), a Brazilian sugar and ethanol producer, reported an impressive
bottom-line result in the first-quarter 2014. Net income was
R$256.1 million (US$108.5 million) reflecting a significant rise
from R$27.1 million (US$12.0 million) recorded in the year-ago
Cosan generated net revenue of R$2,157.2 million (US914.1 million)
in first-quarter 2014, reflecting an increase of 8.4% year over
year. Pro forma revenues, including the Raizen contribution,
increased 13.4% year over year to $9,593.4 million (US$4,065
Fuel sales increased 18.9% year over year primarily due to higher
volumes of ethanol and diesel sold in the quarter. Sugar sales were
up by 4.1% to R$1,225.5 million (US$519.3 million) while ethanol
sales grew 17.6% to R$1,321.3 million (US$559.9 million).
Raizen Energia recorded nil production or crushing activities in
the quarter. Sugar production, from Apr 2013 to Mar 2014, was up
8.0% year over year to 4.5 million tons while crushed sugar volume
increased 9.3% to 61.4 million tons.
Energy cogeneration revenues in the quarter was R$27.3 million
(US$11.6 million), soaring 108.4% year over year. Total gas sales
volume decreased 3.9% in the quarter. Revenues from Rumo's
Transportation business escalated 20.6% while it increased 34.9%
for Loading business.
Revenues from Cosan Lubrificantes increased 3.0% year over year.
Radar generated revenues of R$63.6 million (US$26.9 million) versus
R$15.4 million (US$7.7 million) recorded in the year-ago quarter.
Cosan's cost of goods, as a percentage of revenues, rose 90 basis
points (bps) year over year to 70.5%, leading to a gross margin of
29.5% in the quarter. Sales, general and administrative expenses
increased 4.6% to R$351.7 million (US$149.0 million).
Exiting first-quarter 2014, Cosan had cash and cash equivalents of
approximately R$1,472.5 million (US$651.5 million) versus R$1,474.6
million (US$627.5 million) recorded at the previous quarter-end.
Loans and financing was at R$8,722.5 million (US$3,859.5 million),
down 1.2% from R$8,830.2 million (US$3,757.5 million) in the
Cosan maintained its guidance for 2014. Net revenues are expected
in the range of R$37.5−R$40.5 billion. Earnings before interest,
taxes, depreciation and amortization (EBITDA) are expected to be
within R$4.15−R$4.65 billion and capital expenditure to be in the
R$2.5−R$2.8 billion range. Guidance for the company's segments is
Cosan expects crushed sugarcane volumes to be approximately within
61.0−63.0 million tons, sugar volume sold within 4.4−4.7 million
tons and ethanol volume sold within 2.3−2.6 billion litres. Volume
of energy sold is expected to range within 2.0−2.2 million MW.
EBITDA is likely to be in the R$2.3−R$2.7 billion range, while
capital spending is expected to range from R$2.0−$2.2 billion.
EBITDA is anticipated to be in the R$2.0−R$2.2 billion range and
capital expenditure in the R$750−R$850 million range.
Volume of loading is expected to range from 10.5−12.5 million tons
and EBITDA in the R$400−R$450 million range.
EBITDA is expected in the range of R$170−R$200 million.
Volume of lubricants and base oil sold is likely to be within
270−310 million litres. EBITDA is expected to be in the R$140−R$170
Volume of gas sold is likely to be within 5.2-5.7 million cbm while
EBITDA is expected to be within R$1.30-R$1.55 billion. Capital
expenditure is likely to range within R$0.68-R$0.78 billion.
Cosan has a market capitalization of $3.3 billion and carries a
Zacks Rank #3 (Hold). Some better-ranked stocks in the industry
Otter Tail Corporation
Wilmar International Limited
). All these companies hold a Zacks Rank #2 (Buy).
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