FORM 6-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
dated September 4, 2015
BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS
(Exact Name as Specified in its Charter)
BrasilAgro – Brazilian Agricultural Real Estate Company
U(Translation of Registrant’s Name)
1309 Av. Brigadeiro Faria Lima, 5th floor, São Paulo, São Paulo 01452-002, Brazil
U(Address of principal executive offices)
Julio Cesar de Toledo Piza Neto,
Chief Executive Officer and Investor Relations Officer,
Tel. +55 11 3035 5350, Fax +55 11 3035 5366, ri@brasil-agro.com
1309 Av. Brigadeiro Faria Lima, 5th floor
São Paulo, São Paulo 01452-002, Brazil
U(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1): U
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7): U
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.
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Price (09.03.15) AGRO3: R$10.79 LND: US$2.88
Investor Relations
Julio Toledo Piza CEO & DRI
Ana Paula Zerbinati Ribeiro Investor Relations
Contact + 55 (11) 3035 5374 ri@brasil-agro.com
Website www.brasil-agro.com
Teleconferência Português 04 de setembro de 2015 15h00 (Brasília) | 14h00 (NY) Telefone: +55 (11) 3127 4971 Senha: BrasilAgro
Inglês 04 de setembro de 2015 14h00 (Brasília) | 13h00 (NY) Telefone: + 1 (412) 317 6776 Senha: BrasilAgro |
Earnings Release Year and Quarter ended June 30, 2015
São Paulo, September 3, 2015 – BrasilAgro (BM&FBOVESPA: AGRO3) (NYSE: LND), the Brazilian leader in acquiring and developing rural properties that offer high potential for price appreciation in Brazil, announces its consolidated results for the fiscal year and quarter ended June 30, 2015. The annual and consolidated quarterly information is prepared in accordance with International Financial Reporting Standards (IFRS).
Highlights
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Message from Management
The 2014/15 harvest year was marked by major achievements. We delivered results in all areas of our business: good yields, the optimization of direct costs, a reduction in administrative costs, commercial efficiency and, clearly, a major property transaction, all of which was translated into net income of R$180.8 million and adjusted EBITDA of R$198.4 million. The magnitude of this result can be measured by the 29% increase in the Company’s equity.
At the beginning of the 2014/15 season, given the exceptionally challenging macroeconomic scenario, marked by the volatility of the dollar and international commodity prices, we took certain measures to improve the result of our agricultural operations. We ceased planting in certain new areas (areas in the first or second year of cultivation) due to their high volatility and lower yields, we dissolved a partnership for the exploration of a 7,699 hectare area in Bahia due to lower-than-expected profitability, and we reduced the pace of the clearing of new areas, We also undertook an organizational restructuring, reducing administrative costs.
We closed the harvest year with 79,000 hectares of planted area, distributed among soybean, corn, sugarcane, pasture, and other grains. Average soybean yields were higher than expected and the average in mature areas was equivalent to those presented by major diversified producers. Yields from corn, whose production is concentrated in Bahia, were jeopardized by low rainfall in the region and were below budget. The farms in the Midwest, in more consolidated regions, delivered more than 830,000 tons of sugarcane with yields above the average of the main producing areas in Brazil. The operations in Paraguay continued to improve and closed the year with above-budget margins and yields. On the cost side, we recorded an excellent performance, both in regard to direct and administrative costs, which we succeeded in reducing despite the upturn in inflation.
On the real estate front, the most important event was the sale of the remaining part of Cremaq Farm for R$270.0 million, with an IRR (Internal Rate of Return) of 20.4%. This was the biggest property sale transaction in the Company’s history, not only because of its magnitude, but mainly because it confirmed our capacity to create and capture value through the development of rural properties. Since we began operations in 2006:
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Still on the real estate front, we entered into a partnership to operate 4,263 hectares in the state of Mato Grosso. These areas are close to the Alto Taquari Farm and will also be used for sugarcane. In addition to generating cash quickly, the leasing transaction will also allow us to make use of the operational structure and team already present in the region, as well as ensuring greater property management flexibility
Continuing with our property development activities, we invested R$30.6 million in the clearing of new areas and the building of a silo in Bahia with a grain storage capacity of 10,000 tons and a structure for processing production (cleaning and bagging) with a capacity of 200 tons per hour. The construction of the silo will improve the grain sales strategy in the region and mitigate production distribution logistics risks.
The good result from our agricultural operations and the sale of Cremaq Farm generated net revenue of R$440.7 million, adjusted EBITDA of R$198.4 million and a cash position of R$348.9 million. The Board of Directors will submit its proposal for the distribution of results to the Annual Shareholders’ Meeting to be held in October 2015. This result will allow the Company to invest in new acquisitions, pay dividends and continue with the Share Buyback Program
Taking a wider point of view, we can observe the constant improvement in the Company’s efficiency, with a solid management model and a qualified team committed to delivering results and seeking opportunities for generating value in order to continue recording consistent growth, adding value to our shareholders.
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Operating Performance
Sale of property
In June 2015, the Company sold an area of 27,745 hectares (18,578 of which arable) of the Cremaq Farm in the state of Piauí. The rural property was acquired in 2006 for R$ 42.3 million and has a total area of 32,702 hectares. Of this initial area, 4,957 hectares was sold in May 2013 and the remaining 27,745 hectares was sold in June 2015 for R$ 270.0 million.
The sale had an Internal Rate of Return (IRR) of 20.4% and the Cremaq project as a whole had an IRR of 21.2%.
Sold Area | Data of Sale | Aquisition Value + CAPEX (R$ MM) |
Sale Nominal Value (R$ MM) |
IRR ( % ) |
Total: 4.957 ha | May/13 | 11.0 | 38.0 | 23.8 |
Arable: 3.245 ha | ||||
Total: 27.745 ha | June/2015 | 63.5 | 270.0 | 20.4 |
Arable: 18.578 ha | ||||
Total Cremaq project | 74.5 | 308.0 | 21.2 |
We accelerated the turnover of our portfolio in 2012 and this is the fourth consecutive year of farm sales, during which period the average annual sale value was R$112.9 million (considering 50% of the Cresca sale). All sales were substantially above book value and also higher than the fair value in the annual explanatory notes, generating unleveraged IRRs of between 19% and 27%.
1- It is not possible to calculate the IRR from the sale of Cresca, since the sales receivables was made before we effected payment of the purchase.
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Development of Areas
In the 2014/2015 harvest year, year we transformed 6,700 hectares in Brazil and 2,700 hectares in Paraguay, giving a total of 109,700 hectares transformed since the beginning of operations in 2007/08, giving average growth of 46%. We also have a land bank of 49,000 hectares (including 50% of the Cresca area owned by BrasilAgro).
In June 30, 2015, 17% of our properties were developed, 29% were under development and 55% were still undeveloped.
Due to the difficulties we have been facing in regard to obtaining licenses for the Nova Buriti Farm, we are studying alternatives for the property. One such option is to sell the farm to offset the legal reserve, a mechanism envisaged in the new environmental code through which holders of a legal reserve deficit can regularize themselves by acquiring another area.
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In November 2014, the Company received licenses to open 7,766 thousand hectares in Paraguay.
Another important factor for the development of properties was the construction of a silo at Chaparral Farm in Bahia, with a grain storage capacity of 10,000 tons of grain and a structure for processing production (cleaning and bagging) with a capacity of 200 tons/hour, being able to handle up to three products simultaneously. The construction of the silo will improve the grain sales strategy in the region and mitigate production distribution logistics risks.
Construction of the silo was financed at 4% p.a. over 60 months with a 12-month grace period.
Property Portfolio
At the date of this release, the Company’s property portfolio consisted of 253,342 hectares across five Brazilian states and Paraguay, as shown in the table below:
Farms | Location | Aquisition Date | Project | Total Area ha |
Arable Area ha | ||
1 | Fazenda Jatobá | 100% Owned | Barreiras/BA | Mar / 07 | Grãos e Algodão | 31,606 | 23,680 |
2 | Fazenda Alto Taquari | 100% Owned | Alto Taquari/MT | Ago / 07 | Cana-de-açúcar | 5,395 | 3,666 |
3 | Fazenda Araucária | 100% Owned | Mineiros/GO | Abr / 07 | Cana-de-açúcar | 8,124 | 7,205 |
4 | Fazenda Chaparral | 100% Owned | Correntina/BA | Nov / 07 | Grãos e Algodão | 37,182 | 26,498 |
5 | Fazenda Nova Buriti | 100% Owned | Januária/MG | Dez / 07 | Floresta | 24,211 | 19,004 |
6 | Fazenda Preferência | 100% Owned | Barreiras/BA | Set / 08 | Grãos e Pasto | 17,799 | 14,229 |
7 | Fazenda Parceria II | Leasing | Ribeiro Gonçalves/PI | Nov / 131 | Grãos | 7,455 | 7,455 |
8 | Fazenda Parceria III | Leasing | Alto Taquari/MT | Mai / 152 | Cana-de-açúcar | 4,263 | 4,263 |
9 | Cresca | 50% Owned | Boquerón/Paraguai | Dez / 133 | Grãos e Pasto | 117,307 | 58,654 |
Total | 253,342 | 164,654 | |||||
1- BrasilAgro entered into an agricultural exploration partnership at the Parceria II Farm for up to 11 harvests. | |||||||
2- BrasilAgro entered into an agricultural exploration partnership at Parceria III Farm up to March 31, 2026. | |||||||
3- Total property area, BrasilAgro has a 50% equity interest in Cresca S.A |
The Company entered into a partnership to explore 4,263 hectares in the municipalities of Alto Taquari and Alto Araguaia, in the state of Mato Grosso (“Parceria III”).
These areas are close to Alto Taquari Farm and will also be used for sugarcane. The results obtained from sugarcane underline the region’s consolidation as a producer, recording higher gross margins and yields than traditional cane regions such as the state of São Paulo. In addition to generating cash quickly and allowing us to make use of the operational structure and team already present in the region, the leasing transaction will also ensure greater property management flexibility.
Portfolio Market Value
We appraise the market value of our farms every year. On June 30, 2015, the market value of our portfolio, plus the sales held in the period, was R$1.3 billion.
This appraisal takes place internally. However, whenever we deem necessary, we undertake independent appraisals, the last of which took place in June 2014.
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In order to estimate the market value of our farms, we considered for each property: (i) the level of development; (ii) soil quality and maturity; and (iii) agricultural aptitude and potential.
Potfolio fair value evolution - in R$ thousand | |||||
Farm | Period Sales | BrasilAgro | Period Sales | BrasilAgro | Change % |
06/30/2014 | 06/30/2015 | ||||
Cremaq | - | 239,342 | 270,000 | - | n.a. |
Jatobá | - | 247,127 | - | 298,815 | 20.9% |
Chaparral | - | 221,751 | - | 256,919 | 15.9% |
Preferência | - | 47,044 | - | 52,255 | 11.1% |
Alto Taquari | - | 109,827 | - | 117,245 | 6.8% |
Araucária | 41,300 | 138,512 | - | 144,019 | 4.0% |
Nova Buriti | - | 29,101 | - | 29,654 | 1.9% |
Cresca (50%)1 | 16,442 | 78,856 | - | 111,108 | 40.9% |
Market Value | 57,742 | 1,111,560 | 270,000 | 1,010,015 | 9.5% |
1- Refers to the 50% of Cresca held by BrasilAgro. |
From the accounting standpoint, the property portfolio is recognized under “Non-current assets” as properties for investment, stated at cost plus investments less accrued depreciation. On June 30, 2015, this amount was R$288.4 million and considers the sale of the Cremaq Farm.
Agricultural Operations
The table below shows the breakdown of planted area by farm and crop in the 2014/15 harvest:
Planted Area | Sugarcane | Soybean | Corn | Pasture | Other | 2nd Corn Crop | Total |
Cremaq Farm | 14,965 | 1,963 | 1,787 | 18,715 | |||
Jatobá Farm | 9,535 | 1,196 | 10,731 | ||||
Alto Taquari Farm | 3,622 | 3,622 | |||||
Araucária Farm | 4,844 | 4,844 | |||||
Chaparral Farm | 10,535 | 2,538 | 13,073 | ||||
Preferência Farm | 6,554 | 6,554 | |||||
Partnership II Farm | 7,455 | 7,455 | |||||
Cresca (Paraguay) | 5,463 | 3,375 | 2,665 | 2,564 | 14,067 | ||
Total 14/15 | 8,466 | 47,953 | 9,072 | 9,219 | 2,564 | 1,787 | 79,061 |
Grains – Brazil
In 4Q15, we concluded the 2014/15 grain harvest in the Brazilian properties, covering an area of 61,376 hectares, comprising 42,490 hectares of soybean and 7,484 hectares of corn (first and second crops) in the Cremaq, Jatobá, Chaparral, Preferência, Parceria I and II farms.
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· Soybean
The table below shows soybean yield in the 2014/15 harvest:
Productivity - harvest year 14/15 | Estimate | Realized | Change |
Kg/ha | Kg/ha | % | |
Crop | 2,500 | 2,557 | 2% |
Soybean average yield was higher than estimated. We had an above historical average result in the farms in Piauí and lower yields from the farms in Bahia, impacted by the lower rainfall in January.
The new areas under development represent 29% of total planted area and are most affected by climatic variations, since they have a less mature soil structure and are consequently more susceptible to adverse weather conditions. The table below shows soybean yields by level of development:
Productivity - harvest year 14/15 | Realized |
Soybean | Kg/ha |
New Area - 1st and 2nd year | 1,011 |
Under Development Area - 3rd and 4th year | 1,724 |
Developed Area - Above 4th year | 2,875 |
· Corn
The table below shows corn yield in the 2014/15 harvest:
Productivity - harvest year 14/15 | Estimate | Realized | Change |
Corn | Kg/ha | Kg/ha | % |
Crop | 7,200 | 5,426 | -25% |
Second Crop | 3,800 | 3,968 | 4% |
The first corn crop, whose production is concentrated in Bahia, was also impacted by low rainfall in the region, resulting in lower-than-expected yields, while the yield from the second crop, planted exclusively in Piauí, was higher than estimated for the region, which does not have a second corn crop tradition.
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The chart below shows rainfall in Bahia:
· Sugarcane
The Alto Taquari and Araucária farms are entirely planted with sugarcane and are currently in the harvest period. These properties are part of the agreement to supply sugarcane to ETH Bioenergia for two complete sugarcane crop cycles, or six harvest years with five harvests.
The chart below shows the sugarcane results appropriated in the sugarcane harvest year (April to November) and in the Company’s fiscal year (July 1 to June 30):
Sugarcane harvest year results | January 01 to December 31 | ||
2014 | 2015 | Estimate | |
Tons harvested | 723,593 | 983,320 | |
Hectares harvested | 7,141 | 10,883 | |
TCH - Harvested Tons per Hectares1 | 101.33 | 90.35 | |
1-The TCH in 2015 will be lower because the average age of the plantation leased is greater, reducing the average productivity of the year. | |||
Sugarcane fiscal year results | July 01 to June 30 | ||
2014 | 2015 | ||
Tons harvested | 570,820 | 830,204 | |
Hectares harvested | 7,583 | 8,196 | |
TCH - Harvested Tons per Hectares | 75.28 | 101.30 |
Between January 1 and June 30, 2015, we had harvested 242,000 tons of sugarcane in 2,319 hectares of the Alto Taquari, Araucária and Partnership III Farms.
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· Pasture
The Preferência farm has 6,554 hectares of pasture, 4,633 of which are leased to third parties for cattle raising.
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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) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Gross Profit | 181,508 | 6,319 | 2772.4% | 204,076 | 13,673 | 1392.5% |
Selling expenses | (8,324) | (5,404) | 54.0% | (9,006) | (10,239) | -12.0% |
General and administrative expenses | (10,307) | (9,715) | 6.1% | (29,360) | (30,378) | -3.4% |
Other operating income/expenses, net | 310 | (867) | n.a. | (3,422) | 285 | n.a. |
Depreciation and amortization | 10,216 | - | n.a. | 22,222 | 21,431 | 3.7% |
EBITDA | 173,403 | (9,667) | n.a. | 184,510 | (5,228) | n.a. |
Adjusted EBITDA (R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Gross Profit | 181,508 | 6,319 | 2772.4% | 204,076 | 13,673 | 1392.5% |
Elimination of gains on biological assets (grains and sugarcane planted) | 9,216 | 2,562 | 259.7% | 3,336 | 5,823 | -42.7% |
Selling expenses | (8,324) | (5,404) | 54.0% | (9,006) | (10,239) | -12.0% |
General and administrative expenses | (10,307) | (9,715) | 6.1% | (29,360) | (30,378) | -3.4% |
Other operating income/expenses, net | 310 | (867) | n.a. | (3,422) | 285 | n.a. |
Derivatives Results | 3,505 | 1,867 | 87.7% | 6,080 | 4,816 | 26.2% |
Adjusted Depreciations 1 | 12,282 | 9,526 | 28.9% | 22,909 | 20,404 | 12.3% |
EBITDA Cresca2 | 1,805 | (705) | 0.0% | 3,783 | (705) | n.a. |
Adjusted EBITDA | 189,995 | 3,583 | 5202.7% | 198,396 | 3,679 | 5292.7% |
1- Adjusted depreciation includes depreciation of the already harvested grain and sugarcane cropped. |
EBITDA was calculated as gross profit adjusted by general, administrative, and selling expenses, other operating revenue and expenses and depreciation expenses. Adjusted EBITDA was calculated by excluding biological assets in progress (sugarcane and grains) and adjusting for the harvest’s derivative results and depreciation expenses, including the depreciation of fixed assets of the farms and administrative installations, developed areas and permanent crops.
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Income Statement
Net Revenue from Sales
4Q15 | 4Q14 | Change | 2015 | 2014 | Change | |
Revenues from farm sale |
266,000 | 33,737 | 688.5% | 266,550 | 33,737 | 690.1% |
Revenues from grains |
67,842 | 54,004 | 25.6% | 121,791 | 95,896 | 27.0% |
Revenues from sugarcane |
14,240 | 8,542 | 66.7% | 54,396 | 39,406 | 38.0% |
Revenues from leasing |
1,258 | 303 | 315.2% | 3,204 | 1,143 | 180.3% |
Other revenues |
738 | 647 | 14.1% | 4,217 | 1,730 | 143.8% |
Deductions from gross revenue |
(3,134) | (3,176) | -1.3% | (9,414) | (6,861) | 37.2% |
Net Sales Revenue |
346,944 | 94,057 | 268.9% | 440,744 | 165,051 | 167.0% |
In FY15 net revenue from sales totaled R$440.7 million, a R$275.7 million increase year-over-year, due to: (i) the R$266.5 million revenue from the sale of Cremaq Farm in 2015; (ii) the 38% increase in revenue from sugarcane and (iii) the 27% decrease in grain revenue.
Net Revenue from the Sale of Farms
In June 2015, the Company sold an area of 27,745 hectares of the Cremaq Farm in the State of Piauí for R$270.0 million. The table below shows the booking of the revenue from the sale of this property:
Cremaq Sale (Jun/15) |
Revenues from farm sale 2015 | |
Farm sale (land) |
238,000 | 238,000 |
Property, plant and euipment |
28,000 | 28,000 |
Restricted cash |
4,000 | - |
Remaining balance Cremaq sale - may/2013 |
- | 550 |
Revenues from farm sale |
270,000 | 266,550 |
Cost of farm sale (terra) |
- | (36,290) |
Cost of Property, plant and euipment |
- | (27,843) |
Taxes - PIS and Cofins |
- | (8,687) |
Cost of remaining balance Cremaq sale - may/2013 |
(109) | |
Cost of farm sale |
- | (72,929) |
| ||
Gain on sale of farms - 2015 |
193,621 |
The environmental licensing balance totaling R$4.0 million refers to a 6,020 hectare area which is in the division and georeferencing phase. As a result, registration of the deed of sale is still pending.
The remaining Cremaq balance refers to an adjustment to the sale of Cremaq Farm in May 2013. A topographical survey showed that there was a difference of 62 hectares between the area measured and the value stated in the sale contract executed in May 2013, resulting in an addition of R$550 thousand to the sale price.
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Revenue from the Sale of Agricultural
Products
Net Revenue (R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Total | 81,101 | 60,320 | 34.5% | 174,351 | 131,314 | 32.8% |
Soybean | 62,984 | 46,073 | 36.7% | 101,660 | 82,073 | 23.9% |
Corn | 2,382 | 5,133 | -53.6% | 14,628 | 9,601 | 52.4% |
Sugarcane | 14,049 | 8,384 | 67.6% | 52,925 | 38,235 | 38.4% |
Leasing | 1,068 | 175 | 510.2% | 1,872 | 426 | 339.9% |
Services | 521 | 172 | 203.0% | 1,147 | 269 | 326.9% |
Others | 96 | 383 | -74.9% | 2,118 | 711 | 198.0% |
Tons | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Total | 318,275 | 205,056 | 55.2% | 990,827 | 693,683 | 42.8% |
Soybean | 69,375 | 55,609 | 24.8% | 113,172 | 95,695 | 18.3% |
Corn | 7,024 | 14,139 | -50.3% | 47,214 | 26,720 | 76.7% |
Sugarcane | 241,771 | 135,160 | 78.9% | 830,204 | 570,820 | 45.4% |
Others | 105 | 149 | -29.0% | 237 | 448 | -47.1% |
In 4Q15, net revenue from sales totaled R$81.1 million, an increase of 35% from the same period in the previous year.
Grain net revenue (soybean and corn) in 4Q15 grew 27.7% year-over-year, from R$51.2 million, from the sale of 69,700 tons of grain, to R$65.3 million, from the sale of 76,400 tons of grains.
Soybean revenue in 2015 grew 24% over the previous year, 5% from the increase in soybean prices and 18.3% from higher sales in the period, from R$82.0 million (sale of 95,700 tons at R$857.65 per ton) to $101.7 million (sale of 113,200 tons at R$898.28 per ton).
Corn revenue in 2015 increased by 52% year-over-year, resulting from the 76.7% increase in sales despite the 13.8% decrease in prices, from R$9.6 million (sale of 26,700 tons at R$359.32 per ton) to R$14.6 million (sale of 47,200 tons at R$309,82 per ton).
Sugarcane revenue in 2014 grew 38% over the previous year, from R$38.2 million from the sale of 570,000 tons at R$66.98 per ton to R$52.9 million from the sale of 830,000 tons at R$63.75 per ton. The decrease in the price of sugarcane per ton was due to the 4% decrease in average TRS (total recoverable sugar) kilo per ton harvested, from 140.31 kg/ton in FY14 to 134.40 kg/ton in FY15. The growth in the amount of tons of sugarcane was mainly due to the increase in the period harvest, from 7,583 hectares to 8,196 hectares.
Leasing revenue in 2015 totaling R$ 1.9 million came from the leasing of the areas of the Preferência and Jatobá farms to third parties, net of taxes.
Services revenue in 2015 totaling R$1.1 million came from an advisory services provision agreement related to the development of land owned by Cresca.
Other sales revenue in 2015 totaling R$2.1 million refers to the sale of inputs (seeds, fertilizers and other) of the areas which were not planted in the 2014/15 harvest year and machinery.
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Biological Assets
Biological Assets and Agricultural Products (R$ thousand) | Soybean 14/15 |
Corn(1) 14/15 | Corn(2) 13/14 | Cane | Gain / Loss em 06/30/15 |
Gain and loss on agricultutal products | 8,816 | (4,424) | 402 | 8,329 | 13,123 |
Gain and loss on biological assets | - | - | 685 | (4,276) | (3,336) |
Change on biological assets fair value | 8,816 | (4,424) | 1,087 | 4,053 | 9,788 |
In 2015, the Company recorded a gain of R$9.8 million from biological assets and agricultural products, comprising losses of R$3.1 million from corn and a gain of R$12.9 million from other cultures.
Biological assets correspond to agricultural products in formation (not yet harvested), measured at the net present value of the expected cash flow from these products. The calculation of fair value considers the best estimates in relation to sales prices, discount rates, direct costs, leasing, yields and selling expenses.
Since sugarcane crops consist of various harvest cycles, changes in the assumptions regarding these factors may affect the recognized fair value of the biological assets.
Gains or losses from the variation in the fair value of biological assets are determined by the difference between their fair value and their book value. Book value includes investments and costs effectively incurred until the moment of appraisal, as well as write-offs arising from the harvesting of the agricultural products.
Harvested agricultural products are measured at their value at the time of harvest considering the market price of the area of each farm.
Gains or losses from the variation in the fair value of agricultural products are determined by the difference between their harvested volume at market value (net of selling expenses and taxes) and the production costs incurred (direct and indirect costs, leasing and depreciation).
Gain and loss on agricultutal products | Soybean 14/15 | Corn(1) 14/15 | Corn(2) 13/14 | Cane | Gain / Loss
em 06/30/15 |
Area (hectares) | 42,485 | 5,701 | 2,466 | 8,196 | 58,848 |
Prodution (ton) | 111,751 | 31,653 | 8,450 | 830,204 | 982,057 |
Poroductivity (Ton./ha) | 2.63 | 5.55 | 3.43 | 101.30 | 16.69 |
Production fair value (R$ thousand) | 95,835 | 9,609 | 2,758 | 53,000 | 161,203 |
Production cost (R$ thousand) | (87,019) | (14,033) | (2,356) | (44,671) | (148,080) |
Gain and loss on agricultutal products (R$ thousand) | 8,816 | (4,424) | 402 | 8,329 | 13,123 |
Production fair value (R$ /bag ) | 51.45 | 18.22 | 19.58 | ||
Production cost (R$/bag) | (46.72) | (26.60) | (16.73) | ||
Gain and loss on agricultutal products (R$/bag) | 4.73 | (8.39) | 2.85 |
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The table below shows the results of the sugarcane harvest (April to November):
Year ended June 30, 2014 | Crop 2013 | Crop 2014 | Crop 2015 | Total | |
Net Revenues | 29,763 | 8,472 | 38,235 | ||
Cost of Sales | (26,102) | (8,689) | (34,790) | ||
Gain (loss) of agriculture products | 770 | 3,125 | 3,894 | ||
Profit (Loss) | 4,430 | 2,909 | - | 7,339 | |
Tons harvested | 435,660 | 135,160 | 570,820 | ||
Year ended June 30, 2014 | Crop 2013 | Crop 2014 | Crop 2015 | Total | |
Net Revenues | 38,876 | 14,049 | 52,925 | ||
Cost of Sales | (37,378) | (15,421) | (52,799) | ||
Gain (loss) of agriculture products | 5,146 | 3,183 | 8,329 | ||
Profit (Loss) | - | 6,645 | 1,811 | 8,455 | |
Tons harvested | 588,432 | 241,771 | 830,204 | ||
Year ended June 30, 2014 | Crop 2013 | Crop 2014 | Crop 2015 | Total | |
Net Revenues | 29,763 | 47,349 | 14,049 | 91,160 | |
Cost of Sales | (26,102) | (46,067) | (15,421) | (87,589) | |
Gain (loss) of agriculture products | 770 | 8,271 | 3,183 | 12,224 | |
Profit (Loss) | 4,430 | 9,553 | 1,811 | 15,794 | |
Tons harvested | 435,660 | 723,593 | 241,771 | 1,401,024 |
Impairment
Inventories of agricultural products are measured at their fair value at harvest, considering the average harvest price in line with the prevailing accounting standard. A provision to adjust inventories at the net realized value of agricultural products is constituted when the fair value of the inventory is higher than the realized value. The realization value is the sales price estimated during the normal course of business less estimated selling expenses. The adjustment at realizable value is booked in the period income statement under “Impairment of agricultural products after harvest”.
On June 30, 2015, the amount recognized under impairment of agricultural products was R$3.0 million.
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Production Costs
The table below gives a breakdown of direct production costs:
|
Soybean |
Corn |
Sugarcane |
Variable costs | 84% | 91% | 77% |
Seeds | 12% | 19% | 0% |
Fertilizers | 21% | 32% | 11% |
Defensive | 23% | 16% | 5% |
Agricultural services | 22% | 18% | 49% |
Fuels and lubricants | 4% | 3% | 12% |
Maintence of machines and instruments | 0% | 0% | 0% |
Others | 3% | 3% | 0% |
Fixed costs | 16% | 9% | 23% |
Labor | 7% | 5% | 4% |
Depreciations and amortizations | 2% | 1% | 16% |
Others | 8% | 2% | 3% |
The table below shows the production cost per hectare: | |||
Total Production Cost | 2014/2015 (R$/ha) |
2013/2014 (R$/ha) |
Change |
Soybean1 | 1,835 | 1,668 | 10% |
Corn1 | 2,264 | 2,384 | -5% |
Sugarcane | 4,824 | 4,685 | 3% |
1- The total production cost excludes depreciation with the clearing of areas for soybean and corn |
Total soybean production costs per hectare in FY15 increased by 10% over the year before, due to the higher exchange rate and the upturn in planted area with Intacta seeds, which cost more than other seed varieties.
Intacta seeds provide greater protection against the main caterpillars that attack soybean, are more tolerant to glyphosate herbicides and ensure higher potential yields.
The 3% increase in the total per-hectare sugarcane production cost was due to the 14% upturn in CCT (cutting, loading and transporting) costs, which were mainly impacted by the 15.3% hike in the per-liter diesel cost.
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Cost of Goods Sold
(R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Total of cost of goods sold | (79,603) | (66,277) | 20.1% | (170,489) | (138,536) | 23.1% |
Soybean | (60,418) | (51,005) | 18.5% | (99,238) | (89,031) | 11.5% |
Corn | (2,446) | (4,762) | -48.6% | (13,476) | (9,379) | 43.7% |
Sugarcane | (15,421) | (8,688) | 77.5% | (52,799) | (34,790) | 51.8% |
Leasing | (900) | (922) | -2.3% | (3,693) | (3,029) | 21.9% |
Others | (418) | (899) | -53.5% | (1,283) | (2,306) | -44.4% |
In 2015, the cost of goods sold (COGS) came to R$170.5 million. Due to the fair value adjustments of agricultural products, changes in costs between exercises are directly linked to the market prices of commodities at the time of harvest.
In 2015, total soybean COGS increased by 11.5% year-over-year, from R$89.0 million, from the sale of 95,700 tons at R$930.36 per ton, to R$99.2 million, from the sale of 113,100 tons at R$876.88 per ton.
Total corn COGS climbed by 43.7% year-over-year, from R$9.4 million, from the sale of 26,700 tons at R$351.03 per ton, to R$13.5 million from the sale of 47,200 tons at R$285.42 per ton.
Total sugarcane COGS increased by 51.8% over the previous year, from R$34.8 million, from the sale of 570,000 tons at R$60.95 per ton, to R$52.8 million, from the sale of 830,000 tons at R$63.60 per ton.
Selling Expenses
(R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Selling expenses | (8,324) | (5,404) | 54.0% | (9,006) | (10,239) | -12.0% |
Freight | (3,497) | (3,120) | 12.1% | (3,844) | (3,770) | 2.0% |
Storage and Processing | (1,662) | (1,672) | -0.6% | (2,708) | (2,785) | -2.8% |
Sales Commission | (139) | (1,071) | -87.0% | (263) | (1,019) | -74.2% |
Others | (3,027) | 458 | n.a. | (2,190) | (2,666) | -17.9% |
In FY15, selling expenses totaled R$9.0 million, 12% down on the previous year.
Other selling expenses in FY15 refers to the constitution of provisions for doubtful debt totaling R$2.7 million and the reversal of provisions for onerous contracts totaling R$579 thousand.
General and Administrative
Expenses
(R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
General and administrative expenses | (10,307) | (9,715) | 6.1% | (29,360) | (30,378) | -3.4% |
Depreciations and amortizations | (252) | (299) | -15.7% | (1,249) | (1,118) | 11.7% |
Personnel expenses | (7,992) | (7,199) | 11.0% | (19,543) | (19,589) | -0.2% |
Expenses with services provider | (1,006) | (1,287) | -21.8% | (4,077) | (4,841) | -15.8% |
Leases and Rents | (182) | (151) | 20.5% | (713) | (698) | 2.1% |
Others expenses | (875) | (779) | 12.3% | (3,778) | (4,132) | -8.6% |
In 4Q15, general and administrative expenses grew by 6.1% over the same period in the previous year, from R$9.7 million to R$10.3 million. This increase was due to the booking of an R$800 thousand adjustment to the provision for employee bonus payments.
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In FY15, general and administrative expenses fell by 3.4% over the year before, from R$30.4 million to R$29.3 million due to the renegotiation of service contracts and the organizational restructuring.
The organizational restructuring generated an approximate 5% reduction in personnel expenses. In the full year, this result was offset by the adjustment to the provision for employee bonus payments and period severance pay expenses.
In the year as a whole, other expenses fell by 8.6% over FY14, from R$4.1 million to R$3.7 million. These expenses mainly refer to taxes and corporate, travel and telephony expenses.
Other Operating Revenue / Expenses
4Q15 | 4Q14 | Change | 2015 | 2014 | Change | |
Other operating income/expenses | 309 | (867) | n.a. | (3,422) | 285 | n.a. |
Gain/Loss on sale of fixed assets | 81 | (1,669) | n.a. | (361) | (1,522) | -76.3% |
Write-off of farm sale Cresca | - | - | n.a. | (612) | - | n.a. |
Provisions for lawsuits | 478 | (635) | n.a. | (111) | 1,205 | n.a. |
Horizontina Farm | - | 600 | -100.0% | (1,240) | - | n.a. |
Others | (250) | 837 | n.a. | (1,098) | 602 | n.a. |
In FY15, we recognized other operating expenses of R$3.4 million which mainly refer to: (i) the partial write-off of goodwill from the sale of 24,000 hectares related to the Cresca land and exploration rights contract; and (ii) a payment related to a hereditary rights lawsuit.
Financial Result
(R$ thousand) | 4Q15 | 4Q14 | Chnage | 2015 | 2014 | Change |
Interest | (2,323) | (1,644) | 41.3% | (9,258) | (8,039) | 15.2% |
Monetary variations | (829) | (684) | 21.2% | (2,967) | (2,328) | 27.4% |
Foreign exchange variations on liabilities | (1,086) | (313) | 247.0% | 6,581 | 323 | 1937.5% |
Unwind of present value adjustment | 2,098 | (266) | n.a. | 18,296 | 5,525 | 231.1% |
Results with derivatives | 2,452 | (2,664) | n.a. | 12,401 | (5,583) | n.a. |
Other financial income / expenses | 2,559 | 1,523 | 68.0% | 7,585 | 8,542 | -11.2% |
Total | 2,871 | (4,048) | n.a. | 32,638 | (1,560) | n.a. |
The consolidated financial result is composed of the following items: (i) interest on financing; (ii) the impact of the monetary variation on the amount payable from the acquisition of the Alto Taquari and Nova Buriti farms; (iii) the impact of the U.S. dollar exchange variation on the companies’ USD cash position; (iv) the present value of Cremaq, Araucária and São Pedro farms’ sales receivables, fixed in soybean bags; (v) income from hedge operations; and (vi) bank fees and expenses and returns on cash investments with the FIM Guardian fund, Banco Itaú and Banco BTG Pactual.
Monetary variations refer to the amount payable for the acquisition of the Alto Taquari Farm, which is adjusted by the CDI interbank deposit rate and the Nova Buriti Farm, which is adjusted by the IGPM general market price index.
Foreign exchange variations refer to margin deposits as collateral for derivative transactions with offshore brokerage houses and Cresca’s receivables
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The increase in the gain (loss) line was mainly due to the impact of the appreciation of the dollar on the adjustment to the fair value of receivables from farms denominated in soybean.
The hedge result is incorporating CBOT soybean prices well above the market and an exchange rate close to the current one and amounted to R$12.4 million in 2015, equivalent to realized revenue of R$17.7 million and an unrealized expense of R$5.3 million.
Derivative Operations
Our risk policy primarily aims to hedge the company’s cash flow. In this context, we are concerned not only with the main components of our revenue, but also the main components of our production costs. We therefore monitor on a daily basis: a) the international prices of the main agricultural commodities produced by the company, usually expressed in U.S. dollars; b) the base premium, i.e. the difference between the international and domestic commodity price; c) exchange rates; and d) the prices of the main components such as freight, fertilizers and chemicals, that can significantly impact costs.
The points analyzed when deciding on the price and margin hedging strategy and tools are listed below:
• Estimated gross margin based on the current price scenario.
• Standard deviation from the estimated gross margin for different pricing strategy scenarios.
• Analysis of the estimated gross margin in stress scenarios for different hedge strategies.
• Comparison between current estimates and the Company’s budget.
• Comparison of the estimated gross margin and the historical average.
• Market expectations and trends.
• Tax aspects.
Hedge position on August 28, 2015.
Crop | Soybean | FX | ||
% hedge¹ | Price (USD/bu.) | % hedge² | BRL/USD | |
15/16 | 16.41% | 9.80 | 31.25% | 3.85 |
1- Percentage of volume in tons of soybean locked in. | ||||
2- Percentage of expected revenue in USD. |
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Balance Sheet
Allocation of net income and dividend
distribution
A meeting of the Board of Directors held on this date (September 03, 2015) approved the Management Proposal to be submitted to the next Annual Shareholders’ Meeting to be held on October 28, 2015.
In accordance with Brazilian Corporation Law and with the Bylaws of the Company, management proposes the following distribution of net income for fiscal year 2015:
2015 | |
Net income in fiscal year | 180,810 |
(-) Appropriation of accumulated losses (5% of net income) | (10,988) |
Profit for the period | 169,822 |
(-) Appropriation of the legal reserve (5% of net income) | (8,491) |
Adjusted Net Income | 161,331 |
(-) Minimum compulsory dividends - 25% of adjusted net income | (40,333) |
(-) Additional compulsory dividends - 25% of adjusted net income | (40,333) |
Proposed Dividends – 50% of adjusted net income | (80,666) |
Appropriation of reserve for investment and expansion | 80,665 |
Dividends per share (R$) | 1.39 |
Cash and Cash Equivalents
Cash and Cash equivalents | 2015 | 2014 | Change |
Cash and Cash equivalents | 75,620 | 86,745 | -13% |
Cash and Banks | 12,560 | 15,247 | -18% |
Repurchase agreements | 26,302 | 66,267 | -60% |
Bank deposit certificates | 36,758 | 5,231 | 603% |
Markable securities | 273,258 | 21,532 | 1169% |
Not exclusive investment funds quotas | 69,300 | 21,532 | 222% |
Restricted financial investments | 203,958 | - | n.a. |
Total | 348,878 | 108,277 | 222% |
The Company closed FY15 with a cash position of R$348.9 million, R$240.6 million more than at the end of FY14, due to the result of the sale of Cremaq Farm.
In July, 2015, R$159.4 million was freed, representing 78.16% of the balance of the escrow account related to the partial registration of land entries in the name of the purchaser. The remaining balance will be freed when the remaining entries are registered.
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The amounts invested are remunerated based on a percentage of the CDI interdeposit rate, disclosed daily by the CETIP (an entity that provides custody and clearing services), which varied between 90% and 102.54% on June 30, 2015 and between 91% and 101.50% on June 30, 2014.
Securities refer to investments in the exclusive FIM Guardian investment fund, managed by BTG Pactual.
Properties for Investment
The fundamental pillars of the Company’s business strategy are the acquisition, development, exploration and sale of rural properties suitable for agricultural activities. The Company acquires rural properties with significant potential for generating value, subsequently holding the assets and carrying out profitable agricultural activities on them. Once we acquire our rural properties, we begin to implement high-value-added crops and to transform these rural properties by investing in infrastructure and technology, while also entering into lease agreements with third parties. In line with our strategy, when we deem a rural property has reached its optimal value, we sell it to capture the capital gains.
The rural properties acquired by the Company are booked at their acquisition cost, which does not exceed their realized net value, and are recognized under “Non-Current Assets”.
Properties for investment are evaluated at their historical cost, plus investments in buildings, improvements and the clearing of new areas, less accrued depreciation, in accordance with the same criteria detailed for fixed assets.
The acquisition of Cresca is booked as a joint venture and therefore recognized as an investment and its result as equity income.
Farm | Acquisition value | Buildings and improvements |
Opening area | Construction in progress |
Properties for Investment |
Initial Balance | 237,999 | 23,638 | 68,650 | 4,516 | 334,803 |
In June 30, 2014 | |||||
Acquisitions |
327 | 82 | 4,866 | 25,354 | 30,629 |
Reductions |
(35,879) | (9,798) | (15,263) | (1,534) | (62,474) |
(-) Depreciation/ Amortization | - | (2,016) | (12,595) | - | (14,611) |
In June 30, 2015 | 202,447 | 11,906 | 45,658 | 28,336 | 288,347 |
* Excludes sugarcane investments |
The write-offs in the period refer to the adjustment of the Cremaq Farm area sold, as well as the clearing of areas and construction in progress
In FY15, we invested R$25.3 million in works in progress, mostly referring to the building of the silo in Bahia, which absorbed investments of R$9.5 million, and the clearing of areas, construction works and roads, which absorbed R$15.8 million.
The fair value of the properties totaled R$898.0 million on June 30, 2015.
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CAPEX – Clearing of Areas
The table below gives a breakdown of investments in our properties:
(R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Maintenance | 35 | 751 | -95.4% | 2,724 | 3,566 | -23.6% |
Opening | 838 | 3,990 | -79.0% | 15,033 | 13,550 | 10.9% |
Total | 873 | 4,741 | -81.6% | 17,757 | 17,116 | 3.7% |
Depreciation – Clearing of Areas
The table below shows area clearing depreciation:
(R$ thousand) | 4Q15 | 4Q14 | Change | 2015 | 2014 | Change |
Maintenance | (549) | (675) | -18.6% | (2,183) | (2,784) | -21.6% |
Opening | (2,576) | (2,483) | 3.7% | (10,412) | (9,576) | 8.7% |
Total | (3,125) | (3,158) | -1.1% | (12,595) | (12,360) | 1.9% |
Indebtedness
The table below shows our short and long-term loans and financing position on June 30, 2015 and June 30, 2014.
Loans and Financing (R$ thousand) | Expiration | Annual Interest Tax - % | 06/30/2015 | 06/30/2014 | Change | |
Short term | ||||||
Curto Prazo | ||||||
Financiamento de Custeio Agrícola | nov-15 | Nov-15 | 7,51 to 15,12 | 25,595 | 44,712 | -42.8% |
Financiamento Projeto Bahia | dez-15 | Dec-15 | TJLP + 3,45 and 4,45 / SELIC + 3,45 / Pre 4,00 to 8,50 | 9,469 | 12,742 | -25.7% |
Capital de Giro | set - 15 | Sep-15 | 1,6905 + Monetary Var. / CDI 83,48 | 9,898 | - | n.a. |
Financiamento de Máquinas e Equipamentos | dez-15 | Dec-15 | 5,50 to 8,70 | 943 | 1,814 | -48.0% |
Financiamento de cana-de-açúcar | jul-15 | Jul-15 | TJLP + 3,00 to 4,00 | 1,621 | 2,985 | -45.7% |
Arrendamento Financeiro Canavial - Parceria III | nov-18 | Nov-18 | 6.92% | 3,374 | - | n.a. |
50,900 | 62,253 | -18.2% | ||||
Longo Prazo | ||||||
Financiamento de cana | fev-20 | Jul-15 | TJLP + 3,00 to 4,00 | 1,716 | 1,610 | 6.6% |
Financiamento de Máquinas e Equipamentos | nov-16 | Nov-16 | 5,50 to 8,70 | 113 | 1,056 | -89.3% |
Financiamento Projeto Bahia | out-20 | Oct-21 | TJLP + 3,45 and 4,45 / SELIC + 3,45 / Pre 4,00 to 8,50 | 53,149 | 55,243 | -3.8% |
Arrendamento Financeiro Canavial - Parceria III | nov-18 | Nov-18 | 6.92% | 4,201 | - | n.a. |
59,179 | 57,909 | 2.2% | ||||
Total | 110,079 | 120,162 | -8.4% |
The bulk of our debt comprises loans and financing from development banks and/or government development agencies, through direct and indirect lending, at interest rates that are cheaper than the market rates. During the year, government development agencies disbursed financing of R$79.9 million, giving a total of R$89.8 million.
In 4Q15, we contracted working capital financing in reais totaling R$5.0 million at 83.48% of the CDI, maturing in September, 2015.
In May 2015, the Company entered into a partnership to operate 4,263 hectares in the municipalities of Alto Taquari and Alto Araguaia, in the state of Mato Grosso (“Parceria III”), which consists of the leasing of areas for the planting and cultivation of sugarcane and the acquisition of existing sugarcane plantations. This contract comes under the definition of financial leasing and was recognized under “Sugarcane Financial Leasing – Parceria III’. Payment will always be made in kind (tons of sugarcane) to be delivered to the mill belonging to Brenco Companhia Brasileira de Energia Renovável during the harvest period of the product.
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In addition, the balance of accounts payable on acquisitions on June 30, 2015 was R$48.8 million, 9% up on June 30, 2014, due to the restatement of the installments, which are adjusted by the IGPM (Nova Buriti Farm) and the CDI (Alto Taquari Farm).
Acquisitions payable (R$ thousand) | 06/30/2015 | 06/30/2014 | Change |
Alto Taquari Farm | 29,023 | 26,060 | 11.4% |
Nova Buriti Farm | 19,817 | 18,760 | 5.6% |
Total | 48,840 | 44,820 | 9.0% |
The balance of accounts payable on acquisitions is tied to compliance with certain conditions precedent by the sellers in regard to obtaining the licenses.
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Cresca S.A. – Paraguay
Operating Performance
Cresca has a total area of 117,307 hectares, 58,654 of which arable. BrasilAgro retains a 50% share of Cresca’s capital and is responsible for all the operational management of the property through a Management Fee contract.
The property has 14,256 hectares under development and during the 2014/15 harvest year, 2,700 hectares were transformed into pasture. In the same period, we obtained licenses for the clearing of a further 7,766 hectares, allowing the Company to maintain its development pace.
Also in the 2014/15 harvest year, 11,402 hectares were planted with soybean, corn and poaceous crops (cover crops). We also have 2,665 hectares of pasture.
· Grains
Productivity - harvest year 14/15 | Area Hectares |
Estimate Kg/ha |
Realized Kg/ha |
Change % |
Soja | 5,463 | 1,600 | 1,910 | 19% |
Milho | 3,375 | 3,650 | 4,080 | 12% |
Soybean and corn yields were higher than expected and higher than the property’s historical average. Given its location in a region with limited rainfall, the average yield in the Chaco Paraguaio is less than in other traditional grain-growing regions of the country. On the other hand, soil fertility is high, well above Brazilian standards.
The combination of low production costs and high soil fertility results in highly attractive economic margins for agribusiness in this region of Paraguay, which has no tradition in the cultivation of grains.
Total cost of production | 2014/2015 (R$/ha) |
Soybean | 1,274 |
Corn | 1,190 |
· Cattle
We closed the year with 1,536 head of cattle, distributed through 1,070 hectares of active pasture. We also concluded the formation of another 1,595 hectares which will be opened to livestock at the beginning of this harvest, doubling the property’s stocking rate in 2015/16.
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The stocking rate in the 2014/15 harvest year was 1.20 AU/ha (Animal Unit - 450 kg of live weight) with an average daily weight gain of around 500 grams per animal.
Financial Performance
Financial Statements - R$ thousand | 2015 |
Revenues from grains | 15,271 |
Revenues from sugarcane | 1,652 |
Revenues from farm sale | 30,711 |
Other revenues | 91 |
Net Sales Revenue | 47,725 |
Change in fair value of biological assets and agricultural products | (858) |
Impairment | 133 |
Net Revenue | 47,001 |
Cost of agricultural products sale | (13,269) |
Cost of livestock sale | (1,622) |
Cost of farm sale | (20,466) |
Gross Profit (loss) | 11,644 |
Selling expenses | (2,559) |
General and administrative expenses | (3,102) |
Depreciations and amortizations | (69) |
Personnel expenses | (1,301) |
Expenses with services provider1 | (1,302) |
Leases and Rents | (74) |
Others expenses | (357) |
Other operating income/expenses, net | (7) |
Financial result | (7,385) |
Financial income | (1,213) |
Financial expenses | (6,172) |
Profit (loss) before income and social contribution taxes | (1,409) |
Income and social contribution taxes | (1,081) |
Profit (loss) for the period | (2,490) |
BrasilAgro Interest | 50% |
BrasilAgro results | (1,245) |
Write-off of Company’s fair value due to disposal of farm in Cresca | (3,426) |
Amortization of fair value adjustment on the acquisition date (shareholder’s loans) | 316 |
BrasilAgro results - Equity pick up | (4,355) |
On July 2014, 24,624 hectares of Cresca S.A. were sold. The impact of this sale generated a write-off of R$3,4 million in the Company’s result related to the difference between the fair value of the land (goodwill recognized by BrasilAgro at the moment of acquisition of Cresca S.A.) and its book value.
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Cresca | Write - Off | BrasilAgro | |
Assets | |||
Current assets | |||
Cash and Cash equivalents | 471 | - | 471 |
Trade accounts receivable | 9,837 | - | 9,837 |
Inventories | 5,010 | - | 5,010 |
Biologial assets | 5,440 | - | 5,440 |
Recoverable taxes | 3,120 | - | 3,120 |
Other assets | - | 212 | 212 |
23,878 | 212 | 24,090 | |
Non-current assets | |||
Trade accounts receivable | 14,008 | - | 14,008 |
Investment properties | 164,459 | 84,064 | 248,523 |
Property, plant and euipment | 1,236 | - | 1,236 |
179,703 | 84,064 | 263,767 | |
Total assets | 203,581 | 84,276 | 287,857 |
Liabilities and Equity | |||
Current liabilities | |||
Trade accounts payable | 5,823 | - | 5,823 |
Loans and financing | 194 | - | 194 |
Labor obligations | 183 | - | 183 |
Transactions with related parties | 12,248 | - | 12,248 |
18,448 | - | 18,448 | |
Non-current liabilities | |||
Taxes payable | - | 5,898 | 5,898 |
Transactions with related parties | 62,751 | 1,302 | 64,053 |
62,751 | 7,200 | 69,951 | |
Equity - Attributable to equity holders of the parent | |||
Capital | 93,063 | - | 93,063 |
Capital reserves | 67,038 | - | 67,038 |
Equity variation adjustment | - | 77,076 | 77,076 |
Accumulated losses | (37,719) | - | (37,719) |
Total equity | 122,382 | 77,076 | 199,458 |
Total liabilities and equity | 203,581 | 84,276 | 287,857 |
BrasilAgro Interest | 50% | ||
BrasilAgro Investment | 99,729 |
On June 2015, the Company’s 50% share in Cresca S.A. was registered as an investment in the amount of R$99,7 million, R$61,2 million of which related to accounts in Cresca’s books and R$38,5 million related to the goodwill recognized by BrasilAgro at the moment of the acquisition of the joint venture.
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Capital Markets
Share Performance
On September 03, 2015, BrasilAgro’s shares (AGRO3) were quoted at R$10.79, giving a market cap of R$682.2 million, while its ADRs (LND) were quoted at US$2.88.
In the last 12 months, AGRO3 has appreciated by 14% versus the Ibovespa’s depreciation of 22.5%
Corporate Governance
Sustainability Report
This year, for the first time, we prepared the Company’s Sustainability Report in accordance with the guidelines of the Global Reporting Initiative (GRI), a global, multi-sector and voluntary standard, adopted by companies around the world, containing indicators and principles for the reporting of information relevant to sustained corporate development.
By adhering to the GRI, BrasilAgro seeks to build multistakeholder dialogue and ensure greater operational transparency, as well as take advantage of a management and support tool to identify the best practices to be adopted to generate opportunities and mitigate business risks.
The report is available on the Company’s website at www.brasil-agro.com
Release 4Q15
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Definitions |
4Q14 – quarter ended June 30, 2014. |
FY14 – year ended June 30, 2014. |
Harvest 13/14 – fiscal year begun on July 1, 2013 and ended June 30, 2014 |
4Q15 – quarter ended June 30, 2015. |
FY15 – year ended June 30, 2015. |
Harvest 14/15 – fiscal year begun on July 1, 2014 and ended June 30, 2015. |
Disclaimer The statements contained in this document related to the prospects for BrasilAgro’s businesses, projected operating and financial income and growth are merely projections, and as such are based exclusively on management’s expectations. These expectations depend materially on market conditions, the performance of the Brazilian economy, the industry and international markets, and are therefore subject to change without prior notice. |
Release 4Q15
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Income Statement (R$ ‘000)
4Q15 | 4Q14 | Change | 2015 | 2014 | Change | |
Revenues from farm sale | 266,000 | 33,737 | 688.5% | 266,550 | 33,737 | 690.1% |
Revenues from grains | 67,842 | 54,004 | 25.6% | 121,791 | 95,896 | 27.0% |
Revenues from sugarcane | 14,240 | 8,542 | 66.7% | 54,396 | 39,406 | 38.0% |
Revenues from leasing | 1,258 | 303 | 315.2% | 3,204 | 1,143 | 180.3% |
Other revenues | 738 | 647 | 14.1% | 4,217 | 1,730 | 143.8% |
Deductions from gross revenue | (3,134) | (3,176) | -1.3% | (9,414) | (6,861) | 37.2% |
Net Sales Revenue | 346,944 | 94,057 | 268.9% | 440,744 | 165,051 | 167.0% |
Change in fair value of biological assets and agricultural products | (11,754) | (8,529) | 37.8% | 9,788 | 1,092 | 796.3% |
Impairment | (1,259) | (1,041) | 20.9% | (3,038) | (2,043) | 48.7% |
Net Revenue | 333,931 | 84,487 | 295.2% | 447,494 | 164,100 | 172.7% |
Cost of farm sale | (72,820) | (11,892) | 512.3% | (72,929) | (11,892) | 513.3% |
Cost of agricultural products sale | (79,603) | (66,276) | 20.1% | (170,489) | (138,535) | 23.1% |
Gross Profit | 181,508 | 6,319 | 2772.4% | 204,076 | 13,673 | 1392.5% |
Selling expenses | (8,324) | (5,404) | 54.0% | (9,006) | (10,239) | -12.0% |
General and administrative expenses | (10,307) | (9,715) | 6.1% | (29,360) | (30,378) | -3.4% |
Depreciations and amortizations | (252) | (299) | -15.7% | (1,249) | (1,118) | 11.7% |
Personnel expenses | (7,992) | (7,199) | 11.0% | (19,543) | (19,589) | -0.2% |
Expenses with services provider | (1,006) | (1,287) | -21.8% | (4,077) | (4,841) | -15.8% |
Leases and Rents | (182) | (151) | 20.5% | (713) | (698) | 2.1% |
Others expenses | (875) | (779) | 12.3% | (3,778) | (4,132) | -8.6% |
Other operating income/expenses, net | 310 | (867) | n.a. | (3,422) | 285 | n.a. |
Financial result | 2,871 | (4,048) | n.a. | 32,638 | (1,560) | n.a. |
Financial income | 31,361 | 8,538 | 267.3% | 122,552 | 40,051 | 206.0% |
Interest on Financial Investments | 2,819 | 1,706 | 65.2% | 9,325 | 9,484 | -1.7% |
Interest on assets | 1,029 | 967 | 6.4% | 4,637 | 2,635 | 76.0% |
Foreign exchange variations on liabilities | 259 | 844 | -69.3% | 14,720 | 6,011 | 144.9% |
Unwind of present value adjustment | 5,553 | 5,790 | -4.1% | 41,530 | 19,086 | 117.6% |
Realized results with derivatives | 13,648 | (1,232) | n.a. | 24,204 | - | n.a. |
Unrealized results with derivatives | 8,053 | 463 | 1639.3% | 28,136 | 2,835 | 892.5% |
Financial expenses | (28,490) | (12,586) | 126.4% | (89,914) | (41,611) | 116.1% |
Bank charges | (260) | (183) | 42.1% | (1,740) | (942) | 84.7% |
Interest on liabilities | (3,352) | (2,611) | 28.4% | (13,895) | (10,674) | 30.2% |
Monetary variations | (829) | (684) | 21.2% | (2,967) | (2,328) | 27.4% |
Foreign exchange variations on liabilities | (1,345) | (1,157) | 16.2% | (8,139) | (5,688) | 43.1% |
Unwind of present value adjustment | (3,455) | (6,056) | -42.9% | (23,234) | (13,561) | 71.3% |
Realized results with derivatives | (704) | (5,101) | -86.2% | (6,468) | (6,699) | -3.4% |
Unrealized results with derivatives | (18,545) | 3,206 | n.a. | (33,471) | (1,719) | 1847.1% |
Equity pick up | 117 | (2,554) | n.a. | (4,355) | (704) | 518.6% |
Profit (loss) before income and social contribution taxes | 166,175 | (16,269) | n.a. | 190,571 | (28,923) | n.a. |
Income and social contribution taxes | (4,247) | 9,716 | n.a. | (9,761) | 15,561 | n.a. |
Profit (loss) for the period | 161,928 | (6,553) | n.a. | 180,810 | (13,362) | n.a. |
Outstanding shares at the end of the period | 58,226,600 | 58,442,400 | -0.4% | 58,226,600 | 58,442,400 | -0.4% |
Basic earnings (loss) per share - R$ | 2.78 | (0.11) | n.a. | 3.11 | (0.23) | n.a. |
Release 4Q15
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Balance Sheet (R$ ‘000)
06/30/2015 | 06/30/2014 | Change | |
Current assets | |||
Cash and Cash equivalents | 75,620 | 86,745 | -13% |
Markable securities | 273,258 | 21,532 | 1169% |
Trade accounts receivable | 46,028 | 65,010 | -29% |
Inventories | 32,225 | 40,210 | -20% |
Biologial assets | 1,624 | 1,421 | 14% |
Recoverable taxes | 5,412 | 3,749 | 44% |
Derivative financial instruments | 13,498 | 18,255 | -26% |
Transactions with related parties | 856 | 723 | 18% |
Other assets | 316 | 442 | -29% |
448,837 | 238,087 | 89% | |
Non-current assets | |||
Biological assets | 29,245 | 31,202 | -6% |
Markable securities | 1,468 | 13,782 | -89% |
Recoverable taxes | 24,602 | 29,849 | -18% |
Diferred taxes | 43,137 | 43,554 | -1% |
Derivative financial instruments | 408 | 63 | 548% |
Trade accounts receivable | 22,802 | 37,453 | -39% |
Investment properties | 288,347 | 334,803 | -14% |
Transactions with related parties | 39,060 | 26,068 | 50% |
Other assets | 5,811 | 4,644 | 25% |
Investments in unquoted equity instruments | 99,729 | 50,369 | 98% |
Property, plant and euipment | 10,602 | 13,542 | -22% |
Intagible assets | 3,792 | 4,966 | -24% |
569,003 | 590,295 | -4% | |
Total assets | 1,017,840 | 828,382 | 23% |
Release 4Q15
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Balance Sheet (R$ ‘000)
06/30/2015 | 06/30/2014 | Change | |
Current liabilities | |||
Trade accounts payable | 5,545 | 8,158 | -32% |
Loans and financing | 50,900 | 62,253 | -18% |
Labor obligations | 11,215 | 8,730 | 28% |
Taxes payable | 23,377 | 6,501 | 260% |
Dividends payable | 40,358 | 25 | 161332% |
Derivative financial instruments | 5,655 | 204 | 2672% |
Accounts payable for acquisitions | 48,840 | 44,820 | 9% |
Transactions with related parties | 480 | 33,237 | -99% |
Onerous contract | - | 579 | -100% |
Advances from customers | 8,147 | 15,038 | -46% |
Other liabilities | 4,504 | - | n.a. |
199,021 | 179,545 | 11% | |
Non-current liabilities | |||
Loans and financing | 59,179 | 57,909 | 2% |
Taxes payable | 1,508 | 2,482 | -39% |
Derivative financial instruments | 1,670 | - | n.a. |
Provision for legal claims | 3,684 | 3,573 | 3% |
Other liabilities | 672 | 967 | -31% |
66,713 | 64,931 | 3% | |
Total liabilities | 265,734 | 244,476 | 9% |
Equity | |||
Capital | 584,224 | 584,224 | 0% |
Capital reserves | 2,349 | 4,201 | -44% |
Treasury shares | (224) | (1,934) | -88% |
Profits reserves | 89,156 | - | n.a. |
Proposed additional dividends | 40,333 | - | n.a. |
Equity variation adjustment | 36,268 | 8,403 | 332% |
Accumulated losses | - | (10,988) | -100% |
Total equity | 752,106 | 583,906 | 29% |
Total liabilities and equity | 1,017,840 | 828,382 | 23% |
Release 4Q15
31
Cash Flow (R$ ‘000)
2015 | 2014 | |
Profit (loss) for the period | 180,810 | (13,362) |
Adjustments to reconcile net income | ||
Depreciation and amortization | 22,222 | 21,431 |
Fam sale gain | (193,464) | (21,845) |
Granting of stock options | 82 | 816 |
Residual value of fixed assets | 2,409 | 830 |
Write-off of capitalized cost in investment properties | (1,405) | 2,098 |
Equity Pickup | 4,355 | 704 |
Gain (loss) unrealized results with derivatives | 5,335 | (1,116) |
Exchange rate, monetary and financial charges unrealized | (3,615) | 180 |
(Gain) on remeasurement of receivables from sale of farms | (18,296) | (4,965) |
Income and social contribution taxes | 417 | (18,338) |
Fair value of biological assets and agricultural products and depletion of harvest | (9,788) | (1,092) |
Reversal of impairment of agricultural products after harvest | 3,038 | 2,043 |
Allowance for doubtful accounts | (2,731) | 525 |
Onerous contracts | (579) | 579 |
Provisions for lawsuits | 111 | (1,229) |
Investment losses | 53 | - |
(11,046) | (32,741) | |
Change in operating working capital | ||
Trade accounts receivable | 12,296 | 65,235 |
Inventories | 6,756 | (14,072) |
Biological Assets | 5,627 | 1,337 |
Recoverable Taxes | 4,570 | 882 |
Derivative Transactions | 5,893 | (1,971) |
Other assets | (482) | (2,866) |
Suppliers | (4,516) | (237) |
Related parties | (36,767) | (5,557) |
Taxes payable | (11,317) | - |
Paid income tax and social contribution | 18,512 | (366) |
Labor obligations | 2,485 | (22) |
Advance from customers | (2,891) | 12,914 |
Other obligations | (295) | 344 |
Net Cash generated by (used in) operating activities | (11,175) | 22,880 |
CASH FLOW OF INVESTMENT ACTIVITIES | ||
Additions to immobilized and intangible | (1,800) | (2,413) |
Additions to property for investments | (30,629) | (20,859) |
Redemption of (investment in) marketable securities | (27,482) | 1,222 |
Increase in investments and participations | (25,903) | (14,463) |
Cresca joint venture acquisition | - | (8,592) |
Amount received from the sale of farm | 105,766 | 35,255 |
Net cash (invested in) operating activities | 19,952 | (9,850) |
CASH FLOW OF FINANCING ACTIVITIES | ||
Farm acquisition payment | - | (2,239) |
Loans and financing | 97,407 | 56,723 |
Interest from Loans and Financing | (15,682) | (2,224) |
Payment of loans and financing | (101,403) | (44,100) |
Treasury shares | (224) | (1,934) |
Dividens payed | - | (5,883) |
Acquisition of rights on receivable loans | - | (2,322) |
Generated (provided) net cash by financing activities | (19,902) | (1,979) |
Increase (decrease) in cash and cash equivalents | (11,125) | 11,051 |
Cash and cash equivalents at the beginning of the year | 86,745 | 75,694 |
Cash and cash equivalents at the end of the year | 75,620 | 86,745 |
(11,125) | 11,051 |
Release 4Q15
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Release 4Q15
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: September 4, 2015. |
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BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS | ||
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By: |
/s/ Julio Cesar de Toledo Piza Neto | |
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Name: |
Julio Cesar de Toledo Piza Neto |
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Title: |
Chief Executive Officer and Investor Relations Officer |
Date: September 4, 2015. |
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By: |
/s/ Gustavo Javier Lopez | |
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Name: |
Gustavo Javier Lopez |
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Title: |
Chief Administrative Officer |