Jalles Machado SA
BOVESPA:JALL3
Jalles Machado SA
Jalles Machado SA produces sugarcane and manufactures organic chemical products. The company is headquartered in Goianesia, Goias and currently employs 3,632 full-time employees. The company went IPO on 2021-02-08. The Company’s activities are divided into two operational segments: Sugar-Energy and Natural Rubber. The Sugar-Energy segment is focused on the production of organic, white and Very High Polarization (VHP) sugar; anhydrous, hydrated and organic ethanol; and other derivatives from the sugarcane processing, such as cleaning products and dry yeast. The Sugar-Energy segment includes also cogeneration of electricity, using sugarcane bagasse as a source of thermal, mechanical and electric energy. The Natural Rubber segment consists on rubber tree cultivation and production of latex and its derivatives. The firm sells sugar and cleaning products under Itaja brand name.
Jalles Machado SA produces sugarcane and manufactures organic chemical products. The company is headquartered in Goianesia, Goias and currently employs 3,632 full-time employees. The company went IPO on 2021-02-08. The Company’s activities are divided into two operational segments: Sugar-Energy and Natural Rubber. The Sugar-Energy segment is focused on the production of organic, white and Very High Polarization (VHP) sugar; anhydrous, hydrated and organic ethanol; and other derivatives from the sugarcane processing, such as cleaning products and dry yeast. The Sugar-Energy segment includes also cogeneration of electricity, using sugarcane bagasse as a source of thermal, mechanical and electric energy. The Natural Rubber segment consists on rubber tree cultivation and production of latex and its derivatives. The firm sells sugar and cleaning products under Itaja brand name.
Sugar Market Tightness: Global sugar inventories remain low, with inventory-to-consumption ratios near historic lows, and production forecasts for major exporters like India and Thailand are down, keeping markets tight.
Ethanol Growth & Pricing: Ethanol prices in Sao Paulo improved to BRL 3.40 per liter on average for the year, up from BRL 3.07, though management expects prices to drop in the next crop year as parity at the pump decreases.
Crop Failure Impact: Poor weather led to a 10% decrease in crushing and a 15% revenue drop, pressuring results despite similar fixed costs.
Cost Discipline: Management is implementing committees and strict governance to optimize and reduce costs, targeting a 5% to 10% reduction in unit costs next crop year if yields recover.
Strong Hedge Position: Jalles is well-hedged: 100% of sugar production is hedged for the current crop year, 75% for the next, protecting revenue in a volatile pricing environment.
Cash & Leverage: The company ended the period with BRL 2.06 billion in cash, leverage of 1.2x, and no immediate plans for buybacks or major new investments, focusing on cash preservation.
Production Mix & Flexibility: Jalles expects to start the next crop year with a mix leaning toward ethanol, but will adjust dynamically based on market prices.
Organic Sugar and Tariffs: Organic sugar sales volumes rose year-on-year, but future growth is clouded by US tariffs and weather-related crop failures.
