Good morning to all, and welcome to our Boa Safra Earnings Release Presentation regarding the second quarter of 2022 Q2. Presenting with us Marino Colpo, CEO, Boa Safra, and Felipe Marques, CFO and Investor Relations Officer of Boa Safra. We'd like to note that participants shall be listening to this teleconference during the presentation, and we will have a Q&A after that. During Q&A session, we would like to ask you please to send your questions through our webcast platform, and you will be selecting the slides presentation. I would like to pass the floor to Marino, and he will conduct his presentation. Marino, please, floor is yours.
Many thanks, Helen. Let us move now to slide three. Let us talk about the main highlights of this quarter. I w ould like to mention our growth. The company had a 1.1% increase on the second quarter of 2022 LTM net revenue if comparing the last 12 months. Comparing from the second quarter 2021 to second quarter 2022. I think one of the main highlights would be our order backlog. We have a record of BRL 831 million in our order backlog. The company has achieved more than BRL 800 million in sales, and we expect to have a wonderful result, principally if compared to the last 12 months. By the end of the second quarter 2022, we have had 59% increase in our net income.
I would like to highlight also the completion of Sorriso DC, the construction works, and also Fiagro IPO, which has been tremendous success. Shall we move now to slide four? I would like to mention a little bit of our history since the establishment of Boa Safra in 2009 with the construction of our first cold storage warehouse, and that was in 2013. Since then, we've been building establishing cold storage warehouses in early bases. In 2016, we bring in the IST technology, which is the molecule treated seeds. We started being audited by KPMG. In 2003, we launched the Seed Lab. In 2019, we started the project of the largest seed processing unit in Cabeceiras, Goiás.
In 2020, we introduced the industrial seed treatment as a second generation. In 2021, we went public on B3 with the first photovoltaic plant in Cabeceiras. In 2022, we started the expansion of the distribution center and the seed processing unit and also our logistics. We're actually building two of them, and that will provide an incredible performance with regards to logistics and the quality achieved at the plant that will be taken to the customer level. We have two distribution centers under construction in Balsas that should be launched in a couple of days from now. Sorriso, that has been concluded, and it is actually to be inaugurated on the 30th of this month. The official opening will be on the 30th of this month.
This distribution center is already actually part of our seeds are being taken to Sorriso, to that distribution center. We also mention that this past Monday, we formally launched on the first of August our Fiagro. It basically is a Suno and Boa Safra partnership. That company has brought in some assets, actually, and this Fiagro should strengthen our working capital, for sure. Now, I would like to mention slide number five. I would like to talk a little bit about our figures. It is always important to consider 12 months. I think it is a fair comparison. Remember that in this first quarter, there is this moment in which our cold chambers are full, at full capacity, and we have a little bit of billing with seeds.
It is very shy because the seeds or billing, it starts happening on the third quarter. Actually, part of that should be discharge of raw material. When we analyze the LTM comparing 2021 and 2022, we noticed an increase in 100% in revenue and 11% in EBITDA and 59% in net income and results, basically. The main operational highlights would be our installed capacity that increased in 30%. We moved from 130,000 bags to 170,000 bags. Our storage capacity has also increased more than 50% and our seeds with biotechnology, as a matter of fact, that is the great highlight this year. That is 90% of our seeds being sold carry biotechnology compared to 80% the previous year.
We also have our clients or the stores that are supplied. We are reaching 700 resales or our storages. Actually we're working hard on that actually to expand our presence to the northeast and the southeast of Brazil, actually based on our dedication concluding everything. We are for sure going to have a great market share increase. This is actually released by the end of the year after everything being delivered. The main aspect of the second quarter is order backlog. We're talking about seeds. This is the greatest highlight. BRL 546 million in the second quarter 2022. We have BRL 830 million as order backlog. That is an increase of 50%. Now slide six.
Let me mention a little bit of the operational performance and also the production cycle. Actually, our company, of course, is subject to seasonality. We always like to mention that in our balance. The first quarter 2022. When we talk about the first quarter, we're talking about soybean harvest. Actually, this means a great amount of expenditure at this first quarter and every year because we are harvesting, we are paying for the raw material. We are always incurring in logistics, freight, equipment, teams, operation. All those costs count and make the first quarter basically with just the raw material discharge that is used to produce the seed. In other words, there is a lot of cost.
On the second quarter, those expenditures decrease, but then we're processing seeds and we are storing the seeds in the cold chambers or the cold warehouses. We have a lot in stock. Yes, we have some sale with regards to the raw material discharge and but billing on the second quarter is near zero. This is a point in time in which we are processing and storing the seeds. The third quarter, though, is actually when the rainy season starts and when we start planting, and this is when there is good results. Despite of the fact of that seasonality, the indicator should be related to our backlog. This is the great indicator to investor how the year it is going to roll out. We're gonna talk about that later.
On the third quarter, we have the crop planting, and the fourth quarter is basically when we close our planting. That variation is part of our business. This is every year. Now slide seven. I would like to mention here a little bit about this seasonality of the seed operation. There is a little bit of an explanation of what I just mentioned on what happened at the first, the second, and the third, and the fourth quarters. Now let us go to slide number eight. On slide number eight, you can see that the company has managed to increase production. As you see in green on slide eight, what we have that depicted on the map is the states where we have this integration we produce in four states and we sell the seeds in 11 states.
In those four states that you see on the map, Macapá has a 105,000 hectares. That represents an increase of our areas with our growers. This comparing 2020, 2021 crops. Trying to manage the variations of weather and increasing our technology. Slide nine shows what, in my opinion, is the most important aspect of our operation. It shows our financial performance, the total net revenue, income at Boa Safra. If you have a look on the second quarter of 2021, we had BRL 586 million. We actually had BRL 339 million in seeds and a little bit with the raw material.
You can see the third quarter 2021. You can see a net revenue of BRL 586 million and BRL 207 million in seed backlog. Basically, we made an investment of BRL 403 million with this total revenue in the fourth quarter. Now, on the first quarter 2022, we had BRL 742 million in seed backlog. For the second quarter, BRL 89 million increase. We have basically BRL 831 million seed backlog. If you compare second quarter 2021 with the second quarter 2022, we have an increase of 52% in volume of orders. Those orders, this seed backlog order has a high conversion rate in terms of billing. This is basically what we're gonna see on the third and fourth quarters. I would like to invite our CFO and Investor Relations to talk about our financial performance. Felipe is with you.
Many thanks, Marino, and a good morning to all. Giving continuity to our presentation, our net revenue reaches BRL 125 ,000. This is basically what we have is grains that were sowed. These are not seeds. With the increase on our orders and also the increase of our production capacity, naturally, we can see this expansion and also as mentioned, the raw material and this increase in our performance with the sale of grains. LTM net operating revenue is the same.
We can see here there was a more than 100% increase reaching BRL 1.19 billion if you analyze the last 12 months. Slide 11 shows the EBITDA of the company. In this quarter, there was a little drop with regards to 2021 that goes to BRL 7.3 million. Now, we once again reinforce the fact that when we analyze LTM, of course, we have to consider the variation because of the type of operation. These are not related to cash. This second quarter shows more this variation principally with the comparisons are more erratic. We analyze the last 12 months. You can still see a growth reaching BRL 118 million reals as an EBITDA value.
You know, of course, we always keep our eye on the rearview mirror, principally considering the work that was done in the second quarter, which is reflected on the third and the fourth quarter, so with regards to investments. We basically were ready to realize the third and the fourth quarter, which is highlighted here in a number of orders as was mentioned before. The following slide, which is slide 12, we can see how our CapEx is. Now this year, during this six months, our investments were on top of BRL 100 million. Our strategy is to guarantee that we manage to deliver this market demand expected to happen, and we can finalize those works.
Now, I mentioned once again that we didn't manage to get all the support, financial support that we would expect to, but then we managed to postpone. We're using IPO resources and our own resources to finalize those works. Along with that, we have our company loans as they are approved. We are, of course, those are long-term investments. We are going to see those paired with our liabilities that will link so that we can have a source of resources according to this mobilized asset because of the nature of our operation. With regards to Fiagro, one of the few things that we couldn't get. Well, actually, that was the land. Now we own Primavera and we own Sorriso.
Those were not part of any loan, so they were not connected to this EBITDA. There was a direct line that we negotiated with the banks. Basically with the success on the Fiagro sales. We can even leverage the financing of those lands, which was something that didn't happen in the past. In the following slide 13, you can see our net income. There was a drop in the second quarter, 2022. Once again, it is more erratic. If you compare the figures reaching BRL 6.2 million. When we have a look at the LTM net income and the net margin, just for us to decrease the seasonality, we can see there was an increase of 59%, reaching BRL 118 million net income. This is million reals.
Now, once again, it is still not showing our result this year or this backlog order that has not been built, so it is not reflected here in this figure and this result. Slide 14. A little bit of our cash and our reduction in EBITDA, that ratio. There were two reasons for those results. CapEx, as I mentioned before, and the other reason would be stock. That is actually the whole stock is just for the sale of seeds in the second semester. Of course, because of the increase in commodity prices and the volume increase and also the back orders, so that consumes those values. This actually the worst period of the year with regards to cash and on the second quarter.
Once we start the third and the fourth quarter, we have cash, we have result, and then there is a significant reduction on those. We always look at December. By doing that we can basically build on this, based on the cycle, the combined cycle. Of course, we can have a more encompassing understanding, based on the year. We're talking about leveraging, based on December value. When we have a look on our current liquidity rate here, of course, except the CapEx aspect, so we can see this liquidity ratio of 1.38 on the second quarter. With regards to net debt, we have analyzing 12 months, we wouldn't have that as reflected, because of what we are building and what we are producing in working capital and balance sheet.
It gets a little bit of the results from the past, but you can see that the net debt is 2.6 EBITDA. As we mentioned before in some of the calls, our net debt is of up to three would be something that we understand to be very healthy to the company. Principally at this condition, which is the use of state-of-the-art technology and the stock that we have at this phase of growth that we are showing in our performance that produces those gaps along the year. In the end of the year, we find the balance in net debt and EBITDA, principally with the cash generation of the company that guarantees the level of growth and the delivery performance of the company.
In slide 15, with regards to ESG, we are happy to say that our agenda, our ESG agenda now, shows four very important items. It is very good to show our efforts to ensure the quality of our governance. Now in the next slide, you can see the balance sheet of the company. One of the things that I would like to highlight is that what you have here is consolidated. It is because of Fiagro. This is why we have this balance sheet consolidated with this slight difference or modification of what you used to see as per the results of the company. Now, I would like to move to Q&A, so perhaps we can clarify any doubt. Perhaps we can chat and have something that is very interesting.
Actually, we are quite happy with the results of this first and second quarters. Seeds have been planted, have been sowed. Well, based on the orders and also because of Fiagro, which is another front that we have. We're extremely happy, and I do believe that we have the best of the positions for the next quarter or the next two quarters of the year. Let us go.
Many thanks. Now we're gonna start the Q&A session for investors and analysts. Questions should be sent here through our platform chat. Please hold until we collect the questions. The first question comes from Daniel. He would like to talk about the margin. Ideally, we wouldn't look at quarters because of this variation during the year. The last few months, he sees that our revenue grew more than the EBITDA. He asks you to talk a little bit on the explanation on these drops and what do you expect to happen in the future.
Okay. Let us see. Let us talk about these margins. On the first and the second quarter, there was a hike in the price of soybean as a raw material. Not only that, we also observe the hike in the price of inputs. Many of our partners, those are the integrator growers, they prefer to sell their soybean earlier. Let me explain to you how the arrangement works. We make an agreement with our partners, those growers. They plant our raw material to be seeds. They're seeders.
Our business, our core is to sell soybean seeds, preferably seeds with biotechnology, 90%, as we mentioned, and IST soybeans. That adds more value to the product, right? When we talk about the basic business, the seed business, everything that we buy from those growers, these integrated growers, one-third is discharge. 30%-35% is discharge. The whole of the raw material that comes in, these, what we call, discharge, those are grains. They are from the integrated grower. Despite the fact that we buy from them, we do a very quick operation. We buy that product, and we sell that, and we pay the grower, and we normally have BRL 0.50-BRL 1 per bag of soy. There's a very small, tiny margin.
What happens is that with this increase in the price of soybean, there was an increase in our billing in some million BRL. What we are doing is we are selling those seeds at a higher price, but not necessarily making more money. We can see that there is an increase in the first quarter on our billing and also in the second quarter because of the price of the soybean in the market. We have a very similar margin in our businesses compared to the past. Once again, I am saying that our business is seeds because we have our backlog. This order backlog is our main core. With the hike in price, we are selling that raw material or what we call discharge.
We're paying our integrated grower with a very small, very low margin. We're not to be a trading company. They are becoming more relevant on our balance sheet. That explains a little bit on the decrease of the margin. Because of the increase of this price, the margin that we have on the seeds, basically the same. Seeds is our business. What we want to sell seeds with added value, with some royalties and with IST. Those order backlogs are generating our margins. Trading soya is growing. It is inflated because of the commodity price. If we make BRL 0.50 or BRL 1 per bag, when we talked about BRL 80 or BRL 90 reals per bag, we would have 1%, BRL 1.
Now 180 per bag, so you're making BRL 1 in margin. There is much less in terms of percentage of margin. This is not the base of our business. There is also the seasonality because of the price of the inputs. Much of this raw material. Much of those seeds that are discharged. Previous years, we would see sales in the third and fourth quarters. Why? Because our integrated producer, integrated grower would hold a little to sell those. Because of the increase in the price of inputs, the seeders or rather the growers would sell that raw material. Basically, that would generate the billing, some income from those raw materials. This is basically seasonal.
Okay, there is another question from Daniel. Daniel says that most of the growers are trying to anticipate in the purchase of inputs. We would like to have your comment because perhaps we should wait a little bit longer. In other words, should we get a stronger first quarter in the future years?
Well, I understand what he means. Let us clarify. The answer is no. What happens is at Boa Safra, we have two businesses. Our main core, our main business is seeds business. We have a percentage of the raw material that is linked to the production of seeds, the raw material, the sale of raw material. What happens is that our growers are also affected by the increase, the price increase on inputs and fertilizers. They're trying to make cash more quickly or earlier.
That was anticipated. The raw material was sold before. That also generated some billing to the company, but it is something bad because it is not basically our core. Basically, there was some anticipation. There was more sales. They anticipated or we anticipated part of our billing, but it is basically not producing margin. On the other hand, yes, producers are buying inputs at earlier stage. What we see is that our seeds are selling faster. In the first quarter, we sold 85% of the volume, so almost 90% of what we had. Then we sold 10% or 15% of the volume that we had on the second quarter. I can tell you that Boa Safra is sold out, basically.
Yes, we have some left linked to the end of the cycle, but basically our seeds are sold out. That is shown on our order backlog. Now, you cannot mix up the information. We're talking about our earnings, our results. Because of the fiscal aspect of the operation, we have to show our order backlogs. As a matter of fact, we cannot bill in anticipation. We cannot do that in advance. Otherwise, for example, when you sell 80% or 85% of the first quarter of the year. If you analyze that would be slide nine. You can see that there was already BRL 740 million seed order backlog. We can just put that on our balance sheet to provision our results. The result would be totally different.
We would show a wonderful result in the first quarter. No, all we have is seed order backlog, and that will be billed or invoiced after September. In the beginning of the third quarter. Yes, what you said is correct, but to the company, we only see that as a revenue only after billing in that cycle. We have BRL 130 million in our order backlog. That is 50%, extra 50% if compared to the second quarter last year. What we have is an anticipation that the billing of seeds will be only done on the third and the fourth quarter. Actually, there is this kind of split when we sell and when we bill the seeds.
It is important to see the year as a whole or at least always take into account the entire 12 months because we are subject to this variation, principally between the first and the second quarters of the year.
The next question comes from Pedro Fonseca. Should we count on more growers? How is that aspect? How are you working on the development the more or increasing that partnership and also, with regards to the soy price, principally because of the locations where soy is grown, in Mato Grosso, for example?
As a matter of fact, we are keeping our premium. Yes. This partnership is doing well, so we have some fields or that are already contracted or hired to Boa Safra. We do not have a plant in Mato Grosso.
Actually, we are going to open a plant in Mato Grosso in this coming year, but it is already under construction, and that is in Primavera do Leste. What we are doing now is we are inaugurating our distribution center in Sorriso. That will be a distribution center, and also the plant will be inaugurated in the coming year. We will be also counting on integrated growers in that region. Now, I can tell you about Bahia. Our plant in Bahia actually has already rolled out and the first year. Actually it is for 40,000 bags. Actually, it is a large plant. We are starting big with two stages.
That plant, based on the last report from what we spoke last week, our negotiations and interviews are very well, and we are very positive about the growth that we're having and our hiring capacity. This is not a concern. This is not a relevant concern to the company. We have a great level of success in hiring those regions where we're growing.
The next question also from Pedro. We can see an increase in our loans, and everything is basically concentrated in the short run. Can you give more color in this strategy, in the loan strategy, and also the advance to suppliers?
This is Felipe speaking. Great question, Pedro. There are several other questions that we can see here on the list with regards to that aspect.
Actually, I'm gonna link to that and I'll try to address most of the questions that have been asked here that we have here for us. Basically, with regards to suppliers, this advance to suppliers, as we mentioned here in our call, those refer to the results that we are delivering based on this order backlog. We all kind of preparing that at the end of the day, and we are still not looking at the third and the fourth quarter. But we basically prepared the entire balance sheet to the results that we are going to leverage on the third and the fourth quarters. Now, the big aspect here is a royalty anticipation, right, with the supplier. We pay for those seeds that are going to be sold on the third and the fourth quarter.
We are working with advances to the integrated growers. Basically, most of that is royalties. Yes. Now, linked to our debt, as you see, it is a short-term debt. Yes, it is short-term because that was in part of our cash flow with the seed sale. Once the third and fourth quarters produce the entire of the billing and most of the cash from the sale of the seeds, that is also linked or paired to our cash flow.
It doesn't make sense to us, a company, to have a long-term loan or long-term debt. We are talking about three or four, six months that we see here in a year. That is why we use this strategy, which the less cost and short-term loan, so that we do not carry those debt in our balance sheet. That basically addresses most questions that were related to this very specific aspect of negotiation, in terms of the terms of our loans. Thank you.
Gabriel asks the next question. The increase in the volume of raw material and also only the price of soybean seed.
Marino speaking. In the second quarter, what we basically have is the price increase. We're not talking about increase in raw material. It's not. We are just in line with our average, that is the average that we had in history. In the first quarter, what we see is a little bit of discharge. Last year, there were delays, there were freight issues or transportation issues, and some part of this raw material was sold in January this year. This is why there was a little difference compared to what we basically have. There was not an increase on the raw material. It was just increase of the price of raw material. Thanks, Marino.
Now, the next question comes from Matheus. Historically speaking, you had an expansion on the organic material. Would like to know from you what you talk about the growth plan and new inaugurations and also the growth of our order backlog. Can you just explain how that goes with regards to price and volume?
The first part of your question, we are M&A, we always paying attention to that. There are several possibilities. As a matter of fact, when it comes to the nitty-gritty of things are very expensive in our sector and why. What happens is that the payback is very quick.
Soybean seeds pay back quickly. That goes after starting the operation of a plant, three to four years, you have money back. Basically your CapEx comes back to you. When you analyze M&As, the possible M&As that we have, difference is great. The payback decreases considerably. This is the major aspect, and this is what is holding us in doing that. We're focusing on organic also because our brand is in high demand. The product is in high demand. There is availability with our IPO, so we didn't even imagine that would happen. The brand has increased its presence in the field. It is that is part of the imaginary of the growers. As a company, we can see that there is this chunk of opportunity in growing with organic.
This is what we are doing. We are growing our capacity. Our major highlight to this year is the volume growth and also the volume growth in the coming year. The company is building on that. Our product has high demand, it's in demand. I think this is the major aspect of our business, and we do believe that we are growing organically. On one hand, you have this, the time to build that on. Sometimes the investor thinks that, okay, once you buy, you have the building ahead of money. The payback takes a little longer. You build a plant, three-year payback is very fast. Our strategy is organic, as I said. Yes, we keep an eye on M&A, principally in soybeans and also other seeds. This is something that we always talk.
It is always at stake, and we are paying attention to that a lot. The second part of your question refers to the increase on our order backlog. Yes, there is an increase of 50%, and it is a mixed order backlog. Part is in volume. We expect to grow 35% in volume. Out of this 52%, 32% is in volume, and the other one is price/biotechnology. We are also growing from 80%-90% in volume of sales with biotechnology. There is a little bit of price. With the commodity goes up, the price of soy seed grows, but not in the same proportion, not at the same rate.
Despite the fact that the raw material is indexed to the price of the seed, yes, but it is not at the same level. There is a drop in the commodity price. A seed price drops less than the raw material price, though that happens on both sides. We have 35% in volume, 5% in biotechnology, perhaps 10% in raw material price. That would kind of compose those 50%.
Thanks, Marino. The next question, Victor Blasck. He would like to know if those royalty discounts have been greater compared to last year. In addition, he asks you to make a comment about how you see the growth of integrated growers, if there is the need for increasing the premium growers. Actually, that is probably connected to the previous question with regards to Mato Grosso. Also your understanding on the operation with those new integrated growers.
Our royalty margin is not linked to our market share. A short, direct answer is no, market share is not affecting our royalties. What affects royalties and that would probably be more affecting on sales as of the coming year, that would happen with a new biotechnology for both Bayer and Corteva. They are both launching two new events. They were launching last year, so we're already trading 5% of our volume with these new biotechnology products. In the coming year, we are expecting to grow a lot with those biotechnologies. We want to threefold the presence of this biotechnology. The royalty is higher in price, and that gives us more margin. Not in percentage, but you sell at a higher price with the same margin, you have a greater financial earnings or result.
Okay, let us go to the next question from Roberto. Roberto asks you to give more details with regards to the asset and shares.
Thanks. Actually, we had a plan during our board meeting. Now the board deliberated that the options for purchase of shares, 343,000 options that have been granted. That would be just for three years. This is not immediate. There are several prerequisites. BRL 117 million in shares. This is very small compared to the company capital.
What I would like to highlight is that that plan, the strike price of these options, this is at market price. There were no concessions for in the money options outside the market price of the company. Those components are based on the size and also at the money. The strike price shows a very low power or pricing of those shares that would be showing in our balance sheet in the third quarter.
Thanks, Felipe. The next question comes from Heloisa. The question is, should we look at the company based on the finance margin more than percentage? If a drop in price in soy would result in a greater percental margin.
Felipe, once again, Heloisa, excellent question. Many thanks. We have talked a lot about the results and about operational cash flow and our financial results in the company. These are mixed pieces of information. Why? Because several reasons. When we talk about some anticipation of resources for our integrated product, that revenue is showing in financial results. What we have is a market hedges. You know that, according to our policy, so we buy grains before selling seeds, so we are protecting so that we do not have any trends to one side or the other to protect our balance sheet. This is basically within our financial results. Either positive or negative, you're gonna see that this is offset in our operational result by the cost of goods.
What we can see is that we are trying to work in-house to prove and show other type of metric to be able to reconcile this operation because that involves the operation of the company. I agree with you. It is much easier today when we still don't have a metric in which we can consolidate all that, all those pieces of information. It is much easier to analyze the result of the company putting along with that the finance result at the end of the day. Then you can actually offset the operational results and the finance results of the company. This is how we make our decisions in the end of the day. How to allocate capital. Operational and finance parts are conversing or talking when it comes to making a decision.
Thanks, Felipe. The next question comes from Nelson. You mentioned that the company is supplying 11 states with regards to seeds. What is the share? Is there any strategy to increase that participation in the territory?
Well, Nelson, that is it. We are present in 11 states in the country. Our result, the year-end result, which is the fourth quarter 2021, and also in our earnings release on the fourth quarter this year, we're gonna update that share. We're gonna see information of the company with a breakdown of information, that is, state per state and a market share in each state. We had 6.1% market share in the whole domestic market in Brazil.
This is the only market that we work with. 6.1% of market share in Brazil, and we believe that that should be some growth this year, considering the fact that we have increased our capacity a lot and also our order backlog are very positive, and we should perform quite well. There are strategies. If you see, our company is well established in the center of the country. We meet demand in Goiás, Minas, Mato Grosso, and Distrito Federal. Our participation, though, is to grow in the north and in northeast of the country. We are expanding. There is a plant in Bahia, a distribution center in Maranhão that should be inaugurating in the next 30 days. These are two states. We are making efforts to grow in the north a lot and also to consolidate our participation in Mato Grosso.
We also have a distribution center under construction in Mato Grosso. It is important to remember that Mato Grosso alone takes one-third of the entire soybean fields in Brazil. You cannot forget that the first strategy of the company is to increase our plants in Goiás and in Minas, expansion in the northeast and the north, and also to consolidate the market in Mato Grosso, which is the market that grows extremely fast in Brazil. We also analyzing south and southeast of the country. In the south is a major soybean producer, but it is a region that does not grow so anymore. It is already established. In the southeast, we can see some conversion from sugarcane to soya, so we also have an eye on that. Considering the strategies of Boa Safra to increase our market share in the coming years.
Thanks, Marino. There were several questions. I'm gonna just address the last of this list. Question comes from João. He would like to know if everything is adapted to the production of biotech seeds and all types of seeds and what the demand is and if that is according to the capacity that we have today.
Yes. Actually, basically, our plants are adapted to processing the new biotechnology seeds. Now, all those plants and also the distribution centers, they are being built for IST. The first generation IST and the second generation IST. Our goal is to treat the seeds at the distribution center.
That molecule, the second generation molecule, well, you know, the treatment with fungicides and insecticides, that is the first generation. The molecules, which is the second generation, that will be done, yes, at our plants, at our CDs. Today, Boa Safra is investing quite heavily. We have more, the three extra machines for treating seeds. Actually, what you said is important because demand is increasing actually more than what we had expected, so we have to get ready, and we are focusing on that. After, in the beginning of this, the coming year in Balsas and in Mato Grosso, those two, we're still waiting for the operation licenses. Actually, it was easier to establish a distribution center without that modernized equipment.
Yes, those units will receive and will improve, and the operation as of the coming year will be implemented with the new technology equipment and machinery because of the IST, which is growing a lot.
Many thanks, Marino. I would like to thank you all for the questions submitted. Since we have many, those who haven't been answered, please send it to us, and we will be trying to answer as fast as possible. I would like to pass the floor to Marino for the last comments. Marino, please, you have the floor.
I would like to thank you all, Boa Safra team, and also the presence of investors. We know that our operation is quite. There is a lot of seasonality. Investors should be aware of that. We are very happy with our growth and with the situation of our job sites and with our order backlog indicates and shows that we're gonna have a wonderful year ahead of us. Many thanks for your participation.
Many thanks. This earnings release teleconference for the second quarter 2022.