Summary of Key Takeaways from Brazilian Corporates Conference Call Industry Overview - **Investor Trip**: BofA's 12th Brazil investor trip highlighted a stark sectoral divide and a defensive corporate posture among Brazilian corporates, with a focus on deleveraging and liquidity preservation in a challenging environment [1][2][3] - **Corporate Bond Performance**: Brazilian corporate bonds (EBRZ index) have underperformed with a total return of +3.5% YTD compared to LatAm (+8.9%) and EM (+7.5%) [1] Core Themes - **Deleveraging Strategy**: Companies are prioritizing deleveraging due to increased leverage and high local interest rates (15%), leading to postponed investments and accelerated asset sales [3][4] - **Sectoral Divide**: Sectors like Oil & Gas services, protein, and logistics are performing well, while industrial sectors such as steel and petrochemicals face margin compression due to low-cost imports, particularly from China [4][11] Credit Events and Market Sentiment - **Contagion Fears**: Recent credit events at Ambipar and Braskem have heightened investor scrutiny on balance sheets, potentially leading to a broader repricing of risk [2][4] - **Investor Preferences**: There is a growing emphasis on transparent governance and conservative financial policies among investors [2] Sector-Specific Insights - **Pulp & Paper**: The sector is navigating a downturn in pulp prices, with Suzano taking a leadership role through capacity cuts and diversification into consumer tissue [10] - **Metals & Mining**: The steel market is under pressure from Chinese oversupply, impacting CSN and Gerdau, while Vale remains focused on shareholder returns [11] - **Banking**: A bifurcation in credit quality is evident, with Itaú managing risks effectively while Banco do Brasil faces challenges in its agribusiness portfolio [12][51] - **Oil & Gas**: Petrobras is balancing investments with shareholder returns amid volatile Brent prices, while companies like Acelen are experiencing operational momentum [13][26] - **Agribusiness**: Adecoagro is facing significant margin squeezes despite high production volumes, with a focus on strategic acquisitions [19][37] Financial Health and Projections - **Banco do Brasil**: NPLs in agribusiness have reached 3.5%, prompting increased provisions to R$56 billion, with government intervention expected to stabilize the situation [51][52] - **Braskem**: The company is in crisis management mode, facing a prolonged downturn and cash burn estimated at $1 billion for 2025 [55][57] - **Acelen**: The refinery reported a significant reduction in operating costs from over $12/bbl in 2022 to $7.8/bbl in 1H25, with a positive outlook for diesel prices [26][27][33] Strategic Initiatives - **Acelen Renewables**: Plans for a $3 billion refinery project to produce sustainable aviation fuel and hydrotreated vegetable oil are underway [36] - **Adecoagro's Acquisition**: The acquisition of a stake in Profertil is seen as strategically beneficial despite potential near-term credit pressures [39][40] Conclusion - The Brazilian corporate landscape is characterized by a defensive posture, aggressive deleveraging strategies, and a clear sectoral divide influenced by both domestic and global economic factors. Investors are increasingly cautious, focusing on governance and financial health as key determinants for future investments.

Financial Performance - Net Revenue for 12M25 reached approximately BRL 7,199 million, a 4% increase compared to BRL 6,922 million in 12M24[5] - Adjusted EBITDA for 12M25 was approximately BRL 3,445 million, a 12.2% increase compared to BRL 3,070 million in 12M24[5] - Adjusted EBITDA Margin for 12M25 was 47.9%, a 3.5 percentage point increase compared to 44.4% in 12M24[5] - Net Income decreased by 62.3%, from BRL 1,476 million in 12M24 to BRL 557 million in 12M25[5] Production and Sales - TRS (Total Recoverable Sugar) Sold reached 3,353 thousand tons in 12M25, a decrease of 2% compared to 3,423 thousand tons in 12M24[5] - Sugar production costs for Own Cane were BRL 2,533 per ton[16] - For the 25/26 Harvest, 699 thousand tons of sugar are hedged at an average price of USD 19.60 c/p[18] Indebtedness - Gross Debt increased by 23.8%, from BRL 6,537 million in Mar/24 to BRL 8,089 million in Mar/25[28] - Net Debt increased by 48.6%, from BRL 3,315 million in Mar/24 to BRL 4,926 million in Mar/25[28] - Net Debt / LTM EBITDA ratio increased from 1.08x in Mar/24 to 1.43x in Mar/25[28] Guidance - The company expects a 1.8% increase in TRS Produced for 12M26, reaching 3,539 thousand tons[31] - Crushed Sugarcane is projected to be 22,600 thousand tons for 12M26, a 3.7% increase[31] - Total Capex for 12M26 is guided at BRL 2,316 million, a 15.3% decrease[34, 35]