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DATE
Tuesday, May 12, 2026 at 9 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — Mariano Bosch
- Chief Financial Officer — Emilio Federico Gnecco
- Chief Operating Officer, Sugar, Ethanol & Energy — Renato Junqueira-Santos Pereira
TAKEAWAYS
- Gross Sales -- $394 million, a 22% increase driven mainly by higher fertilizer business production volumes and improved prices, plus higher ethanol and energy prices, while partially offset by lower prices in other commodities such as sugar, peanuts, and rice.
- Adjusted EBITDA -- $86 million, more than doubling year over year, based on strong performance from fertilizers and operational flexibility maximizing ethanol production.
- Fertilizers Segment Sales Growth -- Sales rose 68%, reflecting a 16% increase in urea prices tied to Middle East conflict-led price spikes, and higher production due to reduced downtime after a full-plant maintenance turnaround.
- Sugar, Ethanol & Energy Segment Crushing Volume -- Achieved a record 2.2 million tons of cane, representing a 49% year-over-year increase due to higher yields collected under a continuous harvest model; segment adjusted EBITDA reached $41 million.
- Product Mix (Sugar, Ethanol & Energy) -- Attained a 96% ethanol mix, capturing superior margins as ethanol prices exceeded global sugar prices throughout the period.
- Cost Dynamics (Sugar, Ethanol & Energy) -- Production costs increased from Brazilian real appreciation and accelerated agricultural spending, which outweighed cost dilution from higher volumes.
- Fertilizer Plant Operations -- Downtime reduced to 10 days from 19 days in the prior year, with operations at full capacity following the maintenance turnaround, supporting stronger adjusted EBITDA of $53 million for the segment.
- Capital Structure and Debt -- Net debt increased to $1.6 billion, reflecting seasonal working capital needs; excluding seasonality, net debt declined versus 2025, with pro forma net leverage at 3.2x.
- Dividend Announced -- Cash dividend of $35 million approved, with $17.5 million payout on May 19, and the same amount to be paid in November.
- Food & Agriculture Segment Harvest -- Over half of planted area harvested, resulting in more than 700,000 tons of agricultural products; segment margins expected to improve as the new crop is commercialized.
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RISKS
- Production costs in the sugar, ethanol, and energy segment were adversely impacted by "the appreciation of the Brazilian real, and by the acceleration of certain agriculture expenses that were typically concentrated later in the year, which more than offset the cost dilution from higher crush."
- Food and agriculture segment first quarter results were "impacted by lower commodity prices mainly in peanuts and rice," and also by higher costs in US dollar terms as the company finalized the sale of carryover inventories from the previous harvest season.
SUMMARY
Adecoagro (AGRO 3.11%) reported its first quarterly results under a new three-segment organizational structure, with a marked increase in gross sales and adjusted EBITDA, largely propelled by its fertilizer business and ethanol-focused production mix. Management highlighted that reduced downtime and full capacity operations at the fertilizer plant, combined with favorable urea pricing, strengthened segment profitability and support future annual EBITDA expectations. Strategic capital allocation continues to prioritize deleveraging, as improved operating results and free cash generation may enable net leverage to fall to two times within 2026, ahead of prior expectations.
- CFO Emilio Federico Gnecco stated, "What we thought would be a reduction of bringing down the net debt levels to 2% in the following 1 or 2 years we are probably going to see by the end of this year," directly indicating a faster-than-planned deleveraging trajectory.
- CEO Mariano Bosch clarified Argentina's urea market remains structurally short, saying, "Argentina consumes 2.4 million tons of urea and only produces 1.3 million tons, that is 100% produced by Profertil. So there is always a need of there."
- COO Renato Junqueira-Santos Pereira explained, "The year started with a tight ethanol inventory and high prices," justifying the company's continued ethanol maximization and its decision to stop immediate sales in anticipation of stronger pricing later.
- Management signaled further opportunity in the fertilizer segment, indicating an expansion project remains under study but will not be accelerated solely due to current high prices as "In any case, constructing a urea price, a urea plant needs 4 years. So and the total timing in general are 5 to 7 years. So in this case, it is difficult to go below 4 years."
- Operational flexibility, improved cost structures, and a diversified revenue base position the company to capture upside in volatile agricultural and fertilizer markets, as management indicated "low double digit growth in crushing volumes" and stated that adjusted EBITDA in 2026 is expected to be stronger than previously anticipated.
INDUSTRY GLOSSARY
- CFR Brazil: Cost and Freight (CFR) pricing benchmark for urea delivered to Brazil, commonly used to set regional fertilizer prices.
- Continuous harvest model: An operational approach in sugarcane processing enabling year-round or extended harvest periods and increased productivity.
- Net leverage: The ratio of net debt to annualized EBITDA, used to assess the company's indebtedness relative to its earnings capacity.
- Import parity pricing: Domestic pricing methodology aligning local product prices, such as urea, to the cost of importing equivalent goods, accounting for transportation and import costs.
Full Conference Call Transcript
Mariano Bosch: Good morning and thank you for joining Adecoagro's First Quarter 26 Results Conference. Today, we are presenting the first results from the new Adecoagro. A well diversified agro industrial platform composed of 3 segments. Sugar ethanol and energy, fertilizers, and food and agriculture. The $86 million of adjusted EBITDA generated already reflects the change in scale and earnings potential. With further upside ahead. After the major maintenance turnaround in the fertilizer plant, we are pleased with the ramp up of operations with the plant operating at full capacity since then. Due to the conflict in The Middle East, urea prices have spicked and we are progressively capturing the upside. Leading to an even better than expected result.
In Brazil, we achieved a new first quarter crushing record. Reflecting the returns on our planting expansion investments. The high flexibility of our mills enable us to produce almost 100% ethanol benefiting from better ethanol prices. Harvesting pace remains on track to meet our annual target supporting further cost dilution. In food and agriculture, results reflect the end of the prior harvest season as we sold our carryover stocks. The harvest of the new crop is well advanced presenting good productivity indicators. Margins should improve in the coming quarters as we commercialize the new crop. Supported by a more efficient cost structure.
Overall, higher productivity in Brazil higher urea prices, and better margins in Argentina and Uruguay, should translate into a stronger earnings performance. And most importantly, higher cash generation in 2026. This, in turn, will enable a faster than expected deleveraging, 1 of our main priorities following the acquisition of the fertilizer business. To conclude, I want to reiterate my gratitude to everyone across Adecoagro It is thanks to their hard work that we are able to navigate different commodity cycles and continue to deliver attractive results to our shareholders. Now I will let Emilio walk you through the numbers of the quarter.
Emilio Federico Gnecco: Thank you, Mariano. Good morning, everyone. Before turning to the results of the quarter, I would like to briefly remind everyone that as part of our efforts to update and simplify how we view our operations starting in January 2026, the company now operates under 3 reportable segments. Number 1, the sugar ethanol and energy segment. Number 2, the fertilizer segment, which reflects ProFertil's results, and Number 3, the food and agriculture segment an integrated platform focused on agriculture and food production that was previously reported across 3 separate verticals crops, rice, and dairy. Please now turn to page 4 where you can see our first quarterly results under this new organizational structure.
Gross sales total, $394 million in the first quarter, representing a 22% year-over-year increase. This growth was driven primarily by a strong performance in our fertilizers business supported by higher production volumes and slightly improved prices. Together with higher ethanol and energy prices, in our sugar, ethanol, and energy operations. These factors more than offset the lower prices across the remainder of our commodity portfolio. Including sugar, peanuts, and rice. Adjusted EBITDA reached $86 million, more than doubling the level in the prior year.
In addition to higher sales, results benefited from a first quarter crushing record and our operational flexibility to produce nearly 100% ethanol throughout the period, combined with lower natural gas sourcing costs which is the main input for urea production. Moving to the financial and operational performance of our operations. Let's start with the sugar, ethanol, and energy segment on Slide 6. Due to the rainfall received in the final months of 2025, the cane that remained unharvested recovered meaningfully in yield and was collected during the first quarter under our continuous harvest model, 1 of our key competitive advantages versus other players.
As a result, we achieved a new first quarter crushing record of 2.2 million tons of cane, a 49% year-over-year increase driven by higher productivity despite harvesting a smaller area. In terms of product mix, we reached a 96% ethanol mix during the quarter as ethanol prices traded substantially above global sugar prices and therefore offer superior margins. This highlights the operational flexibility of our industrial assets even while maintenance work was being carried out. On the cost side, production costs were negatively impacted by the appreciation of the Brazilian real, and by the acceleration of certain agriculture expenses that were typically concentrated later in the year, which more than offset the cost dilution from higher crush.
Although we maximize ethanol production and execute its sales at higher prices, than in the prior year, quarterly sales were below last year. Mainly due to lower sugar sales reflecting weaker global prices and lower volumes sold. Overall, adjusted EBITDA for the period reached $41 million, exceeding the performance reported in the previous year. As of today, our crushing pace remains on track to meet our full year target. Accordingly, we expect low double digit growth in crushing volumes driven by greater cane availability and we anticipate a full year of ethanol maximization given the current price scenario. On page 8, we present the fertilizer segment.
The year over year increase in urea production was primarily driven by a higher number of operational days compared to the same period. Last year. As mentioned in our previous call, the fertilizer plant experienced 19 days of downtime during 2025, mainly due to adverse weather conditions that disrupted gas supply. By contrast, this quarter, we recorded only 10 days of downtime, as we ramped up operations following the major maintenance turnaround executed at year end. As of today, the plant is operating continuously at full capacity. In terms of sales, the 68% year-over-year increase was mainly driven by a 16% improvement in urea prices.
Following the escalation of the conflict in The Middle East, a region that accounts for approximately 30% of global urea trade prices began rising sharply in early March. Which only a partial impact reflected in this quarter's results. As a result, adjusted EBITDA showed a strong year over year recovery. reaching $53 million. In addition to higher sales, performance also benefited from greater cost dilution due to the increase in production and lower gas sourcing cost as we leveraged contractual flexibility to secure a portion of our gas supply at more competitive prices. Looking ahead, we expect adjusted EBITDA in 2026 to be stronger than previously anticipated. Potentially exceeding prior year levels supported by a favorable market price outlook.
Please move to Page 10 In our food and agriculture segment, first quarter results were impacted by lower commodity prices mainly in peanuts and rice. As well as by higher costs in US dollar terms as we finalize the sale of carryover inventories from the previous harvest season. Regarding the 25, 26 campaign, we are currently in the harvesting phase. Which we expect to complete over the coming months. As of today, more than half of the planted area has been harvested resulting in over 700 thousand tons of agriculture products. In our dairy operations, processing volumes increase year over year driven by higher raw milk production at our Fristall facilities reflecting improved cow productivity.
We expect margins to improve over the coming quarters as a new crop is harvested and commercialized. Reflecting the cost initiatives implemented. In dairy, we also anticipate further growth in processed milk volumes supported by the launch of new products under our retail brands. Please turn to page 12 of the presentation where we outline our capital allocation strategy starting with our CapEx program. During 2026, we paid the final installment related to the acquisition of a 90% equity stake in Proferti. As a reminder, the $1.1 billion transaction was financed through a combination of $400 million in cash on hand, $400 million in new long term debt facilities, $300 million in equity proceeds.
On the following page 13, we present our debt profile. Our net debt increased to $1.6 billion in 2026, reflecting the seasonal working capital requirements associated with planting and harvesting activities in our food and agriculture business. Excluding this seasonal effect, net debt would have already declined compared to 2025. On a pro form a basis, net leverage stood at 3.2x. Consistent with our ongoing deleveraging path supported by improved operating results despite the seasonality in cash needs. Looking ahead, we expect this metric to continue to decline driven by higher adjusted EBITDA generation primarily from our fertilizers segment. It is also worth noting the company's strong liquidity position and full capacity to repay short term debt.
The majority of our indebtedness is in long term. And its currency composition is well aligned with our revenue mix. Mitigating currency risk. Finally, regarding shareholder returns, a cash dividend of $35 million was approved The first installment of $17.5 million will be paid on May 19, with the second installment payable in November in an equal amount. Before concluding, would like to share a brief closing remark. These are the first quarterly results we present under the new corporate structure. Representing an important milestone for the company. The performance already reflects a stronger and more resilient platform supported by increased diversification and a more robust earnings profile.
As shown in the top right pie chart, our revenue base is now more diversified than in the past. This evolution enhances our ability to deliver consistent performance across different cycles. While improving the stability and sustainability of our cash generation. Over the years, we have demonstrated a strong track record of results and cash flow generation, despite commodity price volatility and adverse weather conditions. Today, the company is particularly well positioned to benefit from upside in fertilizer prices which could translate into stronger than anticipated results while we continue to scale up platform and reinforce our strategic relevance within the set. Thank you very much for your time.
Operator: We will now open the call to questions. Thank you. The floor is now open for If you have a question, please write it down in the Q and A section or click on raise hand for audio questions. Please remember that your company's name should be visible for your question to be taken. We do ask that when you pose your question that you pick up your headset to provide optimum sound quality. Please hold while we poll for questions. Our first question comes from Matheus Enfeldt with UBS.
Analyst (Matheus Enfeldt): Good morning. Thank you, Mariano and Emilio for Victoria, and Renato. Thank you for your time. My first question on capital allocation midterm, how you think Profertil is you mentioned that 1 of the avenues for a future growth could be the expansion of the fertilizer capacity from Profertil. And now how do you think that would be the best path moving forward? And I am thinking particularly whether it would make sense to perhaps find a partner for this.
In order to accelerate a potential FID If you could take advantage of investment programs in Argentina in the near term and sort of perhaps take advantage of higher fertilizer prices for longer if you think of a partnership could make sense for that and how to do that. And then my second question also on the fertilizer business. Is sort of trying to understand how the pricing of urea is undergoing in Argentina. Previous comments mentioned pricing at import parity.
So how is the how are the consumers of your fertilizers really taking this impact in higher urea prices and how the contracts work if you set contracts if you set prices at some advance in time, what is the timeline for that? When do you expect set prices for the remaining sales for the year? Those are my 2 questions. Thank you.
Mariano Bosch: Hi, Matheus. Thank you very much for your question. I am going to start for your second question. And then I would like to reask about the first 1 because some part of it, we could not understand. So going to the fertilizer business and how prices are generated. You mentioned about the import parity and the import parity in our Argentina is because Argentina consumes 2.4 million tons of urea and only produces 1.3 million tons, that is 100% produced by Profertil. So there is always a need of there is always a need of importing urea. that is why there is that is why the clear that there is always gonna be an import parity pricing.
The reduction on potential uses of urea are at the most a 10% reduction. So we are far away to becoming a net exporter. So we will always be a net importer at this level of production and the capacity is only that 1. So that is, absolutely clear. And then when that, urea is needed on when are the needs in Argentina, is for wheat and corn, mainly for those to crop them for rice and many other crops, but the main drivers are wheat and corn. And for wheat, the needs are July, June, Julia onwards. So the need of the usage of fertilizers are starting now or in the following 2 months.
In the next 2 months is where they need for wheat are going to be, delivered. And then during, September, October, November is mainly for corn. So those are the 2 moments where the consumption of fertilizer is higher within Argentina. So that is how urea is going to be priced domestically. Then going to the first part of your question, There was some noises, so we could not hear you clearly. Can you repeat us? Yeah. Yeah. Sure. I am just thinking on the potential to expand the fertilizer plant the urea plant with Profertil. You mentioned that this was a potential, but sort of a longer term plan.
But my question is, could you put find ways to potentially accelerate that given how high prices are in the near term and likely to stay higher for the next couple of years. And if finding a potential partner, perhaps someone with natural gas, perhaps someone willing to reinvest in Argentina, if that could make sense to accelerate a potential FID. that is my question. Thank you. Okay. Clear. Thank you, Matheus. In any case, constructing a urea price, a urea plant needs 4 years. So and the total timing in general are 5 to 7 years. So in this case, it is difficult to go below 4 years.
So, taking that into account, the this increase in fertilizer prices as of today, We are not expecting that to influence our decision on making a urea price. Having said this, of course, we are interested on expanding the plan because we do believe on the being the low cost producer of urea in that specific area. We do believe that Argentina will be a net exporter of natural gas for many, many years going forward. There are many projects being developed in the whole gas productions, including Vaca Muerta as the main leading area where the gas is increasing. So we do that We do see that happening in Argentina.
There is transportation being built, and there are more transportation going through Bahia Blanca that is where we have this port. So we do see a great opportunity to expand this plant. So we do believe that makes sense, and we also do believe that the region is a net importer of urea even in situations like this where the urea price goes up, the region including Brazil will import around 10 million tons of urea, and the region only produces 2.5 at the most. So there is still a lot of space to be a producer of urea. But this is a project that we are studying in details and we are working on it.
But, we still do not see exactly when and how we will start to make it happen. And, of course, there are several ways of financing, including partners, etcetera, etcetera.
Operator: Our next question comes from Isabella Simonato with Bank of America.
Analyst (Isabella Simonato): Hi. Good morning, everyone. Thank you for the call. I have 2 questions still on the fertilizer business. When we look at the average prices that you guys had in Q1, it looks quite similar to Europe you urea prices in Brazil. Right? So my question is, can we assume that trend continues into Q2? I mean, when we look at April and May, can we see a high correlation of the prices you have been selling to the prices in Brazil? And to that point, can you comment a little bit on how volumes are being sold?
I mean, the pace of them Are you seeing the farmers taking a step back in this moment and trying to delay it a little bit purchases or not just to have a sense of the overall environment? And the second question is on the sugar and ethanol side. You mentioned, right, that cost move up because of FX, but also on some agricultural cost. But I assume that since you are crushing more right, for this year, you have more clean availability better productivity. I mean, can we think about some normalization or some decline in unitary cost going forward?
Mariano Bosch: Thank you. Hi, Isabella. Thank you for your question. I am gonna address the first 1, and then I will ask Renato to take the second 1. On the first 1, the answer is yes. The urea price is very correlated to the CFR Brazil. So the main market of urea is CFR Brazil. So that is how we all price urea in the region. So you will see a correlation there. And it is easy to look at it. And the urea price is always a spot price, and the this CFR reflects the spot price of urea.
And then regarding the pace, as I mentioned before, June, Julia, and August is where the needs of fertilizers start in Argentina. We do not see that the need being reduced The most that can be reduced is 10%, but we do not even see that reduction happening. So we do continue to see producers, and we ask producers are using the urea because it is where you see the most or the higher reaction on your productivity at the farms. So the higher impact in productivity within fertilizers in general is urea, So that is why, we continue applying it. And so we do not that as a relevant, reduction.
Then going to your second question regarding the sugar and ethanol cost expectation for this year, Renato can be more clear here.
Renato Junqueira-Santos Pereira: Hi, Isabella. We expect a cost reduction in reais The reduction is going to be between BRL 10 and BRL 15 per ton. I think the main factors that we will reduce the cost is the volume as you said, so we are going to have more cost dilution and some efficiency gains that we are having in our operation and also lower Consecana price. So those facts are more than enough to offset some pressuring costs in fertilizer and diesel costs.
The cost in the quarter is just an anticipation of some agriculture operation that we did because of the weather was in good conditions to do it, especially weed control and pest control But this is just the cost that we have in the first quarter we are not going to have in the future. that is the reason we think it is difficult to measure cost of production by quarter. It makes more sense to see it annually.
Analyst (Isabella Simonato): Thank you. Super clear. Thank you very much.
Operator: Once again, if you have a question, please write it down in Our next question comes from Gabriel Baja with Citi.
Analyst (Gabriel Baja): Hi, everyone. Thanks for taking my questions. I have 2 here. 1 I am trying to change gears here and understand a little bit better the scenario for the crop season this year. I remember in the last conference call, have talked a little bit about the mix for this crop season. As we have discussed, it seems that the strategy to focus in ethanol, it is up and running, but we are seeing ethanol price driving to lower levels the beginning of the crop given this higher supply.
So my question here is trying to understand the company's strategy for the mix from now on, given these lower ethanol price and this, let's say, weak sugar price that we are seeing in the market today. So I am trying to understand here, the structure of the company and then the commercialization strategy here for this crop season. The second point is on seeing this quite strong market for fertilizers. And in the end of the day, we still see the company given the recent acquisition with net debt EBITDA close to 3.2x above, let's say, the comfort zone that I think that is the let's say, the sweet spot here for the COP in terms of capital structure.
How should we think about the company, the deleverage path to reach the 2.0x, like, that EBITDA in the in the following quarters or even months. Given this better scenario for fertilizers? Do you think that it is feasible to think that you are going to reach this number in the beginning of the year. It is the focus of the company right now. How should we think about the capital structure of the company at this point? Given the criteria for commodities? So those are my 2 questions. Thank you.
Mariano Bosch: Okay. Thank you, Gabriel, for your question. Renato is going to answer your first question. Regarding the mix the mix and the crop season.
Renato Junqueira-Santos Pereira: Hi, Gabriel. The year started with a tight ethanol inventory and high prices. So that is why we took advantage of this scenario to sell almost our whole production of first quarter and all the carryover until the April. With prices close to $0.20 per pound equivalent Since then with the beginning of the new sugarcane season, ethanol prices have fallen about 20%. This was passed to the pump So the parity rate of the pump today is close to 60%.
We think that this 60% at the pump it is enough to absorb the ethanol surplus from 1 year to the other for the demand of ethanol is going to increase and the hydro ethanol can reach about 30% of market share In our case, specifically, the 60% parity rate at the pump is still an ethanol equivalent close to $0.17 per pound So that is why we are still maximizing the ethanol production and we think we are doing right we are going to keep maximizing maybe for the whole year At this point, we have stopped selling our ethanol and are in our tanks to sell the ethanol in the last part of the year.
Mariano Bosch: Thank you, Renato. And then, Gabriel, regarding your second question on the leverage, I will ask, Emilio to answer Hello, Gabriel.
Operator: You for your question.
Emilio Federico Gnecco: Well, as you may have seen during the presentation of our quarterly results, we are already showing a reduction in our net debt And even taking into consideration some seasonality of our of our working capital. During the first semester of each year. Now when we think about our net debt, on an annual basis and giving the current scenario for all of the prices of all the commodities that we produce, including the fertilizers. What we thought would be a reduction of bringing down the net debt levels to 2% in the following 1 or 2 years we are probably going to see by the end of this year.
So, hopefully, by 2026, we will be in the levels of 2x EBITDA in on an annualized basis.
Analyst (Gabriel Baja): Thank you. Very clear. Thank you.
Operator: Our next question comes from Bruno Tomazetto with Itau BBA.
Analyst (Bruno Tomazetto): Hey. Good morning. Thank you for taking our questions. The first 1 is regarding your view on El Nino. Right? Recent studies suggest a stronger event in this year. And we would like to hear more about what you guys are anticipating in both terms of sugar and ethanol segments. Maybe more focused on sugar price and the pace of your heads moving forward. But also for Food and Agriculture segments. Right? You mentioned in the earnings release an average yield expected for crops in 2026. So just wondering what could change in a scenario for stronger El Niño materializing the coming months. And then the second 1 is on Food and Agriculture division.
Just wondering how you guys are looking for the segment in the medium and long terms and considering the lower the lower the lower relevance of results for the consolidated company, also assuming that the company is already consolidating several operations into a business unit. Just if there could be any opportunity of M&A or divestments more specifically that could make sense. Especially now that fertilizers unit has gained a lot of relevance for the Adecoagro. that is it. Thank you.
Operator: Thank you, Bruno, for your question.
Mariano Bosch: Regarding El Nino, there are several aspects that can affect if we have a an El Nino year. The main aspect is in terms of prices of the different commodities that we produce As you know, this can affect positively in terms of sugar prices. And if we do have a Niño year, then the Northern Hemisphere can have some less production, and then, that can improve the prices of sugar, basically. And that is probably where the higher impact is. Then in terms of our own productivity, we are not that affected in the sugarcane area.
Mato Grosso do Sul is not affected in terms of production by El Nino or La Nina because it is in a natural area. And then in general, that El Nino would mean more rains, and more rains would mean more uses of fertilizer so that can be positive for the fertilizer business as a global comment. So that they take quickly on El Nino or La Nina, and this apparently looks like an El Nino year that they, of course, would potentially be positive. Then regarding your question on food and agriculture, as we mentioned several times during last year, last year was probably the more difficult year for food and agriculture, food and agriculture in general.
We are having a huge reduction in prices of most of the commodities that we were producing and we were bringing cost of the previous campaign where the cost was higher. So today, we are harvesting. We are in the middle of the harvest of this new campaign where the prices have already gone down, So we do expect that, going forward in the following quarters, the food and agriculture will start more relevant results than what you have seen in this quarter, of course. So, having said this, we do expect that to continue to improve, and we do like the different, businesses that we have. And in all of them, we believe we are the low cost producers.
So, we went through this difficult time, and now we are in a good position to take advantage of being the low-cost producers of these different product different products that we are doing in the whole food and agriculture business.
Analyst (Bruno Tomazetto): Super clear. Thank you.
Operator: Next question from Thiago Duarte.
Analyst (Thiago Duarte): Hi. Hello, everybody. Thanks for the opportunity. it is just 1 question here. On, you know, circling back to the discussion about the deleveraging and the confidence of the company into going back to your leverage target by the end of this year? Instead of a few years ahead given the positive outlook for some of your businesses? So the question is really into what to expect next in terms of in terms of capital allocation, either in terms of speeding up you know, dividend and share buybacks or eventually thinking about new growth opportunities? Just how you were you were thinking about it given that she, you know, the deleveraging might happen sooner than expected. Thank you.
Mariano Bosch: Hi, Thiago. Thank you for your question. Of course, the first focus is on, deleveraging. And as you have heard us say before, we have been always looking to be disciplined We also do have several projects in each 1 of our existing businesses that have potential for growth. We were talking about the 1 particular 1 that is regarding this expansion of the fertilizer business. There are many, interesting projects within our sugar and ethanol business as you have seen with the biogas and several things that are growing and doing pretty well. So we do continue to see interesting projects.
The returns of those projects, we are asking higher returns in order to maintain this level of debt and to continue to continue with our distribution policy or with our dividend policy. As, we have already mentioned before. Thank you, Mariano.
Operator: This concludes the question and answer section. At this time, I would like to turn the floor back to Mr. Mariano Bosch for any closing remarks.
Mariano Bosch: Thank you all for participating in our call. We are very happy with how the company is going with this new Adecoagro, so we hope to see you in our new, coming event.
Operator: Thank you. This concludes today's presentation. You may disconnect at this time and have a nice day.
