Morning. Welcome to Boa Safra third quarter 2022 earnings release teleconference. Among us, Boa Safra CEO, Marino Colpo, and our CFO and IR, Felipe Marques. Please note, participants shall be only listening to the conference during the presentation, and then we will start a Q&A session. During the Q&A session, please submit your questions here through the webcast platform. The selection of the slides is of your own. I now would like to invite Marino to start off his presentation. Marino, please, over to you.
Alan, good morning. Good morning to all investors who are taking part in this earnings release third quarter 2022 of Boa Safra. I would like to ask you to move to slide three. We're talking about our main highlights. 70% growth compared to 2022, the third quarter. This is our growth of our net revenue.
We have a record backlog for our third quarter of BRL 464 million. Of course, this is a record to us. There is a lot to be invoiced on the fourth quarter. We also have an increase in liquidity with a sale of BRL 50 million of the output. Also we're raising a long-term financing amount of BRL 110 million. Of course, that is improving our financial indicators. Felipe, our CFO, will provide you further details on that. We also have our first M&A, our first acquisition. We're gonna be talking about the purchase of Bestway. This is slide number nine. We actually purchased two-thirds of Bestway Seeds. We also concluded Jaborandi. It will be running at full capacity this coming year.
We also finalized our distribution center of Balsas, and we are also expanding or improving our unit of Cabeceiras. We also have our seed processing unit of Primavera do Leste. We're gonna be talking about ESG, which are purpose, mission, vision, values. We also have a project called our Unidade Verde Project, and that was created so that our units are increasingly greener. I would invite you now to move on to slide four. This is our history. It is a fast growth. We have always been dedicated to this speed of acquiring knowledge. Well, meanwhile, he gets back to the connection.
This is Felipe Marques speaking. Now, I would like to just draw your attention back to our growth and, in principally in 2021, 2022.
It is almost one year after we went public. We have also the ESG and things that are being discussed by our committee. The expansion of our distribution centers is a new reality. Actually, it is a new concept to us. With this growth that we have had with Balsas Distribution Center, Marino just mentioned, the conclusion of distribution center in Balsas and also the new format of operation to be closer to our clients and to be faster in providing seeds and of course, keeping up quality. Fiagro also launched with 50 million shares in this third quarter, and also the purchase of Bestway Seeds, and Marino will be talking about that shortly. Now, I would like to pass the floor back to Marino on slide five, and he will continue his presentation.
My apologies to all. There is a minor instability here in our network, so apologies again. Now, we should resume. Now on slide five, I'd like to talk about our figures. When we compare what you see on the top when you compare the third quarter 2022 to the third quarter 2021, we can see a very strong growth in our net operating revenue. That is 50%. It goes from BRL 881 million as opposed to BRL 586 million previous year with a margin going from 99% to 101%. EBITDA margin here from BRL 89 million to BRL 94 million. That is 5% growth. A net profit or a net margin, there was a minor drop, approximately 2% drop.
There are some factors though that explain this performance, and I would like to highlight the main one, which is on the top line where you see revenue. The main highlight would be seeds. It is important to our investors that our investors understand when you buy seeds from our integrated grower, what happens in this industry? What do we do in our plant? We process seeds and we sort out seeds. This is our business. What we do is to we have germplasm. We buy, purchase germplasm. We license technology, biotechnology. Most of the companies are transnational companies. We buy the germplasm, we hire an integrated grower. We provide support, technical support, and that soya is harvested. That are the beans that are taken to our plant to be processed and sold.
At the moment when we purchase the seeds from an integrated grower, so that genetic material, which will be the raw material to our seeds, there is a lot of discharge, and that is in grains, and it is significant. Every year is the same thing. That is the discharge of beans. Let me explain to you what it is, because the equipment selects the best seeds to be packed, to be cooled down, treated and sold to the fields. Those beans that are not perfect, they are considered discharge. That discharge is sold to the industry, to the processing industry as a cake or soy. These are still soybeans, but they are used by the industry. That is about a third.
We sell that as beans and the margin is very low, basically the same price that we would even buy it for. Sometimes it is even less because there is the hauling cost when we bring it to the plant from the producer, from the grower. Because of this strategy, we have to add this raw material. There is a little drop in the price for the fourth quarter, principally because of the price at the port. This is why we liquidate all that raw material. Basically you have a value from the seeds, which represents a very low margin. Sometimes it is pushed down to the fourth quarter. This time we actually had it on the third quarter.
This is just because some strategies in the company. There you're gonna see much more invoicing from seeds and that is of a very low margin for the reason I just explained. Now let me talk a little bit about EBITDA and the net profit. There were some details, some that in both EBITDA and net profit and they were controllable and that is not recurrent. Two main aspects in this case would be a delay in Jaborandi works.
Jaborandi actually was running at 30% capacity and there were some delays because of the rain and also because of equipment imported from Germany and there was a delay and many of the seeds that were going to be processed in Bahia. Much of that to be processed in Bahia was hauled back to our unit in Cabeceiras or in Minas Gerais, in Buritis. There was the delay on the delivery of the equipment. There was the cost from bringing it to Goiás and Minas, plus taxes, because we were crossing states with the material. That was then affected, and it can show on our EBITDA and our net profit. And many of the distribution centers that were starting off and even Jaborandi had to be running with a generator.
That represents a high cost. Our generator is oil-powered, diesel-powered, and that is more expensive than the electricity that is provided. We do believe that we won't, nevertheless, have the same issue in the coming year. That's why I refer to that as a non-recurrent event. Now, you can also see the performance of our operation on the same slide five. In terms of capacity, we moved from 130- 170 thousand bags, and also the storage capacity from 130- 170, and the seeds with biotechnology, there was an increase, and also the increase of stores or dealers that are served by us. I think the main indicator would be with regards to our backlog orders. We have 125% increase.
On the third quarter 2021, we still had 200 million seeds to be invoiced. Now on the third to the fourth quarter, we are actually turning quarters with 464,000. We are really anticipating a very strong fourth quarter with backlog orders, where there is a very good performance and margin. Now, slide number six, I would like to show you a little bit of our operational performance. This is something that we always refer to when we are talking about our earnings release. We have here a picture of the first, second, third, and fourth quarter. There is a lot of variation along the year. Because of the type of business we are in, the first quarter is always harvest, lots of cost.
We even increase our debt during that period of time. The second quarter, though, it is a time for seed processing and storing. There is a decrease on the expenditure, but there is not much of invoicing. There is the third and the fourth quarter when basically we have the best, when we sell, when we have the best figures. DC logistics and the commencement of the next, season when we are planting, and the fourth quarter when we are fully planting. Now, there might be some delay in our invoicing, and it is important people understand, investors understand that September is when we start planting in Brazil. Planting in Brazil goes from September to December, depending on the region where you are. October in Goiás and the north, it would be really in November, in the north and the northeast.
In Mato Grosso, that would be a little earlier, say September, October. There is a like an increase of area planted in the north and northeast. We are likely to have a greater invoicing for the fourth quarter. Even when we send the product to our distribution center and the grower goes and collect that at the distribution center, meaning the grower goes at the last minute because the distribution center is closer to them. It's just a time adjustment, which is beneficial to the producer, to the grower. There might be a greater invoicing between the third and the fourth quarters. Of course, that wouldn't change the final result in the end because it is just basically when we invoice the grower, which would be the third and the fourth quarter.
Now, you can see this circle on seven. Now moving to slide eight, you can see the operational performance of our company. I would like to draw your attention to two things, the growth in number of bags during the third quarter compared to previous year. You can see just a 10% growth in bags. Since the company has a much greater space for growth, more than 10%, that shows us that there will be more bags to be invoiced on the fourth quarter this year. It is also important to analyze the area planted in hectares. Of course, shareholders might have an idea by analyzing our area. We are talking about planted area of integrated growers where we produce our seeds. This is not a trade, this is actually where we produce our seeds.
I would like to highlight or to draw your attention to the Bahia. Actually, we almost threefold our area in Bahia, so there will be a very strong result in Bahia. Actually, there was not a full capacity plant in Bahia, but actually it wasn't ready as yet because of this delay in the delivery of the equipment. Much of that was planted in Bahia and harvested. That was brought down to Goiás and Minas Gerais, and of course we had the holding issue and the holding cost, and this is what affected our year, a little bit reflected on the EBITDA. Now slide nine, you can see our operational performance. Let me draw your attention to our main business or perhaps our main hurdle. You can see here our what is the business of this company.
This is our business. Actually it is vigor and germination rate. Our client buys quality. Many cases. This technology is also used by other companies. We have a cultivar, we have genes, genetic material that other companies also are dealt with by other companies. But quality of the seeds is not established by the genetic material or the type of material or by the biotechnology is used, that is used. The quality of the seed is established by the quality of the production or productive process. This is what we have either in the training provided to our team, our team working in the field, and of course the quality of the equipment used in our plants. But this is all together. All together is what makes our high quality if compared to the rest of what exists in the market.
Of course, how is the company going to keep this 20%-25% growth in volume as we are doing and having the same quality of the product? This is the proof of the pudding. Perhaps to me, this is the most important part. We've been able to grow fast in volume and keeping up the same quality that the market acknowledges and sees. Any of the investors who want to go and talk to players out there in the market, they will notice that this is what we're known for, high quality. Actually we keep quality. We've been making investment in labs, in training. We have a high-tech equipment coming from Germany in our unit.
Unfortunately with this minor issue, the delay from the imports, but we still keep the best in terms of quality of seeds in Brazil. Now going to slide number 10. Once again, I say this is very important piece of information. It is very important to make it clear and that investors understand this slide. You can see here our order backlog. You can see that, in our total net revenue on the bottom of the image, shows clearly that this varies along the year. First quarter, not much invoicing. In second, not much. Then, the thing comes on the third and during the fourth quarter. The same will happen this year.
The first and the second with low invoicing and the third and the fourth a much stronger result and very, very good result this year along with what happened on the fourth quarter 2021. We actually are sure that we are gonna have wonderful results in the fourth quarter 2022. How do we know that? We know by our order backlog. Opposed to what we have in terms of invoices actually, and what we do is as we invoice we use our backlog stock. Those are basically clients that purchased seeds and many pay part of their order and they hold that out from our units as the rainy season starts. They go and collect their seeds, and then they sow their fields with that seed.
Our backlog order, if you see in 2021, we started with BRL 467,000 in January, then they went up to BRL 546 million. You can see that the order grew in BRL 100 million. Then on the third quarter, 2021, you can have here a mix invoicing from seeds and from grains. You can see that BRL 340 million of those orders were invoiced on the third quarter, 2021. Then the company had BRL 206 million on the third quarter, 2021. That was all invoiced on the fourth quarter, 2021. From that goes to zero, then it becomes revenue. It went from the line above to the column below. The same thing happens this year. There is a growth of volume.
Our order backlog from BRL 467 million to BRL 707 million at Q3, and then BRL 881 million. A little bit more because this is because of the second quarter. Now we are reaping results approximately BRL 370 million or BRL 380 million in order. This is a similar figure. If you compare to the third quarter, 2021, you can see that there was a drop in our backlog.
There is a major difference if you compare 2021 to 2022, is that we are still closing the third quarter and because of a little bit of the delay in the planting with BRL 400 and some million, which is a little bit almost twice as much of what we had of orders for the third quarter of 2021. Now I would like to go to slide number 11, and I would like to invite Felipe Marques, our CFO, to continue with this part of the presentation. We will get back when we start our Q&A session. Many thanks.
Many thanks, Marino, and good morning to all. Now, providing a little bit more details.
Actually, there are some questions coming in, and I will try to combine the questions and the answers with this presentation as I see the questions. Well, we have record on the third quarter with regards to our revenue with BRL 881 million. We analyze our LTM, our net operating revenue. We say that this is actually for you to have a better understanding of the company by the year. We are reaching a new record with BRL 1,485 million in revenue. You can see that in the case of LTM, we actually even mentioned that this could happen. Let us go back to what we had in the previous quarter when we talk about the variations during the year. That happened as anticipated.
There was fourth quarter in 2021. There were a lot of material being sold. This is basically what happens, generally speaking. That material that it is not turned into seeds, of course, that was an anticipation in the soy market. There were no financial incentives for us to sell that in the market. LTM would just, right, embrace the third and the fourth quarters. Actually, there was an increase of the volume of material. Basically, this mix of grains, as Marino said, is a very low margin. It's almost zero, which is basically because of the operation that we have. It also varies from year to year.
It might be at least 50% of the volume of seeds sold at even 100%, well, of course, according to our criteria of quality. We actually want to select the best material so that we can have high vigor and germination rates. We are actually aiming at selecting as much as we can the material. This would actually affect these results. There was an increase in the volume of seeds of just 10%. You can see that we increased our capacity in more than 30%. We also had on this third quarter just 10%, actually because of the delay of our planting period and also that window is pushed back to the fourth quarter.
Just to give you some more color of this mix of that composes our revenue. Now, in the slide 12, you can see the EBITDA. Our EBITDA reached BRL 94 million. When you analyze the LTMs, actually there was a huge impact, and you can see the drop BRL 223 million. Actually, there was this drop of 18%. That is explained by what Marino said. There were some non-recurring effects because of our growth and also because of the use of diesel-powered generators. Also the equipment that came from Germany were not set up accordingly or at a correct time. That affected our operation.
Of course, we had to move the seeds to other units in other states, and that generator did BRL 50 million, BRL 15 million in cost. That was because we had to move the seeds to other units. As a matter of fact, we are already connected. Part of those units are already partially operating on electricity, and we actually want to connect them totally to the electric grid so that we can drop the cost of generators and fuel, et cetera. Now, slide three, we highlight the net result of the company, so you can see a marginal drop to BRL 83 million. When we see the LTM, we can see a drop of 14%.
Now, when you analyze the net margin, you can see this a little greater difference because of the financial cost. Actually, you can see the stock or the inventory that we have. We also paid royalties. We also bought raw materials. There was a higher cost because of that new capacity that we are operating at. We still haven't invoiced that totally because of this moving to the fourth quarter. By the end of the fourth quarter, we're gonna have a better understanding of the yearly results. We will eliminate this variation, as I mentioned to you before. On the following slide, you can see a little bit of our financial performance. We have an understanding of medium and long-term results.
This is our strength. We made investments. We have an IPO of BRL 460 million. We also have BRL 113 million investment invested in last year and BRL 183 million invested this year so far. We are guaranteeing that we are, in terms of capacity, ready, to meet the demand. You can see that there was a lot invested. This is our learning curve. When we have new units operating, of course, there are more greater difficulties. Of course, we once we have this investment and we have everything ready before the operation.
We are guaranteeing that we have the best brownfield conditions so that we have an expansion of a unit that is already installed, the capacity of operation and, of course, surprises such as we had in the greenfield are mitigated. With these new units in Jaborandi and Primavera and also the DCs that have greater capacity, almost twice as much. We have a great avenue for the new growth of the company, and we can grow in the brownfield, and that will make our operation easier. We're gonna be able also to deliver the best of the results. Now, in the following slide 15, we can see that our financial performance indicators see you can see this cash and cash equivalents of more of 58% and our net debt.
Of course, we consider our investment and this amount of investments that we made, this net debt is very low. This is what we consider. Of course, considering how much we're gonna sell in the fourth quarter. Of course, the net debt EBITDA is so low. We end this cycle where much of our working capital is actually dedicated for the sale of seeds. As we mentioned, Fiagro is a very important thing because we can see there is a high demand for working capital in the market. Cost is higher, rates are higher, and so the market demands more working capital. We believe that we are in an incredible position, principally after we went public with the new cost of capital of the company and also with Fiagro, BRL 50 million extra in our case.
When we sell shares, we believe that we're gonna have a very robust status. We're gonna be ready for the needs of working capital that are so typical with the company. Many of the investors have asked questions such as, "What about this increase of the working capital?" We're kind of addressing this somehow. To be able to help our trade team keep up with sales and know that that inflates our balance and increasing our liquidity index as a company. Then we always joke, we say that we are looking ahead and we're looking here at our third quarter. When we talk about our gains in the third quarter, actually it's not only results, not gains only. It is that a good result is that we planted a seed to the future of this company.
These moves will provide us conditions so that we can get the best of the performances to be able to address things for us to grow. Actually, they are starting to show results as we speak. Now, I will talk about the purchase of Bestway. Marino will say a little bit about this new avenue of growth here at Boa Safra. Marino, over to you.
Felipe, thanks. Yes, Felipe already said that this is actually how we feel. We are extremely excited when we look at the seeds. We look at the corn market, which is the second largest in Brazil, and the first would be soybean and corn ranked second in terms of growth in Brazil. Brazil grows fast in both soybeans and corn.
Interesting to say, the same companies that provide biotechnology and genetic material, they are also the companies that hire Bestway. They are already partners to Boa Safra. Bottom line, the grower there in the field is the same. The second crop, Safrinha, is the same customer who are planting the fields, who are sowing the fields. There is a strong synergy. We also look this business as a very strong part of our portfolio. We might have results with this in scale up. It is also a new avenue of growth. It is a good business with regards to allocation of resources. Because the same way we believe that Boa Safra has a lot to grow with greenfield and also the investment in plants, because those have a very short-term payback, and the same happens with corn.
Our idea is to assign resources in corn, and that makes a lot of sense, and it is a good and positive move. Actually, for our final release on the fourth quarter release, we want to show our projects and the Bestway including in that presentation. What do we have today? We actually acquired two-thirds of that company, Bestway. Actually, the purchase value was of BRL 35 million. With those BRL 35 million, we bought two-thirds of this company. It is still a small company in the seed market, but with tremendous potential of growth. How did that happen? Bestway has two plants. A small plant, Bestway One, and that is a lease. We have rights for that lease until 2026. Then we might renew the contract.
At this point in time, it would be just until 2026. There is also their own medium-size plant, one million capacity. For capacity, this is the Bestway Two. Yes, we acquired 100% of that plant in terms of mobilized capital. This is what we acquired. The second unit of Bestway Two is they have the know-how in corn, so they do the first part of the processing of corn. We're gonna go to this phase I and phase II. We're anticipating an investment of about BRL 40 million, and that will be done by Bestway.
By mid-2023, we're going to have 1.3 million bags of corn capacity from 1.3 million in phase I and 300,000 in phase II. By the middle of the coming year, we're going to be finishing the unit two of Bestway in phase II, and we're going to have 1.3 million bags of corn with Bestway, along with other projects that we also have on our portfolio. Rest assured that our goal is to be a relevant player in corn as well as we already are relevant in the soybean market. Of course, we want to make investments, but of course, respecting a good cash flow generation and revenue generation with a very attractive payback to the capital of the company.
Now, let us go back and hand the mic back to Felipe, and let us have a look at slide 17 for the final comments. After that we're gonna move to the Q&A.
All right, thanks. Now, in this slide, you can see our ESG agenda. Marino already mentioned. We are realigned and worried, concerned about sustainability. Sustainability could be also considered along with additional value generation to the company. This could be, for example, taken as an example of our photovoltaic plant. It is sustainable, environmentally speaking, because we do not have much of a carbon footprint, and also because we are reducing the cost.
This very pragmatic understanding of sustainability, if we see that in all our projects, we might add value to the environment and also consequently, as a consequence, we drop cost and that is value to the company. We have this as an azimuth. We want to implement new projects in the company. We have great, tremendous positive opportunities to be put that in practice through this committee, this meeting. Also this next slide, you have a little bit of the information of our balance sheet and our results. I would like to pass back to Alan. Of course, there are several interesting questions and of course, we might move to those aspects in the interest of our investors. Many thanks. Now we're gonna start our Q&A sessions.
Questions should be sent, submitted here through the platform chat. Please hold while we receive the questions. I'm gonna read the first question. Question comes from Daniel Sasson from Itaú BBA. On the third quarter, your last 12 months, you can see there was an increase of revenues 70%. EBITDA dropped and also EBITDA margin also dropped. He wants to have more details. What is causing such cost margin? And can you just drop comments with regards to those two aspects for 2023?
Sure. Daniel, as a matter of fact, during our presentation, we already mentioned that. Let me just give you another explanation. The margin dropped two points. Much of that is due to a invoicing from grains more than in the third quarter of the previous year.
Now, grains, they are considered just as discharge of raw material, so there is not much of a gain, or sometimes it is even negative because our integrated grower, they get the freight. I go get the raw material to our integrated grower. They produce, and I bring that back to the plant. One-third of that is sold as grains. I pay for grains with a bonus, and I provide, I give a freight for free. When I sell this discharged material as grain, this is what happens. Generally speaking, we try to sell that at the same and at a balanced value during the year. Because of the hedge strategy and also the premium, because of this negative freight. What is the premium? When you see that the soya, the price is Chicago, based on Chicago prices.
When you look at Chicago prices, it could be positive or negative. What is negative? When it is negative, it is because at every month it values less, so it is inverted base. Generally speaking, the base is positive, but when it is positive, it is easy to put that in the market. But when it is negative, it is when it is shown in our strategy. As fast as possible, we should liquidate it because the grains have a little potential of results for you to have a hedge and to carry it over. Our business is not a commodity business. We have a product that is sold with an added value. Our business is actually we are in the seed business.
Of course, but we still have to discharge the raw material, and this is part of our strategy. The main drop is due to the drop of margin is due to that. Our expectation is to have a margin that is even to the margin that we had the previous year. This is our focus and this is the reason for our work. Actually, there was a little bit of drop in the margin of the seeds. It is not even. It is far from what it looks when you, for example, have the grains in it and with the raw material in it. That is the distortion of the value. In the case of the seeds, there were some elements such as higher cost because the plant was not ready.
The processing plant in Jaborandi, Bahia, operated at 30% capacity. There was a very long delay in the delivery of the equipment that was coming from Germany and parts from the US, and that delivery was late. Much of the equipment coming from Germany was late. For you to have an idea, we are receiving equipment just now. We just received some equipment a few days ago, so they are now being set up. Basically, we had to send the material. We had it in Bahia. We had to bring material from Bahia to Goiás, and then we had to move it back, haul it back to Bahia. There was the cost of this back and forth, going with the material, bringing the seeds back to Bahia.
Another thing was, in addition to that cost, Brazil as a whole is deficient in terms of the electricity that is provided. At that DC was assembled, set up too fast. Nevertheless, we have the grid was not there. Something that we have, we had to run these DC by diesel. We also have some projects, including Jaborandi, with regards to electricity. Those things sometimes are not as fast. Those, not only those who operate in the middle of Brazil know how hard it is for you to get your plant hooked up to the electrical to the electricity grid. Of course, we already have a scheme. We, of course, don't want to have the plant without electricity. It cannot operate.
Of course, we already start with the generators. The generators are there. Once you have the electricity grid connected, we just remove the generator and move it to another DC. Unfortunately, we were so fast. I don't know if you can say unfortunate, but we were so fast when we were assembling our DC. The electricity hadn't arrived there as yet. There was also the cost of diesel because we had to operate it anyhow. This is why we had this EBITDA affected, but it is not a recurrent thing. The other impact was, as I said, hauling back and forth with the material because of the delay of the equipment.
Many thanks. I would like to just go to another question from Daniel. Third quarter, much of our cash comes from actually a working capital of almost BRL 200 million. Basically, twice as much as the EBITDA on the year before. He would like you to say a little bit of the gains of the working capital and what we expect from these results, what we want to have to say about the fourth quarter. Now, what about the anticipation of royalties in the first quarter in the coming year?
Daniel, many thanks. This is Felipe. Many thanks for your question. Very actually very good question. Showing that we are just doing our homework. Well, with regards to working capital, this is something that, as I mentioned before, is something that could be even a hindrance to our performance, to our growth.
Actually, we started to approach that through Fiagro. You can see those BRL 50 million in our balance sheet. Also, what we have in the Fiagro, the CRA that you have in Fiagro, it shows as a working asset. It's right here. That is revolving. 20 years, it makes more sense to be a non-working, but actually it is working on our balance sheet. You can see that, you can see the improvement based on the liquidity of the company. Our long-term because of our growth strategy, as we mentioned. First we build and then we reap. That is already reaching BRL 110 million debt with regards to our long-term financial and loans. We also have more to be used in this fourth quarter.
We are very diligent with regards to that aspect. Yes, we want to have a working capital optimizer in terms of assigning our capital. This is something that we very carefully. We always trying to optimize our capital structure to provide liquidity. We understand that we, with this situation and getting loans long term and subsidized, that opens an avenue to grow as a company with no restriction or with no need for equity. To be able to grow as we want to. We understand that implementing those measures are actually something that we will continue to be doing. In the end, they are already rolling out. I don't see any reverting.
I don't see any sign of reverting that back at the end of this year, seeing this evolution for the next few years too.
Many thanks, Felipe. Let us move to a question from Leonardo Alencar. Since we are already moving on in the mid of the fourth quarter, can you give us some results numbers for sales, margins, and the use of seeds, considering that they are the largest margin of this product?
Good morning, Leonardo. We don't provide guidance, Leonardo. The margins are within our expectations. Also, our results are very good, so our order backlog, they are almost like a guidance. They give us an idea of what to expect for the fourth quarter. Our backlog orders, well, I might say they are being invoiced.
Basically, most of that is already invoiced. We must be delivering what we have here as the backlog order. The same for the margin of seeds that we have, except for those nonrecurrent issues such as excise tax, diesel cost, and of course that might help to drop a little bit in the margin this year. Basically for the seeds, the margin is basically the same, and our focus is to keep that margin and to grow in volume at full blast. This is our focus. We want to keep the same margins as previous years. Now, talking a little bit of 2023. Despite the fact that it's tight for the grower, the scenario that we have today, considering cost, of course, we know that there was an increase of price.
Input is more expensive, in other words. Our understanding is the following. The margins were above the average in the agribusiness. Almost three years with a percentage margin. I'm talking about how things are perceived by growers. I'm talking from the grower's point of view. We don't plant. We are not in this, in the planting business. Actually, we are a business of inputs. The input that we offer is soybean seeds, and now we're starting with corn seeds. We are a company of input seeds. The grower had a higher margin for three years.
Now what we expect to have, according to what the scenario indicates, is that the margins will drop, and they will go back actually to what the grower had three or four years ago, basically, to what we had it in history in the last 10 or 20 years. Now, with the use of technology in our understanding, there won't be any way back. If you see the graph of the use of biotechnology since 2009 and things are growing. TSI sales went up and they actually increased the last few years. Technology provides better margins to the grower. I feel that because of the hike in price of fertilizer, some producers had more cost with fertilizers for this seed. Actually, there were a lot of seeds purchased.
We're gonna just burst records in terms of volume as well this coming year if all the backlog orders really close and as we see here on the balance sheet. Producers or growers do not go back because when there's high cost because of all the inputs and everything. They make an investment in high-quality seeds because they don't want to be spending money in their field with a bad quality seed. Principally in the last few months with the hike of price of fertilizer, so 14% or 15% of the crop is seeds cost and plus the appreciation and labor. This, when you add everything, seeds are just 7% of the full crop cost.
They are not likely to save money on seeds because that is a very good deal using high-quality seeds.
All right. Thank you, Marino. Let us go now to Guilherme. Guilherme asks the following. With regards to your discharge volume, was that caused by inferior quality of the seeds delivered by the integrated grower? Is it because of the demand of the seeds after the treatment? What was the percentage of discharge? Guilherme?
There was no change in the percentage. We are about the same average. What we have done is that we've been able to provide quality. We provide that barrier, that protection with our seeds.
Now I'm talking about 1% or 2% increase in discharge during this year because seeds do not reach 90% germination because our average is 95% and the minimum would be 90 to 99. Minimum would be 90. Our seeds go from 90%- 99% germination, but nothing goes under 95. This is why we are the reference in seed quality because of the control that we have of germination rate. This is why the discard was a little greater than our competition, but also because of the sale price. Sale price a little higher. Well, the grower trusts our quality. It's not that we had less quality this year. No, it was the average. Perhaps even higher than last year, but nothing that really makes a difference in terms of results.
There was a strategy. We didn't want to hold back grains or a smaller volume of grains for the fourth quarter. Because when we look at what happens in Chicago, the basis is basically with futures contracts. We normally have greater prices as months come. If you analyze dollar quotes, the dollar market for February is greater. There is a carryover in dollar. In soya, that is similar. This carryover was negative for the fourth quarter this year. Once again, our main business is not commodity. We're not a commodity business. There is no. We don't apply those things as for the commodities because we actually have a team that is very good to deal with that. There are two advisory groups.
We are always in a very important connection in the company. Once again, this is not our, the result is not linked to that. Of course, we don't want to, of course, have losses with bad dealing in or bad deals with the commodities. Of course, this positive carryover is a great indicator of what to do with our raw material that is discharged. With that material that is not a quality. We even want to mention that in our raw material, this discharge is low. Well, there's a lot of broken grains or lack of uniformity. If we export that or if we sell that to a trade company, we do not export directly, but we even have a drop quality at a discount at a port.
In this case, we even don't put the cost of freight. We kind of put on a blend. We mix that, so we try to make the most of that raw material, so we do not lose money when we are discharging that raw material. We're not losing money. Once again, what happened is that there was the only strategy to sell that on the third quarter. Because on the fourth quarter, basically it was negative. This is what we did, was we anticipated this, the sale of that discharged material. That was just a strategy. Now, just to say or reinforcing what we had, we had our hedging policy. We do not take moves. Actually, it wouldn't make sense. That would be a penalty in the company.
Respecting our hedge company, that was implemented actually just to reinforce. As a matter of fact, we didn't lose money with the commodities or with. There was no bad deal, any bad business. Everything was within what we've been doing and planning to do every year. It is just a strategy because it wouldn't be good to bring part of that stock to the fourth quarter as we usually do when the value is a positive. Basically, that is what we did.
All right. Thank you very much, Marino and Felipe. Now Matheus is asking the following question. This corn is basically produced with regards to, for example, Bolsa de Mercadorias. What are the expectations with regards to investing of the company?
A little bit too early to talk about that because there are several projects still under scrutiny. Of course, we want to be a relevant player in the corn market, and it might be a little bit confusing because in terms of bags or sacks. Just to give you figures, one bag is 25 sacks. If you say of what we had our capacity last year, a maximum capacity, 130,000 bags, and we sold 105,000 bags. Multiplying per 25, you can see. Let me just do it quickly. 105 times 25, 2,600,000 sacks last year. Let me provide you with the Bestway figures. Half next year, 1,300,000. It's basically half of what we did in soya last year.
We're gonna have that capacity. Of course, the company, Boa Safra, grew. We improved our capacity, 170,000 bags. All in all, we expect to have a great growth in terms of volume of sales. 102 last year, where this year we expect to grow at the same pace as we did at full capacity. Of course, we're gonna have a very strong growth for this coming year. We keep growing very strongly in seeds, soybean seeds, but also now with corn seeds. We're gonna have a very good capacity as we had last year or so in both soybeans and corn. We do believe it is going to be relevant, principally once we get a project approved and also entering in partnership to this type of business.
Many thanks, Marino. Now let us move to Diego's question. Anticipating these results on the third quarter, what is the expectation of profit for the fourth quarter 2022?
Well, we don't provide guidance. I cannot say that specifically with regards to what we can expect as profit for the fourth quarter. But there is a good, as I said before, the backlog. Backlog orders provide a very good information. We also have the discharge of raw material that is much smaller than what we had in the third quarter last year. But we still have a much greater seed inventory and also the number of backlog orders, they are almost twice as much. I cannot tell you specifically what the results we expect to have.
We don't give you guidances, but with this information, you can have an idea based on the backlog orders.
Many thanks, Marino. I would like to thank you all for the questions submitted. Actually, we're just going over 20 minutes of our call. For those who have not had their questions answered, please submit them to our emails, and I would like to pass it back to Marino for the final considerations and comments. Marino, please, you have it.
I would like to thank all investors for taking part of this call. Also, I would like to thank you all for submitting the questions. I'd like to say that we are extremely positive and excited.
We think that with Bestway and with a new door opened by the purchase with the corn and also the growth in the greenfield as we've done in soybeans and seeds, and this is the first M&A, and we're actually very satisfied with this alliance. Many other things still make us grow very strongly, and a lot is expected and projected in the coming year. I also want to say that the brand and our product, they are extremely welcomed in the market. They are known for their high quality, as we mentioned before. In the sales and distribution, we've been working hard to increase our client portfolio, and we are extremely positive to have this future as we plan to the company.
Despite of some difficulties because of our field works and our expansion sites and there are things that happen, but we do believe that we're gonna overcome on those difficulties that we had, and we're gonna be having extremely positive results in this coming year. Many thanks to all.
Many thanks. This is the end of Boa Safra third quarter earnings release teleconference. You may now disconnect.