BrasilAgro Posts BRL 81 Million Net Income on Farm Sale, Cuts Debt

By Tom Whitfield

BrasilAgro reported net income of BRL 81 million and adjusted EBITDA of BRL 95 million for the first quarter of its 2026-2027 harvest year. A farm sale drove a large share of the profit, and management used the proceeds to push leverage down to roughly 1.05 times net debt to EBITDA, including farm-sale receivables. The quarter rewards a closer look, because the headline numbers lean on a one-off transaction rather than recurring operations.

What did the farm sale deliver?

CEO André Guillaumon said the property sale generated approximately BRL 51 million in net income and an internal rate of return of 26% in reais. The company acquired the land in a 2021 transaction involving Agrifirma, he said. That timing matters: a 26% IRR over roughly five years is strong, but it rests on a single exit in a land market the CEO himself described as uneven.

Guillaumon said sales in Mato Grosso remain difficult, while transactions in Bahia hold up better, supported in part by irrigation. BrasilAgro will keep selling farms when terms are attractive, he said. He did not quantify what threshold counts as attractive.

How is the balance sheet moving?

CFO and Investor Relations Officer Gustavo Lopez said the quarter included roughly BRL 50 million from farm sales and a positive financial result of BRL 37 million. He credited much of that result to measures that locked in farm-sale receivables as soybean prices rose. In plain words: a hedging decision, not luck, produced the gain.

The company carries approximately BRL 1 billion in debt. Lopez said BrasilAgro is comfortable with its leverage but plans to cut short-term debt by BRL 150 million over the next six to eight months, using some farm-sale receivables. He also said the company previously favored third-party capital for working capital when rates were lower, and no longer finds that structure attractive at current rates. Management wants to extend some maturities to three, four or five years.

Guillaumon said the company prioritized debt reduction this year but will continue paying dividends, with a payment scheduled for Nov. 16. Both goals at once is a claim worth watching; the receivables pipeline will decide whether it holds.

Where do the crops stand?

Planting has moved quickly in Mato Grosso, where roughly 93% to 94% of the planned area was planted as of the day before the call. Across all regions, planting stood at 68% complete, with Maranhão lagging behind other areas, Guillaumon said.

• Soybeans: 57% of future production sold; the company used favorable exchange ratios to purchase fertilizer and manage costs amid volatility.
• Soybean inventory: 54,000 tons sold, about 25,000 tons still to sell.
• Corn: 70,000 tons sold, nearly 50,000 tons remaining. Lopez said corn results trailed the prior year, though proximity to industrial and ethanol customers could open sales opportunities.
• Cotton: the latest harvest delivered good quality and productivity on a smaller area than last year. Sales have not begun; management expects positive margins, supported by derivatives positions.

For sugarcane, Lopez said prices have pressured margins even as productivity stayed strong, and he expects prices to recover. Guillaumon said the Maranhão sugarcane operation harvested more than 210,000 tons in October, a monthly record for that operation. Some sugarcane in São Paulo could remain unharvested at season's end and be collected early in the next harvest period.

Will BrasilAgro buy more land?

Guillaumon said acquisition opportunities are appearing, but some imply returns of only 4% to 4.5%, which he called unattractive relative to the company's cost of capital. BrasilAgro will examine distressed situations and smaller properties, he said, and will buy only when returns justify the investment. That is a disciplined stance; it also means no near-term growth from land purchases unless sellers cut prices.

He said he expects gross margins for farmers to recover as selling prices improve relative to production costs. His caveat: the improvement might not offset financing costs for highly leveraged producers.

On efficiency, BrasilAgro has mapped 81% of its operations with telemetry and targets 90%. Monitoring machinery use has cut diesel consumption in planting and harvesting, and real-time alerts help managers spot field problems, he said. No figures on the savings were disclosed.

A strong quarter, a 26% exit, and a BRL 150 million repayment plan; the open question is what the next quarter earns without a farm to sell.

BrasilAgro (NYSE: LND) acquires, develops and operates rural properties, cultivating soybeans, corn, cotton and sugarcane, alongside cattle raising, and sells farmland when appropriate.