Sucro Limited

Good morning, everyone, and welcome to Sucral Limited's third quarter 2025 earnings conference call. Today's call is being recorded. Joining us are Jonathan Taylor, Chief Executive Officer, and Stefano D. Iniello, Chief Financial Officer. At this time, I'll turn the call over to Jonathan Taylor. Jonathan, please go ahead.

Thanks, Operator, and good morning, everyone. I want to remind listeners that management's comments during this call may include forward-looking statements. These statements involve various known and unknown risks and uncertainties and are based on management's current expectations and beliefs, which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please refer to the text in Succo's earnings, press release, and financial filing for a discussion of the risks and uncertainties associated with these forward-looking statements. All dollar figures referred to today are in U.S. dollars unless stated otherwise. Q3 marked another successful and productive quarter for sucro even amid what continues to be a challenging macro trade environment and some specific U.S. sugar market issues. We saw strong execution at our operating sites and record year-to-date volume performance, surpassing 600,000 metric tons delivered through September. Our U.S. conventional raw sugar flows have remained particularly strong, and our refining operations have now largely returned to normal, with volumes and margins back in line with last year's performance. That's particularly evident at our Lackawanna refinery, which continued to improve operational efficiency and delivered solid contribution in Q3. More broadly, our integrated and synergistic business model continues to be a competitive strength. We're coordinating and integrating refining and origin trade flows depending on market conditions. And our wholesale platform is delivering at scale. Importantly, the margin headwinds that affected earlier quarters are mostly behind us. In Q3, we delivered over $10 million in adjusted gross profit, supported not just by increased volume, but by cost efficiencies gained through improved logistics. We also continue to benefit through increased scale as we reduce SG&A as a percentage of revenue, creating greater efficiencies and improved margins. With that, I'll hand it off to our CFO, Stefano Daniello, to walk you through the financials in more detail.

Stephanie? Thanks, Jonathan, and good morning, everyone. Let's start with volumes and revenue. In Q3, we delivered approximately 148,000 metric tons of sugar, down nearly 18% year over year. However, year-to-date volumes crossed the 600,000 metric ton mark. a record for sucrose. That growth was led by wholesale volumes of conventional sugar in the US as well as by higher bulk raw sugar sales at origin. Adjusted gross profit came in at 13.4 million or 10.1% of revenue compared to 13.8 million and 8% margin last year. Year-to-date adjusted growth profit was 40.4 million or 7.8% of revenue, compared with 44.7 million and 9% in 2024. With refinery operations relatively stable year-over-year, the decrease in adjusted growth profit was driven by lower wholesale organic sugar deliveries in the U.S. and a decrease in volumes and margins in our operation in Mexico, reflective of the market-driven nature of a wholesale business in this geography. Importantly, refining margins have normalized and recovered in Q3 a 35% improvement to $187.66 per metric ton in Q3 2025. And we're now largely through the timing mismatch we flagged earlier this year. In fact, our refining operations saw the strongest results of the prior eight quarters. We expect refining margins to remain strong in Q4, despite challenging market conditions in the US, where we have continued to deliver solid performance through improved cost management. One notable area of improvement was logistics and freight where we saw costs go down by 5.7% year-over-year due to improvement in our land freight management. It is also due to these efforts that year-to-date adjusted EBITDA figures remain consistent with 2024 at 27.5 million or 5.3% of revenue. These results reflect management's commitment to reducing overhead expenses with significant headway in payroll expenses and professional fees. On a non-adjusted basis, Q3 benefited from inventory mark-to-market gains, driven predominantly by the recent changes in the Specialty Sugar quota system, which has resulted in higher pricing for organic sugar in the U.S. Putting it all together, net income remains consistent year over year at 29.4 million compared with 31.1 million in 2024. We expect the positive momentum from Q3 to continue into Q4 to close the year with strong results. On liquidity and capital, as of September 30th, We ended the quarter with over $165 million of unused credit capacity, including $50 million of committed revolver headroom. Working capital remained stable at $119 million. Adjusted leverage was 1.7, and our adjusted net debt to capitalization ratio got a 21.7%. down from the beginning of the year. Our cash conversion cycle was 117 days, a notable improvement from 131 days last year, thanks to proactive working capital management. CapEx-wise, we have revised our full year 2025 projection to 49 million, reflecting updated timing and construction progress. Hamilton now stands at $75 million, including capitalized interest and almost $9 million of capex brought forward to improve operational capability at the output. Accordingly, Hamilton remains aligned with our prior guidance and projections. University Park is now projected at $25 million for 2025, up modestly from our prior estimates. and the lease capital spent will ramp up in 2026 with roughly $5 million targeted next year. Finally, I would like to make mention that in Q3, the company completed the acquisition of the minority interest in one of its subsidiaries through the issuance of shares at $13.35 Canadian. transaction that is expected to improve our results and margins going forward. With that, I'll pass it back to Jonathan for a project update and some closing remarks.