Cosan Limited (CZZ): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


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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 Cosan.


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 of ethanol.

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).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: CZZ

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