São Martinho (SMTO3) Q4 2025 earnings summary

Executive summary

• Fourth quarter sales volume dropped 38% sequentially, mainly due to fires impacting sugarcane production and lower sugar and ethanol output compared to previous quarters.

• Net revenue for 4Q25 was R$1.74 billion, down 5.7% sequentially and 28.2% year-over-year; adjusted EBITDA margin fell to 44.4% from 57.4% in 3Q25 and 47.6% in 4Q24.

• Net income for 4Q25 was R$105.0 million (down 83.3% year-over-year); full-year net income was R$556.7 million (down 62.3%), impacted by the end of Copersucar warrant receipts and fire-related disruptions.

• Record TRS production of 3.48 million tons in 2024/25, despite fires impacting 1 million tons of cane and product mix, with efficiency gains from new technologies and plant expansions.

• Strategic inventory management led to ethanol sales carryover, with cash received in April and May, impacting quarterly revenue recognition.

Financial highlights

• Adjusted EBITDA for 4Q25 was R$771.4 million, down 27.1% sequentially and 33.2% year-over-year; 12M25 adjusted EBITDA rose 12.2% to R$3.45 billion.

• Adjusted EBIT for 4Q25: R$252.3 million (-45.9% year-over-year, margin 14.5%); 12M25: R$1.57 billion (+27.8%, margin 21.8%).

• Sugar production dropped 46% quarter-on-quarter; ethanol production fell 4.7%.

• Sugar prices increased 12.7% year-over-year, but costs rose 12.1%, compressing margins.

• Corn ethanol contributed nearly BRL 300 million in cash generation, offsetting sugarcane shortfalls.

Outlook and guidance

• 2025/26 guidance: sugarcane crushing projected at 22.6 million tons (+3.7% year-over-year), TRS production at 3.16 million tons (+1.8%), average TRS 139.9 kg/ton (-1.9%).

• Corn processing expected at 515,000 tons (+0.7%), ethanol production at 217,000 m³ (+2.0%), DDGS at 140,000 tons (+1.7%).

• Maintenance capex for 2025/26 estimated at R$2.0 billion (-1.0%), total capex at R$2.32 billion (-15.3%).

• No specific production guidance for sugar or ethanol due to recent market and climate uncertainties.

• Recovery in sugarcane milling is anticipated after 2024/25 harvest fires; dry weather may impact 2025/26 productivity.