6-K
BrasilAgro - Brazilian Agricultural Real Estate Co (LND)
FORM 6-KU.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUERPURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
dated May 7, 2020
BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS(Exact Name as Specified in its Charter)
BrasilAgro – Brazilian Agricultural Real Estate Company
U(Translation of Registrant’s Name)
1309 Av. Brigadeiro Faria Lima, 5th floor, São Paulo, São Paulo 01452-002, Brazil
U(Address of principal executive offices)
Gustavo Javier Lopez,
Administrative Officer and Investor Relations Officer,
Tel. +55 11 3035 5350, Fax +55 11 3035 5366, ri@brasil-agro.com
1309 Av. Brigadeiro Faria Lima, 5^th^floor
São Paulo, São Paulo 01452-002, Brazil
U**(**Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): U
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): U
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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| Quarter ended March 31, 2020 | |
|---|---|
| São Paulo, May 6, 2020 – BrasilAgro (B3: AGRO3) (NYSE: LND), the Brazilian leader in acquiring, developing and selling rural properties that offer high potential for price appreciation, announces its consolidated results for the quarter ended March 31, 2020 (“3Q20”). The consolidated information is prepared in accordance with the International Financial Reporting Standard (IFRS). | 3Q20 Conference Call<br><br><br> <br>May 7, 2020 |
| Portuguese with simultaneous translation into English<br><br><br> <br>2:00 p.m. (Brasília)<br>1:00 p.m. (New York)<br><br><br> <br>Phone Brazil: +55 (11) 3127 4971<br>Phone U.S.: +1 929 378 3440<br><br><br> <br>Password: BrasilAgro |
| PRICE | CONTACTS |
|---|---|
AGRO3: R$21.10<br><br><br> <br>LND: US$3.81<br><br><br> <br><br><br><br> <br> |
+ 55 (11) 3035 5374<br><br><br> <br>ri@brasil-agro.com<br><br><br> <br><br><br><br> <br>Gustavo Javier Lopez<br><br><br> <br>IRO<br><br><br> <br><br><br><br> <br>Ana Paula Zerbinati Ribeiro Gama<br><br><br> <br>Elisa Cardoso Castelani<br><br><br> <br>Investor Relations |
| 2020 is being marked by a very challenging scenario with the Covid-19 pandemic, which is substantially changing routine of the population. As disclosed in the Notice to the Market of March 23, we put into practice a plan with several measures established by a Risk and Prevention Committee set up especially for this purpose, in order to preserve the health of our employees, contribute to curb Covid-19 and mitigate its effects on our operations.<br><br><br> <br>We are operating in Brazil and Paraguay with no significant impacts. We have also adopted measures to reinforce our solid balance and liquidity position, in order to further improve our business management capacity. Our leverage level remained virtually flat, our liquidity remained at comfortable levels and our hedging and sales policy allowed us to capture commodity prices above the budget, hedging the net exposure of our balance accounts, given that the Company’s revenues are positively linked to commodity prices and the U.S. dollar.<br><br><br> <br><br><br><br> <br>We closed the 9M19/20 harvest year (“9M20”) with Net Income of R$85.6 million and Adjusted EBITDA of R$78.5 million, reflecting a Net Revenue of R$353.2 million, R$24.0 million of which from the sale of farms and R$336.1 million from the sale of agricultural products. The Company’s result was momentarily impacted by the result of derivative operations, which resulted in a cash mismatch, due to the depreciation of the Brazilian real against the U.S. dollar.<br><br><br> <br>Regarding our operations, we expect to increase soybean production by 2.3%, corn production by 38.7% and the second corn crop production by 7.7% in comparison with the initial estimate disclosed at the beginning of the harvest. We estimate a substantial loss in Paraguay’s productivity due to climate conditions, mitigated by the good performance of other farms, mainly Parceria V, in the state of Mato Grosso. Until the date of publication of this earnings release, we had already harvested 91% of soybean and 100% of second corn crop and started harvesting corn.<br><br><br> <br>We finished harvesting the sugarcane crop last quarter. We harvested 2.2 million tons of sugarcane, registering a TCH (harvest tons per hectare) of 83.3. The measures adopted to mitigate the impacts of Covid-19 on the Company’s results include the marginal reduction of the sugarcane area and the maintenance of our production estimate. We continue to monitor the ethanol margins, which were substantially impacted by the effects of the oil crisis and the lower demand due to the pandemic. |
|---|
An important highlight was the increase in share liquidity, which moved up from R$0.8 million to R$1.9 million average daily traded volume in the twelve months comparing, considering the nine months accumulated period. In addition, the share price was strong in this period of high volatility, closing at R$21.10 per share on May 6, an appreciation of 5.1% since February 21, 2020, the last closing before the generalized impacts of the pandemic on the Brazilian stock exchange market. In the same period IBOV Index depreciated 30.5%.
The scenario is uncertain, and we are not immune to some negative effects that may arise from this pandemic, but we are confident in our team’s resilience capacity and in our solid business model.
Brazilian agribusiness generated exporting surplusses in the quarter and this, among other reasons, reinforces its vital contribution for the society at these times. This shows that the brazilian agricultural sector is a reference in food security and attests the strenghts of this important business.
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Definitions: 3Q19 and 3Q20 – quarters ended March 31, 2019 and 2010 respectively| 9M19 and 9M20 – nine-month periods ended March 31, 2019 and 2020 respectively | 2018/2019 Harvest Year – fiscal year started July 1, 2018 and ended June 30, 2019 | 2019/2020 Harvest Year – fiscal year started July 1, 2019 and ended June 30, 2020.
Covid-19
As announced on March 23, through a Notice to the Market the Company has set a plan with several measures – determined by a Prevention and Risk Committee established especifically for this purpose - in order to preserve the health of its employees, help contain Covid-19’s spreading and mitigate its effects in our operations.
The main initiatives taken up to this day are as follows:
| · | Establishing of a Prevention and Risk Committee to continuously assess the evolution of the general situation, to update the necessary preventive measures and actions to minimize risks and also to coordinate the execution of the action plans; |
|---|---|
| · | Establishing of a work from home default for: (i) people classified as part of the risk group defined by the Ministry of Health; (ii) employees who made an international trip and recently returned to their respective countries, respecting the quarantine period recommended by the authorities; and (iii) employees of our corporate office in São Paulo; |
| · | Adopting several measures and protocols in order to preserve the safety of all the people involved in its operational context, following the orientation of the Ministry of Health, such as: reinforcement of the correct usage of Personal protective equipment and travel and visiting restrictions between our operation units; |
| · | Determining contingency plans to support the Company’s operations, such as measures aiming cash preservation – new credit line obtentions and review of the investment plans – anticipation of agricultural inputs delivery and of the agricultural products sale to ensure storage capability for the Company; |
BrasilAgro’s operations in Brazil and Paraguay are being conducted without significant impacts. We do not present at this time relevant impact due to the Covid-19 pandemic in our Financial Statements.
BrasilAgro will maintain the market and its shareholders duly informed in connection with any new information in relation to this or any other relevant matter.
Property Portfolio
The Company’s property portfolio consisted of 266,598 hectares across six Brazilian states and Paraguay.
| FARMS | LOCATION | AQUISITION DATE | PROJECT | TOTALAREA (ha) | ARABLEAREA (ha) | |
|---|---|---|---|---|---|---|
| 1 | Jatobá Farm | Jaborandi / BA | Mar-07 | Grains and Pasture | 16,939 | 13,090 |
| 2 | Alto Taquari Farm | Alto Taquari / MT | aug/07 | Sugarcane | 5,206 | 3,606 |
| 3 | Araucária Farm | Mineiros / GO | apr/07 | Sugarcane | 5,534 | 4,051 |
| 4 | Chaparral Farm | Correntina / BA | Nov-07 | Grains and Cotton | 37,182 | 26,444 |
| 5 | Nova Buriti Farm | Bonito de Minas / MG | dec/07 | Forest | 24,212 | 17,846 |
| 6 | Preferência Farm | Baianópolis / BA | sep/08 | Grains and Pasture | 17,799 | 12,410 |
| 7 | Partnership II^(1)^ | Ribeiro Gonçalves / PI | Nov-13 | Grains | 7,500 | 7,500 |
| 8 | Morotí (Paraguay) | Boquerón | dec/13 | Grains and Pasture | 59,585 | 34,673 |
| 9 | Partnership III^(2)^ | Alto Taquari / MT | may/15 | Sugarcane | 5,624 | 5,624 |
| 10 | Partnership IV^(3)^ | São Raimundo das Mangabeiras / MA | feb/17 | Sugarcane | 15,000 | 15,000 |
| 11 | São José Farm | São Raimundo das Mangabeiras / MA | feb/17 | Grains and Sugarcane | 17,566 | 10,137 |
| 12 | Partnership V^(4)^ | São Félix do Araguaia / MT | aug/18 | Grains | 20,138 | 20,138 |
| 13 | Partnership VII^(5)^ | Baixa Grande do Ribeiro / PI | dec/19 | Grains | 5,383 | 5,383 |
| 14 | Arrojadinho Farm^(6)^ | Jaborandi / BA | Jan-20 | Grains | 16,642 | 10,306 |
| 15 | Rio do Meio Farm^(7)^ | Correntina / BA | Jan-20 | Grains | 12,288 | 8,501 |
| Total | 266,598 | 194,709 | ||||
| (1) BrasilAgro entered into an agricultural exploration partnership in the Parceria II Farm for up to 11 harvests, involving up to 10,000 hectares. | ||||||
| (2) BrasilAgro entered into an agricultural exploration partnership in the Parceria III Farm potentially up to March 31, 2026. | ||||||
| (3) BrasilAgro entered into an agricultural exploration partnership in the Parceria IV Farm for 15 years of planting of sugarcane, with option of renewal for another 15 years. | ||||||
| (4) BrasilAgro entered into an agricultural exploration partnership in the Parceria V Farm for up to 10 years. | ||||||
| (5) BrasilAgro entered into an agricultural exploration partnership in the Parceria VII Farm for the 2019/2020 harvest, with option of renewal. | ||||||
| (6) Previously referred as Partnership VI, the Farm was acquired through the merger of Agrifirma. | ||||||
| (7) Farm acquired through the merger of Agrifirma. |
As a result of obtaining a new license, we expanded our arable area this quarter and, consequently, we had new measurement in Paraguay, which added approximately 5,000 hectares to the Farm’s arable area.
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The current mix between own and leased areas of the total production area allows greater flexibility in portfolio management, reducing the volatility of the operating cash flow.
Market Value of the Portfolio
We review the internal market value of our farms annually, and on June 30, 2019, the market value of our portfolio was R$1.7 billion.
In order to estimate the market value of our farms, we considered for each property: (i) its level of development; (ii) soil quality and maturity; and (iii) agricultural aptness and potential.
We hired the independent consulting firm Deloitte Touche Tohmatsu to conduct a market valuation of our properties. According to its appraisal, as of July 31, 2019, carried out because of the merger announced in November 2019, the market value of the portfolio was R$1.5 billion.
The table below shows the internal market valuation of the portfolio performed by Deloitte Touche Tohmatsu:
| LOCATION | Area06/30/2018(hectares) | Area06/30/2019(hectares) | Internal Appraisal (R thousand) | Independent Appraisal (R thousand) | |
|---|---|---|---|---|---|
| 06/30/2018 | 06/30/2018 | ||||
| Jatobá Farm | Bahia | 21,197 | 18,073 | 293,136 | 376,040 |
| Alto Taquari Farm | Mato Grosso | 5,394 | 5,291 | 158,726 | 125,910 |
| Araucária Farm | Goiás | 5,534 | 5,534 | 137,796 | 135,170 |
| Chaparral Farm | Bahia | 37,182 | 37,182 | 312,256 | 397,500 |
| Nova Buriti Farm | Minas Gerais | 24,212 | 24,212 | 32,145 | 23,180 |
| Preferência Farm | Bahia | 17,799 | 17,799 | 58,171 | 61,510 |
| São José Farm | Maranhão | 17,566 | 17,566 | 156,798 | 168,260 |
| Arrojadinho Farm | Bahia | - | 16,642 | - | - |
| Rio do Meio Farm | Bahia | - | 12,288 | - | - |
| Morotí (Paraguay) | Chaco Paraguay | 59,490 | 59,585 | 188,946 | 190,954 |
| Total | 188,374 | 214,172 | 1,337,974 | 1,478,524 | |
| ¹ Numbers of 06/30/2019 are not changed by the acquisition or sales made in the 2019/2020 harvest. The amounts will be updated after the period closing with a new appraisal, thus the numbers might be materially different, which wouldn't reflect only the change in the asset value, but mainly the change in the total area. Amounts referring to the farms acquired through the merger of Agrifirma are from the independent appraisal and will be updated on the next internal appraisal. | |||||
| ^2^ Independent Appraisal made in July 2019 due to the merger of Agrifirma. |
All values are in US Dollars.
During the 2019/2020 harvest year, we concluded the transformation process of 3,200 hectares started last harvest and estimate to transform another 3,000 hectares. We accumulated a total transformed area of 128,600 hectares in 11 years of operation. This represents an average growth of 29% in portfolio transformation, which is the main valuation index of our properties.
Agricultural Operations
AREA
The table below shows the breakdown of the growing area by farm in the 2019/2020 Harvest. We finished planting second corn crop in an area of 17,894 hectares this quarter, totaling more than 153,000 hectares planted in the harvest year.
| Area in Production by Farm19/20 Harvest (ha) ^(1)^ | Ratoon Cane | Plant Cane | Soybean | Corn | Corn2nd Crop | Bean2nd Crop | Pasture | Cotton | Other | Total |
|---|---|---|---|---|---|---|---|---|---|---|
| Alto Taquari Farm | 2,447 | 78 | 784 | 663 | 3,972 | |||||
| Araucária Farm | 2,475 | 1,356 | 3,831 | |||||||
| Partnership III Farm | 5,048 | 453 | 300 | 5,801 | ||||||
| São José Farm and Partnership IV Farm | 16,830 | 1,838 | 4,836 | 580 | 631 | 24,715 | ||||
| Jatobá Farm | 4,313 | 7,619 | 11,932 | |||||||
| Chaparral Farm | 9,552 | 301 | 3,085 | 1,713 | 4,598 | 19,249 | ||||
| Preferência Farm | 6,344 | 134 | 6,478 | |||||||
| Partnership II Farm | 5,685 | 1,627 | 296 | 7,608 | ||||||
| Partnership V Farm | 20,143 | 16,023 | 1,459 | 37,625 | ||||||
| Arrojadinho Farm ² | 2,896 | 864 | 3,760 | |||||||
| Rio do Meio Farm ³ | 8,043 | 8,043 | ||||||||
| Partnership VII Farm | 2,504 | 2,642 | 281 | 5,427 | ||||||
| Morotí¹ (Paraguay) | 6,286 | 2,196 | 3,064 | 3,167 | 14,713 | |||||
| Total | 26,800 | 2,369 | 54,342 | 7,045 | 17,894 | 2,624 | 16,806 | 1,713 | 23,561 | 153,154 |
| ¹ Forecast for the 2019/2020 harvest, according to the Company's budget. | ||||||||||
| ² Previously referred as Partnership VI, the Farm was acquired through the merger of Agrifirma. | ||||||||||
| ² The Farm was acquired through the merger of Agrifirma. |
| Area in Production by product (ha) | 18/19 Harvest | 19/20 Harvest (1) | 19/20 Harvest Participation (%) | Change (%) |
|---|---|---|---|---|
| Grains | 66,899 | 81,905 | 53.5% | 22.4% |
| Soybean | 51,843 | 54,342 | 35.5% | 4.8% |
| Corn and Corn 2nd Crop | 15,056 | 24,939 | 16.3% | 65.6% |
| Bean 2nd Crop | - | 2,624 | 1.7% | n.a. |
| Sugarcane | 31,832 | 29,169 | 19.0% | -8.4% |
| Pasture | 17,771 | 16,806 | 11.0% | -5.4% |
| Cotton | 1,580 | 1,713 | 1.1% | n.a. |
| Other | 16,869 | 23,561 | 15.4% | 39.7% |
| Total | 134,951 | 153,154 | 100.0% | 13.5% |
| ¹ Forecast for the 2019/2020 harvest, according to the Company's budget. | ||||
| Area in Production by Land Ownership (ha) | 18/19 Harvest | 19/20 Harvest (1) | 19/20 Harvest Participation (%) | Change (%) |
| --- | --- | --- | --- | --- |
| Own Area | 71,134 | 81,978 | 53.5% | 15.2% |
| Operated by BrasilAgro | 57,014 | 60,106 | 39.2% | 5.4% |
| Leased to third parties | 14,120 | 21,872 | 14.3% | 54.9% |
| Leased area | 63,817 | 71,176 | 46.5% | 11.5% |
| Total | 134,951 | 153,154 | 100.0% | 13.5% |
| ¹ Forecast for the 2019/2020 harvest, according to the Company's budget. |
PRODUCTION
Grains
| Production per product (tons) | 18/19 HarvestRealized | 19/20 HarvestEstimated | Change(%) | 19/20 HarvestForecasted | Change(%) |
|---|---|---|---|---|---|
| Soybean | 154,474 | 158,606 | 2.7% | 162,273 | 2.3% |
| Corn | 15,761 | 29,826 | 89.2% | 41,364 | 38.7% |
| Corn - 2nd Crop | 58,377 | 101,470 | 73.8% | 109,253 | 7.7% |
| Bean - 2nd Crop | - | 7,843 | n.a. | 7,843 | 0.0% |
| Total | 228,612 | 297,745 | 30.2% | 320,734 | 7.7% |
We expect to increase soybean production by 2.3%, corn production by 38.7% and the second corn crop production by 7.7% in comparison with the initial estimate disclosed at the beginning of the harvest. The decisions that led to such changes stemmed from the revaluation carried out based on harvest progress and climate conditions. The change compared to last quarter’s projection was a result of lower harvest caused by climate conditions in Paraguay, which were mitigated by the good performance of other farms, especially Parceria V. By the date of publication of this earnings release, we had already harvested 91% of soybean, started harvesting the corn crop and concluded the entire planting of 2nd corn crop.
Arrojadinho and Rio do Meio Farms, acquired as part of the merger of Agrifirma, have relevant areas for bean growing. Due to business conditions, the Company also allocated second harvest areas to Chaparral and Parceria V Farms for such crop. Second bean crop has already been planted.
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Cotton
| Production (tons) | 18/19 HarvestRealized | 19/20 HarvestEstimated | Change(%) | 19/20 HarvestForecasted | Change(%) |
|---|---|---|---|---|---|
| Cotton | 4,875 | 8,152 | 67.2% | 6,934 | -14.9% |
We project a loss of 14.9% in cotton production in relation to the initial estimate, as climate conditions in Bahia were unfavorable during the planting season for the crop.
Sugarcane
| Sugarcane Harvest Year Result | 2019 Harvest Estimated(Apr/01 to Nov/30) | 2019 HarvestRealized(Apr/01 to Nov/30) | ChangeB/A(%) | 2020 Harvest Estimated(Apr/01 to Nov/30)(C) | ChangeC/B(%) |
|---|---|---|---|---|---|
| Tons harvested | 2,164,999 | 2,171,920 | 0.3% | 2,160,539 | -0.5% |
| Hectares harvested | 26,510 | 26,075 | -1.6% | 26,800 | 2.8% |
| TCH - Harvest tons per hectares | 81.67 | 83.30 | 2.0% | 80.62 | -3.2% |
In December 2019, we finished harvesting sugarcane. We harvested 2.2 million tons of sugarcane, registering a TCH (harvest tons per hectare) of 83.3, which reflects the productivity increase in São José Farm.
The Company remains alert to the impacts that the Covid-19 pandemic and the oil crisis may have on sugarcane prices. To date, we have marginally reduced sugarcane area and maintained our production estimates. Any significant changes will be opportunely announced.
| Sugarcane Accounting Year Result | 2018(Jul/01 to Mar/31) | 2019(Jul/01 to Mar/31) | Change (%) |
|---|---|---|---|
| Tons harvested | 1,329,019 | 1,568,703 | 18.0% |
| Hectares harvested | 20,840 | 18,499 | -11.2% |
| TCH - Harvest tons per hectares | 63.77 | 84.80 | 33.0% |
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Cattle Raising
| Cattle Raising | 18/19Harvest(A) | 19/20 HarvestEstimated(B) | 19/20 HarvestRealized(Up to Mar/31)(C) | ChangeC/A(%) | ChangeC/B(%) |
|---|---|---|---|---|---|
| Hectares | 13,351 | 13,721 | 13,721 | 2.8% | 0.0% |
| Number of heads | 20,865 | 17,983 | 21,351 | 2.3% | 18.7% |
| Meat production (kg) | 2,803,685 | 2,687,005 | 1,977,627 | -29.5% | -26.4% |
| Weight Gain per Day | 0.53 | 0.47 | 0.44 | -17.5% | -6.0% |
| Weight Gain per hectare | 210.00 | 195.83 | 144.13 | -31.4% | -26.4% |
Cattle raising is a transitory activity for the Company, aimed at the transformation of the area. We have 21,400 head of cattle in the Preferência and the Jatobá Farms and in Paraguay, distributed in 13,721 hectares of already active pasture in Brazil and Paraguay. We reduced our beef production estimate in relation to last quarter, as the increase in beef prices changed the Company’s initial strategy to purchase calves.
In addition to the 13,721 hectares estimated for active pasture in 3Q20, the Company has 3,085 hectares of pasture at the Chaparral Farm, which are part of the area opening strategy, because the grasses increase the organic material level in the soil and reduce impacts that could cause lower productivity in new areas.
We estimate a lower weight gain per day for the 2019/2020 harvest due to changes in management strategies in each farm to improve the margin of this activity.
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Other
In order to improve the Company’s results, mitigate operating risks and as a real estate strategy, in 9M20, we leased 21,872 hectares to third parties in the state of Bahia and in Paraguay. The areas were leased to local farmers, and the contracts have a duration of up to 5 years with a value of up to 18% of production, and the minimum value is 5 soybean bags per hectare.
In addition, we have 1,689 hectares of other crops, such as grasses cover crops and sorghum, in order to increase the organic matter and accelerate the maturation of the soil.
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The consolidated financial statements were prepared and are being presented in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board.
Merger of Agrifirma
On January 27, 2020, we concluded the merger of Agrifirma into the Company. The completion of this agreement granted BrasilAgro the control and consolidation of Grupo Agrifirma operations, which is made up of Agrifirma Brasil Agropecuária S.A. and its subsidiaries. As of 3Q20, our financial statements will show the impacts of the operation with comments on the appropriate sections.
As a result of this transaction, we added 28,930 hectares (valued by Deloitte at R$205.6 million) to our property portfolio. The absorbed areas are located in Western Bahia, close to Jatobá and Chaparral farms, and are suitable for growing grains and raising cattle, and also has a relevant potential for irrigation, which translates into gains in scale and synergy with our existing operations, as well as dilution of administrative expenses.
| Paid price (R$ Thousand) | 110,224 |
|---|---|
| ASSETS | |
| Net operational expenses | 3,435 |
| Biological assets | 4,883 |
| Long term assets held for sale | 23,842 |
| Investment properties | 197,711 |
| Fixed assets | 23,541 |
| Loans and financing | (123,862) |
| Other non operational assets and liabilities | 4,262 |
| Net deferred taxes | (27,763) |
| Fair value | 106,049 |
| Goodwill | 4,175 |
For more information, please see note 1.4 in the Interim Financial Information.
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EBITDA and Adjusted EBITDA
EBITDA is presented based on Net Income adjusted for interest, taxes, depreciation and amortization, pursuant to accounting standards.
Adjusted EBITDA was calculated by excluding biological assets in progress (sugarcane and grains planted) and adjusted for the harvest’s derivative results and depreciation expenses, including depreciation of fixed assets of the farms, developed areas and permanent crops.
| EBITDA (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Net Income | 24,625 | 3,952 | 523.1% | 85,603 | 140,076 | -38.9% |
| Interest | 15,293 | 5,967 | n.a. | 24,913 | 1,841 | 1253.2% |
| Taxes | (6,689) | (1,543) | 333.5% | 13,008 | 22,587 | -42.4% |
| Depreciations and amortizations | 3,779 | 1,085 | 248.3% | 21,602 | 20,846 | 3.6% |
| EBITDA | 37,008 | 9,461 | 291.2% | 145,126 | 185,350 | -21.7% |
| Adjusted EBITDA (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
| Net Income | 24,625 | 3,952 | 523.1% | 85,603 | 140,076 | -38.9% |
| Interest | 15,293 | 5,967 | n.a. | 24,913 | 1,841 | 1253.2% |
| Taxes | (6,689) | (1,543) | 333.5% | 13,008 | 22,587 | -42.4% |
| Depreciations and Amortizations | 3,779 | 1,085 | 248.3% | 21,602 | 20,846 | 3.6% |
| Equity pick-up | 26 | (1,174) | n.a. | 89 | (1,144) | n.a. |
| Other operating income/expenses, net | (2) | (116) | -98.3% | (12) | (135) | -91.1% |
| Elimination of the effects of gains on biological assets (grains and sugarcane planted) | (7,821) | 8,638 | n.a. | (40,487) | (20,077) | 101.7% |
| Derivatives Results | (21,412) | 1,684 | n.a. | (26,265) | 7,562 | n.a. |
| Adjusted EBITDA | 7,799 | 18,493 | -57.8% | 78,451 | 171,556 | -54.3% |
Operating EBITDA and Adjusted EBITDA
| EBITDA (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Net Income excluding farm sale | 40,903 | -2,028 | n.a. | 64,907 | 33,815 | 91.9% |
| Interest | 26,148 | 20,530 | n.a. | 24,913 | 1,841 | n.a. |
| Taxes | 5,221 | 13,799 | -62.2% | 13,008 | 22,587 | -42.4% |
| Depreciations and amortizations | 9,630 | 9,222 | 4.4% | 21,602 | 20,846 | 3.6% |
| EBITDA | 49 | -1,191 | n.a. | 89 | -1,144 | n.a. |
| Adjusted EBITDA (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
| Net Income excluding farm sale | 40,903 | -2,028 | n.a. | 64,907 | 33,815 | 91.9% |
| Interest | 26,148 | 20,530 | n.a. | 24,913 | 1,841 | n.a. |
| Taxes | 5,221 | 13,799 | -62.2% | 13,008 | 22,587 | -42.4% |
| Adjusted Depreciation | 9,630 | 9,222 | 4.4% | 21,602 | 20,846 | 3.6% |
| Equity pick-up | 49 | (1,191) | n.a. | 89 | (1,144) | n.a. |
| Other operating income/expenses | (11) | (97) | -88.7% | (12) | (135) | -91.1% |
| Elimination of the effects of gains on biological assets (grains and sugarcane planted) | (35,076) | (9,775) | 258.8% | (40,487) | (20,077) | 101.7% |
| Derivatives Results | (29,114) | 9,695 | n.a. | (26,265) | 7,562 | n.a. |
| Adjusted EBITDA | 17,750 | 40,155 | -55.8% | 57,755 | 65,295 | -11.5% |
15
Due to the high volatility of the US Dollar exchange rate late in the 9M20, caused mainly by the Covid-19 pandemic, we had a negative impact in Derivative Results. In the 9M20 we recorded negative R$26.6 million in this account, negative R$29.2 million attributed to FX operations and R$2.5 million attributed to commodities operations. However, this negative impact will be greatly compensated in our Cash accounts as assets like inventories and biological assets are sold by the Company.
Income Statement
NET REVENUE FROM SALES
| Net Revenue (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Total | 81,253 | 19,655 | 313.4% | 353,154 | 336,873 | 4.8% |
| Farms Sale | - | - | n.a. | 24,052 | 130,205 | -81.5% |
| Soybean | 53,092 | 13,339 | 298.0% | 111,316 | 66,238 | 68.1% |
| Corn | 1,393 | 816 | 70.7% | 25,005 | 7,659 | 226.5% |
| Bean | 2,128 | - | n.a. | 2,128 | - | n.a. |
| Cotton | 4,317 | - | n.a. | 12,876 | - | n.a. |
| Sugarcane | 9,892 | 1,013 | n.a. | 150,100 | 116,126 | 29.3% |
| Cattle Raising | 7,132 | 2,730 | 161.2% | 20,611 | 11,042 | 86.7% |
| Leasing | 2,718 | 1,443 | 88.4% | 6,482 | 5,129 | 26.4% |
| Others | 581 | 314 | n.a. | 584 | 474 | n.a. |
Net revenue from sales came to R$353.2 million in 9M20, 4.8% up year on year.
SALE OF FARMS
In 9M20, we recorded the sale of part of the Jatobá Farm and part of the Alto Taquari Farm, agricultural properties located in the municipalities of Jaborandi, in the Bahia state, and in Alto Taquari, in the Mato Grosso state, respectively. We sold 1,134 hectares (893 arable hectares) of the Jatobá Farm for the nominal value of R$23.2 million (approximately R$25,961/arable hectare) and 85 hectares (65 arable hectares) of the Alto Taquari Farm for the nominal value of R$5.5 million (approximately R$84,817/arable hectare). In the same period last year, we recorded R$181.6 million (nominal value) related to the sale of 9,687 hectares (7,588 arable hectares) of the Jatobá Farm (BA).
The table below shows the revenue from the sale of properties:
16
| Farm Sales(R$ thousand) | 9M20 | 9M19 | Change(%) |
|---|---|---|---|
| Nominal Value of Sale | 28,163 | 181,636 | -84.5% |
| Present Value Adjustment | (4,111) | (51,431) | -92.0% |
| Revenue from Farms Sale | 24,052 | 130,205 | -81.5% |
| Sales Taxes | (878) | (4,753) | -81.5% |
| Selling Costs | (2,478) | (19,191) | -87.1% |
| Farm Sale Gain | 20,696 | 106,261 | -80.5% |
The variation in the amounts announced through a Material Fact and the recorded values from sales indicate the possibility of changes in prices due to differences between the estimated arable hectares and the actual arable hectares recorded in the final measuring. This possibility is remote and is considered as a variable consideration component, as defined in paragraphs 50 and 51 of IFRS 15. Thus, in order to represent the risk of revenue reversal, the Company did not record the 2.3% related to the amount previously announced until the final measuring of the negotiated area.
SALE OF AGRICULTURAL PRODUCTS
| Net Revenue (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Total | 81,253 | 19,655 | 313.4% | 329,102 | 206,668 | 59.2% |
| Soybean | 53,092 | 13,339 | 298.0% | 111,316 | 66,238 | 68.1% |
| Corn | 1,393 | 816 | 70.7% | 25,005 | 7,659 | 226.5% |
| Bean | 2,128 | - | n.a. | 2,128 | - | n.a. |
| Cotton | 4,317 | - | n.a. | 12,876 | - | n.a. |
| Sugarcane | 9,892 | 1,013 | n.a. | 150,100 | 116,126 | 29.3% |
| Cattle Raising | 7,132 | 2,730 | 161.2% | 20,611 | 11,042 | 86.7% |
| Leasing | 2,718 | 1,443 | 88.4% | 6,482 | 5,129 | 26.4% |
| Others | 581 | 314 | n.a. | 584 | 474 | n.a. |
| Quantity sold (tons) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
| Total | 53,951 | 7,145 | n.a. | 1,616,472 | 1,299,871 | 24.4% |
| Soybean | 47,227 | 4,942 | n.a. | 98,161 | 50,854 | 93.0% |
| Corn | 2,775 | 1,474 | 88.3% | 65,543 | 16,312 | 301.8% |
| Bean | 1,429 | - | n.a. | 1,429 | - | n.a. |
| Cotton | 1,186 | - | n.a. | 4,368 | - | n.a. |
| Sugarcane | - | - | n.a. | 1,442,980 | 1,230,381 | 17.3% |
| Cattle Raising | 1,245 | 681 | 82.8% | 3,772 | 2,263 | 66.7% |
Soybean revenue increased by R$45.1 million in 9M20 compared to the same period last year, from R$66.2 million, related the sale of 50,900 tons at R$1,302.51 per ton, to R$111.3 million, related the sale of 98,200 tons at R$1,134.01 per ton.
Corn revenue in 9M20 increased by R$17.3 million compared to the same period of the previous year, from R$7.7 million from the sale of 16,300 tons at R$469.53 per ton, to R$25.0 million, from the sale of 65,500 tons at R$381.51 per ton.
17
The increase in the volume of grains sold reflects the absorption of new production areas. In contrast, the prices practiced in each region impact revenue per ton as they consider factors such as the distance for production outflow. In this sense, there was an impact in 9M20 over 9M19, chiefly due to the production volume added by Fazenda Parceria V, located in Mato Grosso state. Until the end of 3Q20, the absorption of Arrojadinho and Rio do Meio Farms had contributed with bean revenues only.
Sugarcane revenue in 9M20 increased by R$34.0 million compared to the same period of the previous year, from R$116.1 million from the sale of 1.2 million tons at R$94.38 per ton, to R$150.1 million from the sale of 1.4 million tons at R$104.02 per ton of sugarcane. The increase in per-ton sugarcane price was due to the higher price of the TRS (total recoverable sugar) of sugarcane sold. In the same period, there was also an increase in the price of the TRS per ton of sugarcane harvested, which went from 0.647 R$/kg in 9M19 to 0.710 R$/kg in 9M20.
Cattle-raising revenue in 9M20 increased by R$9.6 million compared to the same period of the previous year, from R$11.0 million from the sale of 5,938 head of cattle at R$4.88 per kilo, to R$20.6 million, which refers to the sale of 9,183 head of cattle to R$5.46 per kilo.
Leasing revenue reached R$6.5 million in 9M20 and refers to third-party leases of farms. The contracts have a duration of up to 5 years with a value of up to 18% of production, and the minimum value is 5 soybean bags per hectare.
GAINS OR LOSSES OF AGRICULTURAL PRODUCTS AND BIOLOGICAL ASSETS
| Biological Assets and Agricultural Products (R$ thousand) | Soybean19/20 | Corn(crop)¹ | Corn(2nd crop)18/19 | Cotton18/19 | Sugarcane | CattleRaising | Others | Gain / Loss03/31/20 |
|---|---|---|---|---|---|---|---|---|
| Gains and losses in agricultural products | 30,382 | 57 | 1,154 | (2,115) | 51,683 | (606) | (1,323) | 79,232 |
| Gains and losses in biological assets | 27,111 | 2 | (1,217) | (783) | 15,375 | - | - | 40,488 |
| Change in fair value of biological assets and agricultural products | 57,493 | 59 | (63) | (2,898) | 67,058 | (606) | (1,323) | 119,720 |
| ¹18/19 Harvest (agricultural products) and 19/20 Harvest (biological assets) |
Gains or losses of agricultural products
Gains or losses from the variation in the fair value of agricultural products are determined by the difference between their harvested volume at market value (net of selling expenses and taxes) and the production costs incurred (direct and indirect costs, leasing and depreciation).
Harvested agricultural products are measured at their fair value at the time of harvest considering the market price of the area of each farm.
18
| Agricultural Products | Soybean19/20 | Corn(crop)18/19 | Corn(2nd crop)18/19 | Cotton18/19 | Sugarcane | CattleRaising | Others | Gain / Loss03/31/20 |
|---|---|---|---|---|---|---|---|---|
| Area (hectares) | 27,932 | 1,095 | 7,670 | 976 | 18,499 | 13,721 | 2,016 | 71,909 |
| Production (Tons or Meat Kgs) | 97,025 | - | 33,681 | 3,418 | 1,568,704 | 1,977,627 | 1,429 | 3,681,884 |
| Yield (Ton./ha) (Kg/Head) | - | - | - | - | - | 21,351 | - | 21,351 |
| Livestock - head of cattle | 3.47 | - | 4.39 | 3.50 | 84.80 | 92.62 | 0.71 | 51.20 |
| Production fair value (R$ thousand) | 131,656 | 2,114 | 9,833 | 7,982 | 154,999 | 11,077 | 1,719 | 319,380 |
| Production Cost (R$ thousand) | (101,274) | (2,057) | (8,679) | (10,097) | (103,316) | (11,683) | (3,042) | (240,148) |
| Gain and losses in agricultural products (R$ thousand) | **** 30,382 | 57 | 1,154 | (2,115) | 51,683 | (606) | (1,323) | 79,232 |
The table below shows the results of the sugarcane harvest in the fiscal year, including gains (losses) in the value of agricultural products:
| Period ended June 30, 2019 | 2018 Harvest(Jul to Dec/2018) | 2019 Harvest(Jan to Jun/2019) | Total |
|---|---|---|---|
| Net Revenue | 115,113 | 45,363 | 160,476 |
| Cost of sales | (97,475) | (44,828) | (142,303) |
| Gain (loss) of agricultural products | 16,497 | 11,161 | 27,658 |
| Total | 34,135 | 11,696 | 45,831 |
| Produced Tons | 1,329,019 | 603,216 | 1,932,235 |
| Period ended March 31, 2020 | 2019 Harvest(Jul to Dec/2019) | Total | |
| Net Revenue | 150,100 | 150,100 | |
| Cost of sales | (131,812) | (131,812) | |
| Gain (loss) of agricultural products | 51,683 | 51,683 | |
| Total | 69,971 | 69,971 | |
| Produced Tons | 1,568,704 | 1,568,704 | |
| ¹In 3Q20 there were no revenues, costs or production of the new sugarcane harvest | |||
| Sugarcane Harvest Year | 2018 Harvest(Jan to Dec/2018) | 2019 Harvest(Jan to Dec/2019) | Change |
| Net Revenue | 141,445 | 195,463 | 38.2% |
| Cost of sales | (133,725) | (176,640) | 32.1% |
| Gain (loss) of agricultural products | 27,443 | 62,844 | 129.0% |
| Total | 35,163 | 81,667 | 132.3% |
| Produced Tons | 1,763,193 | 2,171,920 | 23.2% |
We ended the sugarcane harvest in December 2019 with a volume of 23.2% and net revenue of 38.2%, both superior to the previous harvest. Revenue increased quarter on quarter in 3Q20 due to the adjustment to the average TRS (total recoverable sugar) of the harvest. This good result was due to the higher prices of TRS (total recoverable sugar) and Consecana.
19
Loss from cattle raising corresponded to R$0.6 million, with a production of 2.0 tons of meat, 7.8% lower compared to the same period last year.
| Cattle Raising | 9M20 | 9M19 | Change |
|---|---|---|---|
| Net Revenue | 20,611 | 11,042 | 86.7% |
| Cost of sales | (20,597) | (11,325) | 81.9% |
| Gain (loss) of agricultural products | (606) | 389 | -255.8% |
| Total | (592) | 106 | n.a. |
| Produced Kgs | 1,977,627 | 2,143,855 | -7.8% |
Gains or losses of biological assets
| Biological Assets | Soybean19/20¹ | Corn(crop)19/20 | Corn(2nd crop)18/19 | Cotton18/19 | Sugarcane | Gain / Loss03/31/20 |
|---|---|---|---|---|---|---|
| Area (hectares) | 23,064 | 912 | - | - | 26,784 | 50,760 |
| Production (Tons) | 66,856 | 3,996 | - | - | 2,183,415 | 2,254,267 |
| Yield (Ton./ha) | 2.90 | 4.38 | - | - | 81.52 | 44.41 |
| Biological Assets (R$ thousand) | 27,111 | 2 | (1,217) | (783) | 15,375 | 40,488 |
| ¹In the 9M20 it accounts for 50% of the total harvest forecast |
Biological assets correspond to agricultural products in formation (not yet harvested) measured at fair value. This value includes net present cash flow, considering the best estimates in relation to productivity, sales prices, selling expenses, direct and indirect costs and leasing.
The biological assets corresponding to ratoons of sugarcane represent the total area to be harvested from April 1 to November 30, 2020.
IMPAIRMENT, NET
A provision to adjust inventories at the net realized value of agricultural products is recorded when the value recorded in inventory is higher than the realization value. The realization value is the estimated sales price during the normal course of business less estimated selling expenses.
On March 31, 2020, the recognized amount corresponded to a loss of R$1.1 million.
20
PRODUCTION COST
| 18/19 Harvest (%) | Soybean | Corn | Corn2nd Crop | Cotton | Sugarcane | CattleRaising |
|---|---|---|---|---|---|---|
| Variable costs | 72% | 74% | 100% | 86% | 69% | 35% |
| Seeds | 9% | 17% | 22% | 7% | 0% | 0% |
| Fertilizers | 22% | 27% | 28% | 16% | 8% | 0% |
| Defensives | 20% | 12% | 16% | 31% | 7% | 0% |
| Agricultural services | 17% | 14% | 34% | 32% | 45% | 0% |
| Fuels and Lubricants | 3% | 3% | 0% | 0% | 8% | 0% |
| Maintenance of machines and instruments | 0% | 0% | 0% | 0% | 0% | 5% |
| Animal Feed | 0% | 0% | 0% | 0% | 0% | 26% |
| Others | 1% | 1% | 0% | 0% | 0% | 4% |
| Fixed costs | 28% | 26% | 0% | 14% | 31% | 65% |
| Labor | 8% | 10% | 0% | 3% | 6% | 31% |
| Depreciation and amortization | 2% | 7% | 0% | 3% | 9% | 14% |
| Leasing | 14% | 7% | 0% | 8% | 7% | 0% |
| Others | 4% | 2% | 0% | 0% | 10% | 19% |
| (R$ / ha) | 18/19Harvest | 19/20 HarvestEstimated | Change% | |||
| --- | --- | --- | --- | |||
| Soybean^(1)^ | 2,747 | 2,950 | 7.4% | |||
| Corn^(1)^ | 2,578 | 2,366 | -8.2% | |||
| Corn 2nd Crop | 1,357 | 1,585 | 16.8% | |||
| Cotton | 8,286 | 8,877 | 7.1% | |||
| Sugarcane | 5,307 | 5,726 | 7.9% | |||
| (1) includes area opening amortization |
21
COST OF GOODS SOLD
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Cost of Goods Sold | (59,665) | (11,028) | 441.0% | (248,159) | (142,407) | 74.3% |
| Soybean | (44,061) | (5,866) | 651.1% | (103,960) | (36,340) | 186.1% |
| Corn | (1,543) | (438) | 252.3% | (21,244) | (6,708) | 216.7% |
| Bean | (1,573) | - | n.a. | (1,573) | - | n.a. |
| Cotton | (4,087) | - | n.a. | (13,839) | - | n.a. |
| Sugarcane | (25) | (20) | 25.0% | (84,685) | (85,386) | -0.8% |
| Cattle Raising | (7,161) | (3,015) | 137.5% | (20,597) | (11,325) | 81.9% |
| Leasing | (476) | (448) | 6.3% | (1,332) | (1,203) | 10.7% |
| Others | (739) | (1,241) | -40.5% | (929) | (1,445) | -35.7% |
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
| Realization of the Fair Value of Biological Assets | (17,549) | (1,967) | 792.2% | (61,447) | (30,304) | 102.8% |
| Soybean | (17,229) | (2,171) | 693.6% | (13,525) | (20,704) | -34.7% |
| Corn | (144) | (55) | 161.8% | (1,990) | 373 | n.a. |
| Cotton | (189) | - | n.a. | 809 | - | n.a. |
| Sugarcane | - | - | n.a. | (47,152) | (10,238) | 360.6% |
| Others | 13 | 259 | -95.0% | 411 | 265 | 55.1% |
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
| Total Cost of Goods Sold | (77,214) | (12,995) | 494.2% | (309,606) | (172,711) | 79.3% |
| Soybean | (61,290) | (8,037) | 662.6% | (117,485) | (57,044) | 106.0% |
| Corn | (1,687) | (493) | 242.2% | (23,234) | (6,335) | 266.8% |
| Bean | (1,573) | - | n.a. | (1,573) | - | n.a. |
| Cotton | (4,276) | - | n.a. | (13,030) | - | n.a. |
| Sugarcane | (25) | (20) | 25.0% | (131,837) | (95,624) | 37.9% |
| Cattle Raising | (7,161) | (3,015) | 137.5% | (20,597) | (11,325) | 81.9% |
| Leasing | (476) | (448) | 6.3% | (1,332) | (1,203) | 10.7% |
| Others | (726) | (982) | -26.1% | (518) | (1,180) | -56.1% |
Due to adjustments to the fair value of agricultural products, the year over year changes in unit costs are directly linked to the market price of commodities at the time of harvest for the calculation of Total COGS. The comments on each crop below exclude the effect of biological assets appropriated at cost.
Soybean COGS increased by R$67.6 million in 9M20 compared to the previous year, from R$36.3 million, from the sale of 50,900 tons at R$714.59 per ton, to R$104.0 million, from the sale of 98,200 tons at R$1,059.08 per ton. The increase in cost was due to the increase in the volume sold, the variation in fertilizer prices, which were impacted by freight and exchange rates, and - as a result of the sale of farms, which reduces crop growing in mature areas in the year - the drop in the average productivity per hectare.
Corn COGS increased by R$14.5 million in 9M20 compared to the previous year, from R$6.7 million, from the sale of 16,300 tons at R$411.23 per ton, to R$21.2 million, from the sale of 65,500 tons at R$324.12 per ton. The lower cost was due to the higher volume sold and the consequent dilution of fixed cost.
22
Sugarcane COGS decreased by R$700,000 in 9M20 versus the previous year, from R$85.4 million, from the sale of 1.2 million tons at R$69,38 per ton, to R$84.7 million, from the sale of 1.4 million tons at R$58.67 per ton of sugarcane. The decrease in cost per ton is mainly due to improved productivity at the São José Farm, which resulted in greater dilution of cost.
Cattle-raising COGS increased R$9.3 million in relation to the previous year, from R$11.3 million from the sale cost of 5,938 head of cattle at R$2.0 thousand per head to R$20.6 million from the sale cost of 9,183 head of cattle at R$2.2 thousand per head.
SELLING EXPENSES
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Selling expenses | 1,266 | (3,190) | n.a. | (5,145) | (6,098) | -15.6% |
| Freight | (1,451) | (2,369) | -38.8% | (2,838) | (2,949) | -3.8% |
| Storage and Processing | (471) | (1,101) | -57.2% | (4,901) | (1,851) | 164.8% |
| Fees | (48) | (2) | 2300.0% | (95) | (37) | 156.8% |
| Provision for doubtful accounts | 3,534 | 336 | 951.8% | 3,504 | (908) | n.a. |
| Others | (298) | (54) | 451.9% | (815) | (353) | 130.9% |
In 9M20 we recorded R$5.1 million in selling expenses. The year on year decrease of R$953,000 was a result of the reversal of provision for doubtful accounts in the quarter, recorded after the merger of Agrifirma.
GENERAL AND ADMINISTRATIVE EXPENSES
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| General and administrative expenses | (8,990) | (7,455) | 20.6% | (27,997) | (24,539) | 14.1% |
| Depreciations and amortizations | (414) | (156) | 165.4% | (1,066) | (432) | 146.8% |
| Personnel expenses | (5,291) | (5,219) | 1.4% | (18,604) | (16,717) | 11.3% |
| Expenses with services providers | (1,864) | (1,005) | 85.5% | (3,892) | (3,031) | 28.4% |
| Leases and Rents | (48) | (212) | -77.4% | (218) | (630) | -65.4% |
| Taxes | (203) | (99) | 105.1% | (1,182) | (1,161) | 1.8% |
| Travel expenses | (223) | (210) | 6.2% | (563) | (603) | -6.6% |
| Software expenses | (269) | (258) | 4.3% | (882) | (667) | 32.2% |
| Other expenses | (678) | (296) | 129.1% | (1,590) | (1,298) | 22.5% |
In 9M20, general and administrative expenses rose by 14.1% over the same period in the previous year, from R$24.5 million to R$28.0 million. Higher depreciation and lower lease and rental expenses reflect the lease reclassifications made based on IFRS 16. The increase in personnel expenses was due to the payment of taxes related to the Long-Term Stock Option Incentive Plan approved by the Company in 2017.
Other expenses include costs regarding telephony services, building maintenance, registry, insurances, shares listing and others.
23
OTHER OPERATING INCOME / EXPENSES
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Other operating income/expenses | (1,707) | (40) | n.a. | (2,047) | (557) | 267.5% |
| Gain/Loss on sale of fixed assets | (102) | 34 | n.a. | (94) | 3 | n.a. |
| Provisions for lawsuits | (456) | 198 | n.a. | (582) | 402 | n.a. |
| Others | (5,273) | (272) | n.a. | (5,495) | (962) | 471.2% |
| Subscription bonus | 4,124 | - | n.a. | 4,124 | - | n.a. |
In 9M19 the merger of Agrifirma into the Company impacted other operating revenues and expenses, mainly operating costs, as shown in the “Others” line in the table above, and the subscription warrants issued. It is worth noting that, within the scope of the operation, the subscription warrants serve as collateral for the 2-year lockup period, taking into consideration the particularities of one of Agrifirma shareholders, and are not a premium or advantage to any new shareholder.
FINANCIAL RESULT
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Total | (15,293) | (5,967) | 156.3% | (24,913) | (1,841) | 1253.2% |
| Interest ^(i)^ | (6,783) | (5,032) | 34.8% | (15,299) | (14,252) | 7.3% |
| Exchange vartiation ^(ii)^ | (143) | (296) | -51.7% | 306 | (88) | n.a. |
| Present value adjustment ^(iii)^ | 30,192 | (6,164) | n.a. | 24,322 | (4,206) | n.a. |
| Results with derivatives ^(iv)^ | (39,225) | 4,720 | n.a. | (37,205) | 13,214 | n.a. |
| Other financial income / expenses ^(v)^ | 666 | 805 | -17.3% | 2,963 | 3,491 | -15.1% |
The consolidated financial result is composed of: (i) interest on financing; (ii) exchange variation on the offshore account; (iii) the present value of the Araucária, the Alto Taquari and the Jatobá Farms’ sales receivables, fixed in soybean bags, and the leasing of sugarcane areas; (iv) the result from hedge operations; and (v) bank fees and expenses and income from cash investments and cash equivalents.
The restatement of fair value, in the amount of R$24.3 million in 9M20, shows the variation in the amount to be received due to the sales of the Araucária, the Jatobá and the Alto Taquari Farms, denominated in soybean bags, and the variation of Consecana’s price in the lease of the Parceria IV Farm.
The derivatives result reflects the commodities hedge operations result of commodities and dollar FX operations, aiming to reduce the volatility of the company’s exposure, since our revenues, inventories, biological assets and farm receivables have a positive correlation with commodities prices and the U.S. currency. In 9M20, the result of derivative transactions was a negative R$37.2 million, R$58.1 million of which are related to currency operations and R$20.9 million are related to operations with commodities. In 9M19, derivative operations
totaled R$13.2 million, R$6.1 million of which related to currency operations and R$7.1 million to operations with commodities.
24
Due to the high volatility of the US Dollar exchange rate late in the 9M20, caused mainly by the Covid-19 pandemic, we had a negative impact in Derivative Results. However, this negative impact will be greatly compensated in our Cash accounts as assets like inventories, biological assets and receivables from farm sales are sold by the Company in the next six months.
The Company’s cash position went from an average cash flow of R$101.8 million in 9M19 to R$109.4 million in 9M20.
DERIVATIVE OPERATIONS
Our risk policy primarily aims to hedge the Company’s cash flow. In this context, we are concerned not only with the main components of our revenue, but also the main components of our production costs. Therefore, we monitor on a daily basis: a) the international prices of the main agricultural commodities produced by the Company, usually expressed in U.S. dollars; b) the base premium, i.e. the difference between the international and domestic commodity price; c) exchange rates; and d) the prices of the main components such as freight, fertilizers and chemicals, which can substantially impact costs.
The points analyzed when deciding on the price and margin hedging strategy and tools are listed below:
• Estimated gross margin based on the current price environment.
• Standard deviation from the estimated gross margin for different pricing strategy scenarios.
• Analysis of the estimated gross margin in stress scenarios for different hedge strategies.
• Comparison between current estimates and the Company’s budget.
• Comparison of the estimated gross margin and the historical average.
• Market expectations and trends.
• Tax aspects.
25
HEDGE POSITION ON APRIL 27, 2020
| Harvest | FX | ||||
|---|---|---|---|---|---|
| % of hedge^(1)^ | Price (USD/bu) | Volume (thousand) | % of hedge^(2)^ | BRL/USD | |
| 19/20 | 97.37% | 9.59 | USD 45,848 | 100.00% | 4.07 |
| 20/21 | 12.83% | 9.30 | USD 5,271 | 11.82% | 4.21 |
| (1) % of the volume of soybean locked in tons. | |||||
| (2) % of estimated revenue in . |
All values are in US Dollars.
Balance Sheet
NET ASSET VALUE – NAV
| (R$ thousand) | 03/31/2020 | |
|---|---|---|
| Book | NAV | |
| BrasilAgro's Equity | 1,103,455 | 1,103,455 |
| Properties appraisal¹ | - | 1,564,011 |
| (-) Balance Sheet - Land Value (Investment Properties) | - | (821,560) |
| NAV - Net Asset Value | 1,103,455 | 1,845,906 |
| Shares | 62,104 | 62,104 |
| NAV per share | 17.77 | 29.72 |
| (1) 2019 Internal Appraisal (considering Arrojadinho and Rio do Meio Farms values according to the independent appraisal), net of taxes |
26
CASH AND CASH EQUIVALENTS
| Cash and Cash equivalents / Marketable Securities(R$ thousand) | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|
| Cash and Cash equivalents | 72,701 | 106,627 | -31.8% |
| Cash and Banks | 19,090 | 25,614 | -25.5% |
| Repurchase agreements | - | 12,632 | -100.0% |
| Bank deposit certificates | 53,611 | 46,262 | 15.9% |
| Finance Lease bills | - | 22,119 | -100.0% |
| Marketable securities | 7,027 | 4,038 | 74.0% |
| Bank deposit certificates | 7,027 | 3,983 | 76.4% |
| Treasury financial bills | - | 55 | n.a. |
| Restricted Marketable securities | 9,374 | 9,114 | 2.9% |
| Banco do Nordeste (loan guarantees) | 9,374 | 9,114 | 2.9% |
| Total | 89,102 | 119,779 | -25.6% |
CLIENTS
| (R$ thousand) | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|
| Sugarcane Sales | 21,991 | 27,623 | -20.4% |
| Grains Sales | 28,157 | 36,546 | -23.0% |
| Cattle Raising Sales | 2,018 | 1,210 | 66.8% |
| Leases and Rents | 14,250 | 6,954 | 104.9% |
| Machinery Sales | 238 | 121 | 96.7% |
| Farm Sales | 65,960 | 41,351 | 59.5% |
| 132,614 | 113,805 | 16.5% | |
| Provision for doubtful accounts | (1,257) | (1,159) | 8.5% |
| Current total | 131,357 | 112,646 | 16.6% |
| Machinery Sales | 333 | - | n.a. |
| Farm Sales | 229,012 | 180,597 | 26.8% |
| Non-current total | 229,345 | 180,597 | 27.0% |
27
INVENTORIES
| (R$ thousand) | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|
| Soybean | 54,846 | 54,581 | 0.5% |
| Corn | 1,164 | 11,116 | -89.5% |
| Bean | 233 | - | n.a. |
| Cotton | 617 | 4,349 | -85.8% |
| Livestock | 40,273 | 37,122 | 8.5% |
| Other crops | 960 | 255 | 276.5% |
| Agricultural Products | 98,093 | 107,423 | -8.7% |
| Supplies | 24,309 | 26,767 | -9.2% |
| Total | 122,402 | 134,190 | -8.8% |
The Company ended 9M20 with an inventory of 42,400 tons of soybean, 2,700 tons of corn, 100 tons of cotton, 200 tons of bean and 21,400 head of cattle. At the end of 9M19, the Company’s inventory was 83,900 tons of soybean, 15,600 tons of corn and 21,000 head of cattle.
Cattle biological assets are measured at fair value and controlled in accordance with two methodologies: 12 to 15-month calves and steers (heifers) are controlled and valued by head, while older animals are controlled by weight.
| Inventories - Cattle Raising | Total Heads | Value(R$ thousand) | |
|---|---|---|---|
| In June 30, 2019 | 20,865 | 37,122 | |
| Aquisition, Birth | Aquisition Expenses | 9,912 | 10,115 |
| Handling Expenses | - | 11,646 | |
| Sales | (9,183) | (21,426) | |
| Deaths | (243) | (369) | |
| Exchange variation | - | 3,791 | |
| Fair value variation | - | (606) | |
| In March 31, 2020 | 21,351 | 40,273 |
28
INDEBTEDNESS
| (R$ thousand) | Expiration | Annual Interest Tax - % | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|---|---|
| Short term | |||||
| Financing for Agricultural Funding | Jul-20 | Pre 1.80 + CDI rate 7.00 | 11,412 | 38,588 | -70.4% |
| Financing for Agricultural Funding (Guarani) | Jan-21 | Pre 7.22 to 8.25 | 29,333 | 18,364 | 59.7% |
| Financing of Projeto Bahia | Sep-20 | Pre 3.50 to 9.00 | 3,139 | 6,243 | -49.7% |
| Financing of Working Capital | May-20 | Pre 10.50 | 5,235 | - | n.a. |
| Machinery and Equipment Financing | Sep-20 | TJLP + 3.73<br>Pre 8.50 to 10.50 | 1,521 | 1,431 | 6.3% |
| Sugarcane Financing | Aug-20 | TJLP + 2.70 to 3.80<br>Pre 6.14 to 10.00 | 35,815 | 1,401 | n.a. |
| Debentures | Jul-20 | 106.50 and 110.00 of CDI rate | 43,803 | 10,581 | 314.0% |
| 130,258 | 76,608 | 70.0% | |||
| Long term | - | - | 0.0% | ||
| Financing of Agricultural Costs | Aug-24 | Pre 7.64 | 155,116 | - | n.a. |
| Financing of Projeto Bahia | Aug-23 | Pre 9.00 | 18,568 | 22,291 | -16.7% |
| Machinery and Equipment Financing | Jun-24 | TJLP + 3.73<br>Pre 8.50 to 10.50 | 3,469 | 4,111 | -15.6% |
| Sugarcane Financing | Sep-26 | TJLP + 2.70 to 3.80<br>Pre 6.14 to 10.00 | 33,609 | 42,081 | -20.1% |
| Debentures | Jul-23 | 106.50 and 110.00 of CDI rate | 102,241 | 140,762 | -27.4% |
| 313,003 | 209,245 | 49.6% | |||
| Total | 443,261 | 285,853 | 55.1% |
On March 31, 2020 and June 30, 2019, the balance of loans and financing was R$443.3 million and R$285.9 million, respectively. The payment of interest and principal totaled R$182.2 million in 9M20.
During the period, R$190.8 million were also disbursed to finance the cost of sugarcane, soybean, corn and cotton operations.
The average cost of debt is 5.9% p.a., with an average maturity of 1.5 years.
FINANCE LEASES - IFRS 16
With the adoption of IFRS 16, the Company opted for the modified retrospective method, considering the value of the right of use of the asset measured at the amount equivalent to the lease liability, calculated at present value based on the lessee’s incremental borrowing rate on the transition date, classified as financial leases.
Therefore, the value of the right of use of the asset and its equivalent value in the lease liability are now calculated at present value. Asset values, after being marked to market, will be monthly recognized in the cost of production account, according to the respective fraction of each contract, and also updated by the variation of the soybean or sugarcane bag in Reais.
Currently, the Company’s main contracts subject to IFRS 16 refer to agricultural partnership and land lease operations, in addition to other less relevant contracts related to vehicle, property and machinery leases.
29
Liabilities will be recognized whenever there is an effective lease payment, in addition to periodic updating by the variation of the soybean or sugarcane bag and adjustment to present value. The impacts of the adjustment to present value will be recognized in the Financial Result.
For more information, please see Notes 14 and 27 in the Interim Financial Information.
| (R$ thousand) | Nature | 03/31/2020 | 06/30/2019 | Change | ||||
|---|---|---|---|---|---|---|---|---|
| Short Term | ||||||||
| Sugarcane Finance Leasing | Partnership III | 325 | 254 | 28.0% | ||||
| Operating Leases | - | 33,562 | 21,133 | 58.8% | ||||
| 33,887 | 21,387 | 58.4% | ||||||
| Long Term | ||||||||
| Sugarcane Finance Leasing | Partnership IV | 48,420 | 20,943 | 131.2% | ||||
| Operating Leases | - | 100,012 | - | n.a. | ||||
| 148,432 | 20,943 | n.a. | ||||||
| Total | 182,319 | 42,330 | 330.7% | |||||
| (R$ thousand) | 06/30/2019 | IFRS 16 InitialAdoption | ExchangeVariation | Updates | Payment | New contracts | 03/31/2020 | Change |
| Sugarcane Finance Leasing - Partenership III | 254 | - | - | 71 | - | - | 325 | -21.8% |
| Sugarcane Finance Leasing - Partenership IV | 20,943 | - | - | 27,477 | - | - | 48,420 | -56.7% |
| Operating Leases | 2,040 | - | - | - | (2,040) | 5,604 | 5,604 | -63.6% |
| Operating Leases - IFRS 16 | 19,093 | 92,794 | (255) | 10,945 | (23,573) | 28,966 | 127,970 | -85.1% |
| Total | 42,330 | 92,794 | (255) | 38,493 | (25,613) | 34,570 | 182,319 | -76.8% |
PROPERTIES FOR INVESTMENT
The fundamental pillars of the Company’s business strategy are the acquisition, development, exploration and sale of rural properties suitable for agricultural activities. The Company acquires rural properties with significant potential for generating value, subsequently transforming the assets and carrying out profitable agricultural activities on them.
Once we acquire our rural properties, we begin to implement high-value added crops and transform these rural properties by investing in infrastructure and technology. In line with our strategy, when we deem a rural property has reached its optimal return, we sell it to capture the capital gains.
The rural properties acquired by the Company are booked at their acquisition cost, which does not exceed their realized net value, and are recognized under “Non-Current Assets".
Properties for investment are evaluated at their historical cost, plus investments in buildings, improvements and the clearing of new areas, less accrued depreciation, in accordance with the same criteria detailed for fixed assets.
30
| (R$ thousand) | Acquisition value | Buildings and improvements | AreaOpening | Construction in progress | Investment Properties |
|---|---|---|---|---|---|
| Initial Balance | 410,561 | 39,658 | 78,832 | 19,666 | 548,717 |
| In June 30, 2019 | |||||
| Acquisitions | 30 | 115 | 424 | 11,425 | 11,994 |
| Acquisitions - Merger of Agrifirma | 197,710 | 7,906 | - | - | 205,616 |
| Reductions | (1,988) | (5) | (487) | - | (2,480) |
| (-) Depreciation/ Amortization | - | (1,933) | (5,597) | - | (7,530) |
| Cumulative Translation Adjustment | 47,482 | 3,419 | 12,991 | 1,351 | 65,243 |
| In March 31, 2020 | 653,795 | 49,160 | 86,163 | 32,442 | 821,560 |
The “Acquisition – Merger of Agrifirma” line highlights the additions to Properties for Investment arising from the transaction concluded in January 2020.
DEPRECIATION – AREA OPENING
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Maintenance | (1,433) | (623) | 130.0% | (2,276) | (1,570) | 45.0% |
| Opening¹ | (611) | (1,640) | -62.7% | (3,321) | (2,856) | 16.3% |
| Total | (2,044) | (2,263) | -9.7% | (5,597) | (4,426) | 26.5% |
| (1) During the 2018/2019 haverst year the opening depreciation rate was adjusted |
CAPEX – PROPERTY, PLANT AND EQUIPMENT
| (R$ thousand) | Buildings and improvements | Equipments and facilities | Machinery | Furniture and untensils | Construction in progress | Sugarcane | Property, Plant and Equipment |
|---|---|---|---|---|---|---|---|
| Initial Balance | 111 | 13,774 | 11,022 | 1,044 | - | 81,901 | 107,852 |
| In June 30, 2019 | |||||||
| Acquisitions | - | 1,014 | 1,926 | 169 | 96 | 14,292 | 17,497 |
| Acquisitions - Merger of Agrifirma | - | - | 14,278 | 1,357 | - | - | 15,635 |
| Reductions | - | (34) | (890) | (10) | - | - | (934) |
| Transfers | 75 | 125 | - | - | (96) | (104) | - |
| (-) Depreciation/ Amortization | (35) | (1,381) | (3,610) | (132) | - | (10,901) | (16,059) |
| Cumulative Translation Adjustment | - | 26 | 676 | 56 | - | - | 758 |
| In March 31, 2020 | 151 | 13,524 | 23,402 | 2,484 | - | 85,188 | 124,749 |
31
The Company was the first agricultural production company to list its shares on the Novo Mercado segment of B3 (São Paulo Stock Exchange) and was also the first Brazilian agribusiness company to list its ADRs (American Depositary Receipts) on the NYSE (New York Stock Exchange).
Share Performance
On May 6, 2020, BrasilAgro’s shares (AGRO3) were traded at R$21.10, resulting in a market cap of R$1.3 billion, while its ADRs (LND) were traded at US$2.81.
| HIGHLIGHTS - AGRO3 | 9M20 | 9M19 |
|---|---|---|
| Average Daily Trade Volume (R$) | 1,908,327 | 842,069 |
| Maximun (R$ per share) | 20.75 | 15.46 |
| Mininum (R$ per share) | 13.80 | 12.09 |
| Average (R$ per share) | 17.31 | 13.83 |
| Closing Quote (R$ per share) | 17.35 | 14.75 |
| Variation in the period (%) | 9.55% | 21.57% |
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| Weights and Measures used in Agriculture | |
|---|---|
| 1 ton | 1,000 kg |
| 1 Kilo | 2.20462 pounds |
| 1 pound | 0.45359 kg |
| 1 acre | 0.1840 bushel |
| 1 hectare (ha) | 2.47105 acres |
| 1 hectare (ha) | 10,000 m2 |
| 1 bushel | 5.4363 acres |
| Soybean | |
| 1 bushel of soybean | 60 pounds |
| 1 bags of soybean | 60 kg |
| 1 bushel/acre | 67.25 kg/ha |
| 1.00 US$/bushel | 2.3621 US/bag |
| Corn | |
| 1 bushel of corn | 56 pounds |
| 1 bags of corn | 60 kg |
| 1 bushel/acre | 62.77 kg/ha |
| 1.00 US$/bushel | 2.3621 US/bag |
| Cattle | |
| 1 arroba | ~33.1 pounds |
| 1 arroba (including carcass) | ~66.2 pounds |
All values are in US Dollars.
34
| (R$ thousand) | 3Q20 | 3Q19 | Change | 9M20 | 9M19 | Change |
|---|---|---|---|---|---|---|
| Revenues from Farm Sales | - | - | n.a. | 24,052 | 130,205 | -82% |
| Revenues from grains | 58,164 | 14,406 | 304% | 141,307 | 75,885 | 86% |
| Revenues from cotton | 4,332 | - | n.a. | 12,927 | - | n.a. |
| Revenues from sugarcane | 9,893 | 1,028 | n.a. | 150,101 | 118,764 | 26% |
| Revenues from cattle raising | 7,216 | 2,762 | 161% | 21,004 | 11,220 | 87% |
| Revenues from leasing | 4,958 | 1,595 | 211% | 9,553 | 5,660 | 69% |
| Other revenues | 931 | 759 | 23% | 1,174 | 1,042 | 13% |
| Deductions from gross revenue | (4,243) | (895) | 374% | (6,965) | (5,904) | 18% |
| Net Sales Revenue | 81,251 | 19,655 | 313% | 353,153 | 336,872 | 5% |
| Change in fair value of biological assets and agricultural products | 39,276 | 11,376 | 245% | 119,721 | 54,772 | 119% |
| Impairment | (629) | (149) | 322% | (1,111) | (436) | 155% |
| Net Revenue | 119,898 | 30,882 | 288% | 471,763 | 391,208 | 21% |
| Cost of Farm Sale | - | - | n.a. | (3,356) | (23,944) | -86% |
| Cost of agricultural products sale | (77,213) | (12,995) | 494% | (309,605) | (172,711) | 79% |
| Gross Profit | 42,685 | 17,887 | 139% | 158,802 | 194,553 | -18% |
| Selling Expenses | 1,265 | (3,190) | n.a. | (5,146) | (6,098) | -16% |
| General and Administrative Expenses | (8,988) | (7,455) | 21% | (27,996) | (24,538) | 14% |
| Depreciation and Amortization | (414) | (156) | 165% | (1,066) | (432) | 147% |
| Personnel expenses | (5,291) | (5,219) | 1% | (18,604) | (16,717) | 11% |
| Expenses with services providers | (1,864) | (1,005) | 85% | (3,892) | (3,031) | 28% |
| Leases and Rents | (48) | (212) | -77% | (218) | (630) | -65% |
| Others expenses | (1,371) | (863) | 59% | (4,216) | (3,728) | 13% |
| Other operating income/expenses, net | (1,707) | (40) | n.a. | (2,047) | (557) | 268% |
| Equity pick up | (26) | 1,174 | n.a. | (89) | 1,144 | n.a. |
| Financial result | (15,293) | (5,967) | 156% | (24,913) | (1,841) | n.a. |
| Financial income | 137,645 | 44,098 | 212% | 264,265 | 247,608 | 7% |
| Interest on Financial Investments | 907 | 1,048 | -13% | 3,947 | 4,800 | -18% |
| Interest on assets | 1,702 | 113 | n.a. | 2,180 | 352 | n.a. |
| Foreign exchange variations | 5,168 | 3,735 | 38% | 8,615 | 16,391 | -47% |
| Income from leasings' present value adjustment | 1 | 2,173 | -100% | 837 | 9,370 | -91% |
| Income from receivables from farm sales' present value adjustment | 53,537 | 17,371 | 208% | 111,164 | 123,633 | -10% |
| Realized results with derivatives | 25,119 | 9,860 | 155% | 32,905 | 47,018 | -30% |
| Unrealized results with derivatives | 51,211 | 9,798 | 423% | 104,617 | 46,044 | 127% |
| Financial expenses | (152,938) | (50,065) | 205% | (289,178) | (249,449) | 16% |
| Interest expenses | (243) | (67) | 263% | (762) | (248) | 207% |
| Bank charges | 2 | (176) | n.a. | (222) | (1,061) | -79% |
| Interest on liabilities | (8,485) | (5,145) | 65% | (17,479) | (14,604) | 20% |
| Foreign exchange variations | (5,311) | (4,031) | 32% | (8,309) | (16,479) | -50% |
| Expense from leasings' present value adjustment | (15,784) | (8,655) | 82% | (34,068) | (18,357) | 86% |
| Expense from receivables from farm sales' present value adjustment | (7,562) | (17,053) | -56% | (53,611) | (118,852) | -55% |
| Realized results with derivatives | (63,551) | (7,454) | n.a. | (74,170) | (30,239) | 145% |
| Unrealized results with derivatives | (52,004) | (7,484) | n.a. | (100,557) | (49,609) | 103% |
| Profit (loss) before income and social contribution taxes | 17,936 | 2,409 | n.a. | 98,611 | 162,663 | -39% |
| Income and social contribution taxes | 6,689 | 1,543 | 334% | (13,008) | (22,587) | -42% |
| Profit (loss) for the period | 24,625 | 3,952 | n.a. | 85,603 | 140,076 | -39% |
| Outstanding shares at the end of the period | 5,215,385 | - | n.a. | 62,104,301 | 56,888,916 | 9% |
| Basic earnings (loss) per share - R$ | 0.31 | 0.07 | 341% | 1.38 | 2.46 | -44% |
35
| Assets (R$ thousand) | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|
| Current assets | |||
| Cash and Cash equivalents | 72,701 | 106,627 | -32% |
| Marketable securities | 7,027 | 4,038 | 74% |
| Derivative financial instruments | 13,291 | 5,906 | 125% |
| Trade accounts receivable | 151,892 | 125,320 | 21% |
| Inventories | 82,128 | 97,068 | -15% |
| Biologial assets | 203,635 | 99,881 | 104% |
| Transactions with related parties | 721 | 1,987 | -64% |
| Long term assets held for sale | 25,078 | - | n.a. |
| 556,473 | 440,827 | 26.2% | |
| Non-current assets | |||
| Biological assets | 22,994 | 23,235 | -1% |
| Marketable securities | 9,374 | 9,114 | 3% |
| Derivative financial instruments | 1,028 | 1,013 | 1% |
| Diferred taxes | 22,164 | 20,510 | 8% |
| Accounts receivable and other credits | 256,363 | 203,533 | 26% |
| Investment properties | 821,560 | 548,717 | 50% |
| Investments | 5,719 | 1,256 | n.a. |
| Property, plant and equipment | 124,749 | 107,852 | 16% |
| Intangible assets | 5,685 | 1,557 | 265% |
| Using rights | 106,014 | - | n.a. |
| 1,377,150 | 916,787 | 50.2% | |
| Total assets | 1,933,623 | 1,357,614 | 42.4% |
36
| Liabilities (R$ thousand) | 03/31/2020 | 06/30/2019 | Change |
|---|---|---|---|
| Current liabilities | |||
| Trade accounts payable and other obligations | 94,295 | 98,070 | -4% |
| Loans and financing | 130,258 | 76,608 | 70% |
| Labor obligations | 9,145 | 17,093 | -46% |
| Derivative financial instruments | 13,402 | 11,055 | 21% |
| Transactions with related parties | 2,642 | 2,405 | 10% |
| Financial Leasings | 33,887 | 21,387 | 58% |
| 283,629 | 226,618 | 25.2% | |
| Non-current liabilities | |||
| Trade accounts payable and other obligations | 76,840 | 19,451 | 295% |
| Loans and financing | 313,003 | 209,245 | 50% |
| Diferred taxes | 6,799 | - | n.a. |
| Financial Leasings | 148,432 | 20,943 | 609% |
| Provision for legal claims | 1,465 | 824 | 78% |
| 546,539 | 250,463 | 118.2% | |
| Total liabilities | 830,168 | 477,081 | 74.0% |
| Equity | |||
| Share Capital | 699,811 | 584,224 | 20% |
| Capital reserves | (34,292) | 3,645 | n.a. |
| Treasury shares | (31,501) | (35,208) | -11% |
| Profits reserves | 281,052 | 281,052 | 0% |
| Proposed additional dividends | - | 7,944 | n.a. |
| Comprehensive Income | 102,782 | 38,876 | 164% |
| Accumulated profit | 85,603 | - | n.a. |
| Total equity | 1,103,455 | 880,533 | 25.3% |
| Total liabilities and equity | 1,933,623 | 1,357,614 | 42.4% |
37
| (R$ thousand) | 9M20 | 9M19 | Change |
|---|---|---|---|
| CASH FLOW OF OPERATING ACTIVITIES | |||
| Profit (loss) for the period | 85,603 | 140,076 | -39% |
| Adjustments to reconcile net income | |||
| Depreciation and amortization | 21,083 | 20,846 | 1% |
| Farm Sales Gain | (20,696) | (106,261) | -81% |
| Residual value of fixed assets | 443 | 313 | 42% |
| Written-off in investment properties | 492 | 10,652 | -95% |
| Equity Pickup | 89 | (1,144) | n.a. |
| Gain unrealized results with derivatives | (4,060) | 3,565 | n.a. |
| Exchange rate, monetary and financial charges | 46,275 | 18,778 | 146% |
| Adjustment to present value for receivables from sale of farms, machinery and financial leasings | (61,677) | (4,784) | n.a. |
| Share based Incentive Plan (ILPA) | 1,510 | 1,265 | 19% |
| Income and social contribution taxes | 5,145 | 14,512 | -65% |
| Fair value of biological assets and agricultural products and depletion of harvest | (119,721) | (54,772) | 119% |
| Provision (Reversal) of impairment of agricultural products after harvest | 1,111 | 436 | 155% |
| Allowance for doubtful accounts | (3,534) | 908 | n.a. |
| Provisions for lawsuits | 581 | (402) | n.a. |
| (47,356) | 43,988 | n.a. | |
| Changes in the Short Term Operating Capital | |||
| Trade accounts receivable | 40,424 | 38,111 | 6% |
| Inventories | 16,246 | (48,222) | n.a. |
| Biological Assets | 48,621 | (42,059) | n.a. |
| Recoverable Taxes | (1,833) | (2,557) | -28% |
| Derivative Transactions | 2,306 | 7,104 | -68% |
| Other assets | (4,137) | (4,835) | -14% |
| Suppliers | (13,631) | 11,555 | n.a. |
| Related parties | (557) | (92) | n.a. |
| Taxes payable | 30,476 | (5,378) | n.a. |
| Income tax and social contribution | - | 5,647 | -100% |
| Labor obligations | (13,133) | (5,936) | 121% |
| Advance from customers | (3,568) | (20,558) | -83% |
| Operating Leases | (18,890) | 13,681 | n.a. |
| Other obligations | 430 | 3,456 | -88% |
| Net Cash generated by (used in) operating activities | 35,398 | (6,095) | n.a. |
| CASH FLOW OF INVESTMENT ACTIVITIES | |||
| Additions to immobilized and intangible | (17,790) | (28,427) | -37% |
| Additions to property for investments | (11,994) | (22,269) | -46% |
| Redemption of (investment in) marketable securities | (4,012) | 20,079 | n.a. |
| Reduction (increase) of Investment and Participation | (4,127) | - | n.a. |
| Advances for Future Capital Increases | 1,071 | - | n.a. |
| Receivables from farm sale | - | (48) | n.a. |
| Net Cash generated by (used in) investment activities | 3,742 | 23,650 | -84% |
| CASH FLOW OF FINANCING ACTIVITIES | |||
| Raising of Loans and financing | - | - | n.a. |
| Interest from Loans and Financing | 190,769 | 55,252 | 245% |
| Payment of loans and financing | (83,081) | (2,091) | n.a. |
| Generated (provided) net cash by financing activities | (50,000) | (40,999) | 22% |
| Increase (decrease) in cash and cash equivalents | (41,457) | (36,671) | 13% |
| FX Variation in cash and cash equivalents | (39,169) | (49,781) | -21% |
| Cash and cash equivalents initial balance | 5,243 | 465 | n.a. |
| Cash and cash equivalents - Merger with Agirfirma | 106,627 | 104,314 | 2% |
| Cash and cash equivalents final balance | 72,701 | 54,998 | 32% |
| (33,926) | (49,316) | -31% |
38
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 7, 2020. | |||
|---|---|---|---|
| By: | /s/ Gustavo Javier Lopez | ||
| Name: | Gustavo Javier Lopez | ||
| Title: | Administrative Officer and Investor Relations Officer |