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Operator: Good morning, ladies and gentlemen. Welcome to Minerva Foods Earnings Video Conference for the Third Quarter of 2025. Joining us today are Mr. Fernando Galletti de Queiroz, CEO; and Mr. Edison Ticle, CFO and CRO. Please note that this presentation is being recorded and translated simultaneously. To listen to the translation, click the interpretation button. For those listening to the conference in English, you may mute the original audio by selecting mute original audio. The presentation is also available for download at ri.minervfoods.com/en under Presentations. [Operator Instructions] Please note that any forward-looking statements made during this conference regarding Minerva's business outlook, operational and financial targets consist of projections made by the company's Executive Board and are subject to risks and uncertainties. Investors should be aware that political, macroeconomic and other operational factors may affect the company's future performance and lead to results that differ materially from those expressed in such forward-looking statements. To start the Q3 2025 earnings video conference, I will now hand it over to Mr. Fernando Queiroz, CEO. Please go ahead.
Fernando De Queiroz: Good morning, everyone. Thank you for joining Minerva Foods Q3 2025 Earnings Release Call. Minerva ended the third quarter of 2025 with a solid set of operational and financial results, reaffirming the consistency and discipline in the execution of our business strategy. Once again our company has shown that geographic diversification is a key pillar of the operational and commercial execution of our business model, reducing risk and maximizing our arbitration capacity while strengthening our corporate strategy as South America's largest beef exporter. In Q3 2025, we posted record gross revenue of BRL 16.3 billion and record EBITDA of BRL 1.4 billion with an EBITDA margin of 8.9%. In the 12 months ended in September, gross revenue also reached a record high of approximately BRL 54.4 billion and EBITDA totaled BRL 4.6 billion, the highest ever for the company over a 12-month period. In the third quarter of 2025, we successfully completed the integration of our newly acquired assets, which was originally scheduled to conclude only at the end of the year. This early completion reflects our operational efficiency and the strong commitment of our teams in capturing and materializing the expected synergies. The integration process was conducted in a very structured manner in alignment with our organizational structure enabling the consolidation of our management model and the standardization of our administrative, industrial, commercial and financial processes. Therefore, we reached a new level of revenue and operating performance setting historical records that reinforce the strength of our strategy and the resilience of our business model. Edison will dive into the performance of the new assets over this nearly 1-year integration period. Let's now return to our Q3 2025 performance. Starting with gross revenue, as I mentioned earlier, we reached BRL 16.3 billion in the third quarter and BRL 54.4 billion in the last 12 months, both record highs for the company. Exports accounted for 61% of consolidated gross revenue in the quarter and 58% in the last 12 months ending in September. These results reinforce the importance of exports as one of Minerva Foods main operational drivers and once again demonstrate our arbitration between markets and efficiently access a broad range of destinations through our South American production platform. In addition to the foreign market, it is worth highlighting that our domestic operations also benefit from origin-based arbitration allowing us to optimize margins and maximize profitability. Minerva Foods' geographic diversification, which integrates units across several South American countries, significantly enhances our operational flexibility. A good example is our Paraguay operation; which in addition to supplying key markets such as the U.S., Chile and Taiwan; also supports Brazilian domestic demand in a competitive and efficient manner reinforcing regional integration and complementary operations between our production platforms. This stresses the soundness of our business model and the company's ability to capture value both in foreign and domestic markets. Turning now to our operational profitability. Third quarter EBITDA also reached a record level of BRL 1.4 billion with an EBITDA margin of 8.9%. In the last 12 months, our adjusted EBITDA was BRL 4.7 billion, a record for a 12-month period, resulting in a margin of 9%. Net income for Q3 2025 was BRL 120 million bringing the 9-month year-to-date total to approximately BRL 763 million. Finally, regarding our capital structure and considering the pro forma 1-month performance of the new assets, we ended the quarter with a significant reduction in net leverage, which reached 2.5x net debt over EBITDA, the lowest level since 2022. This result is in line with our continued commitment to improving the company's capital structure and reinforces the financial discipline guiding our management. Also regarding our balance sheet, in the third quarter we maintained a solid cash position of BRL 14.9 billion. Edison will later go into more detail about financial performance. Continuing with the highlights of the quarter. In another financial liability management initiative, we carried out the 17th debenture issuance totaling BRL 2 billion, reinforcing our cash position and contributing to the ongoing improvement of our capital structure. We also had the subscription warrants arising from the capital increase totaling BRL 30 million between July and September. It is worth noting that there are still BRL 187.5 million subscription warrants outstanding representing BRL 969.3 million, which should help the company's cash flow over the coming years. Finally, we continued our financial liability management strategy and yesterday, we announced the repurchase and effective cancellation of BRL 76 million related to the 2031 bonds. In total, throughout 2025, the company bought back and canceled approximately BRL 385 million totaling BRL 2.3 billion related to the 2028 and 2031 bonds, an initiative that reinforces our commitment to a more balanced and efficient capital structure, reducing financial costs and strengthening the balance sheet's flexibility. Now regarding our sustainability highlights. We recently published our 14th sustainability report referring to fiscal year 2024. This report confirmed by independent auditors and aligned with key international standards reflects Minerva Foods commitments to the ESG agenda and the creation of sustainable value throughout our chain. It consolidates our progress and results from the past year reinforcing the integration of sustainability into our business strategy and into the company's day-to-day decisions. We also released the Animal Welfare Report, a document that includes data from our global operations, including the supply chain of animals and third-party's raw materials of animal origin. The report highlights policies, procedures and progress towards the goals set as part of our commitment to the topic. For traceability, we achieved 100% compliance in the socioenvironmental audit of cattle purchases in our operations in Paraguay for the sixth consecutive year, which demonstrates our leading position in traceability. Under the Renove program, we consolidated progress in implementing low carbon and carbon-neutral protocols at locations in Brazil, Uruguay and Paraguay with support from external audits to verify the carbon balance at each facility. We also made progress with our subsidiary, MyCarbon, achieving significant developments in carbon credit generation and trading projects with new partnerships and more than 145,700 hectares where we had detailed diagnostics of agricultural practices assessing the potential and opportunities for carbon project development. On Slide 4, we'll discuss our performance by origin. At the top of the slide, we have a breakdown of gross revenue by destination. Asia led accounting for 28% of gross revenue with China standing out at 17%. Next comes NAFTA, which represents 25% of our revenue for this period led by the U.S. with 21%. It's worth noting that this high share of U.S. revenue is mainly due to the impact of stock sales directed to the North American market in previous quarters. Following that, we have the Americas accounting for 24% of gross revenue with Brazil at 17% and Chile at 6%. I'd also like to highlight the importance of the domestic market, which maintains a consistent share in our revenue mix. The continued strengthening of our brand and expanded market penetration in Brazil have helped to reinforce our presence among consumers and support the sustainable growth of our local operations. In the lower left, we show export performance for our beef operations during the third quarter of 2025. Asia was the main destination accounting for 45% of export revenue for the quarter with China alone responsible for 36%. NAFTA comes next with a 14% share. Following that, the Middle East accounted for 11%; the European Union, the Americas and the community of independent states; and Africa contributed 3% of total exports. Looking now at the last 12 months ending in Q3 2025. Asia remained the top destination with 33% of exports. China accounted for 25% of that. NAFTA was second with 29% led by the U.S. at 23%. The Americas accounted for 12% of exports followed by the Middle East at 9%, the European Union at 8%, Eastern Europe at 7% and Africa with 2%. On the right side, we show the exports of our lamb operations in Australia and Chile. In the third quarter, NAFTA remained the main destination with a 43% share driven largely by the U.S., which alone represented 42%. Asia came next with 27%, Europe at 19% and the Middle East at 6% of quarterly exports. In the last 12 months ending in 3Q 2025, we had a similar picture. NAFTA led with 44% of exports followed by Asia with 25%, Europe with 17% and the Middle East with 7%. Let's now look at our revenue performance. The international market remained the main driver of our performance. Exports accounted for almost 70% of gross revenue in the third quarter and 64% in the last 12 months excluding the other category. Looking at a breakdown by operation. Brazil exported 68% of its production in the quarter and 59% in the last 12 months ending in the third quarter. In the LatAm operations excluding Brazil, the export rate was even higher, 71% both in the quarter and in the year-to-date 12-month period. For lamb operations in Australia and Chile, we had a similar scenario. Exports accounted for 65% of gross revenue in the quarter and 73% over the last 12 months. On the right hand side, we show gross revenue by origin. Brazil due to its strong cattle availability continues to be the main operational driver contributing 62% of gross revenue in the quarter and 55% in the last 12 months. Next are Paraguay and Uruguay, both at 10% in the quarter. In the last 12 months, Paraguay contributed 12% and Uruguay 9%. Argentina accounted for 7% in the quarter and 10% in the last 12 months. Australia contributed 3% in the quarter and 5% in the last 12 months. And Colombia had a share of 3% in the quarter and over the past 12 months. Lastly, the other category linked to our trading division represented 5% of revenue in the quarter and 6% in the last 12 months. Before diving deeper into the financial highlights, I'd like to emphasize how optimistic we are regarding the end of 2025 and the opportunities emerging in the global animal protein market. The ongoing imbalance between supply and demand continues to create a favorable environment for South American beef exporters. As we've highlighted in recent quarters, this scenario is mainly the result of supply constraints due to the cattle cycle in key producing regions. While South America continues to expand production and export volumes, other relevant markets faced supply constraints in the face of still resilient domestic demand. This dynamic has supported high price levels and driven increased imports, especially those originating from our continent. In China, the third quarter was marked by strong import volumes driven both by preparations for the Chinese New Year and the local cattle cycle, which is beginning to constrain domestic beef production and, as a result, is creating more space for international products. As we've been discussing, the U.S. market remains constrained with a still depleted herd and a clear impact on domestic beef output, a scenario that's expected to remain existing for the coming years. More recently, Europe has also begun to feel the effects of the global beef supply imbalance with major producers in the region such as France, Germany, Ireland and Poland beginning to experience herd and production challenges, which is already starting to reflect in export dynamics. The global beef demand environment remains positive even in the face of political uncertainty, creating favorable prospects for exporters from our continent. In this sense, Minerva Foods stands out for its strong arbitration ability between markets reinforcing our competitive positioning amid this highly volatile environment. Lastly, before handing things over, I'd like to underscore that our geographic diversification strategy continues to be one of Minerva Foods' greatest strengths. It allows us to mitigate risks, respond quickly to market shifts and maintain competitiveness even in a challenging global landscape. This strategic resilience supports the consistency of our results and reinforces our long-term vision, a vision in which we believe it's entirely possible to combine large-scale production with environmental preservation, technological innovation and social value generation. I'll now turn it over to Edison to walk us through this quarter's financial highlights.
Edison de Andrade Melo e Souza Filho: Thank you, Fernando. Let's move on to Slide 6 where I will discuss the performance of the newly acquired assets. In line with our commitment to provide greater transparency regarding the performance of the newly acquired assets, since Q4 '24 we've been presenting a breakdown of volume and revenue between Minerva's legacy and newly acquired assets. This quarter Brazil once again stands out as the main highlight with a consolidated revenue of BRL 10 billion, of which BRL 3.6 billion came from the new assets. In Argentina, consolidated gross revenue was BRL 1.2 billion with the new plants contributing with BRL 278 million. While in Chile, the new sheep processing facility in Patagonia posted a revenue of BRL 31.1 million and other countries have maintained a regular course of their operations as no changes have occurred in their asset base. Consolidating all of our origins, we reached a total gross revenue of BRL 16.3 billion in Q3, up 80%; of which BRL 11.5 billion refers to Minerva Foods legacy assets and BRL 4 billion to the new assets. As Fernando highlighted at the beginning of the presentation, in Q3 '25 we successfully completed the integration process ahead of schedule. We initially expected the process to last 15 to 18 months, but we have managed to conclude it in less than a year. It's worth emphasizing that completing this phase ahead of schedule reflects the quality of the strategic plan we implemented, which enabled us to follow a clear road map with well-defined milestones, properly mapped risks, which naturally contributed to the company's ability to accelerate its deleveraging process. Let's now move on to Slide 7 for a closer look at the performance of the new assets. For today's call, we've prepared a new slide highlighting metrics on the normalized performance of the new assets. In other words, after the completion of the integration process. On the left hand side, you can see the results for the past 4 quarters of the new assets. Operations in Brazil reached a gross revenue of BRL 3.6 billion in Q3 and BRL 8.2 billion LTM. In Argentina, BRL 278 million in the quarter and BRL 914 million LTM. And in Chile, BRL 31 million in the quarter and BRL 82 million LTM. So altogether, the new assets contributed with BRL 3.9 billion in gross revenue in Q3 '25 and BRL 9.2 billion in the last 12 months. As Fernando mentioned earlier, this quarter marked the completion of the integration process with September being the first month in which the new assets operated under normalized conditions, that is operational and financial indicators that are in line with our historical base. Therefore, the fourth quarter '25 will be the first fully normalized quarter post integration with no plant ramp-ups and adequate sales mix and no further working capital needed or investment needs related to the new assets. With that in mind, we carried out an exercise to assess the expected performance of the new assets in Q3 '25 under normalized operating conditions. In other words, with the full integration and normalized operations. As a result, net revenue from the new assets would reach approximately BRL 4.3 billion. In other words, and also following the same concept of completed integration, annualized performance would have reached close to BRL 17.2 billion as shown in the table in the bottom right hand corner. As you know, Minerva Foods has historically delivered an EBITDA margin of around 9%, which was a rough average of the last 10 to 12 years. So using that same level of margin, which I consider to be very conservative because it doesn't consider the post-integration synergies. The idea is to have a conservative and intelligible reference so that you can understand the level of performance we can expect from the new assets now that we have completed the integration. So if we use the EBITDA margin historical level of 9%, that means we're talking about BRL 388 million coming from the new assets or roughly BRL 1.6 billion worth of EBITDA on an annualized basis, slightly above our initial EBITDA expectations. You may recall that when we announced the acquisition back in '23, our expectation was that the new assets would generate about BRL 1.5 billion in EBITDA including the Uruguayan operations which, as you know, were not approved by the regulators and therefore, not part of the current pro forma. So given these numbers, I'd like to draw your attention to how much was paid for this acquisition. There was so much controversy, so much debate in the last 24 months. Many people said it was expensive. But now in light of the asset's performance, it looks to me like this metric has become even more attractive. So we conducted a couple of analysis to illustrate this point. The first is the contractual value of the assets so what was on the contract; in other words, BRL 1.5 billion as an initial down payment and the remaining BRL 5.3 billion upon completion and final payment in October '24. So if we consider BRL 6.8 billion as the total value of assets, the acquisition multiple was 4.4x EBITDA. We can also try a more conservative approach and consider the cash impact of the acquisition. So the firm value of these new assets reflects not only the amounts that were on the contract, which were BRL 6.8 billion, but also additional disbursements with interest and working capital adjustments, which were worth about BRL 350 million, which adds up to BRL 7.1 billion in firm value. So the transaction multiple in conservative terms would be about 4.6x EBITDA. Historically, Minerva Foods multiple has traded at around 5x to 5.5x firm value over EBITDA. So it seems obvious that even from a purely financial standpoint if we don't consider the strategic side of the acquisition, it was a very attractive acquisition, which is accretive to the company given the evident discount to Minerva's historical multiple and what was paid in these 2 scenarios I've just shared with you. It's also important to emphasize that given the complexity of our sector and the size of this acquisition, this also includes other value generation strategic drives like capturing synergies over time, which further enhance performance and bring the acquisition multiple even further down and it will make the acquisition even more attractive. In summary, the acquisition of the new assets is not only financially accretive and positive, but also a strategic milestone that reinforces our leadership position and significantly expands our market arbitrage capacity. We're very optimistic about the future and we're confident that the synergies among our operations and the successful integration of these assets will continue to generate substantial value and sustainable growth for the companies over years to come. Let's now return to the results discussion and move on to Slide 8 to discuss net revenue and EBITDA. Starting with net revenue, it reached BRL 15.5 billion in Q3 '25, once again marking an all-time record for a single quarter. That's an 82% growth year-on-year and 11% compared to the previous quarter. Over the last 12 months ending in September, net revenue totaled BRL 51.3 billion, also the highest annualized figure ever recorded by the company. It's worth noting that we are already within the '25 net revenue guidance, which we announced earlier this year, which ranges between BRL 50 billion to BRL 58 billion in net revenue for the full year of '25. Turning now to profitability. EBITDA in Q3 '25 reached BRL 1.4 billion, the highest ever achieved in a single quarter, which accounts for a 71% increase year-on-year and 7% quarter-on-quarter with an EBITDA margin of 8.9%. I'd like to highlight once again the excellence in operational and financial execution consistently demonstrated by Minerva Foods over recent quarters even in light of such a highly complex and volatile global environment. Over the last 12 months, consolidated EBITDA including the pro forma effect of 1 month of the new assets totaled BRL 4.7 billion. Once again let me highlight that we delivered solid operational performance and profitability consistent with our historical levels, a direct result of robustness of our business model; specifically the benefits of our geographic diversification strategy, arbitration which are critical to our resilience and operational and financial performance especially amid the recent volatility. Now let's move on to Slide 9 to discuss financial leverage. We ended the quarter with a significant improvement in net leverage, which declined from 3.16x to 2.5x net debt over EBITDA last 12 months. This result reflects 2 key factors. First, our consistently solid operational performance with EBITDA reaching record levels both in the quarter and year-to-date, which is the result of not only favorable global beef market conditions, but also the successful integration and contribution of the new assets, which scaled up revenue and EBITDA while enabling the capture of synergies and greater operational efficiency as well as cost dilution. As a direct consequence, we also had the leverage and the generation of free cash flow in Q3 '25, which made a significant contribution to reducing our debt and reaffirmed our focus on financial discipline and our ability to convert results into cash. Combined, these factors underscore the company's commitment to operational efficiency, financial discipline and long-term value creation for shareholders. Our deleveraging trajectory reaffirms the strength of our balance sheet and the soundness of our capital structure, increasingly more balanced and sustainable. Now let's move on to the next slide to discuss net income and operating cash flow. We posted a net income of BRL 120 million for the quarter and year-to-date it's already reached BRL 763.3 million over the last 12 months reflecting the noncash impact of foreign exchange variation at the end of '24. Net income remains negative at BRL 804 million. On the right hand side of the slide, you can see the operating cash flow for the quarter, which was positive BRL 3.4 billion while the last 12 months totaled approximately BRL 6.3 billion in operating cash generation. Now on Slide 11, we're going to discuss one of our main priorities, which is free cash flow generation, which was a key highlight of Q3 '25. Building up Q3 '25's cash flow, we start from a record EBITDA of BRL 1.4 billion. Next, we released working capital worth BRL 2.5 billion in the period driven mainly by the reduction of inventories, particularly those associated with the U.S. and which accounted for BRL 1.6 billion released from the total. Additionally, the accounts payable line contributed approximately BRL 625 billion back to cash in line with the normal progress of the company's operating volumes and the growth of company's operations. As we mentioned last quarter, maintaining inventory in U.S. territory was part of our tactical strategy, which proved highly successful. Given the country's current tariff policy, volumes already imported were not subject to the full taxes, which directly benefited revenue and strengthened Minerva's competitiveness in the local market. Continuing with the cash flow buildup, CapEx totaled approximately BRL 340 million and focused mainly on maintenance investments and organic expansion projects. Cash-based financial expenses were negative BRL 609 million while cash-based derivative results consumed about -- which is basically hedge and debt indexes and consumed roughly BRL 517 million, which is a result of the mark-to-market effect on the hedge positions. As a result, we ended the quarter with a positive free cash flow of BRL 2.5 billion, the highest ever recorded in a single quarter. Looking at the last 12 months, free cash flow was also positive at BRL 2.9 billion. We started with an EBITDA of BRL 4.6 billion, CapEx of BRL 1 billion and release of working capital of approximately BRL 2.2 billion last 12 months. Cash-based financial expenses were negative at around BRL 2.8 billion. Adding up these effects, it gives us BRL 2.9 billion positive free cash flow for 2025. These results clearly demonstrate the consistency of Minerva Foods operational and financial performance with an accumulated free cash generation of approximately BRL 11 billion since 2018. This track record underscores the company's financial discipline and its strong ability to convert operating results into tangible free cash generation. Now on Slide 12, we review the bridge of our net debt. At the end of the previous quarter, net debt totaled BRL 14.2 billion. Now looking at the debt bridge in Q3, we have a positive free cash flow of BRL 2.5 billion, which contributed to debt reduction. Foreign exchange variation also decreased indebtedness in about BRL 139 million and about BRL 263 million related to noncash derivatives, which increased the debt and the impact of BRL 30 million from having exercised the subscription warrants this quarter and which naturally reduced the net debt. As a result, net debt stood at BRL 11.8 billion at the end of the period, down 17% from the previous quarter. Let's now turn to the next slide to discuss the company's capital structure. As mentioned earlier, net leverage measured by net debt over adjusted EBITDA stood at 2.5x at the end of the quarter, the lowest since 2022. Keeping our conservative cash management approach, we ended the third quarter with a comfortable cash position of BRL 14.9 billion and a debt duration of approximately 4.2 years with about 83% of total indebtedness in the long term as shown in the amortization schedule at the bottom of the slide. Regarding our debt profile, approximately 67% of the total debt is exposed to foreign exchange variation. And let me remind everyone again that Minerva's strict hedging policy currently requires the company to maintain at least 50% of long-term FX exposure hedged. In July, we completed our 17th debenture issuance totaling BRL 2 billion across 4 series with proceeds primarily allocated to debt buyback operations. In line with our liability management strategy, yesterday we announced the repurchase and cancellation of part of the 2031 bond amounting to approximately USD 76 million bringing total repurchases and cancellations in 2025 to approximately USD 385 million or BRL 2.3 billion. This is yet another step towards achieving a more balanced and cost efficient capital structure. In August, we also completed the capital reduction process to absorb accumulated losses from '24, which effectively cleans up the company's balance sheet and creates room to comply with our dividend policy come year-end. Finally, as previously mentioned, in Q3 '25 we exercised stock warrants arising from the capital increase totaling BRL 30 million with approximately BRL 969 million still available to exercise through 2028, which will naturally have a positive impact on the company's cash position and indebtedness. To conclude, I'd like to thank the entire Minerva Foods team for their tremendous efforts and dedication during this crucial integration period, always acting with great focus and in line with our management model. We'll continue to work on continuous improvement and the pursuit of opportunities in the global beef protein market. We are confident in our strategy and long-term business. I'll turn it over to the operator so we can start the Q&A session. Thank you very much.
Operator: [Operator Instructions] Our first question is from Gustavo Troyano, Itau BBA.
Gustavo Troyano: First, I would like to go back to the EBITDA margin in the quarter. I'd love to understand the consequences of this margin moving ahead. We know that in this quarter, you had accelerated inventory selling in the U.S. in these 3 months. So this may have an impact on the gross margin for the quarter. How much has the inventory sale added to the gross margin in this quarter? Along the same lines when we think about accelerating inventory sales in the U.S., I'd like to understand its impact on the SG&A because we saw bigger reductions than what we expected. So I'd love to understand that moving ahead since now we should see a lack of acceleration for that in the U.S. Secondly, I have a question about cash generation, which was the highlight for this quarter. I'd love to pick your brain on what you expect for the full year. We were saying that depending on the sale of inventory in the U.S., for 2025 we should see BRL 1.5 billion approximately according to our conversations. Do you expect this after this quarter? Are you expecting BRL 1.5 billion in working capital for this year or is there a new variable that changes our expectations for the whole year of 2025?
Edison de Andrade Melo e Souza Filho: We'll try to answer everything briefly. For the gross margin, we don't have further comments. The gross margin is worse this quarter because of the price increases in cattle. Compared to the previous quarter, the average price went up by almost 25% in average. So it is only natural for us to see a worse gross margin. However, we should focus on the gain in scale. In spite of the gross margin, we had even better dilution. When it comes to costs and SG&A expenses, we were a little bit under 10% of our net revenue. It was around 14%. We believe that 10% is an optimal level moving forward. Of course we had sales that were above average from our inventory, which helped increase revenue and dilute costs. But in a more normalized scenario, our SG&A should be around 10%. So I don't have any further comments regarding the gross margin. Moving forward, prices are relatively stable. Cattle prices are a little bit higher. So looking forward when we think about the gross margin in our weekly forecasts, it is basically in line with what we saw in the third quarter. Regarding our working capital, what I can tell you is that we had performance that was better than what the market expected for the third quarter. For the 2025 numbers, what we expect is something in alignment with our forecast. It's going to be even better than our forecast. Doing very quick and conservative math, if we look at receivables, advanced payments, inventory; these numbers are going to be more normalized towards the end of the year. So we may have a [ payment ] of around BRL 1 billion in cash. So if we repeat our EBITDA of BRL 1.4 billion, repeat our BRL 600 million expenditure, our CapEx is also repeated and we have normalized numbers for the other parameters. And if we are very conservative and we have normalization of BRL 1 billion in our working capital, we're going to have BRL 500 million of cash burn. If we add that to our free cash flow, which is BRL 1.9 billion to BRL 2 billion, we're going to have a free cash flow of BRL 1.5 billion. We were discussing a free cash flow of around BRL 1 billion at the end of the year. So it's 50% better than our expected forecast at the beginning of the year. Now thinking about deleveraging. Our EBITDA is BRL 4.6 billion for the last 12 months. We're going to have BRL 950 million for the fourth quarter and we're going to get to BRL 5 billion, a little bit over BRL 5 billion of EBITDA for 2025. If we burn BRL 500 million in cash, we'll go from BRL 11.7 billion to BRL 11.2 billion in our debt. For our leveraging, our leveraging goes down a little bit more like 2.44x or 2.45x. So all these numbers are useful for us to leave the market at peace even in a more conservative forecast for the working capital for the end of the year. Sometimes analysts are waiting for the wolf to come around, but he never comes. So if we still have a negative working capital, we're still going to produce BRL 1.5 billion in our free cash flow and we're going to have leveraging under 2.5x.
Operator: Our next question is from Leonardo Alencar, XP.
Leonardo Alencar: First and foremost, congratulations. I know it's a bit sensitive to talk about the future, but you mentioned that you had strategic inventory in the U.S. and much of your results came from that, but it was a surplus. Is there still a surplus to be sold in Q4? Also, can this inventory be transferred to Q1 or would you have to pay tariffs between the U.S. and Brazil? Would you be able to transfer this inventory into Q1 to have a better position? What do you think? Also on the topic of Q4 and of course the impact of the cash flow generation. For China, you mentioned advanced volumes for the third quarter. Is this a matter of demand because of the Chinese New Year or do you have any safeguards thinking about any potential risks for the fourth quarter? And I have 1 last question. You've mentioned bigger quotas for Argentina, but it seems like you haven't really implemented that yet. So you're going to increase it to 80,000 tons, but I don't know if you've done this, if you're waiting, if you have dynamic preference. And I'd love to understand these 3 points for Q4.
Fernando De Queiroz: Okay, Leonardo. For the U.S., we have a sales strategy based on our understanding of the market. So to answer your first question, yes, we may roll out our inventory. But definitely in many countries, you have the first in first served quota. So we should be sending out more shipments so that we're able to work with this quota in order for Minerva to fit into that. There's lots of uncertainty when it comes to what's going to happen with Brazil. However, obviously, we have 3 other countries that are exporting into the U.S. quota. China has been surprising with their volumes. You saw they had record volumes. So we've been having a few conversations regarding safeguards and we do believe that we could have news to share regarding China. But it's not going to be something that impactful to change our guidance with China as one of the main markets as maybe the first or second biggest markets. Regarding the quota from Argentina to the U.S., yes, indeed, we haven't reached a conclusion. In the U.S., they still have issues with their lockdown. As soon as we get over that, then we should see more official logistics. We'll understand how this is going to work in Argentina. We still don't know how this is going to play out. However, we're relying on Argentina with a 5x higher quota going from around 20,000 tons to around 100,000 tons.
Operator: Our next question is from Lucas Mussi, Morgan Stanley.
Lucas Mussi: First, I have a question about capital allocation. From the beginning of the year, we've been discussing this thoroughly talking about the potential return of dividend payments. As soon as the company is more comfortable with the leveraging level, we're talking about the historical levels of 2.5x. Our expectation was to reach this number by the first quarter of next year, but this is something that you were able to achieve 2 quarters earlier. Given the recent conversations regarding the taxation of dividends as of next year, could you please update us on what you're thinking about this regarding the distribution of dividends? Are you going to do it earlier? Again, I'm asking in light of recent developments. Is there any kind of priority? Are you still waiting for next year? I'd love an update on capital allocation given the current circumstances because you were able to achieve this goal earlier than expected with a very comfortable leveraging level. And we have the ongoing fiscal conversations in Brazil. Second, regarding China, China was one of the biggest drivers for the third quarter. We see that in industry data with very strong demand. However, we see reports that most of the growth in the third quarter compared to the second quarter also had to do with advanced stock with a stock buildup from importers in China because they were afraid of potential measures related to safeguards. And potentially in the fourth quarter, we could see lots of deacceleration for that. What do you think about this for China in the short term? Do you see this in your portfolio? Do you expect deacceleration for the fourth quarter or is it just noise?
Edison de Andrade Melo e Souza Filho: Regarding dividends, what we discussed in the last quarter is that we're going to talk to the Board when we have the final numbers for 2025. As you put pretty well, we reached a leveraging level that allows for us to have a more flexible dividend payout policy maybe 2 or 3 quarters earlier than what we expected. So we're going to have this conversation as soon as we have the final numbers for 2025. And if this is within our policy, then we're going to comply with our policies as we have been talking about. Regarding tax changes, I'd like to say that our company is ready. Should changes be made and should we reach the conclusion that having advanced dividend payouts make sense, then we'll do it. But this hasn't happened yet. This is ongoing. We are discussing it, but we don't have anything that is concrete. In our meeting, we said that we would absorb all accrued losses and we would be open to dividend payouts at any point if the company decides to do so. Fernando will answer regarding China.
Fernando De Queiroz: Lucas, yes, there have been advances there. We do believe that there may be something coming from the Chinese government not towards Brazil, but towards the whole import system to strike more balance. The main point is that Brazil is still the biggest, most competitive supplier for China. So you're right in assuming that, yes, we had record numbers from China, almost 200 million tons per month. So yes, depending on the measures that we see in the future, these numbers could go back to normal, let's put it this way. Now what I do find interesting and what we're following up on is the days of available inventory that we have in Chinese ports. This is at very low levels even with record imports. Partially, this is due to a reduction in local production. So we still have a positive flow, but we do see the impacts of the advance of some measures that China could implement.
Operator: The next question is from Guilherme Palhares from Santander.
Guilherme Palhares: I've got a couple of questions about the balance sheet. Edison, there's been some progress in the agreements line. The average cost was 1.54 each month, right? How are you thinking about that line given that there have been more recent debenture issuances, about 113 of the CDI and there seems to be a cost difference. So could you share the agreement strategy compared to a longer-term strategy? Also, you've released some more working capital. You've brought forward some clients from the energy and beef tradings. What of that is recurring in your balance sheet structure?
Edison de Andrade Melo e Souza Filho: Well, the cost of agreement is there as a piece of information, but it's not our cost, that is passed on. So there's a misunderstanding that we offset that financial cost when we buy raw material. There's a discount when we buy raw material because I'm paying the client earlier and we also get more time from the financial institution. So we share that cost as a matter of record, but it's actually a benefit that you can see in the CNMV because of the lower cost of raw material. And beef client and energy trading advances, I mean the energy trading is becoming increasingly more relevant. It buys future energy in the market and at some point, it means using resources and at other times, it means receiving resources. So that's our trading operation at the energy desk. So because these other accounts payable have increased and we have shared all of that, that was because of the energy trading company. It was BRL 500 million to BRL 600 million worth of future energy sales, but receiving for it upfront. Those energy trading operations are longer-term operations so they're more stable. Once they're closed, their average duration is 3 years. So it's going to be in the cash and it's not going anywhere. Beef operations, as I've said many times, have to do with our sales mix. If there's an increase in China, our credit policy is we require payment in advance so a prepayment. So it's natural to have more funds available ahead of time as China's share with us increases. And the company has grown its top line by 80% year-on-year. Now if you look at it on a day-by-day basis in terms of billing, the beef advanced payment bill is about 22, 23 days. Now it's about 26 days. So they're not that different to our historical track record. The difference is because China is increasing its share when compared to other markets. Now if you want to be conservative and think about it in a normalized fashion, bring it down from 26 to 22. So there's about 3 or 4 days to normalize it, which is the calculation I did for the fourth quarter assuming that you have a normalization of the working capital accounts in Q4. Now as for the advanced payments for energy, we share that with you to provide you with more transparency so you understand how those advanced payments work. I think the inventory is about BRL 3.1 billion and its average duration is 3 years. So it's not going anywhere for the next 3 years. It's not leaving our balance sheet.
Guilherme Palhares: Yes, that's a really interesting piece of information for us.
Operator: Next question is from Thiago Duarte from BTG Pactual.
Thiago Duarte: Can we go back to the revenue discussion, but not so much from the market standpoint and more from the company operations standpoint. In terms of slaughtering, in Brazil over 1 million heads were slaughtered this quarter. That's about 13% of the slaughter share in Brazil this quarter. You've already mentioned that the new assets will be running at a suitable level also from a volumes point of view. Now considering the location of the plants, both the legacy plants and the new plants and the cattle you have in those regions, are you considering that share level to be sustainable? Is that something we can consider looking forward in the context of cattle availability in Brazil? And my next question is about inventory monetization again. I know you've already talked about that in a previous question, but it wasn't clear to me. Looking at the company's inventory days, they've gone back to levels very similar to the consolidated historical levels. So last quarter, we talked about that to Edison. So it looks to me like you've made arbitrage tactical movements. Is my interpretation correct? Considering the information we have available right now, for lack of a better word, this revenue surplus that you've got from this inventory.
Edison de Andrade Melo e Souza Filho: Well, Thiago, with regards to your first question, if there is more room, yes. That's the answer. We broke our record over September and October in terms of slaughtering in Brazil. So yes, we're just fine-tuning operations now so that we can become even more flexible and increase productivity even more. So yes, there is room for that and October is proof of it. As for the inventory levels, our strategy is based on the quota system. So there can be variations, but there won't be too much of an impact on the analysis. Most of our tactical movement was done in Q3. As Fernando said, there are normal variations to the operation. There may be a slight reduction in Q4 or if the domestic market becomes stronger or if the market becomes better in Q4 seasonably speaking, but the tactics that we've built up in the first and second quarter was realized in Q3.
Operator: [Operator Instructions] The next question is from Mr. Henrique Brustolin from Bradesco BBI.
Henrique Brustolin: I have a couple of follow-up questions. The first one is about the energy trading company. Looking at the ITR, it looks like the revenue is being multiplied by 3 year-to-date. At least that's what it looks like looking back and that operation seems to have a huge operation to your working capital. So my question is how should we consider that operation? Will it scale up looking forward or is the current level -- can we consider the current level to be recurrent for that line of business? And the second question, if I can take the opportunity. If you could please comment on the specific dynamics taking place in Uruguay and Paraguay. Realized prices in the quarter have been quite solid. So what are your prospects for these 2 markets looking forward?
Edison de Andrade Melo e Souza Filho: It's not being multiplied by 3. It's gone from BRL 600 million to BRL 1.3 billion. I'm not going to say the top level, but it should stand at that level for the next 3 years. It shouldn't go too much up or down. So yes, please consider it to remain stable at that level based on the operations average ratio, which is about 3 years. About Paraguay, Uruguay, Argentina and Colombia excluding Brazil; beef is increasingly becoming a global commodity. So that price increase we've seen everywhere is a result of shortages in the Northern Hemisphere. So there will be market fluctuations. Some markets will change their behavior, but that geographical diversification is what allows Minerva to remain stable to capitalize on asymmetries and to exercise arbitrage among markets. So price level should go up and obviously we can choose between different destinations and different origins and we'll continue to do that.
Henrique Brustolin: Great. I meant multiplying it by 3. I said the revenue in the trading company and not the advance payments, but that was very clear.
Operator: This concludes the Q&A session. I will now turn it over to Mr. Fernando Queiroz for his closing remarks.
Fernando De Queiroz: Thanks, everyone. Thank you for joining Minerva's earnings release conference call. And I would like to congratulate our team because we have been able to integrate assets in record time thanks to a lot of planning, a lot of clarity when it comes to different roles and a multidisciplinary team and work. Each unit was sponsored by a Minerva unit and that made sure that the culture, processes and management systems could be absorbed as quickly as possible. And I'd also like to highlight this shortage scenario in the Northern Hemisphere. The U.S. still hasn't started to retain females. In Europe, there's considerable shortage. Let's keep an eye out for Europe because it's going to become a massive destination. It should grow considerably next year. And that proves that our strength and our accurate strategy to be in South America works because South America is the main platform. And we also see some price movement in Australia. Prices are going up quite rapidly, which only attests to our competitiveness in the region because its main vocation is to produce soft commodities and more specifically speaking beef. We're here if you have any questions. Thank you.
Operator: Thank you. Minerva's earnings release video conference call is now concluded. For further questions, please contact the Investor Relations team at ri@minervafoods.com. Thank you for joining us and have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]