Brazilian sugar and ethanol producer,
) released its fiscal third quarter of 2013 results (ended Dec
31, 2012) on January 6. The company reported net earnings of
R$342.3 million (US$166.2 million) in the quarter compared with
the earnings of R$93.8 million (US$52.1 million) in the year-ago
In the fiscal third quarter 2013; Cosan completed acquiring 60.1%
of controlling interest in Comgas. The company added a new
reporting segment named Comgas that will deal with the natural
gas distribution business.
Cosan's net operating revenue jumped 33.1% year over year to
R$8,397.1 million (US$4,076.3 million).
Fuel sales went up 12.9% in the quarter while sugar sales saw a
40.9% increase to R$1,250.4 million (US$607.0 million) in the
quarter. Ethanol sales were up 25.9% to R$937.6 million (US$455.1
Sugar production in the quarter more than doubled to 1.361
million tons while crushed sugar volume increased 117.1% to 17.8
million tons. All of the 24 mills operated during the quarter
with a crushing capacity of 65 million tons of sugarcane per crop
Energy sales in the quarter reached R$321.7 million (US$156.2
million), up roughly 506.9%. Total gas sales volume jumped 20.8%.
Rumo registered about 61.6% and 38.8% increase in revenue derived
from its Transportation and Loading businesses, respectively.
Radar reported a 13.4% decline in its revenue as no properties
were sold in the quarter while a majority of the revenue came
from leasing activities.
Cost of goods, as a percentage of revenue plummeted 250 basis
points year over year to 87.4% and also registered a 29.4%
year-over-year increase, leading to a gross margin of 12.6% in
the quarter. Selling, general and administrative expenses, as a
percentage of revenue, increased 100 basis points to 7.8%.
Operating margins went down from 6.4% in the year-ago quarter to
4.0% in the reported quarter.
Balance Sheet/Cash Flow
Exiting the third quarter of 2013, Cosan's cash and cash
equivalents (including restricted cash) increased 21.9%
sequentially to R$2422.1 million (US$1,181.5 million) while
long-term debt more than doubled to R$10,025.1 million
Cash flow from operations in the quarter was $557.5 million
(US$270.6 million) while capital spending went up by 22.4% to
R$424.0 million (US$205.8 million).
Management reiterated its guidance for the fiscal year 2013. Net
revenue is expected to be within the R$26.0-R$29.0 billion range;
EBITDA in the range of R$2.3-R$2.6 billion (versus R$2.2-R$2.5
billion expected earlier) and capital expenditure within the
R$2.1-R$2.4 billion range. Guidance for the segments is discussed
Raizen Energia: Management expects crushed sugarcane volumes to
be approximately 56.2 million tons (versus 54-56 million tons
expected earlier), sugar volume sold within 3.9-4.2 million tons,
and ethanol volume sold within 1.85-2.05 billion litres. Volume
of energy sold is expected to range within 1.65-1.85 million MW.
EBITDA is likely to be within the R$2.4-R$2.7 billion range
(prior forecast was R$2.2-R$2.5 billion).
Raizen Combustive is: Fuel volume sold is likely to be within the
21.0-23.0 billion litre range and EBITDA to be within the
R$1.5-R$1.7 billion range (earlier expectation was R$1.3-R$1.5
Rumo: Volume of loading is expected to range within 8.0-10.0
million tons and EBITDA within the R$0.25-R$0.28 billion range.
Radar: EBITDA is expected to be within the R$0.12-R$0.14 billion
Other Business: Volume of lubricants and base oil sold is likely
to be within 0.22-0.26 billion litres.
Cosan currently has a Zacks Rank #3 (Hold). Other players to
watch out for in the industry are
Gruma S.A.B. de CV
), each with a Zacks Rank #2 (Buy).
COSAN LTD-A (CZZ): Free Stock Analysis Report
GRUMA SA-ADR B (GMK): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
SYNGENTA AG-ADR (SYT): Free Stock Analysis
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