Bioceres Crop Solutions (NASDAQ:BIOX) Q2 2021 Earnings Call

0:00 Good morning, and thank you for standing by. I would like to welcome you to the by Chris Harris Crop Solutions fiscal second quarter 2021 earnings conference call. All lines have been placed on lead to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press start and then number one on your telephone keypad. If you would like to update your question, press the pound key. Thank you. Now I'd like to turn the conference over to Max Goya. You may begin.

0:33 Thank you. Good day, everyone, and thank you for joining us. Presenting during today's earnings call will be Federico Trucco, the ESERES Chief Executive Officer, and Enrique Lopez-Negue, our Chief Financial Officer. Both will be available for the Q&A session. Before we proceed, I would like to make the following self-help statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statement section of today's earnings release and presentation, as well in our recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or change events or circumstances. Also, please note that for comparison purposes and a better understanding of our company's underlying performance, in addition to discussing as reported results during our presentation today, we will discuss comparable results, which exclude the impact of hyperinflation accounting in Argentina. Additional information in connection with the application of the rule IAS 29 can be found in our earnings report.

1:31 I would now like to turn the call over to our CEO, Federico Trucco.

1:37 Thanks Max and thanks everyone for joining us today and happy new year. Today we are reporting on our second fiscal quarter that ended on December 31st. As a technology company, our value proposition is centered on developing highly differentiated solutions that create economic incentives in the form of improved yields, management practices, and other efficiencies. to further decarbonize production processes while regenerating agricultural ecosystems. With this central purpose in mind, we have been investing over the last 18 years in a solution called HB4, designed to improve the resiliency of crops in the face of adverse climatic conditions.

2:26 More specifically, limited water availability. The single most important factor affecting agricultural sustainability. During the quarter, we achieved the first approval ever of this technology in wheat, an approval we have been working on since 2015. We discussed the implications of this approval in our September earnings call. Today we are presenting the data obtained from our first pre-commercial production process with independent growers totaling close to 7,000 hectares and 17 times more than in our prior production cycle. And the results are as follows.

3:13 HV4 wheat outyielded commercial varieties commonly used by participating growers by 13.5% on average across all environments and locations. In our yielding environment, representing one-third of all hectares harvested, the average improvement from the HV4 technology was 42%. This is more than twice the performance we estimated using our historical data. In higher yielding environments, we also perform our historical data and we will discuss this in more detail later in today's presentation. As a result, all participating growers have anticipated their willingness to repeat and or increase their exposure to HB4 wheat in the coming season, further validating our value proposition.

4:10 The performance of the current H3-4 wheat varieties and the validation of our value proposition with farmers, as well as the high quality of the seed obtained, allow us to ratify our prior guidance, projecting almost 20 times more hectares for the upcoming season. As we indicated, this projection is subject to Brazil's import approval. Regarding this approval process, the public hearing that precedes the introduction of any new GM crop has already taken place. This occurred on October 22nd, and no further information has been requested by regulators as of today. Continuing with H3-4 Soy, we have engaged with 148 growers across 220 locations, for a total of close to 23,000 hectares, where we are currently multiplying seven materials ranging from maturity groups three to five.

5:13 Despite some initial dry conditions in certain regions, this scaling up process is advancing favorably. We continue to make progress with our collaborators to develop materials for a broader range of maturities, and we have recently announced an important collaboration with ENSIP, a computational breeding company, to fast-track product development and targeting efforts in the United States. This collaboration is possible given the increased flexibility we have achieved after the full acquisition of Verdeca. We will also comment on this later in the presentation. From a financial performance perspective, we experienced a drop in revenues of 17% for the quarter, which Enrique will explain in detail during his part of the presentation.

6:07 This slowdown in revenues partially upset the good momentum of the last three quarters, giving us a revenue growth of 8% for the trailing 12 months. This number does not include HB4 deferred revenues accumulated to date, which we refer to as contributed goods, totaling 3.6 million over the approximately 30,000 hectares of HB4 crop farmed thus far. Please now turn to slide four for a more in-depth overview of HB4 wheat performance. The heat map of South America on the right side of the slide indicates soil water availability in late October of last year as compared to an average year.

6:58 Blue areas have more abundant water than usual, and orange and red areas have less. This image illustrates the severity and extent of the drought conditions during the last week's growing season. As we zoom in on the left side of the slide to the HB4 wheat production locations, we see that in the northern locations where drought was more severe, the average improvement in yield was 60%, with some extreme situations where yields were more than doubled. The average drop in production for this region was reported at 47% by the Rosario Board of Trade, and institutions that have historically reported statistics for different crops.

7:45 Accordingly, our HB4 technology could have reduced this loss by two-thirds. Improved performance was still observed in southern regions, indicated as D and C, with average increases of 7 and 8% as shown. where water constraints were less significant and yields in general were above average. On the following three slides, we present case studies in environments with different productivity levels. First, we see a location in Henderson, Buenos Aires Province, where yields were above 5 tons per hectare and the improvement in the HB4 crop was 20%.

8:32 In these high yielding environments, we have outperformed commercial varieties every 6 out of 10 times, with an average improvement of 3%, probably more a factor of the elite genetics of our varieties and less so of the drought tolerant technology. Moving to the next slide, we see another location in Buenos Aires province, now within an intermediate yield range, that is between 3 to 5 tons per hectare. In this location, we observed an improvement of 30%. When we averaged all locations within the 3 to 5 tons range, we observed a benefit of 11%, outperforming commercial materials every 7.5 out of 10 times.

9:22 Lastly, in the next slide, we go to a western location in the same province, where yields are generally below 3 tons per hectare and observe a benefit in the HB4 crop of 68%. In these lower yielding environments, we have obtained an average yield improvement of 42% across all sites, as indicated before, outperforming commercial materials every 9 out of 10 times. Slide 8 provides an overview of our HB4 scaling up process. We take this opportunity to ratify our prior guidance in terms of hectares and associated discovered revenues, knowing today that we have the variety performance, the seed quality, and the volume of inventories needed to meet these goals.

10:17 Moving now to HB4 Soy on slide 9. We have been able to plant close to 23,000 hectares with 148 participating growers despite the slow start to the planting season, mostly affected by the lack of rainfall until late December. This production cycle represents an 8 to 10 times increase in the number of hectares of farmers, respectively, compared to the prior cycle. We have been able to replace some of the lower performing varieties with new materials coming from our US off-season multiplication process, with a total of seven materials now being validated and scaled up. As indicated before, the process is progressing favorably, and we are closely monitoring the adaptation of the different genetic backgrounds to the current universe of growing conditions.

11:14 A key determinant of our ability to speed up the deployment of HB4 soil. Chinese import approval for HB4 soil is still pending. We are actively engaged with regulators to facilitate the generation of independent in-territory data and supplement our dossier whenever new information is requested. In our assessment, the process is advancing according to precedence. An important aspect of the HP4 seed multiplication process is the data gathering aspect where all sites are actively monitored over 130 different variables with a resolution of some of these variables at the meter square level.

12:00 Slide 10 provides an overview of our data acquisition process and farm inventory surveillance interface. Taking advantage of the data science possibilities generated by this growing database, we have engaged with Nature Source Improved Plants , a U.S.-Mexican company dedicated to computational breeding, to gain powerful insights regarding the interaction of different environments with the genetics of our materials and eco-seed combinations. Improving the design of our breeding strategies and short-cutting the product development process by more accurately predicting the performance of our products for a given location.

12:46 Using the operational research approach championed by ENSIP founder Steve Tankley, a pioneer in genome mapping and black molecular breeding, we also aim to significantly improve the return on our R&D dollars dedicated to this process. As recently announced, we will first use these capabilities to fast track our green efforts for HB4E in the United States, where we expect our proprietary drought-tolerant technology to quickly gain a foothold. Incorporating NCIPS computational technologies into the development of HB4Soy and HB4E, will also help us better target a wider range of drought-prone growing regions around the world, as well as bring them to market faster.

13:37 With that, I will now turn the financial portion of the presentation over to our CFO, Enrique Lopez-Mecure. Enrique?

13:47 Thank you, Federico. Please turn to slide 12. As Federico mentioned, despite the drought that negatively impacted revenues for the quarter, we experienced success in several other areas as it relates to preparation and a broad commercial launch of our drought-modern HP4 technology, including HP4 wheat seed inventory volume target, HP4 wheat outbuilding in historical performance, HP4 soil implanted hectares and scale in rural adoption. All of these alternative metrics grew substantially during the second quarter of 2021 and uniquely positioned the company in the words of GAM as we expand our geographical reach and address both markets for our disruptive HV4 program.

14:35 For life context and for comparison purposes, let me remind you of the seasonal nature of our business. Since the performance of a significant portion of our total portfolio is tied to planting As you can see on this slide, high season begins late in our fiscal first quarter with our strongest performance taking place in the second quarter and the lowest sales level occurring in the third quarter. The year drought in key agricultural areas of Argentina and southern states of Brazil impacted on revenues in the second quarter of fiscal 2021. Total quarterly sales accounted for $47.7 million. Thank you very much.

15:51 On a positive note, during the second quarter, we increased contributed goods for H4 wheat and soybean significantly to $3.6 million, with a gross margin of approximately 60%, compared to $0.7 million in the same year-goal quarter. The value of these contributed goods will be recognized as revenues once the realized inventories are sold as physical grain, and no longer contributed into seed notification agreements. For the time being, this has a financial benefit for the company, as the corresponding gross profits and contributed goods implies that less cash is required for the HB4 inventory process. Please turn to slide 13 for a closer look at what impacted sales and profitability during the second quarter.

16:41 As you can see, during the quarter, drug conditions in some agricultural regions of E-Markets Argentina and Mexico Impacting our revenues primarily in the crop nutrition and crop protection segments, which accounted for 55% and 35% of the total decrease with technology. Crop protection segment revenues decreased 12% to $26.5 million of dry weather during the quarter, shrink the crop protection market size across the affected agricultural areas. Estimates indicate that an average lower shift between one and two applications, Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti The TINA integrated product segment had a mixed performance.

17:48 Cheap treatment back sales in Argentina were lower as a result of the highly successful pre-season summer crop sale campaign of this product prior to the second quarter of fiscal 2021. However, higher sales of steep and robust growth of back sales in South Africa offset the drop in Argentina leading to $12.1 million in compiler revenues per quarter and Ezequiel Simmermacher. Total Comparative Revenues for the crop nutrition segment increased 37% to $9.2 billion.

18:47 Lower sales of fertilizers, mainly in Argentina, reflected a sequential fall in the use of the salt capacity from 30% to 25% on a trading 12-month basis. Stand-alone and upland sales falling in South Africa resulted from the demand shift toward the 50 treatment bags that we previously mentioned. The final gross margin for the segment expanded by 558 basis points to 52.4%, mainly due to higher microbe fertilizer profitability explained by temporary cost efficiency. Overall, gross margins for the business include slightly year-over-year from 52.1% to 52.8%. Now let's turn to slide 14.

19:40 for a look at how revenues and gross margin per segment impacted the evolution of overall gross profit per quarter. The slight gross margin expansion I just described slightly offset the decrease in revenues, with comparable gross profit decreasing 15% year-over-year and reaching $25.2 million for the fiscal second quarter. Profit protection and nutrition nearly contributed to the decrease, while FIDA-integrated products only showed a $0.6 million growth. Please now turn to slide 15, which breaks down the performance in the aesthetic second quarter adjustability dot and margin. The operational performance I just described, which impacted compounded gross profit as well as daily results, driven mainly by senior tech, our major fertilizer manufacturing daily, explains most of the 33% decrease in adjustability dot. which was $14.2 million for the second quarter compared to $21.1 million in the year-ago quarter.

20:45 IAS 29 adjustments compiled with gross profit was slightly offset by lower expenses. Here on the incremental SG&A as we approach the commercial launch of HB4, net of one-time transaction expenses and stock-based compensation charges in both quarters, SG&A expenses decreased 5% and Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti. including product registrations as well as the company's pursuit of regulatory approvals of HB4 in countries that import and produce wind and soil.

21:46 Please come to slide 16. For a closer look at how these orders performed, impacted the sales and profitability growth momentum we have been experiencing in the previous orders. Even with an adverse scenario following the second quarter, our business has proven to be resilient. Federico mentioned previously our sales grew 8% when looking at the trading last 12 months, which smooths down seasonality effects versus that same time period a year ago. As you can see, profitability also showed a slight positive evolution when looking at the trading last 12 months, increasing from $41.3 million in adjusted interest to $42 million.

22:32 Even more, in breaking down contributions to that growth in adjusted EBITDA, operational performance delivered almost $7 million in additional Compatible Growth Profit versus the year-ago LPM. This was mainly offset by IIF29 adjustments to Compatible Growth Profit. Finally, let's please turn to slide 17 for updates on our balance sheet. Cash, cash equivalents, and other short-term investments of December 31, 2020 totaled $36 million, clearly improved liquidity position compared to $16 million as of December 31, 2019. Sequential basis, the cash position was down from the previous quarter as we entered the high season of our business in South America and covered the corresponding working capital needs. During the quarter, we also used our improved financial position to deploy capital in achieving our HP4 program soil in acreage target with almost 23,000 hectares planted, and also to fulfill payments related to the recent budget acquisition.

23:41 Net debt as of December 31, 2020, totaled $128.7 million, which approximately 46% consisted of long-term obligations. The short-term portion of our debt consists of working capital loans that are correlated to our working capital position and the third portion of long-term obligations. Our liquidity position as of December 31st, 2020 represented approximately 40% of the short-term portion of debt covering our accounting debt payment obligations. Our net debt to LPM at the 3D of December 31st, 2020 was 3.5%. Ezequiel Simmermacher Ezequiel Simmermacher Ezequiel Simmermacher And with the acquisition behind us, we are now focused on path-tracking our HB4 inventory

25:23 deals as we prepare for the commercial launch in the four days to come. We look forward to sharing more on our developing story at soon-to-be-announced investor conferences in the coming months. This concludes our presentation for today's call. Operator, please open the line for the Q&A portion of the conference call. If you would like to ask a question, please press Start in the number 1 on your telephone keypad. Again, press Start in the number 1 on your telephone keypad. We'll pause for just a moment to compile the community roster. You have a question from VIN, please.

26:10 Thanks for taking my questions. First, I have a couple on HB4 wheat. First of all, congratulations on some really impressive data coming out of that program. My question to you is, do you have the sense that your farmer customers are going to be willing to purchase seed once that Brazilian approval comes? or do you believe that these farmers are looking for additional certainty that there will be buyers for the grain after harvest before they commit to purchasing seed from you?

26:44 Hi, Ben. This is Federico speaking, so it's first happy new year to you. We haven't talked since last year, and thank you for your question. Obviously, we believe that farmers will have more confidence once the Brazilian approval is in place and conventional commercial channels become available for HP4EAT. In the meantime, we're operating under the HP4 program, which is the identity preserve infrastructure we put in place. to basically take care of that situation with farmers. And this is something we can do today because everything that is produced is needed for the next cycle of seed multiplication.

27:30 So we become customers of all that grain that turns into seed as we're ramping up the HP4 process. Now, eventually, If HB4 is not approved in Brazil, that would represent a risk and an issue that we probably need to take care of ourselves and not leave that in the hands of farmers. We don't want farmers to purchase seed and produce grain that cannot be commercialized afterwards, and that's where we have taken a very prudent approach. Got it. Okay, thank you. And then I guess one other question on the regulatory front around HB4 wheat. I mean, I know it's impossible to lay out a timeline, but, you know, is there any sense that you can or any precedent that you can point to that suggests Ezequiel Simmermacher, Maria Paula Savanti

28:51 I think obviously having had the public hearing, which we referred to during the presentation on the 22nd of October, was kind of the final step in the regulatory process. to be able to be in a position to obtain an approval. Since that public hearing, we have received no new inquiries from Secretario, that is a regulatory agency that deals with the situation in Brazil. Bear in mind, obviously, that December and January are not active months for the public administration in Brazil, so there might be a question coming up after Brazilian Carnival that we released. But in any instance, our working assumption is that the import approval is likely to be in place before the next cropping season. So we need to make decisions by May to be able to fully roll out our HOP for wheat inventories.

30:00 and we think that it is possible that by that month we will have a final answer from the Berbigin regulators. Over on the HP4 Soybean side, I have a couple questions on the NFIP collaboration. Are you looking for them to help you secure commercial partners for an eventual launch here? or are you looking at NSIP to really just kind of help you advance your breeding program in new geographies? It seemed like the latter, but I just wanted to see if you had any sense that they would really help you identify commercial partners or if that was more on you.

30:50 No, you're right in that it's the latter. It's more about doing advanced breeding so that we can have the right materials and factor for the geographies in which we believe HV4 can be a major contributor to yield. So we're focalizing ourselves in, for instance, the 10 million acres of the Dakotas, which is an area that is usually... Thank you very much. to better predict the performance of varieties and fast-track the breeding process. Now, from a commercial perspective, we're actively looking to structure relationships, initially probably equally to what we do in Argentina with identity preserve structures, so that we are running up inventories Ezequiel Simmermacher Regarding the fast track of this

32:27 development timeline, do you think there's going to be any meaningful field trials in the United States starting in a few months, or is that going to be likely an event for 2022 or maybe thereafter?

32:43 No, we will be doing a lot of trialing in the U.S. in the coming season. We have been doing trialing already with some of the materials. Remember that all our off-season production is done in the U.S., probably in a single location or a couple of locations because there the emphasis is on scaling of seed and the quality of the seed and not so much valuing the technology in different geographies. So that is something we're starting to do more aggressively today in the coming season. and there's where we have now the capability to use NCIP's computational breeding and predictive targeting system. I think there's a possibility today in the use of artificial intelligence and machine learning tools to shortcut that process. Got it.

33:47 And then I guess last question on this is regarding locations and for those trials. I think you were ramping up your inventory last year in, I believe, Arkansas. It sounds like you're looking at the Dakotas. Are those kind of the markets you're probably going to be focused on first, or is there additional geography that you're maybe going to be trialing this year?

34:11 So on the trialing side, we will prioritize the Dakotas because we believe that is where the most immediate opportunity lies for HB4 and it's meaningful enough from an acreage perspective. For the production aspect of things, we will continue to do that in Arkansas where these maturity groups that we use in Argentina will probably grow better. If you remember Dakotas, Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Got it. Got it. Okay. Well, thanks for taking my questions. I think that does it for me.

35:13 You know, best of luck with all these initiatives, and I'll jump back into you. Thanks, Seth. Your next question is from Sebastian Azumindi with 5B Plus Capital.

35:34 Hi, good morning everybody. I have two questions regarding the balance sheet of the company. The first one is that if you can give further details on the cash use of receipts for the quarter. And the second one is that given the current liquidity, which is roughly half a rack a day, and that the share price currently trades at 8%, If we should be concerned about arteria integrating the almost 2 million share position, and also if you have any threats about them being a long-term shareholder.

36:13 Hello Sebastian, this is Federico again and thank you for your call and it's good to have you here today. I'll answer the second question and then I'll pass it on to Enrique for the first question. Essentially, I think that the first thing I need to say is that the 1.8 million shares that we gave Arcadia Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Their willingness to sell or divest their equity in Viocedes will not depend on their near-term cash needs, but on sort of their perception of value, and there is where I feel that we continue to be aligned and might have a supporter of the Viocedes story in Arcadia. Now, having said this, I believe that that is a position of significant size. that might be attractive to loan holders that want to participate in the real estate and storage.

37:41 So eventually, those shares become available. I don't anticipate a significant problem in sort of a daily trading of our stock today. I don't know if you want to comment further on this or tackle the second question.

37:59 Hi, Flavio. How are you on the choice? No, I think that what you said about the second piece of question is accurate, Federico. So on your question about the uses of cash during the quarter, you know that our main uses of cash as we have been communicating are around the commercial launch of HP4. So during the quarter, we invested cash in continuing to build up inventories of HV4 wheat and soy that was a significant portion of the use of cashew in the quarter. and the second one in terms of importance was the upfront payment we made to the Verdeca Acquisition for us to consolidate the 100% ownership in the HB4 soil vehicle that we have.

38:50 So those two initiatives were something that we anticipated in terms of piece of cash and then there's the seasonal nature in the build-up of inventories and working capital in general as we entered into the high season in the two most important markets for us, Brazil and Argentina. So those were the main three streams in which we invested cash during the quarter, Sebastian.

39:20 Got it. Thank you for the answers. I have a final question regarding the HB4, if you can talk more about the 42% yield for HB4 wheat, your experience during the quarter, and how should we think about that at much larger scale?

39:45 Thanks for the question, Sebastian. I think the 42% improvement in the lower yielded environment was unanticipated. If you look at everything we've reported until today or prior to this call, we were indicating a 19% yield benefit on average. Ezequiel Simmermacher that play into this. One is obviously the good genetics that we have in wheat compared to sort of historical data where most of the data was produced with the original event and not with the sort of elite backgrounds that we're currently using.

40:52 And then the extreme situation, this was a very extreme drought in the northern Argentina region where we had Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti We found ourselves with this amazing result. Now, I can guarantee that farmers that tried HP4 wheat and saw this outcome, we probably don't want anything else but HP4 wheat in the future.

41:40 This is too meaningful from a yield advantage perspective. So that should give us sort of the demand We are very bullish given the data that we have, given sort of the magnitude, the number of hectares where this number comes from, and hopefully with the approvals in place, we can make this a reality for a much bigger group of farmers.

42:21 Excellent. I have a last question. I saw your debt ratios coming from double digits to plus two times. Seeing the lower cash and current debt, what are the options or any ideas that you have for the next 12 months?

42:45 Thanks for the questions, Fiona. As I explained previously, one of our main lines of investment is around the HP4 commercial launch. So as we invest in initiatives to ramp up inventories and also investment in the Verdeca state, which we believe is going to be highly accurate for our shareholders in the future, but those two initiatives don't bring immediate revenues and profitability into the P&L. Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Maria Paula Savanti

44:16 Thank you, sir.

44:18 Thank you, sir. To ask a question, please press star then the number 1 on your telephone keypad. Again, press star then the number 1 on your telephone keypad. Your next question is from Stephen Ralston with VEX.

44:39 Good morning. Good morning, Stephen. A very interesting information about your seed effort in the HB4 area. Also with the really being able to test it in drought conditions. But if I could just turn to the crop protection and crop nutrition business, which was impacted by lower demand due to the drought conditions. Could you talk about the dynamics of... The first thing to keep in mind is that our portfolio is heavily geared towards the planting season.

45:28 In those two businesses, particularly in the crop nutrition business, Ezequiel Simmermacher Ezequiel Simmermacher Ezequiel Simmermacher, Maria Paula Savanti and when we did so, we prioritized in our initial strategy the positioning of this solution as a high-value solution, like everything else we have in the portfolio. I think we do see that we probably achieved

47:01 Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti More competitive in pricing. And that is something we're actively discussing with our partners in that business. The crop protection piece, if there is no rain, probably pests don't evolve as dramatically as when they're a wetter condition.

47:47 So it might have been one or two sprays that were missed. And that directly affects our adjuvant business. I don't know if you want to comment on anything else on that.

47:57 Yeah, I mean, hi Steve, good to have you on the call. So basically what Federico said, if we unfertilize it by getting into higher volumes strategy, that should allow us to dilute some fixed costs from the manufacturing facility and obviously allow us to improve also sourcing of raw materials. So all of that should translate into a better pricing proposition to the farmer without eroding profitability of the product. So that is an initiative that we will be taking. And then on what Federico said about adjuvants, as we referred to during the presentation, farmers skip at least one or two sprayings in the fields and obviously that translated into less demand of adjuvants.

48:51 But I think that apart from what Federico described is what mainly explains the dynamics on the two segments.

49:03 Thank you very much. Just getting a little granular, what was the capacity utilization at the microbeaded fertilizer facility during the quarter?

49:17 So it was on a 12-month basis, and that's how we monitor our progress on this end. It was 25% done from February.

49:29 Thank you very much for taking my questions.

49:34 Thank you, Stephen. The next question is from Matthias Cremaci with Delta Asset Management.

49:45 Hi Federico, Enrique, thanks for the call. Glad to talk to you. Following up a previous question regarding HB4 wheat, I would like to, if you could provide some color on how are evolving conversations specifically with the buy side of the equation with potential buyers and crushers. How are that conversations are evolving?

50:18 Hi, Matias. It's great to have you on the call, and thank you for the question. We are actively engaged with all stakeholders, particularly the meat industry, not only in Argentina but in Brazil, to provide comfort in terms of this new product. I think that we have been making very good progress compared to when we started. Initially, there was a reaction of concern in the first few weeks But as I see the farmer appetite and in many ways also the environmental side of the equation, I think that we are getting traction with them and probably equally with soy, we might be able to announce in the coming quarters specific relationships with different processors.

51:14 to provide that commercial comfort that would enable the full rollout of our HP4 wheat plants. So we are doing this not only in Argentina, as I indicated before, but also in Brazil, so that most of our customers and domestic market and international markets are taking into account.

51:44 Excellent, Federico, thank you. At this time, there are no questions. Do you have any closing remarks?

52:07 So, no specific closing remarks. I want to thank everyone for participating and remind everyone that we are fully available for follow-ups and to address any questions that might come up after the call. So, I hope everyone had a great day and looking forward to continuing the conversation in the months to come.