Cosan's third-quarter 2014 net income plummeted 92.6% year over
year due primarily to 3% decline in revenues, high expenses and
adverse foreign currency translation impact. Earnings per ADR came
in at $0.04. Fuel sales grew 12.5% while sugar sales dipped 28%.
Sugarcane crushing decreased 8.8% and sugar production fell 11.6%.
For 2014, Cosan maintained its revenue guidance while lowering its
EBITDA forecast to a range of R$4 R$4.3 billion. The proposed
Rumo-ALL merger as well as spin-off of the company's logistics
operations will work in its favor. However, rising costs and
expenses, adverse impacts of unfavorable weather conditions and
higher debt levels might impede the company's growth, going
forward. Considering these, we maintain a Neutral recommendation on
S o Paulo, Brazil-based Cosan Limited (CZZ) was incorporated in
Bermuda in Aug 2007. The company was established as the controlling
shareholder of Cosan S.A., a Brazilian company, after a corporate
restructuring of the Cosan Group in Brazil. Cosan Limited currently
holds roughly 62.3% of the controlling shares of Cosan S.A.
Cosan S.A. is engaged in the cultivation, harvesting and
processing of sugarcane, which is the main raw material used to
produce sugar and ethanol. Cosan is the world's largest producer
and processor of sugarcane, having crushed approximately 61.4
million tons of sugarcane during 2013. It is not only the largest
sugar producer in Brazil, but also the third-largest in the world.
Further, the company is the largest ethanol producer in Brazil and
the fifth-largest in the world, besides being the largest exporter
Cosan reports its results under the following heads: Raizen
Energia (Sugar, Ethanol and Cogeneration), Raizen Combustiveis
(Fuels Distribution), Comgas (Distribution of Natural Gas), Rumo
(Logistics Operations), Radar (Investments in Agricultural Land),
Cosan Lubrificantes (Lubricants and Specialties) and Other Business
(Corporate Structure, Other Investments).
Cosan Limited (CZZ): Read the Full Research
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