July 16, 2020

Company records performance above its targets in the first quarter of the current harvest

Company records performance above its targets in the first quarter of the current harvest

Numbers also confirm the good results of the season 2019/2020

Operating profit result was driven by increased sales

The four units of Coruripe Mill in Minas Gerais registered a strong pace of sugar production between April and June this year (first quarter of the 2020/2021 harvest). In the period, the accumulated crushing of sugarcane was 4.6% higher than what had been budgeted: around 4.64 million tons were processed, while the forecast volume was 4.43 million tons. With an industrial efficiency of 88.44% in the current harvest, the company had sugar production equivalent (AE) 9.6% higher than the result in the same period of the 2019/2020 harvest.

Consolidated net revenue, from April to June 2020, was R $ 486.4 million: 39.6% higher than forecast. In relation to the same period of the previous harvest, there was an increase of 26%. The result was mainly driven by the significant increase in the volume of sales of VHP sugar and a slight increase in the type of crystal. "The improvement in the quality of the raw material and industrial efficiency positively impacted our production", says the president of Coruripe Mill, Mario Lorencatto.

In the first three months of the 20/21 crop, the company's operating profit was R $ 91.2 million with an 18.8% margin, while the budget was R $ 15.7 million with a 4.5% margin (in the same period of the previous harvest, it was R $ 17 million, with a margin of 4.4%). The result of operating profit was driven by the increase in sales and, mainly, by the net prices realized well above the budget and those obtained in the previous harvest.

The adjusted Ebitda accumulated in the first quarter of the current harvest was R $ 161.4 million, with a 33.2% margin on net revenue. In relation to the budget for the same period, performance and margin were much higher: the budget indicated R $ 104.6 million with a margin of 30%. In the same period of the 19/20 harvest, the adjusted Ebitda was R $ 128.5 million, with a 33.3% margin on net revenue.

External audit points to improved profit and Ebitda
In the balance of the 2019/2020 crop, published this week, Ernst & Young's auditors highlighted the historical grinding record (14.6 million tons of sugar cane), 3.25% above the last record recorded in the 2016 harvest / 2017 and 12% above the previous harvest (2018/2019). There was also a historical record in operating profit (R $ 524 million), robust net sales (R $ 2.33 billion) and 41.6% of adjusted EBITDA margin (R $ 967.9 million). The Company ended the harvest with positive net income (R $ 92.4 million), reversing the impacts of the exchange rate variation.

According to Mario Lorencatto, the positive results were obtained from the increase in investments by Usina Coruripe in the renovation and expansion of its cane fields, in the technological modernization and in the acquisition of new machines. "Our goal is to reach a new record in the 2020/2021 harvest, with the expansion of the crushing by 2.9%, reaching 15.05 million tons of sugarcane followed by even higher levels of efficiency and profitability", he predicts. Revenue should register an increase of 5.4% (R $ 2.59 billion) and Ebitda will be above the R $ 1 billion mark, due to the implementation of several actions to improve productivity and reduce costs. Coruripe is among the companies in the sector best positioned in the face of the adverse scenario resulting from Covid-19 and the declines in ethanol consumption and price.

For more information on the IR website or the links below.

Demonstrações Financeiras Usina Coruripe 4T20 BRGAAP PT

Índices Financeiros e Covenants