LAND3 Terra Santa Propriedades Agrícolas

Terra Santa Propriedades Agrícolas S.A. is a Brazilian publicly traded company, with common shares listed on B3 under the ticker LAND3. The company was created in 2021 following a corporate reorganization conducted by SLC Agrícola Centro Oeste S.A., the successor of the former Terra Santa Agro S.A., with the purpose of segregating the rural real estate assets from the former operating group. As a result of this reorganization, Terra Santa Propriedades Agrícolas was consolidated as a rural real estate company specializing in managing a portfolio of farms geared toward general agricultural production, operating through long-term lease agreements. On November 30, 2022, the company carried out a corporate restructuring that included the merger of TS Brasil S.A. and the transfer of assets (bare land, improvements, machinery and equipment) to wholly owned subsidiaries, with the aim of optimizing its capital structure, management, and asset allocation.

Terra Santa Propriedades Agrícolas’ business model is centered on the management and economic exploitation of rural real estate assets, focusing on maximizing efficiency and enhancing the value of its properties. The company operates predominantly through the operating lease of its land and improvements to third parties, without directly engaging in agricultural production. As of December 31, 2024, its operations covered approximately 39,089 hectares of usable area, including structures such as sheds, housing facilities, warehouses, cotton gins, and other physical appurtenances, exploited mainly under a 25-year lease agreement with SLC Agrícola Centro Oeste S.A. All operating revenue originates from this single rural leasing segment, supplemented, until August 2024, by revenue from sustainable forest management in specific areas of its farms.

The company’s activities are organized into three main fronts: leasing of rural properties, potential acquisition and development of new areas, and, until 2024, sustainable forest management. Land leasing is the core of the business, with contracts generally long-term, above the three-year legal minimum, structured to capture cash generation per hectare of agricultural areas. Terra Santa Propriedades Agrícolas also selectively evaluates the purchase of new areas in different regions of Brazil, seeking properties with high agricultural productivity and an attractive cap rate, combining land price and rental value. Sustainable forest management, whose licenses were terminated in 2024, was carried out in areas of the Terra Santa and Iporanga farms, focusing on the extraction of native timber using reduced-impact logging techniques, maintaining forest structure and the continued economic use of resources.

Terra Santa Propriedades Agrícolas’ asset portfolio is concentrated in the state of Mato Grosso, a region of national prominence in the production of soybeans, corn, and cotton. Key properties under management include Fazenda São Francisco in Diamantino; Fazenda Mãe Margarida in Santa Rita do Trivelato; Fazenda Ribeiro do Céu in Nova Mutum; Fazenda Terra Santa in Tabaporã; Fazenda São José in Campo Novo dos Parecis; and Fazenda Iporanga in Nova Maringá. These areas comprise tens of thousands of hectares, including both arable land and legal reserves, permanent preservation areas, and environmental protection areas. Fazenda Iporanga, for example, has more than seven thousand hectares designated as APP, legal reserve, and permanent preservation, illustrating the coexistence of rural real estate exploitation and environmental obligations typical of large agricultural properties in the Legal Amazon and the transition Cerrado.

From a commercial and revenue concentration standpoint, the company exhibits high dependence on a single customer. SLC Agrícola Centro Oeste S.A. accounts for more than 98% of net sales revenue for fiscal year 2024 through the leasing of areas and improvements. This characteristic reflects the nature of the business, based on long-term contracts with large agricultural operators, and makes any diversification of customers in the short term irrelevant for segment analysis purposes. There is no relevant operational segmentation beyond rural leasing, and all net income arises from this single segment. The company has no revenue abroad, with its cash generation entirely tied to the Brazilian agricultural land market.

Terra Santa Propriedades Agrícolas’ activities operate within a regulatory framework heavily influenced by environmental and land-use legislation in Brazil. Its properties are subject to legal reserve and permanent preservation area rules established by the Forest Code, which sets minimum native vegetation coverage percentages according to biome and location in the Legal Amazon or transition regions with the Cerrado. In addition, potentially polluting operations or those that may cause environmental degradation require prior licensing by the relevant environmental agencies, such as IBAMA at the federal level or the Mato Grosso State Department of the Environment (SEMA-MT) at the state level. The company states that it holds or is in the process of obtaining the licenses required for its activities, including licenses related to alternative land use, forest management, and groundwater withdrawal, in compliance with the National Water Resources Policy and concession requirements.

In environmental matters, risk management includes attention to contaminated areas, environmental liabilities, and any remediation obligations, given that environmental civil liability in Brazil is strict and may be joint and several among different parties involved. Terra Santa Propriedades Agrícolas reports that it conducts environmental due diligence prior to acquiring properties, mapping liabilities and defining action plans when necessary. Although it does not publish a greenhouse gas emissions inventory or an annual sustainability report, the company highlights practices such as maintaining preservation areas above the legal minimum, investing in process improvements and reducing social and environmental impacts, as well as complying with legal requirements and local customs in the regions where it operates. The termination in 2024 of forest management licenses on the Terra Santa and Iporanga farms marks a shift in the scope of activities, with an even greater focus on the core rural real estate business.

On the social and governance fronts, Terra Santa Propriedades Agrícolas is structured with a set of formal governance bodies, including a Board of Directors, Fiscal Council, Statutory Audit Committee, Legal Affairs Committee, Strategic and Financial Committee, and Executive Board, in addition to a risk management and internal controls structure. The company is a signatory to the UN Global Compact, committing to principles related to human rights, labor, environment, and anti-corruption, and has joined voluntary movements such as “Transparência 100%” and “Elas Lideram,” aimed at integrity and promoting female leadership. The company highlights the significant presence of women in management positions and on its governance bodies, as well as its pursuit of diversity in gender, origin, color, race, and age group. In 2024, it hired a specialized consultancy to conduct a comprehensive ESG assessment and build a materiality matrix, with the aim of aligning sustainability management with corporate strategy and long-term value creation.

Terra Santa Propriedades Agrícolas’ position as a rural real estate company listed on B3, through LAND3 shares, places the business in a specific niche of the Brazilian capital market focused on monetizing agricultural land assets in a historically fragmented property market. The company emphasizes that the main driver of financial returns is the appreciation of rural properties combined with rental income, within a strategy of mapping land across the country, occasionally acquiring new areas with agricultural potential and, when appropriate, selectively selling farms that have already been developed. This combination of active portfolio management, long-term lease contracts, and exposure to the dynamics of Brazilian agribusiness characterizes the economic and operational profile of Terra Santa Propriedades Agrícolas in the context of the Brazilian stock exchange.