Raízen (RAIZ4) Q1 24/25 earnings summary

Executive summary

• Net revenue reached BRL 57.8 billion in Q1 FY2025, up 18% year-over-year, driven by strong operational performance across all business pillars, including record sugarcane crushing, robust mobility margins, and expanding renewables.

• Net income rose 59% to BRL 1.1 billion, supported by higher sales volumes, improved pricing, and significant tax credits.

• Mobility segment saw margin recovery and expansion in Brazil, Argentina, and Paraguay, with Shell lubricants up 91% YoY and strong B2B and fuel oil sales in Latam.

• Renewables & Sugar achieved record sugarcane crushing, improved agroindustrial efficiency, and ramped up second-generation ethanol (E2G) production, with three plants operational or near completion and over 80 million liters annual capacity targeted.

• Continued commitment to disciplined capital allocation, deleveraging, and maintaining investment grade, with a focus on value generation from recent investments.

Financial highlights

• Adjusted EBITDA was BRL 2.3–3.3 billion, down 29% year-over-year, while net income rose 59% to BRL 1.1 billion; net revenue grew 18% to BRL 57.8 billion.

• Leverage ratio increased to 2.3x net debt/adjusted EBITDA, with net debt at BRL 31.6 billion and average debt maturity over 6 years.

• Monetized over BRL 1.2 billion in tax credits this quarter, with a target of at least BRL 4 billion for the year and similar potential for the next three years.

• CAPEX was BRL 2.2 billion, flat year-over-year, with a focus on renewables, E2G, and agricultural productivity.

• Cash and cash equivalents at quarter-end were BRL 8.73–10 billion, reflecting seasonal working capital needs.

Outlook and guidance

• Guidance for 2024/25: sugarcane crushing between 82–85 million tons, adjusted EBITDA of BRL 14.5–15.5 billion, and CAPEX of BRL 10.5–11.5 billion.

• Leverage expected to normalize below 1.8x by year-end, supported by inventory sales and strong free cash flow generation.

• E2G program targets 4 operational plants and over 80 million liters of cellulosic ethanol production.

• Mobility segment expects margin growth, targeting BRL 150–169 per cubic meter in Brazil, and network expansion.

• Continued focus on capital discipline, operational excellence, and value creation from recent investments.