Atvos sustains the financial results in 2019/2020 crop, and net revenue growth of 6%

Atvos Agroindustrial Participações S.A. ended the 2019/2020 crop with net revenues of R$ 4.5 billion, a 6% increase in relation to the 2018/2019 crop. The adjusted EBITDA of R$ 1.5 billion was 2% higher than the one registered in the previous cycle and gross profit of R$ 246 million compared to R$ 177 million in the previous crop.

The positive financial results obtained follow Atvos’ agricultural and industrial performance that, even facing a challenging scenario, kept their operating pace with 26.9 million tons of ground sugarcane, an increase of 1% compared to the previous crop. The company produced 2 billion liters of (hydrated and anhydrous) ethanol, in addition to 235,000 tons of VHP sugar and the cogeneration of 2.800 GWh of biomass electricity.

R$ 492 million and R$ 933 million investments were made, excluding and including, respectively, the cultural treatment of plant cane, focusing on the formation and maintenance of the cane field. This amount represents a reduction of 11% in relation to the previous period due to conservative cash management in line with the company’s financial restructuring process.

“The best average price on ethanol, in addition to cost reductions and productivity gains impacted positively the results. We continue to focus on controlling expenses and implementing solutions to reduce costs and gain productivity,” says Alexandre Perazzo, Atvos’ financial officer.

In May 2020, the company had their court-supervised reorganization plan approved by their creditors. After homologation by the Justice of the State of São Paulo and implementation of the court-supervised reorganization plan, the reduction of the company’s total indebtedness will be approximately of 48% and the leverage – net debt and EBITDA ratio – will fall from 7.7 to 3.6 times (scenario on March 31, 2020).

“We will have a significant reduction in cash stress, because once the plan is approved there is a forecast to reduce the amount of debt and the average cost, with considerable impact on net income”, says Perazzo.

Operational performance

The average TRS (Total Recoverable Sugars) content recorded in the period got the company’s best historical result of 133.6 kg/hectare, surpassing the previous indicator by 2%. The TRC (Total Recovered Corrected) remained in the rate of 94%, reflecting the improvements between harvests, especially in extraction, fermentation and operational continuity.

Sugarcane suppliers were responsible for 34% of the raw material processed, surpassing the previous 30% rate. This increase is the result of a major area transfer to suppliers, which was 17% above the 2018/2019 crop. The Parceiros Mais Fortes program covers 47 suppliers that were responsible for the delivery of 9.1 million tons of sugarcane, an increase of 15% in relation to the previous cycle.

The expectation is also to strengthen the agricultural partnership program which, in 2019/2020, allocated R$ 1.3 billion, of which R$ 545 million were agricultural partnerships and R$ 739 million in sugar cane supply. As a result, 1,121 agricultural partners and 52 cane suppliers were affected.

The company covers a total of 498,000 planted hectares. In 2019/2020, 70 thousand hectares were planted (considering own planting and suppliers’ planting), a decrease of 5.6% compared to the previous crop, mainly due to cash restrictions. From this planted area, 92% were devoted to renovation, essential for the company to reach their operational maturity.