SAO PAULO, Aug 10 (Reuters) - Brazilian sugar and ethanol group Sao Martinho said on Monday its net earnings fell by more then half in the financial first quarter, to 28.3 million reais ($8.2 million) from 60.7 million reais a year ago.

The medium to large milling group said the weaker earnings for the quarter ended June 30 were due to reduced sales of sugar and ethanol as the company resumed its strategy like many larger mills of stocking sugar and ethanol for futures sales.

Sao Martinho sugar stocks were up 48 percent at 227,044 tonnes from a year ago June 30, while anhydrous ethanol stocks were up 106 percent at 108.64 million liters and hydrous ethanol stocks up 54 percent at 59.4 million liters.

Earnings were also hurt by an increase in financing costs due to an increase in the company's debt load compared with a year ago. Debt climbed 3.8 percent from a year ago to 2.67 billion reais, which is still considered manageable by analysts at 2.4 times earnings before interest, taxes, depreciation and amortization.

Adjusted EBITDA of 225.1 million reais in the first quarter was down almost 1 percent from a year ago.

The company said it has set aside financial provisions against a debt of 295.5 million reais it holds with Copersucar, Brazil's biggest sugar trader. Sao Martinho is in the process of unwinding its commercial relationship with Copersucar.

Cost of products sold fell 11 percent from a year ago.

On June 30, Sao Martinho had sold 740,000 tonnes of equivalent sugar in nondeliverable forward contracts through March 2016 at an average price of 16.59 U.S. cents/lb as hedge against its expected production this crop.

Despite a wet start to the harvest season on April 1, which also corresponds with the start of the group's financial year, Sao Martinho crushed 7.4 million tonnes of cane in the first quarter, or 38 percent of its expected crush for the year.

The crushing season normally ends around Christmas, which would give Sao Martinho ample time to harvest the crop before the summer rains intensify, but meteorologist expect a strong El Nino to increase the odds of the cane belt turning wetter than normal in the coming months.

(Reporting by Reese Ewing; Editing by Ed Davies and Leslie Adler)