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 and adjusted EBITDA at R$2.04 billion (29.4% margin); results were impacted by lower soybean and corn yields but supported by record cotton sales and operational efficiency.

• Planted area expanded by 10.6% to 731,000 hectares for 2024/25, driven by joint ventures, new leases, and the acquisition of Sierentz Agro Brasil Ltda. for USD 135 million, which will add 63,000–96,000 hectares and further diversify the land portfolio.

• Major acquisitions and asset-light strategies increased managed area by up to 14% for 2025/26, with proposals for additional land from Terrus S.A. and purchase of a minority stake in SLC LandCo for R$524.8 million.

• ESG initiatives advanced, including multiple certifications (Regenagri, ISO 9001, Mental Health Seal), 78.3% of farms with integrated management, and 137,000 hectares certified in regenerative agriculture.

• Management proposed a 50% payout of 2024 adjusted net income, totaling R$241 million in dividends (3.1% yield), with a share buyback program active.

Financial highlights

• Adjusted EBITDA was R$2.04 billion (29.4% margin), down 24.8% year-over-year, and free cash flow dropped 92% to R$34.3 million due to lower gross income and higher investments.

• Adjusted net debt increased to R$3.67 billion, with net debt/EBITDA at 1.80x (up from 1.06x), and 69–70% of debt is long-term at an average cost of 13.1%.

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

• Dividend payout for 2024 was R$241 million, with R$389 million paid in 2024 and a proposed R$241 million for 2025.

• Cash position increased to R$1.98 billion, with a manageable debt amortization schedule.

Outlook and guidance

• 2024/25 planted area is set at 731,000–731,644 hectares (+10.6%), with further growth expected from acquisitions; cost per hectare is forecast to fall 5.4% due to lower input prices.

• Soybean productivity is expected to rise 23.9% year-over-year, while cotton and corn yields are projected to remain stable or slightly lower.

• High hedge coverage for 2024/25: 73–75.1% for soybeans, 49.1–88% for cotton, and 35–73% for corn; advanced FX hedging for 2025/26.

• Soybean seed sales target for 2025 is 1.4 million bags (+12–15.6%); cotton seed sales target is 145,000 bags (+0.9–1.2%).

• Sierentz acquisition will add 63,000 hectares (potentially up to 100,000 hectares planted), with control starting July 2025.