São Martinho (SMTO3) Q2 2025 earnings summary

Executive summary

• Net revenue rose 27.6% year-over-year in 2Q25 to R$1,960.5 million, with consolidated net revenue for the six months at R$3.60 billion, driven by higher ethanol and sugar sales volumes and prices, despite lower sugar prices.

• Net income for 6M25 was R$293.8 million, down 54% year-over-year, mainly due to the end of Copersucar Precatório receipts and increased costs.

• Fires and water deficits impacted nearly 2 million tons of sugarcane, shifting the production mix toward more ethanol and less sugar.

• Ethanol market remains robust, with demand up 10% year-over-year and prices recovering.

• The company maintained a strong cash position, with total funds available of R$2.58 billion at September 30, 2024.

Financial highlights

• Adjusted EBITDA for 6M25 was R$1,615.4 million (+33.3%), margin 44.7%; 2Q25 EBITDA margin reached 48.1%.

• Net revenue for 6M25 totaled R$3,615.3 million (+25.1% vs. 6M24).

• Cash cost for sugar was down 7% compared to the previous six months; ethanol costs remained flat, but operating margin dropped.

• Corn ethanol plant contributed BRL 55 million in EBITDA year to date, expected to account for 10% of full-year EBITDA.

• Basic and diluted earnings per share were R$0.8741, down from R$1.8430 in the prior year.

Outlook and guidance

• 2024/25 sugarcane crushing guidance revised to 22.17 million tons (-1.0%), with TRS at 142.7 kg/ton (+1.3%).

• Sugar production guidance cut to 1.32 million tons (-15.2%), ethanol raised to 1.26 million m³ (+14.6%), prioritizing ethanol due to fire impacts.

• CapEx guidance increased by 12.2% to R$2.8 billion, mainly for fire-related crop treatment, expanded planting, irrigation, and biomethane projects.

• Next crop year CapEx expected to normalize to BRL 1.2–1.9 billion.

• Additional R$80 million will be invested in crop treatments to mitigate fire impacts.