Good morning, ladies and gentlemen, and thank you for waiting. At this time, we'd like to welcome everyone to Adecoagro Fourth Quarter 2013 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Hernan Walker, Investor Relations Manager. We would like to inform you that this event is being recorded. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Adecoagro's management and on the information currently available to the company. They involve risks, uncertainties and assumptions because they relate to further (sic) [future] events and therefore depend on circumstances that may or may not occur in the future. Investors should understand the general economic conditions, industry conditions and other operating factors that could affect the future results of Adecoagro and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Mr. Mariano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning, everyone, and thank you for joining our call. We've concluded the 2013 fiscal year with excellent operating results. Our Sugar, Ethanol and Energy business had a very good performance during the year. Our mills crushed 6.4 million tons of sugarcane as a result of the successful completion of the first phase of the Ivinhema mill, the maximization of operational efficiencies from the Angelica mill and the expansion of our sugarcane plantation, which reached 100,000 hectares. We are currently commencing the construction of the second phase of Ivinhema, which is expected to increase the capacity of our cluster to 9 million tons per year by 2015. As we consolidate our cluster, we begin to capture the efficiencies and synergies generated by our 2 state-of-the-art mills surrounded by 1 large sugarcane plantation. Some examples include reduced average [indiscernible] to the mills, optimized sugarcane logistics, as well as harvest efficiencies opportunities. Our focus is to continue expanding our sugarcane plantation. During 2013, we planted 25,000 hectares, even 10% higher than the previous year. All of this will allow Adecoagro to become one of the most efficient and low-cost producers of sugar, ethanol and energy. In the Farming business, we concluded the 2013 fiscal year with significant improvements in our crops, rice and dairy segments, which enhanced our EBITDA generation. Our Land Transformation business once again delivered excellent results. Adecoagro monetized 5 farms, each at the premium to the Cushman & Wakefield independent appraisal of September 2013. These farm sales reflect the execution of our strategy of generating more attractive returns for our shareholders. Accordingly, our Board of Directors approved the implementation of a share repurchase program to enhance our ROICs. In essence, our focus is set on achieving the highest operational efficiencies in order to increase the cash generated by each of our businesses. We are confident that 2014 will be a good year driven by the increased production and operational efficiencies that improve our production costs, combined with the recent recovery in commodity prices. Now I would like to ask Charlie to walk you through the main operational and financial highlights of the quarter. Charlie, please go ahead.

Thank you, Mariano, and good morning, everyone. I would like to walk you through a few slides that reflect the main operating and financial highlights of the fourth quarter and the 2013 fiscal year. Starting on Slide 2. I would like to go over the operating performance of the Sugar, Ethanol and Energy business. Our mills crushed 1.8 million tons of sugarcane during the fourth quarter and 6.4 million in aggregate during 2013, respectively 29% and 43% higher than the previous year. As you may see on the bottom chart, this growth in milling was driven by the ramp-up of the Ivinhema mill, which started operations in April 2013, and higher capacity utilization at the Angelica and UMA mills. Supplying our mills with sugarcane to reach this level of milling was possible as a result of our 16% expansion of our sugarcane plantation, our 5% increase in sugarcane yields and the opportunistic acquisition of 600,000 tons of cane during the harvest from other farmers and mills. We expect harvesting and crushing operations at our mills to continue improving as our cluster in Mato Grosso do Sul is consolidated, capturing synergies and economies of scale. Let's turn to Page 3, which illustrates the monthly rainfall and TRS content at our cluster in Mato Grosso do Sul compared to the historical 5-year average. Average TRS at our operations reached an average of 127 kilos per ton of sugarcane in the fourth quarter and 126 kilos per ton during the full year, 9% and 5%, respectively, below the historical average, partially offsetting the growth in crushing volumes. As you may see on the chart, TRS levels were inevitably affected by excess rains during the month of June and the strong frost that hit the Brazilian Center-South region during mid-July. Let's move on to…

[Operator Instructions] Our first question comes from Giovana Araujo of Itau BBA.

My first question is about commodity prices. Your fourth quarter sales prices of wheat, rice and milk were substantially above last year, 64% for wheat, 39% for milk, 36% for rice. What's the main reason behind that year-over-year growth besides the strength in the international market?

Giovana, this is Mariano. We couldn't understand anything on the question. Can you speak a little bit louder? We were not hearing well.

Okay. My question is about commodity prices. We saw a substantial growth in your wheat, rice and milk prices year-over-year, right? And I would like to know, what's the main reason behind that growth besides the strength in the international market?

Sure. I would ask Marcelo Sanchez to answer your question.

This is Marcelo. Regarding -- the first of the commodities mentioned is the wheat. Basically, the prices that -- the price increase that you're seeing is basically due to the internal Argentinian situation that made up -- captured better prices locally in Argentina. Argentina has a positive average price compared to external prices. That's basically what we saw in wheat. In rice, we have been very active. We mentioned during the last conference call that we do have -- in previous earnings releases that we've been really active in going into destination with our rice. We've been participating actively in big government tenders, and that gave us a chance of improve our price in the rice business year-over-year. And in the last commodity that you're asking, regarding dairy, as you'd probably be aware, the worldwide situation regarding dairy prices influenced positively in our results during last year in dairy.

Okay. And my second question is about Sugar and Ethanol. If you could please detail what's the impact of the drought in your expected yield for 2014, '15 and also crushing and if you see any room for improvements in yields on the back of the recent rains in the region.

Giovana, the impact of the drought that we've seen is much higher in the Center-South than in our own operation. As you see on some of -- you saw in some of the charts, the rains that we had during January and December were below average, but during February and March, we were at average rainfall in our cluster. So we think that, in our cluster, we may have some impact compared to what we were budgeting. But we don't think that impact is going to be too important. Also, I would like to add that, regarding the yields, we've continued to see this -- our yields in Mato Grosso do Sul to continue to improve year-over-year because of the reasons we've already mentioned in our previous call that the sugarcane plantation is improving every time and that, as the soil is better prepared and starts with the second cycle of sugarcane, we can expect our sugarcane yields to continue evolving positively in the cluster.

Our next question is from Rodrigo Mugaburu of Morgan Stanley.

My question is also on the strategy on the sugarcane segment. I was looking at the chart with the investment meeting for the second phase of the mill of Ivinhema, and I was wondering if -- during the situation in the sector in Brazil, I'm sure that there are cheaper -- I mean, is there any room for M&A? I mean, I'm sure there are cheap, very cheap mills out there that would be much cheaper than the greenfield at this point. Did you consider that? I'm sure that there are synergies because, I mean, Ivinhema is already up and running in the cluster, but given how cheap the sector is getting, are you thinking -- is there any room for M&A in the region?

Rodrigo, yes, of course that we are always considering a potential M&A. We've been looking at many. But here, it is important to understand the synergies of this second phase of Ivinhema. The synergies that we are getting there and the IRRs that we get in increasing the capacity in the cluster are much, much higher than any of the different alternatives that we see on the M&A. And we've been looking at many different alternatives in the sector, and as you mentioned, at, in theory, cheap prices. But when you go to the IRR or the returns that you are getting to the money that we would be investing, completing the cluster is by far the best use of our money that we are getting.

Our next question is from Enrico Grimaldi of BTG Pactual.

My question is regarding the Ivinhema mill. You announced that you accelerated recent expansion, right, with the second expansion phase now adding 3 million tons of additional capacity instead of 2 million tons before, right, the second phase specifically. I just want to confirm with you guys if that is, in fact, only an anticipation in the schedule of the greenfield or if the final Ivinhema capacity might actually be higher than the estimated 6.3 million tons we have for 2017. And if it's only an anticipation, right, what changed that makes you now able to ramp up Ivinhema capacity faster? It's more land availability? Is it a better sugar price scenario? Is it good momentum to acquire machinery and plant equipment? I just want to understand these dynamics and what has changed. That's my first question.

Enrico, we are anticipating. We are not budgeting a higher number on the long run. So regarding the first part of your question is that we are anticipating. And we are -- in the second part of your question is we are doing pretty well with the planting. As I mentioned, we planted 25,000 hectares in 2013. That was 10% higher than 2012. We are very optimistic on how we are planting during 2014, and we think that we can achieve this planting. And probably, the planting phase is the most important -- is what gives us the growth base. So this is doing well. And when you start to analyze -- or when we were revising the second phase, there were some alternatives and some opportunities to acquire this fluidized boiler plus some other things that were a little bit different than the original plan. Maybe Marcelo Vieira can add a little bit more, but there were clear opportunities there where we -- even less than what we were budgeting, we could increase this crushing capacity on 3 million instead of the 2 million originally planned. This, of course, accelerates our cash flow generation and so improves the IRR of this whole project. I think that's the main. Marcelo Vieira, if you want to add something, let us know.

Well, I would say that the revision of this project was mainly due to our improving the technical design of the mill, using more efficient equipment, so that we can grow capacity without significant additional CapEx. And this improves the return of the project, but this doesn't modify the overall final design of the project to reach the capacity of 6 million tons.

My second question, and I think Marcelo can help on that, it's actually a follow-up on the first question, right. I can also see on your presentation here that your cost, the second phase cost, is way lower than the first phase cost you will have on a real export ton basis. So if you could please share with us the main reason why, I mean, the second expansion phase is so much cheaper than the first phase, it will be great. I see that most of it is in agricultural equipment, but if you could talk about -- a little more about it, I would appreciate.

Well, in every new greenfield project, the second or the third phases are always less expensive than the first one because the first one includes all the main infrastructure for the project, all the main buildings, all the main houses, all the main storage. So the second phase is mainly additional equipment or completion of equipment that was designed to have a higher capacity. That's why second phase always has lower CapEx than the first one.

Enrico also asked, Marcelo, a single clarification on the presentation on Page 9. The industrial equipment is $388 million and $282 million for the second phase, and the agricultural equipment is $78 million and $174 million. So they are inverted. The numbers are correct, but they are inverted on the industrial equipment and agricultural equipment. That's what Marcelo was saying.

And of course, what I said is about the industry. Regarding plantation, there's no meaningful difference.

[Operator Instructions] And our next question is from Isabella Simonato of Bank of America Merrill Lynch.

Regarding Sugar, I was wondering if you accelerated or not the hedges during this first quarter. And what's your view considering all the weather issues in Brazil and the potential decline in supply?

Isabella, I'm going to ask Marcelo Sanchez, our Commercial Director, to answer your question. Marcelo?

Isabella, as you know, the expectation on the harvest is where most of the attention is now. And our hedges, as of today, it is around 60%. We are still -- we're really pretty constructive on the second semester in terms of prices for the sugar, as well as ethanol is out [ph]. I think that we're going to be able to get better prices in the next half of the year.

Can you just confirm the amount of the hedges, big 0?

Yes.

Our next question is from Robby John [ph] of HSBC.

I had 2 questions. The first one is just following up on the Brazilian drought. Do you have an expectation what would -- what is the South-Center sugarcane crushing to be expected in 2014, '15? And my second question is on the farming revenues. What cost per hectare increases do you expect in 2014 versus what we saw in 2013?

Sorry, can you repeat again the first part of the question?

Sure. And the first question was, do you have an expectation of how much sugarcane will be crushed in the South-Center region? As of today, what is the expectation for the upcoming harvest?

Okay, sure. I'm going to ask Marcelo Sanchez to answer the first part of your question.

We're still thinking on -- this is -- our expectation is around 570 million tons of crushing expected for this year. But as you know, there's something that could be still influencing this number. I mean, there's nothing that could be giving us a certain answer at this time. We're just starting the season now.

And Robby [ph], regarding the second part of your question whether the costs -- how the costs compare this year to the previous year, we see, for our company in particular, we continue to improve on the efficiencies. And this makes costs even lower than last year. In the rice, we have a clear improvement in the costs. So costs, you will certainly see lower costs than what we had in the previous year. In the rest of the crops, you will also see some improvement in terms of cost. And that's mainly in Argentina. In Uruguay, a little bit of improvement only. And on Brazil, also, a little bit of improvement on the crops and more improvement on the sugarcane because of the improvements of the efficiencies I was mentioning. And in general, for the market, I would see costs being a little bit better while the currencies weaken in each country.

Our next question is from Gabriel Lima of Bradesco.

My question is with regards to the peso devaluation, which you mentioned in your presentation. So I just wanted to get a sense on how do you see margins evolving. I know it's a bit early to say, but what would be the expected impact of this currency devaluation in your margins in the Farming business in Argentina, as well as a possible impact if you see impact in land prices in Argentina?

Sure, Gabriel. The devaluation is a clear impact on improvement -- of an improvement in margins. 80% of the sales are direct exports, so this clearly improves the margin, while 60% of the costs are in local currencies. So this combination makes a clear improvement on the margins or the expectation of the margins because of devaluation. And I would say that, for land prices, the impact is exactly the same. As you improve margins, you will expect to improve land prices and always in dollar terms. Specifically, in Argentina, the land farm is always discussed in dollar terms and never in local currency. And I think that was clear that demand of the farms is clear through our sales, also.

Okay. And just a follow-up on the dairy and rice performance, I guess. You mentioned favorable pricing for both segments. But I guess you have been doing some operational improvements as well. So I just wanted to understand how much of this margin improvements for rice and dairy was related to favorable pricing vis–à–vis the improvement, the operating improvement, you're doing in the both segments, please.

Yes. Difficult to split how much to each one, but I would say that the most important is probably the improvement on the operational efficiencies. While you talk on the dairy segment, the operational efficiencies are very clear because we finished our free-stall #2. And so we went from an improvement in the cow productivity of almost 10%. That improvement in our cow productivity is a direct revenue. And there are also improvements in cost efficiencies and especially talking on the conversion of each ton of food -- of feed that the cow receives converted into milk. So that improvement on the ratios of efficiency has the most important impact in the dairy segment. When I go to rice, I would say that there is a clear improvement on the use of water, the cost of production, the amount of people that we are using for each hectare. We are using different techniques. The teams are being consolidated every year. We are now stabilized for the second year with more or less the same amount of hectares that makes the teams much more efficient in all terms, including techniques like CO leveling and other things that we are specifically applying, combined with the improvement on the logistics, as Charlie was mentioning, with the sales, the commercial team that is now based in Uruguay and all the logistics going from the farm to the mills, each one of the mills, and the operation of each one of the mills, specifically Franck. That is a new mill that is now fully operational. So I think there is a huge improvement on all the operational efficiencies, and that is combined with okay prices

Our next question is from Viccenzo Paternostro of Credit Suisse.

My question is regarding the energy, the surplus of energy that you have. I would like to understand what's the volume exposed to spot price and the volume exposed to long-term contract. Basically, I'd like to understand what's going to be the benefit of the higher spot price, energy spot price, in Brazil, as we know that spot price skyrocketed more than double recently because of the drought. That's my question.

Okay. Thank you, Viccenzo. I will ask Marcelo Sanchez to answer this question.

Viccenzo, we have been closely monitoring the market, the expected market for the spot since December last year. And we left aside around 20% of the energy to be sold in the spot market, enjoying the spike in prices that we have been witnessing within the last 60 days. And then I think that this is going to be a constant for the whole year, for the whole this year, and the ratio -- the 80% remaining is already being contracted.

I simply add on, on this is we had the pile of bagasse from last harvest, and that's why we started producing energy at the beginning of March, and that's why we are taking specific advantage of today's spot prices. We are generating energy during March while we would become milling by the 25th of March.

Okay. Do you have any type of numbers, or at least a guidance, for these higher price in million dollars or any indication what's going to be the benefit for this higher spot price?

No, we don't give guidance. It's clear. You can make your own calculation. We started milling almost at the -- we started generating energy almost at the beginning of March, and we are making good money with the spot prices all this month.

[Operator Instructions] I'm showing no further questions. This concludes our question-and-answer session. At this time, I'd like to turn the floor back to Mr. Bosch for any closing remarks.

Finally, I would like to thank everyone for joining the call. I'll highlight that the company's in great shape, both from a financial and an operational standpoint. We are currently starting the harvest time, and all our teams are highly motivated to deliver strong results for our shareholders. So I look forward to meeting you in our upcoming investor relation event. Thank you, and have a great day.

Thank you. This does conclude today's presentation. You may disconnect your line at this time, and have a nice day.