Company ends the period with an adjusted net loss of R$ 96.7 million and an increase in its debt
Raízen concluded the second quarter of the 2024/25 harvest with an adjusted net loss of R$ 96.7 million and an increase in its debt, according to its earnings report released yesterday. The company also finalized the sale of R$ 381 million worth of sugarcane to Usina Alta Mogiana in São Joaquim da Barra (SP).
Raízen will transfer 900,000 tons of raw material to the neighboring company in its Ribeirão Preto (SP) cluster, consisting of both its own sugarcane and contracted third-party supplier agreements. The Ribeirão Preto region was one of the most affected by sugarcane field fires between August and September.
The company reported that the fires impacted approximately 6 million tons of its own and supplier sugarcane, representing 7% of the initially expected crop for the season. As a result, Raízen now expects the total sugarcane crush for this harvest to range between 78.5 million and 80 million tons.
Raízen, a joint venture between Cosan and Shell, expects to receive R$ 300 million in net proceeds from the transaction with Usina Alta Mogiana by the end of this harvest. In a market statement, Raízen emphasized that reducing its debt was one of the goals of the operation, alongside “portfolio recycling” and “increased logistical and agro-industrial efficiency in the local cluster.”
Raízen’s net debt at the end of the second quarter was 13.7% higher than at the close of the previous quarter, reaching R$ 35.9 billion. As a result, leverage increased from 2.3x to 2.6x between the two quarters. The company noted that the rise in debt during this period is seasonal, driven by higher cash consumption for working capital and capital expenditure (Capex) investments.
During the quarter, the company issued US$ 1 billion in green bonds to support its investments in second-generation ethanol (E2G) and other initiatives aimed at reducing carbon emissions.
Capex for the quarter totaled R$ 2.3 billion, a 3.9% increase compared to the previous year. As a result, the company’s primary cash generation (EBITDA before Capex) fell by 9%, reaching R$ 2.3 billion.
The decline in quarterly results reflected a drop in margins for the Mobility (refining and distribution in Latin America) and Renewables (ethanol and electricity) segments, as well as a higher income tax expense.
In addition to the funds raised from the sugarcane sale to Alta Mogiana, Raízen expects to generate revenue from its two new cellulosic ethanol plants: Univalem, in Valparaiso (SP), and Barra, in Barra Bonita (SP). The company announced yesterday that it has begun testing and commissioning these two plants.
“The full start of production and shipments to already contracted customers is expected to take place during the 2024/25 harvest,” Raízen stated. The units still need to obtain all necessary licenses and approvals, including from the National Agency of Petroleum, Natural Gas, and Biofuels (ANP).
If both plants begin operations within this cycle, Raízen will have an operational capacity of 278 million liters of E2G ethanol.
