Jalles Machado (JALL3) Q2 2027 earnings summary

Executive summary

• 2Q27 adjusted EBITDA after settled sugar and FX hedges was R$270.1 million; 6M27 reached R$539.4 million, supported by recovering agricultural productivity and hedge settlements.

• Stronger productivity and lower unit production costs were offset by lower realized prices and reduced sales as inventory was built for the off-season.

• Selective sales and investment needs weighed on cash generation; 6M27 free cash flow was negative R$192.2 million, while cash and financial investments totaled R$2,066.4 million at quarter-end.

Financial highlights

• 2Q27 net revenue fell 47.5% YoY to R$336.3 million; 6M27 fell 40.9% to R$676.8 million, reflecting lower sales volumes and average prices.

• 2Q27 gross profit rose 11.2% to R$167.1 million and gross margin increased 26.2 p.p. to 49.7%; 6M27 gross profit was R$168.7 million, up 258.1%.

• Adjusted EBITDA excluding biological assets and equity-accounted investments, but including settled hedges, was R$270.1 million in 2Q27, down 40.8%; 6M27 was R$539.4 million, down 26.4%.

• Net income was R$41.4 million in 2Q27, versus R$18.9 million; 6M27 recorded a net loss of R$32.7 million, versus net income of R$5.0 million.

• Cash earnings were R$70.1 million in 2Q27, down 7.3% YoY, and R$45.9 million in 6M27, up 30.0%.

Outlook and guidance

• 6M27 ethanol production mix was 60.4%, near the 59.0% FY26/27 guidance; ethanol mix reflected pricing and tax incentives at Goiás units.

• Hedge policy targets fixing up to 85% of VHP and crystal sugar volumes available for hedging; 2026/27 production guidance was 85.2% fixed as of September 30, 2026.

• Future crop hedges included 196.1 thousand tons for 2027/28 at R$2,503/t and 76.4 thousand tons for 2028/29 at R$2,201/t, supporting margin predictability.

• Priorities include improving asset efficiency and returns on recent investments, expanding irrigated areas—particularly at Santa Vitória—and renewing sugarcane fields.