São Martinho profit drops 39.3% to BRL 38.1M

Brazilian sugar and ethanol producer São Martinho posted a net profit of BRL 38.1 million in the first quarter of the 2026/27 harvest, which ended in June. That represents a 39.3% drop compared to the BRL 62.8 million recorded in the same period of the previous cycle.

Net revenue declined 17.7% to BRL 1.53 billion, down from BRL 1.86 billion a year earlier. This drop was driven by lower market prices for sugar and ethanol, as well as the company's commercial choice to postpone a portion of its ethanol sales to future periods. Analysts at XP had forecast net revenue of BRL 1.58 billion for the quarter.

The cost of goods sold decreased at a slower pace to BRL 1.21 billion. Consequently, gross profit contracted 26.8% to BRL 316.6 million from BRL 432.6 million, lowering the gross margin from 23.3% to 20.7%. Operating income before financial expenses and taxes fell 37.8% to BRL 188.8 million, compared with BRL 303.4 million in the prior-year period.

Net financial expenses narrowed to negative BRL 172.2 million from negative BRL 238 million, helped by financial income rising to BRL 266.6 million from BRL 141.9 million, even as financial expenses grew from BRL 379.9 million to BRL 438.8 million. Profit before taxes slid 74.7% to BRL 16.6 million from BRL 65.5 million, before a positive tax effect of BRL 27.4 million in deferred taxes helped lift final net income to BRL 38.1 million.

São Martinho closed the full 2025/26 season with a net profit of BRL 836.2 million, up 50.2% year-on-year, on net revenue of BRL 7.435 billion. In the first quarter of that cycle, its corn ethanol operation processed 137.3 thousand metric tons and contributed BRL 95.5 million in Ebitda.