Good afternoon, ladies and gentlemen, and welcome to Jalles' Earnings Call to discuss the results of the Q2 of the crop year, 2024-25. This conference is being recorded and has simultaneous translation into English. The replay will be available in both languages at the company's website at ri.jalles.com. All participants will be on a listen-only mode during the presentation. After the presentation, we will have a Q&A session when further instructions will be given. As we have limited time in this conference, any questions that are not addressed during the call will be answered later by the company's investor relations team. The earnings release and the presentation on the Q2, rather, of crop year 2023-24 can be accessed on the company's investor relations website and at the CVM's website.
Before proceeding, I would like to mention that any statements that may be made during the conference related to the business prospects, forecasts, operating, and financial targets related to its growth potential are based on the company's management's expectations. Such expectations are subject to change due to macroeconomic conditions, market risks, and other factors. Today with us are Mr. Rodrigo Penna de Siqueira, CFO and IRO. And now I would like to turn the floor over to Mr. Penna. You may proceed, sir.
Thank you, Amanda. Good morning. Good afternoon, everybody. First of all, thank you so much for attending another earnings call for the Q2 of crop year 24-25. And in this quarter, we started running our sugar mill towards the end of last quarter, beginning of this quarter in Santa Vitória.
It was an investment that we made to increase the share of sugar in our mix, and we were able to make progress in terms of productivity in comparison with last year. It was a significant highlight for us. I would like to start the presentation talking about our market perspective for sugar and ethanol, our opinion about the environment worldwide in terms of sugar and the local market in terms of ethanol. Then I'm going to go over operational highlights, then commercial highlights, financial highlights, and production costs. Starting with sugar, since we had production that was lower in the Center-South region, although the sector increased investments, we expected to have a certain mix in the percentage of 52%. And now the share of sugar is at 48.5%. So Brazil greatly reduced its production of sugar. And we finished the 2023-24 crop year with a deficit.
In 2024-25, well, it has just started. The numbers that we have as of October show that we have a deficit of three million tons. Some other sources say that it's been flat. The inventory was already tight. I don't think we have a scenario in which we have more space to go down. I think that the price will be above the historical average. We have been taking advantage of this, taking advantage of a better price environment looking forward. We have a positive perspective about sugar. You can see here that we've had a long-lasting period of many years with sugar prices above the historical levels. That can be explained by movements by India in the production of ethanol. Also, because sugar has to be at a higher price.
Brazil is going to exceed this year 70% of its share in the raw sugar, the VHP sugar trade market. For total sugar, it would be 60%. Brazil accounts for a lot of the price composition of sugar in the global stage. Since ethanol provides a higher return, Brazil will have to work on sugar at a higher price level as well. Now, ethanol, we increased our productivity expectation for ethanol. In our last earnings call, we told you that we were expecting a lower volume of ethanol towards the end of the crop year. Since the share of sugar worsened in the Center-South region, the production of ethanol increased in comparison to our plants. Consumption has been strong. It did not slow down. Parity at pumps have been at about 65%, 66%, 67%, depending on the state.
The scenario is still very good for prices. We are at about 65%-67% in the parity at pumps. In the off-season, it should reach 70%. This projection comes from SCA. These numbers consider a 48.6% share of ethanol and a crushing of 66 million tons. Towards the end of the crop year, these numbers should ramp up. We carried inventory over. We still have a good inventory to sell of hydrous ethanol. Now let's take a look at the operating highlights. I'll try to focus on the last six months. Since the sector is very seasonal, as you know, our sales strategy can change from one year to the next. I think it is more helpful for us to focus on the half-year numbers and not just the quarters.
But you can see the numbers for the quarters on the slide as well. Crushing, we finished the first six months with 6.5 million tons, 4.6% more, and here we have the harvested area. Our total sugar cane per hectare increased by 5% year-on-year, finishing the first half of the year at 91, and we went from 91 to 100. In Jalles Machado, Otávio Lage was roughly the same, and Santa Vitória had this drop that you can see on the slide due to the droughts in the Center-South region. It impacted the situation. Here in the state of Goiás, the weather was closer to normal. It started raining in April, and then we started seeing rains in October as well. But in the state of Minas Gerais, we didn't have any rainfall in May or September, which are usually rainy months.
Since it started only in October, that impacted sugar cane production, especially in September, in terms of yield and quality. So towards the end of the crop year, we felt that impact on yield and quality, which hindered the production of sugar in the new mill in Santa Vitória. Now, total recoverable sugar per hectare went up by 1.2%. Our average total recoverable sugar went down, especially in Otávio Lage. And our production mix, we had 45% of sugar in comparison with 37% last year. And in the quarter, it reached 51%. It is a little bit below what we planned because of the lower total recoverable sugar in Otávio Lage in the beginning of the crop year, and also the Santa Vitória mill in which we had delays. And the ramp-up of the production of sugar took longer than we expected in Santa Vitória.
When the mill started working more according to the normal levels, the quality of the raw material worsened significantly. That came in the way of having the volume that we wanted in the first year of our sugar mill in Santa Vitória. Now, the average age of the sugar cane field, if you look at all three units, last year we had 3.2. This year, it's 3.1. Now, let's take a look at the commercial highlights. We finished the quarter. Oh, let's take a look at the full half-year. We finished with 6% more, with an average price that was 2.4% higher. It's important to notice that organic sugar had a volume that was 10 million tons lower than last year. That happened because of the increase in container prices, which made us push our bookings forward. That is now being offset by the brakebook.
Even though it is more expensive, we are shipping anyway. That should go back to normal by the end of the crop year. This year, we shipped less organic sugar than we expected. Now, for ethanol, I would like to highlight this quarter's price, which was BRL 3 in comparison to BRL 2.57 last year. Year to date, you can see that the price is higher than last year. If you look at the parity at pumps curve, it is now reaching 70%, as I showed you earlier. Now we have a new tax bracket for gasoline starting next year in January. That is going to have a positive effect on the price of ethanol. The market right now is at about BRL 3.10. That's the current price. Ethanol is now reacting.
I think that we're going to see more of that towards the end of the crop year. Now, CBIOs, we are not stocking CBIOs. We have been selling all of the CBIOs that we are issuing. We don't have a clear vision in terms of seeing increased prices for CBIOs. We finished this period at BRL 92, and we sold 222 CBIOs in the first half of the year so far. Now, let's take a look at everything that we've sold and our inventories. If we look at the first six months of the year, out of everything that we produced last year, we sold 49%, and this year, 49% as well. Last year, we had a strategy that was not accurate due to the context that we explained to you in our previous calls, and also because we had inventory carryover.
Out of everything that we produced by September, we sold 49% of that production. We sold less than half of our production until September. The other half, or 51%, has to be sold. Also the production that we are going to have in October, November, and maybe December in the Otávio Lage's unit. Since we have rainfall there, I think the crushing will extend all the way to December. Considering the TRS that we sold right now, 49.8% is sugar. If we had an average share of 45% of sugar, 49% actually was sugar. And 49% of the 45% was sugar. We have a high inventory of ethanol. Although we leaned more towards sugar, we still have a high inventory of ethanol. And sugar is a lot higher than last year.
A significant part of this inventory is organic sugar that we did not ship. Now, EBIT, we finished the quarter at 24% with BRL 130 million in EBIT. In the first half of the year, the margin was 20.9% with BRL 197 million. A bit flat in line with last year, just 2% below at 564, with a margin of 60%. Now, our leverage, we have a high inventory level, as we just saw. Our debt is BRL 1,796. Our net debt over EBITDA ratio is 1.2 times. Our debt profile has an average term of 5.1 years. Now, let me tell you some more about our hedge, our hedge policy. We've been taking advantage of the future prices. We have a hedge policy in place for 25/26.
87% of what we want to hedge, considering our confidence coefficient in the agricultural partnerships that we have with our partners. Out of that available volume, 87% has been hedged at a price of 2,431 for the 2526 crop year. For 2627, the average price is 2.4, with 69% of the volume hedged. For 2728, we have already hedged 7% with 2,613. If you put together our capacity, and of course, we don't give you guidance about this, but we are considering the production capacity for conventional sugar, excluding organic. We are talking about that capacity. That's what we have included in our hedge. You have to put together all of these numbers. We have had 1.6 times our annual capacity in the production of sugar. It's 1.6 times. We are following our policy of taking advantage of these moments.
We were above the market, and in our results, we had an effect of the MTM for sugar in the futures market. Towards the end of September, we had that impact. Now, let's talk about production costs. In our release, there's a section about the production cost for COGS in accounting terms and also cash. The cash COGS is desynchronized in terms of our recurring CapEx and our sales, so it is not really coherent with reality, and then after the end of the year, you can see the whole cycle for recurring CapEx and also sales for the year, so we decided to bring you the figure so that you can have an idea of our production cost in the first six months of the crop year.
In the cost of sugar equivalent in BRLs per ton, we had a decrease of 10.9% in costs year-on-year comparing the first half of the year. And in cents per pound, the drop was of 18.7%, reaching $0.115 per pound. And accounting COGS, excluding the non-recurring effects of Santa Vitória, our COGS was below last year, although we had carryover inventory from last year. And we expect the accounting COGS to go down towards the end of the year. And the main driver behind that was the drop in input prices, agricultural and industrial inputs, and also the average yield, which is a little bit higher. So those are the main drivers behind that cost. And now I would like to give you more color about our CapEx for organic growth and also the sugar mill in Santa Vitória.
Since 2021/22, when we announced BRL 517 million in investments at Otávio Lage and Jalles, and we included a number of investments here, this is what we have. That was the total that we announced in July 2021. So we had BRL 159 million in 2021/22, BRL 152 million in 2022/23, BRL 112 million in 2023/24, and BRL 18 million in the first six months of the 2024/25 crop year.
And these are the amounts that we invested in each of these areas. So we have BRL 74 million to go, but the units are now ready to produce 6.3 million tons. The sugar mill in Santa Vitória, until September, we had BRL 174 million. The plans, according to our plans, we would spend BRL 170 million, but we are going to produce 33% more. We are going to have an increase of 33% in our capacity in Santa Vitória, reaching 20,000 bags per day.
The projection used to be 15,000 bags per day, so with that, I would like to thank you very much for your attention during the presentation, and now we are going to have time for questions. We're here to take any questions you might have. Thank you. Ladies and gentlemen, we will now begin the Q&A session.
If you wish to ask a question, please click the Q&A button at the bottom of your Zoom screen. If you wish to open your microphone to ask your question, please let us know in the Q&A field, and your microphone will be activated when your name is called. You can also submit questions in writing by typing your question in the Q&A field. If you're using a dial-in connection, you can also ask questions. Please press Star 9 on your phone.
After your name is called, you will hear instructions to press Star 6 to activate your microphone. Please make sure to press Star 6 only once. The first question comes from Mr. Gabriel Barros from Citi.
Hello, Rodrigo. Thank you very much for taking my question. The first question is about investments, following up on the last part of your presentation. In one of your investor days not long ago, you were talking about a potential investment in corn ethanol and how the sector evolved in Brazil, and it was creating opportunities for the production of corn ethanol in Brazil. I would like to know how that conversation matured in the company, if you've been talking about this internally, and how close are you to investing in corn ethanol. And also, most of the investments that you proposed to do in the past have already been done.
So what can we expect for next year, including when it comes to decreasing your CapEx in comparison to this year since you have to invest more this year? And talking about your hedge policy, you showed numbers towards the end of the presentation, and there was an increase in the FX rate due to the elections and uncertainties in our market. So maybe you will start spinning up your hedging movements. So if you can share with us how much that has evolved, at what price, and if you give any more information about that, that would be very helpful.
Thank you. Good afternoon, Gabriel, and thank you for participating in our earnings call today. Well, Gabriel, your first question was about corn ethanol. On our Jalles Day, we said that it is a possibility among the future investments that the company will make.
We started analyzing the units, the six units for viability, and then we started refining those assessments, then we are going to start working with our engineers to assess these investments further. But it only means that the company is maturing in those conversations because this would require additional investments from the company, but not next year. If we are going to invest, start investing in that, it would start in March 2027 and onwards. But of course, there's a whole planning that needs to be done beforehand. So it wouldn't even be done in 2026. It would only start in 2027 if we are to make any investments in corn ethanol. But indeed, Gabriel, the company has been considering that possibility, but we need to have the project first and have alternatives.
According to our capital structure, we wouldn't like the capital structure to exceed the leverage level that we have right now. So we want to optimize the things that we have done so far. Another thing that we are going to consider, but not for the 25/26 crop year, because we want to get to full speed at the new sugar mill in Santa Vitória and at Otávio Lage, we also want to get to full speed. And by doing that, we want to reach our full crushing capacity, reaching nine million tons. So about corn ethanol, I think I addressed your question. It's going to happen if it happens towards 2027, and we want to get it right in case we decide to do it. And we are also assessing the possibility of producing biomethane at Santa Vitória. We are assessing, considering that possibility.
For 25/26, our CapEx will be at a lower level, much lower, because we will have finished or virtually finished the investments in organic sugar, in the organic expansion, actually, in the state of Goiás. We might have investments to expand our planted area in 2025 by 2,000 hectares so that we can reach nine million tons of production, as we announced in the past. Our CapEx will be much lower. The expansion improvement CapEx for next year will be much lower because we are going to be finishing this growth cycle that took additional CapEx for the sugar mill in Santa Vitória, as it was not initially included in our plan. We decided to do that because of the prices. When it comes to hedging, we have been taking advantage of the opportunities we've had.
And what we can say about that is what I put in the presentation, everything that we've done until September. But we have been following the same policy that the company has followed over the years. The higher the percentile of prices, if you are in the 20% better, then I can reach up to 80% of hedging. So we follow that logic, that rationale, the policy that we have been following over the years.
Okay, thank you, Rodrigo.
Thank you.
The next question comes from Mr. Bruce Tulin with Bradesco BBI. Please go ahead.
Good afternoon, Rodrigo. It's a pleasure to talk to you. Thank you for taking my question. I have two questions. The first one is about Santa Vitória, about what we said in terms of the productivity impacted by droughts. What do you expect for next year?
I would like to know your perspective about what you have been doing in the field and in terms of the weather conditions so that you can reach 80 tons of sugarcane in the next two years. This is the Q1 in which we see a mix that looks more like what Jalles should be from now on. There are many things happening, but I would like to know your qualitative assessment of the results, considering the changes in mix. Also, if you could give us more color about where we are going to see results improving, that would be very helpful.
Thank you, Enrique. Thank you for your participation. About Santa Vitória, we started with 60 tons per hectare when we started working there, and we already reached 70 tons in the first crop year that we worked there.
But also, the weather condition was very positive that year. Otherwise, we wouldn't have had such a huge leap from one year to the next because we didn't even have room to improve our management practices and the new varieties and all that. So last year was the best year, but sugarcane felt the weather conditions, the heat that we had in February, for example. So this year, we are not going to see the same productivity leap that we had last year. However, going forward, we want to reach the numbers that we disclosed on our Jalles Day last year. We want to reach 79 tons per hectare by 2026. That is our goal. And we are doing everything we can to reach that number in 2026. And next year, we should get something at around what we have right now and 79.
So our vision has been the same. We're keeping our goals. And when it comes to the mix, we are not quite there yet. We are not at the same mix that we are going to have from now on. I believe that across the three units, we have the possibility of changing our mix, reaching 55%. And in the first half of the year, we have 45% of production and 49% sold. So we are going to have a higher mix. And another important point is that in the quarter and in the first half of the year, we shipped little organic sugar. And organic sugar gives us higher margins than conventional sugar. So that is also a factor that impacted us, and that can give us more margin if we fix that situation.
If we were to mix your question with Gabriel's question that came before yours, well, I think that we can assess the situation in Santa Vitória in which we build a sugar mill so that we could reach 50% of sugar in our mix. We can expand that capacity, the capacity of sugar production in Santa Vitória. That means that we have room for improvement and get 55% across the entire group. At Otávio Lage, we can have 60% and 50% at Santa Vitória, and Jalles also 60%. We can go all the way up to 70% in Santa Vitória or even more than that. It makes sense to invest in smaller investments so that we can further improve the share of sugar in our mix.
Okay, thank you.
The next question comes from Matheus Enfeldt with UBS.
Good afternoon, Rodrigo, the entire Jalles team. My first question is about costs. We saw a drop in production costs, a significant one this quarter, and I would like to know more about your perspectives going forward. Are you considering lower costs, even lower costs as you dilute costs more because of a higher crushing rate, or maybe you can even offset inflation in the period and see production costs go down with time with further dilution, and the second question is about regulations. There's a huge discussion about the Fuel of the Future. Do you think you can reach 30% of mixture for next year, and also about RenovaBio, I would like to know more about your strategy of not stocking up on CBIOs, so I believe that the new regulations will bring good opportunities for the sector, and I have another question about your hedging policy.
I do understand that the company tends to be more conservative in terms of guaranteeing margins and guaranteeing prices that are above the historical levels. But maybe there is a discussion within the company about whether or not you were too conservative. And now that you have almost finished your CapEx cycle, maybe you could have your hedge policy more open to different things. Those were my questions. Thank you.
Thank you, Matheus, for your questions. I would like to thank you also for starting covering Jalles at UBS. Thank you very much. About production costs, well, in our business, if you want to produce at full capacity, it is important. I'm sorry, we apologize. We had a connection issue. I'm sorry. Hello, can you hear me?
Yes, we can hear you.
I'm sorry, I think I had connectivity issues. It's raining a lot here where I am.
That's good news then.
Yes, it's good news. It started raining since October. It was supposed to stop raining already, but rainfall extended a little bit. In our business, we have a significant share of fixed costs. If you work at full capacity, that helps diluting the costs, especially after so much CapEx. Yes, that helps a lot. Also, another driver in terms of reducing costs is the relentless pursuit for productivity, for capacity. That is one of the most critical points that led corn ethanol to be so competitive. It was about the evolution of productivity and yields in the fields. The field accounts for 75% of our costs of COGS.
So it is very important for us to work hard on improving yields even more with new varieties, new management practices, more accurate ones that are used at the right moment with technology, and irrigation, the efficient use of irrigation and pivot irrigation that we use in our fields. So I think all of those points are very important. On the other hand, for next year, we don't believe that the input prices will go down. With the FX rate at 5.75, that has an impact on our COGS. The input price is lower, but the FX rate is high. So I don't think we're going to see a further decrease in the costs of inputs.
Workforce should be adjusted according to the inflation and even a little bit more of that because salaries are being adjusted all around Brazil due to the shortage of labor that we've seen in many regions in the country. Sometimes we don't have people to work in our fields. That is a significant part of our costs. It should increase a little bit above the inflation. It's a little bit, but it adds up. About regulations, we believe that a 30% mixture has been evolving well together with the associations and entities that are involved in this mission of considering increasing the mixture to 30%. We actually expected that to happen in the beginning of the year, but now it's probably going to happen in the Q1 of next year. That's the last we heard about this.
Another important point you might be aware of is that we have been working on improving RenovaBio in the regulations. A lot of people have been working on that. In the same bill, they included Consecana and the Sugarcane Partner as a part of RenovaBio. It is not going to affect us so much because we don't use third-party sugarcane, but that should improve the regulatory environment for RenovaBio. RenovaBio has to be advocated for. It has to be defended. Today, we have a great program, very well put together, and legal issues that some companies, some distributors are not honoring.
So I think that they should face harsher punishment so that the program becomes more credible, more serious, and really fulfills its mission, which is encouraging ethanol production in Brazil so that renewable fuels have a larger share in the country, driving down the use of fossil fuels. And you also mentioned the fuel of the future. And those regulations will be very important for the growth of the sector, for sustainable aviation fuel and biomethane, and also the mixture. All of that is very positive. Now, you also asked a question about our hedge policy. That's a very good provocation. That's very good food for thought. And we are always thinking about that at the board level, at the executive level. And we believe exactly what you said. We invested a lot of CapEx in the sugar mill in Santa Vitória.
So it is important to have some security around the prices. And we do believe that it is important to have a strict policy. 50% of our product is completely unhedged, which is ethanol, since we sell all of our ethanol on the spot market. And when we compare Jalles against other units, it's important to remember that we work with 100% own sugarcane. So I can hedge all the sugar I have capacity to produce because I don't have any liabilities related to the price of sugarcane, excluding the agricultural partnerships in which we have a lease, and I have to pay for that lease. And that's the only part that we cannot hedge. So just to give you an easy example, if we have only 50% on our own sugarcane, the company would only be able to hedge 50% because you have to pay for the sugarcane, right?
The price of that sugarcane will go together with the price of sugar and ethanol. So it's a liability, and we don't have that. So we can go a little bit further in our hedge policy. It is very rare to see a company like ours that has 100% own sugarcane. Usually, it's 70% in other companies. And those players cannot have that confidence of being able to hedge everything because they have to pay the other farmers, the partner farmers. I don't know if that was clear, but thank you very much for your questions. And we can talk more about that later if you wish.
Thank you. Very clear.
Thank you.
The next question comes from Mr. Pedro Fonseca with XP. Please go ahead.
Good afternoon. How's it going, Rodrigo? Thank you to the entire Jalles team. Thank you for taking my question.
I would like to follow up on corn ethanol. It is very clear to us that you are still analyzing this project. You are analyzing the viability of this project. But is there any economics that you can give us more color on about what Jalles is considering right now in terms of producing corn ethanol, for example, or EBITDA or about the margin? If there's any number that you are targeting, that you are pursuing, and you can share that with us, that would be great. And the second point is about the delays in shipping organic sugar. You talked about the increase in freight costs. I would like to know how much of the organic sugar margin is impacted by the increase in freight costs.
And I would like to know more about the difference between organic and conventional sugar considering the higher freight costs and what can we expect in terms of shipping volumes in the last two quarters in the crop year. And I have another question. If you could share with us what you've heard and the expectations around India and also the entire Southeast Asia production. Pakistan is already exporting. So is there any surprise that we can see coming from Asia? So those are my questions.
Thank you so much once again. Hi, Pedro. Thank you so much for your participation for covering Jalles. About corn ethanol, well, it wouldn't make sense for us to make any investments with returns lower than 20% today in the current scenario.
What we can tell you for sure is that in one of the units, since we have lower investments to make, for example, in terms of steam, we have sufficient boilers, so the return would be higher than 20% in those cases. And we are considering using the Climate Fund from the BNDES. The funds have finished for this year, but for next year, I believe that they are going to continue with that credit line, and they might raise more funds for this credit line for the coming years. And that would give us results higher than 20% less, and that wouldn't make sense. As I told Gabriel, for those who just joined us, it's important that you know that we are considering those projects just because we want to have future investment on the shelf that we can make, but that would only start in 2027.
Those investments would only start in 2027 because right now we are focused on optimizing all investments that we made in our capacity. We want to extract more from them. We are analyzing corn ethanol, biomethane, or even increase the share of sugar in Santa Vitória, and those would take marginal investments. When we do reach the nine million tons, we can make adjustments here and there and investments here and there as well. Now, when it comes to freight costs, that doesn't impact our price because our clients pay for that. In 95% of our sales, we deliver the sugar to the Port of Santos, and the clients pay for shipment. The delays that we had happened because the freight costs increased very suddenly, and then they have to reschedule the shipments, and sometimes clients don't want to pay for the new price.
So there's a whole negotiation that has to happen between our clients and the container companies. And the increase that we had in our SG&A was because of the higher volume of sugar. So we had that impact. Now, about what should happen by the end of the year in terms of freight, in terms of shipping, well, I think that we are still going to see some distortion in our volumes, but starting next year, shipping will go back to normal, and I think that we'll be able to plan things out until March. And we should remember that our organic crop year doesn't really match our regular crop year from April to March. We usually sell organic sugar until June. So we deliver from June to July. So we are working with our sales team right now so that we can sort things out.
And the market is very good. The market is not with an oversupply right now. And it is not at the premium price that we've seen in the past, but the market is good right now as long as we can have efficiency in our costs. That's what we are always pursuing. Now, India and Southeast Asia and Thailand, we had a period of monsoons and heavy rainfall there. They have higher expectations than they used to have, and Thailand is also ramping up its sugar production. Sugar is better than Manioc right now, which is a competitor of sugar there. So they're migrating and increasing their production of sugar. And at the same time as the Center-South region had an impact with lower quality, the sector invested to have 52.5% in sugar share in the mix, and it is going to be 48%-49%, actually.
So that really harmed the global supply, and the impact is going to carry over to next year. The ratoons were damaged, and the drought and the fires caused an impact in a lot of regions when it doesn't rain, and there's no rainfall that can really impact ratoon sprouting from the ratoons. So that is going to be an impact for next year as well. But the production in Thailand is, according to normal, and actually a little better than expected in India and Thailand. Thailand is going back to the production levels that they used to have in the past. Thank you.
That's very clear, Rodrigo.
Thank you, Pedro.
Excuse me. I would like to turn it over now to Mr. Rodrigo for his closing remarks.
Well, thank you very much for your participation.
I would like to thank the entire investor relations team, Lucas, Felipe, Jacqueline, and also all of you who have been attending our Earnings Calls and covering our company. And Apollo, I think there is a question. There is another question.
Yes, we have a question from Mr. Thiago Duarte. Please go ahead. Thank you.
Thank you for taking my question, Rodrigo. Very briefly, in light of the various topics that we talked about today, considering that you have not updated your guidance, I would like to know your opinion about the guidance that you disclosed in the beginning of the crop year. I am particularly curious about your mix since there was a delay in the production in the new mill. Maybe the mix is not going to lean so much towards sugar, as you indicated in your guidance. And also about sugarcane crushing.
To reach your guidance, you would need a very strong Q3 in terms of crushing. And if there's any point that you would like to highlight in your guidance, that would be very helpful as well. That's it. Thank you.
Thank you, Duarte, for your participation. Your interpretation is correct. We have not been able to reach the mix that we have planned. So yes, there is a tendency to decrease the amount of sugar in comparison to our plan. And when it comes to crushing, it's been in line. It's been flat with a downward trend, but nothing really that would make us review our guidance. It's at about 8.2 with a downward trend. Let's put it that way.
Okay. Thank you.
And just as a compliment, as I said in the beginning, in Santa Vitória, we expected to see an increase year on year because we had the climate, the weather conditions, but it struggled more towards the end of the crop year in May and also in September, and also because of the extreme heat when we were planting in the beginning of the year, in the Q1 from January to March. But it is a small gap in crushing, and the mix is going to be a little bit lower than we expected for two reasons: quality, quality of sugarcane itself, especially in Santa Vitória, and also the delay that I mentioned, the delay in the production of the new mill and a slower ramp-up, slower than we expected.
Okay. Thank you, Rodrigo.
Thank you.
Unfortunately, we don't have more time to take questions. The investor relations team will get in contact with you to address any questions we didn't have time to address in the call. Now, I'll turn it over to Rodrigo for his closing remarks.
Thank you, Amanda. Once again, thank you so much for your participation for covering Jalles. And see you in our next call in the Q3. Thank you. See you next time. This concludes Jalles 2Q 2025 Earnings Call for today. Thank you. Have a good day.