Brasilagro Cia Brasileira De Propriedades Agricolas Q2 Earnings Call Highlights

Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND) executives used the company’s second-quarter earnings call for the 2025–2026 crop year to outline operating conditions across its farms, discuss commodity and input cost dynamics, and explain why first-half financial results were pressured largely by sugarcane performance. Management also highlighted steps taken to tighten commercial execution through hedging and treasury actions, while reiterating that the first half of the year is typically more challenging from an accounting and seasonality standpoint.

Operating backdrop: weather, crops, and technology

Chief Executive Officer André Guillaumon said the season has been marked by irregular rainfall in some areas, but he noted that replanting needs were “very low” and that management was able to plant at the right time. He said conditions in Mato Grosso have been better than the prior harvest, which he described as “really difficult,” and added that crop development across Mato Grosso and Bahia was “spectacular,” with a recent rain five days before the call and more expected.

Guillaumon said sugarcane fields were “recovering a lot,” with improved sprouting and replantation rates. He added that the company accelerated sugarcane planting, including planting more during the summer to gain time.

Management also emphasized the rollout of technology across the operating footprint. Guillaumon said BrasilAgro implemented telemetry in all operating units, including Paraguay, with Bolivia pending to complete full coverage. He said all Brazilian units are “100% covered” by telemetric monitoring and that defensive (crop protection) applications are connected across all 16 operating units. He also cited the opening of a COR (operations control center) in Palmas to monitor company-wide operations.

First-half results: revenue, EBITDA, and loss

For the first six months of the crop year, Guillaumon reported revenue of R$470 million, adjusted EBITDA of R$71.3 million, and a net loss of R$61.8 million. He said the first half is “normally really tough” because certain assets may not yet be classified and because expenses are incurred and reflected in costs before key realizations later in the year.

Chief Financial Officer Gustavo (last name not provided in the transcript) walked through the period’s drivers, noting the company began with losses of roughly R$61.7 million versus about R$77 million in the same period a year earlier. He said the main operational swing versus the prior year was sugarcane, and that savings in some inputs and better results in grains were not enough to compensate for sugarcane’s impact.

He also referenced the sale of Taquari (citing R$207 million) as part of the period’s movements, along with commercial expenses. On financial results, he said performance was better than the previous year and that derivatives did not show the same volatility as in the prior period, when mark-to-market currency effects were significant. He emphasized that some lines are non-cash mark-to-market items, including fair-value updates on receivables.

Commodity and input dynamics: surplus soy, regional corn premiums, and sugar pressure

Guillaumon described a challenging commodity backdrop for soybeans, pointing to what he called a surplus supply environment and higher global stock levels than a few years ago. He said stocks were “over fifty million tons” and that Brazil was again headed toward a “super harvest,” citing market estimates in the 179–182 million ton range. He said strong field conditions in regions such as Maranhão, Pará, and Piauí were weighing on prices and premiums.

For corn, he said market dynamics are increasingly regional as ethanol plants reshape logistics. He said the company has been able to sell corn with a premium in some markets, and noted that the historical soy-to-corn relationship (which he cited as 2.3) has recently been more favorable for corn.

On sugar and ethanol, Guillaumon said ethanol pricing at the end of the last harvest was positive and helped offset pressure from sugar. He said sugar prices fell from prior highs of about $0.22–$0.23 per pound to roughly $0.17 early in the harvest and nearly $0.15 by the end, noting mills can adjust their production mix only partially.

Management also outlined cost-control measures and timing of input purchases. Guillaumon said the company’s treasury and commercial teams monitor exchange ratios to lock fertilizer and agrochemical purchases at advantageous moments. He cited examples of purchasing MAP around $640 per ton and potash (chloride) around $308, and said prepaying certain dollar-linked inputs helped generate savings of roughly 7% to 8% in defensives and some inputs.

Product mix and commercial execution: hedges and receivables

Guillaumon said diversification has been an important strategy to mitigate risk and improve results, and discussed balancing owned and leased land to manage capital allocation and operational stability. He said the company monitors its owned-versus-leased mix and aims to keep it around the low-to-mid 50% range.

On hedging and commercialization, management provided detail on positions:

• Soybeans: about 65% “closed” around $10.80; currency about 55% sold.
• Cotton:
• Ethanol (2025 harvest): referenced at R$2,670.
• Corn: less locked in, which management attributed to opportunities to capture regional premiums.

Management highlighted “receivables from farm sales” as a significant balance sheet line, citing more than 5.5 million sacks and roughly R$120 million in receivables. Later, management referenced nearly 5.9 million—almost 6 million—sacks in this context, and discussed mark-to-market impacts on these receivables as soybean prices and the dollar moved.

Sugarcane and cotton: what hurt results and what management expects next

Sugarcane was repeatedly described as the key detractor in the first half. Gustavo said the company produced about 970,000 tons of sugarcane during the semester versus roughly 1.3 million tons in the prior year’s period, and that ATR (a key quality/maturity measure used in pricing) also declined. He said last year’s ATR averaged around 140 kilograms per ton, versus about 131–132 kilograms per ton this year, which affected pricing and unit costs. With many costs relatively fixed per hectare, lower tonnage increased cost per ton. He cited sugarcane results declining from about R$78 million last year to about R$20 million this year.

Guillaumon attributed last year’s sugarcane challenges partly to extraordinary events, including frost in southeastern São Paulo state and a fire in São José that forced earlier harvesting and reduced maturity. In the Q&A, he said the company is working to improve sugarcane productivity through better nutrition and fertilizer use, improved management, and more effective control of “camalote” grass. He said telemetry and monitoring are helping the company be more precise, and he pointed to visual indicators this year—such as better internode distribution and cane width—as reasons for increased optimism, while noting that biometric analysis would follow as the season advances.

On cotton, Guillaumon said the company is refocusing production toward irrigated areas in Bahia as part of a broader effort to reduce capital at risk, given high production costs and high capital costs. He said BrasilAgro eliminated dryland (“sequeiro”) cotton in the Xingu region, citing agronomic challenges, and is prioritizing irrigation projects such as the final deployment phase at Fazenda Jaborandi. He also noted the crop’s complexity, including the need for 33–34 applications to control insects, and said the company is being cautious about exposing shareholder capital to operational and sanitary risks.

Looking ahead, management said commodity and macro conditions—particularly high interest rates—remain important variables. Gustavo said the company’s financial position is not concerning, but he stressed that high interest rates make operations more difficult and that the company would benefit from a reduction in rates. Guillaumon also discussed land-market dynamics during Q&A, describing observed declines in land pricing in some cases and saying the company expects to be “more buyers than sellers,” while emphasizing that returns still depend heavily on the cost of capital.

About Brasilagro Cia Brasileira De Propriedades Agricolas (NYSE:LND)

Brasilagro Cia Brasileira De Propriedades Agrícolas is a Brazil-based agribusiness company focused on the acquisition, development and commercialization of agricultural land in key farming regions across the country. The company’s core activities include identifying undervalued or underutilized rural properties, implementing infrastructure improvements and modern farming practices, and either operating the land directly or selling it to third parties. Brasilagro’s land bank spans several states in Brazil, with holdings in Maranhão, Bahia, Tocantins, Goiás and Mato Grosso, among others.

In its agricultural operations, Brasilagro cultivates a variety of crops such as soybeans, corn and cotton, leveraging advances in crop genetics, irrigation and soil management to enhance productivity and sustainability.