Good morning. Welcome to Minerva's Q3 2021 Results Conference Call. Today with us, we have Mr. Fernando Galletti de Queiroz, Chief Executive Officer, and Mr. Edison Ticle, CFO and Investor Relations Officer. We wish to inform you that this presentation is being recorded and all participants will be in listen only mode during the company's presentation. Next, we will start the Q&A session for analysts and investors when further instructions will be provided. If you need any assistance during the call, please press star zero to reach the operator. The audio and the slideshow of this presentation are available through a live webcast at www.minervafoods.com/ir. You can find the presentation for download on the webcast platform IR session.
Before proceeding, we wish to mention that forward-looking statements may be made during this presentation relating to Minerva's business prospects, operating and financial estimates and goals are based on beliefs and assumptions of the company management as well as on information currently available. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors can also affect the future results of Minerva and could cause results to differ materially from those expressed in such forward-looking statements. We would now like to turn the conference call to Mr. Fernando Queiroz, CEO, who will begin the presentation. Please, Mr. Queiroz, you may start the presentation.
Good morning, everyone, and thank you for participating in Minerva's Earnings Conference Call For The Third Quarter of 2021. Minerva Foods reaches the end of the first nine months of 2021, reporting an outstanding operating and financial performance with revenue and EBITDA at record levels, consistent net income and cash generation, in addition to maintaining a balanced capital structure.
Even in the face of a challenging scenario, the company's performance in this quarter reflects the good fundamentals of the global beef market, resulting in an accumulated growth of 42% in our gross revenue and 10% in our EBITDA when compared to the previous year. Our geographic diversification plays an essential role in our performance because it allows us to arbitrate markets with greater agility, accelerating our operations when necessary, and thus reducing risks, volatility, maximizing our operating efficiency and financial profitability.
In this context, the operations of Minerva ex- Brazil continues to be highlighted the year with its gross revenues reaching BRL 10.8 billion in the nine months of 2021, an expressive growth of 69% when compared to the previous year. Our operational footprint distributed throughout South America is one of the main pillars of our business model, playing a key role in maintaining our profitability and also acting as an important risk mitigation agent. In line with the maintenance of this strategy, and as previously informed to the market, in the third quarter of 2021, we evolved with our first initiative in the Oceania market in partnership with SALIC, announcing the acquisition of two lamb slaughter plants in Australia.
This initiative is in line with Minerva Foods strategic direction and uniquely complements our operations in South America, maximizing commercial opportunities and operational synergies, reducing risks and contributing to our strategy of consolidation in the animal protein export market, always respecting our commitment to financial discipline and a solid and balanced balance sheet. The COVID-19 pandemic is not over yet and it continues posing challenges to the world population. However, the global beef market remains in high demand, with emphasis on Asia, which remains firm as a major demand driver and largest global beef importer. In a scenario that should become even more stressed in the coming months due to recovery of the global economy, which opens up more opportunities for exporters in South America.
Prospects for the end of the year and beginning of 2022 are increasingly positive, with the global scenario returning to normality and the advance of vaccination stimulating reopening of economies and supporting the resumption of important segments such as tourism and food service. We see a scenario of consumption acceleration not only in the foreign market, but also in the domestic markets in South America, reflecting an extremely positive situation for products and especially for beef exporters in our continent. In the third quarter 2021, we made progress in innovation area where we launched My Beef em Casa, our online sales platform within iFood, where we started to make our products available to users of the app. In this first moment, My Beef em Casa will continue to serve the consumers here in the city of São Paulo.
Yet another movement that brings Minerva Foods closer to the final consumer of beef. We also announced another corporate venture capital initiative with the investment in Traive, a startup in the agricultural sector that with the support of artificial intelligence, advanced data analysis, seeks to offer a set of financial solutions such as credit, insurance and other services for small and medium-sized rural producers, reducing bureaucracy and contributing to more transparency and less risk in the agri market. Currently, with operations in the United States and Brazil, Traive's product portfolio encompasses solutions for the supply chains of the main agricultural commodities such as soybeans, corn, cotton, sugarcane, coffee and wheat. As supported by Minerva's track record and expertise of Minerva Foods, we are also going to advance in the new opportunities in Livestock and the Beef chain.
Now let's move on to slide two to start the presentation of Minerva Foods' Q3 2021 results. We started with net income, which remains positive for the eighth consecutive quarter, reached approximately BRL 73 million in Q3 2021. Year- to- date, net income is positive by BRL 449 million. Considering the last 12 months, Minerva's net income totals approximately BRL 563 million. Free cash flow, which is one of our priorities, has been positive for the 15th consecutive quarter, totaling BRL 83 million in the quarter and BRL 849 million in the 12 months period. 2021, our free cash generation totaled BRL 817 million.
Since 2018, the company has accumulated more than BRL 4 billion in free cash generation, confirming the consistency of our operational and financial management, which reflects a robust cash generation, which we continue to report quarter- after- quarter. Gross revenue reached a record level of BRL 7.8 billion in the quarter and BRL 26.6 billion in the last 12 months, a strong growth on an annual basis of 43% and 36% respectively. I would like to highlight the performance of our exports, which accounted for approximately 70% of our gross revenue, both in the quarter and the past 12 months, as a natural result of the strong international demand for beef and reflection of our export DNA at Minerva Foods. Now talking a bit about our operating profitability in Q3 2021.
Our EBITDA also reached a record level, reaching BRL 648 million, an increase of 70% year-over-year with an EBITDA margin of 8.8%. In the past 12 months, Minerva Foods' EBITDA has also been record, totaling approximately BRL 2.3 billion and delivering a solid EBITDA margin of 9.1% in the period. In previous periods, another highlight of this quarter and one of the main pillars of our management continues to be the solidity of our balance sheet. We ended Q3 2021 with net leverage stable at 2.4x net debt over EBITDA and in line with Minerva Foods' capital discipline.
Our liquidity also remains very comfortable with BRL 8 billion in cash at the end of the period, which combined with the duration of 5.6 years of our debt and guarantees us great tranquility and flexibility in the face of future challenges and opportunities. Still talking about our balance sheet, I want to stress that we continue to improve our capital structure. In this context, I want to mention some initiatives, such as the reopening of Bond 2031 at the beginning of the quarter. Now, more recently in October, we also had the 11th issue of the debentures of the company. In addition to the redemption and cancellation of approximately BRL 384 million related to portion of 2028 Bond, as we announced this week. Over our presentation of results, Edison will provide a little more detail about all these initiatives.
Now let's talk about the other highlights of the quarter. As approved by our Board of Directors and as a result of the good operational and financial performance of Minerva Foods, we announced the payment of prepaid dividends in the amount of BRL 200 million or approximately BRL 0.35 per share, representing approximately 45% of the year- to- date profit. When we add the current distribution with the proceeds paid previously throughout 2021, we reached BRL 304 million or BRL 1.12 per share in earnings distributed to our shareholders in the current year. This represents an expressive dividend yield of approximately 12% based on the closing of October.
The recent distributions of earnings reflect Minerva Foods' commitment to generating value for its shareholders while respecting our capital structure, as it is worth noting that the company's financial leverage remains stable or around 2.5 x even after the payment of the aforementioned interim dividends. Another interesting highlight which took place in the quarter when the beginning of October was a cash refinance of BRL 252 million, referring to warrants subscribed by or undertaken by the controlling group, further improving Minerva Foods' liquidity position. It is worth remembering that we still have BRL 60 million in subscription warrants available in the market that should enter the company's cash by end of 2021. Finally, I must talk about the evolution of our sustainability agenda, and I would like to highlight two main initiatives.
The first was the launch of the app Prospec, which allows rural producers throughout Brazil to carry out geospatial surveys and access historical and social environmental analysis of supplier farms. This way, we're transferring the highest technology used in our analysis and monitoring systems to the producer's palm of hand, contributing to the reduction of deforestation risk and Livestock chain. The second highlight goes to the results of audit by the Federal Public Ministry in the state of Pará, where Minerva Foods achieved 100% social environmental compliance, being the only company among the major players in the sector to present such excellent performance. It is noteworthy that the Federal Public Ministry is the main public tool for transparency on practices to combat illegal deforestation in the Amazon.
In addition, we are very proud of the excellent results achieved that confirm the pioneering spirit and seriousness of our work when the topic is sustainability. During the presentation, Taciano will bring further details about this and other important advances by Minerva in relation to the ESG agenda. Now let's move to the next slide to comment on Minerva's operating performance in the quarter, starting with exports. Q3 2021 consolidated our leadership position as the largest beef exporter in South America, with approximately 20% market share in the continent. Minerva's leading role in beef exports is the result of our geographic diversification in the region, which, supported by our 16 international offices, end up providing us with a great competitive advantage and prominent position in the international market.
It is worth mentioning that the geographic consolidation of Minerva Foods in South America protects our profitability from the long-lasting and consistent upward movement in international grain prices. This is due to the model of cattle raising predominant in our continent, and thus the upward movement of grains in the international market ends up having a reduced impact on our operations. On the right side of the slide, we have the performance of exports by region. Asia is still the highlight, representing around 63% of the export revenue in the past 12 months in Brazil, an expansion of 7 percentage points compared to the same period of the previous year. It is worth highlighting here a 10% share that we place in the NAFTA region as the main destination, USA, which reflects the strength of this market and the reopening to Brazilian beef.
In the case of the operation of Athena Foods, further down on the slide, the Asian market has been the main destination for our exports, 37% of the total exported by the division in the past 12 months, followed by the Americas region, which accounted for 29% of the total exported. I want to take the opportunity to highlight the assertiveness of our geographic diversification strategy and the benefits of our operational footprint in the main beef producing and exporting countries here in South America. You all know that the end of Q3 2021 was impacted by China's restriction to Brazilian beef, and this ended up reflecting on our operational and financial performance.
However, as a result of our geographic diversification, we redirected Chinese demand to four of our plants in Argentina and Uruguay, which include a daily slaughter capacity of around 6,000 heads a day, approximately 60% of Minerva's consolidated exposure. In this way, we continue to serve customers in China through operations outside Brazil, which has allowed us to reduce risks and mitigate impacts inherent to this type of jurisdiction. It's worth mentioning that we're still awaiting the resumption of exports to China from Brazil, and we expect the situation to normalize soon.
Returning to the quarter's results, the performance of exports makes increasingly evident the growing international demand for beef and the unique competitiveness of South America, especially from Asia, where we noticed that the consumption of beef protein has increased consistently and as a reflection of changes in the population's eating habit, which increasingly considers beef as an essential item in their daily diet. Another highlight in our portfolio is the growing exposure to the North American market, especially here in Brazil. A market with high income capacity and which, due to the advanced stage of vaccination, has already been showing consistent signs in the resumption of economic activity and consumption level. Finally, I emphasize once again that the fundamentals and prospects in the global beef market remain very solid in the short and long term.
We have a combination of factors that are very positive for the coming periods, which will benefit beef producers in our continent. Demand for beef protein remains quite consistent in emerging markets, especially in Asia. In addition, we have the advance of vaccination and recovery of the global economy, which gains strength week- after- week with the reopening of markets, and it brings a strong recovery movement in consumption, especially in Tourism and Food Service segments that were strongly impacted since the beginning of the pandemic and we already have signs of strong recovery in most developed countries. Finally, with the rise of grains and the persistent restriction in the supply of beef from Australia, which continues unbalancing the world market and particularly benefiting exporters.
This from a promising horizon, Minerva Foods' strategy is to continue to maximize our competitive advantages, investing in innovation, niche opportunities, risk management, market intelligence to achieve increasingly efficient and profitable commercial and logistical solutions, always trusting our corporate culture, the work of our team, and respecting our commitment to ethics and sustainability. Now, I hand over to Taciano, who will talk a bit more about the sustainability agenda of Minerva Foods.
Good morning, everyone, and thank you, Fernando. When it comes to sustainability, combating illegal deforestation and climate change, Minerva Foods stands out with results. Our backing is not advertisements and long-term goals. Our balance is a measurable result, publicly disclosed and supported by the main public audit process in Brazil. The audit of the commitment in Beef in Pará, the audits supervised by the Federal Public Ministry or General Attorney's Ministry, the only official third party verification audit in Brazil, where all the data for analysis is provided by the government. All the results are publicly disclosed and can be verified on the website of the General Attorney's Ministry, as well as the presentation link.
For the third consecutive year of the audit, Minerva Foods stands out for its results with 100% compliance to verify illegal deforestation, land grabbing, slave labor, invasions of environmental conservation units, indigenous and quilombola lands, environmental and land tenure regularization. This is the real commitment to combat illegal deforestation in the Amazon, result of the commitment of the Minerva Foods team and rural producers, a commitment that extends to all state we operate and also outside Brazil. In Paraguay, we geographically monitor 98% of all purchases, and we maintain our commitment to reach 100% of the purchases monitored by the end of the year.
On slide five, we present SMGeo Prospec. In partnership with Niceplanet Geotecnologia, we launched on October 21st, the most innovative agribusiness application. It is the transfer of technology from those who have the best results in geographic monitoring of the chain to the hands of producers. The application allows you to carry out detailed geospatial service throughout the national territory with the simple use of QR code of the Rural Environmental Registry. Producers can now verify the social environmental compliance of their business partners with simplicity and agility, with no complications. The app is available on the App Store and Google Play. It is worth checking the launch of the application on Minerva Foods YouTube channel with the details of how the tool works.
On slide 16, we will talk about Minerva Foods low carbon emissions program in the production change. The world demand changes and the rule is to keep renewing. The Renove program accompany this changes and goes beyond. It is to engage and collaborate with the production chain in the implementation of low carbon production practices. It is measuring and monitoring the carbon balance of farms. It is to facilitate the access to payment for ecosystem services and the carbon market.
It is recognizing the advances of modern tropical livestock, which protects the environment and develops people and geographies. All this in collaboration with research institutions, agents of organized civil society, companies and producers, using internationally recognized methodologies. We are proud of the path Minerva Foods is taking in sustainable meat production. We will be at COP telling more about Renove. Follow Minerva Foods on social media and learn more. I will now hand over to Edison, who will detail the operating and financial results
Thank you, Taciano. Let us move on to slide seven to talk about operating performance and the breakdown of divisions’ shares and Minerva’s gross revenue. In 3Q, as has been the case throughout the year, Athena Foods continues to stand out. Once again, it expanded share in the revenue account, 56% of consolidated gross revenue for the quarter, while Brazil Division reached 38%, and the Trading, 6%, complementing our total revenue. Now talking about capacity utilization, in 3Q 2021, we operated on a consolidated basis with a capacity of approximately 77%, still reflecting the operational limitations imposed by the pandemic.
At Athena Foods, the level of utilization grew almost 5 percentage points. compared to the previous quarter. This is the result of our geographic diversification, which at the end of the quarter allowed us to redirect the part of production that would have been destined for China from plants from Uruguay and Argentina since exports via Brazil were restricted in September, and thus we accelerated operations at Athena Foods and kept supply our main destination market. As Fernando commented, this move confirms one of Minerva's main competitive advantages, geographic diversification, which gives us a unique opportunity to arbitrate markets, always in search of operational and commercial optimization of the production chain. In the Brazilian division, we had a slight drop, 17.4%, mainly impacted by the lower volume for the Chinese market at the end of the quarter.
As we mentioned previously, consolidated utilization remains below our historical level of 80% and should be resumed over the next few periods with the event of vaccination process, recovery of the global economy at the end of the pandemic. It's worth mentioning that in our analysis, we considered a concept of net utilization, reflecting working days on operation of each of the plants operating in our portfolio. On the right-hand side of the slide, we highlight our consolidated exports by region for Q3 2021 and last 12 months. As Fernando mentioned, Asia continues to be the major client with a major role, representing 46% of exports in the quarter. The past 12 months, the share of the Asian continent remained at 47% of Minerva Foods exports. That is, continue to be our main export destination.
Moving on to slide eight. Let's talk a bit about financial results, starting with net revenue, which reached a record level of BRL 7.4 billion, Q3 2021. Strong expansion of more than 43% compared year-over-year. When we look at it from the perspective of the past 12 months, we could have a robust year-on-year growth of nearly 36%, totaling more than BRL 25 billion in net revenue in the past 12 months. In the composition of this revenue, as I mentioned previously, it's worth highlighting the good moment for exports, which reached a share of approximately 70% of total revenue, both in the quarter and the past 12 months. Speaking of profitability, Minerva's EBITDA reached a record level this quarter, reaching BRL 648 million, an increase of 70% year-on-year.
In the past 12 months, our EBITDA totaled approximately BRL 2.3 billion, an increase of approximately 8% on an annual basis, and once again, record level for the past 12 months. It is very clear on this slide the operational dynamics of our company, which basically spread business. It's a business spread. That is, our profitability is based on the ability to pass on or transfer price, especially when we have scenario of cost pressure. Despite recent increase in cattle price which corresponds to 80%-85% of our total cost, company has been very efficient in transferring these increases to customers, especially in the export market, which is main focus on Minerva. As a result, we have been able to deliver consistent level of profitability over the past quarters despite the upward movement in animal prices, especially in July, August and September.
I want to highlight again the benefit of our geographic diversification, especially when we talk about Athena Foods, which despite the more complicated situation in Brazil in terms of cattle supply, Athena has a much smoother situation and continues to contribute a lot to the growth of company's revenue and also profitability, which I mentioned on the previous slide. This division represented 56% of consolidated revenue in the quarter. In Q3 2021, Athena Foods was even more important with the restrictions imposed by China at the end of the quarter, blocking exports from Brazil. We continue to serve our customers through Athena Foods operations in both Uruguay and Argentina. This makes clear the fundamental role that our geographic diversification has had and continues to play in Minerva Foods business model.
Before moving on to the next slide, due to this temporary movement in China, which partially impacted the numbers for the quarter, I want to talk a bit more about the month- by- month performance in the third quarter. As you know, the end of Q3 turned out to be atypical due to China's restriction to Brazilian beef, and this ended up impacting the performance in the quarter as a whole. When we stratify the analysis month- by- month, we can see a very positive performance both in Brazil and in the Athena Foods operation. If we take month- by- month, for example, July, the consolidated EBITDA margin was already running at a low two-digit level, impacted by the strong demand and reflecting the acceleration of beef prices in the international market.
This scenario ended up being maintained in August with a slight negative variation in Brazil due to the off-season period, which ended up pushing the price of the animal in August. Athena Foods continued operating in a very resilient way. Thus, operating profitability in August, although, also ended up at a very attractive levels, very close to the low double-digit level. Then we get to September and China ended up blocking Brazilian beef, which ended up impacting the end of the quarter. I will be repetitive and comment again, but in the case of Minerva Foods, we have the benefit of the operational footprint distributed by the main beef producing countries in South America, and thus, due to this geographic diversification, we were able to mitigate the impact of the absence of China to Brazil and redirect large part of Chinese demand to Athena Foods.
However, even with this initiative to mitigate risk, the Brazil operation ended up feeling some effects. Some cargo or freights had to be redirected to less profitable markets, and we also have impact on the cost of expenses such as the entire rescheduling and export logistics. In addition, the price of the animal has an inertia. It does not recede immediately, right at the beginning of the recession. Part of the cattle we had already bought ended up being purchased at a much higher price, and this meat produced was not for a market that was as profitable as the Chinese market. We had to redirect to other markets, and with that, the profitability was somewhat compromised. All of this affected the EBITDA margin in September specifically, and impacted our profitability in the quarter.
In September, Brazil had a major drop in the EBITDA margin, about 50-70 basis points. At Athena Foods, we managed to keep the margin levels above double digits. When we look at the quarter as a whole, we managed to maintain a very healthy EBITDA margin and more importantly, EBITDA cash generation much higher than what we were planning at the beginning of the year. Looking at the last quarter in October, we continued with the absence of China for Brazilian exporters, but we already have an important recovery scenario, margins returning to the high single- digit level it's in August. This talking about Brazil. Why this happens? Because the sales operational schedule is already better reflecting the restriction imposed by China.
We had a major drop in the price of animals at the end of September and throughout October, which ended up being absorbed by the industry and obviously ended up benefiting our profitability level. In Brazil, the profitability level in September, which was very low, has returned to the levels of July and August. In this context, it is obviously still early. We still have November, December to follow, but we have great expectations of delivering the last quarter of the year performance superior or higher to what was seen in the Q3. Because it will reflect, first, positive impact of year-end seasonalities. Two, strong price movement in the international market. T hree, the price of cattle here in Brazil, which ended up dropping between 15%, 20%, 30% depending on the market during the month of October.
Compared to the previous quarter, it is at a much more attractive level for the industry. In the worst case scenario, we think that the fourth quarter, even considering restrictions imposed by China, we will have a profitability level, at least the same level, but very likely higher than the profitability we've seen in the third quarter. We're still waiting for the resumption of Chinese exports. We could still believe that this will happen soon, but given the scenario I've explained above, even considering that China does not return, we remain very confident to have a fourth quarter even better than the past quarter. Let's move on to slide nine to talk about financial leverage.
We show our leverage ratio measured by the net debt to EBITDA ratio for the last 12 months remains stable at 2.4 x. The company's net leverage indicator has remained stable since the beginning of 2020. Even considering disbursement of BRL 210 million in the share buyback program and another BRL 541 million rise in distribution of dividends paid throughout this period. Minerva's current level of leverage reflects our commitment to seeking and maintaining a more efficient capital structure, less costly, with lower risk profile, and fully aligned with our financial strategy. It is worth mentioning that discounting the amount of BRL 200 million related to early dividends, which will be effectively paid now by the end of November, that the company's net leverage remains practically stable between 2.4x and 2.5 x in the ratio net debt over EBITDA.
Let's move on to the next slide to talk about net income and operating cash flow. Q3 2021 was another quarter of positive results. Net income reached approximately BRL 72 million in the quarter and has already accumulated approximately BRL 450 million in the nine months of 2021. If we consider accumulated past 12 months, net income totals BRL 563 million. This result is a reflection of our commercial financial strategy over the months, past months and quarters. Total focus, free cash flow generation, risk management, especially reducing indebtedness, pillars that have been priority for the company and have contributed in a very relevant way to the results that we have achieved quarter- after- quarter. Moving now to the right-hand side of the slide, we see operating cash flow positive 3 Q, reaching BRL 412 million.
Even considering a variation of working capital that consumed BRL 204 million in cash this quarter, where the main impact came from the accounts receivable row. In line 12, the last 12 months, cash flow from operating activities totaled BRL +1.8 billion . On slides nine to 11, we talk about the greatest priority of company, which is free cash flow. On slide 11, we see in the bridge of third quarter that free cash flow remained positive for the 15th consecutive quarter, reaching BRL 83 million after the result of the foreign exchange hedge. This being almost four years in a row with positive cash generation, making the free cash flow a bit up in the quarter.
We started with an EBITDA before non-recurring item, BRL 639 million, CapEx of approximately BRL 179 million, concentrated on investment in maintenance and expansion of some of our plants, and also reflecting the anticipation of some investments foreseen in the schedule for the next quarter, such as additional investment in the modernization expansion of operational capacity in Colombia. We have the working capital account, which consumed BRL 204 million, as I mentioned previously, impacted by the accounts receivable line and the cash-based financial result, which was BRL -212 million.
After non-recurring effect to approximately BRL 9 million due to social expenses charged that we have with the PagBank, we reached a positive recurring free cash flow of BRL 53 million in Q3, which after positive cash result, BRL 30 million due to the foreign exchange hedge policy, we reached a free cash flow in the quarter of BRL 83 million. Talking about the past 12 months, free cash flow total approximately BRL 850 million. Start from a EBITDA of BRL 2.3 billion CapEx in the past 12 months, BRL 400 million, which was impacted by the expansion improvement of several plants in our operational chain and also by our corporate venture capital initiative. In addition, the working capital variation negative by BRL 148 million in the past 12 months. Cash-based financial result negative by approximately BRL 898 million.
We also have BRL 32 million non-recurring items related to the pandemic. Adding up, we reach a free cash flow of approximately BRL +850 million in the past 12 months, reflecting an excellent operational and financial performance of the company in this period. On slide 12, we present the bridge of the net debt. At the end of the previous quarter, net debt totaled BRL 5.3 billion. Now we recently had a cash inflow of BRL 252 million, referring to the exercise of controlling group subscription warrants as a subsequent event, which obviously adjusts the net debt down. During the quarter, the cash flow before the result of the foreign exchange hedge was positive BRL 53 million.
We also had the impact of the hedging instrument that ended up reducing our debt by BRL 30 million in the cash concept and another BRL +170 million with accounting effect only. We also have a cash effect, negative impact of BRL 759 million related to exchange variation on the portion of our debt that is in dollars. Adding all these accounts and setting up the bridge maneuver ends the quarter with a net debt of approximately BRL 5.5 billion, even considering that the exchange rate moved from BRL 5 billion to BRL 5.49 billion at the end of the quarter.
I want to emphasize once again that our current hedge policy continues to require that we have at least 50% protection for long-term passive or liability exchange exposure, that this can be seen in our explanatory note to our financial statements as well as our balance sheet. Our foreign exchange exposure is also highly protected, making us more confident to continue focusing on the company's operating and financial execution, seeking path of generating value to our shareholders. On to our next slide, we'll talk about the capital structure. Minerva Foods recently liability management initiative. As we said before, our leverage ratio measured by the net debt over EBITDA ratio for the past 12 months ended up for the quarter 2.4 x.
Our cash position at the end of the quarter remains very comfortable, around BRL 8 billion, adjusted by the inflow of subscription warrants from the controlling group, but also impacted by the repurchase and partial cancellation of the 2028 Bond, as highlighted on the slide. Speaking of indebtedness, about 71% of our debt is exposed to exchange variation or, as I mentioned previously, this management is committed to protecting our balance sheet. We have a hedge, a policy that determines that the company must have at least 50% of its long-term foreign exchange exposure hedged. This has proven to be very efficient given this recent foreign exchange volatility in Brazil.
Currently, our duration is around 5.6 years, with almost 90% of our indebtedness in the long term and 65% of amortizations concentrated only from 2028, as you can see in the chart below. On the right-hand side of the slide, I also present a few more details, the liability management efforts that we've been implementing since mid-2020. More recently, we can highlight the buyback and cancellation of $30 million or approximately BRL 785 million of the 2028 Bond, contributing to the reduction of our gross debt and obviously the cost of debt. In July, we had the Bond 2031 retap, raising an additional $400 million in order to anticipate some more expensive debt rollover that would occur in the short term in our balance sheet.
Finally, in October, we had the 11th issue of debentures by the company in the amount of BRL 400 million maturing five years, yielding CDI +1.6% per year. It's worth mentioning that the proceeds from this offering will be used to pay our sixth issue of debentures maturing on May 2020 and yielding CDI +1.8% per year. Therefore, we're going to have an extension of the debt profile and a reduction of the annual cost of our debt, which ends up translating into a lower level of financial expense. The result of all these initiatives, in addition to reduction cost of our debt and gross leverage, also reflects the stretching of our debt profile, with most relevant maturities being concentrated 2028 and 2031.
The liability management efforts reinforce our commitment to financial discipline, pursuit of capital structure less costly with lower risk profile, especially well aligned with our shareholder value creation strategy. Let's move on to the last slide of the presentation. Talk about early distribution of dividends, which is obviously one of the ways to generate and deliver value to our shareholders. On slide 14, as Fernando commented at the beginning of the presentation, generating value to our shareholders is one of the main priorities of this management. Thus, in line with the excellent operating and financial performance we have achieved in the recent quarters with the consistent execution in our leverage reduction process, we announced yesterday the distribution interim dividends in the amount of BRL 200 million, which gives a dividend of approximately BRL 0.35 per share.
If we take the earnings already distributed over 2021, we have first JCP in January in a net amount of BRL 90 million to complementary dividends in April in the order of BRL 384 million. Now this distribution of dividend of BRL 200 million will reach a total of approximately BRL 600 million or BRL 1.12 reais per share in dividends effectively paid in 2020. We're talking about a significant dividend yield of over 12% considering the asset price at the end of October. This scenario has only been possible with all dedication and effort of the Minerva team in the recent years, and our priority has always been very clear, focus on cash and reduce debt and level of leverage, create conditions for Minerva Foods to manage and deliver value consistently and relevantly to its shareholder.
Finally, it's worth emphasizing that this scenario for distribution of complementary dividend does not compromise Minerva's strategy of maintaining a healthy and balanced level of leverage. You can see on the bottom right of the slide there, if we do the leverage account considering the cash outflow related to these R$ 200 million dividends, the net debt over EBITDA ratio for the past 12 months is stable, 2.5x as I mentioned earlier. In other words, with this distribution, we still have a comfortable balance sheet, a solid balance capture strategy, much less costly with lower risk profile, which ends up providing opportunities like this to generate and distribute even more value to our shareholders. Let's move on to our Q&A session. Thank you very much.
Ladies and gentlemen, we will now start the Q&A session for analysts and investors. Our first question comes from Ricardo Alves from Morgan Stanley.
Good morning, Fernando and Edison. Thank you for the call. I think the result itself has positively surprised. We wanted to know about the strength, considering your comments on the performance of October, really impressive. In this sense, considering that demand is so strong, our base case in the market is that there will be a normalization of China in 2022. When you think about next year, in addition to this volatility of the fourth quarter in 2022, do you see a scenario that is doable of more margin, operating at low double digit, a bit over 10%, considering that the Brazil margin is running at pre-suspension levels? Considering that you have very sound levels, in the sense of speaking about margin of the year a bit ahead. If you have some specific of global prices of beef, this would help you. Thank you.
Ricardo, well, first, I'd like to take the opportunity of your question to make a correction. I've described the performance of the company in the quarter month- by- month, something that I don't usually do. I, because I thought this quarter made sense because the ban on China occurred in September. To recap, in July and August, we had Athena operating at two digit and Minerva high one digit. When we had the ban in September, because the cattle price was high, we had to reprogram logistics in Minerva.
Margins in Brazil fell by 500 basis points and 700 basis points, not as I mentioned previously in the call, so from levels of 9% and moved to levels below 4% in September, actually. On the other hand, the margins of Athena continue very healthy, sound at level of low two digit. We closed the quarter at 8.8% with quite important performance. When we moved to October, the margins in Brazil recovered to levels of July and August, and Athena keeps the same level.
Therefore, October, we had a margin that was very similar to what July and August were, which were the best months in the third quarter. Even assuming a scenario in which we do not have China in the fourth quarter, we should have a performance in the worst case scenario, like the first quarter, but much like, more likely than, better than the third quarter if the conditions given now were given in October are kept until the end of the year. How do we look at 2022? Very difficult to give you prospective margin 2022 because there are many things happening. For example, we have major pressure in terms of freight prices reflected in this quarter in some renegotiations of contract and matured in our expenses, sales. We are in the process of drafting our budget.
I cannot give you a reference or margin prospect, but if everything happens the way they are happening, we will repeat in 2022 the performance for 2021 in the worst case scenario. The balance of supply and demand of beef tends to get worse, much tighter. Economies tend to recover more strongly, removing the Brazilian economy, economies abroad. We see especially in Asia greater movement next year than in 2021. This suddenly drives more consumption of beef, which reflects in price. Second point, we have a major change in terms of Livestock cycle next year. We've been mentioning this since 2018, 2019, and that's our base scenario. From the second half of 2022, we would have a change in the cycle.
The good news is that we see a huge amount, number of animals that were born in this period that probably will be available to the market before we expected. This should support a scenario of cattle prices on average in 2022 lower than 2021. Even assuming this recent drop of September, in which prices moved from that level of $315-$320, somehow, and came close to $260, $270. Even considering this in the average, we're going to have cheaper cattle than we had in 2021. With these drivers put on the table, it's very difficult for us to have a scenario for 2022 in which the margins would be worse in 2021. It's exactly the contrary. The amount of improvement is hard to measure at the moment.
Adding to what Edison said, we've noticed that our thesis of investment based in South America, how much we're making in markets worldwide. A part of the thesis of producing beef in the region of the planet which is most competitive gains strength, pace, and it has increased. We have a favorable cycle in Brazil for next year, as Edison has described, and we have the recovery of economies with a stronger demand, especially driven by Southeast Asia. We are very optimistic, not mentioning the margins, with indication that the next two, three years we're going to have a reality that is quite favorable in South America.
Perfect. Thank you, Fernando. Thank you, Edison, for the clarifications.
The next question is from Rodrigo Almeida from Santander.
Good morning, Fernando. Good morning, Edison. Thank you for your presentation. I'd like to touch on some points. First, talk about capital allocation. You have very sound cash position, BRL 8 billion. Even considering the bond buyback and dividends announced, your position is quite strong. I'd like to understand what you can think in terms of capital structure from now on, the additional dividends. Do you have a more robust buyback spend? You see certain limits. I'd like to hear from you, cash allocation focus and the strategy in terms of reduction of gross debt, going back to the point of the previous question. Prospects for fourth quarter, short term, how can we think about your level of growth? You had levels for Athena Foods.
Can we think that you can have a higher level at Athena Foods? How do you think this can impact the cattle prices in countries like Uruguay? Still on this point, in terms of expenses, so it's grown a lot, so quarter- against- quarter. You talked about logistics. I'd like to understand how this impacts the normalization. If this has a relation to the more challenging global scenario, I'd like to understand how all of it impacts it and possibilities of. If you have any sort of views on M&As, et c. Athena Foods, could you comment on that?
Rodrigo, I'm going to answer the first and the third, and Fernando will answer the second. Talking about the third, as G&A, what drove the prices were freight expenses. You can see that throughout the world we have logistics costs. We had some contracts that were signed that matured. In the third quarter, we re-signed the contract at a higher level, so therefore we have an effect that happens once in the quarter. From now onward, we should not expect additional increases.
There was an increase in expenses with freight. In the third quarter, we locked them in the contracts and this is going to be permanent or maintained next quarter. In terms of capital structure, BRL 8 billion that we have in cash, our commitment of $400 million is debt buyback or rollover. $400 million is something like BRL 2,200,000,000 , about. This will be used over the next few months and quarters in buyback slash rollover. When I say we've issued the bond, I'm going to use the money to amortize the debt.
I have BRL 400 million realized with the debentures that we've issued that are going to be used to redeem a series that will mature in May, and we're going to have anticipated redemption probably by the end of November. The specific date will depend on the best economic ratio in terms of fee and anticipated redemption. There's a clause that from a certain date in November, the fee is dropped significantly. We're just waiting for the date because from the financial standpoint, it's worthwhile waiting two, three weeks to redeem the amount. Mostly the excess cash we have, the policy of cash that is have about three months of cattle. But we should have BRL 5 billion, between BRL 4.5 billion and BRL 5 billion. We have BRL 8 billion.
The BRL 3 billion additional , BRL 3.5 billion additional to BRL 2.6 billion-BRL 2.8 billion will be used for prepayment of debt/rollover and anticipated amortization. Regarding dividends, we are anticipating payment of dividends following the policy defined by the Board previously. We'll wait for the end of the year. Depending on the conditions of capital structure, leverage, and net income at year-end, we should have a complementary distribution of dividends after the disclosure of closing balance sheet of 2021. I'm going to hand over to Fernando to answer the second question.
Rodrigo, what I highlight here is the ability and instruments Minerva has of arbitrage of various sources, origins and various points. We've made an administrative change, and we're going to add a bit more color on next year, which is LATAM North, Brazil, Paraguay and Colombia, and LATAM South between Uruguay and Argentina.
This division has to do with market access and especially the type of raw materials, type of cattle we have in those markets. With this change, we've gained great speed, more integration between the portfolios, between the possibility of your allocating from one country to the other. What we've seen at Athena is that we've had some countries that were highlighted or stood out in this allocation.
This happens weekly based on the cattle price, currency, access to markets, and obviously, as we've mentioned here in the presentation, with certain sanitary changes that we've had, as was the case of China, the speed we moved and that today we prepare through the instruments of analytics, AI and portfolio analysis, they allow us to allocate and reallocate when events happen very quickly our portfolios and production, especially operating areas. Our action is very strong. If China's back, we have contingency plans already established. If it doesn't resume, we move on. We're prepared for whatever scenario we face ahead.
Perfect. Thank you very much. Thank you, Fernando. Thank you, Edison. Have a good day.
The next question is from Thiago Duarte from BTG Pactual.
Hello, good morning, Fernando, Edison, everyone. I think that more than the discussion of the margin that was being discussed in one of the previous questions, I think one of the points that has drawn the most attention this year is dynamics of top line. The strength of growth in revenue. In this context, I'd like to discuss two points. First, when we talk about export mix to the market in Asia, obviously without China, it's been showing this strength in some of the past few quarters.
When we look at Brazil and Athena, the performance of Minerva in the case of Brazil and Americas in the case of Athena. This helps to explain in addition to Asia. It helps explain a lot this dynamics of the average price quite strong in the past quarter. I'd like you to comment, if you can, about which markets in these various geographies. It seems that the U.S. we know has had great performance in terms of beef demand. That is important part of the answer. If you could comment a bit on this, I think these are two key geographies that are drawing our attention in this situation.
Edison made an interesting comment regarding top line in his presentation, where he showed the evolution of EBITDA and margins over the past quarters, mentioning that this is has a level spread. You operate this very well have been operating it quite well over the past years. In this dynamic of top line that is very strong and margins showing some performance regarding top line quite strong. I'd like you to discuss a bit the space that you have, if you have, for average prices to continue growing as they have. It's quite impressive, especially you see average prices in dollar at a high that is quite steep for the past quarters.
I'd like to hear that in this level spread on a revenue that is very strong, if it makes sense that the revenue has more space to grow or not. If we take Brazil, this recent drop in the price of cattle, we assume that it's going to impact average prices of beef. I'd like to ask you this question on the top line in a couple of aspects. Geographic space for high and additional prices, and the other one was CapEx. We've seen the CapEx of growth. If you can give some direction on these levels, on sustainable levels of CapEx in the next quarters and next year. Thank you.
I'm going to talk about CapEx, and then Fernando can give better color. For CapEx, we acquired Colombia a year ago. How we discovered that we were going to invest to increase capacity to production in those plants as we had made in the first acquisition and the investments we made. We increased lines and slaughter houses. We can double production capacity in a one- to two-year period. We're adopting exactly the same tactics. Colombia has become a market in addition to quite important to us in terms of top line. In terms of profitability, it started accessing some markets that it did not before. Now we have become an even more relevant player there. It makes all sense from the standpoint of attracting synergies, having more value in the operation to anticipate this CapEx that was going to be made this year.
Next year we decided to bring it earlier for the third and probably fourth quarter. We continue with this head of maintenance CapEx in this range of approximately, if you take our history, BRL 300 million, roughly a year. Plus something of expansion that was programmed for Colombia along over two years, that we are bringing forward for third, fourth, or probably first quarter next year.
Adding to Edison, he's saying this organic growth that we see in some of the origins balancing a bit more each one of the countries that we have in a proportion of the available cattle and export and market access. This highlight of Colombia that Edison gave is quite relevant. On your two questions, Minerva has always had this DNA of risk management, and this leads to a strategy of opening, of more opening, that are possible, more openings that are possible of markets. China is very important, but we consider that Southeast Asia is quite relevant.
Other markets like Malaysia, Philippines, Indonesia, Singapore, Vietnam, are relevant to us as well. We, with diversification in the Middle East, we have a base for various countries where we operate. NAFTA and Americas, and especially Chile, also become very important destinations going back to Colombia. Colombia has had recently the approval to export the meat and beef to Chile. We're not only pioneers, but with the branding of Minerva, you can quickly leverage markets in those places. Geographic diversification in both origin then destination, considering internal or domestic markets are quite relevant. All of this allows us that within this business spread, moving to your second question, allows us to have options, allows us to have alternatives to redirect our production and our sales according to the market. What do you have in this matrix?
Great opportunity with the investments we've made. In the past two years of analytics, they allow us to identify opportunities, and the opportunities are quickly transferred to operational areas, so that we can reduce inertia of changes and keep stability of margin. The other thing you've mentioned about prices on the international markets, it's not us, it's the market itself. We're seeing food inflation, beef inflation, all areas. In all consumer markets, what we believe that there is an imbalance. Let's look at what happened in other producing countries. We have a reduction of supply which maintains beef at high levels. Just to reinforce one of the positive surprises that we've had has been how China has changed its habit quickly and less flexible, less sensitive to price.
If you analyze what is happening, beef has become an item that is aspirational of the middle class in China. This, you can imagine the power this has. Even with high prices, rising prices, demand maintains reasonably stable. We see good prospects from now onwards, but I reinforce what I said in the previous question, with Rodrigo, the strength that arbitrage has that, so that within the spreads, we can be increasingly more efficient.
Very good. Thank you very much.
The next question is from Gustavo Troyano from Itaú BBA.
Good morning, Fernando. Edison. My question is more focused on the impact of exports from Brazil to China, looking at the use of capacity and level of slaughter in Brazil. You've just captured quite well the dynamics of profitability month- by- month. I'd like to know about the use of capacity, if you can give it month- by- month, considering that the use in Brazil had a slight drop in the fourth quarter, considering the third quarter.
Can you give more granular view over the third quarter, especially focusing on September, where we should see an impact of the ban of China on the slaughter? And I'd like to know qualitatively about the use in Brazil on October. I'd like to know about the impact, the use, the risk of the end of the fourth quarter. Is it worse in October or is it a bit more flat October, November? Thank you very much.
Look, capacity utilization has been analogous to the revenue of this curve. This is close. So we have average capacity for the quarter. Athena on average was over 80% in the three months. I cannot give you a precise number, 80.2%, 80.1%, 80.3%. On average, over 80% accumulated 81% on average. Brazil did not. Brazil had a greater utilization. July and August dropped a bit below 70%. The levels were above 72%, dropped below 70% in September. In October, it got back to September level. In October, it operated in an average that was the previous quarter. Considering seasonality, it's accelerating. This is what I can tell you. Because we actually have a stronger quarter seasonally more favorable in Brazil in the fourth quarter. Again, just making the various disclaimers. The use of capacity is always calculated, adjusted by working day of each month, each quarter. Okay?
Thank you, Edison. Perfect.
Ladies and gentlemen, remind you that if you wish to ask questions, you have to press star one. The next question is from Guilherme Palhares from Bank of America.
Good morning, Fernando. Good morning, Edison. I have two brief questions adding to the agenda on China. Regarding the impact on the domestic market, you see cattle prices. In September, you have high prices and price of Beef more resilient at that. To what extent can we, looking at the fourth quarter, not only considering seasonality, what we have.
I think it's been cut. Connection has been dropped. Excuse us. We have the backup line, so you can proceed. Guilherme, could you please repeat the question? Because our connection has been interrupted.
Mr. Guilherme Palhares has been disconnected. Could you please continue with the webcast questions?
Well, I'm going to read few questions from the webcast and try to answer them. First question on an agreement to revenue margin for the fourth quarter, considering China and Brazil. I think I've answered this question during the presentation. The buyback of the debentures will happen in November. Yes. The date, it will be considering the subscription. We have a date from which we have the fees that are lower. We're going to look at that, and we're going to inform the date that is most convenient economically for the company or financially for the company.
How much volume can be directed to, amongst the geographies? This is a question or a decision we make weekly. As Fernando said, we have a matrix of optimization that is weekly, where we take all the prices that we can sell, all the cuts produced at all Minerva plants, weekly. We make this optimization of this matrix, and then we get to the ideal points, considering all the variables involved, logistic costs, working capital, foreign exchange rate, freight, and especially conditions of each one of the plants.
When I put Brazilian plants to run the matrix with a ban of China, obviously China is no longer a possible destination. China becomes a possible destination to be maximized from other geographies. I cannot give you a color as to volume. All volumes are produced weekly. They are sent to the geographies according to the optimization matrix.
The impact of ocean freight for the company? We use ocean freight, as I said. There have been increases. We have some contracts that have been renegotiated, some of them. In the third quarter we have impact on our financial statement of increase in SG&A. An additional point on ocean freight, all the proteins, the most expensive is Beef. Therefore, in terms of percentage, the impact is lower on Beef than, for example, on chicken and other animal proteins. The situation in China and also pork. The pork price has increased. We've seen this two weeks ago, so there was a drop and pork is no longer true. Beef is still at a level that is quite high, and pork has started to increase again. We continue having the same outlook of supply-demand for next year, especially considering consumption growth that should continue to happen in Asia, China.
Just a question on lamb. It's not in Brazil. Well, actually it's lamb. Lamb is not in Brazil, it's in Australia. We do not intend to have lamb in Brazil. Commenting on the swine, cattle in China, some mentioned that they dropped 30% of what it was because it is crisis and they had great recovery because 2019, 2020. This reflected, by the way, the increase of consumption of grains in China to feed the herds. The herd issue has reached 75%-80% of what it used to be before the ASF crisis. Still 20%-25% lower, but there has been a major recovery.
Why is this good? Because the effect of this important recovery of the swine herd, the growth of Beef does not stop despite of that, because that based on volumes and prices practiced in the domestic Chinese market. Going back to Leon's question, he asked whether the drop of prices in Beef brings an impact to volume in Brazil.
Beef has very high income, so the price need is lower. What happens when the protein prices grow? We have replacement between proteins. Since all proteins became expensive, so you have this happening to the domestic market. If Beef drops and other proteins may keep the same level, you have an increase in volume due to arbitrage and replacement. If the movement is more or less equal and coordinated, then what will determine the volumes is the income volume.
If the ban from China is over, if the purchase price of China will improve in Athena? If the ban of China is over, we'll run the weekly metrics considering that Brazil can export to China. What will happen? More volumes from Brazil will be directed to China and Athena. The volumes that were from other countries, for example U.S. and Chile, that were served by Brazil will continue to be served by the Athena plants, and the final mix in terms of margin will be better than what we had in September. I think I made this very clear during my presentation when everything was open and all the plants maximizing their return, we had Athena operating in low single digit in Brazil and high single digit. When China closed, Athena continued operating in low single digit, and Brazil had a drop in the single digit.
In October, Brazil continued ban by China, but with a drop in cattle prices, the low single digit in Brazil became high single digit, and we had margins in October close to what we had in July and August. Therefore, if we have China ban this scenario that we see in July and August should happen November, December, with a positive effect of seasonality on one hand, and also another point, positive point, which is the drop in cattle prices on the other side. I think this is it. Thank you.
Regardless of the environment that we have, the moment is still challenging. We'll continue to face this together the way we can, have conducted our business with our DNA. The prospects for the world's vaccination should be advanced faster and fills us with hope with the expectation of the end of the pandemic and a new normality in the new market we are dedicating increasingly towards abroad, closer to suppliers, to our customers, regardless of where they are in terms of geographies. One of those pillars that I've mentioned to our culture is sustainability.
Increasingly, this is a differential for companies that want to be global players, for companies that are placed in different markets, in different geographies. We'll keep on being, paying attention to the global market of Beef and more than ever, confident in the power that we have in South America. Our corporate values will reinstate our commitment to capital discipline and ethical and sustainable practices. We believe this is the best way to generate sustainable value in the long term. Thank you very much for your interest in Minerva Foods, and we remain at your disposal for any questions, clarifications, so that we can be increasingly stronger and closer to you. Thank you all very much.
Minerva's conference call is ended. We thank you for your participation, and we wish you a very good day.