Jalles Machado Reports Record Sugar Production Amid $12M Net Loss

Jalles Machado (JALL3) reported a net loss of R$ 73.5 million ($12M) in the third quarter of the 2024/2025 harvest season, ending December 2024. This contrasts sharply with a net profit of R$ 75.8 million ($13M) in the same period last year.

The company attributed the loss to accounting adjustments linked to its debt obligations, despite strong revenue growth. The company’s net revenue rose 49.3%, reaching R$ 740.4 million ($123M) compared to R$ 495.9 million ($83M) in the previous year.

Adjusted EBITDA also grew by 16%, totaling R$ 385.9 million ($64M). These figures reflect improved sales volumes and operational efficiency, but they were insufficient to offset financial pressures.

Jalles Machado crushed 7.9 million tons of sugarcane during the first nine months of the harvest, a 7.1% increase year-over-year. This led to record sugar production of 448,200 tons, up 19.7%.

However, ethanol production fell by 8.5%, reaching 354,000 cubic meters. The production mix shifted, with sugar accounting for 44.6% and ethanol for 55.4%, as the company prioritized higher sugar prices.

Adverse weather significantly impacted operations during this period. Prolonged drought and high temperatures in Santa Vitória, Minas Gerais, reduced sugarcane yields.

Resilience Amid Operational and Financial Challenges

Heavy rainfall in November delayed harvesting in Goianésia, Goiás, leaving approximately 60,000 tons of sugarcane unharvested. Expansion into rain-fed areas and low-quality soils at the Otávio Lage Unit further strained productivity.

Market conditions added to these challenges. While strong hedging strategies supported sugar prices, lower-quality raw materials created additional pressure. Ethanol sales volumes increased due to strategic efforts, but rising production costs eroded margins.

High interest rates and currency depreciation further weighed on financial performance. Despite these setbacks, Jalles Machado remains focused on long-term growth. The company plans to expand its crushing capacity to nine million tons by the 2026/2027 harvest.

This will be achieved through investments in productivity improvements at Santa Vitória. Analysts project a compound annual growth rate of 10.1% for adjusted EBITDA and 25.8% for earnings per share over the next three years.

Jalles Machado’s results highlight its resilience amid operational and financial challenges while emphasizing the need for continued investment and strategic adjustments to sustain profitability in a volatile market environment.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.