Tear Sheet: Jalles Machado S.A.

The price parity between gasoline and ethanol, which usually remains around 70%, has been much lower in the current harvest, at 55%-60%, which has lowered the profitability of ethanol producers in Brazil. The average price for ethanol in fiscal 2024 will be at least 20% lower than the previous one, even despite the recent increase in volumes sold. Considering that, we expect Jalles? EBITDA to be close to R$950 million, or about 18% lower than fiscal 2023 (ended March 31), even with crushing volumes 44% higher after its acquisition of Usina Santa Vitória. As a result, we forecast net debt to EBITDA of about 3.0x in the current harvest, gradually improving to 2.0x-2.5x for the 2024-2025 harvest amid gradual price

...Foreign currency issuer credit rating ##/Stable/-- Local currency issuer credit rating ##/Stable/-- Business risk Fair Country risk Moderately High Industry risk Intermediate Competitive position Fair Financial risk Significant Cash flow/leverage Significant Anchor ## Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Adequate (no impact) Management and governance Neutral (no impact) Comparable rating analysis Neutral (no impact) Stand-alone credit profile ##...

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