Earnings Release Quarter ended December 31, 2011

Transcription

1 Stock price AGRO3 R$ (Feb. 8, 2012) Investor Relations Julio Toledo Piza CEO & IRO Ana Paula Ribeiro Investor Relations Earnings Release Quarter ended December 31, 2011 São Paulo, February 9, BrasilAgro (BM&FBOVESPA: AGRO3) (ADR Ticker: BRCPY) - Companhia Brasileira de Propriedades Agrícolas ( Company ) announces its consolidated results for the quarter ended December 31, The consolidated annual and quarterly information is prepared in accordance with International Financial Reporting Standards (IFRS). Contacts + 55 (11) ri@brasil-agro.com Website Conference Call Portuguese February 10, p.m. (Brasilia) 11 a.m. (NY) Telephone: +55 (11) Code: BrasilAgro Highlights Conclusion of 2011/2012 summer crop, cultivating 56,674 hectares, totaling 65,674 hectares planted area Completed the second year of sugarcane supply to ETH, delivering 618,600 metric tons in compliance with the exclusive supply agreement. Net Revenue of R$82.6 million on the 6M12. Net Income of R$39.9 million on the 6M12. Adjusted EBITDA of R$31.2 million on the 6M12. English February 10, p.m. (Brasilia) 12 p.m. (NY) Telephone: + 1 (973) Code:

2 Operating Performance BrasilAgro concluded the planting of 51,574 hectares for the 2011/2012 summer crop at Chaparral, Cremaq, Horizontina, Jatobá and Parceria I farms, and also planted 5,100 hectares of pasture at the Preferência farm and 9,000 hectares of sugarcane at the Alto Taquari and Araucária farms. The following table provides breakdown of planted area by farm as of December 31 st, 2011: Planted Area Sugarcane Soybean Corn Pasture Cotton Total Cremaq Farm 15,877 3,852 19,729 Jatobá Farm 7,065 3, ,971 Alto Taquari Farm 3,555 3,555 Araucária Farm 5,445 5,445 Chaparral Farm 9,054 1,106 10,160 Nova Buriti Farm 0 Preferência Farm 5,100 5,100 Horizontina Farm 4,319 1,255 5,574 Partnership I Farm 4, ,140 Total 9,000 40,929 8,767 5,100 1,878 65,674 The Company completed the transformation of 10,000 hectares, and keeps the process of clearing other areas in preparation for the 2012/2013 harvest year. In compliance with the exclusive supply agreement, the Company completed the second year of sugarcane supply to ETH, delivering 618,600 metric tons. 2

3 Property Portfolio Properties Location Acquisition Date Project Total Area Arable Area Preduction Area 1 ha ha ha Cremaq Farm Baixa Grande do Ribeiro/PI oct/06 Grains 32,702 21,823 19,729 Jatobá Farm 2 Barreiras/BA Grains and cotton 31,606 24,254 10,971 Alto Taquari Farm Alto Taquari/MT aug/07 Sugar cane 5,186 3,666 3,555 Araucária Farm Mineiros/GO apr/07 Sugar cane 9,682 7,205 5,445 Chaparral Farm Correntina/BA Grains and cotton 37,182 27,414 10,160 Nova Buriti Farm Januária/MG dec/07 Florest 24,247 19,004 0 Preferência Farm Barreiras/BA sep/08 Cattle 17,799 14,237 5,100 Horizontina Farm Tasso Fragoso/MA apr/10 Grains 14,359 8,567 5,574 Partnership I Farm Jaborandi/BA sep/11 3 Grains 7,699 5,725 5,140 Total 180, ,895 65,674 Total Owned by BrasilAgro 177, ,470 (1) Estmated production area for 2011/2012 harvest year. (2) The Jatobá Farm is owned by one of our affiliated, Jaborandi S.A., of which we own 90% of the capital stock and the Maeda Group owns the remaining 10%. (3) BrasilAgro has purchase option in the "Partnership I Farm" with fixed price. BrasilAgro s current property portfolio totals 180,462 hectares, 131,895 of which arable. The planting of the 2011/2012 summer crop at Cremaq, Jatobá, Chaparral, Horizontina and Parceria I farms has been fully concluded. At Cremaq farm, the Company planted 15,877 hectares of soybean and 3,852 hectares of corn, totaling 19,729 hectares. At Jatobá farm, it planted 10,971 hectares, comprising 7,065 hectares of soybean, 3,134 hectares of corn and 772 hectares of cotton. At Chaparral farm, it planted 10,160 hectares, consisting of 9,054 hectares of soybean and 1,106 hectares of cotton. The Horizontina farm has a total planted area of 5,574 hectares, 4,319 hectares of which soybean and 1,255 hectares of corn. Parceria I farm s planted area totals 5,140 hectares, comprising 4,614 hectares of soybean and 526 hectares of corn. The Alto Taquari and Araucária farms are entirely planted with sugarcane, covering 9,000 hectares. Both are part of the sugarcane supply agreement with ETH Bionergia for two completes sugarcane crop cycles (i.e. six harvest years with five harvests) The Company concluded the conversion of cerrado (savanna) into 5,100 hectares of pasture in the Preferência farm, and continues to develop areas. The Company is currently awaiting the licenses required to begin operations at the Nova Buriti farm. 3

4 Hedge Operations Harvest Soybean Hedge (%) ¹ Price (USD /bag) Hedge (%) BRL / USD FX 10/11 97,44% 12,29 97,02% 1,671 11/12 55,47% 13,75 59,70% 1,793 1 percentage in relation to the volume of tons in soybeans Financial Performance 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. EBITDA and Adjusted EBITDA EBITDA (R$ thousand) 2Q12 2Q11 Change 6M12 6M11 Change Gross profit (loss) 3,703 13, % 20,425 15, % Selling expenses (449) (612) -26.6% (852) (624) 36.5% General and administrative (6,208) (3,651) 70.0% (11,948) (7,723) 54.7% Other operating revenue % % Depreciations 2,315 2, % 8,594 6, % EBITDA (618) 11,823 n.a 16,240 14, % Adjusted EBITDA (R$ thousand) 2Q12 2Q11 Change 6M12 6M11 Change Gross profit (loss) 3,703 13, % 20,425 15, % Elimination of gains on biological assets (grains and sugarcane planted) 5,260 (4,762) n.a 12,181 (6,598) n.a Selling expenses (449) (612) -26.6% (852) (624) 36.5% General and administrative (6,208) (3,651) 70.0% (11,948) (7,723) 54.7% Other operating revenue (2,788) 68 n.a % Hedge results 1,178 - n.a 2,783 - n.a Depreciations 2,315 2, % 8,594 6, % Adjusted EBITDA 3,011 7, % 31,204 7, % EBITDA was calculated as gross profit adjusted by general, administrative, selling expenses, other operating revenue, and depreciation expenses, including the depreciation of developed areas, permanent crops, farm fixed assets and administrative expenses. Adjusted EBITDA was calculated excluding biological assets in progress (sugarcane) and adjusted for the harvest s derivatives results. 4

5 Income Statement Net Revenue from Sales Financial Income 2Q12 2Q11 Change 6M12 6M11 Change Revenues from Grains 18,982 9, % 29,317 16, % Revenues from Sugarcane 13,229 17, % 36,166 20, % Leasing Revenues 109 (178) n.a. 161 (47) n.a. Revenue from farm sale - - n.a. 23,291 - n.a. Gain/loss on biological assets 1,091 4, % (2,695) 6,003 n.a. Gain/loss on agricultural products (483) 529 n.a , % Other revenues % % Deductions from Gross Revenue (2,498) (2,688) -7.1% (4,112) (3,625) 13.4% Net Revenue from Sales 30,511 30, % 82,616 41, % Cost of sales (26,808) (17,162) 56.2% (62,191) (25,158) 147.2% Gross profit (loss) 3,703 13, % 20,425 15, % On the six months period ended on December 31, 2011, the Company presented R$82.6 million net revenue from sales, 101% up on the same period of the previous fiscal year. On the 2Q12, net revenue from sales totaled R$30.5 million, 1% up on the same quarter of the previous fiscal year. The 90% upturn in grain revenue is a result of the sale of part of the 2010/2011 harvest production that had been stored (9,000 tons), the sale of the corn winter crop (7,000 tons) and the sale of the rice production. In addition, the year-over-year increasing in net sales revenue was also a consequence of the sugarcane supply to ETH, which generated a revenue of R$13.2 million and delivered 174,000 metric tons. On the six months period ended on December 31, 2011, the Company presented a R$2.7 million loss in biological assets and in agricultural products. The table below shows the breakdown of grain and sugarcane: Current Non Current Biological Assets (R$ thousand) Grains Sugarcane Total Sugarcane Gain/loss on biological assets Fair valur variation 5-5 (2,700) (2,695) 5

6 Cost of goods sold On the six months period ended on December 31, 2011 the costs of goods sold climbed by 147% compared to the same period in the previous year, mainly due to costs from the sugarcane sales and the São Pedro farm sale, which did not occur in the previous year. On the 2Q12, the cost of goods sold totaled R$26.8 million, up 56% comparing with the same quarter of the previous fiscal year. Expenses Financial Expenses 2Q12 2Q11 Change 6M12 6M11 Change Selling expenses (449) (612) -26.6% (852) (624) 36.5% General and administrative (6,208) (3,651) 70.0% (11,948) (7,723) 54.7% Depreciations and amortizations (274) (234) 17.1% (548) (460) 19.1% Personnel (3,351) (2,671) 25.5% (6,581) (5,323) 23.6% Sevices (1,224) (627) 95.2% (1,869) (1,260) 48.3% Others sales (1,359) (119) % (2,950) (680) 333.8% Warrants 8, % 23,404 (6,911) n.a. BrasilAgro s selling expenses came to R$852,000 on the on the six months period ended at December 31, 2011, an increase of 36% comparing to the previous year. The increase was due to the upturn in production, and the consequent increase in agricultural product sales. General and administrative expenses on 6M12 totaled R$11.9 million, increasing by 55% from 2Q11, mainly due to the increase in personnel, service provision and other expenses. The upturn in personnel expenses was due to an 8% increase in payroll, and to the stock-based compensation booking of R$1.6 million, regarding the Company s executives stock option plan. The increase in service provision expenses was due to expenses related to the due diligence of land that was not acquired. The increase in other expenses was mainly due to the reclassification of PIS/COFINS credits on inputs and productive services, which were booked under other expenses on the December 31, In the 2Q12, general and administrative expenses came to R$6.2 million, up 70% from the same period in the previous year. The market value of the Company s consolidated subscription warrants totaled R$79.1 million on June 30, 2011 and R$55.6 million on December 31, 2011, generating a difference of R$23.4 million, recognized in the income statement. 6

7 Financial Result Financial Result 2Q12 2Q11 Change 6M12 6M11 Change Financial income 8,024 7, % 21,436 14, % Interest on Financial Investments 2,999 4, % 7,819 10, % Foreign exchange variations on liabilities 1, % 1, % Interest on assets (452) (834) -45.8% % Gain on remeasurement of trade receivables for the sale of farm 897 2, % 897 2, % Monetary variations % % Realized results with derivatives 1,543 - n.a. 2,038 - n.a. Unrialized results with derivatives 1,931 (32) n.a. 8,216 - n.a. Financial expenses (6,937) (6,502) 6.7% (9,162) (11,759) -22.1% Bank charges (32) (63) -49.2% (267) (81) 229.6% Foreign exchange variations on liabilities % - - n.a. Monetary variations (1,104) (835) 32.2% (1,104) (1,416) -22.0% Interest on liabilities (1,651) (1,768) -6.6% (3,641) (3,883) -6.2% Unrialized results with derivatives - 2, % - - n.a. Total 1, n.a. 12,274 3,133 n.a. The consolidated financial result is composed of the following items: (i) returns on financial investments, (ii) foreign exchange variation on the amount to be paid for the acquisition of the Jatobá Farm, (iii) monetary variation on the amount to be paid for the purchase of the Alto Taquari and Nova Buriti Farms, (iv) result of hedge operations, (v) interest on tax credits and the result of its partnership with Grupo Maeda (Vanguarda Agro), (vi) bank fees and expenses and (vii) interest on financing. 7

8 Balance Sheet Properties for Investment Beginning on July 1, 2009 with the adoption of IFRS, the Company began classifying its land as properties for investment at cost, added to investments in buildings, improvements and the clearing of new areas. Farm Acquisition value Investments Properties for Investment - Total Cremaq 42,021 40,223 82,244 Jatobá 32,999 22,653 55,652 Alto Taquari 1 33, ,254 Araucária 1 70, ,249 Chaparral 47,842 12,788 60,630 Nova Buriti 21, ,820 Preferência 9,540 9,384 18,924 Horizontina 37,715 7,844 45,559 Parceria I not included sugarcane investment 295,143 94, ,428 The table below presents the fair value of the farms, based on a report issued by expert auditors, with reference date of December 31, 2010: Farm Location Total Area Aquisition Date R$ Cremaq Piauí 32,702 Oct ,050 Jatobá Bahia 31,606 Mar ,950 Alto Taquari Mato Grosso 5,186 Aug-07 63,410 Araucária Goiás 9,682 Apr ,161 Chaparral Bahia 37,182 Nov ,050 Nova Buriti Minas Gerais 24,247 Dec-07 21,880 Preferência Bahia 17,799 Sep-08 24,550 Horizontina Maranhão 14,359 Apr-10 48,960 Total 766,011 The Company used to classify its land under long-term inventory. 8

9 Indebtedness The table below shows BrasilAgro s short and long-term loans and financing on December 31, 2011 and June 30, Loans and Financiing (R$ thousand) Annual Interest Tax - % 12/31/ /30/2011 Variation Short term Financiamento de Custeio Agrícola - BNB 6,16 a 7,23-29, % Financiamento Projeto Cremaq - BNB ,247 3, % Outros 1,85 a 8 + TJLP 7,653 4, % 16,900 37, % Long term Financiamento de Safra - Itaú 1,95 a 3,1 + TJLP 8,408 11, % Financiamento de Máquinas e Equipamentos- FINAME 1,95 a 4,5 + TJLP 7,038 4, % Financiamento Projeto Cremaq e Jaborandi - BNB ,067 39, % 53,513 55, % Total 70,413 93, % The largest share of the Company s debt is comprised of loans and financing with development banks and/or government fomenting institutions, through direct and indirect lending, with beneficial interest charges compared to those practiced in the market. The balance of loans and financing came to R$93.3 million and R$70.4 million on June 30, 2011 and December 31, 2011, respectively. In addition, on December 30, 2011 the acquisitions balance of payments was R$39.2 million, down 32% comparing to June 30, It diminished due to the final installment payment of the Horizontina Farm. Acquisitions payable (R$ thousand) 12/30/ /30/2011 Variation Fazenda Jatobá 1,832 1, % Fazenda Alto Taquari 21,348 20, % Fazenda Nova Buriti 16,069 15, % Fazenda Horizontina - 19, % Total 39,249 57, % 9

10 Updating of the financial statements of June 30, 2011 Subsequent to disclosing the first complete financial statements in compliance with IFRS, the Company made the following adjustments resulting from errors in the originally disclosed IFRS statements, as summarized below: Balance Sheet (i) Recognition of amounts invested in land development subsequent to the farms purchase date under investment properties, which were booked under fixed assets in the originally first disclosed financial statements in IFRS. (ii) In the originally disclosed financial statements in IFRS, the subscription warrants of Jaborandi S.A. were booked as a financial liability at cost, and their adjustments to fair value as gains and losses recognized in the income statement. The Company decided that these subscription warrants had been booked incorrectly and should be recognized as share-based payments. The adjustment represents the reversal of the liability and gains / losses registered in the original statements. There are no fiscal effects related to this reversal. Income statement for the period ended December 31, 2010 (iii) The gains / losses on the fair value of biological assets and agricultural products, and impairment related to the realized net value of agricultural products after the harvest, were booked under revenue in the originally-disclosed first statements in IFRS. However, these items are, in fact, income and expenses that do not meet the definition of revenue and are therefore now presented separately in the income statement which is part of these financial statements. (iv) The difference of R$3,248 between the historical cost and fair value of sugarcane harvested and sold during the period, which was originally booked under revenue as a gain / loss in the fair value of biological assets and agricultural products, is now recognized in these consolidated financial statements under costs of goods sold. (v) The above-mentioned Jaborandi S.A. subscription warrants were accounted for under IAS 32 and their fair value adjustment as gains and losses recognized in the income statement. 10

11 Definitions 2Q11 the quarter ended on December 31, M11 six months ended on December 31, /2011 Harvest Year the fiscal year beginning on July 1, 2010 and ending on June 30, Q12 the quarter ended on December 31, M12 six months ended on December 31, /2012 Harvest Year the fiscal year beginning on July 1, 2011 and ending on June 30, Disclaimer The statements contained in this document related to the prospects for BrasilAgro s businesses, projected operating and financial income and growth are merely projections, and as such are based exclusively on management s expectations. These expectations depend materially on market conditions, the performance of the Brazilian economy, the industry and international markets, and therefore are subject to change without prior notice. 11

12 Statement of Operations 2Q12 2Q11 Change 6M12 6M11 Change Revenues from Grains 18,982 9, % 29,317 16, % Revenues from Sugarcane 13,229 17, % 36,166 20, % Leasing Revenues 109 (178) n.a. 161 (47) n.a. Revenue from farm sale - - n.a. 23,291 - n.a. Gain/loss on biological assets 1,091 4, % (2,695) 6,003 n.a. Gain/loss on agricultural products (483) 529 n.a , % Other revenues % % Deductions from Gross Revenue (2,498) (2,688) -7.1% (4,112) (3,625) 13.4% Net Revenue from Sales 30,511 30, % 82,616 41, % Cost of sales (26,808) (17,162) 56.2% (62,191) (25,158) 147.2% Gross profit (loss) 3,703 13, % 20,425 15, % - Selling expenses (449) (612) -26.6% (852) (624) 36.5% General and administrative (6,208) (3,651) 70.0% (11,948) (7,723) 54.7% Depreciations and amortizations (274) (234) 17.1% (548) (460) 19.1% Personnel (3,351) (2,671) 25.5% (6,581) (5,323) 23.6% Sevices (1,224) (627) 95.2% (1,869) (1,260) 48.3% Others sales (1,359) (119) % (2,950) (680) 333.8% Warrants 8, % 23,404 (6,911) n.a. Other operating revenue % % Financial result Financial income 8,024 7, % 21,436 14, % Interest on Financial Investments 2,999 4, % 7,819 10, % Foreign exchange variations on liabilities 1, % 1, % Interest on assets (452) (834) -45.8% % Gain on remeasurement of trade receivables for the sale of farms 897 2, % 897 2, % Monetary variations % % Realized results with derivatives 1,543 - n.a. 2,038 - n.a. Unrialized results with derivatives 1,931 (32) n.a. 8,216 - n.a. Financial expenses (6,937) (6,502) 6.7% (9,162) (11,759) -22.1% Bank charges (32) (63) -49.2% (267) (81) 229.6% Foreign exchange variations on liabilities % - - n.a. Monetary variations (1,104) (835) 32.2% (1,104) (1,416) -22.0% Interest on liabilities (1,651) (1,768) -6.6% (3,641) (3,883) -6.2% Losses in derivatives transactions (4,150) (6,379) -34.9% (4,150) (6,379) -34.9% Unrialized results with derivatives - 2, % - - n.a. Result before income tax and social contribution 6,188 10, % 43,324 3, % - Income tax and social contribution 779 (4,366) n.a. (3,330) (4,335) -23.2% - Net income (loss) for the year 6,967 5, % 39,994 (549) n.a. Atributted to the - Company's Stockholders 6,969 5,904 40,127 (430) Minority interest (2) (68) (133) (119) Outstanding shares at the end of the year ended June 30 58,422,400 58,422,400 58,422,400 58,422,400 Net income (loss) basic and diluted per share - R$ (0.01) 12

13 Balance Sheet (R$ thousand) Assets 12/31/ /30/2011 Change Current assets Cash and Cash equivalents 88, , % Trade accounts receivable 22,153 25, % Inventories 53,719 77, % Biologial assets 44,348 1, % Fiscal and tax credits 6,860 4, % Transactions with derivatives 7,649 5, % Prepaid expenses 1, % Other assets % 224, , % No current assets Biological assets 24,954 40, % Markable securities 22,491 21, % Associated and subsidiary 7,304 7, % Fiscal and tax credits 26,077 25, % Deferred taxes 3,583 3, % Credits for sale of farm 17,532 2, % Properties for investment 389, , % Other assets % 491, , % Investments % Property, plant and euipment 16,776 12, % Intagible assets 2,322 2, % 510, , % Total assets 735, , % 13

14 Liabilities and Stockholders' Equity 12/31/ /30/2010 Change Current liabilitie Suppliers 1,372 2, % Loans and financing 16,900 37, % Labor obligations 2,963 4, % Taxes payable % Dividends proposed % Transactions 4,001 2, % Acquisitions payable 39,249 57, % Advance from customers 4,715 5, % 69, , % No current liabilities Loans and financing 53,513 55, % Deferred taxes 9,336 6, % Warrants 55,653 79, % Advances for Future Capital Increases 7,170 - n.a. Other liabilities % Stockholders' equity capital and reserves attributed to the parent company stockholders' 126, , % Capital 584, , % Capital reserves 1, % Increase in capital by non-controlling interest (1,135) - n.a. Accumulated losses (53,827) (93,954) -42.7% 530, , % Minority interest 7,871 6, % Total stockholders' equity 538, , % Total liabilities and stockholders' equity 735, , % 14