São Martinho (SMTO3) Q2 2026 earnings summary

Executive summary

• CapEx guidance was reduced by 5.3%-5%, focusing on maintenance, operational improvements, and modernization, totaling BRL 2.8 billion for the next crop year.

• Net income for 2Q26 was BRL 176.4 million, down 5.9% year-over-year but up 180.8% sequentially, with net revenue at BRL 1.74 billion, reflecting lower sugar and ethanol prices and volumes.

• Adjusted EBITDA for 2Q26 was BRL 816.9 million, with a margin of 47.0%, down year-over-year due to weaker sugar results.

• Production mix shifted to 49%-51% ethanol and sugar, prioritizing ethanol due to better pricing and liquidity.

• Sugarcane crushing guidance was revised down by 2.7% due to adverse weather, with TRS production also below expectations.

Financial highlights

• Adjusted EBIT margin declined year-over-year, with cash income for the year at BRL 1,019 million, 13% lower than the previous year, mainly due to lower prices and Consecana's effect.

• Corn processing generated BRL 146 million EBIT (31% margin) in the half-year, with corn segment EBITDA margin rising to 34.4% in 6M26.

• Cash COGS in 2Q26 was BRL 761.0 million, down 11.9% year-over-year, reflecting improved industrial efficiency.

• Financial result (cash) was an expense of BRL 67.3 million in 2Q26, 17.6% lower year-over-year.

• Net income for 6M26 was BRL 239.2 million, down 18.6% year-over-year.

Outlook and guidance

• Cane processing guidance for 12M26 was revised down by 2.7% due to adverse weather and lower productivity.

• Ethanol margins are expected to improve in the second half, with robust demand and higher prices anticipated.

• Maintenance CapEx for next year projected below BRL 1.9 billion, with further optimization targeted.

• Yield recovery targeted for next crop year, aiming for 37 tons per hectare, contingent on favorable climate.

• No changes in corn ethanol production estimates.