Earnings Release Quarter ended September 30, 2011

Transcription

1 Earnings Release Quarter ended September 30, 2011 Stock price AGRO3 R$ 9.10 (Nov. 8, 2011) Investor Relations Julio Toledo Piza CEO & IRO Ana Paula Ribeiro Investor Relations Contacts + 55 (11) ri@brasil-agro.com Website Conference Call Portuguese November 9, :30 a.m. (BrT) 8:30 a.m. (NY) Dial-in: +55 (11) Password: BrasilAgro São Paulo, November 8, BrasilAgro (BM&FBOVESPA: AGRO3) (ADR Ticker: BRCPY) - Companhia Brasileira de Propriedades Agrícolas ( Company ) announces its consolidated results for the quarter ended September 30, The consolidated annual and quarterly information is prepared in accordance with the International Financial Reporting Standards (IFRS). Highlights Sale of the São Pedro Farm for R$26.1 million, with 153% appreciation. Partnership for agriculture exploration with a purchase option on properties in the state of Bahia, totaling 7,699 hectares. Estimated planted area for the 2011/2012 harvest year of 71,103 hectares. Net revenue of R$50.6 million and net income of R$32.1 million. English November 9, :30 p.m. (BrT) 9:30 a.m. (NY) Dial-in: + 1 (973) Password:

2 Management's Comments BrasilAgro began the 2011/2012 harvest year with high positive results, closing the first quarter of 2012 with net income of R$32.1 million, and net revenue of R$50.6 million, as a result of the supply of sugarcane, the sale of a property, and the partial sale of grain production of the 2010/2011 harvest year that had been stored. The sale of the São Pedro Farm is part of the Company s business strategy, which targets the gains with agriculture production, and the realization of capital gains through the sale of properties. São Pedro Farm, located in the city of Chapadão do Céu, Goiás state, was sold for R$26.1 million. The sale value equates to 580,000 bags of soybean as of the date of the transaction. This property was acquired in 2006 for R$9.9 million. In line with the commitment to always pursue the best growth opportunities, the Company established partnerships in properties in the city of Jaborandi, Bahia state, next to the Chaparral Farm. These partnerships involve the agriculture exploration with a purchase option on 7,699 hectares of contiguous total area, comprised of 5,725 of arable area, of which 5,143 will be planted in the 2011/2012 harvest year. With these partnerships, BrasilAgro reached a total area of 180,462 hectares, divided into nine farms: Alto Taquari, Araucária, Chaparral, Cremaq, Horizontina, Jatobá, Nova Buriti, Preferência and Parceria I, located in the states of Bahia, Goiás, Maranhão, Mato Grosso, Minas Gerais and Piauí. Continuing its strong pace of planted area expansion, the Company intends to transform approximately 20,613 hectares in the 2011/2012 harvest year, of which 6,609 hectares will planted in the 2011/2012 harvest year. BrasilAgro launched its operations for the 2011/2012 harvest year, and intends to plant approximately 71,103 hectares of soybean, corn (summer and winter crops), rice, cotton, sugar cane, pasture and forests. 2

3 Planted Area Evolution Development Area Evolution 80,000 25,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000-3,160 18,900 6,422 27,082 8,676 37,464 3,000 9,248 45,943 5,992 9,000 56,111 20,000 15,000 10,000 5,000-3,160 4,632 3,262 12,053 2,254 15, ,139 20,613 07/08 08/09 09/10 10/11 11/12* 07/08 08/09 09/10 10/11 11/12* grains sugarcane pasture grains and pasture sugarcane In light of the positive results and the long term perspective, the Company is increasingly consolidating its market position. 3

4 Operating Performance Brasilagro delivered 444 thousand metric tons of sugarcane to ETH as of September 30, complying with the contract as its exclusive supplier. Brasilagro began planting the 2011/2012 summer crops, during which the Company plans to plant 42,314 hectares of soybean, 9,238 hectares of corn, 351 hectares of rice, 1,878 hectares of cotton, and 5,992 hectares of pasture at the Chaparral, Cremaq, Horizontina, Jatobá, Preferência and Parceira I Farms. Continuing its process of clearing new areas for planting, the Company plans to transform approximately 20,613 hectares, maintaining its strong pace of planted area expansion for the next harvest year. The table below shows the breakdown of planted area by farm: Planted Area Sugarcane Soybean Corn Corn - 2nd Crop Rice Pasture Cotton Forestry Total Cremaq Farm 15,434 4,350 1,491 21,275 Jatobá Farm 8,651 3, ,529 Alto Taquari Farm 3,555 3,555 Araucária Farm 5,445 5,445 Chaparral Farm 9,178 1,106 10,284 Nova Buriti Farm 0 Preferência Farm 5,992 5,992 Horizontina Farm 4,435 1, ,880 Partnership I Farm 4, ,143 Total 9,000 42,314 9,238 2, ,992 1, ,103 Brasilagro has already completed the transformation of 6,609 hectares, which corresponds to 9.3% of the area to be planted in the 2011/2012 harvest year, and is in the process of clearing other areas for the 2012/2013 harvest year. 4

5 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 19,784 Jatobá Farm 2 Barreiras/BA Grains and cotton 31,606 24,254 12,529 Alto Taquari Farm Alto Taquari/MT aug/07 Sugar cane 5,186 3,666 3,623 Araucária Farm Mineiros/GO apr/07 Sugar cane 9,682 7,205 5,777 Chaparral Farm Correntina/BA Grains and cotton 37,182 27,414 10,284 Nova Buriti Farm Januária/MG dec/07 Florest 24,247 19,004 0 Preferência Farm Barreiras/BA sep/08 Cattle 17,799 14,237 6,448 Horizontina Farm Tasso Fragoso/MA apr/10 Grains 14,359 8,567 6,041 Partnership I Farm Jaborandi/BA sep/11 3 Grains 7,699 5,725 5,143 Total 180, ,895 69,629 Total Owned by BrasilAgro 177, ,470 68,376 (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 current property portfolio totals 172,763 hectares, divided into eight properties. The Company established a partnership for the agriculture exploration with a purchase option on properties in the state of Bahia, with 7,699 hectares of total area. The Company s total area is now 180,462 hectares, with total arable area of 131,895 hectares. The properties of these partnerships are located in the city of Jaborandi, Bahia state, next to the Chaparral Farm. The partnership consists of the agriculture exploration with a purchase option on a total area of 7,699 hectares, with arable area of 5,725 hectares, of which 5,143 will be planted for the 2011/2012 harvest year. The agreement will be effective for five harvest years, and envisages the right of first refusal on its renewal or the option to purchase the farms, with a fixed pre-determined price, which is set in bags of soybean and will be paid annually. The Company s business strategy focuses on gains with agriculture production and capital gains through the sale of properties. On September 28, 2011, BrasilAgro sold the São Pedro Farm, a rural property with total declared area of 2,447 hectares, 1,724 hectares of which are arable, in the city of Chapadão do Céu, Goiás state, for a price in Reais equivalent to 580,000 bags of soybean. The Buyer made a down payment of R$2.2 million, which corresponds to 50,000 bags of soybean, with the remaining balance to be paid in five installments. The first payment is due on March 30, 2012, and corresponds to 160,000 bags of soybean. The remaining four installments are due 5

6 annually, every March 30 of the subsequent years, and each payment is equivalent to 92,500 bags of soybean. For reference purposes, the entire transaction sums R$26.1 million. The property was acquired in September 2006, and the investments received, including acquisition and development, totaled R$10.3 million. The Company had a gain of 153% with the sale of the property. In addition to the São Pedro Farm, BrasilAgro also sold the Engenho Farm in June 2008, with 116% appreciation in real state. On September 22, 2011, the Company amended the certificate of incorporation of Jaborandi Ltda., an operator whose purpose is to develop and harvest the Jatobá Farm. After the amendment, BrasilAgro and Maeda both hold 50% of the capital stock of Jaborandi Ltda. to better align their interests. BrasilAgro continues to have a significant influence on Jaborandi Ltda. s businesses. BrasilAgro s equity interest held in Jaborandi S.A., owner of Fazenda Jatobá, remained unchanged at 90%, and Maeda s interest remains at 10%. 6

7 Hedge Operations Soybean FX Harvest hedge 1 % Price 1 (USD/bu.) Hedge % BRL / USD 10/ % % / % % ¹ percentage in relation to the volume of tons in soybeans 2 Soybean sales Chicago - CBOT 7

8 Financial Performance The consolidated financial statements were prepared and are being presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. EBITDA and Adjusted EBITDA EBITDA (R$ thousand) 1Q12 1Q11 Change Gross profit (loss) 19,897 2, % Selling expenses (403) (12) % General and administrative (5,740) (4,072) 41.0% Other operating revenue (366) (4) % Depreciations 6,279 3, % EBITDA 19,667 2, % Adjusted EBITDA (R$ thousand) 1Q12 1Q11 Change Gross profit (loss) 19,897 2, % Elimination of gains on biological assets (grains and sugarcane planted) 6,921 (1,836) n.a. Selling expenses (403) (12) % General and administrative (5,740) (4,072) 41.0% Other operating revenue (366) (4) % Hedge results 1,605 - n.a. Depreciations 6,279 3, % Adjusted EBITDA 28, % EBITDA was calculated as the gross profit adjusted for selling expenses, general and administrative expenses, other operating revenues and expenses for the depreciation including: depreciation of fixed assets on the farms, depreciation of developed areas and depreciation of the permanent culture and administrative depreciation. Adjusted EBITDA was calculated eliminating gains on planted biological assets (sugarcane) and adjusted by hedge results. 8

9 Income Statement Net Revenue from Sales Financial Income 1Q12 1Q11 Change Revenues from Grains 10,613 6, % Revenues from Sugarcane 22,937 3, % Leasing Revenues % 0 26,100 - n.a. Gain/loss on biological assets (8,140) 1,241 n.a. Gain/loss on agricultural products % Other revenues % Deductions from Gross Revenue (1,892) (1,512) 25.1% Net Revenue from Sales 50,560 10, % Cost of sales (30,663) (7,996) 283.5% Gross profit (loss) 19,897 2, % In 1Q12, net revenue from sales totaled R$50.6 million, an increase of R$39.8 million from the same quarter of the previous fiscal year. In addition to the 53.4% upturn in grain revenue, as a result of the sale of part of the 2010/2011 grains harvest production that had been stored (15 thousand tons), the increase in net sales revenue in 1Q12 versus 1Q11 was also a consequence of the supply of sugarcane to ETH, which posted revenue of R$22.9 million at the end of September 2011, 618.1% increase compared to the previous year. The Company also booked R$26.1 million in revenue from the sale of the São Pedro Farm. The property was acquired in September Considering all investments made, acquisition and development costs, the company spent R$10.3 million. The Company gained 153% with the sale of the property. In 1Q12, Brasilagro recorded a loss of R$8.1 million in biological assets and agricultural products, the graph below shows the breakdown between sugarcane and grains: Current Non Current Biological Assets (R$ thousand) Grains Sugarcane Total Sugarcane Gain/loss on biological assets Fair valur variation (406) 1,452 1,046 (9,186) (8,140) 9

10 Cost of goods sold The cost of goods sold in 1Q12 climbed 283.5% compared to the same period in the previous year. This increase was mainly a result of the cost of sugarcane sales, and the cost of the sale of the São Pedro Farm, which did not occur in the previous period. Expenses Financial Expenses 1Q12 1Q11 Change Selling expenses (403) (12) % General and administrative (5,740) (4,072) 41.0% Depreciations and amortizations (274) (226) 21.2% Personnel (3,230) (2,652) 21.8% Sevices (645) (633) 1.9% Others sales (1,591) (561) 183.6% Warrants 15,451 (7,992) n.a. BrasilAgro s selling expenses came to R$0.4 million in 1Q12. The increase in selling expenses from 1Q11 was due to the upturn in production, and the consequent increase in agricultural product sales. General and administrative expenses in 1Q12 totaled R$5.7 million, increasing by 41.0% from 1Q11, chiefly due to the increase in personnel and other expenses. The upturn in personnel expenses was due, in addition to an 8% increase in payroll, and the booking of R$0.3 million in stock-based compensation, related to the stock option plan of the Company s executives. The 183.6% increase in other expenses was due to (i) the cost of publishing the annual balance of 2011/2012, which was booked in the 2Q11 in the previous year, and the significant increase in the explanatory note content with the implementation of IFRS, and (ii) the reclassification of PIS/COFINS tax credits related to inputs and services that were booked as of December 31 as other expenses. The market value of the Company s consolidated subscription warrants was R$90.2 million on June 30, 2011 and R$74.7 million on September 30, 2011, generating a difference of R$15.4 million, which was recognized in the income statement. 10

11 Financial Result Financial Result 1Q12 1Q11 Change Financial income 13,412 7, % Interest on Financial Investments 4,821 5, % Foreign exchange variations on liabilities % Interest on assets 870 1, % Monetary variations n.a. Realized results with derivatives n.a. Unrialized results with derivatives 6, % Financial expenses (5,034) (5,257) -4.2% Bank charges (235) (19) % Foreign exchange variations on liabilities - (194) % Monetary variations - (580) % Interest on liabilities (4,799) (2,115) 126.9% Unrialized results with derivatives - (2,349) n.a. Total 8,378 2, % 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, (vi) bank charges and expenses and (vii) interest on financing. 11

12 Balance Sheet Properties for Investment With the adoption of the IFRS, the Company began classifying its land as properties for investment as of July 1, 2009 at cost and investments. Farm Acquisition value Investments Properties for Investment - Total Cremaq 42,021 39,665 81,686 Jatobá 32,999 21,043 54,042 Alto Taquari 1 33, ,256 Araucária 1 70, ,129 Chaparral 47,842 10,822 58,664 Nova Buriti 21, ,825 Preferência 9,540 8,102 17,642 Horizontina 37,715 5,419 43,134 1 not included sugarcane investment 295,143 86, ,378 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 24,155 Dec-07 21,880 Preferência Bahia 17,799 Sep-08 24,550 Horizontina Maranhão 14,359 Apr-10 48,960 Total 789,741 The Company used to classify its land as long-term inventory. 12

13 Indebtedness The table below shows BrasilAgro s short- and long-term loans and financing on September 30, 2011 and June 30, Loans and Financiing (R$ thousand) Annual Interest Tax - % 9/30/2011 6/30/2011 Variation Short term Financiamento de Custeio Agrícola - BNB 6,16 a 7,23 31,772 29, % Financiamento Projeto Cremaq - BNB ,557 3, % Outros 1,85 a 8 + TJLP 6,245 4, % 44,574 37, % Long term Financiamento de Safra - Itaú 1,95 a 3,1 + TJLP 10,593 11, % Financiamento de Máquinas e Equipamentos- FINAME 1,95 a 4,5 + TJLP 7,374 4, % Financiamento Projeto Cremaq e Jaborandi - BNB ,785 39, % 58,752 55, % Total 103,326 93, % The largest share of the Company s debt is comprised of loans and financing with development banks and/or government fomenting bodies, 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$103.3 million on June 30, 2011 and September 30, 2011, respectively. In addition, the balance of accounts payable from acquisitions on September 30, 2011 was R$38.8 million, a 32.5% decrease from June 30, 2011, due to the payment of the last installment of the Horizontina Farm. Acquisitions payable (R$ thousand) 9/30/2011 6/30/2011 Variation Fazenda Jatobá 2,084 1, % Fazenda Alto Taquari 20,811 20, % Fazenda Nova Buriti 15,923 15, % Fazenda Horizontina 0 19, % Total 38,818 57, % 13

14 Definitions 1Q11 quarter ended on September 30, /2011 Harvest Year fiscal year started on July 1, 2010 and ended on June 30, Q12 quarter ended on September 30, /2012 Harvest Year fiscal year starting 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. 14

15 Statement of Operations 1Q12 1Q11 Change Revenues from Grains 10,613 6, % Revenues from Sugarcane 22,937 3, % Leasing Revenues % 26,100 - n.a. Gain/loss on biological assets (8,140) 1,241 n.a. Gain/loss on agricultural products % Other revenues % Deductions from Gross Revenue (1,892) (1,512) 25.1% Net Revenue from Sales 50,560 10, % Cost of sales (30,663) (7,996) 283.5% Gross profit (loss) 19,897 2, % Selling expenses (403) (12) % General and administrative (5,740) (4,072) 41.0% Depreciations and amortizations (274) (226) 21.2% Personnel (3,230) (2,652) 21.8% Sevices (645) (633) 1.9% Others sales (1,591) (561) 183.6% Warrants 15,451 (7,992) n.a. Other operating revenue (366) (4) % Financial result Financial income 13,412 7, % Interest on Financial Investments 4,821 5, % Foreign exchange variations on liabilities % Interest on assets 870 1, % Monetary variations n.a. Realized results with derivatives n.a. Unrialized results with derivatives 6, % Financial expenses (5,034) (5,257) -4.2% Bank charges (235) (19) % Foreign exchange variations on liabilities - (194) % Monetary variations - (580) % Interest on liabilities (4,799) (2,115) 126.9% Unrialized results with derivatives - (2,349) n.a. Result before income tax and social contribution 37,217 (6,732) n.a. Income tax and social contribution (4,109) 31 n.a. Net income (loss) for the year 33,108 (6,701) n.a. Atributted to the Company's Stockholders 32,096 (6,618) Minority interest 1,012 (83) Outstanding shares at the end of the year ended June 30 58,422,400 58,422,400 Net income (loss) basic and diluted per share - R$ (0.1147)

16 Balance Sheet (R$ thousand) Assets 09/30/ /30/2011 Change Current assets Cash and Cash equivalents 121, , % Financial instruments measured at fair value - - n.a. Trade accounts receivable 22,471 25, % Inventories 87,889 77, % Biologial assets 16,011 7, % Fiscal and tax credits 6,572 4, % Transactions with derivatives 12,955 5, % Prepaid expenses % Other assets % 268, , % No current assets Biological assets 19,263 34, % Markable securities 21,899 21, % Associated and subsidiary 7,624 7, % Fiscal and tax credits 24,950 25, % Deferred taxes 3,556 3, % Credits for sale of farm 17,426 2, % Properties for investment 381, , % Transactions with derivatives - - n.a. Other assets % 476, , % Investments % Property, plant and euipment 16,235 12, % Intagible assets 2,456 2, % 495, , % Total assets 763, , % 16

17 Liabilities and Stockholders' Equity 09/30/ /30/2010 Change Current liabilitie Suppliers 4,734 2, % Loans and financing 44,574 37, % Labor obligations 2,565 4, % Taxes payable 1, % Dividends proposed % Transactions 4,823 2, % Acquisitions payable 38,818 57, % Advance from customers 1,212 5, % 97, , % No current liabilities Loans and financing 58,752 55, % Deferred taxes 10,341 6, % Warrants 74,729 90, % Other liabilities 1, % Stockholders' equity capital and reserves attributed to the parent company stockholders' 145, , % Capital 584, , % Capital reserves 1, % Accumulated losses (71,869) (103,965) -30.9% 513, , % Minority interest 6,769 5, % Total stockholders' equity 520, , % Total liabilities and stockholders' equity 763, , % 17