SLC Agrícola (SLCE3) Q4 2024 earnings summary

Executive summary

• Net revenue for 2024 was R$6.92 billion, down 4.4% year-over-year, with net income falling 48.6% to R$481.7 million, mainly due to lower soybean and corn yields despite record cotton sales of 364,000 tons.

• Adjusted EBITDA reached R$2.04 billion (29.4% margin), down 24.8% year-over-year; free cash flow dropped 92% to R$34.3 million.

• Planted area expanded by 10.6% to 731,000 hectares for 2024/25, with significant growth in cotton (+18%) and corn (+30.7%), while soybean area decreased 5.1%.

• Major acquisitions include Sierentz Agro Brasil Ltda. for USD 135 million (adding 63,000–96,000 ha) and a proposal for 33,000 ha from Terrus S.A., supporting asset-light growth and a 14% increase in managed area.

• Management proposes a 50% payout of 2024 adjusted net income, totaling R$241 million in dividends (3.1% yield).

Financial highlights

• 4Q24 net revenue was R$1.98 billion, up 3% year-over-year, but full-year revenue declined 4.4%.

• Adjusted EBITDA for 2024 was R$2.04 billion (29.4% margin); gross margin was 33.4%, and operational margin 21.9%.

• Adjusted free cash flow was R$34.3 million, impacted by lower gross revenue and high investments.

• Adjusted net debt increased to R$3.67 billion, with a net debt/EBITDA ratio of 1.80x (up from 1.06x); 70% of debt is long-term at an average cost of 13.1%.

• Capex reached a record R$1.1 billion, split 48.5% for expansion and 51.5% for maintenance.

Outlook and guidance

• 2024/25 planted area set at 731,000 ha (+10.6%), with further expansion planned for 2025/26 via acquisitions.

• Soybean seed sales target for 2025 is 1.4 million bags (+12–15.6%); cotton seed sales target is 145,000 bags (+0.9–1.2%).

• Production costs per hectare for 2024/25 are expected to decrease 5.4% year-over-year, mainly due to lower input prices.

• High hedge coverage for 2024/25: 75.1% soybeans, 49.1% cotton, 35% corn; advanced FX hedging for 2025/26.

• Dividend payment of R$241 million proposed for May 2025, equal to 50% of 2024 net income.