Jalles Machado S.A.

Overview Key strengths Key risks High share of owned cane and a more value-added portfolio through organic sugar sales. Two years of lower crushed sugarcane volumes due to adverse climatic conditions. Adequate liquidity despite the acquisition of a third mill and high working capital needs. Exposure to the inherent volatility of the sugar and ethanol sector, commodity prices, weather conditions, and variations in exchange rates. Growth in scale with controlled leverage. Smaller scale than those of higher rated peers. In the third quarter of fiscal 2022/2023 ended in December 2022, Jalles crushed 526,000 tons of sugarcane, 44.2% lower than in the same period of the previous fiscal year. (The company's fiscal year runs from April 1 to March 31.) Unusually

...The end of the harvest in October reduced Jalles Machado S.A.'s crushing volumes in fiscal 2022/2023. In the third quarter of fiscal 2022/2023 ended in December 2022, Jalles crushed 526,000 tons of sugarcane, 44.2% lower than in the same period of the previous fiscal year. (The company's fiscal year runs from April 1 to March 31.) Unusually heavy rainfall at the end of 2022 resulted in an early termination of the harvest in October, while in fiscal 2021/2022, the harvest lasted until the end of November 2021. Nevertheless, in the first nine months of 2022, the drop was 4.9% from the same period in 2021, totaling 5.1 million tons of crushed cane in the year. The third quarter was marked by the integration of the recently acquired mill--Usina Vit=ria At·car e -lcool (SVAA)--which has a crushing capacity of 2.7 million tons of sugarcane, but only contributed 112,000 tons in the 2023 year, because the company was fully consolidated in October only. The mill will focus on the production of hydrous...

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