Good afternoon, ladies and gentlemen. Welcome to Jalles Conference Call to discuss the results of the fourth quarter of crop year 2023/2024. 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 in a listen-only mode during the presentation. After the presentation, we will hold a Q&A session when further instructions will be given. As we have limited time for this conference, any questions that are not addressed during the call will be answered later by the company's RI team. The earnings release and the presentation on the fourth quarter of crop year 2023/2024 can be accessed on the company's RI website and also 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 company's business prospects, forecasts, operating financial targets relate to its growth potential, rather the growth potential, and are based on the company's management expectations about the future of Jalles. Such expectations are subject to change due to macroeconomic conditions, market risks and other factors. Today with us, we have Mr. Otávio Lage, our CEO, and Mr. Rodrigo Penna, our CFO and IRO. I'd like to turn the call over to Mr. Lage. You may proceed, sir.
Good afternoon, everyone. First and foremost, I'd like to thank you for joining our conference call. Thank you very much for your trust. We are always very glad to have the trust of our shareholders, our investors.
I would like to thank our team for all the work they've put into this conference, checking all of the figures. Luiz, Rodrigo. Rodrigo is our CFO, who's going to be fleshing out these figures with a lot of accuracy. I'd like to say that it was a difficult year. There was a lot of interference from the government when it comes to ethanol policies, and that definitely had an impact on our results. We responded quickly because of the sugar prices. In August last year, we decided to increase our product mix, to increase the amount of sugar. The plant that we acquired, Santa Vitória, after the IPO, according to the IPO policies, it's a great plant.
It's a great mill in a very good location, where it's easy to have irrigation with an area where you can find good partners for sugarcane, and we invested in the sugar factory. We're already operating, we are already producing sugar. We were able to go live with the factory in record time, unbelievably quickly, in spite of all of the impacts we may have had with suppliers, with providers, but we were able to expand the sugar factory. Other competitors did that, too, so we were also competing with them for labor and for machines. But thanks to the competence of our team, thanks to their dedication, we were able to do it. We also increased sugar production in the Otávio Lage plant. The sugar price is more competitive right now.
The expectation is that closer to the end of the crop year, ethanol prices should be better. São Paulo is a major sugarcane producer, and the yields are below expectation. The sugar production is also below expectation. We see there is expectation for growth. We want to share these figures with you. Rodrigo is going to show them to you. He is our CFO. As we have always had your trust, we hope we can continue to count on it. We want to continue to bank on your trust, and thank you very much for being here. I hope you all enjoy this conference call.
Good morning, everyone. Thank you, Otávio. Thank you everyone for joining another conference call to discuss our earnings. As Otávio said, we are very glad to have you all with us. We're very happy to have you here.
So let's get started with the main challenges we had in this crop year, and also how we responded, considering the ethanol scenario that we had last year, and now having a more sugar-focused year. We are very happy that the Santa Vitória plant started running on the eighteenth with sugarcane juice already, and today, in the early hours of morning, we already had the first sugar production come out, so everyone was celebrating at Santa Vitória. We already had a lot of hedge, 75%, and we have 73% for 2025-2026, and we're doing sugar at a price higher than we had last year, 30% higher year on year. I'd like to start the presentation by talking about what we see when it comes to productivity and Jalles Machado. The Center-South had less rainfall than last year.
We see they varied from 80-81 tons in comparison to 88 tons from our last crop year. So there is a decrease year-on-year, but the Center-South had really leapt from 73 to 88. Jalles did not have this climate bonus, this weather bonus. Santa Vitória had a better improvement, but in the Goiás mills, the Goiás mills had an average climate. And when we think about the production guidance, and we published that yesterday, right? With a material fact. When we look at rainfall in Goiás, it was close to what we had in the previous year, but they were better spread out. There was no peak as we had last year in December. So rainfall was better distributed and approximately the same amount of rainfall. So that allowed for the sugarcane yields to recover.
In Santa Vitória, rainfall was lower than last year, closer to Center-South, but the distribution wasn't as good. So we don't expect the increase in yield for Santa Vitória, with exception of the fact that we're going to be renewing the sugarcane crops, right, the sugarcane fields. We're working to increase the Santa Vitória yield. We want to get to 80 TCH in there, up to 2026, the sugarcane tons per hectare. So this is what we expect for each plant, and we're gonna be talking a bit more about the guidance that we have at the end of the presentation. Now, when we look at the next slide, we want to give you an overview of the supply and demand of sugarcane or sugar, rather, in the world.
Ever since 2020, 2021, we see inventory versus consumption, or rather, the stock-to-consumption ratio at a lower ratio than history. So when we look at historical figures, we see that we have a sustained scenario when it comes to sugar price, and it's not gonna change. What we have here at 2023-2024, and it ends in September 2024, so there's a -2.2, and then a minor surplus in 2024-2025. But the stock-to-consumption ratio is still quite tight, and that allows for prices to be maintained for sugar. Now, when we look at this other aspect, to think about how the sugar price may behave, we're also looking at the main producers in the world getting to the limit of their capacity. So 2024-2025 shows that every sugar-producing country is going to reach their highest mark in history.
They've got to this level with marginal improvements, improving the mix. But there's nothing showing a greenfield sugarcane plant as possible, looking at the current prices, that should compare to what we have in Brazil. So we don't see the likelihood that there'll be any incentive for the production of sugar to grow around the world. The previous slide showed supply and demand, and countries all over the world getting to their capacity. India has got an ethanol program as well. Their total recoverable sugar is still growing, so they're going to continue to grow in that sense for the coming years. Now, the market vision for hydrous ethanol. We started last year with an intense demand. In the first two months, we had 3.9 billion liters in hydrous ethanol.
This year, according to SCA forecasts, we have a supply, not only for fuel, that is 20 billion liters of hydrous ethanol. So 3.9 in two months, if we continue at this level of consumption, we would need another 19.5 billion liters that we don't have. 3.2 would be lacking, would be short of to 3.2, for us to continue to consume ethanol at current level. So what is to be done is an adjustment. We need to make an adjustment. The monthly consumption in these first two months was 1.93 billion, and you have to go to 1.63 billion. So to have this 15% drop in demand, that would need to come through the adjustment of parity at the gas station pump.
Now we have another SCA chart, and the bars show the consumption of fuel hydrous ethanol. This is not the total hydrous ethanol for all purposes. This is only for fuel and what we have here in April and May. Then SCA, again, this is a chart by them, then we have their forecast. What would need to happen for the ethanol, fuel ethanol to be consumed till the end of the year? So demand will need to go down and parity will need to go up. So parity goes up to offset the demand going down. When we look at the petrol prices or gasoline prices that we have at refineries, without any price adjustment, we know that this, the prices there are outdated according to PPI and PPE, even these days.
So we have the gasoline prices being maintained, but because the demand has to be adjusted, then the price needs to be adjusted, too. And here we have these prices, but this is for the São Paulo region. BRL 2.90 is ethanol in São Paulo, is what we have for ethanol in São Paulo today. And Jalles has an advantage here, having more sugar in our mix. Our ability to stock out ethanol in comparison to our production is high, so we can wait for the market to be better, to accelerate ethanol sales, and then we can slow down when parity is worse. Of course, taking into account all other elements that need to be taken into account. So that's it for the market itself, and let's now look at our main figures in Jalles, as you saw in the earnings release.
So sugar, the average price went up by 6.5%, but we had conventional, traditional sugar, not considering organic sugar, fixed at 1,050 BRL per ton. So we needed an adjustment there. And that's different to what we have in 2024, 2025, and we'll talk more about that later. Ethanol was the main challenge this year. There was a substantial drop from 3.34 BRL to 2.58 BRL. This is of a price lower than the cost of production. So that was the bad guy here in our results. That was the culprit... But the company was able to respond quickly. As Otávio mentioned, we responded in that we increased our sugar production in Santa Vitória and Otávio Lage. In this crop year, we marketed only 24% of the total recoverable sugar.
You can see that the ethanol sales were high at the end. We had a strategy in the past to hold back with ethanol, and as we discussed in the previous conference call, the strategy wasn't quite accurate, it wasn't as good, and we sold a lot at the end, but we had carryover stock or inventory that was higher. Also, when it comes to our receivables, it was almost BRL 100 million higher from one year to the next. So 32 million liters versus 12 million last year in ethanol in the stock and sugar, 40 this year, comparing to 35 last year. That's a normal difference in sugar. Our Adjusted EBITDA, BRL 1.207 billion, with a 63% margin, in comparisons to BRL 1.6 billion last year, that was impacted by the ethanol prices.
Adjusted EBIT went from BRL 669 to BRL 180, and the margin dropped from 32.5% to 9.5%. Now, the debt, well, we're in a very comfortable cash position. The debt profile is very comfortable, with a five-year average term. The net debt was at BRL 1,567, at 1.3 times, compared to 1.4 times in the last quarter. There was an increase in the debt level, which was due to this growth plan that we had in the IPO and which is being deployed. We have made a lot of investments that haven't given us the return yet. But we had an improvement in this crop year, as we talked about in the guidance, and we're gonna talk about later. Well, the hedge.
The fixed price was BRL 1,951, and it went to BRL 2,542, so a 30% increase from 2023-2024 to 2024-2025. Now when we look at 2025-2026, we have a price that is 24% better than what we had in 2023-2024. So we have more sugar at a better price than we did. We have more sugar at a better price than we used to have, rather. We had our investment plan at the IPO, and we have been deploying it. We have been putting it in practice, as we had planned. So we'd had investment in Santa Vitória's and Jalles plants. So we had another hundred and twelve million in this crop year.
So out of the BRL 517 million that we announced in July 2021, we did BRL 159 in 2021-2022, and then BRL 152 in 2022-2023. And now there is BRL 92 million outstanding to be using in the Jalles and Otávio Lage plants. So we are really increasing our crushing in the Goiás plants, and we had a plan for agricultural, industrial, and irrigation investments. Here we show our sugar factory, some pictures from the Santa Vitória plant. We started construction in November, and it started running on the eighteenth, and we're producing sugar already. Our idea was to start operations at the start of May, so there was a 45-50-day delay, mainly due to some of the suppliers, some contractors. There's a labor issue.
We see that in most suppliers, but we mitigated that, made the necessary adjustments, and the factory came true, the plant came true. This picture was taken this morning. So the first batch of sugar. So it's an achievement here. Really, we pulled it. This is the sugar storage building and some other pictures from the factory. And this is our last slide. Just want to talk a little bit about the guidance for the 2024-2025 crop year. We had crushing from April to mid-June. So we get a feeling of what the sugarcane field is like. We have this set here for sugarcane pressing at 8,230. And now we've got to 91.4% capacity. So we're climbing up from 82%-91.4% capacity use.
The gains that we had already published is 9 million until the 2026 crop year. TCH going up, so total sugarcane per hectare is also going up. We have an average here of over 96 tons per hectare in Otávio Lage and 95 at Jalles Machado and Santa Vitória. Well, it will take a couple of years until we renew all of the sugarcane fields. We can normally do about 20% a year, so it's climbing 2.4% in yield, in productivity here. The ATR, which stands for Total Recoverable Sugar, has got a 1.8% drop. Our production mix, we could do 55% sugar if we wanted to. We mentioned that in the material fact when we talked about the Otávio Lage factory, sugar factory. But why is it then that it's 50.6?
Well, because of the delay that we had for the start of Santa Vitória. We had 37.5 last year, and now we're climbing up to 51 from one year to the next. The CapEx guidance, there's less room for an expansion there in Santa Vitória, as well as in the industrial part of the IPO. We're getting to a total CapEx of BRL 797 million. This includes recurring and expansion, totaling BRL 800 million, 7.7% less than last year. We just don't have the crop management here. Crop management is not included here. We do that as stock and not as CapEx. All right, that's it. We'd like to say that we're very excited with all of the course changes that we have made to make best use of the sugar market that is doing better than the ethanol market.
We've increased our crushing numbers. We're using our capacity better. Our sugar hedge is at a much better price, and ethanol starts the year with a good level of demand. According to the consulting firms that we work with, the forecasts are for this year to be much better than last year. That price is not our guidance; it's a guidance from the sources that we had on the slides. Okay? Thank you very much for joining the call. Let's start the Q&A session. Ladies and gentlemen, we'll now start the Q&A session. To ask a question, please click the Q&A button at the bottom of the screen. Should you wish to unmute your microphone and ask a question, just write it in the chat and you'll be able to ask your question when your name is called out.
You can also send your question in writing using the Q&A chat. If you're using a phone, you can also ask a question, just please star nine. Once your name has been called out, you'll hear a command to press star six, and it will allow you to unmute your microphone or your telephone, and then you'll be able to ask your question on your phone. Pedro Gama from Citi will ask his first question. Mr. Gama, please, you may ask your question, sir. Can you hear me? Yes, we can hear you. Thank you for taking my questions. I've got two of them. The unit cost is the first one. You increased crushing to 8.2 million. What is the unit cost that we can expect? And the second question is, the yield expectations or productivity levels for Santa Vitória.
We expected a growth bigger than other plants, but what we see in reality is the opposite. On Jalles Day, you also talked about the TCH, the total sugarcane per hectare, and I'd like to know what is necessary for you to reach the number presented. And how do you see your current hedge strategy concerning the sugar price? Good afternoon, Pedro. Thank you for joining the call, and thank you for your questions. Well, unit cost, with exception of labor, which is where we see an increase with inflation and all, and there's, there isn't much unemployment right now, so that's going up, labor. But our inputs is going down, inputs costs is going down. The production or productivity of the plants is going up, and that helps the unit cost. We haven't given any cost guidance.
What we can say is that we see that it's stable, maybe going down a bit. Diesel, that's an important point when it comes to the cost. This is going up, but going down, it's getting better. Only the labor cost is going up because of inflation, I'd say about 1% or 2%. So this is the scenario that we currently have when it comes to unit cost. Last year, compared to this year, when you compare these two crop years, there was an increase in unit cost, but the productivity didn't go up as much because we had a better base in the previous year. We accelerated the renewals in Santa Vitória. We did 25% there. I mean, we renewed all, all of them, but 25 comes mainly from what was driven by Santa Vitória.
So we have more renewal in the sugarcane fields in Santa Vitória, and we're also acquiring newer machinery. Santa Vitória, why is it not going up in yield and productivity as we see in the other plants? Well, it's because of the weather, the climate, right? The previous year was really good when it comes to rainfall, and this year it was sort of what we had in the Center-South, in the center of the country. So there's less potential. So we're working on renewing the sugarcane fields, but the Goiás plants are recovering better, they're bouncing back better. Now, as for the figures presented on Jalles Day, they continue to be our target, 79-odd. I can't remember exactly what it was that we presented on Jalles Day, and that by 2026.
So this continues to be our target. We still have 2024, 2025, and then 2025, 2026 to go from 60, which is what it was, right? We already surpassed the mark of 70, and we're gonna get to close to 80. Sorry, did you ask another question? Yeah, the hedge policies and the sugar prices, if you could comment on these two points. Our hedge strategy remains the same. When future prices are higher than historical prices, then we increase hedge. When it's below historical figures, when you compare, I mean, everything to currency and everything, then, well, we hedge it as per our policies. So we have hedge for two years, because for the third year, you don't have an exact trigger to do it.
The margin would have to be very high, considering that inflation would be twice as high as forecasted inflation, so that we could have a margin that is between 20%-40%. We have talked about that in other instances. We can go into more detail on another occasion. But we have 1.8 years for sugar, conventional sugar, that is fixed. Okay, thank you. Pedro Fonseca from XP will ask the next question. You may ask your question, Mr. Fonseca.
Hello, Otávio and Rodrigo. Hope you're doing well. Lucas, Luis, good afternoon to the whole Jalles' team. Thank you for taking my questions.
You already talked about the cost aspect quite a lot, but when I think about the profit cash ratio, that was impacted by the worst ethanol scenario. When I think about 2024, 2025, thinking about this recovery, do you think there's more upside coming from cost cash ratio or in recovering ethanol prices? So this is my first question. If you could talk a little bit about what leverages we could have for that. The second question is stock and inventory. You changed your strategy, you increased hydrous ethanol, so you don't have too much carryover stock, but you still had a bit more stock than you expected. So how was it sold after the demand continued to be good or did it not? I'd like to understand the economics from this aspect.
If I may add a third question. In the earnings release, you mentioned that you believe there's room for growth in the organic sugar sphere. So now, when it comes to organic sugar, the contract prices, I think it'd be great for us to have these references in in that sense as well. But these are my questions. Thank you. Pedro, right? You ask the question. Thank you for your question, Pedro, and thank you for joining. We know you're always here with us. So when it comes to the cash earnings, right? We went from 5.3 million with the M&A these years. The capacity is 9 million tons.
So one point to revert this and get back to normal levels, to get to a higher capacity level, go from 7.4 million to 8.23 million, which we published in the material fact last night. So we're increasing crushing volumes, and that's the first thing. The second point has to do with sugar. It was at BRL 1,150, and now it's going to almost to BRL 500. So it's much better fixed. It's fixed at a much better price. And as it's paying better than ethanol, the sugar that we already had is gonna be paying better, but we're also migrating from ethanol to sugar, and that's gonna be paying better, too. And the third point... Well, ethanol was BRL 330, then it went to BRL 258, and now the market is considering ethanol to be about BRL 3.
So you see, a 40 cent drop per liter. And the unit costs should have some stability with this increase in production, also considering labor and inputs. Well, then the effect is gonna be even greater. So these are the main factors to revert the more standard level of cash generation. And again, this is no guidance, right? We're just talking about the scenario and what is changing from one year to the next when it comes to the market. And we already see ethanol prices going up. It's BRL 2.90 in São Paulo now. We're at the peak of the crop year, but the market is already adjusting it because you'll see there will not be enough ethanol if you look at the parity. So the market starts making adjustments. We talked about sugar already. The stock-to-consumption ratio should continue the same. And no major investment.
We see no greenfield investment, no greenfield plant investment in Brazil. Most countries are doing this, and the second biggest producer is India, with a growing program for ethanol, with gasoline. And you talked about organic sugar. Well, we don't see a significant improvement, but there is an improvement in pricing year on year. We haven't published that, but there is a minor improvement in pricing for 5%. And we see a growing market, a growing demand in the American market for organic sugar. Crystal clear. Thank you, Rodrigo. Thiago Duarte from BTG Pactual, you may ask the next question. Good afternoon, Rodrigo. How have you and everyone? Two quick questions. Well, it's a very interesting scenario that you have presented, considering how the ethanol market may behave in the coming months.
Would it make sense to expect Jalles to do something similar to what they did in the last crop year when it comes to a commercial strategy perspective? You carried over a lot of ethanol. Well, so thinking about this current scenario and the results in the first and second halves of the year, monetizing it closer to the end of the crop year. So that would be my first question. You also mentioned the remainder of the expansion CapEx that you committed to during the IPO. When we look at the CapEx guidance for this coming year, we're basically talking about most of it being used this year, right? Now, looking forward, CapEx will basically become maintenance CapEx in comparison to what you had committed to doing at the time of the IPO.
Ought we to expect new growth fronts, new growth avenues, or bigger payout further into the future? These are my questions. Thank you. Thank you, Thiago Duarte, for asking your question, and thank you for joining the call. Well, ethanol carryover. Last year was quite unusual. You've been in this segment for a long time. We talked about the factors that influenced the year. PIS/COFINS taxes were exempt for gasoline at the start of the year. They were to be resumed three months later, and then the refinery prices went down, and that delayed ethanol consumption in the year. So there were fewer months at the end of the delay in the year to use all of the supply. And consumer with lower parity took longer to consume ethanol because parity was quite high for a long time.
That was a bit of a surprise to the market. And lastly, during the current year, the sugarcane went up. So those who had more sugarcane yields were not gonna crush it, but then it rained too little, and they started crushing it. So that was a strategy that wasn't right, that wasn't really spot on, but it was a very unusual year. Now, this year, this is a very different year to last year. The first two years had very good ethanol consumption. Almost 4 billion liters of hydrous ethanol, and the... Sorry, I'm chopping up, aren't I? I think you're back now. Yes, for the last sentence you said...
Everything you explained about last year being an unusual year, that was clear, and then you were starting to explain that the ethanol consumption was higher this year, and then you started to break up a bit. Okay. So yes, consumption was strong at the start of the year, and we... I mean, in April, we had better prices, and you can't hold everything back, can you? So we sold a lot then, and we have this policy to slow down now.... But we never had all of our eggs in the same basket. Even if we do believe in a strategy, we mitigate it with other approaches. So our strategy is to put it off and do it later, but not for all of it. But it's a positive scenario. Even BM&F without liquidity will have prices adjusted.
Now, as for CapEx, so we had the Santa Vitória sugar factory. That wasn't part of the IPO plan, but an opportunity that presented itself, and we had the increase in organic sugar and the Goiás plants. Well, there's a three-year investment here with a certain inflation in this period, but we're doing it at the figure that we presented in the past. It's going to be very close to that figure. So now, I mean, at the same time, our EBITDA generation with better revenue is going up. We're gonna have all of this increase in yield and production converting into cash generation. Now, we want to take advantage of the growth that we have achieved so far. We want to fine-tune operations to see if there are any minor improvements to be made.
We may find other minor growth avenues that call for little investment. This is something that we'll do next. And on Jalles Day, we'll talk a little bit more about this, but we'll talk about the opportunities for these minor investments as well as for the biomethane, corn ethanol. All of that is on our radar. But our focus now is to complete the project that we have. Again, going from 5.3 to 9, it's almost a 70% increase in a very capital-intensive segment. Also, considering all of the sugarcane that we own ourselves. I'm not sure if I've answered your question satisfactorily, but feel free to ask for further clarification to follow them up. That was very clear. Thank you. Antonio Rizzo asked a question in writing. Otávio Lage, good afternoon. Thank you very much for taking my question.
What is the competitiveness of sugarcane ethanol compared to corn ethanol?" Thank you. That's a good question, Antonio. Corn ethanol, in regions where corn is very competitive, can be cheaper than sugarcane ethanol, but sugarcane ethanol will yield not only ethanol, but also sugar. Sugar, historically speaking, pays better than ethanol. We always need to tweak and twitch there according to supply and demand. But we have a lot of opportunities there, especially when it comes to the growth in the sugar production. Also, sugar has biomass and biomethane. We see the sugarcane model as a much more thorough model. Combining ethanol and sugar, we can mitigate risk, and we can improve productivity levels also when you compare it to corn. Now, the corn prices right now don't pay the grower, don't pay the farmer.
It's below market prices, so that shows that there's more competitiveness than would be natural. But we have sugar and other products, biomass, and all of that adds a lot of value, and corn ethanol does not have it. But it could be one of the possible growth avenues for the future. We could maybe go more and more towards sugar, which is what we have been doing after all. If you'd like to ask a question, you just need to click on the Q&A button at the bottom of your screen. Sir, you saw the next question, right? Guilherme from Sparta will ask a question. The guidance for 2024, 2025 already considers the effects of La Niña. What are your expectations for this effect?
Our guidance for this, for this crop year was based on the rain season that ended in April, so this guidance considers that. From now on, there is no, I mean, the positive or negative impact of La Niña would be on the coming crop year. And La Niña normally has a positive effect in our Goiás region, but as it is a transition region, it could be different. It could be different in different La Niña contexts, but it's normally positive. But it will, again, impact only the coming crop year. This yield is already ready considering the last year's rain season. If there are no further questions, I'd like to turn the floor over to Mr. Penna so that he can make his final remarks. Well, I'd like to thank you all for joining.
We had over 200 people joining the call, so thank you very much for your interest in the company. Thank you very much for asking your questions, and I'd like to invite you all to our Jalles Day on the 4th of July, American Independence Day. It is going to be in São Paulo. Last year, we did it here at our headquarters, so a lot of people had to come here. But this year we're going to do it in São Paulo with all of the executives and the IR team joining, and we'd like to invite you all. And again, thank you very much to our team, our financial team, IR team, our accounting team, everyone who's worked very hard to deliver all of the materials and the release as best as possible.
Of course, our team on the floor in Santa Vitória, the operating team that had the factory running in a very short time. And thank you very much. Have a great day. See you at Jalles Day. This is the end of the Jalles conference call for the fourth quarter, 2023 to 2024. Have a great afternoon.