to maximize sugar production throughout the year given its attractive premium. Within our ethanol production, we are maximizing the production of hydrous ethanol given the better margin. Let's please turn to slide eight where we describe sales conducted throughout the period. Net sales amounted to $183 million during the quarter, while year-to-date they reached $302 million. The overall increase in sales was fully explained by our commercial strategy to sell our carryover stock of ethanol from last year as well as our daily production to profit from the recovery in prices and clear out our storage capacity.

Consequently, we have already sold 320,000 cubic meters of ethanol at an average net selling price close to 2,700 Brazilian real per cubic meter, 18% higher year-over-year. Regarding sugar, the combination of lower prices and the decline in production given the lower crushing were the main drivers towards the decline in sales year-to-date. Nevertheless, we were able to profit from the sale of back VHP during the quarter, which commanded a premium over spot prices. In the case of energy, higher selling prices more than offset the decline in volume exported driven by the lower milling year-to-date. Regarding carbon credits, we sold over 390,000 CBios at an average price of $10 per CBio, reaching $4 million in revenues.

Please go to page nine where we would like to present the financial performance of the sugar, ethanol, and energy business. Adjusted EBITDA amounted to $68 million during the second quarter and $98 million for the first half of the year. Despite presenting higher sales, results were mainly offset by year-over-year losses in the mark-to-market of our biological assets on lower volume of harvested cane together with year-over-year losses in the mark-to-market of our commodity hedge position, due to less gains presented compared to the same period of last year. Finally, to conclude with the sugar, ethanol, and energy business, please turn to slide 10 where we would like to briefly talk about the current outlook.

As explained in prior releases, our sugarcane plantation has gone through different weather events throughout the last year and a half. However, our annual crushing forecast remains unchanged thanks to, first, our continuous harvest model that enables us to flexibly advance or delay harvesting activities together with higher cane availability due to the expansion planting made during the last years, as well as to higher sourcing of third-party cane. This, in turn, will result in flat to slightly higher cash cost versus the previous year.

From a commercial point of view, we are constructive on both sugar and ethanol prices for the upcoming months as we still have the flexibility to switch our maximization strategy to always produce the product that offers the highest marginal contribution. In the case of sugar, we still have a portion of our 2025 sugar production still unhedged and no commitment for the next year in order to profit from any upside in spot prices as the global supply and demand balance continues to rely on Brazil's production. In ethanol, inventory levels are considerably below the prior year, and the industry continues to prioritize sugar production due to its premium.

On the demand side, parity at the pump continues to favor ethanol consumption and new demand has emerged with the implementation of the E30 mandate. Therefore, any decline in crushing volume could further pressure this tight scenario. Now we would like to move onto the farming business. Please go to slide 12. As of August, we harvested 97% of the total area and produced over 1.2 million tons of agricultural produce. The remaining hectares are expected to be fully harvested during the rest of this month. Despite the precipitations received from February onwards, some of our crops were impacted by previous dry weather and high temperatures, excess rainfall, or even below-average temperatures.

Therefore, average yields for this harvest season ended up below our initial expectations in line to below historical average. In rice, our work on seed genetics and the implementation of new technologies resulted in an average yield of eight tons per hectare, a new record for this business. In the case of dairy, we are working on reversing the decline in cow productivity seen year-to-date. At the industry level, we continue to maximize the production of UHT milk for the domestic market, a product that offers the highest marginal contribution while developing our brand portfolio across several markets. To conclude, we began planting activities for our next campaign starting with wheat and other winter crops.

We are foreseeing a reduction in planted area of approximately 20,000 hectares versus the prior campaign due to our decision to reduce our exposure in the northern region of the country as well as to diminish the amount of leased area to improve crops margins. On the following page 13, we'll present the financial performance of our farming business. Adjusted EBITDA for the farming business totaled $1 million during the quarter, whereas year-to-date, it amounted to $18 million. Starting with our crop segment, the year-over-year decrease in results was mainly driven by an uneven year-over-year comparison as in April 2024, we sold La Pecuaria Farm, which generated $15 million in adjusted EBITDA.

Furthermore, results were also impacted by lower international prices, lower than expected productivity, and higher costs in US dollar terms, which combined continue to pressure margins during the period, mainly for our peanut production. Moving on to rice, the decline in adjusted EBITDA during both periods was mostly explained by the outlier prices reported the prior year, coupled with higher costs in US dollar terms, which in turn fully offset the record production at the farm level.

Lastly, adjusted EBITDA generation in our dairy business was impacted by higher costs in US dollar terms despite the increase in volumes sold and our work towards improving the mix of higher value-added products and maximizing the production of fluid milk for the domestic market. Please turn to page 15 for a broader view of our debt position. Net debt amounted to $699 million, 11% higher year-over-year. This was due to higher short-term borrowings raised to finance working capital in our farming business given the lower results presented at a consolidated level. Consequently, our net leverage ratio stood at 2.3 times, one turn more than the same period of last year.

Despite the increase, we continue with our disciplined capital allocation strategy which also includes investing in growth projects with attractive returns and distributing cash to shareholders while keeping financial flexibility and a strong balance sheet. Subsequent to the end of the quarter, we completed the issuance of a $500 million bond with a seven-year tenor and a 7.5% coupon. A portion of its proceeds was used to partially tender our 2027 senior notes totaling $150 million. This transaction proves our constant work towards anticipating our debt maturities and therefore having most of our debt in the long term. As an example, the average life of our debt which got extended from 2.5 years to 4.5 years.

On the following slide, we describe our CapEx program. Expansion CapEx represented $23 million during the quarter, and $53 million on an accumulated basis. In Brazil, expansion CapEx was mostly allocated to increasing our sugarcane plantation size and expanding our harvesting equipment with the acquisition of two-row harvesters and gruner trucks. In our farming business, our main CapEx program consisted of the development of rice production areas and the expansion of our power gold production capacity. At slide 17, we would like to present our shareholder distribution year-to-date. As of this date, we have already committed $45 million to shareholder distribution. From this amount, $35 million in dividends were approved.

The first installment of $17.5 million was paid in May, representing approximately 17.5¢ per share, while the second installment will be payable during November in an equal cash amount. In addition, we have already repurchased $10 million in shares under our buyback program, representing approximately 1.1% of the company's equity. Thank you very much for your time. We will now open the call to questions. Thank you.

Operator: The floor is now open for questions. If you have a question, please write it down in the Q&A section or click on raise hand for audio questions. Please remember that your company's name should be visible for your question to be taken. We do ask that when you pose your question, that you pick up your headset to provide sound quality. Please hold while we poll for questions. Our first question comes from Gustavo Troiano with Itau BBA.

Gustavo Troiano: Hello, everyone. Thanks for taking my question. Actually, I have two points to explore with you guys, both of them in the sugar and ethanol business. In the earnings report and also earlier in the call, you mentioned that we should expect similar crushing figures year-over-year for the full year despite this lower than anticipated start of the season. Right? So just wanted to catch up with you guys. What are the main drivers behind this crushing acceleration expected for the second half? And in which direction do you believe there could be an asymmetry here for crushing figures for 2025 full year? And the second question on sugar prices.

You already mentioned that you are constructive with both sugar and ethanol prices. But just wanted to hear from you, what are the main triggers or timing for us to see better sugar prices going forward? And you also mentioned in the earnings release that there are no hedging commitments for 2026 at this point. So I think it could be useful for us to understand a little bit of timing. So we can anticipate a little bit of when do you guys intend to start these commitments for 2026? Thank you very much.

Mariano Bosch: Thank you, Gustavo, for your question. Renato can answer both of them.

Renato Junqueira Pereira: Yeah. Thank you, Gustavo, for your question. Regarding the crushing, as Emilio mentioned, we had a difficult first quarter, especially because of the drought of last year. And the second quarter was impacted by the rains in April. But afterwards, we have been crushing very well. Actually, in July, we crushed more than 1.5 million tons of sugarcane. And we have been crushing a lot in August as well. Actually, we reached our daily record last week. We have been crushing very fast. So we think that it is still possible to crush the same amount that we crushed last year. So we are going to be very similar to what we have crushed last year.

And we think that the yields in the last quarter are going to be much better than the yields that we have been obtaining now in the third quarter because of the frost that we had. So that's why we are optimistic about reaching the same level of crushing. Regarding the price of sugar and ethanol, we think that we are optimistic in both cases, especially in the short term. In the case of ethanol, the demand is still very strong. So hydrous demand is almost 2 billion liters per month. Parity is still favoring ethanol consumption. Parity at the pump is at 66%. We had the E30 addition in August, which represents approximately 700 million liters in additional demand.

And we think that the amount of sugarcane that Brazil will crush this year is going to be lower because we have been seeing lower TRS content and also yields in all the sugarcane areas in Brazil. So the mills in most areas are maximizing sugar, so less ethanol supply. So if you take the level of stocks today, it is 30% lower than the same period of last year. That's why we think that the price of ethanol is going to increase. We are building inventories to sell our stocks more towards the end of the year. We think that there is an upside between 5-10% considering the current price levels.

And in the case of sugar, we're also optimistic. We think that the price of sugar is under pressure in the short term because of the funds' high short position and because of the Brazilian higher sugar mix. But as I mentioned, TRS and the yields are lower than expected. Actually, TRS per hectare is 15% lower than the same period of last year. We think that the amount of sugar that Brazil is going to produce is lower than initially expected. And the world is still very dependent on Brazilian sugar. So we think that the price is going to react.

We are going to see more opportunities to hedge our remaining part of the sugar of this year and also the sugar for next year. And I think it's very important to mention that since July, we are maximizing ethanol in Mato Grosso do Sul. If you consider the tax system in Mato Grosso do Sul and the appreciation of the Brazilian real, the parity in Mato Grosso do Sul, the hydrous ethanol parity in Mato Grosso do Sul is close to 18.5¢ per pound. That's why we're maximizing ethanol. So that's why we are positive in both products.

Gustavo Troiano: That's super clear. Thank you very much.

Operator: Our next question comes from Thiago Duarte with BTG. You can open your microphone.

Thiago Duarte: Hey. Hello, guys. Good morning, everybody. Thanks for taking the question. Yeah. I have a question on sugar and ethanol and then a follow-up on Renato's comments just now. Right? The question is about the quality of the cane. Renato just mentioned a few points about TRS per ton being lower across the Center-South of Brazil, and trying to sort of add up to your guidance of keeping the cane crushing volumes flat this year relative to last year. So if I understand correctly, the reason why you believe you're going to be able to crush as much as you did last year is because your harvest area is still significantly lower year-over-year. And then you expect to catch up.

But, obviously, this is being compensated by the fact that yields are lower as well. Right? So just to sort of clarify if that's the reasoning. So you expect a higher area and lower yields for the full year of 2025 relative to 2024. And perhaps this explains why you're expecting unitary cost to be flat or up this year relative to last year? So that would be the first question. And the follow-up is regarding the figure Renato just mentioned. So, you said that because of the tax incentives and the freight costs and everything, your ethanol equivalent sugar equivalent price in Mato Grosso do Sul is over 18¢ a pound. Right?

So my question to you on that is, how do you think that applies to not only other mills in Mato Grosso do Sul, but also other mills located outside of Sao Paulo. So think of Minas Gerais or Goias or even the state of Mato Grosso. Which I believe face similar sugar and ethanol price equivalent trade-offs as you guys. So my question is actually whether you think other mills will not be maximizing the sugar in 2025, relative to ethanol because of the sugar price right now. Thank you.

Renato Junqueira Pereira: Hi, Thiago. Thank you for your questions. Regarding the first question, we think that the yield is going to be very similar to the yield that we had last year. So, the area is going to be a bit higher because we're going to acquire a bit less third-party sugarcane, but the yield is going to be, I would say, flat year-over-year. We think that the TRS content is going to be slightly lower than last year, especially because of the frost and the sugarcane that we have been crushing in July and August. Because when we have a frost, we are obligated to harvest the sugarcane before the ideal period.

So, that's the reason why TRS content should be lower. Regarding the second part of your question, we think that the mills that are in the same situation that we are, that they have the same ICMS system, the same distance to the port, should do the same strategy that we are doing. I don't know precisely how much it represents. I think it's rational to do what we are doing now, which is maximizing ethanol over sugar.

Thiago Duarte: Thank you. And when you think of maximizing ethanol versus sugar for the full year 2025, do you have, like, a rough estimate of how much that means in terms of mix ethanol versus sugar?

Renato Junqueira Pereira: Yes. I think this is a good point. But it's difficult to say because we start sugar in our mill, and we are still maximizing sugar. So the final number will depend on how it progresses from now on. I think in 70% of potential to produce ethanol. This year, considering what has already happened, I think that we're going to finish the year in Mato Grosso do Sul with 60% max ethanol.

Thiago Duarte: Very clear. Thank you, Renato.

Operator: Our next question comes from Lucas Ferreira with JPMorgan. You can open your microphone.

Lucas Ferreira: Hi, everyone. I have two questions. The first one still on the sugar and ethanol business, Renato, can you discuss a little bit in your view what will be the trigger for you guys to start hedging next season? In other words, do you expect that the sugar market should at some point react to what is your view and several of other sugar and ethanol producers a weaker cane quality coming to the season. So what's the time you guys think of moving ahead with the hedges independent of the scenario? In your view, what's the trigger for sugars to move sugar prices to move from here? Second question.

My question is regarding if you can speak a little bit about how the better entering the group changed or not, the way you guys think about strategy? You know, already announced the MOU that you mentioned in the beginning. So how to think about the way you guys think about growth strategy from now and you analyze projects, the scope of our investments or how Tether is helping in reshaping or not the way you guys think about growth? And if you can comment that, that will be great. Thank you.

Mariano Bosch: Thank you, Lucas, for your question. Renato will answer the first, and then I will take the second question.

Renato Junqueira Pereira: Yeah, Lucas. As I mentioned before, we think that the sugar price could react in the short term considering the impact of the Brazilian crop both in yield and TRS content. As I was mentioning, if you compare to last year, we had 15% less TRS per hectare than last year. We think that the market didn't realize it yet. I think as Unica is going to start to release the numbers in August, September, this is going to be more clear and prices should react, and then we should accelerate our hedging for next year. I think it's important to mention that we have already hedged 5% of our next year position at $0.178 per pound.

We did this last week. And, also, as I mentioned earlier, we have the flexibility to change the mix towards ethanol much before than the other players. So we are always more open in terms of hedging than the other players because we have this, I would say, higher flexibility. If you take the same period of last year, we were in a position very similar or even lower than the hedge position that we have today.

Mariano Bosch: Okay. Thank you, Renato. Lucas, regarding Tether and the new shareholder, as we expressed since the very beginning, we are very happy with them as a shareholder. We have already gone through two board meetings. We have our new board with five new members and four of the existing ones. So they are supporting and enhancing the culture of the company, this culture of being very disciplined on our capital allocations. So all the projects we are looking for this organic growth, what Emilio just mentioned, which are the projects.

We are following each one of them, and what are the returns and the level of returns and what are the synergies that we are getting within each one of them. And then also the focus on the day-to-day of the business. We are going through lower results than what we were projecting as you can see in the returns. And as you know about the culture of this company, we focus on this day-to-day and level of returns that we need to achieve. So we are very happy with the support we are having with our new shareholder on following this strategy and culture that we have as a company.

And then very specifically on this test on Bitcoin mining that we are doing is a test. This is 5% of the energy that we are generating in Mato Grosso do Sul. So it's a clear test, but we are enthusiastic about the potential returns we can get there. It looks like they are very attractive, but we need to see them and as part of the culture and this new shareholder also wants us to continue with this idea of making things happen and then continue growing once we see the returns and we can be sure about what we are doing.

So as a whole, we are really happy with what's going on with the company as of today.

Lucas Ferreira: Thank you very much, you both.

Operator: Once again, if you have a question, please write it down in the Q&A section or click on raise hand for audio questions. Our next question comes from Matheus Enfeldt with UBS.

Matheus Enfeldt. Hi. Morning. Thanks for your time and taking my questions. If I could move to the crops business, particularly farming in general, I mean, we've seen a pressure in margins coming particularly from costs in an environment where we're likely to see prices remain sideways for a good while, at least in our view. So my question here is, how you're seeing cost advance from here if we could expect a normalization into 2026, if there's any developments on OpEx efficiency and CapEx efficiency that the company may look for given the tightness in margins that we're seeing for the business. So that's my first question.

And then my second question, sort of a follow-up from the previous question on changes in strategy and the direction that the company is taking. I acknowledge that leverage is perhaps a bit higher than everyone was expecting. But there are a number of opportunities for M&A in the sector, particularly in sugar and ethanol in Brazil. If this is a direction that the company could consider, and if not, I mean, in Brazil, then if there's a preferred sector for inorganic growth, that we could see at least being studied from here. So those are my two questions. Thank you.

Mariano Bosch: Thank you, Matheus, for your question. On the farming in Argentina and Uruguay in the whole farming side, I would like to divide it into the three business segments that we have. We have the dairy business that in that specific case, we are not having the problem of prices and costs. So that business is aligned to what was the previous year and improving organically. So, that's not an issue in that specific business. Then on the second one that is on the rice, there is a huge drop in terms of prices.

So even though we have a very good low-cost production system for rice, and we also have diversified as Emilio was explaining, diversify the varieties to get better prices than the average price of the long rice. The overall prices are coming down, and we cannot do much in that regard. So in terms of the total cost, we are improving them. And so that business, we continue to see relatively sustainable and maybe some way lower than the previous year. But for the following year, we can see it again at a similar level. So the rice business as a whole is going through difficulties, but not that significant. Although prices of long rice have gone down 50%.

So it's a really relevant case, the long rice prices. And then finally, the crop segment that is the one that is going really through difficulties, in this case, is soybean, corn, wheat, and peanuts. The more relevant one is peanut. Peanut is the one that is affecting us more and is probably the more relevant of the four crops. So that drop in prices of 40% in peanuts is the one that is really affecting the margins that we are getting. So these four crops go all in a specific rotation and is what we call the segment crops. In that segment crops, the year that we are showing the numbers is the campaign that is finishing.

And now we are starting to plan the new campaign. For the new campaign, we started renegotiating leases of the land five months ago. So those leases, we are taking them down. So we need to adjust costs and we are working on reducing the total cost where leases are one of the key elements of reduction of cost. Because of the reduction of leases, this year, we will be planting 30 to 35 hectares less than the previous year. So this business as a whole is being reduced because of the results and the returns that we are getting there. So that is clearly what's going on and how we are going through that.

You were asking about the CapEx and OpEx in rice and dairy that in both we've been doing more CapEx and OpEx than crops in the last two years. Those things are also the ones that are helping us on this, lowest cost of production or reaching margins even lower because of the drop in prices, but still reaching positive margins. That is as a whole the farming answering the farming business. And how we see the future of this. And then going back to the other question and our strategy regarding leverage, today, as you mentioned, we are increasing leverage. The main increase is because of the reduction of EBITDA.

So the main increase is in times EBITDA because of the reduction in EBITDA and as a percentage, the total debt is increasing, not really relevant. And we expect to end the year at around these two times EBITDA that is where we feel comfortable. About two times EBITDA, we've always said that we have this internal policy that we don't like to be above that level. Even having said this and regarding your question about potentially doing something around the sugar and ethanol business, because there are so many things for sale in the space. Because of these more difficult results, we are always looking at them.

We are growing on our organic basis, but we are also looking at potential inorganic growth. In order to get some of this inorganic growth, the returns have to be even higher than the returns that we can see in our organic growth. So are we analyzing? Yes. Are we gonna close something? We have no idea. The returns have to be very clear and attractive in order to move forward there and be above the three times EBITDA because we always want to be above the two times EBITDA because we always want to go below that level. So that is a quick answer to your question in this regard.

Matheus Enfeldt: Thank you. That was super clear. Thank you.

Operator: Once again, if you have a question, please write it down in the Q&A section or click on raise hand for audio questions. Our next question comes from Isabella Simonato with Bank of America. You can open your microphone.

Isabella Simonato: Hi. Good morning, everyone. Thank you for the call. Two questions. First of all, can you give a little bit more details about the partnership with Tether in the Bitcoin mining and use of the energy, right, in the operation? So any disclosure on the terms, the length of the contract, and how should it essentially work? I think it's helpful to understand. And second, more on the shareholder structure, right, and ultimately the impact we're seeing on the stock liquidity recently. How is the company seeing that? And especially that right regarding the liquidity of the shares, if there's anything in mind to eventually change that somehow. Thank you.

Mariano Bosch: Thank you, Isabella, for your question. In terms of the liquidity of the shares, you can see that the liquidity is being pretty reasonable. And according to our history of the last eleven years being a public company, we are above the average trading volume that we've been having during the whole history of the company. So we are not seeing any issue as of today regarding this. And then regarding the details of the partnership for Bitcoin mining, this is a test. This is 5% of the energy that we are producing. And so we want to make it happen. We don't have clarity yet on how to make it happen and how this agreement will exactly be.

But, we see this as a potential interest in ending up selling our energy at a very attractive price. So as of our own calculations as of today, it's, like I don't want to mention it, but it's like selling at above $80 per megawatt hour. And so that is what makes us think about this as something potentially very attractive. But we want to make it happen in order to see if this $80 or $100 or $120 we are targeting today as a potential sale, are possible or not. So that will depend on a lot of things that have to happen, and we need to understand all those conversions and see them happen.

So that's a quick answer to this thing that we are enthusiastic about happening.

Isabella Simonato: Okay. Thank you very much.

Mariano Bosch: Thank you.

Operator: This concludes the question and answer section. At this time, I would like to turn the floor back to Mr. Bosch for any closing remarks.

Mariano Bosch: Thank you all for joining the call, and hope to see you in our next meetings.

Operator: Thank you. This concludes today's presentation. You may now disconnect at this time and have a nice day.