Terra Santa Propriedades Agrícolas (LAND3) Q2 2026 earnings summary

Executive summary

• The business model centers on managing a rural real estate portfolio, generating predictable lease income and long-term land appreciation, with contracts covering 39,099 hectares until 2045/2046 and revenue indexed to soybean prices, hedged against market volatility.

• Operational performance, measured by Adjusted EBITDA, remained resilient, though 2Q26 saw a 27% year-over-year decline to R$17.4M.

• Results were impacted by a non-cash impairment of R$31.0 million on litigated land, leading to a net loss of R$4.3 million in 1H26 and R$12.6 million in 2Q26, compared to prior period profits.

• The company maintains a lean operational structure, high revenue-to-operating result conversion, and a strong cash position, with R$94.7 million in cash and net cash of R$10.1 million at June 2026.

Financial highlights

• Consolidated net revenue for 1H26 was R$46.0 million, down from R$51.9 million in 1H25, and 2Q26 net revenue was R$23.5 million, down 21.4% year-over-year, mainly due to lower recognized revenue and a one-off calendar effect.

• Gross profit in 2Q26 was R$22.4 million, with a stable gross margin of 95.5%.

• Operating expenses rose to R$39.7 million in 2Q26, driven by impairment and higher G&A.

• Cash and equivalents increased to R$94.7 million at June 2026 from R$11.6 million at December 2025, reflecting seasonal lease receipts.

• Gross debt was R$84.6 million, resulting in a net cash position of R$10.1 million at period end.

Outlook and guidance

• Revenue predictability is supported by long-term lease contracts with price reviews every three years and hedging strategies to mitigate commodity and FX volatility.

• 100% of 2025/26 soybean volume is fixed at R$110.42/sack, with partial hedges for 2026/27.

• The company expects continued operational stability, focus on cost discipline, legacy risk management, and unlocking value from non-operating land through environmental licensing.

• The impairment is non-cash and reversible if litigation is resolved favorably; no changes to the fair value of the property portfolio.