Cosan S.A. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Disclaimers about forward-looking statements based on current beliefs and assumptions.
• Financial highlights: EBITDA under management BRL 7.4B (down ~BRL 1B Y-o-Y), net income negative BRL 1.2B, net debt stable, debt service coverage ratio 1x.
• Operational performance: Detailed segment-specific insights as above.
• Liability management: Gross debt stable, net debt slightly higher, interest coverage ~1x, debt duration ~6 years at CDI + 90 bps.
• Streamlining: Plan to reduce holdco expenses, including potential ADR review and physical space optimization to cut costs by half.

Segment Performance

• Rumo: Transported volumes increased, but average tariffs reduced, resulting in a 4% increase in EBITDA.
• Compass: Higher distributed volumes, increased residential segment participation, with a 6% growth in EBITDA.
• Moove: Volumes sold up 13% QoQ compared to Q2 '25. Working on eliminating logistics and tax inefficiencies post-Rio de Janeiro plant fire. Received ~BRL 500M in insurance proceeds by October, with CapEx for plant reconstruction ongoing.
• Radar: Sale of properties in 2024 didn't occur in 2025; land appreciation review expected in Q4 with anticipation of increased portfolio value.
• Raizen: Sugarcane crushing increased due to favorable weather, but lower sugar prices and drought/fires affected EBITDA. Fuel distribution segment has healthy margins due to federal police actions cracking down on irregular players.

Guidance

• Commitment to resolve capital structure, including potential divestments and capital increases.
• Urgency in resolving Raizen's capital structure, with ongoing discussions with Shell.
• Expectation of land appreciation review in Radar's Q4 leading to increased portfolio value.
• Plan to focus on divestments following capital allocation priority, starting with Radar.

Risks

• Economic and market conditions affecting future performance.
• Uncertainties in resolving Raizen's capital structure and other portfolio companies.
• Impact of weather conditions on Raizen's sugarcane crushing and production.
• Potential inefficiencies in logistics and tax for Moove due to new production setups.

Question and Answer

Q: Gabriel Barra from Citi asked about supply allocation rationale and Raizen's strategy.

A: Rodrigo and Marcelo discussed offering details, prioritizing existing shareholders, and ongoing discussions with Shell for Raizen's capital structure.

Q: Isabella Simonato from Bank of America asked about Board changes and shareholders' agreement.

A: Marcelo explained Board changes due to new partners, keeping shareholders' agreement terms, and replacing Rodrigo at Raizen.

Q: Thiago Duarte from BTG asked about holdco role and debt use of funds.

A: Rodrigo and Marcelo discussed debt use for cost reduction and duration improvement, and holdco's future role in streamlining.

Q: Matheus Enfeldt from UBS asked about Moove and Raizen timing.

A: Rodrigo discussed Moove's volume recovery and insurance proceeds, Marcelo emphasized urgency in Raizen's capital structure resolution.

Q: Monique Greco from Itaú asked about holdco streamlining and divestment agenda.

A: Rodrigo and Marcelo discussed holdco cost-cutting measures and divestment priority starting with Radar.

Q: Regis Cardoso from XP asked about Radar divestment and Raizen capitalization.

A: Marcelo discussed Radar divestment potential and ongoing discussions on Raizen's capitalization amount.