Jalles Machado (JALL3) Q1 2025 earnings summary

Executive summary

• Achieved 4.7% year-over-year growth in sugarcane productivity, with the Jalles unit leading at 13% and outperforming sector averages.

• Sugar and ethanol prices remained above historical levels, with ethanol prices rising from BRL 2.4 to BRL 2.8 per liter and further to BRL 3.10–3.15 in São Paulo.

• Strategic ethanol stockpiling and expanded hedging positions were adopted to capitalize on expected price improvements.

• Guidance for 8.23 million tons of sugarcane crushing across three units is confirmed, with Santa Vitória ramping up sugar production as planned.

• Faced lower net income due to reduced sugar sales and a more ethanol-focused sales mix.

Financial highlights

• Adjusted EBITDA reached BRL 243.9 million (60.8% margin), down 10.1% year-over-year; EBIT improved to BRL 69 million with a 16.8% margin.

• Net revenue fell 9.8% year-over-year to BRL 401.3 million, mainly due to lower sugar sales and prices.

• Net debt increased 7.4% year-over-year to BRL 1,567.3 million; net debt/EBITDA improved to 1.1x from 1.3x.

• Cash and equivalents at BRL 1,317.2 million, covering 6.1x short-term debt; average debt maturity at 4.8–5 years.

• SG&A expenses rose 32.3% year-over-year, driven by higher personnel and freight costs.

Outlook and guidance

• Sugar and ethanol prices are expected to remain strong, with a higher sugar mix planned for the remainder of the crop year.

• Cash generation is projected to be strong, sufficient to fulfill expansion commitments without increasing debt.

• Production cost per ton is expected to remain stable, with input prices decreasing and workforce costs rising.

• Strategic ethanol stockpiling aims to benefit from anticipated off-season price increases.

• Guidance anticipates lower productivity in the next quarter due to a higher share of first-cut sugarcane.