Verde AgriTech Limited (NPK) Earnings Call Transcript & Summary

Hi, everyone. My name is Cristiano Veloso. I am the Founder and CEO of Verde AgriTech. Welcome to another results presentation. And today, it's a very special one. In all those years, I have never been as excited as I am right now with this strength, capability and results being delivered by our current team. I am very proud to say that the current configuration, Verde AgriTech is second-to-none in the Brazilian agriculture sector. And most certainly, we are already harvesting this year the results from the separation we did last year throughout, as you all know, an absolutely terrible market. So as usual, if you have any questions throughout the presentation, please send them in the Q&A. We will try to answer as many of them as possible. If you're watching this video on YouTube, please share, press like and if there's any question you want answered, do not hesitate to reach out to us. Before we begin the results presentation and the Q&A session, I will be introducing our new team, the leaders of our new team. And after this brief presentation, I will then allow them to go back to what matters the most, which is carried on the communication, the relationship with our customers. So they will be with us here for the first couple of minutes of the presentation, and then they have other priorities. So I would like to start by introducing Marcus Ribeiro. Marcus is our Chief Revenue Officer. Marcus has been doing an absolutely amazing job by gathering the great leaders we have in this call here. Marcus has a very successful career in specialty fertilizer sales, having worked for some of the leading companies in Brazil. We also have in this call, Guilherme Medeiros, who is our recently appointed and with spoilers there will be a press release as well with more of his background. So he has been recently appointed as our Chief Marketing officer. Guilherme is an agronomist. Guilherme has worked for very leading companies as well, developing markets for specialty products. And he will be responsible not just for marketing, but he is also going to be leading our Technical team. One mistake I did in the past was to have separate leaderships for our technical team and for our marketing team. With Guilherme now we can combine those 2 sectors, and that makes me very excited about the transfer of knowledge from search from all the benefits we're seeing all the way to the marketing and communication with our customers. I was just in the call just right now with our private team and the level of feedbacks and results, which are coming from the relationship with the customers already is phenomenal, and I'm pretty certain that with Guilherme now we're going to be able to amplify that in the rest of the company. So I will now present our 4 directors, sales directors, each one is responsible for a different region of Brazil. And each one of those 4 directors leads a team that goes from 9 to 12 other field sales managers, all of them, agronomists, all of them with extensive expertise in selling specialty products. This team you guys are seeing right now was assembled in the later part of last year when a lot of the market had already purchased fertilizers. So this is really the first season. This is really the first year that they will have an opportunity to start developing the market. So starting with the Muriel. She is responsible for the Cerrado region, has been doing an amazing job. She won last year our award for the person who has done the most in the company and we named this trophy. Alysson Paolinelli after our former Director and huge leader. So Muriel, she is the one leading this Cerrado region. All of them, I won't go into details with the companies, but all of them are agronomists with several years of experience with some of the leading specialty companies. I'm really highlighting the word specialty here on purpose because there has been a lot of frustration over the years about sort of how come our product delivers so much more, how come our product costs so much more in the U.S. some many more people buy our product in the U.S. looking at those added benefits, how come more of the Brazilian agronomists or the Brazilian farmers, they can't perceive this value. And a lot of it was our fault in terms of having a team which was equipped in helping the customers in the ground to understand and fully benefit from those advantages. We also have [ Iceland ], who leads the team responsible for the North of Minas Gerais State, an area in the vicinity of our mine [ Iceland ] likewise, very experienced, very successful sales professional, very technical. We have [ Fabricio Santos ] another phenomenal sales executive responsible for the south of Minas Gerais State where the mine is as well as Esprito Santo one of the important state for coffee growing. And our fourth director here is [ Mauricio Bono ] who is responsible for the state of Sao Paulo and Parana state. Again, several years of experience, some specialty products, great relationship to a number of important distributors. And it's a joy to be a witness of the meetings when they all lead their teams and it's hard putting words how exciting we all are. We have in the call as well, Maiara Santos. Maiara Santos is a phenomenal leader. Maiara started with us in our -- an SDR, so as an intern trying to develop the market, called -- calling customers to talk about our product. She went forward to start dealing -- leading the sales development team, then she assembled both the direct the insight sales team and SDR team and now she manage about 10 people looking at all the inside sales we have. We already have several customers who are dealt inside as well as playing a very crucial role supporting the other directors when it comes to schedule calls and creating demand. So -- she also leads our sales force, our CRM team which use some very advanced techniques for customer relationship in generation of demand and other benefits. We also have Diana. Diana also started as an intern at Verde a few years ago. She was in our customer success team, she was in our SDR team. She was in our direct sales team and now she's leading a very important new team we put together, which is our customer success team. Diana, she has in her team at present 6, another one being hired. And what they do is to properly follow in the field, the usage of all product, the benefits the farmers are having. The challenge they might be facing looks at results and the opportunities for innovation. So a very strategic team as well we have in place. We also have in this call as the other leader from our sales team, [ Henrique Vilela ] who has been responsible for all our international sales team for a number of years now and has been able to open other markets internationally, both in South America and Asia, several new clients in North America. He has developed all the key relationships throughout last year, which are translating into more sales for this year when we look at exports. Finally, we have [ Luisa ] who makes it all happen, our Investor Relations Manager. She also started as an intern, has been progressing. She has been doing an amazing job, has been responsible not just for the filings but answering your e-mails every time and has been doing an amazing job. And Felipe Paolucci, who you all have known for our great Chief Financial Officer. So thank you very much Guilherme, Muriel, Marcus, [ Henrique, Fabricio ] Diana, Mauricio. Luisa will stay with us and Maiara. So thank you. It was an opportunity for us. We're very thankful for you to take your time away from a busy schedule talking to our customers, so we could introduce you all through our co-owners. And I will then allow you to go back to what matters the most, which is keeping our customers happy. Thank you very much for attending the call. We shall now begin the boring part of the conversation. Thank you very much. So starting with the presentation. If you could please share your screen with the deck we prepared for today, which, as you may expect, will have a lot of terrible, ugly news from this -- hopefully, since you forgot the last couple of years in the agriculture space in Brazil has been extraordinarily tough and we will begin the presentation looking at how depressing it has been. So next slide, please. We have another slide with all the disclaimers, which is very familiar for everyone and should be on the very first slide as well. When we upload the video, Luisa, this should be at the very beginning of the investors' video, the disclaimer. Showing the results may differ. We have forward-looking statements. You can all go broad, you can lose all your money, but we're doing the best here and among the challenge to make sure it doesn't happen. So the next slide, who hasn't bought a bag of super greensand. I hope you've got Amazon right now, if you're in the U.S. We have a 5% off coupon, and we will be sending you one of our amazing products and you can enjoy the thousands of customers who have bought our products in North America and are very happy with them. Next slide. So let's start looking at how awful the market was for 2024. Please go ahead, Felipe. That is price for agriculture commodity prices coming down. What you can see in this chart on the top for soybeans, when you start looking at 2025, you can see the prices is strengthening a little bit. But one thing which this presentation doesn't have and the next one will have is something called [Foreign Language] or the exchange ratio, which essentially means how many soybeans bags you need in order to buy the inputs you need. And this is what really matters to farms and this is starting to look quite promising. So the farmers are seeing some sort of stabilization and there is an excitement for this year. Unfortunately, some regions of Brazil are dealing with bad weather. So for example, Mato Grosso do Sul I was just on a call earlier today with one of customers, and he was just reporting how terrible it has been with the weather. But several of other regions are experiencing much better yields. You can see corn prices performing really well. Corn prices performing really well. Brazil is using corn for ethanol production as well in addition to sugarcane. There's a lot of new plants being built. There's a big bullish excitement about corn production in Brazil, and it's amazing like how growing -- how producing ethanol out of corn is good as the market as something that expands our market because you don't only need coal, you also need biomass in order to fuel your industry. And the biomass, which is used is eucalyptus. So there's also not a lot of new eucalyptus being grown in Brazil as energy source for those plants. So this is quite bullish. In terms of soybeans, again, from a political perspective, looking at 2025, where we had the previous Trump administration -- administration and when we had the tariffs and the tariffs war with China and the sanctions, the country that most benefited from all of that was Brazil. They were Brazilian farmers because China had to pivot and start buying more, the price went up. So hopefully, we'll see. Brazil is the world's largest soybeans exporter and there is exciting about that as well. Next slide, please. You can see potash price collapsing, but you can also see how in the beginning of this year, there's some recovery there. So some literally recovery from $290 up to $340. But that -- even though when you look at a chart like that, even though the number doesn't seem to be very big, for a farmer, it has a very strong psychological impact when the -- when they start seeing fertilizer price going up, drives consumption and quite frankly, helps us all. I don't think I'm often asked if I think of potash prices, fertilizer prices is going to go through the roof again anytime soon. I personally find it unlikely, but I have already come across several different geopolitical theories to why this might happen, I don't know. They all might be right. Hopefully, they are like there would be a strong increase, but as far as how we run the company as far as how we're planning and how far as we are looking at our future. We're really looking at the base case scenario without big increases and making sure we can be very profitable, no matter what. Next slide. This is painful, certainly. This is still painful eye watering to see how the exchange rates in Brazil have been going up recently all the way from '17 -- when we started this, '17 was when I -- when we built our first plant when I have to sign off as a guarantor to borrow money on personally guaranteeing the loans, otherwise the banks wouldn't lend us the money to build the first operation. The market, you remember, was also terrible back in 2017 and went there, sign it, I put in all everything -- everything there. And then -- and of course, it worked out, had some amazing years. We went back, went down the interest rates, but you can see how terrible, how terrible. Hopefully, you'll start cooling down soon. And we're going to go back to some sort of normality. There's a lot of pressure in Brazil for interest rates to come down. The government seems to be understand. They seem to be trying to put some measures in place. So fingers crossed, they can resolve that. Some people say, if we had those in Brazil, if we have Elon Musk or someone trying to cut costs down in Brazil this interest rate would come down crashing because there's one thing just between us, don't tell anyone, but it's pulling the wastage you see in Brazil in -- If the U.S. is bad, I think Brazil, I think if we were to do something similar in the country, it would be transformational. Trend absolutely transformational, how much scope there is in the country, and all sorts of level of administration to cut down wastage. Who knows, maybe one day. Exchange rate keep changing, the weaker the Brazilian currency is, the better it will always be for us, the better it will always be for farmers. Next slide. That's a painful slide. That's an atrocious and absolutely sad slide. The number of bankruptcies in Brazil in the agricultural sector has been at record levels. What we've seen here is even worse. This is an older source of insolvency. I know -- we know you of a number of very even larger companies, even -- it isn't even showing here in this chart. But if you look at, for example, the bottom one, AgroGalaxy, they owe us money, unfortunately. And that's any solvency filing, they did. The total amount of money though is BRL 4 billion, so about $1 billion. And this is a very successful company. It's backed by one of the most successful private equity groups in agriculture. I know the founder, phenomenal guy and that's what it is. And what the big problem was when this company filed for insolvency was that a lot of the banks that got completely spooked and started canceling credit to a lot of other important suppliers to a lot of farmers. So that was a little bit Lehman Brothers moment last year for the agricultural sector and put us all quite frankly, in a very difficult spot. Because if before you want to sell as much as you possibly could. Now it's not just about selling. It's selling and be certain you're going to get back. It's tough. And we have a lot of tough conversations with Felipe, our CFO, and our sales people who want to make some sales, there are some great opportunities, great possibilities, significant volumes, but there was an equally large risk of solvency. There was an equally large risk that we might do the sale, but might not be receiving any money. So if you keep looking, you have another company, this group of [indiscernible] close to where we are, another company, phenomenal company, same thing and then you have a number of other agricultural groups and others as an example. So it's all really bad. But again, it has been 2 years now. And this is all an impact from all the way back in '22. We've written that in several press releases. We've written back in several MD&As. We've written that all over the place. But what happened was '22 agriculture input prices went up a lot. Agricultural commodity prices equally went up a lot. What a lot of farmers did was to buy those very expensive agricultural input prices, finance them. But when it got to the point in time when they had to pay for those expensive agricultural input prices, which was when they were to sell their agricultural production. The price for corn and soybeans, everything else has crashed. So they were faced with big bills to pay and have much less money from the sale of their production. So that ruined a number of groups unfortunately. Next slide. Next slide is the number with Felipe is going to be showing. But before Felipe starts showing all the bad news, just go to the slide where there's good news there, Felipe. I want to be talking about the good news. Next one. Just go -- you can go back -- to go one back that. Yes. So the key information here is if you look at what we've accomplished, if you look at what this new team I introduced in the beginning of the call, if you look at what they've accomplished in the first 79 days of the year, it's 60% already of everything we did last year. And that's amazing. Absolutely amazing. One shareholder already responded to a post I did on X. But what it did was to calculate on a per day basis and extrapolate that for full year. And you get -- you start getting some exciting numbers, and that's why we are cautiously optimistic -- cautiously optimistic about 2025 and beyond. Having said that Felipe, the floor is yours, please. So all those terrible numbers, which hopefully we're going to start making them look great again very soon.

Okay. Thank you, Cristiano. Thanks, everyone, for joining the conference. We're now presenting Q4 and full year 2024 results. And first, a bit on cash and profitability. So the cash held by the group decreased by $3.5 million from $6.9 million in full year 2023 to $3.4 million in full year 2024. Additionally, the group has $6.9 million in short-term receivables. So the total cash and other receivables, we are close to $10.3 million in the end of 2024. In terms of profitability, sales 2024 were 319,000 tonnes, a 25% reduction compared to 2023. In terms of revenue, 2024 was $21.6 million, a 43% reduction compared to 2023. EBITDA before noncash events was negative CAD 2.5 million compared to CAD 2 million positive in 2022. And in terms of net loss, we had $12.6 million negative compared to $6 million negative in 2022. In terms of sales and general and administrative expenses, we have a relevant reduction, which I will get more in details in the coming charts, but we had $10.1 total million compared to $11.7 million in 2023. So first, in terms of P&L, you can see here the results on the left side of the table, the Q4 2024 compared to today to the prior quarter of 2023. And then in the right side of the table 2024 full year compared to full year 2023. So the key points that might comment here is like as expected, we had a much lower level on total costs which -- by the lower volume. We have also as well, as I explained before, and I will explain later on, the reduction on sales and marketing space among the general administrative expense as well. However, at the end of the day, due to the high level of investments we've made, we have a significant amount on depreciation and also on interest rates to be booked in each month or each year. So at the end of the day, we had a full year losses of $12.5 million compared to $5.9 million in 2023. Of course, we expect this number to improve after we see the company start to grow again. In terms of operation summary on this chart, we can see the numbers per ton. The first table, we see the [indiscernible]. And then the second one, we have an adjustment here excluding freight, which is very relevant for our business. Sometimes the product is cheaper than the freight. So for a full analysis on margin or the cost, for example, et cetera, it's better to analyze -- freight on it. So although we have a lower volume in the year, we were able to decrease the production cost per ton for these 2 reasons. First reason we use a bit more our Plant 2, which has a more effective cost, since right next to the mine compared to the Plant 1. And also in addition, we have the Brazilian real devaluating as well. But on top of it, I think what we should emphasize and explain a bit all the effort that the team has made since the end of 2022. And -- but mostly in the beginning of 2024, reducing costs. We revised all the contractors suppliers contracts and costs one by one, line by line from the biggest one, largest one to the smallest ones. So we were able to reduce a lot of costs or fixed costs for example, rental and other type of, of course, that we have expenses that we have before. This is good to remind. But also a very important point is that when we use more of the Plant 2, we have much lower number of employees needed to operate the plants. So we do have also a reduction in people which explains basically the cost point here reduction per ton. In terms of sales, general and administrative expenses, what we can see here in terms, for example, of sales and marketing was a reduction of close to $700,000 in the year. We have in terms of fee base to sales agents, an increase, but it was mainly driven by 2023 reversion that we've made to adjust the lines. But on the other hand, as Cristiano said before, we increased our sales team, and we do expect to have a higher cost during 2025 in terms on fee base to sales agents, but this is, of course, it depends on the volume and it depends on the value of FOB price are being made in the marketplace. In terms of general and administrative expenses, we also saw a relevant reduction. Here we can keep commenting on the terms I said a few contracts that we had that were not connected to cost but on expenses, like containers, like [indiscernible] structures and among other rentals that we had in the past. And we did have a relevant reduction on staff on [ depot ] people from all over the areas. We really made cost reduction expense reduction plan was not easy to do, but was needed to be made. So the expectation for 2025 is also to remain in the same level or even lower level of expenses. And of course, once we increase volume, both of these expenses in general are fixed costs. This would be diluted by a higher volume in the end of the day, deliver towards a higher EBITDA and profitability. So this is what we are thinking for the coming periods. Another point that's important to raise like what was commented by Cristiano, we had some clients that were on insolvency as well, and we had to do book some relevant amount here. So we had an increase on a loss per expected credit loss, which you used to just call bad debt, but now it's allowance for expected credit losses, an increase of 32% for $2.3 million compared to $1.7 million in 2023. This we are working on since the beginning of the crisis to be more restricted in terms of credit et cetera, to avoid this number to increase even more. So this effort, I think was very helpful to avoid this to be more than this and, of course, to make our results worse and cash flow as well as even worse. In terms on debt overview, and that's a very good use for the moment. We were able to renegotiate as we had already 2 or 3 press releases on this matter. But as most of the ones that have been following us knows, we are -- we had already negotiated with our key creditors, and we were able to exchange the profile of our debt from the short-term to the long-term. So basically, at the end of the day, for 2025, we do not -- we do have an expectation to pay on debt, including interest and principal of all our loans, no more than $300,000. If we did nothing, do nothing scenario prior to April last year when we started this renegotiation, we will have to pay during 2025 over $27.1 million, which would be very hard work for us. So I think now with this plan ongoing with 9 years payment terms after we have the grace period finalized, which will be in April 2026. And the other point which is very important in this scenario, we do have to pay the first 3 years, 10% per year. And then in the last 6 years -- or 4 years in the end of the period, we pay the other 60%. So this is very helpful for our cash flow projections and will allow us to keep investing in commercial area and sales field team and then other research that might be needed to improve our volumes. And of course, the key idea is like how can we grow to achieve our full capacity, which is 3 million tonnes per year, and then reduce, of course, the fixed costs and also the variable costs. Since we have been a larger company, of course, contracts are better. Everything gets better. And at the end of the day, profitability and our ability to pay the creditors as well. So at the end of 2024, the group had a total loan balance of $39.7 million compared to $46.1 million in 2023. So it was a reduction of 16%. This was driven by 2 key points. We paid in the first trimester of 2024 a relevant amount of the banks. And of course, also the Brazilian real devaluated a bit, what also helps to reduce the amount of debt in Canadian dollars. So this is what I have for today in terms of numbers. I will revert it back to Cristiano, who will be leading now the Q&A section. Thank you.

Thank you, Felipe. I hope soon we start reporting phenomenal profits again. We're all looking forward to that.

So we have received a bunch of questions here, which I'm very thankful for. As I always say, and I always will, those questions make us all think about the business as well. So when I get those questions, it's not just trying to answer them. It allows me to reflect on them, and we often see some good suggestions here as well. So I'm quite excited about this conversation we're about to have altogether here. First one, can you talk about the pipeline and the order book and compare it to other years? It seems like the order book is ahead of schedule. Please provide more details. I think we've shared a lot already in terms of having done 60% of what we did last year between product delivered and between signed orders with customers. Still early days. People have done their own calculations of what it might turn out to be. But that team, you all saw at the beginning of that call, they are not working for Verde AgriTech because of the salary they get paid. I tell you that. Those guys are awesome. It's like daily contact by headhunters trying to get them out of Verde AgriTech. The reason they are here with us is because they truly believe on the potential for exponential growth from where we are. That's why we're all here, quite frankly. And we can look at the previous couple of years and think that this is all a terrible disaster scenario when we should all run for the hills or we can look at that and say, hey, that was a pause. It's still a phenomenal product. Still get great feedback. It's still the best country you can have for agriculture. Market seems to be shaping up, and let's come back to being back on track. So each one can take their own view. I feel very similar to how I felt back in 2017, in the early days when no one cared about what we do, no one cared about our potential, no one cared about anything. And then we started proving everything -- everyone wrong, started growing and getting better and people seeing the benefits of the technology and then having some phenomenal years, as you all know, which we would like to think they were just interrupted by this disaster that was agriculture in Brazil for a little while. But it's all cyclical, and fingers crossed, we've hit bottom already. H1 2025 still sees the negative impact of '24, but second half is looking promising. I said a lot, but I didn't answer the question. He's asking about the pipeline order book. We have -- and while I was answering the question, I wasn't really sure I'd give a spoiler here. But yes, I can click here, and I can see from our Salesforce dashboard how much products we have on each one of the phases of our pipeline. It's looking good. It's looking good for the rest of the year. Next question. Hello. Are there any news regarding enhanced rock weathering? I had a paragraph in the press release about ERW. But at the last second, I decided to remove it. We're working on a dedicated press release on ERW. We've been doing a lot with scientists in that front. It's looking good. And hopefully, we will have some very material information in connection to it. Right now, there's nothing more I can say other than saying that we've worked really hard over the last few months. And the reason we had to work really hard was because the market for ERW changed a lot. The science required, the level of field validation required by the certifiers changed radically from when we first announced ERW, and we've been doing the homework to be able to comply with all of that. We're very lucky with the scientist who has been advising us and leading this effort. Couldn't have been luckier with the lady who is working on it for us, and something we remain very bullish. What about Oby Rare Earths? Will it be introduced on ASX as previously announced? Oby Rare Earths, for those of you who were shareholders in Verde AgriTech on the 27th of January 2025. That was the record date. Anyone who bought shares after the 27th of January will not be getting shares in Oby. Those shares should have been issued already, but there were some administrative issues and being a private Australian company. There's something called CDS in Canada, which doesn't allow us to see who our shareholders are in the company. So there was a lot of admin stuff, navigating how to do that. It seems like it's going to be fixed soon. So we should soon be doing it. What we're also going to be doing is doing a webinar, a conference call with the shareholders of Oby. So we should announce that at some point, try to communicate so everyone can be brought up to date with the company and what's going on. And -- but yes, it remains as very exciting, and there's a lot going on there as well. Next question. So next question. You stated in the fourth quarter full year highlights that in 2025, after only 79 days, Verde already has orders and delivered products representing 60% of all products delivered in '24. This is a rather extraordinary acceleration in orders. Did this happen all of a sudden? Or was there a noticeable acceleration that had already begun at the end of '24? Good question. I wouldn't say it happened all of a sudden. It's something that has been consistently improving throughout the beginning of this year and pretty much in line with all the planning and preparation we did throughout last year. So it's like good things. They tend to happen all at once, and we saw that happening again before with Verde AgriTech. But I tell you. It comes from a lot of preparation work, hard work ahead of that. Has the improvement in the economic environment for Brazil been so exaggerated that it caused this? Or are there other factors at play? I think the key factor is really I would like to think we're coming to a bottom in this terrible, disastrous last couple of years or 3 years that has been for agriculture in the face of what I said during the main presentation. Agriculture is cyclical. Absolutely cyclical. And it's hard to think about things getting much worse. And you can see the record level of insolvencies, and indeed, everything has happened. And then it's -- hopefully, it's looking better. Some other question which isn't here, but like someone -- shareholder the other day. And he was saying how currently the United States represent 70% of all stock market value in the world, so the United States is 70%, the rest of the world is 30%, and how he's seeing some institutional investors, retail investors looking away from the United States. And it's certainly a trend that can benefit us. There's also -- perhaps this is worth saying. I posted it on X. I'm trying to be a little bit more active on X. So if you're not following me, try to find me there and follow it. But there was a very obscure article, which was in one of the Russian newspapers, about the President, I think, saying that he had requested a study on potash with a view of creating quotas, something along those lines, which -- it was some sort of official obscure Russian paper. And it was the first time I saw Russia publicly talking about using potash as a geopolitical weapon. For those of you who have been following Verde for a while, you've seen me for the last 15 years saying that no one is more powerful in the world than Vladimir Putin because he can independently decide whether or not the world will be able to eat. It's a fact. If Russia stops supplying potash or starts deciding who gets potash, there will be starvation. Not straight away, but the following harvest will be completely atrocious. Brazil cannot grow food economically. And Brazil is the bread basket of the world. I'll do a post showing the growth of Brazilian agriculture versus the growth of agriculture, for example, in the U.S. And you can see how Brazil is indeed the reason the rest of the world can eat, and this isn't possible without potash. So there's a massive, massive geopolitical play here. And I really wonder if this is a card that Russians will ever want to play. And it's something that's quite interesting like whenever it start -- let's just move on. The other question here is, is this uptick in orders potentially lumpy and therefore not indicative of a trend that will last throughout '25? I don't think so because I can see the pipeline for new orders. And the pipeline is looking strong, and it's growing consistently strong as well. So I don't think it's just an uptick. Next question. Judging by the realized price per tonne, the sales plan to disconnect from conventional potash pricing and command premium has not worked. So that's a statement, which -- it's something we can't start judging yet because in all honesty, this team I introduced at the beginning of the call, they are the ones who know how to sell specialty products and their work is literally beginning in this season. So this is going to be the very first year when our team is going to be validating and following in the ground the added benefits and demonstrating value from replacing a conventional potash with our product. So it's starting now. Even the shift a year ago from digital sales market to the current hybrid approach has resulted in a drop. Again, we can't be judged by last year because this field sales team really, really, really was 70% assembled in the last quarter of last year. And even like at the beginning of this year, we are still like hiring for key positions and finalizing setting up the team. So it's too soon to be judged one way or another. In some extremely unlikely potash supply shock event, what can you offer your very concerned investors that Verde operation can really be turned around? I cannot offer any guarantee that it can be turned around, unfortunately. But I think both myself and the sales team, we are doing our best. And we are excited about the feedback and thankful to the feedback we're receiving from our investors -- sorry, from our customers, from some investors maybe, but mainly from our customers and from our farmers. And we believe this will be able to carry on translating into growth in sales after we see a normalization of agricultural markets. Next question. Is the LCA audit complete? Is there anything positive to share with regard to any commitments from corporate producers committed to reducing the carbon footprint of their supply chain? That's a good question. So yes, so we -- maybe we should press release that. That would be a good press release, [ Luisa ]. It's not material, but I think we add to the story. So let's put together a press release on -- not material press release, okay? Otherwise, I wouldn't be able to talk about it. But let's put together an informative press release, both to our investors and the rest of the corporate agricultural market, where we talk about Bureau Veritas, auditing our life cycle analysis and showing the very small carbon footprint our product has. I know there is a paper that has been written on conventional potash showing some very big numbers. So perhaps later on, we can [ soon feed ] along those lines. But let's work on that press release, which isn't material. So there's another question here, which is saying, I see you're slated to be the CEO of Oby. I don't know if I will be the CEO of Oby. Oby is in the process of raising money to develop. And for now, I would say most of our shareholders or shareholders in Oby are helping, making sure the company can be put together for success. But at this point in time, I have not committed to any sort of full-time role at Oby. And most certainly, I would not be committing to a full-time role with any other company rather than Verde AgriTech, which remains as my main focus. Yes, my main focus here is this turnaround, which I'd like to think is in progress of happening right now. So that's a concern. It's a valid concern about me changing -- being distracted with another. I take that very serious. And even though I have been doing this for over 20 years now, it's something we most certainly learn something new every day. And I hope we carry on learning something new every day along this journey of several ups and downs, which I hope we will start exiting from this fourth or fifth downturn very soon. Next question. Q4 saw corn and coffee prices strengthened significantly, while the Brazilian real weakened a great deal, causing MOP to be considerably more expensive. This development should have strengthened the sales opportunity, and yet this was the weakest quarter the company had in many years. Why? Coffee, the reason prices for coffee went up was because farmers were completely devastated with weather issues in the last harvest. A lot of them struggled with cash flow problems as a consequence of not having enough to sell even if at a greater price. What we were able to do, which we're very excited about this next year, is to test a lot of the new technologies with a lot of our customers. Those are specialty products, which command much greater margins. Lots of those products, you make more money out of the technology than you do on potash itself. And the sustaining higher prices of coffee or even if they were to weaken is something that makes us excited about that. When we talk about corn prices and the increase in recovery, those were sales that pretty much all of them took place earlier in the year as part of farmers buying for both soybeans and corn being grown. So pretty much all of that potash or fertilizer had already been renegotiated much earlier on, and it was negotiating in that scenario, which we went through in detail in the conversation where there was a massive risk of solvency, where there's several distributors going broke, where a lot of sales were made and there isn't as much visibility whether or not money will be coming into the bank accounts. Next question. With the Selic rate now, which is the Brazilian interest rate, at 14.25%, while Canada's rate is at 2.75%, the borrowing differential has continued to widen further and further. Is this the primary cause of negative sales growth? It's one of the reasons cumulative with the other one expressed, which is the very high risk of insolvency. And if so, is there anything that can counter this challenge? I think the dream scenario would be to be able to raise debt in Canada. We've looked into it several times before. But because of the exposure, because of the operations in Brazil, we ended up being penalized with something similar for a small company like ours. As we grow, hopefully, we can be issuing bonds in international markets, and that would be a huge game changer for the company. The problem is that issuing those bonds to a broader market requires a minimum of $100 million plus on a bond issuance, which is far greater than what could work for a small company like us at the moment. But growing -- and the reason it needs to be so much money is because usually the people who are buying those bonds, they hope to have some sort of secondary market. And unless there is a significant amount, there isn't coverage. There isn't research. There isn't even rating. It doesn't work economically. So what you end up with is smaller dedicated funds, smaller dedicated hedge funds, smaller dedicated outfits who look to lend you money. But it ends up with an all-in cost identical to what you would get in Brazil because they know who they are competing against. But if anyone in this call has a lead to something that might work, even if it's something that might -- you should fight, please reach out, and we will certainly see if there's something there to be done. Next question. After following the challenges and struggles of this company for many years, the carbon offsetting set opportunity and the ability to offer a subsidized price to farmers appear to be the only way to finally attract buying demand and grow the sales volume. [ Jay ] is asking this question. The team I introduced in this call at the beginning, they don't want us to discount our product. If anything, they want us to put the price up given the benefits they're seeing from this product. If anything, that's what they're used to selling. If anything, that's what they hope to be demonstrating farmers. So the idea that we would only be feasible, economic and growth and profitable, by discounting it with carbon. I understand how some people might see it this way. But I tell you. People who are dedicating their lives and putting their careers and their families in line as a bet on Verde AgriTech, the people in that -- in the beginning of this call, people who have in average 15, 20 years of selling products, specialty products to farmers, they have a radically different opinion in terms of how our products, our technology should be perceived. The second part of your question is that we've received no tangible update on ERW in almost a year. Is the carbon monetization plan DOA? What's that? Death or -- I don't know what that means. But DOA. I presume it's dead or some sort of -- anyway. Anyway, so no. As I said, it's something very exciting, something we're working with probably the best scientists we could possibly be working on. There's a lot of work, a lot of discussions. There's a lot of work literally going on right now working with data. But we just don't want -- given how much of the science and the requirements for ERW have been changing and advancing in the last few months, we don't want to be saying anything before it's concrete, just in case the market moves ahead of us again. So we're working hard on it. And if anything, from a technical perspective, I'm now excited and concrete than ever in terms of where we are. It doesn't mean it can't change tomorrow when more data becomes available. But as it stands now, it's looking extremely promising. Next question. How optimistic, pessimistic are you about expected credit losses in 2025, future losses and recovery loss from 2025? I'm realistic. It's a write-off. I don't think we're going to get anything back from that number. I'm sorry. If we do, it's going to be like 10%, 15% of that, if at most. I think, unfortunately, given everything we're seeing in terms of insolvency and I think there's very, very little hope. And I think it's thankful -- we should all be thankful to Felipe Paolucci because I think if him and his credit team weren't as rigorous as they were throughout '23 and '24, those numbers would look even uglier than they do now. I know several people in the space. I know several other people who have companies in the agriculture import. I know companies who haven't announced it yet but will completely file soon for insolvency. We've stopped selling to some distributors who -- and one of those distributors is a massive company, a massive public company, which the market is really betting at the moment is going to be another one going to file for insolvency protection very soon. So it's been ugly, and I don't see much hope, unfortunately, with that money. Next question, how are the sales for 2025 located from the plant? That team I presented in the beginning of the call, the 4 directors, they are all operating very close to the plants. So we have 2 directors in the Minas Gerais state. We have Muriel looking at the Cerrado, but that's Goiás state. That's south of Bahia. So that's pretty much very close to the mine as well. And Mauricio, same thing, looking at São Paulo. So -- and then all the team underneath them, which each one of them have another 10 to 12 people they manage, they are all working in this area. So it's reasonable that we will be seeing for 2025 an increase both in specialty and an increase in demand for product close to the plants, which command greater prices. What is also worth mentioning, and this is in the filing we made, there has been a growth in the sale of specialty products last year. Not as big as we would expect or as we see the potential of that growth going in, but there has been nonetheless a growth. Do you see any trends there? Also the type of customers, farmers change? I think the answer is that, yes, we see a trend because there's more people there. But likewise, Maiara's team, which is the inside sales team that look after clients which are a bit further away, they're also doing a good job. They're also bringing orders in, and yes, and it's quite broad, the crops which are grown by our customers. One other question here is about the -- looking at the sales, the sales price for potash, which would be required to make our project profitable. The way to look at it is not looking at the price of potash because this is the point. Looking at the price of potash from the current levels, what the key point here, quite frankly, is increasing volume. It's increasing volume. As we increase volume, we can dilute a lot of the cost, a lot of the variable costs, and that's what drives profitability. So it's less worry about the price of potash and more focus on increasing volumes and diluting overall costs. And that's what we are working hard to achieve. So this concludes all questions we have received. I would like to thank you all for participating in this results conference today. I look forward to the next one. But if any of you have any questions in the meantime, any suggestions, any criticism, please do not hesitate to reach out to us via our e-mail, and we look forward to your feedback. Thank you very much. Look forward to seeing you again soon. Bye-bye.