São Martinho S.A. [SMTO3] reported that El Niño-driven rainfall significantly reduced its crop output expectations for the current season. The company noted a 11% shortfall in total recoverable sugar (TRS), which has put pressure on margins and increased unit costs. Despite this setback, the company emphasized that its liquidity position remains strong, providing a financial buffer.
Looking ahead, São Martinho highlighted two key factors that could support future production. First, the company has carryover sugarcane from previous harvests, which may help offset some of the current shortfall. Second, the introduction of a new phase in corn ethanol production is expected to contribute to next-crop potential, offering a positive outlook for the coming season.
The Q2 2027 earnings call, held on November 10, 2026, provided these insights, with the company balancing the immediate challenges posed by adverse weather conditions with strategic investments aimed at long-term resilience.