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Among The Factors That Contributed To São Martinho’s Profit Increase Are High Ethanol Sales And High Prices Of Biofuel And Sugar
According to the news site Nova Cana, the company of sugar and ethanol São Martinho reported a net profit of R$ 221.6 million in the first quarter of the 2022/23 harvest, representing an increase of 16.6% year-on-year. In this regard, this increase can be attributed to the positive performance observed in the sales of biofuel, as well as the rise in commodity prices.
The adjusted EBITDA indicator, in turn, was R$ 875.7 million in the first quarter of the harvest, which corresponds to a high of 27.2% compared to the same period last year.
In a report published on Monday (the 8th), São Martinho stated that the better performance during this period is mainly due to the higher volume of ethanol sales (+40.8%), with an average selling price 29.6% higher in the quarter, in addition to the high prices of sugar (+13.8%).
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São Martinho’s Net Revenue Also Grew
There was also a growth of 29.2% in São Martinho’s net revenue, which reached R$ 1.7 billion. This increase can be explained by the same previously mentioned factors, and in total, ethanol sales generated R$ 1.04 billion, an increase of 83.4% year-on-year.
According to the company, the performance of the biofuel is primarily a reflection of the better price dynamics, given the appreciation of the price of oil that occurred during the period. Furthermore, there was also a higher volume of ethanol exports in the first quarter of the 2022/23 harvest, with net prices higher than in the domestic market.
Regarding the sugar segment, São Martinho highlighted that, on June 30 of this year, the price fixations for the 2022/23 harvest corresponded to about 604,000 tons, at an approximate value of R$ 2,261 per ton. For the next harvest, 2023/24, starting in April next year, the fixations corresponded to 165,000 tons of sugar, at an approximate price of R$ 2,374 per ton.
Operational Highlights Of São Martinho Were Reduced
On the other hand, among the operational highlights, there was a reduction of 10.5% compared to the previous season, processing a total of 7.8 million tons of sugarcane in the first quarter of this harvest.
In this scenario, São Martinho explains that the decrease mainly reflects the effects of the climatic conditions faced over the periods, such as drier weather and frosts that occurred in July 2021 in part of its sugarcane fields, which ended up harming the productivity of part of the area harvested in the first quarter of 2022/23 and in July of this year. According to the company, this effect will not persist over the following periods.
In the quarter, sugar production reached 416,000 tons, representing a reduction of 23.7% compared to the previous harvest. The production of ethanol, in turn, was 325,000 cubic meters, indicating a decline of 9%.
Finally, it was also concluded that the production mix became even more focused on alcohol. This is because the percentage of raw material aimed at ethanol production rose from 52% in the first quarter of the previous cycle to 56% currently.
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