Jalles Machado (JALL3) Q3 2025 earnings summary

Executive summary

• Achieved record sugarcane crushing and sugar production, with operational improvements and higher harvested area, despite severe weather and drought impacting productivity and TRS quality.

• Recurring results and cash earnings were positive, but net income was negative due to significant non-cash mark-to-market and hedge losses.

• Sugar and ethanol markets saw strong price and volume growth, with ethanol prices and sales volumes rising significantly year-over-year.

• Investments in plant expansion and digital integration are nearly complete, with focus shifting to operational efficiency and asset optimization.

• Maintained robust liquidity, with cash and equivalents at R$1.19 billion, covering 4.4x short-term debt.

Financial highlights

• Adjusted EBITDA for 3Q25 was R$385.9 million (+16.0% YoY), with margin at 52.1%; 9M EBITDA reached BRL 950 million.

• Net loss of R$73.5 million in 3Q25, mainly due to R$168.4 million in non-cash hedge and MTM losses.

• Cash profit in 3Q25 more than doubled to R$31.7 million, up 117%.

• Net debt at 9M25 was R$1.82 billion, with net debt/EBITDA LTM at 1.3x and average debt maturity of 4.8 years.

• Gross revenue in 3Q25 was R$824.1 million (+43.4% YoY); gross margin improved to 25.9%.

Outlook and guidance

• Ethanol supply is expected to decrease next crop year, supporting high or higher prices, with positive outlook for ethanol prices in 2025.

• Sugar prices fixed for 2024/25 to 2027/28 are above historical average, supporting future revenue stability.

• Productivity in Santa Vitória is targeted to recover, aiming for 79 by 2026-2027.

• Sugar mix is expected to increase to 55-56% across units next season, with Santa Vitória at 50%.

• Sugar production capacity to be fully available from April 2025, supporting further growth.