November 10, 2011
BrasilAgro embarks on expansion
BrasilAgro announced that it is still expanding with its Brazilian farming empire topping 180,000 hectares despite a rare land disposal last month.
The Brazil farm operator, which is controlled by Argentine agriculture giant Cresud, revealed an option to buy a further 7,700 hectares of land in the north eastern state of Bahia, where it already owns more than 80,000 hectares.
The deal already allows BrasilAgro to farm the land, of which some 5,100 hectares will be sown with grains for the 2011-12 season.
The agreement, which the company said was "in line with the commitment to always pursue the best growth opportunities", lifted above 180,000 hectares the group's total portfolio, a net increase of 5,000 hectares since June, despite the sale of its Sao Pedro cane operation for BRL26.1 million (US$14.67 million)
The disposal reaped a gain of 150%, factoring in purchase price and development costs, and so fulfilled an ambition for "the realisation of capital gains through the sale of properties", BrasilAgro said.
The new land, coupled with fresh arable area carved out of existing holdings, will lift by nearly 13,000 hectares, or 22%, to 71,100 hectares the group's plantings in 2011-12, with crops including corn, cotton, rice and soy.
And the company has earmarked a further 14,000 hectares for development for sowing next season, "continuing its strong pace of planted area expansion".
The comments came as the group bounced BRL33.1 million (US$18.6 million) into the black for the July to September quarter the first of its financial year, compared with an after-tax loss of BRL6.7 million (US$3.78 million) a year before.
The improvement reflected a near-quintupling to BRL50.6 million (US$28.4 million) in revenues, boosted by takings from the Sao Pedro disposal, besides the sale of grains left from 2010-11 and the coming on stream of cane operations.
BrasilAgro shares closed down 2.3% at BRL8.89 (US$4.99) in San Paulo.