6-K 1 lndpr3q18_6k.htm LNDPR3Q18_6K lndpr3q18_6k.htm - Generated by SEC Publisher for SEC Filing

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 May 8, 2018

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.

 

 

 

 
 
 

For the quarter ended March 31, 2018

 

São Paulo, May 07, 2018 – BrasilAgro (B3: AGRO3) (NYSE: LND), the Brazilian leader in acquiring, developing and selling rural properties that offer high potential for price appreciation in Brazil, announces its consolidated results for the quarter ended March 31, 2018. The consolidated quarterly information is prepared in accordance with International Financial Reporting Standards (IFRS).

3Q18 Conference Call  

May 08, 2018

Portuguese with simultaneous English translation

1:30 p.m. (Brasília)

12:30 p.m. (NY)

Phone: +55 (11) 3127 4971 Phone: + 1 516 300 1066

Password : BrasilAgro

 

 

 

 

 

 

 

www.brasil-agro.com

2

BRASILAGRO 2018

 

 

 
 

 

   

 

PRICE

CONTACTS

 

AGRO3: R$13.20

LND: US$3.79

 

 

+ 55 (11) 3035 5374

ri@brasil-agro.com

 

Gustavo Javier Lopez

IRO

 

Ana Paula Zerbinati Ribeiro

Investor Relations Manager

 

 

www.brasil-agro.com

3

BRASILAGRO 2018

 

 

 
 

MESSAGE FROM MANAGEMENT

On May 7, we announced the sale of 956 hectares (660 arable hectares) of the Araucária Farm, located in a plateau area, for R$61.6 million. This sale represents a gain of R$36.1 million (“present value” – “acquisition value + net depreciation investments”) and has an expected Internal Rate of Return (IRR) of 16.5%.

This was another important transaction for the Company, reinforcing the success and consistency of our business model, with the capture of capital gains through the sale of properties. This sale will be accounted for in the next quarter.

We closed 9M18 with a Net Revenue of R$225.0 million, Net Income of R$85.6 million, and Adjusted EBTIDA of R$70.1 million. This result mainly reflects the sale of 1.3 million tons of agricultural products in the period.

Since the beginning of the 16/17 harvest, we have taken a series of actions to mitigate the Company's operational risks - we started cattle raising activities, incorporated mature areas in the operation (via acquisition and leasing), leased to third parties areas with greater volatility and invested in the development and maturation of the portfolio. These actions resulted in a strong and recurring operating result, confirming our strategy and commitment to deliver results

Regarding the operating performance, we began harvesting the 17/18 soybean and corn crops and, by the date of this release, we had completed 90% of the harvest in the properties in Brazil and Paraguay. With a more mature portfolio and a good rainfall during crop development and harvesting periods, the soybean and corn yields are above expectations in Brazil and Paraguay.

At the sugarcane farms, we began harvesting the 2018 crop in April, and we are concluding the planting of 6,205 hectares in the Middle-West and Maranhão state properties.

In February, we formalized the spin-off process of Cresca S.A., which started in October 2016. With the end of the Joint Venture, BrasilAgro acquired 50% of Cresca’s assets and liabilities through the subsidiary Agropecuária Morotí S.A. The accounting effects of the spin-off are reflected in this result.

The pursuit for excellence in all our value generation fronts brought results above the estimated for this harvest. We believe that an efficient operation and a solid balance sheet are fundamental to the Company’s organic and inorganic expansion plans.

 

www.brasil-agro.com

4

BRASILAGRO 2018

 

 

 
 

OPERATING PERFORMANCE

Definitions: 3Q17 and 3Q18 - quarter ended March 31, 2017 and 2018, respectively| 9M17 and 9M18 – nine-month period ended March 31, 2017 and 2018, respectively | 2016/2017 Harvest Year – fiscal year started on July 1, 2016 and ended on June 30, 2017 | 2017/2018 Harvest Year – fiscal year started on July 1, 2017 and ended on June 30, 2018.

 

Property Sale

In May, we sold an area of the Araucária Farm, an agricultural property located in the municipality of Mineiros, Goiás. A total of 956 hectares (660 arable hectares) were sold, amounting to 1,208 soybean bags per arable hectare or R$61.6 million (~R$93,356/arable hectare). The buyer made an initial payment of 79,200 soybean bags in the amount of R$5.3 million. The second installment of 79,200 soybean bags will be paid in September 2018 and the remaining balance will be paid in six annual installments.

From an accounting standpoint, this plot of the farm is valued in the Company’s books at R$11.0 million (acquisition + net depreciation investments) and has an expected Internal Rate of Return (IRR) of 16.5%.

The property was acquired in 2007 and had a total area of 9,682 hectares, of which 394 hectares were sold in May 2013 1,164 hectares in July 2014, 274 hectares in March 2017 and 1.360 hectares in May 2017, remaining 5,534 hectares in the portfolio after this sale.

The sale will be accounted for in the results of the next quarter and we will continue to operate the area sold until the end of the 2018 sugarcane harvest.

.

 

 

www.brasil-agro.com

5

BRASILAGRO 2018

 

 

 
 

Property Portfolio

On the date of this release, the Company’s property portfolio consisted of 225,877 hectares across six Brazilian states and Paraguay.
 

 

FARMS 

LOCATION 

AQUISITION DATE 

PROJECT 

TOTAL AREA (ha) 

ARABLE AREA (ha) 

1 

Jatobá Farm 

Jaborandi / BA 

mar/07 

Grains and Pasture 

30.981 

24.226 

2 

Alto Taquari Farm 

Alto Taquari / MT 

aug/07 

Sugarcane 

5.394 

3.774 

3 

Araucária Farm 

Mineiros / GO 

apr/07 

Sugarcane 

6.490 

4.784 

4 

Chaparral Farm 

Correntina / BA 

nov/07 

Grains 

37.182 

26.444 

5 

Nova Buriti Farm 

Bonito de Minas / MG 

dec/07 

Forest 

24.212 

17.846 

6 

Preferência arm 

Baianópolis / BA 

sep/08 

Grains and Pasture 

17.799 

12.410 

7 

Partnership II(1) 

Ribeiro Gonçalves / PI 

nov/13 

Grains 

7.500 

7.500 

8 

Partnership III(2) 

Alto Taquari / MT 

may/15 

Sugarcane 

4.263 

4.263 

9 

Partnership IV(3) 

São Raimundo das Mangabeiras / MA 

feb/17 

Sugarcane 

15.000 

15.000 

10 

São José Farm 

São Raimundo das Mangabeiras / MA 

feb/17 

Grains and Sugarcane 

17.566 

10.137 

11 

Palmeiras(4) (Paraguay) 

Boquerón 

dec/13 

Grains and Pasture 

59.490 

29.745 

 

Total 

 

 

 

225.877 

156.129 

1- BrasilAgro entered into an agricultural exploration partnership in the Parceria II Farm for up to 11 harvests, involving up to 10,000 hectares. 

2- BrasilAgro entered into an agricultural exploration partnership in the Parceria III Farm potentially up to March 31, 2026. 

3 - BrasilAgro entered into an agricultural exploration partnership in the Parceria IV Farm for 15 years of planting of sugarcane, with option of renewal for another 15 years. 

4- New social denomination of the operation in Paraguay.

 

 

 

Development of Areas

......................................................................................................................................................

We concluded a process to transform approximately 2,000 hectares in Paraguay, representing an average growth of 32% in the portfolio transformation in the last 10 years.

 

 

www.brasil-agro.com

6

BRASILAGRO 2018

 

 

 
 

Market Value of the Portfolio

In 2017, we hired the independent consulting firm Deloitte Touche Tohmatsu to conduct a market valuation of our properties. According to their appraisal, as of June 30, 2017, the market value of the portfolio was R$1.4 billion.

We internally appraise, on an annual basis, the market value of our farms. And on June 30, 2017, date of the appraisal, the market value of our portfolio was R$1.3 billion, an increase of 24.6% in relation to the previous year.

In order to estimate the market value of our farms, we considered for each property: (i) its level of development; (ii) soil quality and maturity; and (iii) agricultural aptitude and potential.

The table below shows the portfolio’s internal market valuation as of June 30, 2016 and 2017 and the independent market valuation performed by independent consulting firm Deloitte Touche Tohmatsu on June 30, 2017.

 

FARM

LOCATION

Internally Appraise (R$ thousand)

Independent Valuation

(R$ thousand)

30/06/2016 

Period Sales 

30/06/2017 

30/06/2017 

1

Jatobá Farm 

Jaborandi / BA 

303.455 

10.100 

321.802 

360.758 

2

Alto Taquari Farm 

Alto Taquari / MT 

120.607 

 

150.940 

119.706 

3

Araucária Farm 

Mineiros / GO 

150.881 

30.200 

166.352 

172.327 

4

Chaparral Farm 

Correntina / BA 

262.747 

 

291.751 

352.391 

5

Nova Buriti Farm 

Bonito de Minas / MG 

31.967 

 

30.282 

23.407 

6

Preferência Farm 

Baianópolis / BA 

56.564 

 

54.680 

64.392 

7

São José Farm 

São Raimundo das Mangabeiras / MA 

0 

 

148.255 

156.981 

8

Palmeiras (Paraguay) 

Boquerón 

154.849 

 

143.074 

143.039 

 

Total 

 

1.081.070 

40.300 

1.307.136 

1.393.001 

 

www.brasil-agro.com

7

BRASILAGRO 2018

 

 

 
 

Agricultural Operations

The table below shows the breakdown of the planted area by farm in the 17/18 Harvest:
 

Planted Area by Farm - Crop 17/18 (ha) 

Ratoon Cane 

Plant Cane 

Soybean 

Corn 

Corn - 2nd Crop 

Pasture 

Other 

Total 

Jatobá Farm 

 

 

4.203 

1.582 

 

5.005 

10.057 

20.847 

Alto Taquari Farm 

3.070 

395 

 

 

 

 

176 

3.641 

Araucária Farm 

2.949 

336 

 

 

 

 

255 

3.540 

Chaparral Farm 

 

 

9.596 

1.195 

 

5.002 

3.522 

19.315 

Preferência Farm 

 

 

 

 

 

6.376 

134 

6.510 

Partnership II Farm 

 

 

7.452 

 

 

 

 

7.452 

Partnership III Farm 

3.081 

1.474 

 

 

 

 

357 

4.912 

São José Farm and Partnership IV Farm 

15.847 

4.000 

5.255 

 

350 

 

 

25.452 

Palmeiras (Paraguay) 

 

 

5.300 

996 

 

3.262 

967 

10.525 

Total 

24.947 

6.205 

31.806 

3.773 

350 

19.645 

15.468 

102.194 

                 
                 

Planted area by crop (ha) 

Crop 16/17 

Crop 17/18 

Harvest Participation 17/18 (%) 

Change (%) 

        

Grains 

30.139 

35.929 

35,2% 

19,2% 

        

Soybean 

22.549 

31.806 

31,1% 

41,1% 

        

Corn 

7.590 

4.123 

4,0% 

-45,7% 

        

Sugarcane 

29.698 

31.152 

30,5% 

4,9% 

        

Pasture 

16.425 

19.645 

19,2% 

19,6% 

        

Others 

12.611 

15.468 

15,1% 

22,7% 

        

Total 

88.873 

102.194 

100,0% 

15,0% 

        
                 
                 

Area Planted by Land Ownership (ha) 

Crop 16/17 

Crop 17/18 

Harvest Participation 17/18 (%) 

Change (%) 

        

Ownn Area 

59.678 

74.378 

72,8% 

24,6% 

        

Operated by BrasilAgro 

52.027 

74.378 

72,8% 

43,0% 

        

Leased to third parties 

7.651 

0 

0,0% 

n.a. 

        

Leased area 

29.195 

27.816 

27,2% 

-4,7% 

        

Total 

88.873 

102.194 

100,0% 

15,0% 

        


GRAINS

In 3Q18, we began harvesting the 17/18 soybean and corn crops and, by the date of this release, we had concluded 99% of the soybean harvest and 30% of the corn harvest.

 

Crop 16/17 

Crop 17/18 

Change 

Crop 17/18 Estimated until 

Change 

Productivity per culture (tons) 

Realizad 

Estimated 

(%) 

Mar/18 

(%) 

Soybean 

65.057 

82.020 

26,1% 

110.694 

35,0% 

Corn 

40.502 

27.111 

-33,1% 

18.944 

-30,1% 

Corn - 2nd Crop 

- 

2.319 

n.a. 

2.625 

13,2% 

Total 

105.559 

111.450 

5,6% 

132.263 

18,7% 


We expect a result above that initially estimated on the farms in Piauí and Bahia, impact of the good level of rainfall during the development of the crops and in the harvest period.

SUGARCANE

The following table shows the sugarcane results appropriated in the sugarcane harvest year (April to November) and during the Company’s fiscal year:

www.brasil-agro.com

8

BRASILAGRO 2018

 

 

 
 
 

2016 

2017 

Change 

2017 Estimated 

Change 

Year Crop Result - Sugarcane 

(01/apr a 31/dec) 

(01/apr a 31/dec) 

(%) 

(01/apr a 30/nov) 

(%) 

Tons Harvested 

869.501 

1.858.754 

113,8% 

1.660.174 

12,0% 

Hectares harvested 

10.336 

27.130 

162,5% 

25.977 

4,4% 

TCH - Harvest Tons per Hectares 

84,12 

68,51 

-18,6% 

63,91 

7,2% 

           
           
         

Change 

Accounting Year Result - Sugarcane 

 

9M17 

 

9M18  

(%) 

Tons Harvested 

 

539.221 

 

1.378.554 

155,7% 

Hectares harvested 

 

6.659 

 

20.431 

206,8% 

TCH - Harvest Tons per Hectares 

 

80,98 

 

67,47 

-16,7% 

 

In November, we ended the 8th year of sugarcane supply in the Alto Taquari, Araucária, Parceria III and Parceria IV Farms, delivering 1.8 million tons, from April to November, the sugarcane harvest year.

We started the renewal of the cane field for the new sugarcane harvest and we will plant another 6,205 hectares in the farms in the Midwest region and in Maranhão.

The reduction of tons harvested per hectare is due to the sugarcane crop reform period in the areas harvested at the São José Farm. These areas were not being managed in accordance with the Company’s quality standards and thus are being reformed in order to improve their productivity and quality levels.

CATTLE RAISING

As of March 31, we had 20,692 head of cattle in the Preferência and Jatobá Farms and in Paraguay, distributed in 11,381 hectares of already active pasture in Brazil and 3,262 hectares of already active pasture in Paraguay.

Livestock 

9M18 

Crop 17/18 

Change 

 

 

Estimated 

(%) 

Hectares 

14.643 

14.029 

4,4% 

Number of heads 

20.692 

15.799 

31,0% 

Meat production (kg) 

1.742.197 

2.414.186 

-27,8% 

Weight Gain per Day 

0,31 

0,42 

-26,9% 

Weight Gain per hectare 

118,98 

172,09 

-30,9% 

 
OTHERS

In order to improve the Company’s results and mitigate operating risks, we leased 10,543 hectares to third parties in the state of Bahia and in the Midwest region, as a real estate strategy. The areas were leased to local farmers and the contracts have a term of up to five harvests.

In addition, we have 4,925 hectares of grasses cover crops and sorghum, in order to increase the organic matter and accelerate the maturation of the soil.

 

www.brasil-agro.com

9

BRASILAGRO 2018

 

 

 
 

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 is calculated as gross profit adjusted by general, administrative, and selling expenses, other operating revenue 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 depreciation of fixed assets of the farms and administrative installations, developed areas and permanent crops.

EBITDA (R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Gross Profit 

34.179 

7.519 

355% 

94.528 

18.951 

399% 

Selling expenses 

(2.257) 

(417) 

441% 

(4.347) 

(537) 

709% 

General and administrative expenses 

(6.829) 

(5.964) 

15% 

(21.619) 

(19.638) 

10% 

Other operating income/expenses, net 

37.116 

(119) 

n.a. 

35.872 

(5.736) 

n.a. 

Depreciations and amortizations 

391 

363 

8% 

18.364 

7.201 

155% 

EBITDA 

62.600 

1.382 

4430% 

122.798 

241 

n.a. 

             
             

Adjusted EBITDA (R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Gross Profit 

34.179 

7.519 

4 

94.528 

18.951 

399% 

Elimination of gains on biological assets (grains and sugarcane planted) 

(19.672) 

(16.860) 

17% 

(16.664) 

(13.879) 

20% 

Selling expenses 

(2.257) 

(417) 

441% 

(4.347) 

(537) 

709% 

General and administrative expenses 

(6.829) 

(5.964) 

15% 

(21.619) 

(19.638) 

10% 

Other operating income/expenses, net 

1.462 

(119) 

n.a. 

218 

(5.736) 

n.a. 

Derivatives Results 

3.324 

891 

273% 

3.964 

2.064 

92% 

Adjusted Depreciations 1 

755 

1.693 

-55% 

14.042 

7.822 

80% 

EBITDA Cresca2 

0 

(686) 

n.a. 

(9) 

(1.077) 

-99% 

Adjusted EBITDA 

10.961 

(13.944) 

n.a. 

70.113 

(12.030) 

n.a. 

(1) Adjusted Depreciation includes depreciation of harvested grains and sugarcane.

(2) The amounts refer to Cresca’s administrative expenses. The operating result in Paraguay is consolidated to BrasilAgro.

(3) Not included the Cresca spin-off effects.

 

www.brasil-agro.com

10

BRASILAGRO 2018

 

 

 
 

Income Statement

 

Since March 2017, the results of the operation in Paraguay have been disclosed, consolidated with the results of the operation in Brazil.

NET REVENUE FROM SALES OF AGRICULTURAL PRODUCTS

Net Revenue (R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Total 

17.907 

14.946 

20% 

149.491 

72.693 

106% 

Farms Sale 

- 

3.854 

-100% 

- 

3.854 

-100% 

Soybean 

16.957 

8.727 

94% 

23.552 

14.946 

58% 

Corn 

662 

403 

64% 

9.061 

723 

1153% 

Sugarcane 

(294) 

1.105 

n.a. 

111.888 

50.053 

124% 

Livestock 

319 

- 

n.a. 

2.847 

- 

n.a. 

Leasing 

1.041 

602 

73% 

2.964 

1.420 

109% 

Services 

- 

- 

n.a. 

- 

26 

-100% 

Others 

(778) 

255 

n.a. 

(821) 

1.671 

n.a. 

 
 

Tons 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Quantity sold 

22.302 

8.717 

156% 

1.272.545 

527.755 

141% 

Soybean 

15.741 

7.752 

103% 

22.711 

13.156 

73% 

Corn 

6.561 

956 

586% 

25.029 

1.372 

1724% 

Sugarcane 

- 

- 

n.a. 

1.224.751 

512.697 

139% 

Others 

- 

9 

-100% 

54 

530 

-90% 

In 3Q18, the recorded net revenue from sales was R$17.9 million, with an increase in volume sold during the period of R$13.5 million compared to the previous year.

Net revenue from grains (soybean and corn) in 9M18 increased by R$16.9 million from the previous year, from R$15.7 million, from the sale of 14,500 tons, to R$32.6 million, from the sale of 47,700 tons.

Soybean revenue increased by R$8.6 million in 9M18 when compared to the previous year, from R$14.9 million, from the sale of 13,200 tons at R$1,136.06 per ton, to R$23.5 million, from the sale of 22,700 tons at R$1,037.03 per ton.

Corn revenue in 9M18 increased by R$8.3 million when compared to the previous year, from R$723 thousand from the sale of 1,400 tons at R$526.97 per ton, to R$9,0 million, from the sale of 25,000 tons at R$362.02 per ton. Corn sold until 6M18 was produced in the previous harvest and was stored as a sales strategy. As of 3Q18, the sale of corn already refers to the 17/18 harvest.

Sugarcane revenue in 9M18 increased by R$61.8 million when compared to the previous year, from R$50.0 million from the sale of 512,700 tons at R$97.63 per ton, to R$111.9 million from the sale of 1.2 million tons at R$91.36 per ton of sugarcane. The reduction in per-ton sugarcane price was due to the 1% reduction in the TRS (total recoverable sugar), which went from 146,62 kg/ton (0.668 R$/kg) in 9M17 to 145.43 kg/ton (0.669 R$/kg) in 9M18. The difference of 153,800 tons of sugarcane produced in relation to the total sold is the result of leasing payment.

www.brasil-agro.com

11

BRASILAGRO 2018

 

 

 
 

Cattle-raising revenue totaled R$2.9 thousand in 9M18, resulting from the sale of 1,336 head of cattle in Brazil and Paraguay at R$5.23 per kg.

Leasing revenue reached R$2.9 million in 9M18 and reflects the third-party leases of Farms in Bahia and in the Midwest region.

The amount recorded in other sales revenue was R$821 thousand in 9M18 due to the payment of taxes (FUNRURAL). During the same period of the previous year, we had other revenue in the amount of R$1.5 million, which came from the sale of inputs (seeds, fertilizers and byproducts) from areas that were not planted in the 2016/17 harvest year and R$200 thousand, which came from the sale of 369 tons of sorghum.

GAINS OR LOSSES OF AGRICULTURAL PRODUCTS AND BIOLOGICAL ASSETS

Biological Assets and Agricultural Products (R$ thousand) 

Soybean 

Corn (crop) 

 

 

 

Gain / Loss 

 

17/18 

17/18 

Sugarcane 

Livestok 

Others 

03/31/18 

Gain and losses in agricultural products 

12.586 

770 

43.780 

1.141 

(312) 

57.965 

Gain and losses in biological assets dos ativos biológicos 

24.209 

(1.062) 

(6.483) 

 

- 

16.664 

Change in fair value of biological assets and agricultural products 

36.795 

(292) 

37.297 

1.141 

(312) 

74.629 


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).

Harvested agricultural products are measured at their value at the time of harvest considering the market price of the area of each farm.

Since July 1, 2016, biological assets corresponding to ratoons of sugarcane have been measured at cost less depreciation (Accounting Standard IAS 16), while planted cane will continue to be measured at fair value (Accounting Standard IAS 41).

Agricultural Products 

Soybean 

Corn (crop) 

 

 

 

Gain / Loss 

 

17/18 

16/17 

Sugarcane 

Livestok 

Others 

03/31/18 

Area (hectares) 

9.650 

937 

20.431 

14.643 

- 

45.661 

Production (Tons) 

35.633 

4.303 

1.378.554 

1.742 

- 

1.420.232 

Yield (Ton./ha) 

3,69 

4,59 

67,47 

0,12 

- 

31,10 

Livestock - head of cattle 

- 

- 

- 

20.692 

- 

20.692 

Production fair value (R$ thousand) 

37.321 

2.326 

114.688 

8.068 

(143) 

162.260 

Production Cost (R$ thousand) 

(24.735) 

(1.556) 

(70.908) 

(6.927) 

(169) 

(104.295) 

Gain and losses in agricultural products (R$ thousand) 

12.586 

770 

43.780 

1.141 

(312) 

57.965 

Biological assets correspond to agricultural products in formation (not yet harvested) and cattle, 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 and indirect costs, leasing, yields and selling expenses.

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BRASILAGRO 2018

 

 

 
 

Cattle biological assets are measured at fair value and controlled in accordance with two methodologies: 12 to 15-month calves and steers (heifers) are controlled and valued by head, while older animals are controlled by weight.

Fair value variation is impacted by variations between fair value and cost, as well as by fair value variations between the periods.

Gains or losses from the variation in the fair value of grains and sugarcane 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.

The table below shows the results of the sugarcane harvest:

Period ended June 30, de junho de 2017 

2016 Crop 

2017 Crop 

Total 

Net Revenue 

48.949 

23.072 

72.021 

Cost of sales 

(43.420) 

(31.078) 

(74.498) 

Gain (loss) of agricultural products and biological assets value 

7.215,00 

4.316 

11.531 

Total 

12.744 

(3.689) 

9.055 

Tons 

535.103 

480.200 

1.015.303 

 

Period ended December 31, 2017 

2016 Crop 

2017 Crop 

Total 

Net Revenue 

 

112.182 

112.182 

Cost of sales 

 

(97.495) 

(97.495) 

Gain (loss) of agricultural products and biological assets value 

 

38.975 

38.975 

Total 

- 

53.662 

53.662 

Produced Tons 

 

1.378.554 

1.378.554 


IMPAIRMENT (REVERSAL OF PROVISIONS OF THE RECOVERABLE AMOUNT OF AGRICULTURAL PRODUCTS, NET)

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.

On March 31, 2018, the recognized amount corresponded to a gain of R$882 thousand.

 

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BRASILAGRO 2018

 

 

 
 
COST OF PRODUCTION

(%) 

Soybean 

Corn 

Sugarcane 

Livestock 

Variable costs 

76% 

76% 

73% 

22% 

Seeds 

15% 

16% 

0% 

0% 

Fertilizers 

16% 

23% 

10% 

1% 

Defensive 

19% 

15% 

6% 

0% 

Agricultural services 

19% 

16% 

47% 

0% 

Fuels and Lubricants 

4% 

4% 

8% 

1% 

Maintence of machines and instruments 

0% 

0% 

0% 

6% 

Animal Feed 

0% 

0% 

0% 

9% 

Others 

3% 

2% 

2% 

5% 

Fixed costs 

24% 

24% 

27% 

78% 

Labor 

4% 

2% 

3% 

11% 

Depreciation and amortization 

11% 

12% 

12% 

66% 

Leasing 

6% 

8% 

10% 

0% 

Others 

3% 

2% 

2% 

1% 

 

(R$ / ha) 

Crop16/17 

Crop 17/18 

Change 

 

Realized 

Estimated 

 

Soybean 

2.159 

2.163 

0,2% 

Corn 

2.397 

2.164 

-9,7% 

Sugarcane 

4.416 

5.140 

16,4% 


The increase in the cost of production of sugarcane reflects the carrying out costs of the São José Farm, which did not occur in the previous harvest.

COST OF GOODS SOLD

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Total of cost of goods sold 

(16.225) 

(7.482) 

117% 

(130.474) 

(58.769) 

122% 

Soybean 

(15.447) 

(6.665) 

132% 

(21.425) 

(12.211) 

75% 

Corn 

(316) 

(391) 

-19% 

(8.642) 

(569) 

1419% 

Sugarcane 

(283) 

145 

n.a. 

(97.778) 

(43.275) 

126% 

Livestock 

(246) 

(7) 

3423% 

(2.875) 

(64) 

4392% 

Others 

67 

(563) 

n.a. 

246 

(2.650) 

n.a. 

Cost of goods sold (COGS) came to R$130.5 million in 9M18. Due to the fair value adjustments of agricultural products, period changes in costs are directly linked to the market price of commodities at the time of harvest.

Total soybean COGS increased by R$9.2 million in 9M18 when compared to the previous year, from R$12.2 million, from the sale of 13,200 tons at R$928.17 per ton, to R$21.4 million, from the sale of 22,700 tons at R$943.38 per ton. Total soybean COGS in 3Q18 and 3Q17 reflects the reversal of the provision for loss.

Total corn COGS increased by R$8.0 million in 9M18 versus the previous year, from R$569 thousand, from the sale of 1,400 tons at R$414,72 per ton, to R$8.6 million, from the sale of 25,000 tons at R$345,28 per ton.

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BRASILAGRO 2018

 

 

 
 

Total sugarcane COGS increased by R$54.5 million in 9M18 versus the previous year, from R$43.3 million, from the sale of 512,700 tons at R$84.41 per ton, to R$97.8 million, from the sale of 1.2 million tons at R$79.84 per ton of sugarcane.

Total cattle-raising COGS reached R$2.9 million in 9M18 and reflects the net result of animal death and birth during the period (R$52 thousand negative) and the sale cost of 1,336 head of cattle in Brazil and Paraguay at R$2.2 million (R$2,113.00 per head).

Other COGS in the positive amount of R$246 thousand in 9M18 mainly refers to the raw material inventory adjustment. In 9M17, other COGS in the amount of R$1.7 million refers to the sale of inputs (seeds, fertilizers and byproducts) and R$900 thousand refers to the sale of 369 tons of sorghum.

SELLING EXPENSES

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Selling expenses 

(2.257) 

(417) 

442% 

(4.347) 

(537) 

709% 

Freight 

(607) 

(160) 

280% 

(810) 

(176) 

360% 

Storage and Processing 

(1.277) 

(207) 

517% 

(2.720) 

(581) 

368% 

Others 

(373) 

(50) 

646% 

(817) 

220 

n.a. 


In 9M18 we recorded R$4.3 million in selling expenses. This result is due to the increase in freight, reflected by the increase in grain sales during the period.

The increase in storage and processing expenses in 9M18 is due to the increase in storage expenses for grain inventory from the 16/17 harvest.

Other selling expenses refer to the loss for doubtful debtors (PDD).

GENERAL AND ADMINISTRATIVE EXPENSES

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

General and administrative expenses 

(6.829) 

(5.964) 

15% 

(21.619) 

(19.638) 

10% 

Depreciations and amortizations 

(145) 

(179) 

-19% 

(482) 

(530) 

-9% 

Personnel expenses 

(4.374) 

(4.114) 

6% 

(13.621) 

(12.903) 

6% 

Expenses with services provider 

(1.139) 

(725) 

57% 

(3.414) 

(2.402) 

42% 

Leases and Rents 

(200) 

(200) 

0% 

(496) 

(589) 

-16% 

Others expenses 

(971) 

(746) 

30% 

(3.606) 

(3.214) 

12% 


As of March 2017, we began to consolidate general and administrative expenses of the operation in Paraguay, which were previously accounted for under the equity pick up.

In 9M18, general and administrative expenses increased by 10% in comparison to the same period of the previous year, from R$19.6 million to R$21.6 million.

The 42% increase in expenses with service providers is mainly due to the expenses with advisors for the development of new projects, legal advice and information technology, and expenses with the issuance of the Agribusiness Receivables Certificate (CRA).

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BRASILAGRO 2018

 

 

 
 

The 16% decrease in leases and rents is mainly due to renegotiations of lease contracts.

OTHER OPEARTING INCOME / EXPENSES

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Other operating income/expenses 

37.116 

(119) 

n.a. 

35.872 

(5.736) 

n.a. 

Gain/Loss on sale of fixed assets 

(135) 

(14) 

864% 

(294) 

(536) 

-45% 

Management Fee - Cresca Reversal 

- 

- 

n.a. 

- 

(2.490) 

-100% 

Provisions for lawsuits 

410 

(83) 

n.a. 

299 

(545) 

n.a. 

Alto Taquari Farm 

- 

34 

-100% 

- 

34 

-100% 

Added value obteined by spin-off (Cresca - Paraguay) 

5.040 

- 

n.a. 

5.040 

- 

n.a. 

Written-off in the conversion of joint venture by spin-off (Cresca - Paraguay) 

30.616 

- 

n.a. 

30.616 

- 

n.a. 

Others 

1.185 

(56) 

n.a. 

211 

(2.199) 

n.a. 


The increase in other operating expenses (income) is a result of the recognition of amounts incurred with the conclusion of the spin-off of the Cresca operation in Paraguay, in the amount of R$35.3 million. In 9M17, the management fee reversal of Cresca totaling R$2.5 million was recorded.

Spin-off of the Joint Venture Cresca S.A.

On February 9, 2018, the spin-off process of the Joint Venture Cresca S.A. (company that owns the property in Paraguay) was formalized. At that moment, the part owned by BrasilAgro was transferred to its subsidiary Agropecuária Morotí S.A., which is 100% controlled by the Company.

After the spin-off, considering that the Company obtained the control of assets and liabilities previously jointly controlled, as required by IFRS 3 – Business Combinations, the assets acquired, and the liabilities assumed were remeasured at their fair values on the acquisition date and the result recorded in profit or loss.

The investment was recorded at the Company for R$115.6 million and the fair value totaled R$120.6 million; therefore, we recorded gain of R$5.0 million. The fair value of assets and liabilities was preliminarily estimated and is expected to be concluded by June 30, 2018.

Moreover, the effects from the translation of investments abroad were recorded under other comprehensive income. With the spin-off, as required by accounting practices, the accumulated effect from the translation of investments abroad, totaling R$30.6 million, was written-off from other comprehensive income and recorded under profit/loss.

 

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FINANCIAL RESULT

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Total 

(17.324) 

5.784 

n.a. 

(9.839) 

22.204 

n.a. 

Interest (i) 

(20.256) 

(1.477) 

1271% 

(14.136) 

(3.542) 

299% 

Monetary variation (ii) 

(166) 

(185) 

-10% 

(6) 

(495) 

-99% 

Exchange vartiation (iii) 

(254) 

(1.603) 

-84% 

(190) 

(1.380) 

-86% 

Unwind of present value adjustment (iv) 

5.294 

(1.395) 

n.a. 

3.885 

(2.888) 

n.a. 

Results with derivatives (v) 

(1.999) 

8.558 

n.a. 

280 

18.738 

-99% 

Other financial income / expenses (vi) 

57 

1.886 

-97% 

328 

11.771 

-97% 

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 Nova Buriti Farm; (iii) the impact of the U.S. dollar exchange variation on the offshore account and Cresca’s receivables; (iv) the present value of Cremaq, Araucária and Jatobá Farms’ sales receivables, fixed in soybean bags; (v) the result from hedge operations; and (vi) bank fees and expenses and returns on cash investments.

Interest variation is mainly due to the recognition of the financial revenue obtained from the Nova Buriti Farm renegotiation, in the amount of R$9.3 million, interest on loans and financing in the amount of R$7.4 million, and interest on Cresca’s loan of R$16.5 million which was pardoned.

The derivatives result reflects the commodities hedge operations result and the impact of the exchange variation on cash, which was partially dollarized in order to maintain purchasing power in regard to inputs, investments and new acquisitions, which have a positive correlation with the US currency. In 9M18, the result of derivative transactions was R$280 thousand, of which R$1.7 million (negative) are related to currency operations and R$1.5 million are related to operations with commodities. In 9M17, derivative operations totaled R$18.7 million, of which R$11.1 million are a loss related to currency operations and R$7.6 million are in operations with commodities.

The reduction in other financial income / expenses is due to the decrease in the Company’s cash position, from an average cash flow of R$129.7 million in 9M17 to R$41.5 million in 9M18 and also decrease in the SELIC rate (Brazil’s basic interest rate) in the period, in addition to bank fees and expenses with financial investments.

On August 30, 2017, the title deed for the Nova Buriti Farm was given and, consequently, the payment of the Farm balance was paid. The Farm’s total price was adjusted, with the partial cancellation of the monetary adjustments (by the IGP-M – General Market Price Index) that would be owed by the Company. The amount of R$9.3 million was recognized as financial income in 9M18 and the outstanding balance of the debt will not be restated.

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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 environment.

• 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 April 30, 2018

 

 

Soybean 

 

 

FX 

 

Crop 

      

Volume 

    
 

Volume(1) 

% of hedge(2) 

Price (USD/bu) 

(thousand) 

% of hedge(3) 

BRL/USD 

17/18 

80.897 ton 

85,9% 

10,46 

USD 39.174 

108,2% 

3,37 

(1) Net estimated volume of production + farm sales receivables.

(2) % of the volume of soybean locked in tons.

(3) % of estimated revenue in USD.

 

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BRASILAGRO 2018

 

 

 
 

Balance Sheet

 
NET ASSET VALUE – NAV

(R$ thousand) 

March 31, 2018 

 

Book 

NAV 

BrasilAgro's Equity 

716.977 

716.977 

Properties appraisal 

 

1.307.136 

(-) Balance Sheet - Net Agri Openning Capex 

-89.643 

(-) Balance Sheet - Land Value 

 

-539.101 

NAV - Net Asset Value 

716.977 

1.395.369 

Shares 

56.889 

56.889 

NAV per share 

12,60 

24,53 


CASH AND CASH EQUIVALENTS

Cash and Cash equivalents 

03/31/2018 

06/30/2017 

Change 

Cash and Cash equivalents 

16.923 

43.798 

-61% 

Cash and Banks 

6.830 

15.159 

-55% 

Repurchase agreements 

10.003 

28.639 

-65% 

Bank deposit certificates 

90 

- 

n.a. 

Markable securities 

1.149 

6.972 

-84% 

Restricted financial investments 

2 

2 

0% 

Bank deposit certificates 

1.114 

- 

n.a. 

Banco do Nordeste (loan guarantees) 

- 

5.502 

-100% 

Treasury financial bills 

33 

1.468 

-98% 

Restricted Markable securities 

17.952 

17.088 

5% 

Bank deposit certificates 

9.427 

8.982 

5% 

Banco do Nordeste (loan guarantees) 

8.525 

8.106 

5% 

Total 

36.024 

67.858 

-47% 

 

The Company ended the quarter with a cash position of R$36.0 million, a decrease of 47% over June 30, 2017, mainly due to investments in the amount of R$18.9 million and payment of dividends in the amount of R$13.0 million.

INVENTORY

(R$ thousand) 

03/31/2018 

06/30/2017 

Change 

Soybean 

21.184 

6.837 

210% 

Corn 

336 

6.819 

-95% 

Livestock 

32.136 

11.153 

188% 

Other crops 

90 

50 

80% 

Agricultural Products 

53.746 

24.859 

116% 

Supplies 

10.465 

8.952 

17% 

Total 

64.211 

33.811 

90% 

 

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INDEBTEDNESS

(R$ thousand) 

Expiration 

Annual Interest Tax - % 

03/31/2018 

06/30/2017 

Change 

Short term 

 

 

 

 

 

Financiamento de Custeio Agrícola 

Sep-18 

8,50 and 12,75 TJLP + 3,45 and 4,45 / SELIC + 3,45 / Pre 4,00 to 

65.722 

10.703 

514,1% 

Financiamento Projeto Bahia 

Dec-18 

9,00 

3.097 

15.236 

-79,7% 

Capital de Giro 

May-18 

1,40 to 2,30% + 100% of CDI 

16.638 

15.782 

5,4% 

Capital de Giro (USD) 

Aug-17 

3,49% 

- 

5.031 

-100,0% 

Financiamento de Máquinas e Equipamentos 

Dec-18 

TJLP + 3,73 

255 

1 

25400,0% 

Financiamento de cana-de-açúcar 

Dec-18 

TJLP + 2,70 and 12,75% 

1.442 

8.248 

-82,5% 

Arrendamento Financeiro Canavial - Parceria III 

May-18 

6,92% 

2.424 

1.619 

49,7% 

 

 

 

89.578 

56.620 

58,2% 

Long term 

 

 

 

 

 

Financiamento de cana-de-açúcar 

Dec-23 

TJLP + 2,70 and 12,75% 

33.131 

1.025 

3132,3% 

Financiamento de Máquinas e Equipamentos 

Jun-24 

TJLP + 3,73% 

5.833 

1.208 

382,9% 

Financiamento Projeto Bahia 

Aug-23 

TJLP + 3,45 and 4,45/SELIC + 3,45/Pre 4,00 to 9,00 

26.777 

30.862 

-13,2% 

Arrendamento Financeiro Canavial - Parceria III 

nov-18 

6,92% 

- 

1.665 

-100,0% 

Arrendamento Financeiro Canavial - Parceria IV 

Jan-32 

R$/kg 0,6462 

21.118 

20.795 

1,6% 

 

 

 

86.859 

55.555 

56,3% 

Total 

 

 

176.437 

112.175 

57,3% 

 

On March 31, 2018 and June 30, 2017, the balance of loans and financing was R$176.4 million and R$112.2 million, respectively. The payment of interest and principal totaled R$73.2 million in 9M18.

During the period, a total of R$116.2 million was disbursed in new financing referring to the cost of sugarcane, soybean and corn operations and R$13.9 million was disbursed for investments related to area opening.

ACQUISITIONS PAYABLE

(R$ thousand) 

Adjustment Rate 

03/31/2018 

06/30/2017 

Change 

Nova Buriti Farm 

IGP-M 

1.706 

22.085 

-92% 

São José Farm 

CDI 

- 

2.561 

-100% 

Total 

 

1.706 

24.646 

-93% 


On August 30, 2017, the title deed for the Nova Buriti Farm was given and, consequently, the partial payment of R$5.8 million was made. Part of the remaining balance, in the amount of R$1.5 million, was paid on October 18, 2017, and in January 2018, R$6.1 million of the outstanding balance of accounts payable on acquisitions were paid.

At the time of the negotiation, the Farm’s total price was adjusted, with the partial cancellation of the monetary adjustments (by the IGP-M – General Market Price Index) that would be owed by the Company. The discount on the amount of R$9.3 million was recognized as financial income in 9M18 and the outstanding balance of the debt will not be restated.

 

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20

BRASILAGRO 2018

 

 

 
 

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.

(R$ thousand) 

Acquisition 

Buildings and 

 

Construction in 

Investment 

 

value 

improvements 

Opening area 

progress 

Properties 

Initial Balance 

300.487 

26.369 

53.021 

9.922 

389.799 

In June 30, 2017 

 

 

 

 

 

Acquisitions 

1.890 

99 

901 

14.961 

17.851 

Incorporation - corporate reorganization 

121.269 

18 

9.518 

10.147 

140.952 

Reductions 

- 

-53 

- 

-1 

-54 

(-) Depreciation/ Amortization 

- 

-621 

-8.826 

- 

-9.447 

In March 31, 2017 

423.646 

25.812 

54.614 

35.029 

539.101 

 
On March 31, 2018, we recorded R$35.0 million in ongoing work, which refers to the clearance of areas at the Palmeiras, Chaparral and Araucária Farms.

In February, we formalized the spin-off process of Cresca S.A., which started in October 2016. With the end of the Joint Venture, BrasilAgro acquired 50% of Cresca’s assets and liabilities through the subsidiary Agropecuária Morotí S.A. As a result, the farm was accounted for as properties for investment as of this quarter in the amount of R$140.9 million, as mentioned at the table above in incorporation – corporate reorganization.

 

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21

BRASILAGRO 2018

 

 

 
 

CAPEX – AREA OPENING

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Maintenance 

785 

915 

-14% 

3.407 

2.265 

50% 

Opening 

321 

221 

46% 

5.930 

5.981 

-1% 

Total 

1.106 

1.136 

-3% 

9.337 

8.246 

13% 

 
DEPRECIATION – AREA OPENING

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Maintenance 

(596) 

(465) 

28% 

(1.739) 

(1.391) 

25% 

Opening 

(4.765) 

(2.276) 

109% 

(9.455) 

(6.663) 

42% 

Total 

(5.361) 

(2.741) 

96% 

(11.194) 

(8.054) 

39% 

 

www.brasil-agro.com

22

BRASILAGRO 2018

 

 

 
 

CAPITAL MARKETS

The Company was the first agricultural production company to list its shares on the Novo Mercado segment of the B3 (São Paulo Stock Exchange) and was also the first Brazilian agribusiness company to list its ADRs (American Depositary Receipts) on NYSE (New York Stock Exchange).

 

Share Performance

......................................................................................................................................................

On May 04, 2018, BrasilAgro’s shares (AGRO3) were traded at R$13.10, resulting in a market cap of R$745.2 million, while its ADRs (LND) were traded at US$3.66.

 

HIGHLIGHTS - AGRO3 

3Q18 

3Q17 

Average Daily Trade Volume (R$) 

607.329 

1.163.502 

Maximun (R$ per share) 

13,50 

12,88 

Mininum (R$ per share) 

12,40 

10,85 

Average (R$ per share) 

13,32 

11,87 

Closing Quote (R$ per share) 

13,00 

11,98 

Variation in the period (%) 

-2,99% 

0,67% 


During 3Q18, BrasilAgro’s shares reached a trading volume of R$36.4 million, from 9,893 trades, with a daily average traded volume of R$0.6 million.

 

www.brasil-agro.com

23

BRASILAGRO 2018

 

 

 
 

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.

 

WEIGHTS AND MEASURES USED IN AGRICULTURE

 

Weights and Measures used in Agriculture

1 ton 

1.000 kg 

 

1 Kilo 

2.20462 pounds 

 

1 pound 

0.45359 kg 

 

1 acre 

0.1840 bushel 

 

1 hectare (ha) 

2.47105 acres 

 

1 hectare (ha) 

10.000 m2 

 

1 bushel 

5.4363 acres 

 

 

 

 

Soybean 

 

 

1 bushel of soybean 

60 pounds 

27.2155 kg 

1 bags of soybean 

60 kg 

2.20462 bushels 

1 bushel/acre 

67.25 kg/ha 

 

1.00 US$/bushel 

2.3621 US$/saca 

 

 

 

 

Corn 

 

 

1 bushel of corn 

56 pounds 

25.4012 kg 

1 bags of corn 

60 kg 

2.36210 bushels 

1 bushel/acre 

62.77 kg/ha 

 

1.00 US$/bushel 

2.3621 US$/saca 

 

 

www.brasil-agro.com

24

BRASILAGRO 2018

 

 

 
 

INCOME STATEMENT

 

(R$ thousand) 

3Q18 

3Q17 

Change 

9M18 

9M17 

Change 

Revenues from Farm Sales 

- 

3.854 

-100,0% 

- 

3.854 

-100% 

Revenues from grains 

18.096 

9.447 

91,6% 

33.673 

16.420 

105% 

Revenues from sugarcane 

(225) 

1.137 

n.a. 

115.122 

51.727 

123% 

Revenues from leasing 

1.427 

629 

126,9% 

3.861 

1.563 

147% 

Revenues from Livestock 

322 

- 

n.a. 

2.869 

- 

n.a. 

Other revenues 

67 

467 

-85,7% 

136 

2.137 

-94% 

Deductions from gross revenue 

(1.780) 

(588) 

202,7% 

(6.170) 

(3.008) 

105% 

Net Sales Revenue 

17.907 

14.946 

19,8% 

149.491 

72.693 

106% 

Change in fair value of biological assets and agricultural products 

32.528 

241 

13397,1% 

74.629 

5.464 

1266% 

Impairment 

(31) 

(186) 

-83,3% 

882 

(437) 

n.a. 

Net Revenue 

50.404 

15.001 

236,0% 

225.002 

77.720 

190% 

Cost of agricultural products sale 

(16.225) 

(7.482) 

116,9% 

(130.474) 

(58.769) 

122% 

Gross Profit 

34.179 

7.519 

354,6% 

94.528 

18.951 

399% 

Selling expenses 

(2.257) 

(417) 

441,2% 

(4.347) 

(537) 

709% 

General and administrative expenses 

(6.829) 

(5.964) 

14,5% 

(21.619) 

(19.638) 

10% 

Depreciations and amortizations 

(145) 

(179) 

-19,0% 

(482) 

(530) 

-9% 

Personnel expenses 

(4.374) 

(4.114) 

6,3% 

(13.621) 

(12.903) 

6% 

Expenses with services provider 

(1.139) 

(725) 

57,1% 

(3.414) 

(2.402) 

42% 

Leases and Rents 

(200) 

(200) 

0,0% 

(496) 

(589) 

-16% 

Others expenses 

(971) 

(746) 

30,2% 

(3.606) 

(3.214) 

12% 

Other operating income/expenses, net 

37.116 

(119) 

n.a. 

35.872 

(5.736) 

n.a. 

Equity pick up 

16.096 

(1.430) 

n.a. 

14.699 

(3.730) 

n.a. 

Financial result 

(17.324) 

5.784 

n.a. 

(9.839) 

22.204 

n.a. 

Financial income 

14.381 

21.147 

-32,0% 

57.378 

71.475 

-20% 

Interest on Financial Investments 

377 

2.335 

-83,9% 

1.648 

14.614 

-89% 

Interest on assets 

(572) 

677 

n.a. 

10.266 

3.272 

214% 

Monetary variations 

(161) 

- 

n.a. 

160 

- 

n.a. 

Foreign exchange variations on liabilities 

1.463 

976 

49,9% 

7.169 

8.997 

-20% 

Unwind of present value adjustment 

6.667 

976 

583,1% 

19.014 

4.121 

361% 

Realized results with derivatives 

3.468 

1.427 

143,0% 

7.084 

11.334 

-37% 

Unrealized results with derivatives 

3.139 

14.756 

-78,7% 

12.037 

29.137 

-59% 

Financial expenses 

(31.705) 

(15.363) 

106,4% 

(67.217) 

(49.271) 

36% 

Interest expenses 

(199) 

(328) 

-39,3% 

(870) 

(1.906) 

-54% 

Bank charges 

(121) 

(121) 

0,0% 

(450) 

(937) 

-52% 

Interest on liabilities 

(19.684) 

(2.154) 

813,8% 

(24.402) 

(6.814) 

258% 

Monetary variations 

(5) 

(185) 

-97,3% 

(166) 

(495) 

-66% 

Foreign exchange variations on liabilities 

(1.717) 

(2.579) 

-33,4% 

(7.359) 

(10.377) 

-29% 

Unwind of present value adjustment 

(1.373) 

(2.371) 

-42,1% 

(15.129) 

(7.009) 

116% 

Realized results with derivatives 

(1.055) 

(70) 

1407,1% 

(4.949) 

(2.149) 

130% 

Unrealized results with derivatives 

(7.551) 

(7.555) 

-0,1% 

(13.892) 

(19.584) 

-29% 

Profit (loss) before income and social contribution taxes 

60.981 

5.373 

1034,9% 

109.294 

11.514 

849% 

Income and social contribution taxes 

(6.997) 

(832) 

741,0% 

(23.673) 

(5.331) 

344% 

Profit (loss) for the period 

53.984 

4.541 

1088,8% 

85.621 

6.183 

1285% 

Outstanding shares at the end of the period 

56.888.916 

56.888.916 

 

56.888.916 

56.888.916 

 

Basic earnings (loss) per share - R$ 

0,95 

0,08 

1088,8% 

1,51 

0,11 

1285% 


www.brasil-agro.com

25

BRASILAGRO 2018

 

 

 
 

BALANCE SHEET – ASSETS

 

Assets (R$ thousand) 

03/31/2018 

06/30/2017 

Change 

Current assets 

 

 

 

Cash and Cash equivalents 

16.780 

43.798 

-61,7% 

Markable securities 

1.149 

6.972 

-83,5% 

Trade accounts receivable 

65.146 

54.026 

20,6% 

Inventories 

32.075 

22.658 

41,6% 

Biologial assets 

118.583 

38.260 

209,9% 

Derivative financial instruments 

3.809 

4.090 

-6,9% 

Transactions with related parties 

2.639 

1.298 

103,3% 

 

240.181 

171.102 

40,4% 

 

Non-current assets 

 

 

 

Biological assets 

32.136 

13.435 

139,2% 

Markable securities 

17.952 

17.088 

5,1% 

Diferred taxes 

31.727 

53.780 

-41,0% 

Derivative financial instruments 

641 

1 

64000,0% 

Accounts receivable and sundry credits 

39.859 

44.605 

-10,6% 

Investment properties 

539.101 

389.799 

38,3% 

Transactions with related parties 

- 

35.640 

-100,0% 

Investments 

100 

101.426 

-99,9% 

Property, plant and euipment 

72.018 

54.745 

31,6% 

Intagible assets 

1.364 

1.672 

-18,4% 

 

734.898 

712.191 

3,2% 

 

Total assets 

975.079 

883.293 

10,4% 

 

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26

BRASILAGRO 2018

 

 

 
 

BALANCE SHEET – LIABILITIES

 

Liabilities (R$ thousand) 

03/31/2018 

06/30/2017 

Change 

Current liabilities 

 

 

 

Trade accounts payable and other obligations 

52.941 

55.615 

-4,8% 

Loans and financing 

89.578 

56.620 

58,2% 

Labor obligations 

6.962 

11.513 

-39,5% 

Derivative financial instruments 

8.746 

3.978 

119,9% 

Accounts payable for acquisitions 

1.706 

24.646 

-93,1% 

Transactions with related parties 

2.526 

4.784 

-47,2% 

 

162.459 

157.156 

3,4% 

 

 

 

 

Non-current liabilities 

 

 

 

Trade accounts payable and other obligations 

7.489 

1.520 

392,7% 

Loans and financing 

86.859 

55.555 

56,3% 

Derivative financial instruments 

- 

- 

n.a. 

Provision for legal claims 

1.295 

1.594 

-18,8% 

 

95.643 

58.669 

63,0% 

Total liabilities 

258.102 

215.825 

19,6% 

 

 

 

 

Equity 

 

 

 

Capital 

584.224 

584.224 

n.a. 

Capital reserves 

1.153 

1.525 

-24,4% 

Treasury shares 

(35.208) 

(36.797) 

-4,3% 

Profits reserves 

68.615 

68.615 

0,0% 

Proposed additional dividends 

- 

6.486 

-100,0% 

Equity variation adjustment 

12.552 

43.415 

-71,1% 

Accumulated losses 

85.641 

- 

n.a. 

Total equity 

716.977 

667.468 

7,4% 

 

 

 

 

Total liabilities and equity 

975.079 

883.293 

10,4% 

 

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27

BRASILAGRO 2018

 

 

 
 

CASH  FLOW

 

R$ (thousand) 

9M18 

9M17 

Change 

CASH FLOW OF OPERATIONAL ACTIVITIES 

 

 

 

Profit (loss) for the period 

85.621 

6.183 

1285% 

Adjustments to reconcile net income 

 

 

 

Depreciation and amortization 

18.364 

7.201 

155% 

Added value obteined by spin-off 

(5.040) 

- 

n.a. 

Written-off in the conversion of joint venture by spin-off 

(30.616) 

- 

n.a. 

Residual value of fixed assets 

408 

1.587 

-74% 

Written-off in investment properties 

54 

62 

-13% 

Equity Pickup 

(14.699) 

3.730 

n.a. 

Exchance variation effect 

- 

79 

-100% 

Gain unrealized results with derivatives 

1.855 

(9.553) 

n.a. 

Exchange rate, monetary and financial charges unrealized 

15.052 

(7.291) 

n.a. 

Adjustment to present value for receivables from sale of farms, machinery and financial 

(3.885) 

2.888 

n.a. 

leasings 

 

 

 

Income and social contribution taxes 

22.053 

3.055 

622% 

Fair value of biological assets and agricultural products and depletion of harvest 

(74.629) 

(5.464) 

1266% 

Provision (Reversal) of impairment of agricultural products after harvest 

(882) 

437 

n.a. 

Allowance for doubtful accounts 

(744) 

269 

n.a. 

Provisions for lawsuits 

(299) 

545 

n.a. 

 

12.613 

3.728 

238% 

 

Trade accounts receivable 

(1.351) 

(1.762) 

-23% 

Inventories 

(8.199) 

15.758 

n.a. 

Biological Assets 

(24.395) 

(25.648) 

-5% 

Recoverable Taxes 

426 

(349) 

n.a. 

Derivative Transactions 

2.514 

20.573 

-88% 

Other assets 

243 

(1.250) 

n.a. 

Suppliers 

9.462 

8.685 

9% 

Related parties 

(2.782) 

17.305 

n.a. 

Taxes payable 

(1.744) 

(2.437) 

-28% 

Income tax and social contribution 

(286) 

(2.643) 

-89% 

Labor obligations 

(4.551) 

(3.829) 

19% 

Advance from customers 

(4.820) 

72 

n.a. 

Other obligations 

(461) 

(4.976) 

-91% 

Net Cash generated by (used in) operating activities 

(23.331) 

23.227 

n.a. 

CASH FLOW OF INVESTMENT ACTIVITIES 

 

 

 

Additions to immobilized and intangible 

(27.263) 

(21.599) 

26% 

Additions to property for investments 

(17.851) 

(109.800) 

-84% 

Redemption of (investment in) marketable securities 

6.159 

124.728 

-95% 

Increase in investments and participations 

- 

- 

n.a. 

Payments of farm acquisition 

(13.672) 

- 

n.a. 

Receivables from farm sale 

5.588 

- 

n.a. 

Net Cash generated by (used in) investment activities 

(47.039) 

(6.671) 

605% 

CASH FLOW OF FINANCING ACTIVITIES 

 

 

 

Raising of Loans and financing 

130.144 

38.268 

240% 

Interest from Loans and Financing 

(7.166) 

(6.137) 

17% 

Payment of loans and financing 

(66.043) 

(46.394) 

42% 

Treasury shares 

(610) 

(5.848) 

-90% 

Dividends paid 

(12.973) 

(32.042) 

-60% 

Generated (provided) net cash by financing activities 

43.352 

(52.153) 

n.a. 

Increase (decrease) in cash and cash equivalents 

(27.018) 

(35.597) 

-24% 

Cash and cash equivalents at the beginning of the year 

43.798 

54.204 

-19% 

Cash and cash equivalents at the end of the year 

16.780 

18.607 

-10% 

 

(27.018) 

(35.597) 

-24% 


 

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28

BRASILAGRO 2018

 

 

 

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: May 8, 2018.

 

 

 

 

BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS

 

 

 

 

 

By:

/s/ André Guillaumon

 

 

Name:

André Guillaumon

 

 

Title:

Chief Executive Officer and Operation Officer

 

Date: May 8, 2018.

 

 

By:

/s/ Gustavo Javier Lopez

 

 

Name:

Gustavo Javier Lopez

 

 

Title:

Administrative Officer and Investor Relations Officer