Raízen (RAIZ4) Q3 24/25 earnings summary

Executive summary

• The period was marked by challenging agro-industrial conditions, including severe drought and wildfires, which reduced sugarcane yields and sugar output, leading to lower production and margin pressure.

• Net revenue rose 18% year-over-year to R$197.5 billion, but net losses reached R$1.66 billion for the nine months and BRL 2.6 billion for Q3 24'25, reversing prior-year profits.

• Adjusted EBITDA declined 17% to BRL 9.1 billion, with primary cash generation down 36% year-over-year; leverage increased to 3.0x, and net debt rose to BRL 38.6 billion.

• Strategic shift underway, focusing on operational efficiency, simplification, and core businesses, with leadership transitions and asset portfolio reviews initiated.

• Portfolio recycling advanced through divestments, including sugarcane exploration rights, solar DG projects, and partial divestment in Paraguay Mobility, generating significant cash inflows.

Financial highlights

• Net revenue increased 18% year-over-year to R$197.5 billion; Q3 24'25 net revenue up 14% to BRL 66.9 billion.

• Adjusted EBITDA fell 17% to BRL 9.1 billion; gross profit declined 35.8% in Q3; net loss of BRL 2.57 billion in Q3 and R$1.66 billion YTD.

• Leverage ratio increased to 3.0x, with net debt at BRL 38.6 billion; weighted average debt maturity extended to 6.5 years.

• CAPEX reduced by 8% year-over-year to BRL 2.8 billion; investments YTD at BRL 7.4 billion focused on maintenance and E2G plant construction.

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

Outlook and guidance

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

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

• E2G production ramping up, with capacity expansion projects underway; no new growth projects in 2025-26, focus on completing existing E2G and refinery projects.

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

• Financial guidance discontinued for FY ending March 31, 2025, due to ongoing portfolio recycling and capital structure optimization.