Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to SLC Agrícola to the second quarter of 2020 earnings conference call. Today we have with us Mr. Aurélio Pavinato, CEO, and Mr. Ivo Marcon Brum, CFO and Investor Relations Officer. We would like to inform you that this event is being recorded and all participants will be listen-only mode with the company's presentation. After the company remarks are completed, there will be a question-and-answer session, and at that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to reach an operator. Also, today's live webcast, both audio and slideshow may be accessed through the SLC Agrícola website at www.slcagricola.com.br in the Investor Relations section by clicking the banner of Webcast 2Q 2020.
The following presentation is also available to download on the webcast platform. The following information is available in thousands of Brazilian Real and in IFRS, except when otherwise indicated. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of SLC Agrícola management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to the future events and therefore depend on circumstances that may or may not occur in the future. The investor should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of the company and could cause results that differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Aurélio Pavinato, CEO. You may proceed.
Good morning. Thank you for participating in SLC Agrícola's earnings conference call for the second quarter of 2020. Let's go to slide three, please, where we will comment on our operating performance. With the end of the soybean harvest, the final yield was 3,900 kg per hectare or 8.1% higher than our initial estimate and 19.2% higher than the national average. Note that for the third straight year, we set a new soybean yield record, which is in line with our current strategy to focus on maximizing operating efficiency. For cotton, with 55% of the area harvested, the estimated yield considering the weighting between the cotton first and second crops is 1,761 kg per hectare, down 2.4% from the initial forecast, which is explained by the low precipitation.
Lastly, for the corn second crop, with 84% of the area harvested, the estimated yield is slightly below forecast at 7,220 kg per hectare, due to below-average precipitation in the state of Mato Grosso and Mato Grosso do Sul during the flowering and seed filling phases. Even so, the result is 32% above the national average for corn second crop published by CONAB, already using the data released yesterday by the institution. Let's go now to slide five, where I will comment briefly on the international price of our main product. The second quarter of 2020 registered a recovery in international cotton prices, given that the supply side responded to lower prices by reducing the planted area in the Northern Hemisphere. On the demand side, the beginning of a recovery already can be observed as economies begin to resume retail activities, albeit slowly.
In Brazil, the effect from the lower prices in dollar was significantly mitigated by the weaker Brazilian Real against the dollar. In addition, taking advantage of the expansion in planted area in the 2018/2019 crop year, which was harvested in the middle of 2019, and the stability in planted area in the 2019-2020 crop year, currently being harvested. The ANEA estimates that in 2020, Brazil will export 1.9 million tons, in line with the growth trend observed in the last four years. Soybean spot prices on Chicago Board of Trade and the prices paid for the grain based on the Paranaguá CEPEA reference also staged recoveries over recent months.
The maintenance of the premiums paid and the local currency depreciation enabled soybean price to reach levels above those in the same period of last year, and more recently, results in quotes of over BRL 115 per bag, according to CEPEA data for Paranaguá. In a quarter marked by risk aversion due to the economic slowdown, prices for the soy complex in Chicago showed resilience in relation to the Bloomberg Commodity Index, which registered a decline of approximately 15% in 2020. The resumption of imports by China, driven by expectations of a recovery in domestic demand in that country, has been the main factor sustaining prices. Especially as the past cycle marked by the U.S.-China trade war and the African swine fever, which contributes to the scenario of depressed prices for the commodity international markets.
For corn, international prices currently are down from the same period of last year, reflected to a large extent the scenario of lower consumption in the United States, which is basically due to the closure of corn ethanol production plants in the country and the resulting increase in estimated ending stocks. In Brazil, however, the market was strong in the first half of the year due to the demand from the animal protein industry and from export markets, supporting to date a continuation of high premiums over prices in Chicago. I will now pass the call over to my colleague Ivo Marcon Brum, our CFO and IRO, who will go over our financial results in the period.
Good morning, everyone. Let's go to slide seven, which presents some highlights from our income statement. Net revenue grew by 36% year-over-year in the second quarter, mainly due to the higher volume of soybean invoiced. In the first half of this year, net revenue advanced at 15.8% due to 11% increase in the invoice volume combined with the higher invoiced unit price for all crops except cotton. Adjusted EBITDA was BRL 145 million , advancing 31% on the second quarter last year. Adjusted EBITDA margin ended the period at 25.7%. The variation in the adjusted EBITDA reflected the growth of BRL 35 million in gross income, excluding variation in the biological assets. Analyzing the contribution by crop, gross income growth in the quarter was driven by soybean crop, which registers growth in the invoice volume added by margin expansion.
This higher gross income was partially offset by increase in SG&A. In the first half, adjusted EBITDA was BRL 327.7 million, 3.3% higher than the prior-year period, with adjusted EBITDA margin of 27.4%. Net income in the second quarter was BRL 196.1 million, decreasing 7.5% year-over-year, mainly due to the accounting dynamics of biological assets, especially soybean. In 2020, most of the net income attributed to this crop was recognized in the first quarter when compared to 2019. This is confirmed by an analysis of the net income in the year to date, which grew by 9% on the prior year period to BRL 352.5 million. As we have been emphasizing our communication materials, the accounting dynamic of biological assets can shift income recognition between quarters, which means that the analysis of the year-to-date results better reflects the expectation of a given crop year.
To conclude, slide eight presents our debt position. Adjusted net debt ended the second quarter of 2020 at BRL 1.4 billion, representing increase of BRL 487 million from the fourth quarter of last year. Net debt was affected mainly by the higher working capital needs, which in turn were influenced by the higher payments of agricultural inputs for the 2019/2020 crop year. Note that this increase in debt is expected for this period of the year, given the financial cycle of the business, given that we are now harvesting of cotton and corn, which will be invoiced in the second half of the year, generate higher operational cash flow. Gross debt also increased in the period, reflecting the conservative strategy to maintain a comfortable cash position to protect the company from any further economic financial stress caused by pandemic.
With the new interest rate scenario, the company raised mainly long-term debt indexed to the CDI rate, which led to a reduction in the cost of the debt with the annual average rate falling from 5% in the fourth quarter 2019 to 3.2% in the first half of this year. Lastly, I wish to highlight that annual shareholders meeting held virtually on July 30th, approved a new dividend distribution of BRL [7.7] million, which was paid yesterday, bringing total dividends paid in the year to BRL 147.5 million. I will now pass the call back to Pavinato for his outlook for the rest of the crop year and the next crop year.
Thank you, Ivo. Let's go to slide 10, which shows the updated hedge position for the 2019/2020 and 2020/2021 crop years, already converted into Brazilian real. We made great progress in selling production from the crop year, obtaining prices above the current market and above last crop year based on the amount in local currency. We also concluded our purchase of fertilizers and chemicals for the 2020/2021 crop year, with the negotiations leading to significantly lower prices in dollar compared to last crop year. Considering the current scenario for dollar costs and prices, as well as the level of the FX rate, our expectation is for the good level of profitability to be maintained for 2021. Thank you. I will be available for those questions.
Thank you. The floor now is open for questions and we will initiate the Q&A session. If you would like to ask a question, please dial star one at your phone. If at any point your question has been answered, you can remove yourself from the queue by pressing the pound key. Our first question is from Guilherme Palhares from Bank of America. Mr. Guilherme, you may proceed.
Hi, Pavinato. Hi, Ivo. Hope you're all safe. I have two questions on my side. The first one is regarding the mix of crops for the next season, given the outlook that you will have already designed for us, how are you thinking about the planning for the production for the next crop? Also, given that we saw this huge forecast having expectations lowered, what are your thoughts going forward during this crop? I know that the company is already harvesting a large share of its crops, but do you see any downside risks to yields as well? Lastly, a third question here is regarding cost of the current season. When comparing to your first budget, last year, how costs are behaving during this crop? Thank you.
Good morning, Guilherme. About the mix of crops, we are going to announce in October our planted area for next crop year. The trend, Guilherme, is to maintain the share of crops because the soybean profitability is in a good level. The corn has been a profitable crop, better than years before, so we're going to plant as much as possible corn. The cotton, the price recovered, and when we see the contribution margin of the cotton, comparative to soybean, normally it has been higher than soybean. Considering this information, we can say the trend is not to change so much the share of crops. About the cost production, as we mentioned, the reduction prices of fertilizer and chemicals is going to help us a lot to reduce our production cost in dollar terms.
Considering that the Brazilian Real depreciation and all of our Brazilian Real basis costs will be much lower in dollar term. Our forecast that next crop year, we are going to have a strong reduction on cost in dollar terms. As you can see, with this price level in the market, it gives us probably an opportunity to keep good margins over the years. I don't know if I answered all your questions.
That's very clear, Pavinato. If I may ask about the dollar that you marked your cost during this season, what is the average dollar that you had during this season? When looking at the next one, if taking the current effects could be a good proxy, so we can estimate cost growth for the next season. Thank you.
I would like Ivo to answer this hedge position. Ivo, please?
Okay, Pavinato. Thank you, Guilherme. As you know, you have a hedge policy, so according, you are paying the suppliers, we start to sell the NDFs for the future sales. Last crop, our dollar, let's say, base for the cost was around BRL 4 per dollar. In the end of the crop, we will have around the BRL 4.20 because we have the devaluation of reais in the process. For the next crop, our goal nowadays is around BRL 5.20 per dollar. You have a few payments, let's say, of the suppliers. When you have a position, you sell the future dollar. But our idea is to have something around BRL 5.20 as our base for the next budget. You have the definition clearly in the next quarter because we have a meeting with our board to define our budget.
Okay, that's very clear. Thank you, guys.
Remember everyone, if you have a question to do, please press star one at your phone. Thank you. This concludes today's presentation. You may disconnect your lines at this time and have a nice day.