SLC Agrícola (SLCE3) Q4 2024 earnings summary

Executive summary

• Net revenue for 2024 was R$6.92 billion, down 4.4% year-over-year, with net income falling 48.6% to R$482 million due to lower soybean and corn yields, despite record cotton sales and expanded planted area by 10.6% to 731,000 ha.

• Adjusted EBITDA reached R$2.04 billion (29.4% margin), down 24.8% year-over-year; net debt/EBITDA rose to 1.80x.

• Major acquisitions included Sierentz Agro Brasil Ltda. for USD 135 million, adding up to 96,000 ha, and expansion through joint ventures and new lease agreements.

• Capex reached a record R$1.1 billion, split between expansion (48.5%) and maintenance (51.5%), focused on machinery, soil correction, and irrigation.

• Strong ESG initiatives continued, with multiple certifications and 78.3% of farms certified.

Financial highlights

• Net revenue: R$6.92 billion (-4.4% YoY); net income: R$482 million (-48.6% YoY).

• Adjusted EBITDA: R$2.04 billion (29.4% margin); adjusted free cash flow: R$34.3 million (-92% YoY).

• Adjusted net debt: R$3.67 billion; net debt/EBITDA: 1.80x (up from 1.06x in 2023).

• Dividend proposal: R$241 million (50% payout), 3.1% yield.

• Capex: R$1.1 billion (+7.3% YoY), focused on expansion and maintenance.

Outlook and guidance

• Planted area for 2024/25 forecast at 731,000 ha (+10.6%), with further growth from acquisitions.

• Production costs per hectare expected to fall 5.4% in 2024/25 due to lower input prices.

• Soybean and corn productivity forecasted to recover, with soybean yields up 23.9% and corn up 18%.

• Soybean seed sales target for 2025 is 1.4 million bags (+15.6%); cotton seed sales target is 145,000 bags (+1.2%).

• High hedge coverage for 2024/25: 75.1% soybeans, 49.1% cotton, 35% corn.