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, reflecting higher equity pickup and lower financial expenses.

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

• Management remains focused on capital discipline, operational execution, and safety standards amid macroeconomic volatility and higher interest rates.

• Major events included Moove's IPO process, Compass's acquisition of Compagas, and Rumo's investment optimization at Santos Port.

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 year-over-year.

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

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

• Gross profit for 2Q24 was R$3.6 billion, up from R$2.8 billion in 2Q23.

• Net financial expenses for 6M24 totaled R$4.3 billion, reflecting higher debt costs and negative derivative results.

Outlook and guidance

• Management expects continued disciplined capital allocation, leverage control, and support for contracted growth projects, with investments aligned to the strategic roadmap.

• No major changes expected in the portfolio mix or Vale stake in the short term.

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