Três Tentos Agroindustrial S/A ($TTEN3)

Good morning, and welcome to the call earnings for Três Tentos first quarter. Today with us, we have Mr. [ Roman Silence ], CEO and IRO; Luiz Dumoncel, Cristiano Costa, CFO Eduardo Jose Motter, manager. This conference is being recorded and will be made available at the company's IR website, where you can also find the respective slide deck. If you need simultaneous translation, we do have that facility by clicking on the interpretation button which can be found on the bottom part of your Zoom screen. For those listening to the conference in English, there's an option to mute the original Portuguese audio to click on the respective button during the event. [Operator Instructions]. We'd like to say that forward-looking statements made during the company's presentation concerning the company's business outlook, operating and financial goals and the company's future growth potential are beliefs and assumptions on the part of the company's management and are based on information currently available. Such forward-looking statements involve risks and uncertainties and therefore, depend on circumstances that may or may not materialize. Investors should have in mind that general economic conditions, a business conditions and other operating factors might affect the company's future performance and produce results that will differ from the ones shared here in these forward-looking statements. Now I turn the conference over to Mr. Dumoncel. Please, Mr. Dumoncel, you can carry on.

Thank you. First of all, good morning, everyone. It is with great joy that we meet you all here this morning to yet again, share another quarter of results for Três Tentos. Without a doubt, this has been a quarter which was quite special that shows strong growth, strong performance right off the bat in 2026. We enjoyed very positive numbers, important growth indicators, starting by revenue, over 20% of increase. Just to highlight 29th consecutive quarter where we post growth in our revenues. We also had, in addition to sales and revenues, which is, of course, fundamental. We also saw our margins grow. So an important growth in adjusted EBITDA, net income and so on and the other indicators on the slide that show we have started with the right best or best foot forward this year. When we look at those numbers from the point of view of different industries or segments as we usually do, we break our performance down across 3 different pillars. As you can see on the slide, you see the 3 segments, imports, grains industry have all contributed to the final growth. If we go into more detail across each of those numbers is starting with ag inputs. We saw an increase of more than 30% and income or revenue from inputs where we could highlight the following, of course, the growth of the company in new stores. We have been talking about it. We currently stores at maturity cycle and that maturity cycle is still going strong with several stores still growing. And of course, other gains in older, more mature stores. Our IPO happened in 2021. As you know, last 5 years. So almost all stores which have been opened since the IPO, 35 of them. There are still gaining market share, which, of course, reflects in the ag inputs pillar. And of course, the primate situation in Rio Grande do Sul state. In this quarter, -- in the first quarter of 2026, we had a quarter which is quite better than the 1 we had last year, which also helped drive this growth. And the second pillar grain, that's where we saw the most relevant growth and that growth is also linked to what I said when I talked about ag inputs, more stores, more businesses, more barter operations, especially in Mato Grosso state, where we just saw harvest operations being finalized in Q1. So that also is reflected in this growth in the grains pillar. And as for Rio Grande do Sul, where we only started harvesting in late March. We saw an increase in corn. The volume of core so vis-a-vis wet because of the harvest of the wheat, which happened last year was a smaller wheat, which price is under pressure, of course, which has helped reduce businesses and sales revenue in wheat, but an increase in corn offset that drop in wheat. As for the industry pillar, we see a smaller growth compared to the first 2% to 5% growth in revenue. But when we look at the growth in volume, it was way above that 12% in biodiesel in volume and 24% in meal soybean meal in volume. So the number here Express is also a drop in prices. And it's also worth mentioning that this volume can also be explained, but the ramp-up industrial facilities, which have been increasing capacity. On the next slide, we see our adjusted EBITDA -- that's how we first approached those numbers, the EBITDA margin. And the financial result which is also adjusted by derivatives and commodities. That's also an effect which is taking into account as we usually do. Leading up to an adjusted EBITDA of BRL 394 million, twice as much as we posted last year, elevating our EBITDA margin to 9.4%, which we understand is a quite significant result, which shows the important gains the company has accomplished across several factors. And that is also present in the release we published yesterday. All segments contributed to this higher margin -- to this margin gain especially when you include the hedging operations along with the other indicators. So it's important to have that snapshot that breakdown of numbers for you to have a clear idea. And speaking of numbers, I'd like to call Christiano to the call, who will be continuing to shed some more light on the company's numbers. Over to you, Christiano.

Good morning, everyone. Now we have closed our first quarter of 2026, with a net debt, excluding financial and cap terms, to the tune of BRL 164 million. As you can see, that amount is in line with the growth of our invested capital for the past 12 months as we built our new corn ethanol plant in Portugal Lagonorthy and also our industrial expansions in other geographies. So our leverage when we look at this adjusted EBITDA with the effect of the operating hedging operations mentioned by Joao we reached the level of 1.37x, very much in line with what we had in our plans when we started planning the new growth cycle. So we understand we are on the right track, which is what had been planned, which is important for the company. On the next slide, we show how the changing at that unfolded throughout the first quarter. We had an evolution of BRL 473 million. As you can see, the first component, which is also predicted the dividend payout BRL 91 million. We also had scheduled the completion of money raised to finalize Porto Alegre do Norte and other expansion works leading to an amount of BRL 245 million on the top of the slide. And lastly, we had some needs for working capital, which is traditional, especially in the first half of the year, especially because of receivables and payments, especially for soybean grains. That's a, seasonal effect happens mainly in the first half and had already been scheduled. The balance is our cash generation, operating cash. So we are within the expected path, and we are ready to be able to reach the end of the year within we had planned in terms of cash generation and also in terms of leverage. So it has been a healthy quarter for the company all in all. Having said that, I give the floor back to Joao Marcelo Dumoncel, our CEO, would be mentioning about the outlook for the remaining of the year. Over to you, Joao Marcelo Dumoncel.

Good morning, everyone. Christian, thank you for participating. This is our first call for 2026 earnings call. I'm very happy to be here and to have this beautiful snapshot here on the screen. This is photo taken 2 or 3 days ago of our plant in Porto Alegre do Norte, May 15. Today, we are communicating to all of you that the plant is now ready. Last week, we had a visit from A and B -- they monitor inspected all the facilities. They went back to Brazilian and they are doing their analysis, preparing a report and the final certification. As soon as we have the certification in hand, we'll start -- ready to start. The corn for the first month of operation has already been transferred, and we are 100% to receive the new corn harvest. We are in contact with several growers. I'd like to make reference to our Três Tentos team, which led this expansion of the company towards the Araguaia Valley I'd like to acknowledge the hard work you have all put in this project. On the next slide, we'll see our expansion across different areas in the country, what we have been doing and what we plan for the future. We are moving ahead as we had planned and communicated in our last Três Tentos day -- you will remember, we mentioned we will be moving to Para, Colas, Tocantins and Goias. And that's exactly what we're doing. In this first quarter, we have already opened 2 stores, 1 in Santana Daraguaa and another 1 in Rio Verde and then in Goias, and we are doing what's necessary to open the other stores we have planned for -- and right now, we have 75 stores spread across those states. If we think about coverage area, we are going to so Mato Grosso contain Colas and Measures, we're talking about approximately 25 million hectares not including the second crop, the winter crops. In other words, the company is selling its footprint across very important agricultural states in Brazil. We do have a structure in place to expand efficiently with hiring the right people, hiring professional to live in those regions, and we have been around -- and that allows us to strengthen the culture of the company, irrespective of where we are of the geography where we operate. We are taking differentiated solutions to growers across all those states. And as stores mature, we realize the good level of acceptance that the regions have. We are being quite welcome in those new states. On the next slide, which is the last 1 we have before we move to the Q&A session. I'd like to start by reinforcing the pace of new store openings. And along with that, I'd like to reinforce how much we have prepared and worked to get where we are. We are not opening stores just for the sake of it. The stores, all the grain units in the future, potential industries, they all are underlined by a lot of hard work in terms of preparation, planning so that we can continue to expand with an eye on logistics. The industrial expansions, which we had announced last year, they have been completed. Right now, we are crushing soybean in 2,000 tonnes a day, 2,000, 4,000 tonnes a day in cruise out and 5,000 tonnes of soya a day on BR-163 for the winter. We are ready to start operations, our first ethanol plant for the company in the Vale do Araguaia, which brings about a capacity of 2,800 tonnes a day, which will lead us to over 1.2 million liters of ethanol per day, 800,000 tons of DDG as per day and another 50 tons of oil. We are already not going to start producing, but we are ready to start selling marketing. So we have everything in place in the ethanol brand and everything that was necessary to start this new work front is up and running. So right now, we're only waiting for the respective permits and authorizations from the authorities. So in the coming weeks, we expect to start the operations in those geographies. And we should also highlight Rio Grande do Sul. And do Sul had a summer crop, which was good, not a bumper crop, a couple of failures here and there, but a good crop all in all. The market says we should harvest over 20 million tons of soya bean in Rio Grande do Sul has been harvested already antistats continues its industrialization and marketing of those products. And then for the winter, we are now planting canola. Last year, we planted in in 200,000 hectares on Rio Grande do Sul. This year, we should be getting close to 400,000 hectares. It is truly a product that added a lot of value to our chain at the right moment at a very timely manner so that growers in the area could have better financial numbers. So Canola is a product that has a lot of liquidity, especially when we have biofuels being incentivized, has become really attractive, and we're quite confident in the progress of Canola in -- Rio Grande do Sul. So those were the main comments. For now, Anre can move on to the Q&A and continue to come to chat. Thank you for your attention so far.

[Operator Instructions] Our first question comes from Henrique Brustolin from Bradesco. You may carry answer.

Luiz, Joao, Christiano. I'd like to explore profitability across the industry and trading segments. 2 points actually. First -- was there any mismatch between the hedging number we saw. Was there any mismatch hedge related to the previous quarter? Just we have a clear picture of what level should we be looking at? And #2, even if there is something around the head. Profitability would still remain strong. In Q4, we saw a growth in logistics expenses without and offsetting on the margin -- gross margin indicator. So a little more color on that. What were the elements that led to this important expansion in gross margin when we look at it on a quarter-by-quarter basis? And what should we expect looking forward?

Brustolin, Henrique, great question. We will comment on it. And I'd like to ask Joao Dumoncel to please touch upon -- and then Christiana might jump in, if he feels the need. Can we do that? Okay.

To your first point, there was no mismatch as you put it. in terms of hedging. As for the gross margin topic vis-a-vis logistics and I have been talking about it quarter-on-quarter, there is a compensation and offsetting Logistics go up, margins also have to go up. For us, -- it is important to see that the influence is linked to logistics, product mix, more soybean more corn, more wheat, for example, corn in the Rio Grande Sul area and the geographic mix as we grow in Mato Grosso Logistics also grew, but you can also see gross margin going up as well. So there's an offset in that respect, with gross margin also growing. That's a trend that we clearly saw in the Q1 in Q1. So a lot of soybean in Mato Grosso, so Logistics was still a bit under pressure, proportionally speaking, of course. But we also had profitability coming from soyabean. Last quarter, if you remember. We had a prevalence, if you will, of grains coming from corn, especially in the Vale do Araguaia region, where we saw an increase in freight prices, logistics. But or because of its own characteristics and the timing, it brought about a smaller margin. And it could -- globally speaking, it couldn't show or reflect a higher margin growth. That's basically it in terms of the explanation.

Next question comes from Guilherme Palhares from Santander.

Good morning Luiz, from Marcelo Cristiano. I'd like to explore a couple of points. The operating numbers has been well addressed. I'd like to hear from you about the credit situation. We saw a low level of delay in your portfolio. relatively low level of default. So what happened on April 30. And also, if you could talk about the increase in number of days for receivables compared to the last 12 months. Is there any negotiations going on? #2, I'd like to hear from you about CapEx. Luiz mentioned how the expansion works which took place. So what can we expect in terms of CapEx for the remaining of the year? And a bit of a breakdown. When you open the expansion CapEx when you add all the components together, it's about BRL 1.5 billion in investments. So like to know if anything changed or inflation also affected that number for the CapEx line -- and if you already have established the infrastructure in Porto Alegre do Norte for the Phase 2 of the ethanol plants.

Palhares for your questions. I'll start by commenting on your questions about the default levels once again, and I've been talking about this a lot. That shows the strength of our ecosystem, the Três Tentos ecosystem. When we have a relationship with our partners from starting to the end from planting to harvesting, pains were always along with that. As I said, from planting to grain delivering when you do the hedging of those grains, we're always close to our growers. And we see growers trying to manage their businesses in a responsible manner. Managing their areas, their acreage, their businesses in a very responsible, sensible manner. So -- we have received almost 100% of all the receivables of a couple of adjustments only. And we are going to -- we are also doing well. Of course, we in the South, we have 2 crops and a bit of the third crop. So we are still waiting for growers to amortize those remaining debts from previous crops or we had floods or drought. But all of that has been overcome or is being overcome by growers. So that level of close relationship with growers across all levels makes a difference and makes us sure and confident that default levels will remain low. I think Joao Dumoncel can jump in and also talk about receivables a little bit.

Palhares, Luiz touched upon the main points. payment terms. What can we talk about that? There is a trend, which is an increase in the sale of barter operations. So as we grow operations in Mato Grosso we'll see a higher impact on payment terms and also another trend, which is the purchases being made before and forward buying forward selling, we have 27 corn being already purchased by growers or selling by growers as they understand that before the war fertilizer prices were lower. So that was a forward sale move and also we increased the sale of inputs for canola areas. All of that really materialized in Q1, right? And this will only mature later in the year. There is a more extended term for that. As to your third question around CapEx, we are now working on closing the numbers. and we will update the market very soon. There are a couple of moves I mentioned foreign exchange rate, inflation infrastructure for Phase 2 of the ethanol plant where we had a couple of added components, but we'll update officially the market very soon, okay?

Okay. Just to confirm -- as for the infrastructure in Porto Alegre, that has already been calculated with an eye on expanding down the road, correct?

Correct Yes. We are also ready or getting ready for both phases.

Next question from Mr. Thiago Duarte from BTG.

Nice talking to you. I'd like to talk about ag inputs a little bit. The first part of the question, so -- this is the best key 1 for that division. Probably the ever despite increasing more gross accounting for 40% of sales. Still, I'd like to go back to a discussion we already had about the contribution margin coming from Argos in structural terms. I want to see -- and how surprised you guys are with the slightly better margin in the region. You did mention mix reasons in Rio Grande do Sul, but it gives us the impression that model growth is really, really helping in terms of profitability. If you could break that down a little bit and separate fertilizer prices on the 1 hand and structural issues on the other competition to help us understand if we should change the bar move the bar as we go forward in terms of profitability? And #2, if you could talk about the profile of those new stores you have already opened in Goias and Para. Especially when you look at Goias, you're talking about a coverage area of about 1.6 billion hectares for that store loan which will give that store a coverage area, which would be larger than the average area that you have in Mato Grosso. So those new regions, should we expect something closer to what we have in Mato Grosso are something closer to Mato Grosso, larger margins, lower turnover. That's important for us to understand all the regions as a whole. Thank you.

Thank you for your questions I'll comment a little bit on the the Goias store in Rio Verde the release we published yesterday shows total areas in the states, in the regions and potential areas pinpointing the areas as we conclude new stores. So we plant a flag, if you will, that represents the potential that we can reach. But of course, we will increase the number of units. And as we do that we will know the regions, where we will really invest when we move to Marora. -- we can look at Macros as 50 million hectares of soybean. Or if you look at the BR-163 a different number. So those are the regions we have been putting -- considering as a potentially important matters. But then we'll move to breaking that down as stores grow. That goes for Santander guidance and the other units that we are going to be opening. As for the contribution margins for ag inputs, I'd like to Joao Dumoncel to please jump in, please.

Good morning, Tiago. Yes, ag inputs have been performing well as a segment, there are structural factors affecting, as you mentioned, the competition environment is less intense, less fierce, if you will. There was an accommodation of different players -- the market as a whole changed, and I understand the market is now trying to find a better profitability level. And of course, competition is not that fierce as it used to be. That mix plus margin has been increasing in Mato Grosso. Margins in Mato Grosso tends to be lower than in Rio Grande do Sul, and that remains true. But that gap will vary depending on the moment. And we saw a variation now, which was positive that gap narrowed now. But important to say Rio Grande do Sul, we also had, as I said, we had the canola coming into the equation. So canola revenue was quite important in this quarter. Unlike Q1 last year, we had a better soybean crop this year, we have improved product mix. So for Crop Protection numbers also grew, which helped the product mix boost the margin. But looking at the future, looking ahead, we want to continue to focus on profitability. We have several aspects, parter, alternative crops. We have been investing in our after sale and services branch as we go to other regions and of course, new regions as a whole. So in terms of structure, there will be similar or more similar to Mato Grosso. Perhaps a few regions you'll be bearing better than others, depending on different situations, depending on different dynamics. But we are quite optimistic for the year in summary, not only in terms of volumes but also in terms of profitability.

Our next question comes from Gustavo Troyano from Itau.

First, an update on your FFO plan as we get closer to the start, the economics for the first year, what kind of performance you expect for the first year than also a drop in prices early on in the year. I would imagine that corn will also be a factor. And of course, there is a learning curve for a new operation. So I'd like to know from you, how we can expect the profitability curve throughout the year for the corn ethanol plant -- and what do you expect to REIT to get to this year? And a follow-up on the previous comment. It's clear that this is going to be a higher cost year fertilizers seeds and all of that -- so just to try and understand your perception about whether we could see some acquisition timing effect that will change your mindset in terms of the distribution across the year. So growers delaying to make decisions. Do you see that already happening as we get closer to the planting season.

Good morning, Bruno. Thank you for your questions. I'll start by ethanol, and then I'd like to ask Joao Marcelo to add to my comments. As I mentioned early on in the presentation on the commercial front, all the commercial structure is ready to start at the ethanol plant. We have the first contract already finalized. We have bought most of the corn. Of course, with the new crop. We'll be buying more corn -- and today, we are able to show that right now, we are seeing results which are in line with what the market has reported. So the market has been reported, those return levels and Três Tentos reaching those same levels at the very minimum the average number reported by the market. And we are quite happy with that performance -- it's a good outlook going forward. Joao Dumoncel, can you comment on that as well? And also agricultural costs vis-a-vis timing for purchases.

Okay. I think we have this respect expectation. The plant ramp-up. We are now making adjustments, commissioning, testing the plant with no product. That's what we are doing right now, testing the plant, so we expect the ramp-up to be quick. And I believe that perhaps in about 30 to 60 days, we will have the operations the operation very close to stability everything going well. So that's what we expect to see. As for costs vis-a-vis products, we did have early purchases as I mentioned before. Especially for fertilizers when you talk about inputs, but also a lot of purchases, which were pushed back, fertilizer team did not come down to 0, but in the afterward period, we saw a big drop, especially for nitrogen-based fertilizers. The 1 that really suffered the main impact phosphorus too, but suffered more nitrogen-based fertilizers. And for the past few weeks, a month that opened up an avenue for new negotiations around fertilizers, growers continue to buy and selecting seeds -- as soon as they harvest, they start defining seeds for the coming crop and also for crop protection. Also -- we're also seeing early purchases probably out of fear from the effect coming from the war, but not many molecules were affected by the war so far. But in line with your question, we do believe that it's no longer something specific to this year. So growers will make decisions later, especially in Rio Grande do Sul. We are talking to suppliers so that we can have a good reaction power without running risks. To have products ready to be delivered even as decisions are made later than sooner.

Next question from Mr. [ Vitor Bansi ] from UBS.

Good morning, Joao, Christian, Luiz. Congratulations on your members. I have 2 questions. First, about the renewable field dynamics. How do you see that balance for the second half of the year comparing biodiesel and ethanol, considering all the discussions we have been seeing in the market. especially a potential increase in the mandates, tax exemptions, new mandates when you combine all that, how do you expect the industry to perform in the second half of the year? Lookingat pricing also? And a second question, if I may. Going back to the previous question about industry and grains. -- from a slightly different point of view, if we were to consider a gross margin, net of logistics and hedge, we could calculate that we will have a different margin, close to 9% in the quarter, which was high above -- higher than last quarter, higher than last year and higher than the historical leverage. So I'd like to better understand -- how much of that we can see as recurring? And how much of that has to do with the specificities of this quarter, which have already been mentioned by you today?

Thank you for your questions. As for biofuels -- our view is that we are considering the second half of the year as suffering the effect of government decisions around the world, not only in Brazil. So there might be measures to support the respective economies to overcome this challenging moment. In terms of logistics, especially for oil, which is already affecting all countries. At trade status Victor, we have a longer-term view. We do believe that things will move forward and consolidate. We have to say that ethanol, which we started with sugarcane and now corn-based ethanol that is a consolidated market. It is a consolidated biofuel. Today, we have 30% of blend. We expect that mix to continue to grow and becoming even more efficient -- as for biodiesel, we have 15% working towards 16% as early as the end of this year. So we're already running tests for 20%. So Brazil, the cleanest energy source metrics in the world -- it's nice when we meet business leaders and people in the market professionals. They always have a positive word to say about that, they do acknowledge Brazil's huge competitive advantage on that front. So we do have this important biofuel production, bringing about more possibilities to produce vegetable protein on the site. So we are quite optimistic for the second half of the year, but especially for the long run. As for grains, margins and industry, I'd like Joao Dumoncel or Cristiano to add to that, if you can, please.

Okay. actually, from a broader point view, industry margins for grains saw a very good performance this quarter. Your question was, is it going to be recurrent? Well, broadly speaking, not for this quarter, but we will increasingly have a growing industrial performance. And that, of course, adds more margins, at least in theory for the coming quarters for the remaining of the year, we will have probably more volumes of soybean and also the ethanol plant going into operations. So we understand that this will be a good catalyst for higher margins. And as for grains when we have higher product mix in Mato Grosso. So we have more opportunities to capture more margins. We have more opportunities to increase margins as we expand in the Midwestern part of Brazil, in addition to what we already have and we're in Rio Grande do Sul, but Christian or anything else to add?

Thank you, Joao. Just to add 2 important aspects where we try to separate brain plus industry and exclude the other sectors. All these sectors are fundamental here. And of onetimes, 1 compensates the other proportionally. So we need to reinforce the strength of our ecosystem, including barter and also as we operationalize our hedging positions. -- sometimes, we have a natural hedge importing fertilizers and selling soybeans. That goes under the operating hedge umbrella. That's also important to highlight. Also important to mention is that to Joao Dumoncel's point in terms of opportunities. As we gain new geographies as we capture more scale, we are able to reap more opportunities not only in terms of logistics or barter or input sales, but also in grain trading, having a better inverted position, which was not possible before. and match hedging operations and capturing other opportunities despite prices having been stable when you compare December 31, with March 31 in commodities throughout the quarters, we see volatility, and that's where we need to be paying close attention to our positions. So we do see that effect. And also the advantage of having longer barters, longer frames, combining all the strategy that allows us to capture all of that. But once again, we did have logistics as a high-impact item -- so I need to understand what is met from your calculation, but we do see an effect -- we do have this investor education program throughout quarters to better understand how we can capture margin -- there is also a fat coming from SG&A. So when you combine all of that, we have -- we are able to explain these good quarters. There are systematic elements and other which are structural. As Luiz Osorio said before, we need to increasingly look at [ ReSTeNTOs ] as a whole. And throughout the year. because we may have a quarter where logistics will wait a little more because of a structural challenge. And then we can do well in the following quarter -- so there's a balance, and which is natural in the sector. It's naturally in the whole industry to have better or worse quarters in terms of margin, but within the historical average. It is important to be resilient when you compare better quarters with more challenging quarters. And this quarter, we had a lot of volatility, and we had the war starting -- so all of that has to be factored in and then compare with our historical averages and acknowledge those results. That does not mean that challenges are gone. It's quite the opposite. You mentioned renewable fuels. Also subsidies being given to other fuels, gasoline, we kept a closer eye on tax issues and how this will affect margins. So as Luiz Osorio said, we do have a long-term view, but also paying attention to short term effect to be able to capture opportunities. And with that, we'll be able to do a great job when we are doing business in the ethanol and DDG industry, we have been working a lot, trying to find good long-term strategies, but also with an eye on short-term opportunities.

Our next question comes from Gabriel Barra from Citi.

I'd like to explore the investment side. We talked about the corn, ethanol and Bertagni North -- if you could have a brief follow-up, what's your outlook for the impact coming from that plant for this year. We expected to the plans to ramp-up earlier this year. A&P has just inspected the plant. So what kind of impact do you expect to see coming from the plant? Maybe you'll have fewer production months. How will that impact we said the plant should be going operationally in the coming weeks. So a bit more color on that. And then reading some Redington is a longer-term project. What kind of CapEx are we talking about when you talk about ratings, the CapEx in the branded to Arti impacted. So how do you see CapEx in Redesa should we have the same mindset, the same time line for Redact -- we have been talking about the war E32 and 16 -- there has been a lot of discussion this week in New York. I'd like to hear from you how are things unfolding about E32 and B16 in your point of view, what can we expect to see this year?

Barra. we're going to split the answers. I'll start talking about E32 and B16 -- we have been having meetings here in New York throughout a week that we've been here with several market agents, government agents, people quite linked to all of the procedures. As for B16, the tests are continuing. So within plan, we're getting close to the conclusion of that study for that to really materialize. Brazil is aware that today, it does have a production capacity to reach at that level, that percentage relatively easily. There are adjustments being made, of course, in some industries as far as you know so that we have better quality of the product -- so we continue to produce this biofuel in a safe manner. Our expectation is that this could happen in the second half of the year. But if the worst comes worst, early next year. As for E32, it's closer to becoming a reality based on what we've seen here in our likelihood as early as midyear, we'll see an increase of another 2% of ethanol anhydrous ethanol being added to gasoline. Those are the comments we've heard here throughout the week. As for investments in ethanol and impacts in the production months, we're not going to change our guidance yet. The guidance we had provided. We think that in the coming weeks, about 30 days, perhaps a month maybe a little more. We will have the plant 100% operational producing. And when we reach that level in about a month, we will then look and decide what kind of volume level we are going to be able to reach this year. As for red and sale and the CapEx or Potato Norte, Jean Marcelo, if you could mention something about that.

Okay. As for CapEx, Barra, as I mentioned in my previous answer, we are assessing it is slightly above -- that was our first original number, due to certain aspects I have already mentioned, and we will update you very soon. As for red and so, or project is exactly the same as the 1 we have in Porto Alegre do Norte. It's a replication of work actually. There is a time line as is the objective for this year is to work with moving earth now I want to have a drier period between June and October. So moving earth so that we can start works in 2027. That's the time line we announced back then, and it's ongoing now. We are now finalizing the permit process -- so we can start implementing and moving the IRP, as I said.

Next question from Mr. [ Ricardo Boiati ] from Safra.

My question has to do with logistics expenses. Given the fact that there are many moving parts and as Christiano said, it's not always easy to separate logistics from the revenue mix and gross margin I'd like to better understand your view on potential impacts coming from freight costs, a change in mix, we should see happening in the second half with more corn crushing and potentially lower volume and the trading and grain division. How much of that will influence the behavior of logistics expenses throughout the year, especially as we move into the second half. And within this context, if you could update Miritituba board, what's the status of the work? What do you expect to see in terms of start-up operations. And what kind of benefit will it have in the line of logistics expenses.

Ricardo, thank you for your questions. Logistics, states work increasingly with more value-added products, logistics will have a different impact it's not merely grain transportation across long distances. But I'd like Eduardo to jump in to help you with your question. As for Miritituba, I think Cristiano can also help -- he's been participating in the Board meetings relative to that topic, so he will be able to give you some more color on your question. Okay. Over to you, Eduardo.

Okay. Thank you, Ricardo for your question. Yes, when we look at the company's results, it's always important to look at the results, which is a gross income per segment combined with logistics. And in the first quarter of this year when compared to last year that there was an increase in gross margin -- but because of the geographic mix, an increase in motors, when you look Q4, there was a different in product mix within Mato Grosso itself, a lot more core than soybean. So that also impacts the EBITDA margin, even with the hedging effect being included. So it's important to look added as a whole, including logistics. Any prediction for the remaining of the year, we need to include several variables because of the mix, as I said, product mix and geographical mix. So it's important to look at historically a longer historical level, 12 last months in the quarter, you can only see variations because of mix differences, so it's important to look at the -- in the longer run historically. So historically, yes, we have been delivering better margins, better profitability for the company. But now with all the investments we have made an increasing capacity of the industries as we expand production and with the startup of the new ethanol plant, we will hit some dilution in terms of logistics in the final numbers. But it's important to follow up or to monitor throughout the quarters, but to look of a longer view longer term? I will ask Christian to talk about Miritituba now.

Thank you, Eduardo. Thank you for your question, Ricardo. As for our terminal or port terminal in Miritituba, things are going well on track. We had a couple of issues because of high levels of rainfall higher than expected in Q1 have already recovered. The works. In terms of ramp-up, we continue to maintain our prediction. Q4 and Q4 will be operational. I think on the boys longline -- this is just the first phase. After that, we start expansion works. But in our view, in the first half of this year, we'll be able to capture some of that investment, which will allow us to overcome local issues and have better latency as we ship out grains. We are already working in full steam in terms of meal production in Vera. So it will be fundamental to have exit way out to ship out those grains to capture efficiency gains in terms of speed rate types at the peak of the crop year when you have the higher price differentials, of course. -- so as for freight prices, if I could complement what Eduardo said, -- that's the rationale you have mentioned as we add value as we ramp up Portland, we will have less for grains moving and more DDG, more ethanol coming out. That's the plan. And that effect will be observed as early as the second half of this year. Of course, freight costs several components, toll tariffs, diesel prices, and it also very sensitive to demand. So we need to explore strategic alternatives to mitigate those peak moments. So both Miritituba and Porto Lagdenarti will play a fundamental role on that front. When we compare second half of '26 with '25, '27, '26. Those will be fundamental numbers to compare. Thank you.

We now close our Q&A session. I'd like to turn the floor back to the company for their final remarks.

You make are answers. Okay, everyone, as we close our call, Thank you so much for participating. Thank you for your questions, your interest in the company. I'd like also to highlight that trade status -- we are turning -- this has been 5 years since the IPO 5. So this has been quite the journey, a very rewarding experience of working closer to the investor market close to shareholders, always trying to improve. We've been doing this constantly as you know. We have identified at a company for 31 years, what we can do along growers, we have been able to overcome less favorable moments and also enjoy the more favorable ones. So we try to strengthen the company as we strengthen our relationship with the growers. And we do believe the Brazilian agricultural industry as we believe in the company, we believe in moving forward in the new states. I also like to underline the hard job done by our team. We're talking about very special, very talented people who do exceptional work. So thank you to everyone. And also a big thank you to growers, our long-term partners. Also, it's important to say the focus the company has on disciplined in terms of capital allocation, discipline in terms of execution of businesses, always looking to reach the best results with safety and maturity governance -- so that's the final message I'd like to leave with you all as we close this quarter very, very excited for the second quarter. As we ramp up our Porto Alegre do Norte plant so that we can move on and growing as we had planned. Thank you so much once again, and have a nice day, everyone.

Três Tentos' Audio Conference for Q1 2026 is now over. The IR department remains available for questions or comments you may still have. Thank you once again, and have a nice day, everyone.