Latest news with #Raizen
Reuters
2 days ago
- Business
- Reuters
Petrobras mulls investment in Raizen to re-enter ethanol market, O Globo reports
SAO PAULO, Aug 16 (Reuters) - Brazilian state-run oil company Petrobras is considering an investment in sugar and ethanol producer Raizen ( opens new tab as a way to re-enter the ethanol market, local newspaper O Globo reported on Saturday, citing sources. Petrobras had previously said it was eying a return to the ethanol sector after having announced in its 2017-2021 strategic plan it would no longer produce biofuels, while Raizen is open to a new partner as it faces financial hurdles. Petrobras and Raizen did not immediately respond to requests for comment. O Globo said Petrobras could make a decision by year-end. The oil company is studying several options, including joining Raizen as a partner or buying assets from the firm, the report added. Raizen, the world's largest sugar maker and a leading ethanol producer, is controlled by Shell (SHEL.L), opens new tab and Brazilian conglomerate Cosan ( opens new tab. The company also has businesses in the fuel distribution sector. Raizen earlier this week acknowledged the possibility of a new shareholder after reporting weak results, which caused its stock to plunge to a record low. Cosan said bringing in a new partner for the company was "an option we like." Raizen has been facing operational challenges and high debt. Recent measures put in place to reduce leverage included divestitures and shutting down a major mill.
Yahoo
2 days ago
- Business
- Yahoo
Cosan SA (CSAN) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth
EBITDA: Approximately BRL6 billion, slightly below last year. Net Income: Negative BRL1 billion for the quarter. Net Debt: Stable compared to the first quarter of 2025. Dividends Received: BRL600 million from Rumo and Radar. Rumo Performance: Higher transported volumes and increased market share in the Port of Santos. Compass Performance: Growth in residential segment sales with higher margins. Moove Performance: Reduction in volumes sold due to a fire in February; recovery trajectory ongoing. Radar Performance: Stable EBITDA; sale of a farm in Q2 2025. Raizen Performance: Positive results in fuel distribution with better margins and higher volumes; negative impact from delayed sugarcane crushing. Debt Service Coverage Ratio: Stable compared to the previous quarter. Average Debt Cost: Decreased from CDI plus 90 bps to CDI plus 88 bps. Average Debt Duration: 6.2 years. Warning! GuruFocus has detected 4 Warning Signs with CSAN. Release Date: August 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cosan SA (NYSE:CSAN) reported an EBITDA under management of roughly BRL6 billion for the second quarter of 2025, indicating strong operational performance despite being slightly below last year. Rumo, a subsidiary of Cosan SA (NYSE:CSAN), experienced higher transported volumes and increased market share in the Port of Santos, contributing positively to the company's EBITDA. Compass, another subsidiary, showed growth in its portfolio with higher sales in the residential segment, leading to improved margins. Cosan SA (NYSE:CSAN) maintained stable net debt and debt service coverage ratio compared to the first quarter of 2025, reflecting effective financial management. Raizen, part of Cosan SA (NYSE:CSAN)'s portfolio, achieved positive results in the fuel distribution segment with better margins and higher volumes. Negative Points Cosan SA (NYSE:CSAN) reported a negative net income of about BRL1 billion for the quarter, indicating financial challenges. The company experienced a fatality in the quarter, highlighting ongoing safety concerns despite improvements in safety metrics. Moove, a subsidiary, faced a reduction in volumes sold due to a fire in February, impacting its recovery trajectory. Raizen's EBITDA was negatively affected by delays in sugarcane crushing due to weather conditions and a previous fire. The company is facing challenges in deleveraging and managing its capital structure, with ongoing discussions about asset sales and strategic partnerships. Q & A Highlights Q: Could you provide an update on Moove's insurance claims and the impact on EBITDA? Also, how is the debt service coverage ratio expected to evolve? A: The insurance process for Moove is progressing, with over BRL400 million accounted for this quarter. The full impact will be seen over the next few quarters. Regarding the debt service coverage ratio, some debt is structured as bullet payments, affecting cash flow timing. We anticipate a reduction in the ratio and are working on structural leverage reduction. Q: Can you elaborate on Moove's volume recovery post-fire and the company's strategy for portfolio recycling and debt reduction? A: Moove managed to maintain volumes by focusing on preserving its distributor network and key clients. The company is recovering market share and optimizing operations. For portfolio recycling, deleveraging remains a priority, and we are exploring partial asset sales to maintain a balanced portfolio while reducing debt. Q: What are the conditions for bringing in a strategic partner for Raizen, and what is the potential for Moove's current results generation? A: We are actively seeking a strategic partner for Raizen to address capital structure needs. Moove is focused on optimizing its new production ecosystem and recovering volumes. The company is on track, but we are not providing specific guidance on future results. Q: Considering the current balance sheet and Raizen's capital needs, is a capital increase at Cosan a possibility? A: Bringing in a third player for Raizen is separate from any potential capital increase at Cosan. We are prioritizing asset monetization to address capital structure issues. Succession planning is also a priority, but any capital increase would be discussed with Rubens and his family. Q: With Compass's strong results, could it pay dividends above its 50% payout policy? And what about Moove's potential as a dividend payer? A: While we are not providing dividend guidance, Compass is expected to continue paying strong dividends due to its stable cash generation. Moove is focused on recovery, but in the mid to long term, it is expected to generate significant cash and potentially pay dividends. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
2 days ago
- Business
- Yahoo
Cosan SA (CSAN) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth
EBITDA: Approximately BRL6 billion, slightly below last year. Net Income: Negative BRL1 billion for the quarter. Net Debt: Stable compared to the first quarter of 2025. Dividends Received: BRL600 million from Rumo and Radar. Rumo Performance: Higher transported volumes and increased market share in the Port of Santos. Compass Performance: Growth in residential segment sales with higher margins. Moove Performance: Reduction in volumes sold due to a fire in February; recovery trajectory ongoing. Radar Performance: Stable EBITDA; sale of a farm in Q2 2025. Raizen Performance: Positive results in fuel distribution with better margins and higher volumes; negative impact from delayed sugarcane crushing. Debt Service Coverage Ratio: Stable compared to the previous quarter. Average Debt Cost: Decreased from CDI plus 90 bps to CDI plus 88 bps. Average Debt Duration: 6.2 years. Warning! GuruFocus has detected 4 Warning Signs with CSAN. Release Date: August 15, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cosan SA (NYSE:CSAN) reported an EBITDA under management of roughly BRL6 billion for the second quarter of 2025, indicating strong operational performance despite being slightly below last year. Rumo, a subsidiary of Cosan SA (NYSE:CSAN), experienced higher transported volumes and increased market share in the Port of Santos, contributing positively to the company's EBITDA. Compass, another subsidiary, showed growth in its portfolio with higher sales in the residential segment, leading to improved margins. Cosan SA (NYSE:CSAN) maintained stable net debt and debt service coverage ratio compared to the first quarter of 2025, reflecting effective financial management. Raizen, part of Cosan SA (NYSE:CSAN)'s portfolio, achieved positive results in the fuel distribution segment with better margins and higher volumes. Negative Points Cosan SA (NYSE:CSAN) reported a negative net income of about BRL1 billion for the quarter, indicating financial challenges. The company experienced a fatality in the quarter, highlighting ongoing safety concerns despite improvements in safety metrics. Moove, a subsidiary, faced a reduction in volumes sold due to a fire in February, impacting its recovery trajectory. Raizen's EBITDA was negatively affected by delays in sugarcane crushing due to weather conditions and a previous fire. The company is facing challenges in deleveraging and managing its capital structure, with ongoing discussions about asset sales and strategic partnerships. Q & A Highlights Q: Could you provide an update on Moove's insurance claims and the impact on EBITDA? Also, how is the debt service coverage ratio expected to evolve? A: The insurance process for Moove is progressing, with over BRL400 million accounted for this quarter. The full impact will be seen over the next few quarters. Regarding the debt service coverage ratio, some debt is structured as bullet payments, affecting cash flow timing. We anticipate a reduction in the ratio and are working on structural leverage reduction. Q: Can you elaborate on Moove's volume recovery post-fire and the company's strategy for portfolio recycling and debt reduction? A: Moove managed to maintain volumes by focusing on preserving its distributor network and key clients. The company is recovering market share and optimizing operations. For portfolio recycling, deleveraging remains a priority, and we are exploring partial asset sales to maintain a balanced portfolio while reducing debt. Q: What are the conditions for bringing in a strategic partner for Raizen, and what is the potential for Moove's current results generation? A: We are actively seeking a strategic partner for Raizen to address capital structure needs. Moove is focused on optimizing its new production ecosystem and recovering volumes. The company is on track, but we are not providing specific guidance on future results. Q: Considering the current balance sheet and Raizen's capital needs, is a capital increase at Cosan a possibility? A: Bringing in a third player for Raizen is separate from any potential capital increase at Cosan. We are prioritizing asset monetization to address capital structure issues. Succession planning is also a priority, but any capital increase would be discussed with Rubens and his family. Q: With Compass's strong results, could it pay dividends above its 50% payout policy? And what about Moove's potential as a dividend payer? A: While we are not providing dividend guidance, Compass is expected to continue paying strong dividends due to its stable cash generation. Moove is focused on recovery, but in the mid to long term, it is expected to generate significant cash and potentially pay dividends. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
3 days ago
- Business
- Yahoo
Shares of sugar maker Raizen hit record low, executives open to new partner
SAO PAULO (Reuters) -Brazilian sugarcane processor Raizen admitted the possibility of a new shareholder after weak results, which caused the company's stock plunge to a record low on Thursday. WHY IT'S IMPORTANT Raizen, one of the world's largest sugar producers, is controlled by Shell and Brazilian conglomerate Cosan. It faces operational challenges and high debt. In a conference call following the results, executives said the company will face operational transformation and portfolio simplification in the next two or three years, which could be accelerated by a capital injection. BY THE NUMBERS Raizen reported a net loss of 1.8 billion reais ($333.12 million) for the first quarter of the 2025/26 crop year. Core earnings fell 23.4% year-on-year to 1.89 billion reais, missing the 2.16 billion reais forecast by analysts polled by LSEG. Its leverage ratio jumped to 4.5 from 2.3 a year earlier, with net debt rising 55.8%. WHAT'S NEXT Raizen has been adopting measures to deal with a large debt load, including divestitures and shutting down a major mill. The firm's Chief Financial Officer Rafael Bergman told the call that divestitures should continue, with updates likely in the coming quarters. Ongoing discussions include the possibility of a capital injection that could involve current or new shareholders, but there is still no certainty about whether this potential operation will take place, he said. Newspaper Valor Economico reported later on Thursday citing sources that Raizen hired an investment bank to look for a new minority partner. The firm declined to comment on the report. KEY QUOTES "Obviously, this (potential operation) requires a degree of coordination with Shell and Cosan so that we can evaluate mechanisms to accelerate our journey and reduce execution risks in a plan that, from an operational standpoint, is quite clear and has a high degree of confidence in its success," Bergman said. MARKET REACTION Raizen's shares plunged as much as 15% to an all-time low, on track for their worst day ever during the afternoon. The stock was the worst performer on Brazil's Bovespa index. BTG Pactual analysts were unimpressed, saying Raizen's operational preview last month already indicated lower profitability amid lower yields and higher unit costs, along with maintenance stoppages at an Argentine refinery. "With a net debt cost of 1.6 billion reais in the quarter (6.2 billion annualized), Raizen needs to accelerate the deleveraging process," they added. ($1 = 5.4034 reais) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
3 days ago
- Business
- Reuters
Shares of sugar maker Raizen hit record low, executives open to new partner
SAO PAULO, Aug 14 (Reuters) - Brazilian sugarcane processor Raizen ( opens new tab admitted the possibility of a new shareholder after weak results, which caused the company's stock plunge to a record low on Thursday. Raizen, one of the world's largest sugar producers, is controlled by Shell (SHEL.L), opens new tab and Brazilian conglomerate Cosan ( opens new tab. It faces operational challenges and high debt. In a conference call following the results, executives said the company will face operational transformation and portfolio simplification in the next two or three years, which could be accelerated by a capital injection. Raizen reported a net loss of 1.8 billion reais ($333.12 million) for the first quarter of the 2025/26 crop year. Core earnings fell 23.4% year-on-year to 1.89 billion reais, missing the 2.16 billion reais forecast by analysts polled by LSEG. Its leverage ratio jumped to 4.5 from 2.3 a year earlier, with net debt rising 55.8%. Raizen has been adopting measures to deal with a large debt load, including divestitures and shutting down a major mill. The firm's Chief Financial Officer Rafael Bergman told the call that divestitures should continue, with updates likely in the coming quarters. Ongoing discussions include the possibility of a capital injection that could involve current or new shareholders, but there is still no certainty about whether this potential operation will take place, he said. Newspaper Valor Economico reported later on Thursday citing sources that Raizen hired an investment bank to look for a new minority partner. The firm declined to comment on the report. "Obviously, this (potential operation) requires a degree of coordination with Shell and Cosan so that we can evaluate mechanisms to accelerate our journey and reduce execution risks in a plan that, from an operational standpoint, is quite clear and has a high degree of confidence in its success," Bergman said. Raizen's shares plunged as much as 15% to an all-time low, on track for their worst day ever during the afternoon. The stock was the worst performer on Brazil's Bovespa index (.BVSP), opens new tab. BTG Pactual analysts were unimpressed, saying Raizen's operational preview last month already indicated lower profitability amid lower yields and higher unit costs, along with maintenance stoppages at an Argentine refinery. "With a net debt cost of 1.6 billion reais in the quarter (6.2 billion annualized), Raizen needs to accelerate the deleveraging process," they added. ($1 = 5.4034 reais)
