Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to SLC Agrícola third quarter of 2018 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 this event is being recorded, and all participants will be in listen-only mode during the company's presentation.
After the company's remarks are complete, there will be a question- and- answer session. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Also, today's live webcast, both audio and slideshow, may be accessed through SLC Agrícola website at slcagricola.com.br in the investor relations section by clicking on the banner Webcast 3Q 2018. The following presentation is also available to download on the webcast platform.
The following information is available in thousands of Brazilian reals 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.
Investors 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 to differ materially from those expressed in such forward-looking statements. Now, I'll turn the conference over to Mr. Aurélio Pavinato, CEO. Mr. Pavinato, you may proceed.
Good morning, and thank you for participating in SLC Agrícola's earnings conference call for the third quarter of 2018. Let's go to slide three, please, which has a summary of our yields in the 2017-2018 crop year, whose harvest was completed in this third quarter. We updated our estimate for cotton lint yield to 1,810 kg per hectare, up 1.3% from the figure presented on the second quarter. The figure was also 8.3% above our initial forecast and 6% above the Brazilian average. For soybeans, which harvest was completed in the second quarter, the average yield was 3 tons at 3,739 kg per hectare, 10.2% above the Brazilian average and 13.9% above the 2016-2017 crop year.
This second straight year of yields well above the trend line is with current strategy of focusing on yield gains and on expanding our advance in relation to the average national yields. The main measures supporting these results were improvement in machinery dimensioning per farm, growth focus on developed areas with a consequent increase in the average maturity of our fields, and investments in precision agriculture to ensure greater crop uniformity. Let's turn it to slide five, where we will begin our comments on the recent price variation in our main products and short-term price outlooks.
Cotton prices are basically at the same level as the start of the year, given the recent decline, which was due to the uncertainties caused by the trade war between the United States and China. In the short term, however, the supply-demand balance for cotton remains favorable, with consumption following a solid upward path in recent years to new records and production growing more slowly, which points to yet another year of drawdowns in global stocks.
The USDA report of November 8th estimated world cotton consumption of 25.9 million tons and world cotton production 25.9 million tons and consumption 27.6 million tons. In the United States, the world's largest cotton exporter, USDA data point to production of 5 million tons, 12% lower than last crop year, mainly due to the severe drought in Texas, the country's main cotton-producing state. On top of that, Hurricane Florence and Michael not only caused additional losses in the volume produced, estimated at up to 290,000 tons, but also affected the quality of the fiber produced.
Since Brazilian cotton is of high quality, on par with that of the U.S. and Australia, a production shortfall in the United States provides space for Brazil to expand its share of global trade. In the case of soybeans, whose price chart show, you can see on slide seven, there was a reduction in prices over the year in Chicago. Basically, due to the confirmation by China of a 25% duty on soybean imports from the United States, which is one of the developments of the trade war since earlier.
Soybean prices were further pressured by the good conditions at the U.S. crop in 2018, 2019, for which harvest is 83% concluded, according to the USDA. Despite the lower price in Chicago, the prices paid in Brazilian reals to local producers remain above the level of the year ago, given the Brazilian reals depreciation during the year, and the premiums in U.S. dollar, the so-called basis, currently in the Brazilian market, as shown in the chart.
Note that prices currently practicing Chicago are not attractive to U.S. producers, which has led the Trump administration to announce a temporary financial aid package for farmers until trade discussions with China are not concluded. Corn prices, which you can see on slide seven, are also near the levels at the start of the year, despite the volatility during the period. In the global market, a second year of production deficits should support prices in the short and medium term. Despite the strong production in the United States in the 2018, 2019 crop year, shortfalls in second crop corn in Brazil and at the corn crop in Argentina reduced supply during the year.
The trade war between the United States and China had a little impact on international corn prices, since China is not a relevant corn importer. In domestic markets, prices are traded at a premium on Chicago prices, as you can see in the chart, being the shortfall in the second crop, the main factor of the support. According to CONAB, corn production was 17% lower than in 2016, 2017 crop years in Brazil. I will now pass the call over to my colleague, Ivo Brum, our CFO and IRO, who will comment on our financial results in the period.
Good morning, everyone. Let's go to slide nine, which shows some highlights from our income statement for the period. Improvement on the operational front supported unprecedented financial results for the nine month period, with adjusted EBITDA of BRL 397 million, up 26% year-over-year. Net income of BRL 373 million, up 60% year-over-year. On the quarterly comparison, EBITDA and net income were lower. However, in our business, quarterly analysis must take into account the context. The lower EBITDA is explained by the fact that a higher percentage of the soybeans from the current crop was invoiced over the first semester, if compared with 2017.
Also by delays in the shipment, which were postponed to the fourth quarter, given the inconvenience established of the minimum freight rates. Our expectation for the fourth quarter of 2018 is to invoice approximately another 85,000 tons of cotton, 166,000 tons of the soybean, and 130,000 tons of corn. In the case of net income, the reduction between the third quarter of this year and the same quarter last year is due to the dynamics of recognizing Biological Assets, since the distribution of the net income among quarters was different in 2018 than in 2017.
In 2018, higher shares of the net profit projected for the year was recognized in the first half, with a lower share left to be recognized in the third and fourth quarters. Net debt, as detailed on slide 10, increased during the year, but net debt to EBITDA ratio remained at a very comfortable level of 1.45x . The higher debt balance is explained by the sharp expansion in the planted area for the new crop year, mainly due to the incorporation of a new production unit, Pantanal Farm, and by the significant expansion in the cotton planted area, which pressure working capital requirements. I will now pass the call back over to Pavinato , who will comment on the outlook for the next call.
Thank you, Ivo. Let's move to slide 12, which has an infographic with a summary of the production cycle. We are finalizing the planting of soybean, which was already 80% complete as of November 9th, and are about to start planting cotton. To date, the crops are presenting excellent aspects, given the excellent execution of the planting operations by our teams, combined with good rainfall distribution and intensity in all regions. As you can see on slides 13, 14, 15, and 16. Let's go after to slide 17, which shows our updated planted area forecast for the 2018-2019 crop year.
As you can see, due to the excellent conditions for planting soybean, we expanded the initially projected planted area from 455,000 to 457,000 hectares, which is 13% larger than in the previous crop year. Also note that in line with another pillar of our current strategy, which is growing our operations in higher value crops, we are expanding our cotton planted area by 28%. As part of the continuous efforts to optimize asset utilization, the company's total second crop planted area is expanding 18.7%.
On slide 18, you can see details of the cost per hectare budget for the 2018-2019 crop year. Mainly due to the r eal depreciation over the year, the average cost increase in r eals is estimated at 19.4% on the previous crop year, considering a budget effects rate of BRL 3.8 for input costs. Note, however, that these effects will be offset proportionally by the increase in revenues, giving the company's hedging strategy, which has precisely this objective.
Therefore, there should be no downward pressure on margins, as you can see on slide 19, which presents the company's current hedge position for 2018 and 2019, showing good prices levels. Lastly, given this combination of factors, namely the expansion in planted area, the alignment of costs and revenues, and good yield expectations for 2018-2019 crop year are very positive, leading us to expect high profitability for the coming crop year. Thank you. Now let's open the call for questions.
Ladies and gentlemen, we will now initiate the question- and- answer session. If you would like to ask a question, please dial star one. If at any point your question has been answered, you may remove your question from the Q&A by pressing the pound key. Thank you. This concludes today's presentation. You may disconnect your line at this time, and have a nice day.