Bioceres Crop Solutions (NASDAQ:BIOX) Q1 2021 Earnings Call

0:00 Good day, everyone, and welcome to Bayer Sears Crop First Quarter 2021, Bayer Sears Crop Solutions Corp. Fiscal First Quarter 2021 conference call. Today's call is being recorded. Following the speaker's remarks, there will be a question and answer session. I'd now like to turn the conference over to Mr. Maximo Guglia, Investor Relations, who will make some opening remarks and introduce today's other speakers. Please go ahead. Thank you. Good day, everyone, and thank you for joining us. Presenting during today's earnings call will be Federico Trucco, the OSERES Chief Executive Officer, and Enrique López Lecube, 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.

0:48 Today's call will contain forward-looking statements, and I refer you to a 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. So, please note that for comparison purposes and a better understanding of our company's underlying performance, in addition to discussing its reported results, during our presentation today, we will discuss comparative results, which exclude the impact of hyperinflation accounting in Argentina. Additional information in connection with the application of the Rule IIS 29 can be found in our earnings report. I would now like to turn the call over to our CEO, Federico Trucco.

1:37 Thanks, Max. Although today's call was originally intended to discuss our first quarter financial performance, recent significant developments warrant time in today's presentation. As announced earlier today, we are acquiring Archeria's Biosciences' full interest in Verdeca LLC, a joint venture we launched in 2012 for the development of second-generation biotechnologies for soybean, including the development of HV4 soy. In conjunction with the acquisition of Archeria's interest in Verdeca, We are acquiring rights to Archeria genome-edited wheat varieties designed to improve health and shelf-life aspects of wheat flours and flour-derived food products, as well as other IP assets.

2:34 The vision of these technologies to our pipeline, together with the recent approval of H3-4 wheat in Argentina, which we will discuss later in this presentation, helped position the Aceres as a leader in this biotech orphan, yet incredibly important staple crop. Finally, Enrique will comment on the strong momentum that our core business maintained as we entered into the new fiscal year, delivering an 8% growth in comparable revenues and a 30% increase in adjusted EBITDA. Please turn to slide four for an overview of the various assets we are acquiring.

3:22 With full ownership in Verdeca, we'll be able to consolidate one of the most important technologies in our pipeline, HP4 soil. Having full control of HP4 soil will enhance our ability to initiate breeding and go-to-market collaborations with partners in new and existing geographies. Allowing us to execute our strategy at a faster pace. Although we now have to fully fund the ongoing drilling, regulatory, and working capital efforts, we believe that the incremental economics resulting from this transaction, ranging between an additional 25% to 42.5% of Technology Associated Revenues, depending on the go-to-market channel and other third-party obligations, will provide a very attractive return on allocated capital.

4:19 On a per hectare basis, the additional revenues may equate to approximately $6. give or take two and a half dollars, a value that is not insignificant over the 21.5 million hectares targeted with HB4 soil in geographies in which the technology has already been approved by regulators. Through the deal, we also receive exclusive rights to other soybean traits, as well as assume ownership of Cardicat's budget, and Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti. On slide 5, we present the wheat technologies being in-licensed for Latin America.

5:32 While the appearance of HEP4 technology substantially improves growers' yields and provides a range of significant environmental benefits, including increased carbon sequestration and reduced water usage, We are now expanding our portfolio to quality traits which offer tremendous health benefits including resistant starch and reduced gluten. Resistant starch varieties have 10 times the dietary fiber of conventional wheat and thus digest more slowly, preventing the rapid production of black sugar that normally occurs when we eat wheat-based products such as pasta, bread, and pizza.

6:17 Reduced gluten varieties have 65% less gluten, while resulting in flour that is substantially equivalent in taste and performance to conventional flour. For producers and retailers of wheat-derived products, the oxidative stability technology, while also in licensing, will enable enhanced product shelf lives. For consumers, having these attributes straight from the farm will help them obtain the quality products they seek with cleaner, shorter product labels, an important consumer trend these days. It is also important to know that by expanding our portfolio of wheat trades, we will be leveraging Bioceres' investment in identity preserved production platforms and tracing systems.

7:12 such as those currently being used for our HP4 premium. The data gathered through these platforms will allow consumers to make more informed decisions by understanding the health and environmental aspects underlying the fictionalized data. Before moving to the next slide, it is important to know that some wheat technologies being in-licensed are subject to third-party peer-ins. and therefore to a CLOVAX provision in our agreement with Arcadia. We will discuss this provision when we look at the total consideration for this transaction on the following slide. Please turn to slide 6.

7:59 To acquire the full interest in Verdeca and rights to other intellectual property that I have discussed, were paying a total of $32 million in cash and equity as shown in this slide. Of these amounts, $20 million is being paid upfront, comprising $5 million in cash and $15 million in stock at a value of $8 per share. These 1.875 million newly issued shares We lead to a total of 40.6 million shares outstanding, with $8 per share representing a meaningful premium compared to yesterday's closing price.

8:49 One-third of these shares, that is $5 million at the value of a transaction, are pledged in favor of Yoseres and will be released once all clearances regarding third-party rights to a REIT portfolio being in-licensed are achieved. All shares will be locked up for a six-month period. The remaining 12 million in cash will be paid post-cleansing and are conditioned on regulatory milestones and HB4 soil penetration levels. More specifically, 2 million will be paid upon achieving import approval in China or reaching 200,000 hectares of HB4 soy in a single growing season.

9:37 The remaining 10 million will be deducted from commercial royalties paid to Baraka from HB4 soy sales, of which 6% will go to Arcadia until the 10 million consideration is met. These numbers do not include $1 million of fees and other transaction-related costs that will reverse Arcadia and non-verdical royalties that may be paid once non-soil intellectual property is commercialized. Please move to slide seven. Last month was particularly important in our company's history as we achieved a long-awaited approval for HP4E in Argentina A technology we've been developing with French partner Florimonde 3 for more than 8 years.

10:31 Argentina is Latin America's most important wheat producer, accounting for roughly 70% of the wheat produced in the region and 3-4% of the world's production. Today, drought tolerant HB4 wheat is also the only genetically modified wheat to be approved and on a commercial path to market anywhere in the world, which represents a major milestone in wheat's global value chain, generating significant media backslash around the globe. If you turn to slide 8, you will see that until now, wheat was an orphan crop in the sphere of biotechnology.

11:16 Despite being planted in 200 million hectares globally, the highest of any crop, By comparison, corn with 10% less hectares planted than wheat has 44 biotechnology events approved, while soybean and rice have 24.9 approved events each. These comparisons make clear that the approval of HP4 wheat is the beginning of a monumental but achievable quest to modernize and transform wheat production around the world. for the benefit of both consumers and growers alike. For growers, our HB4 wheat increases yields by an average of 20% during growing seasons impacted by droughts, which is increasingly frequent across the world and that's increasingly threatening our food supplies.

12:13 Suffice it to say, HB4's economic as well as human benefits are clear and indisputable. and are based on over 10 years of field validation. For consumers, our hreform technology helps mitigate climate change by facilitating double cropping, which seasonally rotates wheat and soybean, an environmentally friendlier growing system that is otherwise limited by water availability. When combined with soil regenerative practices, An evergreen cropping system made possible by HB4 captures more carbon than conventional growing practices. I will quantify the carbon sequestration package for you.

13:01 For each hectare farmed per year, the resulting sequestration is equivalent to six months of carbon emitted by a city automobile. The other major environmental benefit are reduced water consumption and higher crop yields that reduce the need to expand agriculture's global footprint, particularly with regard to rainforests, as well as marginal and fragile ecosystems. Of course, some market participants have expressed concerns as to the potential disruption this technology may signify for the conventional wheat value chain. To address these concerns around wheat global trade, we have adopted the general principles shown in the next slide.

13:50 So please turn to slide 9. There are five primary conditions the company is pursuing to launch HP4 wheat in a given country once regulatory clearance is achieved. These include Satisfying the requirements of the resolution granting , for instance, in the case of Argentina's approval, we need to obtain import approval in Brazil before a commercial launch may be initiated in Argentina. Brazil is Argentina's most important lead importer. Import approval in a geography where a regulatory system exists and which represents at least 5% of the total Greek exports from the country where we want to launch, based on a five-year moving average.

14:43 That's the second condition. Thirdly, the availability of a low-cost detection method with a 1% sensitivity level. This has already been achieved for all geographies. Fourth, the existence of a value capture system and an identity reserve channel that ensures IP protection as well as minimizes disruption to conventional channels while adoption is initiated and at a single digit market share. And lastly, the existence of an outreach and educational program in the country of interest for growers and consumers. Please turn to slide 10 for an overview of our go-to-market roadmap.

15:36 For our go-to-market roadmap, we have prioritized our target countries chronologically for regulatory approval of HB50. In total, we are targeting, at this stage, about one-third of the global tech bridge dedicated to it, and in three phases. In the next two years, we are pursuing approvals and launches in Argentina, Uruguay, Paraguay, and Brazil, representing 9.4 million hectares, or close to 13% of our initial addressable market. Immediately following, we expect to launch in South Africa and Bolivia, as well as the United States, where we have already applied for food and feed approval.

16:27 These markets allow us to move from 9.6 million hectares to 25.3 million hectares and represent about 35% of our targeted markets. Starting today, but anticipating a longer process, we will pursue launches in Australia, Canada and Russia. Along with the previously mentioned countries, these geographies represent 72.5 million hectares. One third of all factors planted with these immunoids on an annual basis. Please turn to slide 11. Argentina's regulatory tier eliminates significant operating challenges for us and will lower the cost of working with growers to multiply related with varieties and building up seed inventories ahead of our faced commercial launches across the world in the coming years.

17:29 In effect, We are now able to transition from thousands to hundreds of thousands of hectares in our next week cycle. As you can see on this slide, our ramping up of H340 inventories will expand from less than 7,000 hectares in the current cycle to more than 60,000 hectares in the next cycle. And if the real input approval is granted in time, it would be twice that number of hectares. It is important to note that this process will continue to be assured by robust, close growing systems which, along with identity preservation and traceability, are still of paramount importance to us. Accordingly, we continue working to enhance the state-of-the-art digital farming tools that are an integral part of our HV4 program for wheat and soybean.

18:26 In addition to generating extensive and detailed datasets for each production field that is monitored, we are applying and leveraging data science and blockchain technology to other areas of the value chain, such as storage, logistics, and processing, in order to guarantee complete farm-to-fold traceability. As those of you who follow our company know, Our HB4 program for wheat and soy entails a formal agreement with growers to clearly contribute to goods, agricultural inputs, which comprise bioceresis seed germ plasms and drought tolerant traits, customized microbial solutions, as well as our next-gen crop protection and nutrition technologies.

19:15 In the aggregate, the combination of these technologies and our HB4 wheat program deliver a solution that not only enhances the activity, but optimizes water resources, increases carbon sequestration, and reduces the use of agricultural chemicals. The value of these contributed goods for our HB4 program with growers will be recognized as revenues once the realized inventories are sold as seed or grain, but not longer contributed. Near the bottom of this slide are the estimated metrics that we will be using for account four and track the underlying economic performance of our HB4 week program ahead of reporting HB4 revenues and related accounting measures.

20:06 By publishing the level of contributed goods, the investment community can also use this information to better follow our process. For the next ramping up phases, we estimate that the HB4 approval implies an economic impact of 4 to 15 million in additional revenues for contributed goods for fiscal year 2021, depending on Brazil approval. We will be using the same accounting for HB4 SOI program in the upcoming quarters, which is currently progressing as discussed during our last earnings call. Please turn to slide 12. Before turning the call over to Enrique for an overview of the quarter's financial performance, I would like to close my presentation with a slide that shows a field in Cordoba, which received almost no rainfall during the winter season.

21:05 The right half of the image captures wheat grown with bioceresis HV4 wheat and illustrates the full potential of our drought-tolerant wheat trade. That concludes my portion of the presentation. I'll now turn the call over to Enrique for the review of our first quarter results. Thank you, Federico. Please turn to slide 13. We are glad to report that the significant milestones and developments at Biaxeres, like the regulatory approval of HB4 wheat in Argentina, and the acquisition of strategically relevant assets and licenses from Arcadia were also matched by the growth momentum we maintained in sales and profitability of our core business as we entered the new fiscal year.

21:59 To provide 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 drug portfolio is tied to planting activities for road crops. As you can see in this slide, high season begins late in our first fiscal quarter with our strongest performance taking place in the second quarter and the lowest sales level occurring in the third. Our top line during the quarter ended September 30th grew 8% year-over-year on a comparable basis to $42.2 million, which implies a 9% shaker for the Q1 over the last two years.

22:45 This level of growth signals a good start of the system and confirms the growth trend of our sales, even without benefiting from HB4 revenues, the main catalyst for our next phase of growth. Furthermore, since the beginning of our current fiscal year in July, we have seen soybean and corn prices trade up significantly, predicting an increase in farmers' profitability across markets where we operate commercially. As we have learned from past experience, enhanced profits for farmers usually come hand-in-hand with appetite for technology and premium products, so we will keep a close eye on commodity price behavior and how that can provide an additional benefit for our business going forward.

23:33 Let's please turn to slide 14 for a closer look at what drove sales and profitability during the quarter. As you can see, crop protection and seed and integrated products contributed to the Porter's 8% revenue growth versus Q1 of the prior year, while sales in crop nutrition declined. Crop protection maintained its growth momentum in the Porter, with revenue increasing $2.1 million, or 11%, to $21.8 million, consistent with our expansion strategies for Brazil and Uruguay. At the product category level, this segment's main driver was adjuvant volumes, which increased 40% and 50% in Brazil and Uruguay, respectively.

24:19 Adjuvant volumes also grew in Argentina during the quarter, increasing nearly 30% year over year. As a point of reference regarding the magnitude of our commercial footprint for this product category, our adjuvants reached over 13 million hectares of farmland. Growth driven by adjuvants was partially offset by lower B2B sales of seed-treated insecticides and pesticides in Argentina compared to strong sales of these products in the first quarter of last year. Sales in our seed and integrated product segment rose significantly by $3.1 million, which represented a 57% year-over-year increase, reaching a total of $8.6 million for the quarter.

25:07 growth in this segment was mainly due to a 69% increase in sales volumes of seed treatment packs, which accounted for 85% of this segment's revenue. Our ready-to-use pack solutions for on-farm seed treatment reached 2.2 million hectares during this quarter. This performance was on the heels of strong quarter sales of bags in Argentina where we had executed a highly successful pre-sale campaign ahead of the summer crop season. As you know here, that some of the year-over-year growth was due to weaker revenues in last year's quarter when Argentine growers had delayed purchases of seed treatment bags.

25:53 As I noted before, crop nutrition offset the growth achieved in the other business segments. Lower sales of micro-rich fertilizers in Argentina and a decline in inoculant sales in Brazil led to a 15% decrease in the segment's revenue year-over-year, which totaled $11.9 million. Limited rainfall in certain parts of Argentina caused growers to delay purchases of our fertilizers ahead of planting, with volume declining 10% compared to last year's quarter, which, by the way, was a strong one. Anticipatory purchases by growers that drove double-digit growth in the fourth quarter of the prior fiscal year also impacted our first quarter volumes.

26:38 Still, we were able to maintain capacity utilization of our fertilizer plant unchanged sequentially on a 12-month basis at 30%. And we remain optimistic about the evolution of this product moving forward. Inoculant volumes also declined mainly due to strong sales of this product in Brazil during the fourth quarter of the prior fiscal year. Hectares-wise, our inoculants reached 4.1 million hectares during this quarter. In terms of margins, growth in compatible revenues was achieved profitably as overall gross margins expanded 200 basis points year-over-year from 45.5% to 47.5%.

27:25 Gross margins in crop protection decreased from 40.5% to 38.6% as growth in Brazil was achieved through a greater proportion of P2D adjuvant sales and effects on inflation dynamics in Argentina negatively affected inventory valuation of adjuvants sold during the quarter. A notable increase in sales of seed and integrated products was achieved with relatively steady margins at 67.7%. And finally, with their volumes in crop nutrition compared to the first quarter of the prior fiscal year were backward by higher profitability with a margin expansion of 520 basis points from 43.9% to 49.1%. Please turn to slide 15 now to look at how revenues and gross margins per segment contribute to growth of our overall gross profit for the quarter.

28:23 In line with the gross margin expansion I just described, compared with gross profit increased 13% year-over-year, a higher growth rate than our revenue growth, reaching $20 million for the fiscal first quarter. Sales growth in crop protection was slightly offset by the gross margin decline, resulting in 5% gross profit growth in the segment, which totaled $8.4 million. In the greatest box, comparable gross profit increased $2.1 million, or 58%, in line with sales growth, reaching $5.8 million for the quarter and becoming the main contributor of gross profit growth. And lastly, our crop nutrition performance Gross profit decreased 5% to $5.8 million after decline in sales was positively offset by higher gross margins in fertilizers.

29:19 Please turn to slide 16, which breaks down the growth in GeoCeres' first quarter adjusted EBITDA, which increased 30% to $10.5 million on higher revenues and an increase in our EBITDA margin. The margin expanded 246 basis points, mostly due to a total increase of $3.2 million related to gross profit, which was mostly driven by significant profitable growth in secret impact that I highlighted. As regards the CNA expenses, these were flat as a percentage of sales, On a nominal basis, SG&A increased nearly 16% in the quarter, due to unfavorable effects on inflation dynamics in Argentina, where most of our administrative functions are located. Expenses incurred in this country are largely denominated in local currency, and therefore exposed to fluctuations related to effects on inflation adjustments.

30:19 Finally, let's please turn to Section 10 for an update on our financial position. The Aceresis debt profile has improved considerably since last year, with long-term debt accounting for 62% of total debt versus 33% at the end of the first quarter of fiscal 2020. Also, following the $17 million public offering of Rizobacter bonds earlier in the quarter, our cash position strengthened further. At the end of September, cash and short-term investments stood at $60 million, nearly five times The level at the end of the first quarter of the previous year. From a liquidity standpoint, that cash represented around 97% of the current portion of our debt. In terms of leverage, this peaked down to 2.12 times net debt to EBITDA, despite the year-over-year increasing net debt as we generated significantly higher levels of EBITDA.

31:20 In addition to the strength of the FSS core business, our solid balance sheet and greedy position are serving as a strong foundation for executing our HB4 wheat and soy strategy. By way of example, we are now in a position to fund working capital requirements for the accelerated inventory build-up process in both wheat and soy that Federico had discussed, as well as fund expansion of our global regulatory footprint in wheat and the advancement of our breeding products. Our strong financial position has also allowed us to regain full control of HB4 soil and given us access to cutting-edge wind technologies that reinforce our leading position in this problem. This not only provides an attractive ROI for the company, but also has the potential of being highly effective for our shareholders as we advance HB4 wind and soil.

32:15 This concludes our presentation for today. And with that, I will ask the operator to open up the line for any questions that participants in today's call might have. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. Please vote for your first question. And your first question comes from Sally Yonkus with Brookline. Hi, Federico and Enrique. Congratulations, good quarter. I have a question on the income statement. What's the reason for the high finance cost? It's like $12.7 million.

33:05 What's the source of that? Hi Sally, thanks for joining today's call. With regards to that question, keep in mind that we usually separate non-cash expenses that are more related to inflation and effects adjustments and to accounting adjustments from our cash financial expenses. So if you look at the cash financial expenses, you will see that we were below what we spent last year. That will be around $3.9 million. So we have not only improved our cash generation by lowering financial expenses, but also we are spending less cash in interest expenses with higher debt. but you need to keep in mind that we separate cash financial expenses from non-cash financial expenses that are related to affecting inflation adjustments.

34:17 Okay, so do you expect levels along that level for the next couple quarters for the finance costs? Yeah, so... If you take a look at the press release that we issued, suddenly you will see that the cash financial expenses for the quarter were at $3.9 million compared to $4.5 million from the prior year's quarter. So again, with significantly higher debt, we are spending less on interest expenses. And obviously, moving forward, we believe that our interest expenses today are in line with what we should be expensing if we keep these same net debt levels.

35:11 Okay, thanks. And then, as far as the acquisition of the rest of the Verdeca JV, have you paid any cash yet for that? Yes, so for the acquisition of Verdeca there is a $5 million upfront payment that is the consideration, the cash consideration that gets paid at the closing of the transaction and that goes out immediately. and then there are additional considerations in cash for $3 million of which two are tied to performance of HB4 soy, and there is a $1 million reimbursement of expenses. That is all cash consideration that the $2 million of HB4 soy-related payment and the $1 million reimbursement of expenses will be done post-closing while the $5 million are from payments.

36:20 Okay, thank you. Thanks. No more questions. Thank you. Once again, if you would like to ask a question, please press star 1 on your telephone keypad. And your next question comes from Ben Clive from National Securities. All right, thanks for taking my questions this morning. I've got a few here. So first question on working capital build. Federico, I apologize. I missed a few minutes at the beginning of your prepared remarks. So if you address this, I'm sorry, but I'm going to ask about the working capital build here and how that changes now. So with Arcadia no longer in the picture on the HB4 soy market, Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Hi Ben, it's great to hear from you. That is a very important point because obviously as we assume full control of CordaCap, that also means we need to source the full working capital node. I think that this transaction is one Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti Ezequiel Simmermacher, Jose Roque, Maria Paula Savanti So that, in a way, gave us the confidence that we could take the full load and

38:02 also, in exchange for that, receive the full economics of this technology that we now own entirely. I don't know, Vic, if you want to comment more on the working capital consideration related to the acquisition. Yes, I believe, Federico, your answer is pretty much a conversation. Hi, Ben, pleasure to have you on the call and talking back to you. So, as Federico mentioned, this implies that you will need to take care of the full burden of the working capital piece. The only thing that I might add, that from a working capital perspective, this is an investment that has a crop cycle. So this is regardless of the fact that it is an investment in capital, it's only for the period of the crop cycle. So within our business, for most of its products, We cover pretty much all of the cash that it invests in working capital by the time that harvests come. So that's probably the only piece that we expect that we will be able, regardless of the three-year corporate bond that we issued during the quarter, we believe that there's further working capital sources, short-term working capital sources that can be used to fund a seasonal investment.

39:31 Got it. Okay. Well, thank you for that. I'd like to turn it over to HB4 wheat. So, you know, you talked a lot about kind of the economic and environmental benefits of the products, which I think are clear. But my question here is, you know, while those benefits I think are clear, you know, what is really being done to really drive demand for the product More downstream, are farmers comfortable at this point buying the product once you have import approval from Brazil? Are your farmers comfortable putting this product in the ground or do they need more visibility that there's going to ultimately be demand from processors and consumer goods companies for the product?

40:24 and if there is still hesitation from those farmers, what are you guys doing to drive that demand? Thanks for that question. I think this is a very important point. From a farmer's perspective, they're eager. waiting in line, if you will, to have access to the technology. So farmers are pro-technology in general, and they're eager to adopt solutions that will help them improve productivity. So we have to be the more cautious party in that relationship because we don't want them to face commercial problems after they plant a crop. and for that reason we went into great efforts into building a commercial channel that can basically take HB4-derived wheat products to consumers without disrupting and the existing channels. So for that purpose, what we are doing is identifying leaders that are willing participants of this new story around environment preservation and sort of improved water and carbon footprint

41:56 and are using these to differentiate an otherwise difficult to differentiate If you look at the flowers and flower-derived products, there's little differentiation from this perspective, and that is something that food processors, I think, are starting to understand and are willing to participate. Now, this has to be done in an identity-preserved manner where we can keep This channel isolated to some extent from the conventional channel, at least initially. If we go above the double-digit mark from a market share or market penetration perspective, I think this will become less of a concern.

42:50 But initially, that's the way we're operating. And so far, I think we're really encouraged by what we see. Can I ask you a clarifying question? When you say you're identifying partners, where in the supply chain are you targeting and seeing traction? You mentioned processors, but are you also seeing the final consumer goods companies? You know, considering this, you know, or somewhere else in the supply chain, I mean, where specifically, once the farmer sells the crop, are you building partnerships and building advocacy for this?

43:43 The main partners really are the leaders. Remember, there are geographies in which there are no mandatory labeling, so this can go through a generic channel without differentiation. Obviously, we want to differentiate this on purpose because we believe this is actually better than normally produced wheat because of the carbon sequestration implications of HB4. and that is something we're doing with a very small group of leaders under the HP Co-brand so that this particular group of consumers that are pro-science and concerned about climate change can use their processing power to in a way help us visualize this demand.

44:36 What I'm saying still remains to be seen. I mean, this is kind of the open question, if you will, around genetically modified wheat. But it's one that I believe is exciting and that we are leading with a message that is It's in a way restricted to the science around the technology, but understanding sort of the emotional elements that play the consumer's position. Perfect. Got it.

45:22 Very good. Last question I have for you, and I'll get back in queue here. Hoping you can comment just kind of on general growing conditions now. You talked about the drought that's pervasive throughout your area. What does the current growing condition really kind of imply for the second quarter here? and maybe into the third quarter. Are you expecting any material shifts one way or another on your chemistry or your fertilizer business given how expansive drought conditions are right now? Look, the dry conditions that affected us to some extent in the first quarter have by now more or less normalized, so we are not seeing significant delays in the current quarter. I don't know, Enrique, if you have additional information in terms of what you expect.

46:25 Yeah, sure, Federico. Ben, as we stated over the call, at the beginning of the season, there were a couple of tough months in Argentina. I think that went to a smoother beginning of the season, but in Argentina, there were a couple of tough months. And that normalized a couple of weeks ago with rainfall that helped crops. So today, moisture conditions are looking good. but rainfall during this spring Argentina needs to maintain. So the other important fact here for me is obviously communities' prices. that have turned it up.

47:12 And so, to us, the farmers' profitability is making a lot of sense now. So, if we have a normal season during the next couple of months, that should include profitability for farmers in Brazil. Got it. Very good. Well, thanks for taking my questions, and I'll get back in line. If you would like to ask a question, please press star 1 on your telephone keypad. Again, that is star 1 to ask a question.

48:10 At this time, there are no further questions. I'd like to hand the call back over to Federico Trucco for some closing remarks. Thank you. I would like to close the call with perhaps a personal reflection. My first relevant transaction as CEO, you said, is back in 2011, 2012. for the agreement with IKEA Biosciences for reconstitution and financing of Profeca. At that time, business could barely pay the due diligence and legal costs associated to the transaction. HP4 was a technology promise. Our ability to deregulate a GMO event was disputable, and the overall investment requirements to transform this promise into a commercially approved product was estimated at over $100 million by industry experts.

49:10 To be able to say that we have successfully overcome these initial difficulties and are today regaining full control, not only on HB4 soy, but also on other very attractive and near-stage technologies and technology platforms within Federico's portfolio, fills me with an enormous pride. I would like to thank Arcadia for trusting us back in 2012 and for helping us advance Rebecca's pipeline to its current state. We also take this opportunity to thank Arcadia for being a shareholder of our company. Thank you for joining our call today. As always, we appreciate your interest in Yoseres. We look forward to meeting more of you in person in the future.

49:56 and to updating you on our progress during our next earnings call. In the meantime, please do not hesitate to contact us with any questions you may have. Please stay safe and enjoy the rest of the day. Thank you. Thank you for participating. This concludes today's conference call. You may now disconnect.