Sao Martinho : São Martinho reports net income of R$39.7 million in the first quarter of the 2016/17 harvest year (1Q17)

SÃO MARTINHO REPORTS NET INCOME OF R$39.7 MILLION IN THE FIRST QUARTER OF THE 2016/17 HARVEST YEAR (1Q17) The result is 26.1% higher than in 1Q16, while adjusted EBITDA grew 48.3%

São Paulo, August 2016 - São Martinho S.A., one of Brazil's largest sugar and ethanol producers, announced to the market its results for the first quarter of the 2016/17 crop year (1Q17). Net income was the highlight in the period, totaling R$39.7 million, an increase of 26.1% over the first quarter of the previous crop year (1Q16).

The Company's adjusted EBITDA reached R$333.8 million in 1Q17 (EBITDA margin of 47.0%), up 48.3% compared to 1Q16. The increase of this indicator was supported by the higher sugar and ethanol sales volumes and better sales prices in the period.

Adjusted EBIT in 1Q17 came to R$176.7 million (EBIT margin of 24.9%), increasing 74.9% from 1Q16. The adjusted EBIT growth is explained by the same factors that positively impacted Adjusted EBITDA.

On June 30, 2016, the Company's sugar prices for the 2016/17 crop year were hedged for 664,500 tons at US$15.28 cents/lb, representing hedging of approximately 74.1% of own sugarcane and 64.7% of total sugarcane. In addition to the hedging of sugar prices, the São Martinho Group also held U.S. dollar NDFs in the amount of US$121.8 million with an average exchange rate of R$3.89/US$ for sugar exports in the 2016/17 crop year.

In 1Q17, São Martinho began hedging sugar prices for the 2017/18 crop year at an average price of R$1,565/ton for a total of 150,600 tons. This volume represents approximately 15% of the total hedge for own cane.

The São Martinho Group processed 8.2 million tons of sugarcane in the first quarter of the 2016/17 crop year - or 39.8% of the production guidance for the season - a growth of 10.5% on the previous crop year. The higher production reflects the drier weather at the start of the crop year, which enabled the Company to accelerate its crushing activities in the period.

About São Martinho

The São Martinho Group is one of the largest sugar and ethanol groups in Brazil, with sugarcane crushing capacity of approximately 23 million tons (21 million of capacity proportional to the shareholding interest). It operates four mills: São Martinho, in Pradópolis, in the Ribeirão Preto region of São Paulo; Iracema, in Iracemápolis, in the Limeira region of São Paulo, Santa Cruz, located in Américo Brasiliense (SP) and Boa Vista, in Quirinópolis (GO), 300 km from Goiânia (GO), the latter being a joint-venture with Petrobras Biocombustível. The average harvest mechanization ratio is 97%, with this figure reaching 100% at the Boa Vista Mill. Visit the website: www.saomartinho.com.br.

Information:

Conceito Comunicação (16) 3621-3252 /(16) 3916-1902

Contacts: Rodrigo Pinto / [e-mail].