Company Achieves Net Income of R$ 97.5 Million in the Period
Brasilagro has kicked off 2025 on a positive note, with early indicators suggesting a more favorable year after a challenging period for the agribusiness sector. Following its unique fiscal calendar, the company reported a net income of R$ 97.5 million for the first quarter of the fiscal year—over three times the R$ 30 million recorded in the same period last year.
Profit Margins and EBITDA Surge
Brasilagro’s net margin reached 21%, while adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose to R$ 169.4 million, compared to R$ 23.4 million a year ago.
Significant Contribution from Real Estate Sales
A substantial portion of operational revenue, R$ 107 million, stemmed from real estate activity. This includes the sale of the Alto Taquari farm, valued at R$ 189.4 million, which was incorporated into the quarterly results. The first phase of this sale occurred in October 2021, and the combined internal rate of return (IRR) for both phases reached 18.7%, according to the company.
Operational Highlights in Agricultural Ventures
While the bulk of operating income came from land transactions, Brasilagro also benefited from strategic decisions in its agricultural operations. “Our choice to hold over the 2023/24 soybean crop proved to be advantageous,” stated CEO André Guillaumon.
During the last quarter, soybeans traded at an average of R$ 105 per sack, but this quarter, the average sale price increased to R$ 125 per sack, noted CFO and Investor Relations Director Gustavo Javier Lopez.
Commodity Price Volatility Managed through Strategic Hedging
“This quarter was marked by volatility in major commodity prices and exchange rate fluctuations. However, our marketing strategy and hedging, alongside efficient cost management, helped us mitigate these impacts,” Guillaumon added.
By the end of September, Brasilagro had marketed 56,800 tons of soybeans, a 55% increase over the 36,700 tons sold during the same period last year.
Sugarcane Yields and Rising Sugar Prices
Sugarcane cultivation also yielded positive results, with 1.6 million tons harvested across Mato Grosso and São Paulo. The Maranhão harvest remains, with expectations for strong performance. “The 20% recovery in sugar prices benefited us, alongside lease agreements in São Paulo and premiums negotiated with mills for our cane,” Guillaumon explained.
Net Revenue and Composition
Brasilagro’s net revenue for the quarter reached R$ 454.6 million, comprising R$ 129.3 million from farm sales and R$ 325.3 million from agricultural product sales. This represents a 67% increase over the first quarter of 2024.
Outlook and Planting Adjustments for 2024/25
Looking ahead, Guillaumon highlighted that while soybean planting has reached 43% of the estimated area for 2024/25, early delays due to drought may alter plans. In Mato Grosso, 80% of the crop was planted in damp soil, though late planting has shifted the company’s plans for the second crop. Brasilagro now intends to plant 43% more corn acreage in winter, while reducing cotton acreage by 12%.
“To allow time for an ideal cotton planting window, we’d need the soybeans harvested in January. Given that’s unlikely, we’ve chosen to plant corn in certain areas instead. It isn’t worth risking productivity for a crop with much higher production costs than corn,” Guillaumon noted.
He explained that corn production costs range from R$ 3,000 to R$ 4,000 per ton, while cotton production costs rise significantly to R$ 12,000 to R$ 13,000 per ton.
Hedge Positions on Soybeans, Cotton, and Domestic Market
Brasilagro has already secured sales for 33% of the 2024/25 soybean harvest at an average price of $11.57 per bushel, and 50% of the exchange rate for soybean exports at R$ 5.55. Cotton sales are also secured for 26% of production at 80.42 cents per pound, with 56% of foreign exchange hedged at R$ 5.50.
In the domestic market, the company hedged 13% of the corn harvest at R$ 55.17 per sack; 31% of ethanol at R$ 2.594 per cubic meter; and 4% of sugar at R$ 1.09 per kilogram of ATR.
Land Sales and Strategic Acquisitions
On land sales, Guillaumon noted that Brasilagro will continue selling properties that reach maturity values, stating, “Once they’re ready, returns on the asset’s value start to decline.”
Nonetheless, leasing and new acquisitions remain on the table. “We’re also a real estate trading company,” he concluded.
