Cosan (CSAN3) Q2 2024 earnings summary

Executive summary

• EBITDA under management reached R$7.1 billion, up 15% year-over-year, driven by higher volumes, improved margins, and strong segment results across key businesses.

• Net loss at the corporate level was R$227 million, a significant improvement from -R$1.0 billion in 2Q23.

• Dividend and interest on capital receipts totaled R$2.1 billion, up sharply from R$267 million in 2Q23.

• The period was marked by major capital market activity, including new debenture issuances, loan agreements, and the internalization of senior notes.

• Key events included Moove's IPO process, Compass's acquisition of Compagas, and the start of the São Paulo Regasification Terminal.

Financial highlights

• Net debt at the corporate level decreased to R$21.3 billion from R$22.7 billion in 1Q24; DSCR improved to 1.3x from 1.1x in 1Q24.

• Cash balance rose to R$4 billion, with R$1.4 billion earmarked for liability management.

• Gross profit for 1H24 was R$6.47 billion, up from R$5.25 billion in 1H23.

• Net financial expense improved by R$661 million year-over-year, mainly due to gains from unwinding collar financing and lower MtM losses.

• Dividends and interest on capital received increased, notably from Compass and Moove.

Outlook and guidance

• Management remains focused on disciplined capital allocation, leverage control, and supporting contracted growth projects.

• No major changes expected in the portfolio mix; focus remains on de-leveraging while maintaining or improving portfolio quality.

• Targeting a sustainable debt service coverage ratio of 1.5x, aiming for stability by end of 2025.

• Strategic investments and partnerships, such as the new port terminal in Santos and the acquisition of Compagas, are expected to drive future growth.