Good morning, ladies and gentlemen and thank you for waiting. At this time we would like to welcome everyone to Adecoagro's 3Q ‘15 Results Conference Call. Today, with us we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; Mr. Marcelo Sanchez, Commercial Director and Mr. Hernan Walker, Investor Relations Manager. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question-and-answer section. At that time, further instructions will be given. [Operator Instructions]. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Adecoagro's management and on information currently available to the company. They involve risks, uncertainties and assumptions, because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also 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. As you all know, commodity prices have experienced a downward trend over the last couple of years. As of today, however we may be experiencing a turnaround in the economics of the environment in which we operate. We are convinced that this positive shift in the dynamics will apply to the sugar, ethanol and energy business in Brazil, as well as the farming business in Argentina, albeit for different reasons. Regarding the sugar, ethanol and energy business we are now in process of a more favorable pricing outcome. This is mainly driven by the global sugar requisite and by some specific measures that the Brazilian government and they took to promote the ethanol consumption. These were the price scenario would be strengthened by the impressive operational performance that we are achieving. We are reporting a significant improvement in our agriculture industrial operations, including 33% increase in total milling; 21% increase in TRS per hectare, resulting in a 37% increase in total production of sugar and ethanol measured in TRS equivalent; and a 54% increase in exported energy implying more than 70 KWh/ton of cane crushed, by far the highest ratio in the industry. At the same time the depreciation of the Brazilian real further dilutes our cost. It is worth noting the convenience on the timing of this positive outlook for our cash generation. As we previously stated, Adecoagro’s CapEx citing has come to end. This said, it’s the ideal conditions to reap the benefits in the short and medium term. Moving to the farming business, the positive outlook is related to the event or change in some economic policies that the following administration will potentially address. This may include a combination of the elimination of export per quarter, the…

Good morning, everyone. I would like to walk you through a few slides that reflect the main operational and financial highlights of the quarter. Let’s start on page 4, where we like to focus on sugarcane milling. During the third quarter of 2015, our mills crushed 3.2 million tons of sugarcane compared to 2.7 million tons in the third quarter of 2014. This 15% increase mainly explained by a 22% increase in milling per day as a result of the ramp-up of capacity at the Ivinhema mill, together with the higher milling efficiencies in all of our mills. This was partially offset by a 5% decrease in total effective milling days due to higher number of rainy days in the period. On a year-to-date basis sugarcane crushing reached 6.5 million tons, 33% higher year-over-year. In addition to the drivers I just explained for the third quarter, the cumulative growth reflects our strategy of accelerating the start of the 2015 harvest in each of our mills, in order to extend the harvest season and increase annual sugarcane crushing. This is reflected in the 11 initial days of effective milling in the first nine months of 2015 compared to the first nine months of 2014. This strategy was made possible by our focus on minimizing the inter-harvest maintenance and most importantly, by the growth in our sugarcane plantation and annual crop treatment. Let’s move to page five where I would like to highlight our agricultural productivity. As you can see in the top charts, our sugarcane yields in the third quarter of 2015 reached 86 tons per hectare, 11% higher than last year. In addition our TRS content increased 3% reaching a 141 kilos per ton of sugarcane. As a result of these two factors, sugarcane production per hectare increased 14% for…

Thank you [Operator Instructions]. Our first question comes from Thiago Duarte of BTG. Please go ahead.

Hello, Mariano; hello Carlos. Good afternoon everyone. I have two questions on the sugar and ethanol business. The first one you mentioned that you engaged in commercializing sugar from third parties during the quarter. Is that an ongoing strategy, something that you should do every once in a while and that we should expect and if that’s the case, I wonder how much you expect to be able to commercialize from third quarter sugar, that would be the first question. And the second quarter, if you look at your agricultural indicators in the sugar and ethanol division, you pretty much differ from what we’ve been seeing in the Center-South region of Brazil this year, especially with regards to TRS content per ton of cane. So just wondering why do you see that? What was different in terms of let’s say weather and some other factors? And now that you are stabilizing or reaching kind of full capacity in that cluster, what kind of agricultural yield and TRS per ton you expect to have on a more normalized and ongoing basis, that would be very helpful. Thank you.

Hello.

Yes, hello Thiago, thank you for your question. I’m going to ask Marcelo Sanchez to answer the first part of your question regarding the commercialization of sugar.

Hi Thiago, how are you? The reason why we are being engaged in third party commercialization is because we are always opportunistic in terms of taking advantage and serving positive arbitrage that the market is giving us. And I think that going forward, of course we will be in the market for taking those possibilities into our favor. It’s not going to be an important portion of our sales of course; I mean that’s it.

I will take the second part of your question regarding the productivity and the yields of the sugarcane that we are having in our regain compared to last year and compared to other regions. Since we decided to – since we choose this place to produce sugarcane, that the agro economic conditions of this area to produce sugarcane was key, this area has a very good range and straight out all around the year, so that’s the main difference compared to the traditional or more tradition regions for sugarcane. So in this case we do expect yields to be more consistent and to be high yields in terms of sugarcane per hectare and we also expect the TRS to be more similar all over the year. So we don’t expect a huge change in TRS all over the year. So we do expect that TRS, that will be consistent in line with what we’ve been having this year, all over the year. Basically we were always thinking on 85 to 90 tons of sugarcane per hectare and TRS between 133 and 140, so that’s the average that we’ve been always looking for and/or targeting and this year we are clearly achieving this. Because of all these things that Charlie explained in detail, there is this implementation of the pest controls, the selections of the right varieties and the selection of the right varieties and harvesting them at the right timing of the year is key. So those are all the things that we’ve been able to execute in order to finally make this happen.

Okay. So if you allow me a follow-up question on the margin side, I mean excluding the third party sugar sales, the EBITDA of 58% in the quarter, of course this might be a little bit volatile throughout the year, but on a full year basis and knowing that prices have recovered recently for both sugar and ethanol, is it fair to assume a similar level of margin, again excluding third party commercialization going forward.

Yes, I think it’s a fair assessment and should be in line with what you’re seeing or talking about.

Okay, thank you Mariano.

Our next question comes from Antonio Barreto of Itaú BBA. Please go ahead.

Hi guys, good afternoon. My first question is about your strategy or growth strategy. You guys are reaching a tipping point, I would say not only in the terms of the companies past years growth which has been very much focused on growing the sugar and ethanol assets, but also when I look at the market, sugar and ethanol price is better. We look at the elections in Argentina and their prospects for lower export taxes and evaluation. So where do you guys see the growth of the company coming from considering those two scenarios. Are you going to see more investments in sugar and ethanol or are you going to see more investments in Argentina, considering that you guys are going to deleverage over the coming three years.

Hi Antonio, thank you for your question. This is a question we’ve been receiving since there is a clarity that we are going to start being cash flow positive. So we are always thinking the same way. We analyze all the different opportunities that we have as a growth plan. So we have an interesting pipeline of alternatives that each one of them will depend on the return on invested capital that we expect for each one of them and that’s what we’ve been, we are going to be prioritizing. But within the different alternatives we also include paying back debt and we also include giving back the money to the shareholders, including through buyback or dividends. So there are three different alternatives are always in our place, a growth project, giving back the money to shareholders or reducing debt. So we’ve been always focused and very disciplined on this return on invested capital and we will continue with the same strategy.

Okay, thank you. And my second question is about the environment for the farming in Argentina after the elections. We know that both candidates talk about structural differences in terms of on the weighted effects, in terms of lower export taxes. I was wondering if could walk us through the current export tax structure for the industry? What is the tax rate for each crop and if you guys have heard anything more specific in the local press, what the two candidates say about the timeline of, let’s say a decrease in the export taxes, one would grow faster than the other. What kind of decrease would you expect? What they are talking to the local press, if you could walk us through that, it would be great? Thank you.

Okay, thank you Antonio. The current export taxes are soybean 35%, corn 20%, wheat 23% and rice 5%. On top of that, there are export quotas for corn and wheat that in general also reduces prices; that’s the current situation. Regarding what the two candidates are saying, both of them are saying clearly that they are going to reduce export taxes and both of them are talking about some kind of not using their quotas anymore, and both of them are saying that there will be some kind of evaluation. We know nothing else on what is being said in the press and what’s publicly said by both the candidates. Of course we talk with a group of people that is working with them on implementing specific policies, but there is nothing else to say than what they say publicly. So I think we need to wait for the elections and finally what they will implement. All of them are very positive measures for our cash generation.

Okay, thank you.

[Operator Instructions]. Our next question comes from Rodrigo Mugaburu of Morgan Stanley. Please go ahead.

Hi, thank you. Hi Mariano and Carlos. My question is also related to Argentina. Corn prices in Argentina are starting to move up. Pricing means some kind changes in the short term. So my question is, given this improved prices, could we see some increase in corn planted area now in December or the planted will be sensitive if they have no changes. And then a follow-up on the other one is, we went through that you have a wheat, corn and also soybeans. Should we expect them to be sold 100% until the end of the year or you might try to speculate a little bit about the outcome of the elections and potentially benefiting from our weaker currency or your tax change. Thanks.

Hi Rodrigo, yes I see clearly your point. As I always say we do follow a sustainable production model. This sustainable production model includes crop rotation within the different farms, but there is some flexibility. In the last two months we’ve been increasing the area of corn that we are planting this year and on top of what is included in this report, we are also increasing like additional 5% to 10% the hectares of corn, but we are switching from soybean second crop to corn or late corn.

Great, thanks. Regarding inventories, should we expect them to be sold, flowing that money into the fiscal year ’15 or something could go through in the next year.

Sorry, on the inventories on which crop.

Wheat, corn and also I see on the report, the inventory for soybeans.

Yes, so those are all flows that you will start seeing in the following months.

Okay, thanks.

[Operator Instructions]. Our next question comes from Viccenzo Paternostro of Credit Suisse. Please go ahead.

Hello everyone. Thanks for the questions. My first question is regarding the FX risks. I mean, it seems you managed the company in dollar terms, report is in dollar term and your debt is in dollars, but most of your EBITDA is in Brazil real and we had this huge depreciation of the currencies. So how do you access the risk of further depreciation? How could this affect your deleveraging problems? So that would be my first question. My second question is regarding sugar price. I mean you mentioned during the presentation that you would take the opportunity that the sugar price increased recently to increase the hedging. So I would like to know what’s your view, what’s the level. Do you think it makes sense to increase the leverage or how is your view on further sugar price hike. Thank you.

Hello Viccenzo. I’m going to ask Charlie to answer the FX question that you asked. Charlie.

Yes. Hi, referring our debt structure that we do have in Brazil, I would say that 40% is real denominated. That’s what, the most is mainly the debt that we got from the BNDES long term and 60% in dollar terms. The question is more related on the payback, on the way to payback. That’s matched to the inflows of dollars that we get from our export from sugar. So we always look at having more inflow of dollars compared to the debt that we have to pay in dollar terms. So our objective is always to be squared or matched in order to avoid any risk on the FX.

Hi, so this is Mariano. I’m going to tackle your question regarding sugar prices. In our – at the end of the 3Q we ended up with a 37% cash position for the 2015, 2016 sugar production and as you know, our strategy was to carry current sugar and of course this is a positive view that we have for next year and that’s the reason why our increase in sugarcane went up to a little bit above 50% for this year as of today. And we are of course, we’ve been constructive in prices and the market has been showing that we are in the right direction, but of course it’s a long way to go, there are certain possibilities for prices moving down. But I think that with a 60% hedge it’s going to be our target for the next year by the year end.

Okay, thank you.

This concludes the question-and-answer session. I would like to turn the floor back over to Mr. Bosch for any closing remarks.

Thank you everyone for participating on the call. We’ll continue committed to be the low cost producers in each one of the commodities that we produce and we hope to see you soon in our upcoming IR meetings. Bye.

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