Brasilagro does not plan to launch a share buyback program in the near term, despite its shares trading at a discount. The company is prioritizing debt reduction, which CEO André Guillaumon considers a better use of capital than buying back shares or acquiring additional farmland under current conditions.
Guillaumon said the company weighs the expected returns from buying land, repurchasing shares and paying down debt. He estimated that new land projects could deliver internal rates of return of 6% to 7%, while debt repayment offers an estimated return of about 9% to 10%, after inflation.
The CEO said the shares had been affected by recent market volatility, including a decline following the presidential election. He described Brasilagro’s drop as smaller than losses in some interest-rate-sensitive sectors, and said the stock had begun to recover. A steeper decline could make a buyback more attractive, he said, but the company does not currently see sufficient reason to proceed.
Brasilagro continues to monitor farmland acquisition opportunities, as financial strain in the sector may bring agricultural assets to market. Any purchase would need to offer returns that justify the company’s cost of capital. Guillaumon said higher long-term interest rates make new investments less attractive and call for disciplined capital allocation.
At the end of the first quarter of fiscal 2027, adjusted net debt stood at R$136.3 million, down 51% from R$280.5 million in June. The ratio of adjusted net debt to trailing 12-month EBITDA fell from 2.82 times to 1.05 times.
Guillaumon said the share price’s recovery will depend on the path of interest rates and the company’s operating performance. He also pointed to recovering international soybean prices and currency depreciation as factors that could support agricultural results, while reiterating that reducing debt remains the company’s priority.
Sources: CNN Brasil.