Stronger ethanol market drives Evolua back to profitability

The joint venture between Copersucar and Vibra posted a net profit of R$187.8 million in 2024/25, reversing a R$91.8 million loss in the previous cycle. The company reported a return on invested capital (ROIC) of 42%—“one of the highest in the sector,” CEO Pedro Paranhos told Valor.

Unlike the 2023/24 season, when improving sugarcane crop conditions led to a continuous decline in ethanol prices, the 2024/25 harvest featured a more stable supply outlook. This resulted in a more typical price pattern, with lower prices during harvest and higher prices in the off-season, which favored Evolua’s strategy of carrying product into non-production months.

Moreover, strong supply made hydrous ethanol more competitive than gasoline for most of the season, boosting biofuel consumption. Demand rose 18% compared to the previous cycle.

The company’s gross revenue grew 15% to R$12 billion, while ethanol volume traded remained stable at 9.6 billion liters, representing a 25% share of Brazil’s ethanol market.

About half of that volume still comes from Copersucar-affiliated mills, but Evolua is working to expand its reach. In the past season, it began forming partnerships with independent ethanol producers. In February, it signed its first such agreement — with Agro Serra mill in São Raimundo das Mangabeiras (Maranhão state), which supplies 80% of the state’s anhydrous ethanol.

“Our main strategic pillar is to grow by building new partnerships with producers,” said Mr. Paranhos. He noted that Evolua is “in talks with several producers to expand its supply base.”

The trader aims to prioritize partnerships with mills in regions where it currently has limited presence—such as the Central-West, North, and Northeast—and with corn ethanol plants, which are not part of Copersucar’s current network.

While it works to expand its supply base, Evolua expects to keep pace with market growth in the current 2025/26 season. Mr. Paranhos projects a 2% increase in Otto-cycle fuel sales—slightly below the 2.6% growth recorded last season—which should drive ethanol sales, whether hydrous or anhydrous (used as a gasoline additive).

In the biofuels sector, expectations are high that the federal government will officially raise the mandatory ethanol blend in gasoline from 27% to 30% in July. Initial projections had anticipated the move between April and May, when distributors sign ethanol contracts. Despite the delay, Mr. Paranhos said the market has already priced in the change.

He added that a drop in hydrous ethanol production will make room for the increased output of anhydrous ethanol needed to meet the new mandate. However, sugar production is unlikely to be reduced to favor ethanol, since sugar remains more profitable than the biofuel.