Q1 2025 Adecoagro SA Earnings Call
www.gpg.edu
[inaudible] thank you for joining us today, thank you
The the the the the the the the the
Juan Sartori, Juan Sartori, Juan Sartori, Juan Sartori, Juan Sartori, Mariano Bosch,
Mariano Bosch: Juan Sartori, Juan Sartori, Juan Sartori, Juan Sartori,
Speaker Change: Good morning, ladies and gentlemen, and thank you for waiting at this time, we would like to welcome everyone to Adecco address first quarter of 2025 results conference call.
Speaker Change: We does we had missed there once that Audi is decorative chairman Mr. Mariano Bosch CEO, Nick at a minimum vehicle CFO, Mr. Han nitrogen gate, a bit Ada sugar ethanol and energy in me says, we've got major Investor Relations Officer.
Speaker Change: They will like to inform you that this event is being recorded and all participants will be listen only mode. During the companys presentation.
Speaker Change: After the company's remarks are completed there will be a question and answer section at that time further instructions will be given.
Before proceeding let me mention that forward looking statements are based on the beliefs and assumptions of the collaborative management and on information currently available to the company.
Speaker Change: 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.
Speaker Change: Investors should understand that general economic conditions industry conditions and other operating factors could also affect the future results of Adecco agile and could cause results to differ materially from those expressed in such forward looking statements now I will turn the conference over to Jimmy standby Deanna Bush.
Speaker Change: Mr. Bosch you may begin your conference.
Speaker Change: Good morning, Thank you for joining the call out at all.
Speaker Change: <unk> first quarter results conference.
Speaker Change: Before we start with the highlights of the performance that they've gotten Bunny, we would like to comment on the recent transaction.
Speaker Change: As you may all be aware that it has completed its tender offer process and has become our largest shareholder.
Speaker Change: Holding 70% of the company's equity.
Speaker Change: Okay.
Speaker Change: This is clearly the start of a new era for the company.
Speaker Change: And we are all very excited and enthusiastic as well.
Speaker Change: The future prospects with this new venture.
Speaker Change: I still remember when we founded <unk> back in 2002.
Speaker Change: We had the IVF producing each of the commodities were a week without cheap being the low cost producer worldwide.
Speaker Change: Within this concept.
Speaker Change: Is that it has taken us more than 20 years to develop our current four business segments.
Speaker Change: In each one we leveraged on the best combination of solid climate people to develop our existing sustainable production will see steps.
Speaker Change: We are very happy that the significance that caused such a day there.
Speaker Change: Leader in technology and innovation in its field.
Speaker Change: <unk> knowledge to our work and wants to support us.
Speaker Change: I answered that.
Speaker Change: Through the implementation of cutting edge technologies, we will be in a position to continue transforming the traditional <unk> space.
Speaker Change: While we venture into potential new exciting projects.
Speaker Change: Having said all this.
Speaker Change: We have invited today, our executive chairman Mr coincide authorities.
Speaker Change: <unk> has recently joined the new board representing further together with other four new latex us.
Speaker Change: One welcome to other collateral.
Speaker Change: We'll pass the floor to you.
Mariano Bosch: Thank you Mariano good morning, everyone.
Speaker Change: I am once our story, it's an honor to join the board of the collateral as newly appointed executive Chairman representing now.
Mariano Bosch: A significant shareholder in the company.
Mariano Bosch: Following the completion of the tender offer we have appointed a newly formed board, which we believe that in combination with the continuing members and the quality of management is now an ideal composition of experiencing new avs that will support and lead the company into the future.
Mariano Bosch: Okay.
Mariano Bosch: The other is the creator of the largest most transparent and liquid stable coin in the industry.
Mariano Bosch: <unk> mission is to build sustainable and resilient infrastructure for the benefit of underserved communities.
Mariano Bosch: By leveraging our cutting edge blockchain and peer to peer technology. It is committed to improving financial inclusion while fostering economic growth in emerging countries, where there is a huge opportunity to unlock growth.
Mariano Bosch: The company currently has more than 400 million users around the world and recently surpassed 150 billion in assets and $13 billion in profits in 2024.
Mariano Bosch: Further investment in I think Guangdong is part of its strategy to investigate reserved tangible assets with limited supply, which supports sustainable developments that create real impacts.
Mariano Bosch: We are excited to become part of this remarkable company, which almost some of the best agricultural and energy assets in the world.
Mariano Bosch: Of particular importance for us.
Mariano Bosch: Susan with coin gold and farmlands, the basic assets for stable and correlated long term reserves.
Mariano Bosch: We are recognizing that the Guangdong a platform of management efficiency, and integrating and operating agricultural and energy assets that will only be improved by the incorporation of a successful and committed long term shareholder.
Mariano Bosch: We are committed to supporting I think Congress management in executing its current strategy and contributing to its future growth journey with.
Mariano Bosch: We currently see organic and inorganic opportunities in Latin American countries with very attractive returns, which we may explore and now ready to provide financial support if needed in order to execute.
Mariano Bosch: We are here to help strengthen the company already that solar which is operating integrating and managing complex businesses with discipline and excellence.
Mariano Bosch: We will contribute to maximize long term value, maintaining a disciplined capital allocation strategy, including our firm commitment to keeping a healthy balance sheet and the companys leverage levels, while pursing aggressive growth opportunities when they present themselves.
Mariano Bosch: Okay.
Mariano Bosch: We will also maintain the current shareholder distribution policies by focusing on dividends and a strong emphasis on maximizing the stock price sometimes by remaining open to opportunistic buybacks to the extent we conclude it is the best use of the company's resources as well as aligning management compensation, even more to this upside.
Mariano Bosch: In addition, we intend to offer I think quadro the latest technological innovation and capabilities areas for desert has deep expertise and success and is currently transforming around the world, we see opportunities to explore leveraging stable clients in blockchain technology to increase efficiency and commodity trading.
Mariano Bosch: Explore real asset organization, and potentially integrate AI and peer to peer technologies under development to further strengthen operational performance.
Mariano Bosch: We're looking forward to working with the board management team and Investor community on this journey.
Mariano Bosch: Thank you and luxury Mariano.
Speaker Change: Thank you Gwen.
Mariano Bosch: Now <unk>.
Mariano Bosch: Going into the results of the quarter consolidated adjusted EBITDA reached $36 million.
Mariano Bosch: Starting with our business in Argentina, and Uruguay our.
Mariano Bosch: Our rice operations achieved a new record in parallel DVD.
Mariano Bosch: Moving that all the investment made in seed genetics land levering machinery pays off.
Mariano Bosch: Nevertheless, rice prices <unk> seen are going down.
Mariano Bosch: Indeed, our.
Speaker Change: Our presses in the retail and export markets.
Speaker Change: <unk> SaaS commercial flexibility to maximize the production of their products that offer us the highest margin with.
Speaker Change: Which continues to lead the fluid mix.
Speaker Change: Although the crops business is facing another challenging year in terms of prices and costs.
Speaker Change: We are seeing an improvement in Colorado DVD versus last year.
Speaker Change: Let's move into the sugar ethanol and energy business.
Speaker Change: During the quarter, we sold all the ethanol that was stored in our tanks at prices significantly higher than in the previous periods.
Speaker Change: Now that the new season has started we have once again the flexibility to build up inventory in our storage tanks if needed.
Speaker Change: In the Meanwhile.
Speaker Change: We are strategically crashing.
And that has impacted by the dry weather.
Speaker Change: In order to maximize productivity during the second half as we accelerate our crashing base and reach our annual target.
Speaker Change: The higher the meeting David that we will be diluting our costs as we always say.
Speaker Change: To conclude I would like to reiterate my gratitude to all our people in our required at all but this time I would like a special thank our former directors millennium Sachi Ala and <unk>.
Speaker Change: Louise Gilman, Leann and direct with local and National Russo.
Speaker Change: For their support and valuable contributions throughout all these years.
Speaker Change: Now I will let me walk you through the numbers I'll say a quarter.
Mariano Bosch: Thank you Mariano good morning, everyone.
Mariano Bosch: Please turn to page five with a summary of our consolidated financial results.
Mariano Bosch: New sales totaled $324 million during the first quarter.
Mariano Bosch: 28% higher year over year on higher volume sold mainly ethanol as we exited our tanks, which in turn fully offset the lower prices for some of the commodities that we produce.
Mariano Bosch: Despite an increase in sales adjusted EBITDA was down to $36 million, marking a 60% year over year decrease.
Mariano Bosch: The year over year decline either.
Mariano Bosch: Was mainly explained by losses in our biological assets line.
Mariano Bosch: Rice, and sugar ethanol and energy businesses.
Mariano Bosch: Due to lower prices as well to lower production in the case of our Brazilian operations.
Mariano Bosch: In addition results were also negatively impacted by one off expenses incurred by the company in connection with the tender offer.
Mariano Bosch: Now please turn to slide six.
Mariano Bosch: Regarding our production figures in the bottom right chart, we can see that crushing volume in our sugar ethanol and energy business was down 31% year over year due to the slower and selective meeting base adopted during the first quarter, which we will describe in more detail during the presentation.
Mariano Bosch: On the other hand total production farming division reported at 25% year over year increase explained by higher planted area as well as record productivity in our rice operations.
Mariano Bosch: Let's move to slide eight with the operational performance of our sugar ethanol and energy business.
Mariano Bosch: Our prior release, we anticipated that during the first quarter, our crushing volume will decline compared to the same period over last year as a result of the dry weather experienced throughout 2024, which got extended into the first months of this year affecting the use of our sugarcane plantation.
Mariano Bosch: Yeah.
Mariano Bosch: Under this scenario, we made the decision to harvest those gains that were in the fifth or sixth Scott.
Mariano Bosch: And had less potential, allowing the younger cane to continue growing and recover productivity indicators in the event we received the range.
Mariano Bosch: As a result, we can see a decreasing both yields and Trs content during the period.
Mariano Bosch: We continue to maximize sugar production given its attractive premium our production mix stood at 42% on lower sugar content.
Mariano Bosch: For the reasons previously explained which resulted in less production flexibility.
Mariano Bosch: Within our ethanol production, we continue to preferred hydrous ethanol over anhydrous ethanol given the better margin.
Mariano Bosch: Please turn to slide nine we describe sales conducted throughout the period.
Mariano Bosch: Net sales amounted to $119 million in the quarter, 15% higher year over year.
Mariano Bosch: This was fully explained by our commercial strategy to sell our last year's carry of ethanol to profit from the significant recovery in prices during the first quarter of 2025.
Mariano Bosch: In 2024, we held to our ethanol inventories waiting for an improvement in prices.
Mariano Bosch: Throughout the period, we sold over 160000 cubic meters of ethanol representing 30% of the total volume produced in 2024 at an average price of 2700 <unk> per cubic meter, 31% higher year over year.
Mariano Bosch: <unk>.
Mariano Bosch: Regarding sugar the combination of lower prices and the decline in production given the lower crushing were the main drivers stores due to declining sales.
Mariano Bosch: The case of energy and despite the lower volume with.
Mariano Bosch: We produce energy using our store Burgos, and we're able to profit from the hiking spot prices throughout the quarter.
Mariano Bosch: Regarding cargo grades we sold over 110000 <unk> at an average price of $12 <unk>.
Mariano Bosch: Please go to page 10, where we were.
Mariano Bosch: I would like to present, the financial performance of the sugar ethanol and energy business.
Mariano Bosch: Adjusted EBITDA amounted to $30 million during the first quarter.
Mariano Bosch: 42% lower than the same period of last year.
Mariano Bosch: Despite presenting higher sales on a year over year gains in the mark to market of our commodity hedge position.
Mariano Bosch: Were mainly offset by year over year losses in the mark to market of our biological assets on lower crushing and constant kind of prices on harvested.
Mariano Bosch: Finally to conclude with the sugar ethanol and energy business. Please turn to slide 11.
Mariano Bosch: We would like to briefly talk about the current outlook.
Rainfall received over the last few weeks eight yield recovery.
Mariano Bosch: Assuming weather going normal we expect to accelerate our crushing base here in the second half of the year and reach an annual aggression figure in line to slightly above the previous year.
Mariano Bosch: Also our unitary cost in cents per pound should decline as crushing increases in productivity recovers.
Mariano Bosch: From a commercial point of view the evolution of sugar prices will mostly depend on Brazil's production. While it is still subject to came productivity industrial flexibility in logistics.
Mariano Bosch: Consequently, we still see some upside to current spot prices.
Mariano Bosch: And why we have hedged less than 50% of our 2025 sugar production.
Mariano Bosch: In the case of ethanol consumer preference continues to favor ethanol, but supply may be limited given the industry the expectations to continue maximizing sugar production due to the greater premium that comments.
Mariano Bosch: Moreover, new demand is expected to come with the implementation of <unk>.
Mariano Bosch: Adding more pressure to the trade balance.
Now we would like to move on to the farming business. Please go to slide 13.
Mariano Bosch: We are currently undergoing harvesting activities for most of our grades.
Mariano Bosch: So at the end of April we harvested 52% over the 305000 hectares.
Mariano Bosch: Presented area and produce over 790000 tons of agriculture produce.
Mariano Bosch: Despite the precipitation has received from February onwards, the productivity of some of our crops such as wheat and early corn was impacted by the dry weather and high temperatures registered during December and January.
Mariano Bosch: On the other hand, we foresee a recovery in our late corn production due to the improved weather conditions experienced so far as.
Mariano Bosch: As well as the absence of Cedar platform.
Mariano Bosch: Okay.
Mariano Bosch: That drove the decline in yields in the previous campaign.
Mariano Bosch: For the rest of our crops, we are forecasting a slight improvement in yields versus the prior year, but in line with historical levels.
Mariano Bosch: In rice, we are almost done with the harvesting activities. Our average yield reached eight tons per Hector a new record for this business and a significant year over year improvement.
Lastly, we continue enhancing efficiencies in our dairy free sales despite the declining cryo for TVT reported in the quarter, which.
Mariano Bosch: Which we expect to reverse throughout the following months.
Mariano Bosch: At the industry level, we are working on product development for the domestic and export markets, while expanding our presence across different price tiers with our consumer product brands.
Mariano Bosch: On the following page 14, we present, the financial performance of our farming business.
Mariano Bosch: Adjusted EBITDA for the pharma business totaled $17 million during the quarter, making up 27 million year over year decrease.
Mariano Bosch: Starting with our crop segment the year over year decrease in results was mainly driven by lower international prices lower than unexpected broke CVD and higher costs in U S dollars, which combine continued to pressure margins during the period.
Mariano Bosch: Moving on to Rice, adjusted EBITDA reached $10 million during the quarter.
Mariano Bosch: Despite the record productivity and decrease in sales the declining EBITDA generation was mainly explained by an uneven year over year comparison as during the first quarter of 2012 before we were able to profit from record prices explained by India's policy to prohibit the exports of white long reign.
Mariano Bosch: And a very poor production of rice and South America.
Mariano Bosch: Prices have currently come down to normal levels, given higher global supply.
Mariano Bosch: On an annual basis, we expect a similar performance of this segment compared to 2024, but more evenly distributed during the quarters.
Mariano Bosch: Lastly, adjusted EBITDA in our dairy segment totaled $7 million during the period driven by higher sales on higher prices as we improve the mix of value added products and continued to maximize the production of fluid milk for the domestic market.
Mariano Bosch: Let's now turn to page 16, where we would like to present, our capital allocation strategy.
Mariano Bosch: According to our distribution policy, we are committed to a minimum.
Mariano Bosch: Distribution of 40% of the cash generated during the previous year.
Mariano Bosch: A combination of cash dividends and share repurchases.
Based on 2024 net cash from operations the minimum amount to be distributed in the policy. This year is $64 million.
Mariano Bosch: Out of which we have already committed $45 million between dividends and share repurchases.
Mariano Bosch: In terms of dividends or distributions of $35 million was approved.
Mariano Bosch: The first installment of $17 5 million will be paid on may 16th representing 17 <unk> per share.
Mariano Bosch: Whereas the second installment will be payable in November in an equal rationale.
Mariano Bosch: In addition, we have already repurchased $10 million in shares under our buyback program, representing approximately one 1% of the company's equity.
Mariano Bosch: Please turn to page 17 for a broader view of our debt position.
Mariano Bosch: Net debt amounted to $679 million.
Mariano Bosch: 6% higher year over year.
Mariano Bosch: This was explained by the increase in short term debt throughout the period as we work with.
Mariano Bosch: Well to secure new financing at attractive rates to finance part of our working capital consisting of the planting and harvesting activities of our crops.
Mariano Bosch: As shown in our financial figures. This was achieved without this attending our distribution policy and growth projects not compromising our liquidity ratio, which stood at one six times showing the company's full capacity to repay short term debt with its cash balances.
Mariano Bosch: By the end of the quarter, our net leverage ratio reached one seven times, given the lower sales percentage.
Mariano Bosch: We expect to reduce our short term debt exposure throughout the second half of the year as we collect the cash from our sales as well as to reduce our net leverage ratio of greater than expected results in the upcoming quarters.
Mariano Bosch: The following slide we describe our Capex program in the first quarter of 2025, we invested $30 million in expansion projects in Brazil expansion Capex was mostly allocated to increasing our sugarcane plantation size and expanding our harvesting equipment with the.
Mariano Bosch: Question of to roll Harvesters and Bruna trucks.
Mariano Bosch: Our pharma business. Our main Capex program consisted the development of rice production areas, the expansion of our drawing and storage capacity and.
Mariano Bosch: Our bustle that I wont rice mill and the construction of a new warehouse for dairy products and our typical day reprocessing facility.
Mariano Bosch: Thank you very much for your time, we will now open the call to questions.
Mariano Bosch: Thank you the floor is now open for questions. If you have a question. Please write it down the Q&A section click on right hand for all your questions. Please.
Mariano Bosch: Please remember that the company's name should be feasible for your questions will be taken.
Mariano Bosch: We do ask that when you pose your question that you pick up your handset to provide optimal sound quality.
Mariano Bosch: <unk> hold as we collect the questions.
Speaker Change: Our first question comes from Thiago Duarte with that is it back to al.
Speaker Change: Microphone is open.
Speaker Change: Yes. Thank you good morning, guys. Thanks, Thanks for the opportunity I have a couple of questions.
The first one is is on the sugar ethanol and energy business.
Speaker Change: And trying to reconcile your expectations that you that you throughout the year, you should be able to meet last year's sugarcane crushing volumes and coming from a pretty weak quarter on a year over year basis. So I'm just I'm just trying to.
Speaker Change: To understand.
Speaker Change: Whether you expect this to come from better yields. So last year, you delivered if I'm not mistaken 70.
Speaker Change: Tons of cane per Hector So if you expect to be able to meet that.
Speaker Change: On the balance of the year or if we should be looking for higher.
Speaker Change: Harvested area, so whether the.
Cane availability improvements should come from higher area or higher yields that would be the first question. The second question comes from.
Speaker Change: As it relates to the crops business.
Speaker Change: I was wondering.
Speaker Change: If you could provide a little bit more color in terms of the unit economics for the different crops because this quarter, what we saw was.
Speaker Change: Baker.
Speaker Change: Representation of corn.
Speaker Change: In terms of your sales volumes.
Speaker Change: Relative to soybean and wheat, mainly.
Speaker Change: And so I was wondering how those unit economics compare and whether they could explain or at least partially explain.
Speaker Change: Low margin that you delivered this quarter in the in the crop segment.
Speaker Change: And if I may a third question and Im not sure <unk> is in the call but in his in his prepared remarks. He talks about one of the things you've talked about was.
Speaker Change: Providing financial support if necessary for their quad was grow and even mention both organic and inorganic opportunities across Latin America. So I was I was wondering.
Speaker Change: What kind of opportunity.
Speaker Change: He sees us as compelling in the region.
Speaker Change: What segment within it that quad rules different business segments would make some sense.
Speaker Change: And whatever other color he could provide on the opportunities that he he foresees in terms of growth for our therefore that would be it. Thank you.
Speaker Change: Hi, Hello, Thank you for your questions.
Speaker Change: Yes quantities with us in the God.
Speaker Change: So im going to take the opportunity of starting answering your third question, so I'm going to ask.
Speaker Change: One two to take that question.
Speaker Change: Directive for him.
Speaker Change: One do you want to take that.
Speaker Change: Question, Yes, perfect Hotel very nice meeting you and thank you for the question.
Speaker Change: All those strategic directions that the company are going to take.
Speaker Change: The future with initial holder I think are a combination of continuation we believe the company's we'll manage it.
Speaker Change: Very high quality low cost production assets that are well positioned into into the future. So what we want to be on top of that continuation of simply giving it a little bit more dynamism and acceleration when capital is needed of strategic direction is to be supported.
Speaker Change: And I think what we are seeing right now because of the of the timing you said emotional skills or segments.
Speaker Change: There are integration opportunities, that's what we mean by organic there are capex.
Capex has to be approved with much higher return on equity than the average of the company.
Speaker Change: Maybe acquisitions to be considered around all of those segments, but.
Speaker Change: But also there are some areas, which are growing a little bit beyond for example, we believe that the energy, which so far was mostly.
Speaker Change: A byproduct of agricultural production could be an area, where I think quality with how a stronger focus generating some stable long term blueprint with us there and those people with treating trouble from Latin America right. Now there are areas related to the inputs of agriculture that could be.
Speaker Change: Provide both a hedge and even long term exposure because of the of the correlations of the absolute demand what while we mean the intent, thereby supporting and you've been very aggressive at least that we believe this management team has a capacity of integrating and operating assets in Latin American and an incredible.
Speaker Change: Fashion and I think if it was needed or any type of capital whether it be.
Speaker Change: Equity partners or joint venturing, we would be weighted to oncor any of those transactions always with an idea of focusing on a disciplined allocation of capital with a strong return on equity. So we may end of life.
Speaker Change: My box or repurchase or issuing debt or making or not acquisitions internal rates internally always compared with the average return that the company is doing.
Speaker Change: Current operations and in order to improve it in the in the long term.
Speaker Change: Thank you very much for the question very clear and I think two out there so.
Speaker Change: I'm going to ask Anthony to go on the first day.
Speaker Change: Part of your question regarding the our expectation.
Speaker Change: Our expectation for crushing volumes.
John: Hi, John Good morning.
John: Andrew mentioned the weather was very dry.
John: Both during the whole 2024 and also the first quarter of this year.
John: Our yields declines.
John: But despite the just dry Roger you had <unk>.
John: <unk> record last year. So we anticipated this sugarcane that otherwise would be crushed in the first quarter. That's why we have the less.
John: In terms of intensive.
John: In terms of corrosion.
John: And we did this to others to leave the sugar cane and for better.
John: The potential to grow to be crushed in the second part of the year.
John: <unk> was good causing April the weather changed we had a lot of the rains in April actually the range in April was 50% higher than the historical.
John: The average so the sugarcane outlook the biological assets looks much better now so we expect that the yields.
John: This year is going to be higher than the one that we had last year I would say something between five and 10%.
John: Higher I think the challenge now will be crush.
John: The sugarcane that we have we'll have the sugarcane, but the challenge will be just that.
John: <unk> two <unk>. So we use of time is going to be the key.
John: To be following now.
John: But since we have the continual harvests two module if you don't grow the sugarcane. This year, we can crush more in the first quarter of next year and have much more intensive quarter.
John: So we think that it is possible to grow but the key point now as the use of time.
John: No wrong.
John: Okay. Thank you and I talked earlier and then on your second question regarding the economic unit of their traditional crops here. It is important to understand that they have to be analyzed in a campaign, it's difficult to analyze within only a quarter how that the economic perform.
John: Much of our growth.
John: So when we think what are.
John: The economic benefit of the different crops today, the first graph Esa com full season, then we have the wheat and soybean double crop and third the soybean full season, so within this city.
John: Our locations so.
John: <unk> when we decided our planting crops that these what we are deciding now that's one will be the <unk> corn <unk>.
John: Soybean double crop and then we'll see some upside.
John: Within the city.
John: In that rotation, we can always change then 15% in an OTC them two months, they know where sustainable production system, we cannot do 100% of corn. So we cannot we have to always maintain the rotation, but we are going to be a little bit more in client till we make half of it.
John: In percent more on gone compared to soybeans, we'll see some when we ink on the economic results on this traditional drops. So those were the questions you are asking.
John: If you have any follow up a question we've gotten off to an excellent.
Speaker Change: That's all that's all very clear, thank you Mariano in and hang onto them.
Speaker Change: Thank you for your question.
Speaker Change: Yes.
Speaker Change: Our next question comes from Julia retail with Morgan Stanley.
Speaker Change: Phone is open.
Julia retail: Hello. Good morning are you hear me.
Speaker Change: Yes. Thank you very much for having me Mr started thank everybody on the floor the remarks.
Speaker Change: I would like to direct my question to you Mr. Subside if possible.
Speaker Change: Hum.
Speaker Change: Sure. The quality is one of the largest agricultural companies and Watson America is known for being low cost producer with great assets strong management.
Speaker Change: As you already know.
Speaker Change: But also it has a great reputation with participation.
Speaker Change: Fairness with shareholders.
Speaker Change: And in that sense I would like to ask.
Speaker Change: Can you control group in place we will keep.
Speaker Change: It's high standards of transparency with Goldman <unk>.
Speaker Change: Shareholders also.
Speaker Change: Do you think that is.
Speaker Change: How important do you think is that.
Speaker Change: And lastly, a follow up on this.
Michael: The first question from Michael <unk>.
Speaker Change: Okay.
Speaker Change: Also generate a lot of cash over time, even at low cycle.
Speaker Change: Times like this year.
Speaker Change: How does the new control group plan to use this cash flow in the future.
Speaker Change: I understand you talked about some opportunities that may come in it will be ready to ship to comply but.
Speaker Change: <unk> raised.
Speaker Change: How do you plan to use this cash flow.
Speaker Change: Can we stay with a 40% dividend policies.
Speaker Change: The remaining part of that will be done.
Speaker Change: Okay.
Speaker Change: Thank you <unk> for your questions.
Speaker Change: The first.
Speaker Change: Part of that question regarding the announced policy I will ask one to answer but.
Speaker Change: And then I can complement same thing for the second part of your question. So one if you want to address.
Carlson: Carlson and thank you Julian is meant to you for the questions.
Carlson: In the whole first of all everything you said about the high quality of asset management balancing credibility is what attracted us to invest in the quality and the in the first place who was very important in the acquisition for us to do it in a way that it respects the history of the culture and the existing achievements, particularly in transparency and incorporate.
Carlson: Golar and its one of the main discussion with Whatsapp. We wanted the company to remain listed precisely because adhering to all of the standards of being a publicly listed company in New York was an important message to the market. That's how we define leaving 30% float in order to reach sufficient.
Carlson: To have a controlling shareholder but also have the possibility of investors to participate in the best way to the growth story that we think is going to have to.
Carlson: To happen. In addition, as we got as we became controlling shareholders. We also implemented a lot of minority protections that were not present before so we can move that now to protections that are of a much higher standard that what the stock exchange requires until now.
Speaker Change: Maybe they're Emilio can go through each of them, but all related partners have been validated by independent.
Speaker Change: Correct.
Speaker Change: We are restricted to a full takeover of the company we ever go beyond 80%. So I believe the company is going to be continuing with everything Thats made it a great company, so far but probably right.
Speaker Change: Our highest highest standard and thats, what we commit also a controlling shareholder to the market going going into the future.
Speaker Change: On the second aspect of distribution first of all 2025 distribution policies approved so it's going to stay like this and into the future that you'll say the company generates a lot of a lot of cash flow.
Speaker Change: And if anything youre, probably consistently misunderstood or undervalued by the market. So we're going to be seen how to invest that cash flow in the most profitable way in the future first of all by continuing our dividend policy, and then investing in repurchasing shares or making acquisitions, but always with.
Speaker Change: The idea of improving the return on equity of these investments in the future.
Speaker Change: So was I believe one typically.
Speaker Change: Yes.
Speaker Change: Okay. Okay.
Speaker Change: No nothing to add let's go to the question yes.
Speaker Change: Once again, if you have a question. Please write it down into Q&A section our fleet on right hand for all your questions.
Speaker Change: Our next question comes from Lucas Fajita with J P. Morgan your microphone is open.
Speaker Change: Okay.
Speaker Change: Luca we cannot hear you.
Luca: Hi, sorry, I was going and hi, everybody. So thanks, very much pretty space to ask questions I have a couple of four one.
Speaker Change: And one by the way I don't know if you remember and you might remember you from 2010 or 11 during the UHD IPO of <unk>. So you can track the couple of times, so nice to speak to you again.
Luca: The first question is about the land of the company. So if if.
Luca: Better has any specific plan to monetize the land Thats one of the key assets for the company, it's very undervalued in the stock price. So if you see any opportunity I don't know if a sale lease back or anything that could unlock value for the land.
Luca: Of the company and the second point since you just mentioned that the plan is to keep the company listed.
Luca: You also have some planned for the liquidity of the stock because that has been one of the main pushback on the other quadrants investment case.
Luca: Historically and now I believe that the liquidator could shrink further right.
Luca: With a large better.
Luca: Taken in the company so for for all the minority of the R&D. So if there is any plan.
Luca: For liquidity to improve in the future. Thank you.
Luca: Okay.
Speaker Change: Idaho Gus thank.
Luca: Thank you for the question.
Luca: One do you want to to address.
Luca: Yes perfectly.
Luca: No.
Luca: Good to reconnect after so many years so.
Luca: No we have all been working for a long time with all these issues and I think Thats why we may end up having some of the solutions right now.
Luca: <unk> as a publicly listed asset has always underperformed and it's really one of the biggest challenges.
Luca: One is we have a large land holdings in a public company they tend to be under undervalued underappreciated.
Luca: A further land is excellent long term assets and we want to have more of it we think its something thats going to appreciate over time to generate stability and we think our company than other Guangdong solves one of the big problems, which is operating at an efficient manner at our scale with Justin always notes is not easy.
Luca: Now in order to them to treat the other side of that challenge I think definitely one of the big works that would have to do is whatever the mechanism whereby we can see.
Luca: Serialized will crystallize devaluation of those land holdings into the QUADRA story, and we will be working definitely on several mechanisms to present to the market.
Luca: Coming months in order to see how we can we can attach to that.
Luca: The usual unusual challenge.
Luca: Thank you very clear.
Luca: Yeah.
Luca: On reality.
Luca: Got it.
Luca: I think one was also clear in explaining.
Luca: Minority shareholders will be Brett. Thank you you've done have you had better protections that what they have before on having.
Luca: 30% on the float.
We believe it's something that.
Luca: You have likely.
Luca: Yes, Hello, Mariana one more comment.
Luca: The float is definitely smaller from a technical point of view.
Luca: Before relatively large shareholders that would not trade. So I don't think the flow test dramatically being reduced of course, the transactional place part of it but what we have seen in the latest data post transaction. The liquidity is not worse than before and maybe we can expect that to continue in the future.
Luca: What we have is a big amount of people who follow the stocks.
Luca: Purely as a discount trades that would buy this company at the strong <unk> and then sell it when you get close to it maybe.
Speaker Change: What we have done also remove a lot of that structural overhang. So our perception is that we are interested in in a high stock price and maximizing the surprise and having a liquid well covered stock for the future and we're going to be trying to operate on that basis, the future of the strategy of the company.
Luca: Okay.
Luca: Thank you very much guys.
Luca: Yeah.
Luca: Thank you next question.
Luca: Okay.
Jonathan: Our next question comes from Jonathan <unk> with <unk> BBA.
Speaker Change: Your microphone is open.
Speaker Change: Good morning, everyone.
Speaker Change: And I'll post your questions on our side if I may.
Speaker Change: Sort of who already presented some interesting thoughts about the new investment plan mentioned that that's where.
Speaker Change: We appreciate all information provided but it would be great to all foods caused the expected timeline for these.
Speaker Change: In terms of implementing these new projects or even how quickly could we expect to see results to be reflected on the company's results.
Speaker Change: Hi random lengths.
Speaker Change: If you could breakdown the answer between projects through accelerate current operations or new projects to be implemented moving ahead.
Speaker Change: It would be great.
Speaker Change: And my second question on his focus on all operations in Argentina, just to point with your most recent thoughts on the macroeconomic environment in Argentina. We recently had some new development fall in export tariffs and of course.
Speaker Change: FX dynamics, so glad <unk>, what you guys can alright, perceiving that country or expected.
Speaker Change: Thanks for the company in Austria here your general perception about this operationally in the medium to long term that's it. Thank you.
Speaker Change: Okay. Thank you Bruno for your question I'm going to address the second part of your question regarding Argentinian economic.
Speaker Change: Elements.
Here there are two main forces number one is now we have.
Speaker Change: Same door, when we export and we export.
Speaker Change: All of our sites and for export. So we are seeing the real xolair for first time in a long time. So that's of course very much welcome conceptually and then.
Speaker Change: The the overall costs are increasing so in that sense that is how we report.
Speaker Change: The costs.
Speaker Change: And the overhead cost.
Speaker Change: The general costs are increasing although variable cost.
Speaker Change: <unk> have always been in dollar terms.
Speaker Change: Not necessarily increasing in the same pace.
Speaker Change: Sure.
Speaker Change: In some cases even.
Speaker Change: Reducing so we are now in a much more real system. We are very happy to leave the system. We've been always working to be the low cost producers in each one of the segments that we have so we are optimistic that we can improve.
Speaker Change: In the long term our results in Argentina. So we are in a better situation that before within this whole economics resets for Argentina.
Speaker Change: And we are affected by it.
Speaker Change: The commodity prices.
Speaker Change: That's of course, FX and defend waste our EBITDA, one way yada yada. So that's conceptually whats going on in <unk>. So we welcome all these changes in Argentina.
Speaker Change: Our company in the medium and long.
Speaker Change: Long term and in the short term molecule.
Speaker Change: And then regarding the timeline of the projects that one has been explaining.
Well.
Brian: I would add one comment and then let Brian comment on top of this.
Speaker Change: These projects take time, all our projects that in the organic projects that one talking about the <unk>.
Brian: Roger.
Speaker Change: We carefully analyze execution for US is the key element and we don't need to be in a hurry to execute because thats when the execution doesn't loews clarified so that projects take time and we are analyzing each one of their projects with the right timing.
Speaker Change: We are not in a hurry to do them. So they will be then in the way we've been always working that east maximizing.
Speaker Change: The are minimizing the execution risks and maximizing.
Speaker Change: Our exit.
Speaker Change: Execution question. So one I don't know if you want to complement something on on.
Speaker Change: On timing.
Speaker Change: So 400% growth Mariano said, yes, I know.
Speaker Change: Our same store analysis Zanesville hub to go through a formal process of due diligence, but the new board, which what.
Speaker Change: Incorporate the last week.
Speaker Change: Or whether you have the different strategic line side will start working.
Speaker Change: Several of the areas that we discussed about.
Speaker Change: It would be likely over the next 12 months.
Speaker Change: The results and execution several ones on both lines.
Speaker Change: But we cannot commit to a pilot, but I saw some timing on any of them because they.
Speaker Change: We are not based on data on the outcome and the results rather than the absolute necessity to to do something.
Speaker Change: So that's super clear thank you.
Speaker Change: Okay.
Speaker Change: Once again, if you have a question. Please write it down when the Q&A section our fleet on right hand for all your questions.
Our next question comes from Matt <unk> with UBS your microphone is open.
Matt: Hi, Good morning, Thank you for taking my questions and congrats on the positive conclusion of the tender offer.
Speaker Change: I think I was very clear on the direction and what the strategic rationale behind.
Speaker Change: With the state and other QUADRA from further.
Speaker Change: I was wondering if you could discuss sizing or what size of the QUADRA could take in a couple of years from now right.
Speaker Change: If we look over the past four to five years.
Speaker Change: Capex has been around 200 $400 million per year.
Speaker Change: Which has allowed to describe it to today over a strong growth over the past.
Speaker Change: Number a few years, but looking forward.
Speaker Change: My question here is what's the size that could.
Speaker Change: Could be calm in the near future right because there are.
Speaker Change: M&A potential deals in Brazil.
It's public that could essentially increase our the cargo capacity by like 50% or something like that but that will require very large amounts of capital in the near term. So I'm really trying to get a sense of I know the timing is over the next 12 months to get a bit more visibility as in the previous question by.
Speaker Change: My question is more on size.
Speaker Change: If we could see other crago, taking this large steps in capex and that will double for the year or over the next couple of years to really increase the size of the company or if it's much more.
Speaker Change: A complementary approach for the existing projects and existing capacity.
Speaker Change: Moving forward I think that that's my only question. Thank you.
Speaker Change: Thank you Matthew for your question.
Speaker Change: Do you want to address our.
Speaker Change: Q1, yes duopoly.
Speaker Change: Hoping to give a quick comment Bob I think the size would be additionally, micro things. The first one is the capacity.
Speaker Change: Hey, good asset and this management team has shown that escape hour to do much more we actually see the quarter grow the platform to be able to deploy capital very successfully because we can monetize those assets.
Speaker Change: I think now you call us a holder with net profit of <unk> $13 billion. So the access to financing. These are good and I would say.
Speaker Change: Guaranteed.
Speaker Change: Jeff on the support of the ACP. So hold up so I think that if we find good deals to deploy.
Speaker Change: We are both too.
Speaker Change: Hello.
Speaker Change: Thank you if I could just follow up on that then.
Speaker Change: Theres, obviously, a limitation on how much of a stake tether could reaching another cargo up to 80%.
Speaker Change: Which implies there is a limitation to how much capital at the end of the day.
Speaker Change: There could be.
Speaker Change: Could be allowed to between <unk> <unk>.
Speaker Change: On that.
Speaker Change: What's the leverage that.
Speaker Change: <unk> would be comfortable.
Speaker Change: And an expansion cycle.
Speaker Change: Five three times, which is sort of what we discussed for the sector would that be a reasonable leverage to support growth moving forward.
Speaker Change: I think let me jump in here.
Speaker Change: Assay one explained at the beginning pivotal ways on how we can.
Speaker Change: Explore opportunities to win it.
Speaker Change: And of course this 80%.
Speaker Change: In terms of their potential growth is taking into account and also the level of debt that we can get into it.
Speaker Change: Taking into account so.
Speaker Change: Adding to all these things and depending on how interesting are all the projects that we have in our pipeline. That's a decision that we would be taking and we'll be sharing with you how this evolves.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: One more thing is that we bank on the strategically documentation in there.
Speaker Change: <unk> of technology whereby copy.
Speaker Change: Capital can be open.
Speaker Change: The technology on other votes.
Speaker Change: Every single one, but I think we can analyze that also.
Speaker Change: By way of putting more capital philosophy <unk> joint ventures.
Speaker Change: Both lawsuits partnership with other companies or other ways of financing the vessels need validation nothing yet.
Speaker Change: Okay. Thank you.
Jimmy Standby: This concludes the question and answer section at this time I would like to turn the floor back Jimmy stabilize for any closing remarks.
I simply want to thank everyone for participating in our call and we hope to see you in our upcoming events.
Jimmy Standby: Yeah.
Jimmy Standby: Thank you everyone very much.
Jimmy Standby: Okay.
Jimmy Standby: Thank you. This concludes today's presentation you may disconnect at this time and have a very nice day.
Jimmy Standby: Goodbye.