Summary table

Our crushed sugarcane totaled 61.5 million tons.

A 6% improvement in agricultural productivity compared to the 2019/2020 harvest.

R$2.2 billion adjusted EBITDA on the Renewables front.

R$1.7 billion adjusted EBITDA in the Sugar business, up 60% from the previous harvest

Adjusted consolidated EBITDA of R$2.7 billion in Marketing & Services.

R$6.6 billion of combined and consolidated adjusted EBITDA.

Net income attributable to controlling shareholders totaled R$1.5 billion in the period.

According to data from the Brazilian Sugarcane Industry Association (UNICA), Brazil's Center-South Region ended the 2020/2021 harvest with around 606 million tons processed, up 3% over the previous period (590 million tons). At the same time, we crushed 61.5 million tons, which is more than 10% of the total processed in the region where our bioenergy parks are located and 3% more than the volume from the previous harvest (59.6 million tons). This expansion is due to increased agricultural productivity as a result of continuous investments in sugarcane fields. The production of sugar equivalent totaled 8.3 million tons, a 7% increase over the previous harvest.

Agricultural productivity reached 10.2 kg of Total Recoverable Sugars (ATR) per hectare of cultivated area, with a 6% improvement over 2019/2020. Investments under the operational improvement plan drove both product availability and the capture of efficiency gains, reducing unit cash cost (excluding the effect of CONSECANA) by 3% in the period. Resources aimed at the sugarcane agribusiness operation totaled R$2.9 billion.

Adjusted EBITDA of R$2.2 billion on the Renewables front, down 9% from the previous harvest, was influenced by the lower contribution from the results of resale and trading of electricity compared with the 2019/2020 harvest, partially offset by the 5% increase in the volume sold of owned ethanol, with higher average selling prices, totaling net revenues of R$12.4 billion. The volume of energy traded decreased by 31%, reflecting less attractive prices in the spot market. As a result, the net revenue of this product in the harvest totaled R$2.1 billion.

However, adjusted EBITDA for Sugar (R$1.7 billion) grew 60% as a result of a 16% increase in owned volume, with average prices 30% better and a reduction in costs, demonstrating the balance and resilience of our portfolio. The volume of sugar sales grew 88% compared with the previous harvest, due to the higher volume produced and the expansion of the origination and resale operations, in line with our strategy to further expand our operations in the value chain of the product. The average sugar price reached R$1,548.90 per ton as a result of the hedging strategy, while net revenue totaled R$11.4 billion, more than double the sales from the 2019/2020 harvest.

In Marketing & Services, which encompasses a single, synergistic value platform, we ended the last quarter of the harvest with strong fuel volumes in Brazil and Argentina—despite the limited circulation of people—and with healthy margins driven by gains from our procurement and sales strategy. The results in the segment, which improved sequentially throughout the 2020/2021 crop year, confirm the continuing recovery of economic activity, reflected in the sequential increase in demand for fuel in both countries. However, the consolidated result was below that of the previous harvest.

The business reached adjusted consolidated EBITDA of R$2.7 billion, down 19% from the previous harvest, reflecting the negative impact of social distancing on fuel consumption, especially between March and May 2020, which marked the beginning of the pandemic.

Adjusted EBITDA for the Brazilian operation totaled R$2.1 billion. Fuel sales volumes decreased by 10% due to the impact of the pandemic, especially in aviation (-73%) and Otto cycle (-12%) fuels, partially offset by the increase in diesel sales (+4%), driven by higher demand from agribusiness and transportation. The Shell network ended the crop year with 6,579 service stations in the country.

In the Proximity segment, we ended the harvest with 1,187 stores, including Shell Select and OXXO, with a growth rate in line with the Grupo NÓS's expansion plan.

In Argentina, adjusted EBITDA was US$124 million (R$662 million), down 26% and strongly impacted in the first half of the year by social distancing measures. Sales of gasoline and diesel have been growing along with the increase in market share and the number of Shell service stations. At the end of March 2021, there were 785 Shell service stations in the country, representing a market share of 23.2% according to data from the Department of Energy of Argentina, an official body of the Federal Government. In Brazilian reais (BRL), the results of the operations in Argentina were in line with the previous year, since the depreciation of the exchange rate offset the drop in volumes.6

Our combined and consolidated adjusted EBITDA ended the crop year at R$6.6 billion. Net income attributable to controlling shareholders totaled R$1.5 billion in the period.

For more information, view our financial statements, available here.

6 The functional currency of the downstream operation in Argentina is the US Dollar, which is why our results are reported in this currency.

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