São Martinho (SMTO3) Q2 2026 earnings summary

Executive summary

• CapEx guidance for the 2025/26 crop year was reduced by 5.3% to BRL 2.8 billion, focusing on maintenance, modernization, and operational improvements.

• Sugarcane crushing guidance was revised down by 2.7% due to adverse weather, with TRS 1.6% below expectations and production mix shifting to 49% sugar and 51% ethanol.

• Net revenue and profit declined year-over-year, with 2Q26 net income at BRL 176.4 million (down 5.9%) and consolidated profit for 6M26 at BRL 239.2 million.

• Operations span sugarcane cultivation, sugar, ethanol, electric power, and real estate, with 70% of sugarcane sourced from owned or related land.

• Interim financials reviewed by independent auditors confirmed compliance with Brazilian and international standards.

Financial highlights

• Adjusted EBITDA for 2Q26 was BRL 816.9 million (margin 47.0%), down 13.4% year-over-year; 6M26 adjusted EBITDA was BRL 1,621.9 million (+0.4% year-over-year).

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

• Cash income year-to-date at BRL 1,019 million, 13% lower than the previous year, mainly due to Consecana's effect and a 4% drop in sugar prices.

• Corn processing generated BRL 146.2 million EBITDA in 6M26, with margin improvement from lower corn costs.

• Cash COGS in 2Q26 was BRL 761.0 million, down 11.9% year-over-year, due to lower sales and improved industrial efficiency.

Outlook and guidance

• Processed cane for 2025/26 is projected at 22.0 million metric tons (down 2.7%), with TRS at 137.6 kg/ton (down 1.6%) and TRS produced at 3,027.5 thousand metric tons (down 4.2%).

• Maintenance CapEx for next year projected at BRL 1.91 billion, with further optimization targeted.

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

• Market conditions favor a higher ethanol mix in production.

• No changes in corn ethanol production estimates.