Hello, welcome to today's Bioceres Crop Solutions fiscal third quarter 2023 financial results conference call. My name is Bailey, and I'll be the moderator for today's call. All lines will be muted during the presentation portion, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Paula Savanti, Head of Investor Relations. Paula, please go ahead. Good morning. Thank you, and welcome to everybody for joining our call. Presenting today will be Federico Trucco, our Chief Executive Officer, and Enrique Lopez Lecube, our Chief Financial Officer. Both of them will be available for the Q&A session. Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of today's earnings release and presentation, as well as the recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed circumstances. This conference call is being webcast, and the webcast link is available at Bioceres Crop Solutions Investor Relations website. At this time, I will turn the call over to our CEO, Federico Trucco. Thank you. Thank you, Paula. Welcome everyone to our fiscal third quarter earnings call. We're delighted to resume our growth trajectory with solid numbers being reported in this quarter, despite the historical drought in Argentina, which continued to affect our sales in this important market. Please turn to slide two for our key business and financial highlights. Our outstanding performance in this quarter results from the combination of strategic actions we have taken over the last year to diversify the product and geographic exposure of our business. Total revenues were up by 33% when compared to the pro forma numbers for the third quarter of last year, which are inclusive of historical revenues from ProFarm. Top line growth was primarily driven by revenues in the Crop Nutrition segment, resulting from the initial proceeds generated by the strategic partnership with Syngenta, which more than offset the negative impact of the extended drought in Argentina. Adjusted EBITDA was $35.8 million in the quarter, mainly benefited from proceeds from the Syngenta agreement that were recognized in this period. On an LTM basis, Adjusted EBITDA stood at $85.3 million. Enrique will discuss our financial performance in greater depth during his part of the presentation. We are also making great strides internationally on the HB4 front. Brazil's recent full commercialization and cultivation approval for HB4 wheat consolidated our collaboration with local institutions and seed developers such as Embrapa and OR Sementes. The approval of HB4 grain importation by Brazil, adding to the prior approval for flour importation, allows us to further diversify our go-to-market strategy in Argentina, as I will discuss later in today's call. In Brazil, our HB4 soybean program is steadily advancing with an initial set of varieties tested by farmers in five states, with at least one variety consistently outperforming the top commercial alternatives. I will provide an update on the current soy harvest in Argentina and more information about next steps later in the call. During this quarter, we have published our inaugural sustainability report, and I will briefly discuss some key aspects of our sustainability strategy towards the end of today's call. Let's pass over the presentation to Enrique. Thank you, Federico, and good morning to everyone on the call today. I'd like to dive further into our financial performance and expectations for the remainder of the year. Before we start, let me remind everyone that, as on the previous two earnings calls, all yearly comparisons in this presentation are made on a pro forma basis, meaning that they include ProFarm numbers for fiscal year 2022. Let's jump to slide four, which provides some context on the evolution of the fiscal year to date. As you might recall, we started the fiscal year with an outstanding first quarter, in which revenues increased by 71% year-over-year and EBITDA almost doubled, continuing the growth momentum from previous quarters. This was partly a result of early sales that our commercial teams locked in ahead of what looked like a challenging summer crop season in one of our primary end markets, Argentina. During the second quarter, an impressive streak of continuous quarterly growth that spanned across more than two years was interrupted by a severe drought in Argentina, with overall revenues declining 7% year-over-year. This climatic event had a particularly negative impact on our micro-irrigated fertilizers business, which had been previously delivering outstanding growth, and of course, also reduced the need for some of our crop protection products. It was not surprising to see that demand for insecticides and fungicides was substantially weaker, along with a pullback in demand for fertilizers as farmers dealt with getting planters into rock solid fields. Despite these headwinds, we saw our revenues decline only 7% on the back of geographic diversification and commercial savviness. Brings us to the third quarter, a period for which, as Federico mentioned, we are delighted to report a 33% increase in the top line compared with the pro forma numbers from a year ago. This is important for multiple reasons, I would argue that resuming growth and being able to successfully navigate traumatic conditions in a key end market are amongst the most important. You might recall that at the time of our second quarter earnings call, we indicated that weather conditions had started to improve in Argentina. The transition from La Niña to El Niño was slower than what all forecasts had expected, and the months of February and March were still dry and unseasonably hot. This ruled out the possibility of pre-season sales of fertilizers in the third quarter. The strategic agreement for our inoculants business with a market leader such as Syngenta is what allowed us to more than offset the impacts of this unanticipated scenario. We will get into a bit more detail in coming slides. Looking at the year-to-date revenues, performance in the first and third quarters allowed us to offset the decline in the second quarter, our most important quarter in terms of sales, and still achieve a 28% increase compared with the pro forma nine month period of 2022. With year-to-date revenues standing at $315 million, if the weather situation in Argentina finally improves in coming weeks, we believe we are in good shape to reach our target of 20% top line growth for the full fiscal year from the roughly $359 million in revenues for fiscal 2022 on a pro forma basis. Turning to slide five, let's take a look at this quarter's revenues in more detail. Revenues in Crop Nutrition doubled, driving most of the growth in the quarter, while Seed and Integrated Products grew 65%, more than offsetting the decline in Crop Protection. The performance in Crop Nutrition was mainly driven by inoculant results from the agreement with Syngenta. To recap briefly, in September 2022, we announced a partnership with Syngenta Seedcare to accelerate and expand the international growth of our inoculant business. Under this agreement, Syngenta became the exclusive distributor of certain Bioceres' biological seed treatment solutions, mainly inoculants, for a period of 10 years in geographies outside of Argentina. The agreement includes contractually stipulated minimum profit sharing targets that Syngenta must meet annually, as well as an upfront consideration to compensate for transition costs and profits shared with Syngenta over the initial 12 months of the agreement. Period during which Syngenta is expected to take over the commercial operation and prepare to achieve the agreed growth goals. In this quarter, we are recognizing both initial operational profits from the agreement, as well as $33 million from the upfront compensatory payment that corresponds to the countries in which profit sharing already began in January 2023. Although we expect operational profit sharing with Syngenta to continue flowing throughout the remainder of 2023, we do not expect any additional compensatory payments to be recognized until January 2024, when new countries will be incorporated to the profit-sharing framework and an additional $17 million in compensatory payment are expected to be booked. The performance from the agreement with Syngenta is what drove the increase in revenues in our most relevant segment for the quarter and allowed us to successfully weather the storm under an unprecedented halt in demand of fertilizers in Argentina, which we estimate to have reduced sales by $10 million compared with the year-ago quarter. The inoculants agreement reflects the value of strategic actions taken a few months back that allowed us to monetize our extensive portfolio of technologies in alternative ways. Turning to Crop Protection, revenues declined 3% with lower insecticide, fungicide, and adjuvant sales in Argentina, a decline that was not fully offset by increased sales in other countries of Latin America. ProFarm product sales in the US also saw some softness, shaped by heavy rains in California, which prevented growers from accessing their fields and pushed demand of bioinsecticides into the fourth quarter. Seed and Integrated Products revenues increased 65%, driven by sales of seed treatment packs in Argentina, as well as increased sales in Europe. Let's now turn to slide six, please. Gross profit was up by 84% year-over-year, with the increase driven by the same dynamics I just described for revenues. Gross profit from the Syngenta agreement, both from shared profits as well as the compensatory payment, largely offset the decline in microbial fertilizer profits and the fact that in the year ago quarter, we had recognized 100% of the profit generated by inoculants, while in this year's quarter, we began sharing profits with Syngenta. Although going forward, we do not expect to maintain an 84% gross margin in Crop Nutrition, it does illustrate the outsized effect on margins that proceeds from the inoculant agreements can have. We expect these profits to be uneven at first, as revenue recognition will not be dictated by our own commercial efforts, but by how Syngenta channels to market. Going forward, we expect the profit sharing to become a stable and meaningful contributor to our financial results over the life of the agreement. Regarding the other two segments with a much stronger profitability profile, the gross profit increase brought by Seed and Integrated Products almost doubled the decline of gross profit from lower margin Crop Protection products. Overall gross margin for the quarter stood at 61%. Considering that some of the profits we booked from Syngenta this quarter cover calendar 2023 in full, this margin level is not something we expect to repeat in the coming quarters, but rather continue targeting a range of 42%-48% depending on revenue composition. Turning to slide seven. Adjusted EBITDA reached $35.8 million this quarter, which is traditionally our lowest due to revenue seasonality. As was the case with gross margin, this quarter's EBITDA received the full benefit of profits from Syngenta, some of which account for full calendar 2023. On a different note, a proactive control on costs implemented in Argentina during the quarter to offset headwinds from dry weather, as well as the realization of cost synergies in ProFarm, further contributed to the improvement of the Adjusted EBITDA metric. The continued execution of cost synergies in ProFarm gives us confidence in our plan to be Adjusted EBITDA neutral on these assets by the end of fiscal 2023, assuming we benefit from this year's rainfall in California. This quarter reminds us that our business sometimes does not lend itself to evenly balanced quarters and is usually best understood on an annual basis. For the last 12 months, Adjusted EBITDA was $85.3 million, a 67% improvement compared with the same period of the previous year on a pro forma basis. Please turn to slide eight to wrap up with some brief remarks on our financial debt and cash position. Total financial debt as of March 31st was $250 million. The increase year-over-year is driven by the financing agreements linked to the merger with ProFarm, as well as new financing obtained during the last quarters to support working capital. As mentioned in our last earnings call, in February, we issued a $26.6 million public bond in the Argentine local market, of which roughly $21 million mature in February 2025, and the remaining amount in February 2026. All the proceeds were used to pay down short-term debt, thus extending our debt maturity profile and reducing the portion of current debt to 42% from 56% in the year ago quarter. It is also important to note that our cash position and net working capital long exceed short-term debt. Importantly, all profits from Syngenta, operational and compensatory, flow from the top line to the bottom line of the PNL very efficiently and have a high conversion to cash. Along with our February issuance, this drove our cash balance to $71 million at the end of the quarter. A much desirable position to be in considering the growth nature of our business, the turmoil in the global markets, and the headwinds from drought. Our leverage ratio was 2.1x, a significant improvement compared to 3.06 at the end of the year ago quarter, and 3.13x in the previous quarter. As we look ahead, we are cautiously optimistic about the fourth quarter. In South America, farmers in Argentina are still waiting for a couple of more rains to occur before feeling confident about winter crops plantings. If soil moisture gets close to normal levels, we see strong activity coming. Not only do we have a unique technology at a moment when farmers have a fresh memory of what climate change can do to their businesses, but we also have wheat seed availability, an input that could be in short supply if acreage returns to normal. Brazil is coming out of a bumper crop, which makes us feel confident about allocating capital to move HB4 soybeans forward as fast as biology allows. Finally, on the ProFarm front, we are well-aligned with our cost target, and if weather supports demand for bioinsecticides in California, we are on track to achieve our EBITDA neutral target by fiscal year-end. Although last year's fourth quarter was a strong one, we are confident that with the right conditions, we will be able to deliver growth and improve on the $85 million in last twelve months EBITDA that we reported today. That concludes my remarks. I will hand the floor over to Federico now. Thank you, Enrique. Please now... Or number nine, sorry. Brazil's full approval of HB4 wheat completes our regulatory process in this country, complementing the key approval received in 2021 for feed and food use of HB4 flour. This regulatory milestone has two important implications. It adds a 3.2 million hectare market to our current 6.5 million hectare market in Argentina, which is a 50% increase in our current available market opportunity, which translates to an incremental target of 1.1 million HB4 hectares, two-thirds of which we expect to result from the Cerrado region of Brazil. To be able to meet this target, we have established two important collaborations. With Embrapa, as previously announced, aimed at combining HB4 technology with Embrapa's tropical wheat genetics, currently utilized in 50% of the Cerrado wheat hectares. With OR Sementes, a historical provider of top-performing wheat genetics utilized in 20% of Brazil's wheat area. A second aspect derived from this approval is the clearance for HB4 grain importation, which is very important in terms of further diversifying our commercial strategy in Argentina, with low level presence of HB4 grain no longer being a matter of regulatory concern. In just a moment, I will try to summarize where we stand in terms of go-to-market channels for HB4 seeds. First, please turn to slide 10 for an update on our soybean efforts. We are very happy to show our initial results from 800 hectares planted in Brazil with an initial set of 16 Generation HB4 farmers. Each farmer tested one or two HB4 varieties against several top-performing commercial controls. What you see in the chart is the win rate of the top-performing material in each of eight regions, with 6-56 sites per region. It is important to note that drought was not significant in Brazil in the last season, so these results are derived from generally high-yielding conditions. We are now doing off-season seed increases to be able to expand the program to 50 farmers in the upcoming cycle, covering a total area of approximately 10,000 hectares. In Argentina, 26% of the hectares with HB4 soy have been harvested already, and we expect all fields to be finalized by the end of the month. We'll report the performance of the current portfolio varieties once harvest is completed in our next earnings call. However, it is important to know that seed quality in fields harvested up to date is very poor, and this will affect seed availability in the next season. Seed quality for the next season is an industry-wide concern. We are analyzing off-season strategies to try to minimize any inventory gaps. Regarding our commercial approach, in slide 11, you can find a summary describing our current proprietary and non-proprietary channels for both crops. In the case of wheat, we're significantly expanding access to multipliers and distributors in Argentina following Brazil's grain import approval. We have currently enabled 45 Bioceres Semillas seed multipliers, who can now develop their own inventories for future direct-to-farmer certified seed sales. At the same time, we have enabled third parties, such as Buck Semillas, to develop HB4 varieties with their own genetics, allowing us to address the needs of farmers more quickly in certain regions. Collectively, our proprietary and non-proprietary channels supply more than 40% of the conventional wheat genetics in Argentina. As discussed before, our Brazil collaborators currently provide genetics to 25% of that market. Although we are not clear yet for cultivation in Australia, our recently acquired assets in that country can provide a projected 5%-10% footprint once approvals are in place in an initial phase. In the case of soy, we expect to initiate multiplier relationships in Argentina in the next campaign, although these may be initially limited by the seed availability due to quality considerations, as we just discussed. In Argentina, our existing collaborators provide genetics for 30% of the market, whereas in Brazil, they may cover up to 80%, giving us access to the genetics required to address our targeted expectations. Turning to the next slide, we would like to take a few minutes to discuss our sustainability strategy. As described in our recently published sustainability report, in addition to our internal sustainability efforts, our portfolio of products, technologies, and contractual arrangements, such as those in Generation HB4 services contracts, promote efficient resource use and protect soil health and ecosystem biodiversity, while strengthening crops against weather conditions associated with climate change. We're encouraged to see that farmers' adoption of good agricultural practices can be independent of regulations when science and business models are used to align productivity incentives with positive externalities. This concept is at the heart of our all-around value proposition. Let me just provide some examples by showing you what happened in Generation HB4 wheat fields over the last two seasons. Please turn to the next slide for that. What you see here are the average improvements in utilized water or the reduction in CO2 emissions per ton of grain produced under the HB4 program compared to the non-HB4 fields. What you see in terms of water is a 5% reduction on a per ton basis or per kilo basis, and a 30% reduction in carbon footprint on an equal unit. Also, importantly, as we deploy our biological solutions like we do today with our Rizoderma biofungicide, we can significantly reduce the environmental impact quotient of the seed treatments. What you see there is the environmental impact of a standard seed treatment with synthetic chemistries compared to the impact of the expected impact of a Rizoderma seed treatment that is six times less in terms of active ingredient exposure to the environment. We think these type of measurements will be significantly improved, particularly in markets where we are deploying our bioinsecticidal solutions as well, like Risonema in Brazil, that is coming up as a replacement of chemical nematicides and other insecticides. Being able to discontinue neonics and abamectins that are often associated to toxic effects in bees. These are products that have shown zero effect of toxicity in non-target organisms such as pollinators and bees. We will start to emphasize the biodiversity metrics on top of the water and carbon footprint metrics that we're showing here to be a pioneer in this important aspect of sustainability on a forward-going basis. With that, I think we can close today's presentation and open up the floor for any questions that you may have. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question, and please do ensure that you have unmuted locally. Our first question today comes from the line of Ben Klieve from Lake Street Capital Markets. Please go ahead. Your line is now open. All right. Excuse me. All right. Thanks everybody for taking my questions. A few for me. First, I'll start with HB4. Federico, I appreciated your comments on all the various initiatives under both wheat and soy. You know, all that considered, I'm wondering if you can comment on how, if at all, your expectations have changed for your prior targets for both of these. You had previously targeted $15 million of EBITDA in wheat in 2024 and $20 million of EBITDA for soy by 2025. I'm just wondering, you know, given all of these dynamics, are you still confident in those in those estimates or do you think there's gonna be some downside pressure, given especially weather conditions? Hi, Ben. Thank you for your question. It's great to have you in the call. I don't think we can adjust any of our guidance. In wheat, we feel fairly confident in terms of where we stand today. As Enrique indicated, rains have resumed, and with a couple more rains, I think we're gonna have a very strong wheat season in Argentina. We have all the inventory that is required. We have the performance. There's the sort of a top-of-mind aspect of drought in our customers' heads today. I think we're gonna have a very good season and one that will put us in place to meet that guidance in the upcoming fiscal year. In soy, we're only 25% done. We don't know how much inventory we'll have for the upcoming season in Argentina. The good news is that Brazil's moving at a faster pace than what we expected. I think there might be some compensatory effect there that might allow us to keep the current target. Today's probably too early to tell on the soy front. Got it. Very fair and great to hear your confidence on the wheat side, in the face of this, in case of these weather conditions. Turning to the Syngenta agreement, again, a lot to unpack here. I'm wondering if you guys can help us understand the degree to which the upfront $50 million payment was a function of effectively replacing profit that now is shared with Syngenta versus up-front payments just that Syngenta is making, you know, for the agreement itself. I mean, how much of that $50 million is effectively just shifting profit from, you know, just Bioceres to the joint initiative versus, you know, kind of a royalty payment, if you will? Sure, Ben. let me tell you how I think about this, and maybe Enrique can then jump in. Essentially, the Syngenta agreement has a guaranteed profitability to us of $280 million over 10 years. No? That is not $28 million every year. The initial years, where there's a transition, are not as efficient as the second and third and fourth year on a forward-going basis. Part of the initial payment we received compensates in year one and in year two for the onboarding of new geographies and the inefficiencies that might result from passing the business over to Syngenta. I think, and to be clear on this, is that whatever we are reporting today on an Adjusted EBITDA basis is where we expect to deliver growth on top of in future quarters and future years. It's, it's not like we believe this represents a new base on top of which we will be able to deliver strong growth. Perhaps slightly overloaded in the first quarter or the calendar year 2023, where maybe ideally it should have been spread over all of calendar year 2023. I will let Enrique add his comments to this aspect. Hey, Ben, good to have you on the call. I, look, I think that what Federico just said is absolutely correct. This is not a plug and play. I mean, this agreement with Syngenta, in our view, is a fantastic agreement for the company and requires some hand-holding at the beginning. What we probably need to sort of like emphasize is that this is not an automatic agreement. It's taking a lot of joint work between the two companies, not only on the R&D front, sort of like looking ahead on what else we can build together, but also on sort of like transferring the commercial operation to them. The compensatory payment offsets part of that, and as Federico said, it might be a little bit front-loaded on this first calendar quarter. At the end of the day, we are sort of like, setting our minds to build on top of this. There might be some lumpiness, but this is what we're thinking to build on. Got it. Very helpful. There's, yeah, plenty of dynamics going on. I appreciate all those comments. The, you know, there's a lot more to discuss. I guess I'll leave it with one question on HB4 Soy and your expansion initiatives in the United States. Can you comment on initiatives that you're taking with spring planting season now well underway in the U.S., with HB4 Soy, specifically to get this through the, you know, to get this to commercial scale? Sure, Ben. In the U.S., we are probably a year behind or maybe a year and a half behind where we are in Brazil. We will be at the 800 hectare level probably next year. We're now developing varieties with the genetics of two providers, one which we announced, which is Don Mario, another one that has not been announced, but it's a top provider for U.S., for U.S. soy genetics. We expect those to be in place depending on what we get in the current, in the upcoming cycle for the fiscal for 2024, 2025 season, if you will. It's that's what you should think of the U.S. as one coming a year behind Brazil. Got it. Got it. Very helpful. All right, there's plenty more to discuss, but I'll leave it there. Thanks for taking my questions, and I'll get back in line. Thank you. The next question today comes from the line of Brian Wright from Roth MKM. Please go ahead. Your line is now open. Thanks. Good morning. Just wanted to dig in a little bit on the soy program in Brazil on that chart. I think it was slide nine or 10, depending on whether you're using the PDF or Anyway, on, it looked like area 304 had 100% success rates, and I know there was only, you know, six location data points, but that wasn't chosen for the targeted region. I was just kind of curious as to why that one was excluded. It's not shown, I think, but it is a targeted region. 304 is a targeted region. It is a targeted region. The only reason there were only six sites there is mostly due to logistics and our ability to, I mean, a greater number of sites. Yeah, it's where we got the best performance. We definitely are going to pursue 304. Okay. Yeah, I was just wondering because you had made a comment about the seed quality issues and so I didn't know if there was some leakage there. No, seed... Sorry. That's the question. Seed quality is only an Argentine issue, not a Brazil issue. In Brazil, we are doing off-season, but just to have a seed purity guarantee, which you don't get out of the farmers' fields, it has to be done in a special way. That's kind of probably generating a little bit of confusion there. Okay. Okay. Thanks for that clarification. Then I just wanted to follow up a little bit on the slide on the sustainability factors for HB4 wheat inventories. I just wanna make sure I interpreted what you had said correctly. So those benefits from a sustainability perspective were a function of the seed treatment packs and how that does savings. There's no incremental benefit in this analysis for just the higher yields that you get on average, given diverse kind of climate conditions. Is that- There are two elements. There are two aspects that we want to address with sustainability. One is climate change, and the other one is biodiversity protection, sort of the shift away from synthetic chemistries. In terms of climate change, basically, there's a carbon footprint metric, and there is a water footprint metric that are associated to the incremental yield of an HB4 crop under this particular condition. In terms of both of these indicators, what you see is that we're using 5% less water on a per kilo basis or per ton basis. There's 30% less CO2 emissions on a per ton or per kilo basis of HB4 grain being produced compared to non-HB4 grain produced by non-HB4 seeds. On the second aspect, which is, okay, to achieve that, what chemicals were utilized? At the seed treatment level, we replaced the biofungicides that are normally used with a biological alternative. By doing that, we reduced 6 times the active ingredient or toxicity, if you will, of the active ingredient load to the soil environment. I don't know if that is clear or still confusing to you. Yeah, no. Yeah, no, that, so It's two different aspects. In that first aspect, with the water reduction and the carbon footprint, it does include the relative yield impact. Right. -is part of the driver of that. Yeah. Okay. Thank you so much. Thank you. The next question today comes from the line of Bobby Burleson from Canaccord Genuity. Please go ahead. Your line is now open. Yeah, thanks for taking my questions. You know, maybe just switching gears a little bit back to the weather outlook for Argentina. Maybe help us understand what you're seeing regionally in different areas. You know, I believe that there's more progress being made in terms of moisture levels in certain regions. Hi, Bobby. It's great to have you on the call. Yes, I think we're still cautious, no, because last time we connected in our second quarter earnings call, we felt that we were almost done. Then, it didn't rain anymore, and it got worse instead of better. That in part affected our third quarter results, as Enrique just described. Rains have significantly resumed in many areas of Argentina. Still, they haven't replenish the underground water to the extent that would be required for a record harvest. I think we might be two rain events away from that, to be simplistic in sort of my comment. Forecasts are looking good, and I think, when we look at sort of the monthly dynamics in our Rizobacter business, we're liking what we see. We're cautiously optimistic about the weather front, and we believe that farmers will want to recover part of the lost income of the two last harvests, in the upcoming winter season if conditions aligned. We hope for that. Great. Thanks. Then maybe in terms of, you know, help us, help us understand what you're seeing in terms of, some international suppliers of crop protection and other products into Argentina in the current inflationary environment. You know, are there difficulties for some of your competitors, in terms of importing into the country, and how does that position Bioceres to maybe, benefit? Well, as this is obviously public knowledge, Argentina doesn't have a wealth of dollars in the central bank to be able to import in unrestricted terms. For those providers that are heavily reliant on imported active ingredients, except for China, that's probably an exception to what I'm saying. In general, it's becoming tougher for those that rely on central bank dollars to perform their general importations. This might be a sort of a transitory benefit to us because we do not rely on that. I mean, we, for the microbial fertilizer business, if you will, we have the inventories and the access to the raw material that is required to fully supply our existing customer base and be able to catch up on our lost sales of the second and third quarter. It might be a transitory advantage to maybe some other entities that are dependent on importations for similar type products. I don't know, Enrique, if you wanna add anything to that or? No, I think that's fine. Obviously, that's sort of like a structural advantage, probably to biologicals. You're just ramping up the bacteria. I think that structurally speaking, that is. This is an example. Of why biologicals not only make sense from a sustainability perspective, from a biodiversity perspective, but also from a logistics perspective. I mean, with global supply chains having been disrupted more than a few times in the last five years, having the ability to manufacture locally, I think has become more important than what it was in the past. Great. Well, congratulations on the strong results, and I'll hop back into the queue. Thank you. The next question today comes from the line of Kemp Dolliver from Brookline Capital Markets. Please go ahead. Your line is now open. Hi. Thank you and good morning. I wanna be sure I understand the payments in the context of the profit guarantee. In October, you received the $50 million upfront payment, and it looks like you will recognize that. Well, you recognized $33 million of it in the quarter just reported. You'll recognize the balance in the third quarter, fiscal third quarter of 2024. The first question will be, is that correct? The related question is this $50 million part of the $280 million profit guarantee, or is it separate? Thank you. Hi, Kemp. Thank you for participating in the call. You got it right. I think you got it right. These are part of the 280, so but they were not evenly spread on an annual basis, so that's why the upfront payment compensated in part for probably slow start of the profit sharing, so that we can as new geographies are delivered to Syngenta zone, we can get to sort of a steady state level of the 280 on an annual basis. There's 33 in this quarter. There'll be 17 in the same quarter of next year on top of whatever we are generating with the different geographies at the time. This will tend to normalize over the 10 years. Remember, the $280 are the base. Now that's the minimum profit guarantee. On top of that, we get to share at the 50% level in Brazil and between 35% and 45% of the profitability in the rest of the world, excluding Argentina, where we have retained full rights now. Excellent. Thank you. The other question, which is pretty straightforward, is what's the definition of win rate that you show on slide 10? The win rate is essentially how many times was our variety, the number one variety compared to the rest of the commercial varieties or the control varieties. A win rate of 100% means that we won in every single instance. In the 6 sites, we were the number one. 78%, 80% would say we won in eight sites out of 10 sites. Right. Is there a minimum threshold of performance, say it has to be 10% better or 15% better, or is it just any output? Anything above 50% means that your genetics are at par with the top performing materials for that particular region. Remember, this is not under drought. What we want here is to have genetics that have no penalty, so that the farmer, if there is a good year, the odds of being at par with any of the other alternatives should be 50/50, almost random. Above 50 is great. Below 50 means we need to improve the genetics to be able to not penalize the farmer on a good year. This is not looking at the drought effect. This is looking at the sort of the genetic background of these materials so that they can be competitive under all conditions. Great. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question today comes from the line of Kristen Owen from Oppenheimer. Please go ahead. Your line is now open. Great. Thank you. Good morning, appreciate you taking the question. Enrique, you started to mention this in some of your prepared remarks, but I'm wondering if you can give a bit more of a detailed update on where we stand with ProFarm, first in terms of the demand outlook, given some of the weather conditions that you discussed in California. Also if you could expand on the update around break-even profitability for that business. Thank you. Hi, Kristen. Good to have you on the call, and thanks for the question. Sure. Look, I mean, in terms of ProFarm, I think that we are We're confident about the cost piece because that's something that is not dependent on any sort of like exogenous factors. There, we are tracking well, both in terms of the synergy costs Streamlining the R&D work in such a way that we don't jeopardize long-term value, but that we make that efficient, at least under what we consider to be efficient out of the 20 years of R&D experience that Bioceres has. On the revenue side, what we saw is that California got too much water now, so farmers were not able to get on the fields to spray, which, at the end of the day, should push demand into the fourth quarter. If that happens and we are well-aligned with our plans for revenues, in the fiscal year, we should be able even to beat the EBITDA neutrality because what we are seeing in ProFarm is better margins than the historical margins. Good on the margin side, check on the cost side. What we need is the market to be there. By the way, I'm saying that from a very short term framework. I mean, we're not expecting demand to be there, the factor that will be driving revenues up. There's a lot of work that we can do in the midterm with ProFarm to continue expanding the market. In the short term, I mean, it is what it is, right? What ProFarm had accomplished in terms of commercial expansion is what it was, and we're working to expand that market penetration. In the short term, we are still dependent on sort of like whatever was built in the past, to be there for us in terms of demand. If those things happen, I think that we are in very, very good shape to have ProFarm be contributing to our EBITDA. As I said, we hope to sort of like build on top of the $85 million of EBITDA that we are reporting today on an LTM basis. Okay. That's super helpful. Thank you for that update. Then I wanted to ask just a question around the incremental HB4 grain opportunity, the additional 3.4 million hectares. You talked about some of the seed inventory efforts now underway, but just help us understand or contextualize, given some of the other comments that you've made about weather, how quickly you can move to serve that additional acreage opportunity and how we can think about quantifying that growth opportunity in the model. Thank you. Hi, Kristen. This is Federico. In terms of the 3.2 million hectares of Brazil, obviously the genetics that we have in Argentina are not applicable to Brazil. That's why we partner with Embrapa and OR Sementes to develop locally adapted varieties. This will take a few years before we can be at the stage where we are today in Argentina. I think this is not something that will impact the guidance that we provided. The guidance that we provided for fiscal 2024 in wheat will be 100% met with Argentine acreage. This will build, built on top of that as these 3.2 million hectares become onboarded. Brazil wants to be self-sufficient in wheat. To be able to do that, they need the productivity and the acreage in the Cerrado region to materialize, and that can be done today with a combination of HB4 technology with tropical genetics that is unique to us and the Embrapa collaboration. It might take us a few years to be there, but I think it can become a very meaningful market for us, bringing incremental growth to the guidance we provided for fiscal 2024. Complimenting on what Federico said, Kristen, I think the only reason why we're not still putting an EBITDA number behind that target market is because we wanna figure out how long it's gonna take us to get there in terms of the variety development that Federico just mentioned. Once we have a little bit more visibility on that, we will provide some guidance because we think this is for sure a very clear opportunity for HB4, probably a much clearer opportunity than in Argentina that is an already existing market where you need to make yourself some room despite having a unique technology. Here, we're talking about sort of like shaping the landscape, shaping the market, and changing the supply and demand dynamics for Brazil. We are probably working with some partners that might help us do that faster. When we have more visibility, we will throw some numbers into this. Okay. Thank you very much. That, that's extremely helpful for contextualizing that announcement. Last one, if I could just squeeze it in. Given some of the return to normal seasonality, some of the unusual things that were going on in Q4 last year, just for modeling purposes, help us understand, you know, how you're thinking about working capital needs for this fourth quarter and how that could compare to last year's fourth quarter. I'll leave it there. Thank you. Yeah. I mean, look, I think that we touched upon this on the last earnings call. We do expect sort of like working capital to still be on the current levels for the foreseeable future, probably the next two quarters. This is a higher working capital position than what we would like to have. Coming out of sort of like the dry weather situation in Argentina where we wanna stand by our distributors, that's one thing. Obviously ramping up HB4, those two things are probably the biggest drivers for our working capital position. I wouldn't expect it to go any higher in sort of like terms of or proportionality to sales. Rather we are gonna keep an eye on trying to streamline our working capital position. That might take us two or three additional quarters, but don't expect this to sort of like continue going up on a proportion to sales, but rather going back to what was in the last couple of years. I think an important element to what Enrique is saying is the fact that we're now enabling, for instance, in the HB4 wheat business, multipliers. Now the burden of the working capital for incremental inventories is not in our shoulders. Not for the multipliers that are producing seed for future sales. It's in their shoulders, and having that network become available, I think, takes part of the working capital pressure off from the seed side of the business. Great. Thank you. Thank you. There are no additional questions waiting at this time, so I'd like to pass the conference over to Federico Trucco for any closing remarks. Please go ahead. I wanna thank everyone again for joining the call. I think we had a great quarter, and one that in a way helps us better illustrate the value of some of the strategic agreements we did last year in moments when we need them the most, no? We had a historical drought in Argentina, which still remains a very important market for us. We hope that in the future, we can do more of these type of deals. I think we have a portfolio with multiple technologies and technology families that can give us the incremental diversification, incremental profitability and a more diversified go-to-market approach. We're gonna close a good fiscal year, we believe. Please, do feel free to reach out if you wanna follow up on any of the different aspects we discussed today. Have a great day, looking forward to connecting in the future. This concludes today's conference call. Thank you all for your participation. You may now disconnect your line.