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

Ladies and gentlemen, good morning. Welcome to our [audio gap] presentation earnings results for the first quarter 2026. This conference is being recorded, and you can access ri.boasafrasementes.com.br and listen to the recording of this presentation. It will be also available for downloading. We'd like to let you know that we're going to have a Q&A session at the end of this presentation. And details for that will be disclosed prior to the Q&A session. All that is being said will be based on the opinion and the information provided by the company and that refers to future events and all information depends on circumstances that may or may not occur. We would like to let you know that you have to consider that events should be related to the macroeconomic fluctuations and other factors that may interfere on the results or the final results that are being disclosed here based on the opinion of our staff. CEO, Marino and Felipe Marques, CFO, are present during this conference and also the relation with customers. I'd like to pass the floor to Felipe Marques, who could start the conference. You may now proceed, Felipe Marques.

Good morning to all. It is a great pleasure to be here with you this morning. to talk about our earnings for the first quarter. Marino Colpo and Felipe Marques is present here to share with you our presentation to bring the information to our asset holders. Marino, go ahead, please.

Good morning to all. It is a great honor to be sharing this hour with you. Very briefly, let me disclose a little bit of our history, the history of our company and some of the aspects that have been important to the history of this company. I would like to mention the highlight of our 2021 IPO with the 2022 with Fiagro launch. In 2023, we managed to open some distribution centers moving with and also to other acquisitions in 2024, we had our follow-on. And 2025 was marked by 2 emissions, 2 CRAs. And we also purchased the SBS green seeds, and we had the expansion to the south of Brazil in 2026. You see on Page 4 for those who are just listening to me and following through the presentation in 2023, 2026 better, we started with our combination or our joint venture with BASF, we started our unit in Ituiutaba. So this joint venture was very important. Of course, the joint venture with Bestway in Nigeria, which is a very strong move. Those were 2 very important moves that we did in 2026 with corn. Now let us move to Slide 5. I would like to mention the fact that we have a seasonality. There is a variation in the business because of the type of business. Of course, that may decrease, we might increase our invoicing in the first and the second quarter, which is the trend for this kind of industry. But of course, we depend quite a lot from soya seeds, and this is the bulkiest part of our business, and this is the main part of our revenues. So the main aspects are actually the third and the fourth quarters are very important. Of course, the first and the second quarter are, of course, important. But then now according to our expectations, we might even go bigger than last year with the results that we had, BRL 130 million is actually a small figure. About 5% of our year results come in the first quarter. Now if you move to Page 5, the first quarter, we grew 20%. So let me call your attention to our crops. So of course, there are some better results in the first quarter. we had a little drop in our results. In 2026, we have BRL 27 million in gross profit, EBITDA, BRL 15 million. And now in the first quarter 2026, we have BRL 9.8 million as results. And net profit, you can see the drop from BRL 25.7 million to BRL 3.7 million. We, basically, we're growing with the EBITDA. You can see that the growth is actually existing, but we have our seditors because of the high interest and that is a reality. Now let me go to Page 7. Let me talk a bit about the highlights. You can see on this graph that today, we have 18 units operating. And you see the map. The company is present. We are expanding. We are really growing in throughout the territory. You can see the production capacity. There was not much change between '25 to '26. We still on the 220 -- sorry, 280 as capacity. But the area that we planted. This is actually those fields are going to be seeds. So we're talking about integrated seeders. Those are partners. It is important to highlight that this is the first time that we moved from hired fields that we are beyond our capacity. So if you compare to the past, we had much less area hired if you compare to our production capacity. So we are very glad to increase our area in hectares. Why? Because of the quality. We are really focused on delivering high-quality seeds. And this is the good thing that we had at the company. We had a very difficult weather. There was -- we went through excessive rains and our expectations today from us is as a matter of fact, we believe that there is a lack of seeds in the market, principally in some areas. So in the average cycle from 7.8 to 8.2. So we have a very difficult hard time to find seeds in the market today. So we are expanding our area. And this is a good move because not only thinking about the fact that we managed to work with a much less volume, at least compared to what we had planned before. And according to our goals, we managed to produce seeds, but we also have not only seeds, but high-quality seeds with those labs working hard. Of course, we have our tests and our seed is stored. So there has never been such a high-quality seed before. So of course, there is a lack of seeds in the market, and we have a high-quality seeds. So that makes us very positive. with regards to our future. Now on Slide #8, this is our order book for soybeans. And it is very important, not only thinking about the 5% of our invoice in the first quarter. We have to think about what we invoice throughout the year. So -- but this is a very good way of looking at what it is going to happen throughout this year, BRL 1.5 billion. So this is a combination between soya and other crops. Now we're comparing to this to the first quarter of 2025. And you can see we are still growing. So this is the greatest result that we've had so far in the history of this company. Now you can see that there is going to be an evolution of this book in the third and the fourth quarters with increase of results. Now let me show you the order book for soya. So we're talking about soya seeds, which is a little bit less if you compare to the results we had in 2025, 1.3. But the highlights here is now on Page 10. actually, Page 11. The portfolio here there. Page 13, portfolio diversification. This is just for other crops, BRL 70 million in the first quarter 2025, and you can see the great deal of opportunities that we have for growth with new crops, with new businesses and the company is making headway in that sense. As a matter of fact, I just moved ahead. Let me bring you back to Slide #11, just to talk about our diversification. And that is something that we're talking about basically the same thing. We are talking about other crops having before 11%, BRL 179 billion in 2025. And now in the last couple of months and now at the beginning of 2026, we have here an increase in our invoicing, more than BRL 132 million, so 73% in the period. So you can see the comparison. Now let's move to Slide 12. Let me talk about soybean seeds and new businesses. You can see on the right new crops, you can see the growth. We're talking about 31% growth. Slide 13 that I mentioned before, you can see the order, the order of other crops. Soya is not contemplated here. And you can see the, if you look at the history, the strong evolution that we've had with other crops. And this is the reason. And that explains per se why we are so happy and so positive about the growth of the company. Slide 14. I would like to invite Felipe Marques now to go along and talk a little bit about our financial information, our financial data, our CFO.

Thank you very much, Marino. Now you can see here the evolution, 17% of this quarter. BRL 143 million according to Marino's words. Yes, of course, that was boosted by other businesses of the company that shows the reduction of capillarity and showing that we are actually based on this -- our new businesses, we are celebrating a good jump on our order book, checking the scenario for both the past and the future. So this is shaping our image, principally when we analyze our gross operating revenue, our adjusted EBITDA. Now talking about how the variations throughout the year, we have the growth, BRL 2.8 billion compared to what we had in the previous year in the same time of the year. Now checking our adjusted EBITDA, so you can see that we have a minor drop -- this is actually because of the market. You can see here the BRL 25. But when we check out here on the right, the LTM, there is a drop of 10%. And the main comment at this point in time is, as a matter of fact, the market BRL 35 million that pushed EBITDA down. Now when you check out the EBITDA of the company, it goes on a trend of growing quarter-over-quarter, of course, considering all the businesses of the company. There is an expressive reduction that we managed to implement for both expenditures and also if you analyze the first quarter of 2025 and compared to 2026, you can see that our moves, principally the decisions from the end of the past year, you can see here translated in figures. Absolute figures here and relative figures too, the realized CapEx, there is a trend for growth. Our installed capacity in soya is very good. So we are moving from a stable -- we're getting more stable in terms of capacity, and we're also growing recently when we analyze the LTM and those figures are actually connected to other results of the company. So our strategy is growth. And principally, connected to other businesses. In terms of net profit, of course, this is a quarter when we are actually getting ready. The same thing happened in the previous year. You could see here BRL 6 million in the first quarter of past year and BRL 4 million on this quarter. There was a drop here from BRL 94 million to BRL 15 million, of course, due to the fact that this is basically the period that we had the results in 2025 linked to the offer of seeds in the market price and the excessive production that we had that actually had this operational situation. In terms of realized CapEx, something that we already talked about. It shows how our CapEx is much lower compared to the history, we have here a series of improvements, BRL 13 million, and that is in the first quarter of 2026. So using the structures that we have and our growth, and you can see another level of like there is less working capital is not so necessary. That goes along with what we have in mind. So we are trying to obtain more efficiency of capital. Now here, that profile, you can see the new reality that we're just talking about and everything that we've done throughout the year. You can see with such expressive growth that we have, we have never expanded so much like what we had in 2025, we have more working capital. But still, we are quite -- we have a very high current liquidity. You can see that we jumped from 1.5 to 4.6. A few companies in the agribusiness has such a high liquidity profiles such as Boa Safra. So we can see that our agro sector is suffering. It is not a matter of assets, it is a matter of liquidity. And this is something that makes us different in the market there in the market. So this is something that is fundamental that provides solid situation. We got very good foundation principally for our partners so that we honor our business, we honor our industry and in such a challenging situation with a lack of seats in the market, so the clients can trust on us because of our high current liquidity figures. So we are becoming increasingly more in terms of trust, we are -- we have a very good image, increasingly good image in the market. And of course, the market is moving the way it is moving. And this is something that it is right there, and it is open information. So there is a high demand for our products. So we can see that both in with the distribution, the shops and even growers that are there out in the market trying to get the product. So there are so many companies that are in the seed market, we can see that there was some sort of reticence out in the market, but not with us because we have a high liquidity level. We are very sure about what we do and our image is very positive, and we are actually achieving the first rank in terms of company of choice with the customers. And this is something that is really affecting our orders. And the trend is that we are going to grow in a situation that it is quite difficult if you compare to what we had last year. This is my comment, of course. But when we check here, the cash and securities and our gross debt, we're talking about 30, 29 days accounts receivable. So this is actually a very short term in terms of receivables. principally with the growth that we had last year. So you might have this net debt of 163 million. So I think that shows per se, as I said, that we have to have seasonality. We have to see the entire picture of the entire year to watch this as a film. And this is why we show you all those details that show the level of liquidity and how solid and sturdy we are. It is very important that we have to consider our accounts receivable. We received on the 30th of April. So most of our receivables have been locked in -- but unfortunately, this report doesn't contemplate that information. we're going to show that on the -- when we disclose the information for the second quarter. And that will combine all the information to show and prove that we have a wonderful capacity of growth with soy. We're going to be showing the growth, and we're also going to be showing the consumption of capital we had last year and won't have this year. Something that we really get proud of is that we have only BRL 163 million -- so 96% of our long-term debt is -- our amortization schedule is very positive to us. Perhaps we have the best 96% no long term. So this is the best situation of the companies in Agro with this schedule, long term, almost BRL 600 million -- more than 16 months. So you see this level of current liquidity of almost.

I think we were very we were very lucky and we have a very good situation for both financial costs, quite different to what is happening out there in the agro sector. And also with all this crisis in the seed market. Of course, Felipe, you are right. cash flow, much less cash, 42% reduction compared to 2025. Even selling more seeds and other businesses on the first quarter. So of course, that would kind of give more push to working capital. But we see a reduction of 42% in cash generated from operating activities. We start having good signs of -- we are reaping the results of what we did last year. There is less need for cash, less need for working capital, even in the first quarter. This is something that really motivates us. It's a new tone. Our efficiency project, 2026 will be really marked by good results, reminding you that the first quarter is not the best figure that we have to show, but this is when we start really show in the seed, we can share figures of our orders, our order book. This is when we are getting ready to deliver good results as of the second quarter. Thank you. Now let us move to our Q&A.

Now we invite you to our Q&A session [operator instructions] First question comes from Pedro from XP.

Question is strategies, commercial strategies. I may be wrong. Please correct me if I'm wrong. 2 years, your strategy is to hold sales. But now last year, kind of go back to the normality of the strategy of the company to try to give a push to our sales and market. Now trying to understand what you see now in the scenario with lack of seeds, how do you expect to do or to develop your strategy or market strategy in 2026? And also, I would like to know from you if you could just provide some sort of details in terms of this growth of single-digit growth in our backlog order. I know that it is difficult to predict this is something that is based on portfolio, et cetera. But is there something else that we could get from you in terms of price and volume so that we could just imagine reading in figures what we're going to have in end of the year and now leveraging. You of course, talking about liquidity and a super solid position, but with a more leveraging level, we understand the seasonality, and it is impressive, the results that we had compared to last year. So I'd like to understand how you see the level of leveraging, if you understand that with a better situation this year, so this leveraging should come to a higher ground and more healthier standard. So you have any strategy that you have in mind to decrease this leveraging push throughout the year? This is my question.

Thank you very much for your question. Talking about commercial strategy. Felipe will talk about leveraging I think we have very good stand in 2026. Part of this was in January, February, March was also good. April, we did well with our sales. Part of the volume was not with high price. Now all the -- of course, the lack of seeds is pushing prices up, we are positive about the year. There will be better price for seeds because of the lack of seed in the market, and that restriction is a general restrictions, not only to us, so it's there. So we have great possibilities. As a matter of fact, there will be a lack of certain inputs in the market. So we're trying to get the good margin. We believe this is going to be a positive year, not in volume, but in margin, in price. But this is what we expect for 2026.

Pedro, leveraging. We feel very comfortable in terms of leveraging here back in the company. We had very narrow margins in 2025, correct. And also there was the growth. That was the major aspect of what we had. And of course, we needed working capital. When we step on the brakes with the same volume of installed capacity. We have the demand for working capital to be used for growth. There's not such a thing. So that per se makes life easier to us. there's that need for cash for money on the first quarter 2026. It's not a big deal, but we can see some signs of positiveness. Just like Marino said, we have a very restrictive offer. Now price is another pressure. Price is what it is; what matters. There's no demand for capital, but there are other assets of the business that demand growth, less than soya. But we also check on prices that are out there in the market of seeds. And this is a general situation, not only for soya. So what we had in the past in terms of prices, generally speaking, is repeating in other seeds, other markets because of the restrictions, because of the crisis that we have in the sector and also getting worse because of the weather. Seed prices, we can see seed prices, generally speaking, much higher in all crops for 2026. So the question is cash generation or growth demand lower profits. But when we analyze our results for the first quarter, we're talking about just BRL 3 million negative. So once again, let me repeat, when we watch the entire video or the film of this company, so the first quarter doesn't show you the entire picture. But when you see what happens throughout the year, you can see that this is the moment when we consume when we use more cash, and it is now low. So the level of liquidity based on the entire work of not growing much this year shows a good result -- this is something that is not actually causing any friction because of the structure of the company. The capital structure is quite solid today, and we are now reaping good value, just like what we have always done, especially considering what happened in the sector, correct. Now I would like to just mention that the great spillage of our business actually is the excessive production of seeds last year. So we are, of course, working on efficiency, but to gain efficiency. Despite of the fact that we are still growing volume, we lost efficiency. Last year, just like we said, the fourth quarter, we dropped in efficiency. We had 270,000 bags. We sold 210,000, a little bit perhaps 212,000. And that was 30% that was there too much 20% on average and sometimes even 17%. When we have less that is left over, so of course, our margin is better. So when, of course, we have too much in terms of seeds that are left behind, we have not such a positive result. So of course, it was a difficult year. But in generally speaking, that what we had as a leftover was a negative aspect of our business. The idea this year is to have -- operate at the same level of volume, sell more. Of course, we had some difficulties in the production. But at the same time, we have better pricing. We also have our backlog order, which is quite aligned to what we had last year. So we really believe that our efficiency project is going to work out quite well. We should close the year with much less leftovers compared to what we had last year, which is a very positive stuff in addition to price. Perhaps we have less offer, so with a better price, and so we can get better results. That shows we're managing it quite well. We should get back to our historical margin levels.

Next question comes from Pedro Gama from Citi.

Two other points. As a matter of fact, you talked about the liquid debt this quarter. Now what about the follow-up of what happened in April and perhaps May. What can you expect in terms of bad debt and payments? How do you see the balance of the strategy that you disclosed a couple of months ago in terms of diversifying our client portfolio? Another thing, when you talk about the lack of seeds, I would like to know from you, what about the premium product mix? How is that going? And of course, growers have margins that are very tight. So what is the average price of seeds? So perhaps you might even kill the demand from those premium growers. What is your expectations? And how do you see that in the market?

Let me get your questions, Pedro. I might pass the mic to Felipe for him to talk about bad debt. He knows that more than me. About sales, the first question. Well, the market is sluggish. There is a pressure because of the hike in the price of inputs, fertilizers out there. while the seed is also more expensive. Now when you check out and see their margins, growers have a bad moment, a bad situation in the end of the coming year. But now the picture that if you take a picture now of their margins for the coming year is, actually, the situation is historically speaking, at this point in time of the year, that shows this image shows, this shot shows that it is the worst situation possible, right? Growers have a very difficult tight situation. This is actually a fact generally speaking, prices are quite low. Everybody is selling at lower prices, but it is a positive surprise to us. But even with the situation, we do quite well in sales. So we hear behind the backdrops, we talk about it, and this is due to the -- how solid we are. Many people come to us, and we know that we have clients. They say they come and say they want to buy, they're going to get the seeds from the competition, and then they come back to us and then they end up buying the seats from us. So we have a very good name. There are so many companies, growers and resellers. As a matter of fact, they are not feeling safe enough to send their money to the competition. So this is quite clear. And this is how we feel. And this is my personal feel on the reasons that despite of the fact that the market is sluggish, as we mentioned, so we are still doing well. Growers will probably just leave to the last minute to buy input because they believe that the prices would drop. I always talk a friend of mine, I don't have to be in a hurry if I'm going to make a bad deal. So last -- next year, soya prices will be down. So why should I worry and why should I hurry? So this is their mindset. This is how they see things. As a matter of fact, in our case, as companies, we are navigating through those difficult waters quite well. Now in terms of bad debt, Felipe will talk about it, but that at least from my understanding, we haven't had no major surprise in terms of bad debt. So everything is kind of moving according to what we expected that would happen. So we might have bad debt in line with what we had, which is very low bad debt compared to what we had in the last years. Of course, there were some bad debts last 2 years, but nothing too major. So, so far, as according to what I see, we should be along with other similar situations that -- similar to what we had in the last 2 years. Felipe should just make the last comments about what I've just said. Now let us talk about premium product. Well, of course, a wonderful job in terms of premium products, new brands. Those brands are growing despite of the difficulties actually for 2 reasons, in my opinion. First, we are being able to add high quality to those labels. Well, we have great volumes. We might, with that always be actually, we are able to choose the best lots. So we always have the best lots in Brazil. I dare to say so. Our premium seed is unbiddable. There is no comparison, they are best, that's it. Our seed, our premium seed has great levels of quality. And also a second thing, our capacity to form teams, there are several players in the market, but it is important to let our investors know that the best 2 of those great companies and among the top 10 in the sectors, we had a great deal of their team that came to us. They came to work with us. And they brought many clients along with them. So our portfolio is also growing, and that is a lot. Many of those are bringing, adding more. And actually, many were direct sales. So those brought this possibility, this new chances and possibilities of increasing our volumes. So we are very positive about the growth principally with these additions. Now just in terms of diversifying sales, so talking about the strategy of increasing our client base, yes, that was a correct move. But it was the best, the only strategy that we actually could use. If we hadn't done that, we would be probably in a bad situation. So we analyze our history. In 2021, there were 300 sellers, concentrated trading. And those distributors, most of them they moved to bankruptcy. Actually, they were in recovery. That most of them were in for 2022 onwards, they were kind of trying to recover. So they had serious situations, very difficult situations, not only from recovery, actually, we managed to increase our client base, more than 950 points of sales. So the distributors had our product on their shelves. So though today, we are much more diversified. We, of course, have to consider that there is a much higher commercial cost. We've been trying to improve our margins also because of this situation, of course, to accommodate this change in this cost. But today, we don't have such a high concentration in certain distribution centers. So this helps us plan better, have a better image and of course, decrease our bad debt. So we are moving away from that concentrated scheme. What do you say, Felipe?

I agree with what you mentioned. So I think it is, yes, this management style. So from 96% last year, and considering that there is a mitigation of risks for bad debt. Our portfolio is much more straight out. Nothing really concerns us or represents high and relevant risk to the company in our belief. The things that we've been doing in terms of guarantees, in terms of the contact and the intimacy that we have with our clients, that shows that we are really trying to have a much, much less bad debt. And principally, compared to what you see in the market out there, that shows us as a highlight or it makes us stand out in terms of company in 10% of market share in the company, a very wide portfolio to offer to our clients, principally considering the restrictions that we have, the offer of seed, credit. So we also have the credit management. So those who want to remain with Boa Safra, they have to pay on time. So we are actually a strategic supplier to our company to their companies. 15% of what they buy is seeds. They sell, they resell Boa Safra seeds. So there is a rupture of their portfolio when they don't have Boa Safra seeds. So that is a negative stuff. That's why they want to have our seeds. It is relevant. When you're talking about the seed business, it is relevant to have Boa Safra seeds. So that is a strong point. And of course, this is a very straight out sector. Nothing worries really because of not having that concentration of account receivables. So actually, we have those cases of not being able to pay on the day, but partially paying a little bit here and a little bit there. So there are possibilities of paying installments on a daily basis. So of course, we have this actually possibility of paying in at least partially. And this is something that really shows our advantage compared to a portfolio that we had just for payments just in the end of the fourth quarter. So this is going to be really showing a positive scenario in terms of receivables, and that goes along with what we had last year. That's it.

We are sure there won't be surprises. Of course, things may occur along the way. But even with those clients that were kind of -- we were reticent, most of them have paid most part of their debt for the loans. So we are very good informed about it. It might happen that they may have to pay a bit now and a bit later. Those who are probably going to declare that they are bankrupt, they won't pay even the first installment. So we kind of -- we're [indiscernible] about it. There won't be surprises. We are sure of that and you do that the second quarter will really show our good results.

Next question comes from Bruno Tomazetto.

The possibility of getting my question. Follow-up with regards to efficiency and restructuring of the company from 2025, what are the actions? So probably not reflected in the results. But what is, from what you planned, what has been delivered, if there is any other detail and also the P&L on the next coming quarters, the curve of the results? And the second part of the question in terms of restructuring, I would like to understand, is there any if some sort of leverage that you use to push the growth? Is there any time of getting normalized? What can you do to increase and get more clients, new clients in terms of margins? So what can you talk about the ramp-up of the business? And we kind of understand what is in your mind potentially with what you showed in the last few years.

Thank you very much, Bruno. Let me just talk about the efficiency project and what that is based on. Let's see our efficiency project has 4 major lines, 3 of them are to reduce leftovers. We lose margin because there is too much left over. That is what everything shows us. Our studies show that we moved from 17%, 20%-21% and then there was product that was left over. And then we got to 31% last year. And that leftover consumes our margin. Despite the fact that we are growing, we gain market, but that leftover would before our margins. This is the major aspect. And then we have cost. This is also very important. So what are these 4 fronts, 3 are within the managing leftovers, one portfolio. We've been studying portfolio quite from close. Our portfolio was quite large. We tried to reduce 101 pieces. Now we have an average 65. Now we are at the level of 80. We want to reduce the offers, less material offered. Why? Because we understood it was difficult to manage that leftover that we had of several materials with those with less demand. A second thing would be what we have in terms of indicators. There were studies that show that at least have some of the industries are not as efficient in terms of efficiency, in terms of discharge. So actually, they are discharging more or they are wasting more. If you compare to more efficient plants, actually, we're trying to level all everything that we have to come to the same level of efficiency. We have already reached some results, but there is still something to come. So we're trying to level all plants to the same efficiency. And of course, there is the part of the process we have to mention. We moved from a few units, and we jumped to 16 units. The growth was fast. So the second part would be to deal with this part. Third, we focus on orders, sellout a better job from the team. We increased our services in terms of team, so sellout. We are still studying what it is really rolling well. So we want to really be sure of what it is happening out there. The fourth aspect, I should say, comes to cost. Cost is not part of efficiency per se in terms of leftovers, but since we're growing and since we are a company that is trying to get always ready for greater volumes. Our G&A and our cost and when we analyze the figures, we grew faster than we should in this moment and the moment of heights in the sector. But now when we see what happened, we believe that we are capable. Of course, we are being able to show that with less G&A, with less cost, we can have and be basically the same sales results as since -- actually, this is why we are reducing cost and trying to kind of shrink in terms of cost, shrink that part. Basically, this is what it is. This is my opinion.

Yes. Just adding to what you just said, you can see that on our balance sheet. Working capital is less needed. That shows that even growing, we are just injecting less working capital in our operation. NCG, you can see NCG is going down if you compare to our invoicing. So the first quarter, you can see SG&A absolute figures, much less compared to first quarter 2025. You can see the figures and that is on our balance sheet. You can analyze the situation. You can see that we are able to show our efficiency. And we are managing to capture more gross profit because of the diversification with other crops. Scale is important. Of course, in the end of the day, it is important to have scale, but also price, as I mentioned before, price levels, very low now compared to last year. Now we are recovering in all businesses today, not only so. This is something that we might expand to sectors. So those are factors; margin, SG&A that is less price per unit in all seed categories in addition to gains in scale, and they were at suboptimal levels to pay for the structure that we had available. So we can see that in the balance sheet in the first quarter, you can see you might seem to be little if you compare to the entire situation, but you can see that the margins are being captured, and this is under control where we allocate capital, where we assign our assets. So considering the size of the company, we are actually able to negotiate terms that allows us to play hard considering the solidity of the company. So we are able to really enter good yields to contain the capital allocation. So we are going to continue with those diligences along 2026.

Next question comes from Henrique from Banco Bradesco.

Can you talk about working capital and all initiatives for 2026? My question, -- can you share a little bit more of what you see in terms of order book conditions, not only price, but also terms. That would help us understand a little bit of the evolution of the working capital. Of course, you have the benefit of first quarter. So that seems to be less important in terms of building up stock. Perhaps it is, of course, related to the seasonality. And of course, that will speed up in the following quarters. But when you look at the end of the year and the main line when consume when that consumes working capital. So there is a big deal of things happening, isolating the conditions of the market.

That is a good comment. Of course, we are building our backlog order. There is a lot to happen. Yes, you're right. Obviously, there are 2 things at this point in time that you have to consider. There is less money in the market. In fact, that is clear to all of us. There will be less money in the market further now. So we should imagine in our sector that everybody would demand more working capital for those work in the sector. But there is a move here. if you're talking about financial market, so we can bring this to our business, an analogy of course, there are resellers and growers that are capitalized. They have capital. And those companies that have conditions to anticipate pay, they will pay for those who they trust when you look in the seed sector. So we kind of take the first rank. We rank first on this list. So our capacity or strength of receivables and those anticipated. Anticipation is actually a positive possibility of capture liquidity. Even if there is less liquidity in the market, we're going to be able to capture that more than others, of course, compared to them. And credit, yes, there will be some move. We also, because of our balance sheet, you can see that we might have a major pressure. But then there are 2 things that will be kind of oscillating on one side, we might receive more from those who have liquidity. And for those who don't have much liquidity, we will kind of give their possibilities. We don't know how much that will be. So to see how the portfolio evolves. But if it is more focused, it is to bring more price. If it is to bring to a more liquidity side of it, we're going to have less price. And of course, that should be a natural move. We are prepared for both situations. To us here in the management, we want to maximize the returns to our asset holders and investors. We, of course, have a recession out in the market. So that makes even worse the situation more complicated. So that puts us in this dialogue. What are the comparative advantages? And this is since our IPO. So our comparative advantages almost sounds like we are in a good moment, right, in good days and good times. But now we're in a restrictive moment. So of course, for us to reach 10% of market share. And with the restriction on portfolio that we have, things start to become very obvious. And we are here to be able to get the best value of our order book in a year of recession with lack of seeds and with the solidity that we managed to build Boa Safra that translates into positiveness. Yes, even in our models, I think it is difficult for us to really decrease our credit for the coming year, but it is, in fact, there are many requests. and many orders. Why? Because they are sure that they trust on us, and we can work based on what happened last year despite of all the credit restrictions that we have and all the needs in terms of working capital that we see in the sector as a whole.

This is the end of our Q&A session. We'd like to pass the floor now to Marino Colpo to wrap up our event.

Many thanks to all participants Many thanks to all investors. It is a pleasure to be here with us. Thank you to all who asked questions. And my thanks to all marketing and to our team members for the event and for your contribution. Thank you very much. Have you all a wonderful day. With that, we thank you for your participation and wish you a good afternoon.