Jalles sold half as much and doubled its profit. The secret is 200,000 m³ of ethanol sitting in its tanks
In the second quarter of the 2026/27 season, Jalles' profit rose 118.8% to R$ 41.4 million while revenue fell 47.5%. The market read the drop as a commercial choice and the stock opened 7.8% higher.
To save you time4
- How much did Jalles earn?
- R$ 41.4 million in the July to September quarter, up 118.8% from R$ 18.9 million a year earlier.
- Why did revenue fall so much?
- Net revenue dropped 47.5% to R$ 336.3 million on lower volumes and prices. The company held 200,200 m³ of ethanol in stock, up 79.5%.
- How did the market react?
- The stock opened 7.8% higher at R$ 2.35. XP called the weak revenue a timing effect.
- What's the watch point?
- Leverage rose to 2 times from 1.2 times a year earlier, with net debt of R$ 2 billion.
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Here's the paradox: Brazilian sugar and ethanol producer Jalles (JALL3) saw revenue fall almost by half in the second quarter of the 2026/27 season (July to September), and yet profit more than doubled. It came in at R$ 41.4 million, up 118.8% from R$ 18.9 million a year earlier.
Net revenue fell 47.5% to R$ 336.3 million, with less sugar and ethanol sold at lower average prices. Adjusted EBITDA (operating cash generation) dropped 50.6% to R$ 201.4 million.
What matters here
The key is inventory. Jalles ended September with 200,200 m³ of ethanol in storage, 79.5% more than a year earlier. Management says the goal is to save volume for periods of more attractive prices, especially the off-season.
In the field, operations improved: average yield rose 17.4% to 86.6 tonnes per hectare, and the mix shifted to 54.8% ethanol. Ethanol output grew 8.9% to 159,300 m³, while sugar fell 8.7%.
How the market read it
The market liked it: the stock opened 7.8% higher at R$ 2.35. XP put it simply: "We see the weaker revenue as a timing effect," estimating the inventory could add about R$ 224 million in revenue. BTG, at neutral, was less generous: "The disappointment reflected weaker-than-expected sugar prices."
What I'd watch
The balance sheet. Net debt rose 8.4% in 12 months to R$ 2 billion, and leverage reached 2 times, versus 1.2 times in the same quarter last year. Cash of R$ 2.06 billion provides room. Holding stock is a bet on off-season ethanol prices: if prices come through, the thesis pays off. If not, financial costs eat the advantage.
