Fitch: Jalles Machado BB-

Fitch Ratings said it published Jalles Machado SA’s BB- foreign- and local-currency issuer default ratings and A+(bra) long-term national scale rating.

The outlook is stable.

The ratings reflect the company’s strong business model and robust operating margins, Fitch said.

Jalles Machado benefits from fiscal incentives on the sale of sugar and ethanol and relatively low land-lease costs, Fitch said.

The ratings incorporates the company’s strong agricultural performance due to its adequate investments in the cane fields, use of irrigation over a relevant portion of its harvest area and self-sufficiency in sugar cane, which explain the lower volatility of Jalles Machado’s operating cash flow generation compared to most of its peers.

The ratings also consider the company’s exposure to the inherent volatility of sugar prices and the Brazilian ethanol industry dynamics, Fitch said.

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