Q2 2026 Tres Tentos Agroindustrial SA Earnings Call
Speaker #1: Buying meal from third parties—for all your negotiations being sold before being processed—that led to an impact to the tune of 0.8 percentage points on the industry margin.
Speaker #1: Está aqui para quem precisar de tradução jurídica.
Speaker #2: For those who need simultaneous translation, this feature is available through the interpretation icon—a little globe—in the bottom part of your Zoom screen.
Speaker #2: For participants listening to the English audio, you may mute the original Portuguese audio by clicking on 'Mute Original Audio.' During the event, all participants will be in listen-only mode while the company presents the results.
Speaker #1: And finally, the fifth point is the suspension of the fiscal fees, tax, or taxes during the quarter. That had an impact of approximately 0.4 percentage points on the margin, and just like item number 3, there was an increase in input costs.
Speaker #2: Afterwards, we'll begin a Q&A session. Questions can be sent via audio by clicking on the 'raised hand' icon, also found at the bottom of your Zoom screen.
Speaker #1: Those two combined were driven by the war. So, item number 5 has been reversed, so that suspension is no longer valid. That was lifted at the end of July, despite being the only commitments—item number 4—that the company had to go to market to raise and make adjustments because of the delay of the mandatory plan for biodiesel and soybean crushing.
Speaker #2: To send questions in writing, simply click the Q&A icon, also found on the screen, and then type in your question. Before moving on, we'd like to state that any forward-looking statements made during this call regarding the company's business outlook, operating and financial forecasts and goals, as well as 3tentos' future growth potential, are based on the company's current expectations and assumptions, and on current information.
Speaker #2: Forward-looking statements involve risks and uncertainties, and therefore depend on circumstances that may or may not materialize. Investors should keep in mind that general economic conditions, aggregate business conditions, and other operating factors may affect 3tentos' future performance and lead to results that will differ considerably from those expressed in these forward-looking statements.
Speaker #2: I would now like to turn the floor over to Mr. João Marcelo Dumoncel. Over to you, Mr. Dumoncel. You may carry on. Thank you.
Speaker #2: Good morning, everyone, and welcome to our Q2 results call. Thank you for your attention once again. We'll start by showing you the highlights for the quarter, Q2 2026.
Speaker #2: The company continues on its growth momentum. As per the thesis we have been advocating and exercising throughout the years—this is the 30th consecutive quarter where the company has a growth in revenue.
Speaker #2: This quarter in particular, this growth was driven by ag inputs and grains, as I mentioned, and also by a record soybean harvest in Brazil.
Speaker #2: Making up for losses in Rio Grande do Sul as well, in terms of crop numbers. And in terms of inputs, we have delivered an increase in canola acreage in Rio Grande do Sul.
Speaker #2: We more than doubled canola acreage, and 3tentos has been an important player in this scenario, fostering growers and fostering the crop in Rio Grande do Sul as an alternative for a second crop.
Speaker #2: ethanol
At previous levels, but there is a trend that shows some recovery in the fees and also for the meal prices. We see signs that, uh, improvements are on the horizon.
So, the idea for this slide was to be as transparent as possible.
To clarify, where is it in terms of margins for the Industrial segment—which was the segment that I referred to—a drop in numbers, a straight drop in margins that we see in the first charts on the left. If we look at the next slide, please, we have what I just said, but now translated into numbers. We had growth in net operating revenue, both in the quarter and in the first half.
A revenue of $4.7 billion.
and the
Year to date for the first half, we've seen growth of 12.8%. There's a drop in margin, but growth in absolute figures. When you look at it from the point of view of the whole first half of the year, I'd like to reinforce that.
There are aspects to that, uh,
Pictures that are seasonal or non-recurring. That's why we wanted to break that down in detail and share that with you. I now turn the floor over to Cristiano, who will go into more detail.
On the financial numbers, over to you. And good morning, everyone.
The next slide gives us some color on what the quarter was in terms of our net debt. We closed December last year with a net debt of about $1.6 billion, and we closed the quarter at the half of the year, on June 30th.
At 3.6 billion.
So that variation reflects a need for working capital, which is a seasonal need for the company.
Uh, where we recover our inventory—it's about the first half, especially the second quarter of this first half, and also final investments as we expand our industry segments.
$1.3 billion to recover inventories throughout the half, and about $500 million. In terms of capex, those two amounts combined.
Account for almost all the variation in our net debt: $1.845 billion.
So, there's a need for working capital, which is totally consistent.
with our
production Dynamics.
So this is a first, uh, breakdown of how that varied on the next slide.
We have.
Our net debt throughout the time.
As you can see, on the left-hand side of the slide,
Usually, we have an increase.
In in that.
1.460 billion.
Throughout 2025, we can see that from Q2 to Q4, there's not that drop, which reflects the fact that inventory is transformed into finalized products.
Why hasn't that dropped?
Played out in a more consistent manner because we are working on our industrial capex. And we ended the year with net debt of 1.2 times our adjusted EBITDA.
As a hedge, this is a new metric that the market has adopted. We have been explaining that this is the best way to reflect what the company stands for.
And when we see that same variation between Q2 2026 and Q2 to Q3 2026, we see a growth of about $1.6 billion, which reflects the whole—
The variation in inventory that we have received are the soybeans we have received and we have stored for that, so that in the second half of the year we can crush.
so, we have
We understood that.
And in light of all those factors that Mr. Dumoncel has just explained, that we saw in the second quarter, we could have an AA line a little more compromised by the war and other market dynamics. We talked with our creditors, and they made a methodological adjustment.
Instead of using pure beta, as we used before in context, we started to use this new metric, which is conceptually more adequate to our business, which is the adjusted EBITDA, with the hedge effect included, as you observed in our financial statements today. The hedge effect coming from that combination is higher than 45 or 50% of all our EBITDA.
So there is a dynamic to hedge or protect the company, which is totally in line with the commodity price dynamics and foreign exchange dynamics, which you have seen for the past 18 months.
Of course, we also understand we are still following our working capital planning. Quite reassured, all creditors have understood this new metric, and they also understood the dynamics of the company within that seasonality that was mentioned on the top right-hand side of the slide. We can see that, usually, we have a drop of about 40% in our inventory levels. So if we look at our inventory today, it's sitting at $4.2 billion.
If we include.
That number to estimate what?
This will be happening in the second half of the year. We are talking about $1.7 billion in terms of reduction.
with an additional component, which is the following:
Throughout the second half of 2025, we had a volume of R$862 million of capex, which will not happen in the second half of 2026.
So, if we were to follow this dynamics, this momentum of transforming all the inventory into finalized products and ship out and transform that into revenue, we will resume.
Adequate levels.
Of net debt over EBITDA, which is the metric you use to adjust the ratios.
So we are, as I said, quite reassured, and we...
Are you confident that we'll be able to carry this on?
At the same time, we need to continue our job to recover margins. That, as Marcelo said,
So that we can, uh, resume previous levels, which you deem to be healthier, to start or to kick off 2027 in a more adequate position. So, in terms of, uh, leveraging dynamics, that's what I had. In terms of the waiver, we talked, uh, we did it, uh, over the accounting period.
Before June 30th.
With no, uh, default or reclassification of that. So that's what I had for that. I turn the floor back over to Lewis for him to talk a bit about the quarter and how this quarter is an important moment for the company. But even more relevant is that we have a long-term dynamic.
Quite well in place and quite well on track.
Hello, Louis, can you hear us?
um,
important to say.
We are finalizing the corn national plant.
Uh, we have been investing heavily in the past two years.
We completed that in mid-June.
The ramp up started.
Had an important contribution in terms of revenue, about zero in the second quarter.
We'll see.
uh, results coming in Q3
But we have a full contribution, we have to wait for Q4.
Q3, we are still ramping it up.
Even though in the current basis, the ramp-up is happening in a very successful manner.
And we are already operating at the full nominal capacity, at 2,800 tons of corn a day.
So, we're quite happy with this ramp-up.
With the operational ramp-up, of course, we are a bit behind.
We were expecting to have this happen by late March, initially.
and we had three months when we lagged behind, but
Everything's back on track.
And the ramp-up has been concluded.
Next slide, please.
uh, not as large as for the stores,
We have.
More stores opening. The second quarter is in line with what we had announced as of late last year.
We have reached the level of 81 stores.
Those 6 new stores.
Were open.
And the expansion areas, as we call them expansion areas, are the four new states: Goiás, Mato Grosso, Minas Gerais, and Pará.
totally 8.
Stores across those four new states.
In addition to those 8 stores, we have 4 Tangará stores in Mato Grosso along with the 2 industries, Vera and Porto Nori, and 59 stores in total. We are going to the south, along with the 2 industrial plants.
And isue and cruise Alta.
If we move to the next slide,
We have a summary—a compilation, if you will—of all the numbers.
From a long-term View.
So that I can show the consistency of our thesis, the consistency of our results delivery, and our growth.
and we try to,
Draw a timeline to convey to you all the reassurance and all the confidence we have in our business model and what we are delivering now.
If we look, in terms of not revenue,
We have between 23 and 25; their average is a career of 35%.
And we have already reached a CAGR of 26%.
When we compare '25 to '26.
In terms of the adjusted beta, we also had important growth—20%—from between '23 and '25. We continue to grow a bit.
Of course, in this comparison, at a slower pace because of what you have already discussed,
so,
Especially length, to industry, margins, and a CapEx space.
Which was quite intense last year, 2025.
So, like the NY, but also with investments.
In expansion, once again, to recap.
We invested in soybean crushing, uh, and also, uh, biodiesel production plants. Those investments—we have them itemized in 2023. We completed the soybean processing plant in Vera.
We acquired the Três Tentos de SCAP. We opened six new stores. The trading division was established, and MRO accounted for.
An important share of our net revenue in 2024—we continue to grow our growth. So we opened yet, uh, another 7 stores.
and for 2025,
We increased our processing capacity by 40%, reaching 589 and 62,000.
In the production of biodiesel.
We started the process to increase those productions.
We have opened new stores and the model is growing. So, we continue to increase our share rapidly. And as I just mentioned,
In the first half of 2026, we opened eight new stores in new states. As I mentioned, we concluded the first ethanol plant in MOS. So this is sort of a...
Journey of deliveries that we have been threading, and which makes us all very confident.
About our capacity and our consistency.
Of our thesis.
Despite some seasonal effects, there is some seasonal cycling effect.
That is inherent to the business and is quite common in every business scenario as a whole.
In terms of the long-term vision.
We?
continue on our
We have opened new stores, as I mentioned, of course. Very, very cautiously moving forward, trying to identify opportunities, and, of course, using a very solid rationale—it has to be viable for us to move forward.
And right now, as investments in infrastructure,
we have, uh, uh
Being more conservative, if you will, it's not on our radar to make larger investments in capex in the short run, anyway.
So it had this thought of three centers, and it's all a new activity for us.
Which is now being consolidated.
Within our ecosystem, we expanded our industrial complexes. As I mentioned, that can only rearrange, also highlight.
We have a summer crop.
Which was, uh, quite promising. The last crop had good expectations for the next crop as well.
and also,
A material fact that we announced in terms of guidance for the second half of '26, an update of that—once again, reaffirming the figures for the second half of 2026.
so, uh, and summary, um,
That's what we had. And now, we remain available for questions or comments that you may have. We are all available to address questions or doubts that you may have. I reaffirm, as I said, our trust and confidence in the business, our confidence in our thesis, and in the structure that the company has put together for industries. We are working at full steam, with 81 stores and 250 consultants out in the field.
Providing support to growers every single day, selling inputs.
So, the operation is completely, uh,
Up and running, and moving forward, we're quite confident.
For the second half, the second half of the year.
As usual, there are many challenges. But we are prepared to face them all.
We'll now start the Q&A session.
Questions can be made through audio by clicking on the icon. Please raise your hand.
Can be found at the bottom part of your screen right now. A prompt will appear for you to unmute your mic to send your question in. Just click on the Q&A icon, also at the bottom part of your screen, and then type in your question. Our first question comes from Lucas from JP Morgan.
Look, as you may, carry on.
Hello, good morning everyone. My first question is about...
uh, corn ethanol now that have reached nominal capacity.
Do you have any numbers you could share in terms of the profitability of the plant?
The corn, based on the corn you have bought.
Are you able to?
Give that, uh, prediction—the quality of the DDG coming from that.
Uh, this counts compared to the industry numbers, just to better understand.
Your vision, uh, on your breakeven cost for the plant, um, and how to look at profitability, if you could.
and also,
About stores in new stores, in new states—how are those stores being, uh, received, right? Or performing in terms of market share?
That learning curve, if you will, for those new stores—this information on energy, especially in a year.
Or we have Elmo coming for those new regions.
So, what can you tell us about that? Thank you.
Can you hear me now?
Yes, yes. Now we can
Still release.
Okay, good morning, everyone. I apologize for the technical glitch.
But I was able to, uh, hear, uh, Marcelo.
So, I'd like to reinforce our confidence and our commitment.
I see and Trace titles.
As a very strong company in its ecosystem.
Uh, Lucas, I apologize. I'm going to, uh, recap a little bit but I'll
Soon, get to your question.
This is an agribusiness company that is prepared to face seasonality.
Volatility that was uh how how how IPO if you go back to 2021 the IPO in 2 and a half years we delivered. Oh
The plan we had committed to at the time.
and with the BR 163,
Uh, plant up and running. Then we started our second growth cycle and today we already have 81 stores out of the 100. We had proposed by 2030.
And the ethanol plant in Porto is also operational, so the whole plan is almost delivered.
I would also like to make a comment.
About the leverage level of the company.
On June 30th, 2026.
We were on track.
We knew it was going to be a higher leverage uh, because of all the investment that was made.
20 million tons for the crop-growing reality, over 50 million tons of soybean amount of growth. So, in addition to the corn origination... So, in short, we prepared for that moment. So, on July 1st, we started the second half of the year.
With all that investment behind us,
And now we can, uh, manage that, right?
So, those 81 stores for plants are operational and across 6 states.
I think Louise froze again.
So, if you could, please carry on.
Now, going back to look at this question then. Okay.
and then perhaps, um,
Louis can come back, okay.
Lucas.
I can answer your questions now. Uh, first of all,
in terms of ethanol,
We are still.
In the ramp up phase.
Uh, including the commercial ramp-up.
So, we are trading ethanol. We do have active contracting plays.
In the spot Market.
Well, I wouldn't have guidance. Now, in terms of profitability to share with you at this point,
But what I do have, of course, is that...
We are quite bullish about the potential demand.
The market is, uh, wide open.
and,
We are able to trade that regionally.
Uh, and also BDG, of course, BDG.
Has been performing really, really well.
in the region, specifically,
Surprisingly enough, our DDG book is filled until the end of the year. So we are already trying to manage a pent-up demand for DDG, and that's a very important factor for us.
especially for, uh,
Feed lots, uh, in the region.
As for the stores and the resellers, our expectation...
For the year.
For those new stores.
Is still a more conservative expectation.
Uh, the stores ramp up from the opening day.
Uh, then we get together, the teams, uh, the team is then introduced to the market. That, of course, takes time. There's a sequence of events that need to unfold, and which do not happen overnight. So, it takes some time for us to gain traction, if you will, in the coming periods. Uh, our expectation is that—
The revenue for those new regions will sit at around 6% to 8% of the overall revenue for imports for the whole company.
So, not yet that relevant, but from the qualitative point of view, we are quite excited with those new regions.
Because we work quite well received and welcome. We understand that.
Markets understand and appreciate our value proposition.
so uh, pharma's uh
are buying into our program. Our teams are also out in the field working well.
We have highly qualified, experienced professionals who have worked in the region before, who understand our value proposition as well, and who have also bought into the program.
And I want to help us.
Add value to those regions which is our Moto. Thank you.
Our next question comes from Gustavo from BTG Pactual.
You may carry on.
Good morning everyone. Thank you for taking my questions. I have 2 questions.
First, about the industry segment, I'd like to go back to that slide where you had a breakdown of all the impacts on the quarter and focus specifically on the implementation of the B16.
Those 4 percentage points that you mentioned coming from that delay.
I'd like to get your perception on how comfortable you are.
Those 4 points will be recovered in the second half of the year.
And recover more normalized levels.
The trend curve shows that, but I’d like to hear from you: how comfortable are you that that trend will continue, based on your momentum and your track record?
How long are non-integrated players able to operate, uh, with that bio feed, which seems to be low?
So, you may have to react to that. So A Bit of Your perception in terms of the timeline, that that will take to happen.
It doesn't seem to be profitable today with that level of fees. The second question, about the leverage—uh, the inventory levels that Cristiano mentioned.
You said that, historically, inventory will drop by 40% from here until the end of the year. So, does it make sense for us to expect that level of reduction?
Will you follow the track record, or is there any other reason that would lead the second half to be slightly different from what you’ve had historically? Okay.
As we move towards the end of the year,
As well. Thank you.
I can start, and then Cristiano will help me out here.
And then we all go. So you can also jump in, as for the industry too.
We have a reduction in the fees.
As we see in the chart, there is a trend—a downward trend.
Not necessarily recovering the full 4 percentage points. Uh, we know that the second half does show an improvement.
In the fees.
because we leave the cycle, the year, and
Supply tends to be more stable.
But the B16 delay.
And the trend is that it won't happen in the second half.
And that will be a factor that will continue to be present. So there is a possibility for us to see an improvement in this scenario as the chart shows, but perhaps not enough to recover those 4 percentage points. That's how we feel about it today.
You also talked about non-integrated players.
Also, the feeling in the market, the sentiment in the market is that to some extent.
we will need to have an increasing fee, or
Necessarily have.
To have.
Uh, some kind of drop in the supply level because of that pandemic. As for the leverage level—
One of takeover. Yeah, sure.
Thank you for your question. We presented our global inventory dynamics.
And we're talking about grains plus finished products. If you look at our explanatory notes for inventories, if you add what we have in biodiesel at home oil meal and grass today, it's 3.2 billion.
So, we would imagine that we could reach the end of the year within our forecast.
Even if we are more conservative—about 35% instead of 42%—we would still reach the end of the year in a position that we deem to be adequate. Of course, we will carry over some more inventory than last year, but we are now working with industrial capacities, which are quite relevant in terms of expansions and so on. So, we need to have...
Inventories for about 60 to 90 days—that has to make sense, looking at the cost.
To carry that inventory. Of course, the market dynamics for pricing—we're always monitoring that and doing the hedges that are necessary. So,
If you want to use a deflator for that 42 to 35, that might make sense. Forty-two to thirty-five percent, something like that. I did not mention.
But it might be worth mentioning. Now, also, I'd add an increase. I have been working.
To make those resources, um, become cash. This is going to be
put in place.
That might help us recover some of those taxes.
As the new law is implemented—well, that's a slightly more difficult topic, more complex, and we don't want to use that as a deleveraging factor. But just to mention, it is also a point to be taken into account.
The new tax law.
Thank you. Thank you.
Our next question.
Good morning.
Can you hear me?
Yes.
I would like to have a follow-up.
on the question about,
The CapEx for the ethanol plant—you said $1.5 billion on the slide.
How can we compare that with the budget?
Given that.
There is a capitalized interest rates issue. If you could break that down.
uh, a bridge of that investment and also to understand
How much of that investment has already been made?
Anything else as you expand the plant? Uh, I know it's a modular plant, so...
How much has been done, and how much still needs to be done?
Uh, looking at the meter.
And a second question.
If we could go back question about the biodiesel fees.
It seems to me that it is also a matter of...
distribution.
There is a gradual process of cleaning that up.
Based on your experience, you haven't—never—it's time for that. We have—we've had that happen before: delay in blend, and then margins were recovered. That movement has happened before. Could you share your expectations based on your experience in terms of the absorption of those volumes, the delay in the mandatory blend?
I can talk about capex, and then Cristiano will address the other question.
The biodiesel fees.
Talk about distribution.
As for the ethanol CapEx, we did not.
Make a final review.
Of the capex.
because,
the plants started to operate just now, at the end of Q2,
so,
It does take, uh, structural preparation, uh, things that made sense.
For a potential expansion.
And also the interest rates capitalization.
Which makes this capex.
Behave, as it has.
From 1.3.
Which we had announced to 1.5.
which we have just
shared as the new CapEx. So basically,
It has. We have to include the interest rates issue and that preparation for a potential expansion. At some point, we had already mentioned this.
In case we need to increase.
Capacity.
So, some things were made specially relative to infrastructure—the drying, the energy proportions—several technical parts or aspects that have pre.
Uh, prepared for a potential expansion, as I said, in terms of the fee for biodiesel. Oh yeah, sure. Good morning.
Well, that is it, everyone. Thank you for your question.
As for the biodiesel fee.
You are correct. Uh, it's not new; that has happened, as you mentioned, in the biodiesel industry throughout the years.
We have been in this market since 2014.
We have seen cuts in the plant.
Uh, plants that were delayed.
And are affected, and the fees.
And right now, we are going through yet another period where there is a delay in the military plan.
So, we understand that yes, that has happened.
And Distributors are trying to.
Buy before time or to push their purchases slightly forward.
and,
So, they have a lot of products in their portfolios.
Because of that.
But I would say that throughout.
These five years where we no longer have the auction in place—this is a scenario where there was a delay.
And a delay, but there was no crop failure, for example.
So,
Throughout these five years, we had, for example,
Some, uh, problems. Motor grow. So I had a problem, slightly lower, but also impacted.
This is our mentioned, both models grow. So, anyway, we're going to see.
Harvested good to very good crops.
And still, we had that delay in the B16 blend.
So, that's about how we see. I think, uh,
Uh, if you look back, as I said, it's nothing new.
Okay, thank you. Have a nice day.
$237 billion and capitalized interest rates.
Just to be sure you have the number. Okay. Thank you, Cristina.
Our next question comes from Leonardo Alinka from XP.
Mr. Lincoln, how do you make Iran?
Good morning, everyone. Thank you for taking my question.
First of all, if you could,
One of the recurrent issues in logistics is the fluctuation in transportation costs.
That has a correlation with the grain trading segment.
But because of that volatility on that line, if you could give us some more detail on that.
And also, the input dynamics was positive. Margins have improved.
My suspicion, especially in the South, is that things are healthy. If you could talk from the point of view of growers,
Are they delaying purchases?
Cell from the point of view of the Growers, and one follow-up.
Going back to biodiesel.
If I got it, right.
You're talking about profitability.
There was a drop after bleeding biodiesel, and the chart shows a variation in fees.
So there's a marginal Improvement.
If we were to follow up on that model, a B16 happening only early next year or in the second half of next year.
Uh, with the Elmo coming.
What?
How do you see the evolution going forward of those fees?
And what does that negative part on the chart mean? I didn't really understand that negative portion of the graph or the chart.
I'll start with the input question, and then help me out with the logistics question and the fees.
Uh, Leonardo, that was for the inputs question. As I said, we are performing around important volumes and also important amounts.
From the point of view of the grower, to your point.
There is a certain level of caution.
A certain delay in the decision-making process—the war—really affected the dynamics.
especially because of fertilizer prices. So, those who had bought fertilizers before the war,
All good.
Especially in the midwest Market.
But in Real Grande, they were less prepared. But then, when the war started, the market sort of froze for some time. Prices went through the roof, then went back down after. They didn't resume previous levels, of course.
They started to slow down, if you will.
uh, to snap back, and now we have
Of course, from a logistics standpoint, you have to bring that product to Brazil on time.
to be used. So, farmers are making their decisions. Now,
And they're trying to use less fertilizer. The fertilizer industry has announced that they expect to see lower volumes in terms of fertilizer sales across the country.
And growers are also looking at costs.
That, as I said.
The input Market.
Is very resilient.
Growers.
They cannot get around not buying imported seeds or fertilizer. They can use less, but they cannot simply eliminate the purchase of inputs and seeds.
which will serve as a hatch, and
Crop protection, as the name says,
So, those investments have to be made.
Can you help me out with the biodiesel fees and…?
Logistics.
Okay.
Thank you for the question.
As for Logistics.
The best analysis that can be made in this quarter.
Is the breakdown of Revenue.
Where we can see the grains.
We have a higher share when there are no historical levels, not because grains are speeding up, but because of something we mentioned before.
The delay in the industry.
so grains, As We Know,
Carry.
The largest freight costs.
100% of the products of the product are, is affected the whole time on like industrialized products, where
It spreads impacts, uh, meal, but minus FOB for biofuel, both ethanol and Minimals. And, of course, here we talk about biodiesel mainly.
Uh, we do have a lot of FOB sales, and the logistics is, is...
Ours fall under the responsibility of the customers. If I understood the question,
And trying to shed some light on what that chart represents.
The fee is sort of a premium if I met the market calls it a fee. Uh, that's the lingo that buyers and distributors use. But that fee is—
...but a premium that regulates the pricing of soybean oil.
And the appetite is regulated by supply and demand. So, every two months, all the negotiations might happen—uh, at different times—it usually is every two months. Every biomass buyer, we need to sit down and negotiate.
We have to upload numbers to the A&P system.
So that's a fee that is negotiated. It is actually a premium; a better name would be premium for biodiesel.
Okay.
Uh, just one final question in the negative area of the chart.
Does that mean that?
Other players will.
Leave the market because it wouldn't make sense to work in the biodiesel market. I wouldn't say—
That I straightforward conclusion.
Because we do have, uh, swiping oil also. So just as...
Uh, payments for biodiesel over there, you have premiums for oil. So I've been oil—
Chicago plus basis meal. Also, sometimes the results are there even in a scenario where I have negative basis.
Out of all the products that we work with, coming from soybean to biodiesel, they have the same basic dynamics. But in this case, we're talking specifically about biodiesel.
The pressure is higher right now, so right now the answer is yes.
It is the main offender, if you will, for that biodiesel account or line, if you will. Okay, thank you.
As a compliment, the fact that you have a negative basis does not mean it's not delivering results. It's simply a price adjustment.
because this is a price-forming mechanism based on the Chicago Board of Trade numbers or CME.
Numbers. Our next question comes from Thiago DUI from BTG.
He said, "You may proceed."
Good morning.
Good to talk to you. Two questions.
First.
I would like to hear from you, your understanding of the soybean origination, which has been coming.
Strong.
In the quarter.
Yeah, your commercial platform is being highly successful, but I'd like to hear some more color on that, and also why.
Having had originated 1.5 million—are traded 1.5 million tons of soybean in the first half. Why are you still maintaining the guidance?
The level of 1.7, that seems to be slightly low when you think about the full year,
And a second question, talking about the Asano plants.
I think a question we all have,
Given the localization, the location of the plant is different if you were at the origin of modern growth. So, and given that you are now running at full steam,
I'd like to hear from you 2 things number 1.
What kind of price basis for corn?
Should we be looking at our origination price? We're else per bag.
And what kind of price for ethanol?
Uh, and hydros or hydrated.
What kind of ethanol prices—premium or discount?
In terms of CEA, are you getting in these first weeks of operation of the plant? Thank you.
Thank you, Thiago.
Can we start?
Okay. Okay, boom.
Thank you, Thiago, for your question.
About your first point.
About soybean.
Volumes.
Being smaller.
and the guidance that we have announced for the full year,
And the smaller portion is reserved for the second half, which has to do with something that Cristiano mentioned before.
An increase in demand on the part of the plants.
Our decision around that soybean has to do with the supply of, uh, expanded plants.
In addition to that, there is
The import scenario in Brazil.
And looking at, we went to the Sue also even with a better crop here than previously still Rio Grande.
There has been increased crushing, both by Tres Tentos centers and other plants—other factories in the region.
So, we shouldn't see an increase in our areas.
in export volumes along the same lines, the US
It is now coming with a product in the same global flow of exports.
Of course.
We are still assessing how that will unfold.
we have to think about the US and China relations, but
not only trade status, but, uh,
We will see a Slowdown.
In exports of soybeans.
But it's a very dynamic scenario, as you know, so it will also depend on geopolitical factors.
Unfolding as for ethanol.
Would you like to compliment?
now, I think origination
The usual guidance is okay.
We have sped up, uh, in the first half.
Because of new factories, the availability is high. And then in the second half,
It's just a consequence of having lower inventories, which would then be allocated to the industry, okay?
and as, for ethanol,
Ethanol, or the whole ethanol complex, if you will. I think this is the third—
Corn, a crop that we plant or that we work with in the other valley.
So, it's very similar to what we had along the 163 Highway.
There are some mismatches. Sometimes 1,163 is a bit higher, sometimes a bit lower when compared to the valley, the other guy Valley, but they are both similar scenarios. When we talk about corn origination as for ethanol,
And hydrous ethanol with premiums within the historical levels for the past few years.
What we've been doing?
And for the hydrated version, we have concentrated on the spot market.
Especially.
In the northern regions.
Closer to the plants. Those are the main areas for that right now.
Thank you.
Our next question is from Gabriel Baja, from Citi. Mr. Baja, you may proceed.
Oh, thank you for taking my questions.
First.
And its sound quality is chopping.
All the questions seem to be when we look at the slightly higher leverage.
it is a quarter that carries over a bit more inventory, that's expected, but still
Leverage is higher when you ask for a waiver until the end of the year.
It seems that.
That leverage could remain high for the rest of the year, unlike what we expected.
So, I'd like to understand, first and foremost, in your view.
What should we expect in terms of leverage for the end of the year? And when do we expect to reach more comfortable levels, below 2 times, or closer to 1.5 times? When will that happen? That's number one. Number two,
A follow-up.
Capex.
Question, you have the new plan?
The Market's a bit more difficult if you could perhaps delay, the plateau or revisit the investment plan.
And the final question in the input pillar.
We've seen similar scenario before.
2022.
Fertilizer prices going up.
Yeah, his collection is quite choppy. Yeah, the question is not understandable.
Trying to do a comparison between differential marketing, 2022 and 2026 taking the war into account, and so on.
Okay.
Uh, your connection was quite choppy, so we didn't get all the questions. Uh,
In full, but you can confirm later.
if you could address the
No, I heard you, but we heard you are part of it. Anyway, in terms of leverage, that request for the waiver to the end of the year is more methodological than risk-based. If you look at our DF, you'll see that our, uh, financial statements—50% of our own numbers come from the hedging. If I were to work with the same metric we had in the contract...
I would have—I would be out of the curve for the coming quarters. So, we have rewritten the metric.
This is an important point. B, we have already tried to rewrite the metric along with the creditors.
Converging to what, uh, the norm will be under IFRS 18 when IFRS 18 comes into place. All those hedges will—
be part of the definition of operating, uh,
Results or EBITDA. So this is an accounting method issue.
We are one of the companies that have the highest hedge. These are the results as they result generator. So we made a convergence, if you will. We do not have...
A definition for the IRFS, 18.
But we also need to make some internal adjustments.
And we will maintain the metric that the market has been using.
Also bar.
Speaking with Equity people.
When we talk to credit people, actually the credit people look at what we have in terms of growing inventory.
It is an accounting inventory, but it's also very net.
And I repeat the number—$3.2 billion—including grains and finalized products, meal, oil, and biotic. That's a very substantial figure. If you remove from our note that $3.2 billion, that's the size of our inventory. I said it's a different way to look at the company's liquidity level.
So we understand that we are able to follow on that track. We will be...
in a place.
Where we'll have less levels of 1.5 maybe before 2. And so it it depends on delivering a better, a better in the second half than last year. And we do have that in the Horizon and also follow on our natural momentum of reducing inventories, transforming that into cash. So it's a lot of work, uh, Big Challenge.
But it's clear. The ask for the waiver was not mainly based on risk.
But on a methodological change.
In the past, 3 quarters.
Most of the result was linked to the hatch.
So that's a dynamic just for you to understand, okay.
Yeah, there's a question I mentioned about retention. If you could replant the capex, given the slightly more challenging scenario, would it make sense for you to revisit the timeline of the project?
and as for inputs 2022,
We presented a similar scenario with fertilizer prices going up due to the war.
So, can we expect the same for this year?
Especially with the war.
How similar is the scenario now to 2022? Yeah. Okay, I think we got it now.
Compliment.
As a complement to The Leverage question, we are extremely reassured and safe about our deleveraging process.
As Cristiano mentioned, a 3.22 day, which is our net debt.
Is 100% covered by very high, liquidity inventories that will.
We saw that the track record is over 40%.
It could.
To be safe, let's be more conservative—35.
But historically, around 40% becomes cash in the second half.
of that inventory. Also important to mention is that we have a plant,
a CAPEX of $1.5 billion, which has not yet, uh,
Uh, returned, uh, to the A. So, those two factors combined, uh, we will bring some, uh,
Of course, uh, the The Leverage level is still there we are, paying attention to that leverage level and working hard to monitor that, but it, it provides some level of safety that the situation is totally under control.
S for redemption, we are monitoring.
Heading. So,
Those 2 aspects.
Both the deleveraging base which is important for us to carry on.
just as
The profitability levels, ethanol prices, and so on.
So that we can, um, confirm our profitability levels.
For now, we have maintained those numbers, but we are keeping a close eye on those movements.
We have a plan in place.
To invest by 2027 and throughout 2028.
And that may, uh, be adjusted in terms of the timeline for the investments, and then it will depend on upcoming situations.
As for the inputs question.
as we see it,
At least for us, uh, the market has not...
created large inventories.
I think.
Because in other periods, we saw that happen.
Um,
going up and going down.
perhaps sometimes the War, uh,
Is over.
Sooner than later, not the case. Now, perhaps anyway, companies have noted, inventors know—especially urea.
Which is the product that saw the highest variations? So, I do not see the same thing today as we head into 2022.
Uh, we have not put together, uh, inventories at high price levels—not us.
Okay, thank you.
We now close the Q&A session.
And I'd like to turn the floor back over to Mr. Dumoncel, Marcel to Marcel, for his final comments. Over to you, Mr. Dumoncel.
I'd like to thank you once again for your attention, for your questions, and for your interest. We remain available, side by side with analysts, as was mentioned.
We basically here this.
Has been a challenging quarter.
For the company.
We try to put it into perspective, taking into account the whole semester. We try to be as transparent as possible in terms of explaining the main drivers of the numbers—the leverage levels. And once again, the structure we have put together, the operating conditions, and especially our thesis.
Remain.
We consider that to be quite solid, quite robust, and we continue to be quite confident.
and,
Surely, one challenging quarter will not...
uh,
Change our execution track record, our results track record, and especially our outlook for the future.
So, we count on you.
Uh, and we remain available, as I said, to clarify or answer questions or to shed light on any points that you need. Thank you once again, and have a nice day, everyone. The video conference to discuss Q2 results is now over.
The IR department remains available for any questions or comments you may have.
Thank you once again, and have a nice day, everyone.
