Jalles Machado (JALL3) investor relations material

Executive summary

• Operational efficiency and production improved, with new sugar mill operations in Santa Vitória and increased harvested area and grinding volumes, despite adverse weather and cost pressures.

• Gross revenue and adjusted EBITDA grew over 20% year-over-year, driven by strong export and ethanol sales, though net income declined sharply due to higher costs and SG&A expenses.

• Market conditions for sugar and ethanol remained favorable, but organic sugar shipments were impacted by freight costs, expected to normalize by year-end.

Financial highlights

• Adjusted EBIT for the quarter was R$130.2 million with a 24% margin; adjusted EBITDA reached R$320.9 million, margin 59.1%.

• Net revenue increased 21.4% year-over-year to R$1,145.8 million in 6M26.

• Net debt stands at R$1,850.8 million, with net debt/EBITDA LTM at 1.2x and average debt term of 5.1 years.

• Production costs per ton of sugar equivalent dropped 10.9% year-on-year; in cents per pound, costs fell 18.7% to 11.5 cents.

• Gross profit fell 87.8% to R$47.1 million in 6M26, with gross margin dropping to 4.1%.

Outlook and guidance

• Sugar mix is trending below initial guidance due to delays and lower quality in Santa Vitória, but crushing volumes are largely in line with expectations.

• 75% of available sugar for 2026/27 is hedged at R$2,475/ton, and 36% for 2027/28 at R$2,530/ton, above current market prices.

• CapEx will decrease significantly in 2025-26 as major expansion projects conclude, with only minor investments planned for planted area expansion.

• Corn ethanol and biomethane projects are under evaluation, with potential investments only starting in 2027.

• Management’s outlook is subject to significant risks and uncertainties, including market and economic conditions.