Boa Safra Sementes S.A. (SOJA3) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to Boa Safra Q4 2024 Earnings Release Conference. This conference is being recorded. The material can be accessed in our company's website, ri.boasafrasementes.com.br. This presentation is also available for download. We would like to let you know that at the end of this conference, we will have a Q&A session. Further instructions will be provided at the beginning of the Q&A. Before proceeding, I would like to take this opportunity to emphasize that these forward-looking statements are based on beliefs and assumptions of Boa Safra management and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may not or may occur. Investors, analysts, journalists should take into account the factors related to macroeconomic environment events, the industry and other variables could cause results to differ materially from those expressed in respect forward-looking statements. We count on the presence of Mr. Marino Colpo, CEO to Boa Safra; and Mr. Felipe Marques, CFO and Investor Relations Officer. Investor Relations team is also present with us. Now I would like to pass the floor to Mr. Colpo, who shall begin the presentation. Marino Colpo, please, you may proceed.

Hello. Good afternoon to all. Once again, we're here to disclose our gains by the Q4 2024. Let us talk about the company, let us talk about the key aspects of our results, then we're going to have our Q&A session. Now just to sum up and let us be straightforward, that was a bad result. We had challenges in 2024 and much beyond we had expected, but this is the reality. Nevertheless, we had -- as a matter of fact, what was the big issue during this year? What I would say is weather-related issues. But let us talk about 3 negative aspects of what was wrong and what was good in 2024, and let us just consider what we have further down and look forward to 2025. Difficult things, it was climate and production. There was a big drought in the very beginning. It was horrible principally in the growing areas. As a matter of fact, it was something that marked history. Generally speaking, our seed areas or seed fields are planted in October-November. As a matter of fact, it was totally the opposite. We ended up planting by Christmas, 25th of December, we would still having areas to be planted for the seed production. So we didn't reach that area. So that was quite scary to many. As a matter of fact, I thought that in the beginning, it could be even a good news because of the drought, and we would be late in the planting and then we would eventually run in the dry field. Of course, when you plant late then you harvest late, but then I thought that we could eventually pick the seeds in the drought. And of course, there is a bad weather pattern here in Brazil. But as a matter of fact, we had a drought and then the rain was not enough. And we had a lot of rain in March and in April. So -- and then we had our production affected. As you would know, we had 240,000 bags. We produced 205,000 big bags. So this issue related to the production triggered several other problems that reflected our results. And with regards to cost and expenditures, the third listed on the line, we were organized to grow a certain percentage and we had costs allocated to that, we had our sales team totally organized for that matter. But with the production that we had, we -- as a matter of fact, the percentage of related costs and expenditures were higher. Now with regards to the bad debt, which was something that we were fearing, we reassessed the situation. As of July, we started reassessing credit, some sales that had been hired in the beginning of the year with good pricing levels. But then once we thought that the crisis was hitting higher, principally, when it comes to big distributors, we decided to step back and to be a little bit more demanding on the credit details, which triggered some cancellations. Now that was what happened in the Q3, many orders canceled. So people were not able to deliver many -- much of what was supposed to be delivered as necessary or needed guarantees, so then we had this Q4, we actually reached a little lower average price. So those were the 3 challenges for 2024, the climate production credit and cost and expenditures. So basically, that affected our -- the results, which was very bad. Well, now let us talk about certain good things that happened, nevertheless, last year. And of course, I gave you first the bad news. Now I consider that for both DaSoja and Avra seeds, those were very good businesses. We enhanced our business with soya seed. We acquired -- in the beginning of 2024, we acquired the company. So for first year, the company twice-fold in size, showing a very huge growth. DaSoja is a company in which we have some shares and they sell directly to the final consumer, so directly to the grower, principally operating in the northeast of the country, which is an area near Tocantins as a matter of fact, the Northeast counts on large producers or large growers that operate with a good level of sales. And we have another -- a different channel, access channel with DaSoja. Now let me talk about Avra. Avra is [indiscernible] fact that they sell to distributors is a premium brand with exclusive portfolio. That brand, Avra, is very exclusive. So a few distributors work with that brand. Despite of the fact that we launched that last year, it is already standing out with great results and we believe that it is really growing a lot this year. So those 2 businesses even with our large participation, we can innovate with this different approach in our chain. Now let me talk to you about our new distribution centers and our investments. Works were fine within the budget. Everything is good to go. Let us talk about the capacity that we have for this coming year. Now one of the major aspects that I would like to refer to is the capillarity and our presence. We actually managed to sell to many more clients and many more distributors so that was the first stage. So we have a great deal of clients. We are straying out like we're really being present. So we're just decreasing our dependence on key accounts, which is a good positive piece of news from the previous year, and we move forward. Now let us look forward ahead to 2025. The grate highlight would be the 280,000 big bags, 240,000 for the previous year, but we just made to 205,000. We didn't reach the -- not even close to what was our goal. Now our expectations 280,000 big bags, which is an increase of 20% of our productive or production capacity, 40% possibility of increasing our figures. And this is what we are moving to. We have a great opportunity in 2025. Now we started with green use also. With regards to the joint venture that we have now, it is a great opportunity to -- for the next 2 years to have the grip, the control of SBS Green Seeds. SBS is a joint venture. It is -- this is an initiative in our regenerative agriculture. We're taking a step forward. On top of the pasture and also, this is something that is growing. This is the future agriculture, a low impact, focusing on a constant improvement in quality of the soil, so it is a fantastic time. It is time and we -- in our agri business, we know that there is a crisis, and it is complex situation for me in agribusiness sector. But we have this great opportunity of going into a field despite of all the difficulties. So we look at the cup as half full, and we are really with great opportunities in our hands for new businesses. I think that now, Felipe is going to be talking about our capital structure. Also, look at it as a cup half full. Of course, we have a very difficult situation in credit in Brazil. Agri, to my understanding, has passed this worst part. Now talking about the production in Brazil. About 10%, yes, price is the same. I see less issues, at least on the side of the growers. It is now, it sounds like the growers are now coming to afloat. So the worst moments of the storm is just gone. The moment is improving and Boa Safra has a very strong capital structure with this CRA and our finance situation is solid so as it's been shown. Now turning to our next page. I just gave you a brief about our journey in 2024. This sales percentage to great distributors, this is a very important figure. And you may see that in 2021, 65% was actually large distributors and we're kind of cutting this participation or their participation by 10% yearly. So then we're moving to the retail market, '22, '23, '24. So you can see that it is of half, 22% which is our sale to large distributors, and I consider that extremely good. Now we always communicate -- that communicates with that lower arm, showing the number of resellers shops that sell our products. We move to 308 to 697 points of sale in 2024. So we have very good strong goals, and we have about 1,300 shops that are in our map. We're working hard to meet shops and distributors -- direct distributors to really spread out and increase our distribution base with those direct clients. Now talking about credit, 94% of our credit sales have some sort of guarantees. So we can see our market share, 80%. That was a reduction in volume, if you compare to 2023. I mentioned that we actually lost some shares principally in Mato Grosso in Goiás and Rondônia, a little bit in Para, but may -- there was a large issue regarding to the weather, drought and excessive rain. So that was something that affected our year making very difficult to produce, principally reach our market share. There was, of course, we have this production difficulties. Now you can see here is our units. Penápolis in Sao Paulo is the highlight. High capacity to -- related to regenerative agriculture, 280,000 big bags, that is UBS. We have a great opportunity to provide material. We increased production. We increased capacity. The 2 new distribution centers are being inaugurated, more than 120,000 square meters of warehouse, temperature control warehouse and 15 TSI equipment. So 232 lorries or trucks a day, and this is a very high capacity to deliver. We have the cities and main areas -- growing areas in Brazil. So they are present near the growers. Now I'd like to highlight our operation. Production capacity in 1,000 big bags. You can see in the graph, we are still growing and we expect to reach the volume. As a matter of fact, this is really very close to our productive capacity in the number of big bags, 161,000 big bags sold. Now interesting to see that the high area is also growing. If you compare to what we had in 2021, we had [ 80,000, 1,000 ] hectares, we're able to produce 130,000 big bags. Now we have almost 1,000 hectares to 1,000 big bags, so 274,000 hectares to 280,000 big bags. We, of course, have a very challenging situation. This is a general situation overall. We are increasing our portfolio. We are increasing our presence in different regions, but this is our bet. We want to spray out our presence, have more field and be able to work. With this, we will be able to deliver the figures that are proposed in terms of productive capacity. Now we're talking about technology embedded in the seeds. So now we have new technologies, we have biotechnologies, the portfolio. In 2021, we will sell basically 1% of those RRs and 97% it was IPRO, XTD and 2% with the new biotechnologies with [indiscernible] and right now the capacity is growing 2% to 3% and then to 9% in 2023. In 2024, we closed the year with 22% with those embedded technologies in the seed. And of course, we expect to increase to 25% in the next release. So we're still in a growing curve with new technologies. This is a trend, and we believe that those will increase our productivity to the grower. We will have more protection against caterpillars, against the issues, and of course, we're going to have much better results. Now let us move and talk about our regenerative agriculture. Basically, this is an exclusive licensing brand, a union of brands. Semembrás, they would sell pasture seeds. Nobre, coverage plants. It's not only pasture, but also a mix of seeds for pastures for fields with aiming at increasing the quality of the soil, control of disease and pests and diseases. Those were 2 things that we joined together with Boa Safra fodders. As a matter of fact, it is a brand that we launched Boa Safra Forrageiras that was launched about 1.5 years ago, focusing on sellers and resellers. With this new combination, we also know how that it was brought from Semembrás. So we are kind of combining all that together. It is a tradition since 1960 in trading seeds in the area of regenerative agriculture. They started in Penápolis in the state of Sao Paulo. This is a company that produces seeds for pasture. There is a trend to increase the share of agriculture -- regenerative agriculture. We also use our distribution center to distribute those seeds. Remember, they already had a sales team that were present in several states of Brazil. So Semembrás sales team, they dedicate their time with the extension units in the -- throughout the country to get in contact with growers and farmers. And now we are working with them. Now there is this trend of paying attention to the soil quality, the use of less chemicals, pesticides. So we have nematodes that really affect the soil quite hardly. And when it comes to regenerative agriculture, as a matter of fact, the base is to improve the soil quality and also control the problem related to nematodes in the soil. So it's been quite increasing this new approach of using this new line of products with the regenerative agriculture. So that provides a complete technical solution that it is offered to resellers, which by -- in turn offer to the growers. And also, we have the carbon footprint sequestration today. As a matter of fact, we don't have a specific legislation for that matter. But then there are the calculations. And what we see is that according to what is being disclosed in Brazil, so every time we have more organic matter that is left on the soil. And then you use coverage plants with the new regenerative agriculture technology, so we can arrest carbon. So there is a good difference in the values, and we believe that this approach would be ready. If it goes the way it is going, we can increase another source of income with the clients. So with the new -- this new type of product. Now let us pass the floor to Felipe, who will talk about the finance performance here at Boa Safra.

There was a minor drop of 11.4%. When we talk about this drop, it's small because I'm talking about the volume, considering that we have a drop in price. Because of the mix, just like as Marino said, production mix and the credit guarantees that were not put at the table. So that made us reduce our credit. And of course, that justifies basically this 11.4% drop in our revenue. Now as a consequence, we have EBITDA adjusted that, of course, suffered an impact with a drop of 35.5% in the EBITDA. And we were ready from the cost point of view and also expenditure point of view to achieve 20% growth of volume against -- year against year. Now much of this was actually along with the revenue reduction causing a direct impact in our EBITDA here back at the company. And at the end of the day, we can see that our adjusted net profit, so you can see there is a very specific visible dropping to 62%. We moved from BRL 246 million to BRL 93 million. This is also basically what we have an additional impact financial results because of more working capital because of inter-rate action '24, but the effective result you see in the year '24 because of the end of our credit CapEx reduction that is relevant. We would expect BRL 200 million of investments, BRL 167 million in 2024 -- BRL 177 million, forgive me, in trying to optimize our capital structure. So there was -- interest rates were higher. Mobilizing the capital, working capital demands more capital. So we see that in this sense, we cannot be outside. So this is where we have more room to try and grow in capacity with less invested dollar per big bag of installed capacity. Now finance indicators. Main drop is on the average price. Average price, if you see gross revenue for soya, almost at BRL 10,200 in 2023, that drops to BRL 8,900. Most of that is change in price. That is the impact that we suffered in addition to the volume that was not as expected. More specifically to the -- related to the weather issues, just like Marino said, plus sales to new sales at the second time of the game when the guarantees that were not put on the table by our clients and we had to draw back. Now we -- now you can see our profit before taxes. We changed a little bit on the concept. We would show you the net profit. But because of the EBITDA -- adjusted EBITDA consolidated, so we have a new metric to be sharing with you. How much we generate in results in profit before tax in this per big bags -- big bag capacity here in the company. You can see that we had half, which was much related to a smaller production and a number of sales that we had if you compare to the results that we had in '23 in net debt and adjusted EBITDA, it's quite comfortable in the company. That is the consolidated results. You can see that we show we are solid from the capital structure of the company. Credit is not here because of this is just 2025, but we can see that the consolidated results, it's -- net debt is negative, much -- smaller than BRL 50 million. Now let's go back to Marino. He's going to be talking about new crops and our diversification of our portfolio.

Now, this is something that we really did well. There is this plan. We want diversification of crops. Starting in 2022, you can see the first box or chart, how big we are in terms of area with these new crops, planted area, 38% new crops, 62% just soya, a great potential. Now you can see that the revenue reported or brought by new crops. If you compare to soybean, it grows quite fine. You can see that in 3 years, we grew basically 10x, right, from 16 in 2021 to 87 in '23 and 155 in '24. So in addition to these new crops being in our basket, there's a great potential, 10% of our business. When we look at the invoicing, so you can see that sales results, we, of course, be growing a lot with soybean this year with this opportunity of growing almost 40%, it's great. But when we see those new crops, the addition or the combination of those bring us a potential 40% of growth. Let us talk about our order. Those are very important figures, all the time. You can see what's going on, when you look at our orders. So of course, we had great years. The phases of the year, third and the fourth quarters are always much better. First and second quarters are a little low. But then in the case of order backlog, so now you can see in the fourth quarter 2022, we had 0; in the 2023, the fourth quarter, BRL 10 million in orders. Our invoicing is basically 0. And of course, fourth quarter this year, there was a drop, BRL 14 million sold in January. But because Para, we're lagging behind in their planting season. This is one of the states that had a very late window -- planting window. And generally speaking, the -- December is the planting season, but then they pushed down to January. This is why we had this difference in millions to be logged in January, but that was, as a matter of fact, the result that should be in December. Now what about other crops and services? Basically, 0 in the beginning in the second quarter. But then it is increasing with the other crops and other services. We already had BRL 22 million for the first quarter in '25, that is orders to be invoiced as of January. You can see that those crops for both invoicing and orders, they have a different behavior. And now once we are learning and gaining room with those new crops, we might start on the first quarter with more strength to shrink our season of fluctuation when you see the business in overall terms. Now the financial health or stand of the company. With regards to our debt, our gross debt. You can see that BRL 415 million in the company and the net result, according to the controller, just BRL 49 million. That is how we step into 2025, lots of challenges, high financial costs in the sector. But we have a very comfortable position, only BRL 49 million. This is from this point of view. Since we have a lots to happen in the receivables in May -- up to May, that shows how solid we are. Now when we look at our liquidity, controlled liquidity, 3.77 better, our strength with all this credit restriction that we have at Boa Safra, this is a very good moment. And of course, without CRA, it was just something that happened in January '25. That was a very short series, 5 years. CRA brings a reinforcement and now you're going to be seeing that in our balance. Boa Safra in figures. Our main aspects here, the drop of 11% in our operational revenue. Consequence, gross profit is impacted, but lots of costs are not variable costs. They are fixed costs at the end. And our proposal, our idea is to increase our capacity in 20% from 1 year to the next and impact over the EBITDA because of the expenditures that we mentioned. Of course, we had this growth of 20%. So there was a drop in the EBITDA from we going to 9.5% in '24, we were 13% in '23. It's difficult in the agribusiness in the end of the day. But when we look and consider several other balances, of course, we knew that it was going to be a difficult year. But by far, we are in red. Yes, we have a very special detail. It's a particular situation that was the weather that affected us and triggered all several aspects that ended up pushing our results down. There was a drop in our net profit, 43% drop and 8.7% in our net profit and the adjusted net profit, you can see a small operations and our participation was about 40% with them, our result was BRL 93 million to the company, the adjusted results. So it is a scenario that makes us think that the year wraps up with figures that are away from our initial expectatives. I understand the reading from our investors. But we are strong with a good quality of our balance and considering the progresses that we had with DaSoja and Avra. So with those contracts, we are stepping firmly on to 2025. Thank you. Well, I would like to say that it is an interesting point when you talk about the adjusted net profit. We try to be very realistic. We know that the figures are kind of timid, but we really are able to stand strong and [indiscernible] throughout those years. We are always very careful. And generally speaking, it is the other way around, and there is always more risk, so we are very conservative, that's what I want to say.

[Operator Instructions]. Now XP.

I have some questions. Now I know that we do not open our order portfolio for the first quarter. But can you share a little bit of what you have with regards to the quality and the volume, price regarding your orders -- order backlog? Now the volumes, is it on your diagnosis? Is this a major issue for 2024. How do you see this happen in 2025? Now if I may, a third question. Looking forward, yes, we increased the seed, the presence of new technologies coming in the composition of the company. New technologies, yes, I would like to understand how we could anticipate the economic results after this [indiscernible] other technologies, but how do you expect to see that will happen in terms of the use of new technologies in terms of the results?

Many thanks. Let me just react. I was just taking notes very briefly what you mentioned. So with regards to the sales, honestly, we don't disclose information about our orders. But in the beginning of the year, I say it was very atypical in a good side to us. Dollars, the exchange rate is $1 per BRL 6. So very good for the growers to close deals for the following crop. So we see a lot of going on in the imports sector. So this is -- I'm talking about the sales in December. The market changed. As a matter of fact, it is ahead in the historic average. Actually, there were sales contracts closed in December, which is very rare, just basically because of the exchange rate, dollar-real. What I would say is that our backlog order is doing quite well, that's what I can say. Now let's talk about production. Every year is -- there are challenges every year. It seems to us by now -- until now that this will be a much easier year if you compare to 2024. Their challenges are much smaller compared to what we had. They had good results, they grow -- their crops are doing well. Principally, those long cycle and short cycle, average cycle, everything goes well. And a lot of information will come out in our balance for the first quarter. By now, everything seems to be very good. We still have 2 weeks to see what's going on. So this is the peak of the season because the crop it was averaged in April last year, but now since we planted a little bit before, so we are kind of a week away from our pick of the crop. Now about new biotechnologies, yes, this is gaining terrain. I feel that now we have great material, a very competitive material, 22% last year in their presence. Now we expect this year to have a strong growth. But I think good news, there is demand for this new technology for both pesticides, also for caterpillar control, I think we're going to be quick in that sense. Until 2028, those patents -- the new technologies will actually be continuing.

Our next question comes from Gabriel Barra from Citibank. Our next question comes to Henrique Brustolin from Bradesco BBI.

I want to talk about commercial performance, 2024 and 2025. 2024, obviously, a typical from a production point of view. Everything that happened in the distribution channel, but now consider the sales, you sold less than the production capacity of the previous year. So -- because of the challenge, let me hear from you about the volume performance in the company. Maybe the entire sector suffered, of course. Now how does that change for 2025 so that we can have some comforting words in terms of volume that you are working on this year? This is the first one, and it is with regards to volume. Now the second part of my question is with regards to bring up price. Perhaps you could explain to us the average price based on last year? So you already made a comment and the relevant mix principally because of the cancellation of so many orders. But since we are growing volume share this year, how much do you think you expect for 2024 for the price of soybeans could be used as a reference for 2025? Or perhaps should we talk about the levels of 2023, perhaps those would be a better reference? Those are my 2 questions.

Gabriel (sic) [ Henrique ], let us try and sort out those questions. Thank you for your questions, actually. 2024, yes, it was a huge challenge. Why? We had sold early and we felt that there were production issues once we started turning to like tightening up our demands, our guarantees, we had a change in the volume. So we basically went out selling in August. This is basically when they were starting planting. Then there were sales in September and October. It's very difficult once you were out there with. They try to go back to a reseller or a shop and ask them to change the product or change the product from someone else, well, that costs much more to us in terms of what kind of a discount you have to give to someone who had already expected you have bought some seeds from somebody and all those things represented a huge challenge to us in 2024. That really caused us a direct impact this last minute sales, and that was a huge impact that we had in 2024. What do we expect? What do we have as a forecast for this year? I think we should go back to historic average in terms of target that we are going to have the record pricing just like in 2023. No, we are talking about the average, considering what happened in the last 6 years. 2022 is just a benchmark. It was a good year. We're growing. You're talking about 40% growth in volume. The average volume is 40%, right, in sales. So this is a huge growth. A very important figure, hoping to deliver is volume and we increase the share in the market. This is the major challenge. We are working on this -- to deliver this volume. Based on my experience, it'd be better in terms of price if you compare to 2024. So we have the figures there. What we had in 2025, the end of the year, to be able to consider all those canceled orders. Anyhow, we are talking about a better figure.

Our next question comes from Pedro Gama, Citi.

As a matter of fact, I have 2 questions. First, of course, I would like to talk about this recovery scenario throughout 2025. I understand that on one side, you have to consider that there is an increase in the margin because of the yield that improved and also the hike in the corn price. You can imagine what will happen during the entire crop. But I would like to ask about the appetite you think that producer would have for this year? Do you think that you're going to improve their appetite for tech seeds? And how do you think this happens in terms of the credit policies? What are the guarantees throughout 2024? How much it is going to improve and also improving the margin? How do you see the liquidity of the producer? Do you think it is going to be improving or do you think that this level of capital investment will continue to grow? And the second point, talking about the price, just asked in the previous gentleman, I would like to ask about the dynamics of this. In my mind, I try to see that the basic seed would have -- to have pressure downwards because the supply of soya seed would grow just like based on what you just said, but the demand won't be so big because of the credit that you see that is happening in the market because of the liquidity, we can have a very small growth in terms of planted area. I would like to hear from you, I want to see if you agree with my understanding or my reading of the situation.

Pedro, I think that our position is very good for 2025. I see some recovery. And when you talk about producer margins, I'm not talking about price, on average, 10% more. So this is the estimation that we have at this point in time. 10% is a great view of difference in terms of extra margin, despite of the similarity of price compared to last year. The producer or the grower has more volume. Now, premium coming back is, this something that is a question mark for us. Yes, you can see that TSI is growing. 94 was good. There was an increase in TSI. Nevertheless, we feel that growers are going back to basics, not necessarily the seeds. Seeds go with more technology, but the producer, the grower try to buy seeds with a basic treatment with a premium seed or biological tech -- with more added value, the growers said, no -- step back and say, "No, listen, I need my seeds treated, but honestly speaking, I want just cheapest treatment whatever you have, the basic of the basic," that's what they say. And that type of product, like the simple tech product, shoot up. So despite of the fact that we increased the sale of treated seeds, it was not much compared to the previous year, about 10%. So we grew, yes, but the average ticket of that treatment was much smaller or lower. I don't have much information at this point in time. Of course, treatment is something that is always kind of later down the line. But I think that -- if you ask, "Well, Marino, is this going to be the same, that they're going to be the same type of levels of treatment?" No, I don't think so. Yes, we improved the margins. Yes, we're doing -- we're making an effort to sell premium treatments, sell biological treatments. But it's difficult to mention figures for this year. What I know is that things are moving towards biological treatments. There are new products, there are new treatments available. The trend is regenerative agriculture, less chemistry, more biological. I think that the next 5, 10 years, we're going to have increasingly more biotech, more delivery capacity, more treatment capacity. This is our target amidst the crisis that we had last year. We had a drop in production and price. But this year, a normal production, but -- of course, the growers had to tighten their belt and they might not make heavy investments. But once again, coming back, I don't know if biotech products will come back as strong as what we had in '23. This is my understanding. This is my reading. But I think there will be an improvement in the average price trend. Yes, there will be much more TSI compared to last year, people understand a little bit more the technology. There's this shift, high added value will be this year. This is my bet. Now the use of working capital, my view, we used a lot of our working capital last year. That was not something that stayed behind of what I had expected. We are paying attention to that. We are really making a huge effort. The strategy of the company is so that we can change the use of working capital to have a more balance this year already. And I think it is possible to change the strategies of our orders. So we want to go more in retail. So this is good piece of news that we have more clients, almost 100, and we're going to go even further. We have a much stronger team with more sales. Of course, a larger team presents a major cost, but we, of course, have to find a balance with other crops, there are more visits, there are more crops being sold. And we have been able to spray that out. There will be very reserved conditions in terms of credit guarantee. So the worst storm is gone. Now considering the interest rates, that really is difficult on the growers side. And of course, on the reseller's side, so you have to be very careful to really consider our order backlog. So we're talking about March already, end of March. And it is showing that it is quite along with our strategy. It is quite straight out and this is our strategy for our recovery. I hope I was clear in my talk.

Our next question comes from Bruno Tomazetto from Itau BBA. Our next question is from Eduardo Lazzaretti from GTI.

I have 2 questions first. Can you just expand on the sales mix that affected the average price? We think that the drop is relevant because of the TSI share. Second question, can comment what happened in the increase in the percentage of known controllers in the total result?

Well, I think that for the first question, we already provided the answer when we were reacting to what Bruno asked about the TSI, that was more basic and plus the sales that we had in the second time of the game and also because of the price and the mix of average cycle with a great concentration of Mato Grosso. With regards to the other question, well, actually, there were major mixes and changes analyzing '23 and '24. There were [indiscernible] several -- a lot was sold, now there is just 40% participation. And then we have noncontrolling profits. Now DaSoja, this is a company that brings results in 2024, and we have only 45% participation in DaSoja. So those were 2 major moves that the noncontrollers get a grip in the relevance and greater relevance when you analyze the consolidated results.

Our Q&A session is ended now. If you still have a doubt or question, please submit it to ri.boasafrasementes.com.br. I would like to pass the floor to Marino Colpo to make his last comments.

Well, I would like to thank you all for the trust deposited on our work. And it's been very diligent. Our control of the capital and the expenditures and costs with all the changes that we applied are producing very good results for the company, principally, our presence that is greater in the retail business. Of course, there's several challenges. We want to deliver major growth. We have an opportunity here to grow and increase our results and really turn this page of this challenging year behind. Thank you.

Boa Safra's conference is closed now. We thank you for your participation and wish you a good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]