Cosan (CSAN3) Q3 2024 earnings summary

Executive summary

• Management prioritized disciplined capital allocation, liability management, and portfolio optimization amid high interest rates and economic volatility in Brazil.

• Significant management changes included new CEOs for Cosan, Cosan Investimentos, and Raízen, aiming to refocus on core business and simplify operations.

• Portfolio transactions included the acquisition of Compagas, sale of Norgás, acquisition of Pax Group, sale of Vista Alegre Farm, and sale of Vale shares and related derivatives.

• Consolidated net sales reached R$32.2 billion for 9M24, up from R$29.96 billion in 9M23, with strong contributions from Raízen, Compass, Moove, and Rumo.

• EBITDA for 9M24 was R$13.2 billion, compared to R$11.56 billion in 9M23, reflecting operational growth and margin expansion.

Financial highlights

• Adjusted EBITDA under management reached R$8.2 billion in 3Q24, up 2% year-over-year.

• Net income for Cosan Corporate was R$293 million, down from R$679 million in 3Q23, mainly due to lower dividends from Vale and negative impact from TRS of Cosan shares.

• Dividends and interest on capital received totaled R$343 million, down from R$503 million in 3Q23.

• Net debt at Cosan Corporate stood at R$21.7 billion, stable compared to Q2.

• Cash balance decreased to R$2.4 billion at quarter-end due to liability management activities.

Outlook and guidance

• Management expects continued growth in core segments, with ongoing investments in logistics, energy, and infrastructure, and remains focused on capital discipline and asset recycling.

• No major debt amortizations are expected until 2026, supporting ongoing investment cycles.

• E2G (second-generation ethanol) remains part of Raízen's core, with focus on completing plants under construction before reassessing further expansion.