Brazilian sugar and ethanol producer,
) reported net earnings of R$208.8 million (US$91.6 million) in
the third quarter of 2013. Results improved significantly over
the previous quarter's reported net loss of R$198.0 million
(US$96.1 million) but on a year-over-year basis represented a
decline of 26.3%.
Cosan's impressive net revenue of R$2,434.5 million (US$1,067.8
million) reflected an increase of 300% over the year-ago quarter.
Raizen contribution came into effect in second quarter 2013, and
will be considered under the equity pick-up method.
Pro forma revenue generated by Cosan, including the Raizen
contribution, was R$9,547.9 million (US$4,187.7 million).
Fuel sales in the quarter went up 16.7% year over year due
primarily to higher sales volume of ethanol and diesel. Sugar
sales in the quarter saw a 14.6% increase to R$1,492.3 million
(US$654.5 million) in the quarter. Ethanol sales were up 112% to
R$1,519.8 million (US$666.6 million).
All of the 24 mills operated during the quarter have a crushing
capacity of 65.6 million tons of sugarcane per crop year. Cosan
produced 2.13 million tons of sugar production in the quarter,
reflecting 1.1% year over year decline. Crushed sugar volume also
decreased 1.8% to 26.8 million tons.
Energy cogeneration revenue in the quarter was R$153.3 million
(US$67.2 million), down roughly 6.5%. Total gas sales volume
jumped 1.1%. Rumo registered about 62.8% and 14.4% increase in
revenue derived from its Transportation and Loading businesses,
Revenue derived from Lubrificantes e Especialidades segment
increased 10.2% year over year. Radar reported a 22.7% decline in
its revenue due to no property sales during the quarter.
Cosan's cost of goods, as a percentage of revenue, was up 190
basis points year over year to 70.4%, leading to a gross margin
of 29.6% in the quarter. Operating margins in the quarter was
Exiting the third quarter 2013, Cosan's cash and cash equivalents
were approximately R$1,202.2 million (US$539.1 million) versus
R$1,490.6 million (US$668.4 million) in the previous quarter.
Loans and financing were down 0.9% sequentially to R$8,617.2
million (US$3,864.2 million).
Management of Cosan maintained its guidance for year 2013,
including net revenue in the range of R$35.0-R$38.0 billion and
EBITDA within R$3.95-R$4.35 billion range. Capital expenditure is
anticipated to be within R$2.8-R$3.0 billion range, lower than
prior expected range of R$2.95-R$3.2 billion.
Guidance for Cosan's segments is discussed below:
Management expects crushed sugarcane volumes of approximately
59.0-62.0 million tons, sugar volume sold within 4.3-4.6 million
tons, and ethanol volume sold within 2.1-2.3 billion liters.
Volume of energy sold is expected to range within 1.9-2.1 million
MW. EBITDA is likely to be in the R$2.4-R$2.7 billion range.
Fuel volume sold is likely to be in the 22.5-24.0 billion litre
range and EBITDA to be within the R$1.6-R$1.8 billion range.
Volume of loading is expected to range within 8.5-10.5 million
tons and EBITDA within the R$0.33-R$0.37 billion range.
EBITDA is expected to be within the R$0.14-R$0.16 billion range.
Lubrificantes e Especialidades:
Volume of lubricants and base oil sold is likely to be within
0.27-0.31 billion litres. EBITDA is expected to be within the
R$0.14-R$0.17 billion range.
Volume of gas sold is likely to be within 5.2-5.7 million cbm
while EBITDA is expected to be within R$1.35-R$1.55 billion
Cosan currently has a Zacks Rank #2 (Buy). Other players to watch
out for in the industry are
Darling International Inc.
), with a Zacks Rank #1 (Strong Buy) while
The Andersons, Inc.
MDU Resources Group Inc.
), each carry a Zacks Rank #2 (Buy).
ANDERSONS INC (ANDE): Free Stock Analysis
COSAN LTD-A (CZZ): Free Stock Analysis Report
DARLING INTL (DAR): Free Stock Analysis
MDU RESOURCES (MDU): Free Stock Analysis
To read this article on Zacks.com click here.