SMTO3: quote, dividends and indicators for São Martinho

São Martinho S.A., traded on B3 under the ticker SMTO3, is one of the leading companies in the Brazilian sugar-energy sector, with a centennial track record tied to the Ometto family and the countryside of the state of São Paulo. Its origins date back to 1914, with the first sugarcane mill at Sítio Olaria, evolving over the following decades with expansion into sugar and alcohol production. Key milestones include the acquisition of the Iracema Unit in 1937, the development of sugar production in 1946, and the incorporation of the São Martinho Unit in Pradópolis (SP) in 1949, which would become one of the largest sugarcane processors in the world. From the 2000s onward, the company went through a process of management unification and professionalization, culminating in its 2007 IPO on B3 and an expansion cycle that included the inauguration of the Boa Vista Unit in Goiás in 2008 and the acquisition of control of the Santa Cruz Unit in 2014. This history combines organic growth, investments in agricultural and industrial technology, and consolidation moves in the sector.

São Martinho’s business model is integrated around sugarcane and, more recently, corn, covering the production and commercialization of sugar, ethanol, electricity and agro-industrial byproducts. According to its corporate purpose, the company operates in the industrialization of sugarcane, the manufacture and trade of sugar and alcohol and their derivatives, cogeneration of electricity, agricultural and livestock activities, as well as the import and export of goods and raw materials. It also participates in the manufacture and commercialization of chemical and organic products, additives and supplements for animal nutrition, and may hold equity stakes in other businesses. In the 2024/25 crop year, the company reported net revenue of R$ 7.2 billion, with a well-balanced contribution between ethanol and sugar, each accounting for 45% of revenue, while electricity accounted for 3% and other products for 6%, highlighting a portfolio concentrated in biofuels and sugar, with ancillary revenue from energy and derivatives.

From an operational standpoint, São Martinho structures its activities around four mills: São Martinho (Pradópolis/SP), Iracema (Iracemápolis/SP), Santa Cruz (Américo Brasiliense/SP) and Boa Vista (Quirinópolis/GO). The São Martinho, Iracema and Santa Cruz units are flexible, able to direct production to either sugar or ethanol, while the Boa Vista Mill is dedicated to ethanol and cogeneration. The company has installed capacity to crush 24.5 million tons of sugarcane per crop year, distributed among the units, and cogeneration capacity of approximately 1.1 TWh of energy per crop year from sugarcane bagasse. In the 2024/25 crop year, around 22 million tons of sugarcane were processed, with production of 1.329 million tons of sugar and 1.221 million m³ of ethanol, a little over 1 million m³ sourced from sugarcane and around 213 thousand m³ from corn processing. The company also reached a mechanized harvesting rate close to 100% and managed an agricultural area of approximately 350 thousand hectares, combining owned land and areas belonging to agricultural partners.

São Martinho’s product portfolio is composed mostly of VHP (Very High Polarization) sugar, a standard widely used in the international market, and ethanol in different specifications. In sugar, the company focuses on the production of raw sugar for export and the domestic market, with VHP as the main reference. In ethanol, it produces hydrous ethanol, intended for direct use in flex-fuel vehicles, anhydrous ethanol, used as a gasoline additive, and industrial ethanol, consumed by paint, cosmetics and alcoholic beverage industries. Starting in the 2023/24 crop year, it began producing corn ethanol at a plant attached to the Boa Vista Unit, adding ethanol, DDGS (a high-digestibility protein coproduct for animal feed) and corn oil to its portfolio. Among the sugarcane chain byproducts, highlights include yeast for animal feed, fusel oil and bagasse used for steam and electricity generation, with the surplus sold mainly to orange juice producers. The company also maintains a real estate business arm with occasional project launches in the municipalities where it operates, although this activity represents a marginal share of total revenue.

São Martinho’s markets combine a strong domestic presence with significant exposure to international commodity trade. In the 2024/25 crop year, revenue was split between the domestic market, with around R$ 3.86 billion, and the foreign market, with approximately R$ 3.3 billion. In Brazil, sales are concentrated in sugar, ethanol and electricity, as well as yeast, DDGS, CBIOs (Decarbonization Credits) and other derivatives. In the foreign market, sugar is the main product, followed by ethanol, with customers in countries such as Singapore, France, Switzerland, Japan, the United States and the United Kingdom. The company relies mainly on the railway network to ship sugar, reinforcing its logistical competitiveness in exports, while ethanol is sold to distributors that largely pick up the product directly at the mills located in the country’s main sugar-energy hubs. As of March 31, 2025, the company had two customers individually accounting for more than 10% of its net revenue, totaling 42% of sales, concentrated in the sugar and ethanol segments, which underscores the importance of large trading houses and distributors in its customer base.

São Martinho’s production base is strongly integrated with agricultural activities, focusing on land partnership and lease agreements, in addition to owned areas for sugarcane cultivation. These agreements generally have a term equivalent to one sugarcane cycle and are automatically renewable, with partners’ compensation based on the TRS (total recoverable sugars, "ATR" in Portuguese) content of the cane, according to the Consecana system, which reflects average prices calculated by CEPEA/ESALQ. The company has invested in mechanization for decades, having been a pioneer in developing planting and harvesting equipment, which resulted in virtually fully mechanized harvesting of raw (unburned) sugarcane, with positive impacts on productivity, costs and emissions reduction. The agricultural cycle combines different sugarcane varieties and planting windows throughout the year, with an average useful life of sugarcane fields of about seven years and annual renewal of part of the planted area. This integration between agricultural technology, soil and water management and industrial processes is a key element in achieving high yields and stable supply of raw material for the mills.

From a regulatory standpoint, São Martinho’s activities involve extensive interaction with municipal, state and federal agencies, covering areas such as environment, energy, water resources, biofuels, health surveillance and agriculture. The company depends on licenses and authorizations from entities such as CETESB, DAEE, SEMAD, SEMIL, IBAMA, ANA, ANEEL, ANP, MAPA and ANVISA, among others, in addition to complying with labor, tax, antitrust, securities and specific regulations for electricity and biofuel production. All operating units maintain valid licenses, and rural areas comply with the requirements of the Forest Code and the Rural Environmental Registry. São Martinho also participates in sector public policies such as RenovaBio, issuing and trading CBIOs linked to the production of lower-carbon-intensity biofuels, and maintains institutional relations with government bodies guided by transparency and regulatory compliance.

In environmental, social and governance sustainability, São Martinho adopts a series of practices and certifications that reflect the integration of this theme into its business model. All four mills are certified under ISO 14001 and Bonsucro, ensuring global standards of environmental management and sector-specific sustainability for the sugar-energy industry, from sugarcane cultivation to sugar and ethanol production. The São Martinho and Santa Cruz units also hold ISCC EU and ISCC CORSIA certifications, which qualify the company to supply biofuels to demanding markets, including the sustainable aviation fuel segment. The company is a signatory to the Agro-environmental Protocol in the state of São Paulo, promotes rational use of water resources, waste management, preservation of fauna and flora and environmental education projects such as “Viva a Natureza” and the Sustainability Education Centers, which have already received tens of thousands of visitors. On the social front, the company stands out for its high compliance with legal quotas for people with disabilities and apprentices, as well as its adherence to the UN Global Compact and the Women’s Empowerment Principles, in addition to adopting a Code of Ethics that establishes conduct guidelines for employees, suppliers, customers and other stakeholders. These elements, together with its track record of agricultural and industrial innovation, help define São Martinho’s profile as a large-scale sugar-energy company with significant presence in the capital markets through SMTO3 shares on B3.