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LEASES
 12 Months Ended
Dec. 31, 2022
Leases  
LEASES

 

18.LEASES

The Company is lessee in several lease agreements for forest lands, offices, distribution centers, outgrowers, vehicles, among others. Some contracts have a renewal option for an additional period at the end of the agreement, established by contractual amendments. Automatic renewals or renewals for undetermined periods are not allowed.

The contract clauses mentioned, with respect to renewal, readjustment and purchase option, are contracted according to market practices. In addition, there are no clauses of contingent payments or restrictions on dividends distribution, payments of interest on shareholders’ equity or obtaining debt.

18.1.    Right-of-use assets

The right-of-use assets as set forth below are part of the balances of property, plant and equipment and intangible assets (notes 13 and 14).

                         
   
                           
  Average rate (1)   12.31.21   Additions   Disposals   Monetary correction by Hyperinflation   Exchange rate variation   12.31.22
Cost                          
Land     145,394   732    (2,489)    3,534   (7,431)    139,740
Buildings      3,223,625     927,818    (116,707)     18,933    (22,526)    4,031,143
Machinery and equipment     117,412   4,086   (74,193)   815   (432)     47,688
Vehicles     369,979     246,075    (5,477)    6,279    (14,740)    602,116
Software       79,731    -   (67,428)     -     -     12,303
       3,936,141     1,178,711    (266,294)     29,561    (45,129)    4,832,990
                           
Depreciation                          
Land 8.95%    (36,439)   (12,334)   2,401    1,090    1,276    (44,006)
Buildings 5.16%     (1,383,968)    (510,875)     104,540   (10,225)     15,751     (1,784,777)
Machinery and equipment 25.60%    (73,385)   (27,726)    74,111     (475)    192    (27,283)
Vehicles 23.19%     (189,817)    (161,992)   4,383     (5,496)    6,015     (346,907)
Software 76.58%    (61,193)    (3,998)    54,377     -     -    (10,814)
        (1,744,802)    (716,925)     239,812   (15,106)     23,234     (2,213,787)
       2,191,339     461,786   (26,482)     14,455    (21,895)    2,619,203
(1)Weighted average annual rate.
   
                               
  Average rate (1)   12.31.20   Additions   Disposals   Transfers   Business combination   Exchange rate variation   12.31.21
Cost                              
Land       48,661   3,761    (2,503)   90,549    -    4,926    145,394
Buildings      2,861,916     532,728   (88,723)     (90,549)   6,252    2,001    3,223,625
Machinery and equipment     112,593    98,353   (98,918)     596   4,527    261    117,412
Vehicles     344,918    46,707   (29,186)    (596)   851    7,285    369,979
Software       74,582   5,213   (64)   -    -     -     79,731
       3,442,670     686,762    (219,394)   -    11,630     14,473    3,936,141
                               
Depreciation                              
Land 9.03%    (13,526)   (12,030)   1,533     (11,954)    -   (462)    (36,439)
Buildings 21.29%     (914,816)    (535,838)    59,332   11,954    -   (4,600)     (1,383,968)
Machinery and equipment 57.13%     (107,316)   (64,228)    98,673    (338)    -   (176)    (73,385)
Vehicles 28.83%     (101,495)    (102,320)    17,699     338    -   (4,039)     (189,817)
Software 42.22%    (33,048)   (28,209)    64   -    -     -    (61,193)
        (1,170,201)    (742,625)     177,301   -    -   (9,277)     (1,744,802)
       2,272,469   (55,863)   (42,093)   -    11,630    5,196    2,191,339
(1)Weighted average annual rate.

 

 

18.2.Lease liabilities
                                 
                                   
  WAM (1)   12.31.21   Additions   Payments   Interest paid   Interest accrued   Disposals   Exchange rate variation   12.31.22
Land   10.3     126,293     732    (7,709)     (9,653)   9,653   (166)   (6,674)     112,476
Buildings  1.8     2,095,375     935,916    (458,434)    (102,740)     191,431    (19,395)   (8,079)     2,634,074
Machinery and equipment  2.0    45,218     4,086     (25,609)     (2,709)   2,709    (10)   (1,120)    22,565
Vehicles  1.9     192,694     246,075    (153,992)   (15,830)    15,830   (1,362)   (9,200)     274,215
Software  0.8    19,666   -    (4,102)     (249)   249    (13,960)     -     1,604
        2,479,246     1,186,809    (649,846)    (131,181)     219,872    (34,893)    (25,073)     3,044,934
                                   
Current       471,956                             676,864
Non-current       2,007,290                             2,368,070
(1)Weighted average maturity in years.

 

   
                                           
  WAM (1)   12.31.20   Additions   Payments   Interest paid   Interest accrued   Disposals   Transfers   Business combination   Exchange rate variation   12.31.21
Land  4.6    37,868   3,761   (6,890)   (9,063)   9,063    (1,160)    82,851     -   9,863     126,293
Buildings  1.9   2,195,407     532,728     (507,479)     (120,193)     186,165     (92,461)     (82,851)    8,805   (24,746)   2,095,375
Machinery and equipment  0.9   3,773    98,353    (62,357)   (3,764)   3,764   (35)   -    4,998   486    45,218
Vehicles  1.8     256,423    46,707    (99,944)    (17,577)    17,577    (1,680)   -    940     (9,752)     192,694
Software  1.5    43,210   5,213    (28,757)   (2,306)   2,306   -   -     -    -    19,666
      2,536,681     686,762     (705,427)     (152,903)     218,875     (95,336)   -   14,743   (24,149)   2,479,246
                                           
Current       383,162                                     471,956
Non-current     2,153,519                                   2,007,290
(1)Weighted average maturity in years.

 

18.3.Lease liabilities maturity schedule

The maturity schedule of the minimum required future payments is presented below:

   
   
     
    12.31.22
Current   676,864
Non-current    2,368,070
2024   559,084
2025   438,093
2026   321,796
2027   231,775
2028 onwards   817,322
     3,044,934

 

 

18.4.Incremental borrowing rate

The Company uses nominal incremental borrowing rates to measure its lease liabilities. The nominal and real interest rates are presented below:

 

               
    12.31.22   12.31.21
Contract Terms   Nominal rate % p.a.   Real rate % p.a.   Nominal rate % p.a.   Real rate % p.a.
1 year   14.39%   8.31%   5.34%   0.86%
2 years   14.36%   7.09%   5.24%   1.02%
3 years   13.72%   6.71%   6.83%   2.60%
4 years   12.40%   6.68%   8.49%   4.41%
5 years   16.24%   8.21%   9.69%   4.85%
6 years   13.66%   7.20%   10.61%   5.15%
7 years   -   -   11.18%   10.56%
12 years   -   -   9.85%   5.55%
15 years   17.89%   10.24%   -   -
16 years   -   -   12.44%   6.70%
17 years   12.29%   6.63%   13.12%   6.77%
18 years   14.74%   8.05%   13.01%   6.70%
19 years   18.27%   10.53%   -   -
20 years   -   -   12.95%   7.07%

 

The nominal rates presented above as of December 31, 2022 refer to the incremental borrowing rates used in contracts recognized during the year ended December 31, 2022 and the rates as of December 31, 2021 refer to the rates used in contracts recognized during the year ended December 31, 2021.

 

18.5.Amounts recognized in the statement of income

The amounts directly recognized in the statement of income presented below relate to items not capitalized including: low-value assets, short-term leases and leases with variable payments.

           
           
    12.31.22   12.31.21   12.31.20
Variable payments not included in the lease liabilities   217,498   282,732     300,949
Expenses related to short-term leases   124,451   171,733     162,313
Expenses related to low-value assets     13,469    4,681   3,531
Amounts recognized in the statement of income    355,418   459,146     466,793

 

18.6.    Sale-and-leaseback transactions

During the year ended December 31, 2022, the conditions for ownership transfer of a feed factory in Francisco Beltrão, previously owned by the Company, were concluded. The transaction was classified as a sale-and-leaseback. The right-of use asset and lease liability was recognized and are presented in the additions of the Buildings class, with the following amounts: right-of-use asset of R$2,945 and lease liability of R$11,042. A gain was recognized under Other Operating Income in the amount of R$5,521.