3tentos sold 17% more and earned less per bag. But it never generated this much cash
Net income of R$208m (+2.5%), adjusted EBITDA -38.5% and record free cash flow of R$1.1bn. Its ethanol plant started up.
To save you time3
- How much did 3tentos earn?
- R$208.2 million in Q3, 2.5% above a year earlier, with a 3.6% net margin.
- Why did EBITDA fall?
- Grains and industry were less profitable and logistics per tonne got pricier. Hedged adjusted EBITDA fell 38.5% to R$226.7 million.
- And cash?
- Free cash flow of R$1.1 billion, the company's highest ever. Its first ethanol plant started operating.
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3tentos sold more and earned less per unit, but ended the quarter with the largest free cash flow in its history.
The numbers
- Net income: R$208.2 million (+2.5%), 3.6% net margin.
- Revenue: R$5.85 billion (+17.2%), up in every segment.
- Adjusted EBITDA (hedged): R$226.7 million, -38.5%.
- Free cash flow: R$1.1 billion, a record.
- Nine months: net income of about R$499 million, -31.3%.
Why margins tightened
Grains and industry (crushing) were less profitable and logistics per tonne rose. It is the same squeeze visible in global crush margins.
What's new
The company's first ethanol plant began operating in the quarter, giving Center-West corn a second outlet and diversifying margins.
What I would watch
Falling EBITDA with record cash signals released working capital, good for riding out the cycle. The question for TTEN3 is when grain margins recover; until then, ethanol is what can offset.
