Jalles Machado (JALL3) Q3 2026 earnings summary

Executive summary

• Net income rebounded to R$60.4 million for 9M26, reversing a prior year loss, driven by improved financial results, positive hedge settlements, and cost controls despite challenging weather and lower yields.

• Adjusted EBITDA for 9M26 reached R$1,023.7 million, up 7.7% year-over-year, with margin expanding to 61.6%–62%.

• Production mix shifted toward ethanol (53.6%–63.6% of output), capitalizing on favorable price parity and market conditions.

• Revenue declined 1.4%–15% year-over-year due to lower sugarcane yields and production, despite a 3%–3.4% increase in harvested area.

• Ethanol prices rose 11% year-over-year, while sugar prices fell 5%–8.6% on average.

Financial highlights

• Adjusted EBIT margin was 15.6%, with EBIT up 61.6% and EBITDA up 243.5% year-over-year.

• Net debt/EBITDA improved to 1.2x, with net debt stable at R$1,832.1 million and cash position at R$2,060.4 million, covering maturities through 2029/30.

• Hedge and derivatives gains rose 168.6%–182.4%, supporting revenue and margin predictability.

• Free cash flow for 9M26 was R$86.9 million, up 21.3% year-over-year.

• Average debt cost at CDI +0.0% to +0.1%, with cash yield at CDI +0.2%.

Outlook and guidance

• 75% of 2026/27 sugar production hedged at R$2,475/ton, with 100% hedged for 2025/26, providing margin predictability.

• Ethanol prices in São Paulo projected to average BRL 2.50–2.70 per liter next crop year, down from BRL 3.40 this year.

• Unit costs expected to drop 5%–10% next crop year, contingent on yield recovery and cost optimization.

• Management projects continued volatility due to market, economic, and sector-specific risks.

• No buyback program planned; focus remains on cash preservation and operational efficiency.