Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro’s First Quarter 2024 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Emilio Gnecco, CFO; Mr. Renato Junqueira Pereira, Sugar, Ethanol and Energy VP; and Mrs. Vitoria Cabello, Investor Relations Officer. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question-and-answer section. At this time, further instructions will be given. 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, and thank you for joining the Adecoagro’s 2024 first quarter results conference. Consolidated adjusted EBITDA during the quarter reached $90 million, in line with our previous year. Our sugar, ethanol, and energy business reported a crashing record figure for the first quarter ever since we set foot in Brazil. This was possible thanks to all the investments done in expansion planting to have good cane availability. In fact, we were one of the only players harvesting and producing sugar we continued to command an attractive premium over ethanol during the quarter. Having in place a continuous harvest model enabled us to crush cane year around and to constantly supply new products to the market, especially during Brazil's inter-harvest period, without mentioning that the higher the milling, the lower our cost of production. Despite this outstanding operational performance, the decrease in the forward curve of sugar prices was the main driver towards the year-over-year decline in adjusted EBITDA degeneration for this particular segment. Moving to our farming operations, the outperformance in all three operating segments shows the daily effort and hard work of our teams towards maximizing yields and still being the low cost producer. In crops, normal weather conditions translated into a significant recovery in yields, consequently into results, despite the lower international prices for soy, corn, and wheat. We are currently in the middle of the harvest season, therefore yields are still being defined, but we know that we are on track towards a normal operating year for this segment. Furthermore, having in place a sustainable integrated business model in our rice operation enabled us to capture an important year-over-year increase in the average selling price, as we were the only rice producers with available production when stocks were limited. This is so since we have flexibility to cater to both the domestic and export market with our high value added products. In the dairy segment, the significant recovery in crop yields led to a reduction in the cost of feed of our dairy cow, which is one of the main cost components for this business. Moreover, we continue working on product development for the domestic and export markets and taking advantage of our flexibility to supply both markets with our daily portfolio. Before passing the word to Emilio, a brief update on our distribution policy. On April 17, our Annual Shareholder meeting approved a total cash dividend distribution of $35 million. And in addition to this, we continue buying back shares under our program. We have already repurchased 2.6 million shares equal to 2.4% of the company's equity. As you may see, we are committed to our distribution policy, while we continue investing in growth projects with attractive IRRs and maintaining our debt levels. To conclude, I would like to reiterate my gratitude to all our employees, contractors, and stakeholders for their hard work and commitment. Now, I will let Emilio walk you through the numbers of the quarter.

Thank you, Mariano. Good morning everyone. Let's start on page four with a summary of our consolidated financial results. Gross sales totaled $254 million during the first quarter, 3% higher year-over-year. This was mostly explained by greater sugar cane crush, which enabled us to increase our sugar production and execute sales at solid prices. In addition, our rice operations reported a 83% year-over-year increase in the average selling price, driven by limited supply both in the export and domestic markets. Adjusted EBITDA reached $90 million in line with the previous year. The outperformance of all the three of our farming businesses fully offset the decline reported in the sugar, ethanol, and energy business, which was explained by a loss in our biological assets driven by a reduction of sugar and ethanol price. Now please turn to slide five. Regarding our production figures, in the bottom right chart, we can see that crushing volumes in our sugar, ethanol, and energy business were up 47% versus the same period of last year. Higher crushing translates into higher production volume, thus increasing sales and diluting costs. Total production in our farming division reported a 19% year-over-year increase, explained by a fully recovering years after normal weather conditions experienced during the development of our crops, as well as to higher planted area. Let's move to slide seven, with the operational performance of our sugar, ethanol and energy business. During the first quarter of 2024, crushing volume amounted to 2.2 million tons, an all-time record for our first quarter million figure. This was mainly explained by greater sugarcane availability, due to the expansion planting activities carried out over the past years. Regarding productivity, TRS per hectare remained in line versus last year as TRS content presented a 5% year-over-year improvement, reaching 117 kilograms per ton,…

Thank you. The floor is now open for questions. [Operator Instructions] Our first question comes from Henrique Brustolin with BTG.

Hi, hello everybody. Thanks for taking my questions. I have two, I think both of them for Renato in the sugar and ethanol business. The first, I would just like to hear a little bit more about how is -- what's your view behind what's happening to sugar prices, right? We saw this sharp contraction in recent weeks. So how do you, what do you think is behind it and what do you expect for the remainder of the year when it comes to sugar, right? And the second one, also in sugar and ethanol, is how that changes the company's perspective in terms of results for the year, right? We are seeing the hedging position was already pretty advanced. Ethanol prices are stronger at the margin, but the sugar curve is now lower, and on the other hand you also have, I think, a good perspective in terms of unitary costs. So if you could just discuss a little bit on how that changes or how is the view in terms of results for the whole crop season, even when compared to the previous one, I think it would be very helpful. Thank you.

Hi Enrique, this is Mariano, thank you for your questions. The second question is talking about the impact on the results. It is important to understand that the sugar price, although we have already fixed 57% of the price at a much higher price than today's prices, there is an impact on the biological assets. So that's why the EBITDA is reduced and that's what we explain in the numbers. For the full-year, the same concept would be there in terms of the biological asset impact. So we can expect on the whole sugar and ethanol business to be lower than the previous year, although there is an increase on production, efficiencies, et cetera, but we can also see an increase on the other crops that will probably compensate that reduction on the sugar and ethanol sector. So making this quick clarification on what we expect, I would like Renato to go deeper in terms of what's our view on the price of sugar and what could happen one way or the other.

Hi Henrique. So I think it's important to talk a little bit about the price of sugar and ethanol, because both are important to see how our price is going to be. So, starting with sugar, we think that with the perspective of Brazil, you produce 42 million tons, 43 million tons of sugar. The market projections have moved from a small deficit to a small surplus, but the stocks worldwide is still very low. Actually, the stock to use ratio is one of the lowest, I think it's the lowest since 2011, and the supply is very dependent on the Brazil's crop. So any news about the reductions in the Brazilian crop, any weather issue, it can trigger an increase in sugar price. We are -- as Mariano mentioned, we are 57% hedged at [23.6 cents] (ph) per pound. And we are very optimistic about the ethanol or very constructive about the ethanol scenario in the short-term. So we think that it is very likely that we are going to change the mix in Mato Grosso do Sul at some point in the second semester. And we are very constructive with ethanol scenario, because we think that the supply of ethanol is going to be lower this year as the sugarcane crushing in Brazil is going to be lower than last year, which was a high crushing season, between 5% and 10% lower. I think the mix is going to be even more oriented to sugar 3% or 2% more than it was last year that was already very high, 49%. So as a result, the ethanol supply is going to be lower between 2 billion liters and 3 billion liters, which is much more than enough to compensate that small increase in the corn, ethanol increase. And the demand of ethanol has been very high. Actually, the ethanol demand increases 60% since January, and the part that depends is still at 65%, so very competitive -- ethanol is still very competitive. Ethanol demand monthly, hydrous demand is reaching almost 2 billion liters of ethanol. So we think that the S&D of ethanol is very tight. So price has to move towards the 7% part to curb demand at some point. And in this situation, we are going to change the mix from sugar to ethanol, we believe.

That's very clear. Thanks very much.

Thank you, Henrique.

Next question from Isabella Simonato with Bank of America.

Hi, Mariano, Emilio. Good morning, thank you for the opportunity. I have two questions, first of all, on the rice business, right? We have been seeing a pretty big freezing prices, right? And even the prices that you guys delivered in Q1 calls a lot of the attention, but I would like to hear from you how do you see rice pricing dynamics right especially considering a potential impact in the South of Brazil. So if you could elaborate a little bit on the outlook for the rest of the year? I think would be quite helpful. And second question is on capital allocation, right? As you mentioned, you guys are finishing some CapEx right on sugar and ethanol and also on the rice business. So I was wondering what could we expect next right in terms of CapEx and potential investments, if there's any? Thank you.

Sure. Thank you, Isabella. On your first question regarding rice prices, that I think it is important to understand the international general rice prices and our particular increase in terms of rice prices. As we've been talking before, we have this model where we are developing the genetics to produce at the farms and then process at the mills and then sell it to our specific clients where we are developing this whole chain attending to the needs of our specific clients. That is important to understand that there is a portion of that increasing prices that is specific for the increasing, we call it quality, but is the selling the right price to the guy that is asking wherever in the world we are selling this rice. So that is a part of the answer or the increase in prices. There is another part of the increase in prices, this is very important in this quarter, that is the ability to sell in the domestic market and in the export market. So as there was a lack of rice in the region, we were able to capture a benefit in the domestic prices in terms of those prices. And going forward, we continue to see the strategy and we are working every time more with the strategy. And I think it was very important to develop the strategy what we did last year in increasing or two years ago in increasing and buying these Viterra assets of rice Uruguay and consolidate our whole footprint in Argentina and Uruguay to continue absolutely in line with this strategy. Furthermore, the global supply of rice of the region is being lower than the average and probably within the lowest of the last years in terms of the total production of South America. And this total production has been affected by, in general terms, lower yields than the average, because of the planting was late and then at the harvesting time it was too rainy so that happened to the overall area and on top of that we had this sad situation in Rio Grande do Sul, that is also, Rio Grande do Sul is a very important state in terms of the total supply of rice for the region. So we still don't know how much this will affect, but there is some, of course, effect on this lack of supply. So that's the overall concept for the rice business. I don't know if you want to make any clarification. So going to your second question. Sorry Isabella…

No, no, I was going to say that it was clear. Thank you.

Okay. So, going to the second part of your question and regarding capital allocation and CapEx, as Emilio explained pretty well in his last two slides of the presentation, we are complying with our distribution policy, while being very consistent there. And as you can see, we are well advanced in our buyback program and that has been the case because we saw an opportunity on buying back shares and the returns we are obtaining there and we may see that opportunity to continue to be there. So we'll see, but there is a huge potential for increasing there or to go. The policy talks about the minimum, doesn't talk about how much we can do. So that is one indication. And in the other part of the question regarding CapEx, we are seeing a very good opportunity in our old sugar, ethanol and energy business. And as Renato has been explaining so many times, the competitive advantages that we have there in the cluster that we are seeing today on how we've been harvesting during this inter-harvest period, we continue to grow there and we continue to see this growth path that we are going and today particularly you can see in the report that we've been planting more cane in the right moment that is in this first quarter. So we are happy with what we've been investing there and that can continue to happen, consolidating the full plantation of what we are doing. And on top of that, this law of fuel of the future that the Brazil has just passed or sorry it's still to be passed in the Senate, but it has already been passed in the lower house. I think it's very much aligned with what we are doing there in Mato Grosso do…

Thanks for the detailed explanation. Thank you.

[Operator Instructions] Our next question comes from Larissa Perez with Itau BBA.

Good morning Mariano, Emilio, Renato, Victoria, [Indiscernible]. Thank you for taking my questions. I actually have two follow-ups. The first one would be for Renato and it's a follow-up on Henrique’s question. I was just wondering, it was mentioning that the company expects to increase sugarcane crushing this year and you were just explaining how this could have a material impact on unitary costs given the fixed cost dilution effect? So I was wondering if you could please give us some color on the size of this increase in crushing expected for this harvest and or in the drop in the unit costs expected for this harvest? That would be my first question for Renato. And my second question is for Mariano and it's actually a follow-up on Isa's question. You just mentioned that you have the policy to distribute at least 40% of your adjusted free cash flow from operations. I was just wondering under which circumstances would the company consider increasing distribution even further? Because as you said, 40% is just the minimum. So I was wondering what could make a Adeco distribute even more than 40%. Those would be my 2 two questions. Thank you so much.

Thank you Larissa for your question. I will ask Renato to go on more details on this crushing and then I will take the other one.

Hi Larissa, thank you for your question. So as it was mentioned, we have been investing in our sugarcane fields, growing our sugarcane fields. So that's the reason we have a record crushing in the first quarter. We initially thought that we're going to have a yield higher this year than last year, but since the weather is a bit drier now, we think the yields are going to be quite in line with the yields that we had last year. But due to the increase in area, we think that we are going to crush more cane than last year. I would say around 5%, the crush is going to be 5% higher than last year. And of course, it is going to help our costs. So we think that we have potential to decrease our costs between 5% and 10% as a consequence of the volume, because of the dilution. And also because there are some maybe some gains in price of sugarcane. [Bonsucro] (ph) is a little bit down. Even price of alternative crops in the region are down. So maybe leasing rates is going to be lower so we think that 5% to 10% decrease.

Thank you, Renato. Larissa and to be more specific on what we've been talking about capital allocation and you mentioned about under what circumstances we can increase the distribution policy. You can see that in today's circumstances, if we continue to do the same that we've been doing, we would of course surpass the distribution policy and distribute through buybacks more than what the policy requires. That is a very quick answer. But we still need to go the full-year ahead. The year has unknown things that on weather, on prices. So we still don't know what our EBITDA is going to be this year. So of course, we also take into account that and how we are projecting our annual EBITDA that today we are projecting, as I mentioned at the beginning, very much in line with what we had last year. And we are also following very closely all our investment projects. We have room for both of them and the debt levels that you've seen today and as we've been decreasing in the last years the level of debt that we have, we are beyond, so we still have room for doing both of them. But that's something that we make decisions as we go through the year.

That's super clear. Thank you, Renato. Thank you, Mariana.

[Operator Instructions] Our next question comes from Julia Rizzo with Morgan Stanley.

Hi, hello everyone. Thank you for getting my question. Renato, I would love if you could share your view. It’s -- now that sugar prices went down and the discount from ethanol to sugar have narrowed significantly. At what point it’s -- you decide to switch, it's no longer more interesting for you to stay max sugar and start to switch in your production to produce ethanol instead of sugar? If that changes also your outlook, your scenario for expecting higher ethanol prices likely on second-half of the year?

Hi, Julia. Thank you for your question. As I mentioned, we are optimists about the ethanol perspective in the short-term, especially because of the supply that is lower, as it was mentioned. The demand is very, very high. So today in Mato Grosso do Sul, our ethanol equivalent, hydro-ethanol equivalent is $0.17 per pound. So we are still a bit below sugar parts. But we think the scenario of ethanol is going to keep improving. And we are going to reach the $0.18, $0.19 per pound at some point in the future. And then we will change the mix to produce as much as ethanol as possible in Mato Grosso do Sul. So this 57% that we have hedged in sugar is considering a max sugar scenario. So if you consider that we're going to change the mix, this 57% is more than that. So I think that's going to be the case in the near future.

But when do you think the industry will start to rethink the max sugar? What is the minimum discount for ethanol?

Since you are in Mato Grosso do Sul and we have the IMS tax rebate, we are the first ones to switch mix, so the rest of the industry has 200 points of difference. So today we are at 17, the rest of the industry is close to 15.

Okay, thank you very much, I appreciate that.

This concludes the question-and-answer section. At this time I would like to turn the floor back to Mr. Bosch for any closing remarks.

Thank you everyone for participating on our call and hope to see you in our upcoming meetings.

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