Raízen S.A. (RAIZ4) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for waiting, and welcome to the Raízen S.A. Fourth Quarter and the 2022/'23 Crop Year Earnings Conference Call. [Operator Instructions] We advise you that the video conference is being recorded and will be available on the company's IR website, ir.raízen.com.br, where the complete material of our earnings call can be found. You can also download the presentation from the chat icon, including in Portuguese. During the company's presentation, all participants will have their microphones disabled, then we will start the question-and-answer session. We emphasize that the information contained in this presentation and any statements that may be made during the earnings call regarding business prospects, projections and operational and financial goals at Raízen S.A. constitute the beliefs and assumptions of the company's management as well as information currently available. Forward considerations are not performance guarantees. They involve risks, uncertainties and assumptions as they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect the future performance of Raízen S.A. and lead to results that differ materially from those expressed in such forward-looking statements. Today, we have the presence of the company's executives, Ricardo Mussa, CEO; Carlos Moura, CFO; and Phillipe Casale, Head of IR. I will now give the floor to Mr. Phillipe Casale.

Good morning, everyone, and thank you for attending the Raízen results conference call for the closing of the 2022/'23 crop year. Here with me today are Ricardo Mussa, our CEO; and Carlos Moura, our CFO and IRO. I will go briefly over the highlights of the results released last Friday, and then I will invite Carlos to highlight some relevant topics related to this crop year in our business plan and in our expansion plans. Let's begin the results presentation on Slide 3. We closed the last quarter of 2022/'23 harvest, with all lines of business being expanded, despite the overall complexity and volatility in the business environment. Our net revenue was record-breaking, and we delivered a consolidated EBITDA above the projections in our guidance. Return on capital measured by ROACE made significant progress versus last crop year, while we remain firm in delivering our expansion plans with more than BRL 11 billion invested in the year. Primary cash generation measured by EBITDA minus recurring CapEx was BRL 7.9 billion. Now let's move to Slide 4 with more detailed discussion on each of the business segments, starting with Renewables and Sugar on Slide 4. After crushing has been completed last quarter, we present a picture of the closing of the crop year and compare it with last year as well as with our expectations for the year. Due to the drier climate, we had reduced sugarcane availability, productivity and sugar equivalent production. This was also the main component of stress on costs since it generated less dilution of the fixed portion, as you can see in the graph on the right. In addition, the effects of inflation also impacted the raw material and labor costs during this crop year. We managed to mitigate part of these effects of inflation by implementing various internal actions and working closely with suppliers to improve the cost efficiency balance. In terms of agricultural productivity, we are moving forward on our journey towards recovery, closing the crop year with an encouraging performance that will allow us to continue on the path of gradually reaching the average productivity of the market at this first stage. Now we can move to the next slide, #5, with the financial highlights of the Renewables and Sugar segment. The segment's combined adjusted EBITDA grew both in the quarter and in the year. We have been rapidly expanding the volumes traded for ethanol, power and sugar, taking advantage of market opportunities to maximize our share in the chain and expanding the return of our operations as a consequence. In addition, we captured better prices for ethanol and sugar, which is in line with our strategy of differentiation for those products. In Power, we reached an EBITDA of BRL 1 billion this year, a result that reflects our integrated performance in generation, commercialization and trading. As you may have noticed, we have been increasing over the disclosure of the Power segment, and we will soon announce the new brand that is going to be dedicated to explore the opportunities in this segment. Now moving on to the next slide. Let's give an update about the ethanol prices. We continue to expand the value of the ethanol value chain this year and improving the prices that we have recognized in the results. In the annual comparison, the growth was 8% year-on-year, which is equivalent to a premium of 30% compared to the average hydrous product in the local market. As shown in the last quarters, we explore the value of the ethanol chain in a unique way with an integrated positioning, selling ethanol for different markets and applications at scale and with product certification. This places us in a privileged position to capture superior returns, especially in scenarios of the present local prices. Now moving to the next slide. Let's talk about the results in Marketing & Services. Beginning with the Brazilian operation, the business environment during the fourth quarter of the crop year was marked by challenges and volatility. We reinforced our supply strategy to mitigate potential negative effects on our operations. While at the same time, we are intensifying our commercial and marketing initiatives, enhancing the value of the [Shell's] Integrated Offer. We closed the crop year in the quarter with more than 1 billion liters added in the last 12 months, maintaining the pace of renewal and branding of new stations. With the launch of the new Shell V-Power, which has proven to be the most used and recognized premium fuel in Brazil, we carried out a commercial repositioning, pursuing more value for [Raízen] and for our resellers. I should also mention the progress made in Shell Box with growing numbers of users and transactions in addition to the accelerated expansion in the number of Shell Select stores in mainly OXXO markets. Only in this last quarter of the crop year, we opened 85 new OXXO markets, and we will continue to accelerate expansions in line with our growth plan. The center of our strategy is to expand the value proposition for our resellers, increasing the economic value of the market in a sustainable way. There is a seasonal concentration of SG&A expenses during the last quarter of the crop year, which this year were more than offset by a tax gain related to the Complementary Law 192. As a result, we had an important increase in margins this year, even when we normalized this effect. Volumes sold were in line with the comparative periods, both in the quarter and in the year, but with an important improvement in [auto] cycle and aviation sales. This growth is directly related to our strategy to grow and serve our Shell network instead of serving a high-volume business, notably on the diesel side. In aviation, volumes increased, anchored by increased volumes in commercial aviation, both to Brazilian and to foreign airlines known as the visiting. Now moving to the next slide with the operations in Argentina and Paraguay. In Marketing & Services LatAm, the highlight was the complete resumption of operations at the refinery after the scheduled maintenance last quarter. We posted a strong expansion in both volumes and margins, despite all the challenges imposed by the economic scenario in Argentina, while expanding our operations and the rebranding in Paraguay. We completed another cycle of investments in the refinery to maximize the efficiency to refine products with lower sulfur content, further reducing the carbon footprint. Another important initiative in Argentina is to balance the capital structure in the country's operation due to the current capital restrictions and controls. We optimized the operation with funding from local market, running the operation at a higher leverage than usual, which, at this time, serves to increase the efficiency of Raízen's capital structure. Well, with that, I'm closing the presentation of the operational and the financial results. Now I'd like to bring Carlos on to talk a bit more about our capital structure and also the strategic advances we had in our business this year. Carlos, please.

Thank you, Phillipe. Good morning, all. Initially, I would like to point out that in this crop year, we have made several improvements that demonstrate how this group has worked to create business with resilience under the scenarios. We have been working tirelessly to achieve a sustainable capital structure by closely monitoring the economic challenges in the geographies in which we operate. There was strong cash generation during the last quarter of the crop year, which has historically been the case here at Raízen. Here, we have been using the company's balance sheet to support the business increasing, pursuing to maintain prudent levels of liquidity balanced with a current capital structure that can support our expansion cycle. On operating cash flow, the main effects of working capital in the quarter are related to the following: First, inventories, which followed the typical seasonality of this harvest period, which will increase sales and normalization of inventory levels in markets and services business; second, in suppliers and accounts payables. We maintained the consolidated financial cycle in a healthy alignment, taking advantage of occasional optionality in our balance sheet; and last but not least, in account receivables, which is consistent with higher volumes commercialized and payment [indiscernible] given indirect sales to final customers of sugar and ethanol, offering higher implied profitability and low credit risk. In cash flow from investments, the main expenditures were in recovery and [indiscernible] productivity in connection with investments in building the E2G plants, expanding the Power segment in the Biogas plant located in the Costa Pinto Bioenergy Park and increasing operating efficiency in Argentinian refinery. Financing cash flow incorporates a higher level of amortization in the period, which in accordance with our guideline of extending the average debt term in our balance sheet. These effects also helped to explain the movement in net debt, as shown in the graph below. Despite the increasing debt of the period, we maintained healthy levels of leverage flat year-over-year. Moving to the next slide. I would like to connect these numbers with our capital allocation priorities. We have 3 major commandments within our group, which guides our decision-making process, ensuring financial discipline and our company's ability to be [adaptive] in any scenario. Our first priority, which is to preserve our investment grade during the current investment cycle, we are in a leverage below our projections in parallel with the continuous extension of our debt. An important source of funds which will come from the compensation of recoverable taxes in which we already made considerable improvements. This line is an important vector for coming years, as detailed in the new Note 8 of the financial statements. Second, managing and prioritizing our capital allocation, supporting business strategies. We are strictly following these priorities, as shown in the slide, and continuously access the returns of each of these groups of investments. And the third priority translates into exercising our optionality by continuously evaluating our portfolio and partnerships, notably in Biogas, Power and other new business, seeking to maximize the value of the portfolio that we are currently managing. This may also represent divestments for supporting our growth plan, always consistent with the first two points already presented. Next slide, please. On all the items that we listed amongst the 6 main pillars, I would like to highlight the Topic 5 related to the operational optimization, especially in Renewables and Sugar, resulting from the lower crushing volumes that we entailed lower our [indiscernible] efficiency and concentration of costs. However, we have improved in all items in which we highlight the expansion of business, generation of more margins, integration of acquiring businesses and the growth of Power business. I would like to point out the progress of the initiatives of our strategic plan according to the next slide, starting with the E2G. We have proven the operational capacity, and we have made great improvements in our journey of market expansion. The credibility assured by the company with our partners and with customers reflects the intellectual property over the technology and our execution capacity. We broke the production record at the plant proving that this technology is ready and can be fully scaled. Currently, we have 5 new plants being built, meeting a global demand that does not stop growing. Our contract portfolio already has 4.3 billion liters to be sold over the next few years, sustaining a consistent projection of the E2G program. In Power business, we are capturing market opportunities, intensifying partnerships and enlarging our scale. Our performance in generation, trading and solutions for energy sector is based in one single pillar, the customer-centric approach. In Sugar, we accelerated our strategy, advancing in direct sales to the destination with almost 100% of our production already being sold with any intermediaries, also advancing in the portion sold to and originated from third parties. Another important achievement was the creation of the world's first 100% traceable sugar chain with no-GMO, ensuring additional demand from our products with superior returns, all of that in a constructive pricing cycle. Next slide, please. We know the opportunities and challenges that we have ahead. However, we are confident and ready to navigate in this environment and deliver solid results considering the following assumptions. We anticipate crushing that will be 9% higher than this year, reaching 80 million tons due to the appropriate weather and improvement in our agricultural productivity. The increase in crushing will dilute fixed costs with higher volumes of commercialization in an environment of superior prices than we had in the last harvest, mainly in Sugar, where we have already a good portion of sugar hedged and fixed in our portfolio. We are substantially accelerating our Power platform with an increasingly significant contribution to the results after increases capacity and volumes sold, mainly in the free market environment [illuminated] in Brazil as ACL. In Marketing & Services, we have increases in sales volumes in our Shell network besides the opportunities to optimize and capture gains within our integrated supply and sales platform. Our focus in maximizing profitability in our operations in Brazil, even considering the risks of a still volatile business environment. Regarding investments, this will be the year with the highest CapEx in our cycle of expansion. Our priorities will be the following: CapEx linked to the agricultural use in the recovery journey; projects to expand renewables in our Bioenergy Parks, mainly with the construction of the 5 E2G plants and 1 Biogas plant already under construction; distributed power generation projects, focus on increasing the generation of renewable electricity to meet the growth of our customer base; and finally, expanded tools in marketing service to expand our network, grow and optimize our logistics infrastructure and complete investments to be made to adjust the quality of products and reduce sulfur emissions in our Argentinian refinery. Two important points to highlight. The matrix management of expenses, expanding our perimeter and scope of action. Our ambition is to achieve a reference model capable of making us even more resilient in any scenario that we may face ahead. The patient, rigor and prudence in the cash flow, given the scenario of higher interest rates and less availability of credit in the market, which imposes us our vision of recycle the asset portfolio, monetizing tax credits and develop solutions for the capital structure that we already mapped with the objective to sustain the investment plan and maintain the leverage and liquidity principles that I have mentioned. I would like to reiterate our motivation and confidence to deliver the results expected for this crop year. Next slide, please. On the opportunity side, the highlights is the [indiscernible] production, benefiting our Sugar business in marketing services to persevere the integrated value offering and hence, even more the lubricants business, expand the Power business, attracting more customers and optimizing our portfolio management, monetize tax credits and continuously review the assets of the company. In the challenges side, we are attentive to the unfolding of potential [new], which can affect our crushing volumes due to the rainfall regime at the end of this harvest. In this sense, we are accelerating our production, looking closely into the volatility and externalities in the oil products markets where we reiterate our fight against illegality and tax evasion as well our attention to the diverse sources of supply. Macroeconomic and political scenario in which the adaptation of the Brazilian government in its first year as well the election in Argentina will impose a lot of attention from us. Higher interest rates, which demands diversification and creativity in the source of capital, especially in the cycle of investments and business expansion. Tax reform and recent court decisions, which make the business environment less predictable and naturally demand our attention and concentration in this matter. Very important. Please note that we have made a few more slides available in the appendix related to the Raizen's sustainability journey as well all the updates about the E2G program. Thank you for your attention, and now we can move to the Q&A session.

[Operator Instructions] Let's now go to our first question. It comes from Gabriel Barra with Citibank.

I have two from my side. The first one, in terms of cash flow generation, working capital and leverage, as you mentioned, you saw a significant release of working capital at the end of this year, as already expected. But the amount in market is sort of surprising here, something close to BRL 4 billion. Could you talk a little bit about this dynamic? Additionally, could you provide more details about the cash flow generation for this year for next -- for this crop season and the company's net debt target for the end of this crop year? It could help us here to understand this dynamic that's important, taking account the huge investment that you have for this year. The second point about the tax credit, right? I think one point here I want to understand is about the monetization of those tax credits and the time line here. Additionally, the company has a very large line of credits in the balance sheet. If I'm not mistaken, you mentioned something about 10 years to monetize all of these credits. But my question is this full amount or just the BRL 3.3 billion? And additionally, there is any kind of risk here that you need to monitor in the following quarters? Or do you think that this is conservative in terms of monetizing this credit, and there is no risk here with the Brazilian [indiscernible] or something like that? So those two points will help us to understand a little bit here the quarter.

Good morning, Barra. It's our pleasure to talk with you. I will start on your first question about cash flow generation, then I will pass to Mussa to talk about the tax credits and the other points. Regarding to the cash flow generation for this year crop, we had a very positive momentum due to the management of working capital. If you remember, 2 quarters before, we said about to put our balance sheet at the service of the strategy related to sugar, related to ethanol, putting the accounting receivables with more intensity. We have optimized our supply chain in fuels, adjusting our inventory levels for the end of the year in all of our business lines. And that's the reason why we had a very strong cash generation and gaining more extension in our debt maturity. Regarding the vision for 2023-'24, we expect to maintain our net debt stable, which means something like BRL 20 million, BRL 21 billion in net debt. We have around the same 1.3x adjusted EBITDA. Why? First, with the primary cash generation, even considering the increase of the CapEx for this year to sustain our expansion, but continues to manage the working capital taking more advantage of the positions that we already taken, monetizing tax credits with more and more intensity. Just for reference, in this year, we compensated and monetized something about BRL 3.7 [billion], even with a higher level of tax in Argentina and some tax credit -- tax payments in Brazil that we won't have this effect again for this year. The expectation of the company is to compensate and monetize 100% of the tax charge of the company and recycling our portfolio, which means to take advantage of some assets to -- for example, E2G contracts that we can have opportunity to monetize them, developing advances and other solutions in order to match our demand for capital in the E2G plants. That is the major part of our expansion program. Mussa?

No. Thank you, Barra. Just to conclude, I think Carlos already talked a little bit about our tax monetization. If you look into this year, the quality of this tax price is really phenomenal compared to what we have in our balance sheet. So it's something that we -- in our recovery took into 5 years is something that we can do it even faster than that. So in the end of the day, it's -- when you look into how we achieve those numbers, especially compared to other types of credits, this is pretty much a very good one. We can even ask for that in cash if we wanted to, but we understood that we could compensate with other taxes that we have inside the company and it will be faster to do that. It was a long debate internally how we would monetize that faster? And that's why we are so confident and we put that in our business plan moving ahead.

And Barra, this is Phillipe here. Just one complement here about this -- the tax credit and how we're going to be able to show you guys this. We have a new financial -- a new note on the financial statement, which is Note 8, which is well disclosed each line and each type of credit and how we are going to use this going forward. So just a reference for you guys to follow up every quarter about this usage of the tax.

Well, now moving on to our next question. It comes from Luiz Carvalho with UBS.

I have basically two here as well. The first, if you may, I don't know, help us to try to reconciliate the [indiscernible] to the cash flow. You provided a guidance between 13.5 and 14.5 of EBITDA and a CapEx of 13, 14. So trying to understand how the dividend policy would play, given that you already paid a certain amount this year? So that's the first one. The second one, it's about the breakdown of the guidance, right? I mean what is implied in terms of margin on the fuel distribution side? I mean now that -- I mean, when we look in terms of the [indiscernible] potential guidance to reach that, we would get something between 110, 120. But I mean, the recent margins has been lower than that. So just trying to get a sense here in terms of what do you think about the margins looking forward? And if I may, a third one. If you would like to proceed to distribute more dividends, I mean, what's the reason behind that? I mean given the stock is pretty much down compared to the IPO level, why a buyback wouldn't make much more sense here?

So Luiz, thank you for your question. Firstly, I would like to highlight your last point that we put a slide in our presentation to reinforce our discipline and covariance in the balance sheet management and maintain a prudential level of leverage, and I will go deeper in this point. Extending the maturity and intensifying the level of tax credits monetization, maintaining the pace of capital expenditures in our main projects and if necessary, we will exercise our options, including buybacks or dividends and recycling our portfolio. But the first commandment, which means that the preservation of our investment grade, even in this investment cycle, is the principle. And that is the discipline that we are running the company and the reason why for maintaining the expectations for this year '23-'24, to reach a net debt to EBITDA of 1.3x. Why? Given the better performance of working capital, we have done a very positive quarter. But if you remember, the other quarters were very intense in working capital consumption. Second, reduce the level of the payment of taxes, as I mentioned to Barra previously, and considering a lower level of interest payments some people in the market is considering the competence regime as the driver of the interest payments. That is not the case due to the extension of the debt, we have a lower pressure in this line. Another important point is the portfolio recycling. And again, we will work to develop partnerships or get some advances in our E2G contracts with more intensity in order to sustain our expansion. Once again, it's important to match the demand of capital of E2G with alternative sources of capital to maintain our balance sheet safe and in a prudential way.

To your point here on the guidance part, Luiz, of course, we are seeing the improvement in operational margin. So I disagree with you that we're seeing lower margins. I know that has been difficult for the market to understand how where is the margin for the fuel segment. if you look and if you compare apples to apples of '21-'22 compared to '22-'23, of course, these one-offs of having lower inventory hits and reduction on prices, huge effects on the tax cuts last year. If you take that off, you can see that the operational margins for the entire sector, not only Raízen, has been improving. And if you look into next year, just for us to achieve our numbers, we need to reach BRL 120 but that's pretty much feasible. Of course, and my ambition is much higher than that, but it's moving ahead, and we are seeing the improvement of the operational margins. A very good example for me is when you look into the PL 192, that's an example of how high the margins of the sector can be. So when you had that opportunity and it would not pass-through prices and you saw the value creation of -- for the company when that happens. So that tells me that the margin target on the medium term can be much, much higher that's why we're still very optimistic on delivering the next year results. Not as challenging, I believe, as it was this particular year.

Now we're moving on to Thiago Duarte with BTG Pactual.

Yes, I'd like to focus on the guidance and a little bit of the assumptions that drove the -- both the EBITDA and the CapEx guidance that you're providing. I think Mussa just made reference to BRL 120 per cubic meter in the Marketing & Services business in Brazil, I think that's a good color. And with regards to the Renewables and Sugar, a couple of things that I would love to hear more color on. Number one, what's the price of sugar and ethanol or at least a range for pricing that you -- that the company is assuming in order to get to the guidance? And number two, with regards to cost, right, with 9% increase in crushing and the expected cost dilution, what kind of unitary cost you guys expect to be able to achieve in this new crop? And with regards to the CapEx, can you also quantify in terms of the growth in terms of the expansion CapEx, how much of that is expected to grow exclusively into the E2G plants that are being built that will be helpful as well?

Thank you, Thiago, for the question. Let me give you a highlight overview, and if Carlos get all the detail on the numbers. But just to give you some highlights of the guidance. So we are improving our productivity for next year. So -- and the numbers so far are really good. So the first initial signs coming from the crop are really, really good. The challenge for me this year is much less the ton per acre -- per hectare and much more being able to harvest everything because of potential [El Niño]. So it's a different challenge, Thiago. If you look what we achieved on the first, second or the third cut, more than 2/3 of our entire base already fixed. So we are having a very high confidence level on the volume side. If you take the -- so we are getting almost 10% more, maybe a little bit more than that on the volume side. If you take price wise, you see that Sugar already hedged around 20% higher than last year. That's 85% of our total production. If you look into the spare, the 15%, it can be even higher than other market today is trading above 120, 125. So we can have even higher numbers on the Sugar side. Ethanol price was pretty much the same at the average that we had last year, but also an increase in volume. Cost-wise here, Thiago, I don't have the number, maybe Carlos can give you on the unitary cost. He can share you later. We are seeing, of course, dilution of costs and less inflationary pressure than we saw last year. So that's also used to -- we see more volume, better prices and lower cost. And so we -- for me, the higher risk that I have right now is being able to harvest the crop, really that would be the highest risk because we have more spare capacity than the average. We, on average, should be better than the market because we have more spare capacity to harvest the entire crop that we have ahead of us. So that is, for me, the main point for the confidence that we have on the guidance on this year, Thiago.

Thiago, related to the cost, just to going into the detail, we put in our release now our new vision of costs related to the cost of agriculture production. That is the almost the cash cost that is forming the inventories level, which will have, as Mussa said, strong dilution due to the volumes. But we are already seeing the relief in the diesel prices, fertilizers and labor. And this will be positive for our costs. We expect to stabilize the level of costs in nominal terms with dilution in Sugar equivalent cash costs. For your question regarding the E2G forecasted investment for this year, a disbursement in about BRL 3.5 billion in E2G.

And the rest is coming, of course, we have Biogas that we are concluding [indiscernible] also Power. We have a lot of distribution generation that we have already sold and everything. So these -- those 3, all the growth investments, Thiago, we have very low risk on the commercial side. It's really implementation. That's why when we saw our plant of Costa Pinto plant performing so well, we are getting more and more confident on the level that we're going to achieve in E2G. The Bonfim plant is pretty much almost done here. So we are on the final, final stage to start the plant. We have 5 plants under construction right now. You can see on these slides what we have right now on the screen on Bonfim, [indiscernible], [indiscernible] and [Gaza], all under construction at the same time. And it's important, of course, to recover the productivity to be able to supply all the biomass into those plants. So that's why we are getting much more confident this year with that -- with the development expenses. We also see some relief on the CapEx side of steel and everything that is related to E2G plants. And of course, getting more confident once those plants are reaching -- finalizing the construction and now really excited about the starting of Bonfim plant, and that would be another milestone. I think the milestone of reaching the productivity that we reach on Costa Pinto was phenomenal. So we beat the record of production. Now we need to prove that the plant that we built is operational, and that will be another milestone by August, September this year. We'll be back here talking about it.

Let's now move on to the question by Isabella Simonato with Bank of America.

I have two questions. First of all, still on the sugar and ethanol scenario, right? I wonder if you could give us a little bit more clarity if you're being able to hedge the next crop season at current price level in the next couple of weeks or months? - and what's your view on the sugar prices for the next 12 months? If you could also address a little bit the dynamics for ethanol, right, considering that fuel consumption probably won't move much this year? You do have a decent supply. So what's your view, especially on the [parity] with gasoline? And my second question, Mussa, you mentioned investments on biogas, right? I wonder what's your view on that and if you continue to pursue the plants as initially thought?

No. Great. Thank you. Great questions, Isabella. First on the hedge of sugar. So I just explained that we already hedged the '23-'24 season almost 85%. And if you look in '24-'25, we've hedged around 30%. But we are still -- if you look into prices right now, even higher, much better, we are constructed -- as I always said, since the IPO -- has always been, I think sugar should find structurally a new level to stabilize and attract new production. We haven't seen any new production of sugar for the past, I would say, 9 years or 10 years, and demand keeps growing. So of course, right now, it's exacerbated for the problems that was in the Indian crop. Even in Brazil, it was below, but everyone expected last year. So we had a deficit on the global sugar market for the past 3 years. So -- but having said that, Isabella, I'm still constructive on sugar. I don't know if those prices 26-27, we will sustain. But for me, structurally, sugar should be above 20 cents, 21 cents to be able to attract new production. And that's what we see prices moving forward. And that's why even though we are constructive on prices, we are not taking much risk. Our company needs cash. That's why we took the risk approach of fixing hedging prices. And we're moving on '24-'25, getting advantage of those very good prices and very good returns. So for me, '24-'25, we will have even more production. So we are fixing also the -- now the third plant is really phenomenal [indiscernible] is coming. So we expect '25-'26 to have 100% of our sugarcane in full potential to have much more volume. And if we can guarantee those prices that we are seeing today, then we are going to have very good cash flow coming from that. More than that, Isabella, that's when '24-'25 and '25-'26 that when the cash flow from E2G will come. So the company will move into a different animal -- a different shape of cash flow generation, much less volatility on the cash flow. That's why we are very, very, I would say, cautious of [manning] the risk for this season and the next crop season to be able to have. That's the peak of CapEx that we have. We end all the CapEx in Argentina this year. Then the E2G will finance itself. It's going to be a strong cash flow generation coming from E2G, '25-'26 onwards. So for me, we are not taking much risk and okay, that's way to get even better price of sugar. If we had very good results, we are hedging and fixing that. On the ethanol side, what we see prices, of course, will depend on gasoline prices. What we see is very stable prices compared to last year. We are seeing our premium. And again, Isabella, remember that we're exporting a lot and we are getting better and better on the export side in [indiscernible] segments. So the premiums that we are getting on the ethanol side should compensate for any price reduction that might see on [hybrid] But this year, we have the return on [PIS/COFINS] tax starting in June. We have seen a discussion to increase from 27% to 30% on the ethanol side. So -- but we're not seeing any upside. We are putting pretty much the same prices that we had on the previous year. On the biogas side, we, of course, biogas is a great molecule. We are concluding the 2 plants that we already sold into very good prices, Scania to Volkswagen and all that. The discussion right now is the same, Isabella, is what's the best use of the biogas. We have new products coming in. We are talking about even biomethanol and other stuff. So we are more cautious on just setting up new contracts because we are seeing other potential uses of the biogas even internally. That's what we are taking some time to not speed up the construction of new plants because the horizon show very good potential other products or other uses for the biogas, but it's still very constructive at the same way we were before, Isabella, for the good reason, right, to have more alternatives than we had before. On the Raízen Day, we're going to share more about these new products and everything that we are developing starting from biogas, from fertilizer, from [green] ammonia and other stuff that we're going to talk more on the Raízen Day.