Bruno Tomazetto

Bruno Tomazetto inquired about the carryover impacts from the 2025 sugarcane harvest into the 2026 outlook and how marginal movements are being measured. He also asked for a long-term perspective on whether Brazil will see a reduction in planted areas given current market instabilities and high interest rates.

Answer

André Guillaumon, CEO of BrasilAgro, expressed optimism for the 2026 sugarcane harvest due to improved growth distribution and internode development compared to the previous year's hot summer. Regarding planted areas, he noted that external pressures (like deforestation concerns) are deactivating, leading to a more rational expansion driven by contribution margins. He anticipates a slowdown in new soy area incorporation from 800k to 400-500k hectares this year, then to a basal 200-250k hectares annually.

Bruno Tomazetto from Itaú BBA asked for a follow-up on the sugarcane harvest for 2026, specifically if impacts from 2025 would carry over and how marginal movements are measured. He also posed a long-term question on whether Brazil's planted area might reduce given high interest rates and geopolitical instability, and what factors would trigger such an adjustment.

Answer

André Guillaumon, CEO, expressed optimism for the 2026 sugarcane harvest, citing improved growth patterns and internode distribution compared to the previous year's hot summer. Regarding planted areas, he explained that external factors like sustainability criteria and trading restrictions had distorted expansion, but these pressures are easing, leading to a more rational approach. He noted that recent expansion primarily came from converting pastureland and predicted a reduction in new soy area incorporation in the coming years, adjusting supply-demand.

Bruno Tomazetto from Itaú BBA sought clarity on the expected timeline for implementing Tether's new investment plans and when results might become visible. He also asked for management's latest perspective on the macroeconomic environment in Argentina, particularly regarding export tariffs and FX dynamics, and its impact on the company.

Answer

Executive Mariano Bosch addressed the Argentina question, stating that the new 'real dollar' exchange rate for exports is a welcome change, creating a more realistic operating environment that benefits a low-cost producer in the long term despite some rising costs. Regarding timelines, both Mr. Bosch and Executive Chairman Juan Jose-Pineyro Sartori emphasized a disciplined, unhurried approach to execution to minimize risk. Mr. Sartori suggested that results from new strategic initiatives would likely be seen over the next 12 months but declined to commit to a specific short-term schedule.

Bruno Tomazetto inquired about the ethanol-to-gasoline price parity, considering the dual dynamics of industry-wide inventory buildups and higher-than-expected ethanol supply. He also asked for Adecoagro's outlook on the impact of recent fires on Brazil's sugar production and whether current prices reflect this.

Answer

Executive Renato Pereira explained that strong ethanol demand and a low 65% price parity at the pump are creating a tight stock-to-use ratio, which should push prices higher into late 2024 and early 2025. Regarding sugar, he stated that the fires will negatively impact yields in the first half of the next year, keeping the market tight and supporting prices, which provides an opportunity for Adecoagro to hedge its remaining production.

Bruno Tomazetto inquired about BrasilAgro's current strategy regarding land leasing, asking if the company sees opportunities to partner with capital-constrained producers in the current high-interest-rate environment.

Answer

CEO André Guillaumon affirmed that the company is actively looking at leasing opportunities, particularly as some producers have become over-leveraged. He stressed the importance of maintaining capital discipline, aiming for a 50-50 split between own and third-party capital. The current focus is on leasing more mature, transformed areas rather than undeveloped land, which aligns with their strategy of managing risk in a high-cost-of-capital environment. He noted that capitalized players will find interesting opportunities in the sector.

Bruno Tomazetto of Itaú BBA asked about the M&A outlook for 2025, considering how a high-interest-rate environment might create opportunities with less capitalized players in the agribusiness sector.

Answer

Executive André Guillaumon acknowledged that high interest rates are creating stress for leveraged companies, leading to specific regional opportunities. He highlighted Bahia as a liquid, 'heated' market where the company can sell assets at a premium and use the capital to acquire properties in other, less liquid regions, effectively creating a buyer's market for strategic acquisitions.

Bruno Tomazetto of Itau BBA asked for the company's outlook on M&A opportunities in 2025, considering the high-interest-rate environment.

Answer

Executive André Guillaumon described the current environment as a 'buyer's market' with occasional acquisition opportunities arising from high leverage in the sector. He highlighted a strategic advantage in the market's regional liquidity differences, noting that the company can sell assets in 'heated' markets like Bahia and use the capital to acquire assets in other regions.