Sao Martinho stock faces lower cane guidance after profit drop

São Martinho reported net income of BRL 50.9 million for the second quarter of its 2026/27 crop year on Monday, November 9, a 71% decline from the year-earlier period, according to Reuters.

Profit falls as guidance is cut

Adjusted EBITDA declined 6.9% to BRL 760.9 million, while the adjusted EBITDA margin narrowed from 47% to 40.6%. Net revenue increased 7.7% to BRL 1.87 billion, above the average analyst estimate of BRL 1.75 billion compiled by LSEG.

The company expects to process about 22.8 million tonnes of sugarcane in the 2026/27 crop year, 3.5% below its previous outlook. Its average total recoverable sugar estimate was reduced to 132.2 kilograms per tonne, 7.3% below the earlier guidance.

Corn ethanol remains a growth project

São Martinho expects its corn ethanol operation to process 495,000 tonnes and produce 209 million cubic meters of ethanol. The company also expects the facility to generate 365,100 tonnes of total recoverable sugar.

Brazilian sugar and ethanol producer

São Martinho operates in Brazil's sugar and ethanol industry, processing sugarcane and producing corn ethanol. Reuters describes the company as one of the larger participants in Brazil's sugar and ethanol sector. Its current outlook places crop execution, ethanol production and commodity pricing at the center of the investment case.

Brazilian equities trade within the Bovespa market environment.