SLC Agrícola (SLCE3) Q2 2025 earnings summary

Executive summary

• Net revenue for 1H25 reached R$4.2 billion, up 26.7% year-over-year, with 2Q25 net revenue at R$1.86 billion, up 37.8% from 2Q24, driven by strong soybean and corn yields and prices.

• Adjusted EBITDA for 1H25 rose 55.9% to R$1.5 billion (35.8% margin), with 2Q25 adjusted EBITDA at R$556.6 million (29.9% margin), more than doubling year-over-year.

• Net income for 1H25 was R$650.6 million, up 18.2% year-over-year, but 2Q25 net income dropped 56.5% to R$139.8 million due to lower biological asset postings.

• Strategic land acquisitions, including Sierentz Agro Brasil, and irrigation projects expanded the planted area by 12.9% for 2025/26.

• ESG initiatives advanced, with recognition for carbon credit projects and circular economy efforts.

Financial highlights

• Gross margin in 2Q25 was 35.2%, down from 61.5% in 2Q24; operational margin for 1H25 was 31.5%.

• Free cash flow was negative R$2.05 billion in 1H25, reflecting seasonal working capital needs and land acquisitions.

• Dividend payout in 1H25 totaled R$241 million, with a five-year average yield of 4.9%.

• Land portfolio valued at R$13.4 billion (+15.6%), with NAV per share at R$31.90.

• 1H25 CAPEX reached R$1.25 billion, mainly for land and infrastructure investments.

Outlook and guidance

• Planted area is expected to grow 12.9% in 2025/26, with irrigated area expanding by 3,300–3,360 hectares (+21%).

• For 2025/26, 95% of phosphates, 100% of potash, 60% of nitrogen, and 91% of crop protection inputs are secured.

• Hedging for 2025/26 advanced: 56.7% of soybeans, 25% of cotton and corn locked.

• Long-term irrigation target is 53,000 hectares.