SLC Agrícola (SLCE3) Q1 2026 earnings summary

Executive summary

• Net revenue in 1Q26 fell 2.7% year-over-year to R$2.27 billion, mainly due to lower invoiced volumes of cotton lint, soybeans, and cottonseed, partially offset by higher corn, seeds, and cattle sales.

• Adjusted EBITDA dropped 26.3% to R$695.2 million, with margin compressing to 30.7% due to lower gross profit and higher administrative and selling expenses.

• Net income declined 53.8% to R$236.1 million, reflecting reduced gross profit, higher expenses, and increased leverage.

• Record soybean yields achieved: 4,146 kg/ha (+4.7% YoY), with planted area up 12.5% and yields 12.2% above the national average.

• Free cash flow improved 4.6% year-over-year but remained negative due to seasonal working capital needs and land acquisition payments.

Financial highlights

• Gross income decreased 12.3% to R$943.2 million, with gross margin at 41.6% (down 4.6 p.p. YoY).

• Cost of goods sold rose 3.7% to R$1.72 billion, mainly from higher unit costs for soybeans and cotton.

• Adjusted net debt reached R$6.56 billion, up R$1.3 billion year-over-year, with Net Debt/EBITDA ratio rising to 2.72x.

• Average interest rate on debt decreased to 14.9% from 15.1% p.a.

• Administrative expenses rose 53% and selling expenses 27.5% year-over-year.

Outlook and guidance

• Margin compression in 1Q26 is expected to reverse in coming quarters as higher-yielding farm volumes are recognized.

• The company is closely monitoring fertilizer markets due to geopolitical risks, with nitrogen purchases delayed to optimize timing.

• Strategic focus on irrigation expansion, aiming for 53,000 irrigated hectares in coming years.

• For 2026/27, 35.7% of soybean and 33.5% of cotton production are already hedged at favorable prices.

• ESG targets include achieving carbon neutrality in Scope 1 and 2 emissions by 2030.