SLC Agrícola (SLCE3) Q2 2025 earnings summary

Executive summary

• Net revenue reached R$4.2 billion in 1H25, up 26.7% year-over-year, with Q2 2025 net revenue at R$1.86 billion (+37.8%), driven by record volumes, higher yields, and expanded planted area, especially in soybeans and corn.

• Adjusted EBITDA rose 55.9% to R$1.5 billion in 1H25 (margin 35.8%), with Q2 2025 EBITDA at R$556.6 million (29.9%), reflecting operational efficiency and favorable crop yields.

• Net income for 1H25 was R$650.5 million (+18.2% YoY), but Q2 2025 net income dropped 56.5% to R$139.8 million due to lower biological asset postings and mark-to-market adjustments.

• Strategic land acquisitions, including Sierentz Agro, expanded the planted area for 2025/26 by up to 14.1%, supporting future growth and irrigation projects.

• ESG initiatives advanced, with recognition for carbon credit projects and circular economy leadership.

Financial highlights

• Gross margin was 41.3% in 1H25 (down from 44.7% YoY); Q2 2025 gross margin fell to 35.2% from 61.5% in Q2 2024.

• Free cash flow was negative R$2.05 billion in 1H25, mainly due to land and minority stake acquisitions.

• Adjusted net debt at 2Q25 was R$6 billion, up R$2.3 billion YoY, with Net Debt/EBITDA at 2.33x.

• Dividend payments in 1H25 totaled R$241 million, with a five-year average dividend yield of 4.9%.

• Land portfolio appraised at R$13.4 billion (+15.6% YoY); NAV per share up 11.9% to R$31.90.

Outlook and guidance

• Planted area for 2025/26 projected to grow 12.9–14.1% to 830,000 hectares, with irrigation expansion of 3,300–3,360 hectares and a long-term target of 53,000 hectares.

• Input purchases for 2025/26 are well advanced: 100% potassium chloride, 95% phosphate, 60% nitrogen, and 91% crop protection secured.

• Hedging for 2025/26 advanced: 56.7% of soybeans, 25% of cotton and corn locked; for 2024/25, 95.9% of soybeans, 70.1% of corn, and 56.2% of cotton production sold.