São Martinho (SMTO3), of ethanol and sugar production, reported on Monday night (20) its result regarding the closing of the 2021/22 harvest. Despite the lower volumes sold in the period, as a result of the crop failure, the high prices of sugar and ethanol offset the result.
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Marked by the strong sugarcane crop failure that occurred mainly in the central-south region, São Martinho ended the 21/22 crop with a crushing of 19.9 million tons, 11.6% lower than in the previous crop. The break was a consequence of the prolonged drought, frosts and fires that affected the sugarcane plantations in the region.
Yield, measured by TCH (tons per hectare), was 71.8 (vs. 80.7 in the 20/21 crop), affected by the aforementioned problems, while the average ATR (Total Recoverable Sugar) was 146.7 kg per ton, slightly above the previous crop.
With a lower crushing, the volume of sugar sold in the consolidated of the harvest was 8.8% lower, while the reduction in ethanol was 13%. São Martinho, like other companies in the sector, prioritized the production of anhydrous ethanol, because of the better profitability of the product.
Given the lower Brazilian sugar production, the global deficit of the product and the devaluation of the real in the period, sugar prices increased by 32.7% in this harvest, more than offsetting the drop in volume. In ethanol, the average price increased by 69.1% in the period, again offsetting the drop in volume sold.
Mainly due to the reasons mentioned above, total net revenue grew 33.4%, ending the harvest at R$ 5.8 billion. The company’s net income in the crop year totaled R$ 1.4 billion.
Along with the result, São Martinho released its projections for the 2022/23 harvest, which began in April. Due to the low volume of rains at the beginning of this year, the lower intensity of solar radiation and the climatic problems of the past harvest (which continue to affect the region’s sugarcane plantations), the company estimates a crushing of 20.3 million tons of sugarcane, a slight recovery of 2% in relation to the 2021/22 harvest.
Finally, the company announced the payment of Interest on Equity (JCP) in the amount of R$115 million, which is equivalent to R$0.33 per share. Payment will be made on July 5th, taking into account the shareholding base on March 31st, that is, those who held the share on that date will be entitled to receive the proceeds.
São Martinho shares closed down 1.76% on Tuesday (21), quoted at R$ 41.25.
