São Martinho S.A

What it is

The Ometto family set up their first sugarcane mill in 1914; over the next century they added the Iracema (1937), São Martinho (1949), Boa Vista (2008), and Santa Cruz (2014) mills. The São Martinho mill in Pradópolis is considered the largest sugarcane processing facility in the world.

The four mills — São Martinho, Iracema, Santa Cruz, and Boa Vista — split their work: the first three make both sugar and ethanol, while Boa Vista is dedicated exclusively to ethanol. Beyond fuel and sweetener, every mill also burns the cane fibre left after pressing — known as bagasse — to generate electricity, part of which is sold to the national grid.

Two newer products round out the range: SMartLiO, a vegetable-oil substitute used in biofuels, paint, and chemicals, and Dried Distillers Grains with Solubles (DDG), an animal-feed ingredient for ruminants, pigs, and poultry made as a by-product of corn ethanol at the Boa Vista plant.

Who owns it

The company’s largest shareholder is LJN Participações S.A., with roughly 58% of shares outstanding — enough to have decisive control over the company’s future. LJN Participações is itself held by members of the Ometto family through several personal holding companies.

The remaining approximately 40% of shares trade freely on the B3 Novo Mercado with 100% tag-along rights — meaning any buyer of the controlling block must offer minority shareholders the same price. The Vanguard Group and Trigono Capital are the second and third largest holders, with about 1.9% and 1.5% respectively.

Who runs it

Fabio Venturelli is CEO; Felipe Vicchiato is CFO and head of investor relations. Venturelli, formerly a director at Dow Química, took the helm when the Ometto family moved to fully professionalise management — a transition that shifted the family to the board while keeping day-to-day operations in outside hands.

Guilherme Fontes Ribeiro has served as Chairman of the Board since 2024.

The money, in plain words

Revenue has grown steadily — from R$6.89bn (US$1.3 bn) in FY2024 to R$7.16bn (US$1.4 bn) in FY2025 to R$7.43bn (US$1.4 bn) in the most recent twelve months, roughly 3.8% growth year-on-year (our calculation). It keeps about 11 cents of profit from every real of sales — a net profit margin of 11.25%, reasonable for a commodity producer whose raw material (sugarcane) is subject to weather and price cycles.

For every real of shareholders’ equity in the business, it earns back about 12 cents a year — a return on equity of 11.89%, adequate but not exceptional (our calculation). The shares trade at just 5.9 times earnings — a low price-to-earnings ratio — which usually signals either deep pessimism or a structural discount that patient investors sometimes find attractive.

The balance sheet carries significant debt: R$9.94bn (US$1.9 bn) (~$1.93bn) of gross borrowings against only R$95m (US$18 mn) (~$18m) of cash, giving net debt of roughly R$9.85bn (US$1.9 bn) (~$1.91bn, our calculation) — almost 1.3 times total assets’ equity base. That leverage is not unusual for a capital-intensive mill operator, but it does amplify the impact of any revenue shock.

What it is doing now

In the fourth quarter of its 2024–25 crop year, sales volume fell 38% and profits dropped sharply, as fires damaged standing cane and cut sugar production by nearly half against the prior quarter. The company posted full-year FY2026 net income of R$836m (US$162 mn) (~$162m), up 50% from R$557m (US$108 mn) the prior year, as the harvest normalised (our calculation from EODHD data).

Corn ethanol at the Boa Vista mill is generating positive cash at a production cost of R$1.60 (US$0.31)per litre, and new assets — a high-pressure boiler and a biomethane plant — were completed during the year, adding incremental revenue streams.

What to watch

• Weather and fire risk. A 46% quarter-on-quarter drop in sugar output from fire damage underlines how exposed the harvest remains to climate events, and management has flagged ongoing uncertainty in production guidance.
• Debt load. Net debt near R$9.85bn (US$1.9 bn) (~$1.91bn) means any rise in Brazilian interest rates or a weak sugar/ethanol price cycle feeds quickly into the bottom line.
• Commodity prices. Sugar and ethanol are global commodities — the company’s margins move with world prices in dollars, then are translated back into reais, so the real/dollar exchange rate is a second lever on profits.
• New products. SMartDDG and SMartLiO, both derived from corn ethanol processing, are early-stage bets on diversifying revenue beyond the sugarcane cycle.

This is news, not investment advice.