Jalles Machado (JALL3) Q2 2026 earnings summary

Executive summary

• Operations expanded with the new Santa Vitória sugar mill, boosting production capacity and efficiency, while gross revenue grew 20.4% year-over-year in 6M26, driven by strong exports and higher ethanol sales.

• Interim financials for the six months ended September 30, 2025, confirmed compliance with CPC 21 and IAS 34, with no material modifications required.

• Production costs declined due to lower fertilizer prices and accounting adjustments, supporting margins despite adverse weather and cost pressures.

• Net income for 6M26 was R$5.0 million, down sharply year-over-year, impacted by higher costs, SG&A expenses, and negative fair value changes in biological assets.

• Cash and cash equivalents stood at R$1,487.3 million, covering debt amortizations through 2029/30.

Financial highlights

• Net revenue increased 21.4% year-over-year to R$1,145.8 million in 6M26.

• Adjusted EBIT for the quarter reached BRL 130 million with a margin of 24%; adjusted EBITDA rose 20.0% to R$677.5 million in 6M26, but gross profit fell 87.8% to R$47.1 million.

• Net debt was R$1,850.8 million, with a net debt/EBITDA LTM ratio of 1.2x and average debt maturity of 5.1 years.

• Capex (excluding cultural treatments) was R$273.1 million in 6M26, down 10.6% year-over-year.

• Basic and diluted earnings per share were R$0.0164 for the six months.

Outlook and guidance

• Sugar mix is trending below initial guidance due to operational delays and lower quality in Santa Vitória, but crushing volumes are largely in line with expectations.

• 75% of available sugar for 2026/27 is hedged at R$2,475/ton, and 36% for 2027/28 at R$2,530/ton, above current market prices.

• CapEx will decrease significantly in 2025-26 as major expansion projects conclude, with only minor investments planned for planted area expansion.

• Management expects improved results at Santa Vitória as sugarcane production increases and production mix flexibility is enhanced.

• Corn ethanol and biomethane projects are under evaluation, with potential investments only starting in 2027.