Raízen (RAIZ4) Q3 24/25 earnings summary

Executive summary

• The quarter was marked by challenging agro-industrial conditions, with dry weather and wildfires impacting sugarcane yields and quality, leading to lower sugar output and a lower sugar mix year over year.

• Net revenue rose 14% year-over-year to BRL 66.9 billion, driven by advances in sugar and ethanol sales, but offset by lower trading results and Mobility performance.

• Reported net loss of BRL 2.6 billion for Q3 24'25, with gross profit and EBITDA declining significantly year-over-year.

• The company is entering a new cycle focused on simplification, operational efficiency, and capital structure optimization, with a clear shift away from non-core activities and new growth projects.

• Leadership transitions, asset portfolio reviews, and divestments have been initiated to accelerate simplification and generate cash inflows.

Financial highlights

• Adjusted EBITDA declined 17% to BRL 9.1 billion, with primary cash generation down 36% to BRL 1.5 billion year-over-year.

• Gross profit fell 35.8% year-over-year to BRL 2.9 billion in Q3; net loss of BRL 2.57 billion in Q3 24'25.

• Leverage and net debt increased, with net debt at BRL 38.6 billion and leverage ratio at 3.0x, up from 1.9x prior year.

• CAPEX decreased 8% to BRL 2.8 billion compared to Q3 23'24, with investments focused on maintenance, productivity recovery, and E2G plant construction.

• Cash flow was impacted by lower operating cash generation, higher working capital needs, and elevated investments.

Outlook and guidance

• Sugar price hedging at profitable levels and favorable market fundamentals are expected to support healthy margins for the next two crop years.

• Ethanol demand is anticipated to rise due to higher blending mandates, improved domestic prices, and regulatory changes.

• No new growth projects will be initiated in 2025-26; focus will be on completing two E2G plants and the Argentine refinery phase two.

• CapEx will be reduced, with recurring maintenance CapEx maintained to ensure asset productivity.

• Focus on operational efficiency, asset portfolio simplification, and capital structure optimization to create shareholder value.