São Martinho (SMTO3) Q3 2026 earnings summary

Executive summary

• Sugarcane processed reached 21.7 million tons, slightly below last year due to lower productivity and TRS, impacting costs and product availability.

• Net income surged 168.5%–169% year-over-year in 3Q26, driven by subsidy credits, operational efficiency, and mark-to-market derivative adjustments.

• Adjusted EBITDA margin for 3Q26 was 49.4%, down from 57.4% year-over-year, with EBITDA declining due to lower ethanol sales.

• Interim financials for the nine months ended December 31, 2025, were reviewed with no material modifications required.

Financial highlights

• Net revenue for 3Q26 was BRL 1.59 billion, down 13.6% year-over-year, mainly due to lower ethanol sales and CBIOS prices.

• 9M26 net revenue reached BRL 5.19 billion, a 4.9% decrease from 9M25, with net income for the period at BRL 663.3 million, up 46.9% year-over-year.

• Adjusted EBITDA for 9M26 was BRL 2,409.0 million (down 9.9%), with a margin of 46.4%.

• Net debt at December 2025 was BRL 5.8–5.91 billion, with Net Debt/LTM EBITDA at 1.8–1.82x.

• Cash position at December was BRL 3.4 billion, with a comfortable debt amortization schedule and little short-term debt.

Outlook and guidance

• Expectation of 10%-15% cost reduction next crop year if productivity and TRS improve, targeting 24 million tons crushed.

• Ethanol sales were strategically shifted to Q4 to capitalize on better prices; corn operations and processing volumes remain in line with guidance.

• Healthy rainfall and crop conditions support optimism for yield recovery and cost dilution in the next cycle.

• Maintenance Capex expected to remain stable at BRL 1.9 billion next year, with productivity gains driving cost leverage.

• The impact of the 2025 tax reform will be fully known only after regulatory implementation.