an S.A.(CSAN) - 2025 Q1 - Quarterly Report

Report on Review of Parent Company and Consolidated Interim Financial Statements This section introduces the independent auditor's review of Cosan S.A.'s interim financial statements for Q1 2025, covering both parent company and consolidated figures Introduction This section introduces the independent auditor's review of Cosan S.A.'s interim financial statements for Q1 2025, covering both parent company and consolidated figures - The review covered the interim statement of financial position, statements of profit or loss, other comprehensive income, changes in equity, and cash flows for the quarter ended March 31, 2025, for both the parent company and consolidated entities[8] Scope of Review The review was conducted under Brazilian and International Standards on Reviews of Interim Financial Information, which is less extensive than an audit - The review was conducted in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 and ISRE 2410), which is less extensive than an audit[10] Conclusion PricewaterhouseCoopers concluded that the interim financial statements are prepared, in all material respects, in accordance with CPC 21 and IAS 34 - The independent auditors concluded that the interim financial statements for the quarter ended March 31, 2025, are prepared, in all material respects, in accordance with CPC 21 and IAS 34[11] Statements of Value Added The interim financial statements include parent company and consolidated statements of value added, presented as supplementary information under IAS 34 - The parent company and consolidated statements of value added for the quarter ended March 31, 2025, are presented as supplementary information under IAS 34 and were found to be properly prepared in accordance with CPC 09[12] Audit and Review of Previous Year's Figures Comparative figures for Q1 2024 and the year ended December 31, 2024, were reviewed/audited by other independent auditors, who issued unqualified reports - The accounting information for the quarter ended March 31, 2024, and the statement of financial position for December 31, 2024, were reviewed/audited by other independent auditors, who issued unqualified reports[13] Statements of Financial Position This section presents the consolidated and parent company statements of financial position, detailing assets, liabilities, and equity as of March 31, 2025, compared to December 31, 2024 Consolidated Financial Position The consolidated financial position as of March 31, 2025, shows decreases in total assets, liabilities, and equity, primarily due to reductions in cash, investments, and loans Consolidated Financial Position (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Total Assets | 127,486,217 | 141,265,902 | (13,779,685) | -9.75% | | Total Liabilities | 92,715,239 | 101,867,540 | (9,152,301) | -8.98% | | Total Shareholders' Equity | 34,770,978 | 39,398,362 | (4,627,384) | -11.75% | - Key asset changes include a decrease in Cash and cash equivalents by R$2,094,459 thousand and a significant decrease in Investments in subsidiaries and associates by R$9,128,792 thousand[16] - Key liability changes include a decrease in current Loans, borrowings and debentures by R$1,775,131 thousand and non-current by R$3,999,641 thousand, along with a reduction in current Trade payables by R$1,282,003 thousand[19] Parent Company Financial Position The parent company's financial position as of March 31, 2025, also experienced a notable decline in total assets, liabilities, and equity Parent Company Financial Position (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Total Assets | 31,597,900 | 42,237,334 | (10,639,434) | -25.19% | | Total Liabilities | 23,706,237 | 31,333,570 | (7,627,333) | -24.34% | | Total Shareholders' Equity | 7,891,663 | 10,903,764 | (3,012,101) | -27.62% | Statements of Profit or Loss This section presents the consolidated and parent company statements of profit or loss, detailing revenue, expenses, and net income for the three months ended March 31, 2025, compared to the prior year Consolidated Profit or Loss The consolidated entity reported a significant loss for Q1 2025, primarily due to negative equity in earnings of investees and increased finance results Consolidated Profit or Loss (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Net sales | 9,662,601 | 9,842,056 | (179,455) | -1.82% | | Gross profit | 2,870,696 | 2,913,619 | (42,923) | -1.47% | | Equity in earnings (losses) of investees | (1,119,998) | 57,515 | (1,177,513) | -2047.32% | | Finance results, net | (1,902,995) | (1,779,329) | (123,666) | 6.95% | | Profit (loss) for the period | (1,935,398) | 263,544 | (2,198,942) | -834.40% | | Losses per share (Basic & Diluted) | (R$0.96) | (R$0.10) | (R$0.86) | -860.00% | - Profit (loss) before income taxes significantly declined from R$247,907 thousand in Q1 2024 to (R$888,863) thousand in Q1 2025[21] Parent Company Profit or Loss The parent company also reported a substantial loss for the period, primarily driven by negative equity in earnings of investees and increased income taxes Parent Company Profit or Loss (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Profit (loss) before equity in earnings of investees, finance results and income taxes | 115,988 | (117,921) | 233,909 | 198.36% | | Equity in earnings (losses) of investees | (621,430) | 778,295 | (1,399,725) | -1798.44% | | Finance results, net | (623,234) | (1,322,711) | 699,477 | -52.88% | | Profit (loss) for the period | (1,787,895) | (192,175) | (1,595,720) | 830.34% | - Income taxes shifted from a positive R$470,162 thousand in Q1 2024 to a negative (R$659,219) thousand in Q1 2025[21] Statements of Other Comprehensive Income This section presents the consolidated and parent company statements of other comprehensive income, detailing components such as foreign currency translation differences and cash flow hedges Consolidated Other Comprehensive Income The consolidated entity reported a total comprehensive loss for Q1 2025, primarily due to the period's loss and negative foreign currency translation differences Consolidated Other Comprehensive Income (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Profit (loss) for the period | (1,935,398) | 263,544 | (2,198,942) | -834.40% | | Foreign currency translation differences | (290,198) | 63,056 | (353,254) | -560.21% | | Gain (loss) on cash flow hedge | 222,492 | (42,564) | 265,056 | -622.72% | | Actuarial losses (gains) with defined benefit plan | (59,336) | 24,286 | (83,622) | -344.39% | | Total comprehensive income for the period | (2,073,463) | 300,065 | (2,373,528) | -790.99% | Parent Company Other Comprehensive Income The parent company also reported a total comprehensive loss, significantly impacted by the period's loss and negative foreign currency translation differences Parent Company Other Comprehensive Income (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Profit (loss) for the period | (1,787,895) | (192,175) | (1,595,720) | 830.34% | | Foreign currency translation differences | (290,696) | 62,887 | (353,583) | -562.20% | | Gain (loss) on cash flow hedge | 162,887 | (32,384) | 195,271 | -602.87% | | Actuarial losses (gains) with defined benefit plan | (22,497) | 14,408 | (36,905) | -256.15% | | Total comprehensive income for the period | (1,929,702) | (147,264) | (1,782,438) | 1210.34% | Statement of Changes in Equity This section presents the consolidated and parent company statements of changes in equity, detailing movements in total shareholders' equity and equity attributable to owners Consolidated Equity Changes Consolidated shareholders' equity decreased significantly from January 1, 2025, to March 31, 2025, due to the period's loss and changes in shareholding interest Consolidated Equity Changes (January 1, 2025 to March 31, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Total shareholders' equity | 39,398,362 | 34,770,978 | (4,627,384) | -11.75% | | Loss for the period | — | (1,935,398) | (1,935,398) | N/A | | Change of shareholding interest in subsidiary | — | (2,168,930) | (2,168,930) | N/A | | Dividends | — | (375,782) | (375,782) | N/A | Parent Company Equity Changes The parent company's equity attributable to owners also saw a substantial decrease, driven by the period's loss and changes in shareholding interest Parent Company Equity Changes (January 1, 2025 to March 31, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Equity attributable to owners of the Company | 10,903,764 | 7,891,663 | (3,012,101) | -27.62% | | Loss for the period | — | (1,787,895) | (1,787,895) | N/A | | Change of shareholding interest in subsidiary | — | (975,200) | (975,200) | N/A | Statement of Cash Flows This section presents the consolidated and parent company statements of cash flows, detailing cash movements from operating, investing, and financing activities Consolidated Cash Flow The consolidated entity experienced a significant net cash outflow from financing activities, leading to a decrease in cash and cash equivalents Consolidated Cash Flow (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Net cash (generated) used in operating activities | 1,729,904 | 1,946,085 | (216,181) | -11.11% | | Net cash (generated) used in investing activities | 5,946,122 | (1,097,239) | 7,043,361 | -641.91% | | Net cash (used in) generated from financing activities | (9,573,313) | 845,573 | (10,418,886) | -1232.10% | | Increase (decrease) in cash and cash equivalents | (1,897,287) | 1,694,419 | (3,591,706) | -211.98% | | Cash and cash equivalents at the end of the period | 14,809,083 | 16,398,421 | (1,589,338) | -9.69% | Parent Company Cash Flow The parent company's cash flow from investing activities turned significantly positive, while financing activities resulted in a substantial outflow Parent Company Cash Flow (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Net cash (generated) used in operating activities | 45,693 | (52,145) | 97,838 | -187.62% | | Net cash (generated) used in investing activities | 8,926,540 | (3,243,369) | 12,169,909 | -375.19% | | Net cash (used in) generated from financing activities | (8,437,342) | 2,213,994 | (10,651,336) | -481.00% | | Increase (decrease) in cash and cash equivalents | 534,891 | (1,081,520) | 1,616,411 | -149.46% | | Cash and cash equivalents at the end of the period | 2,732,522 | 691,728 | 2,040,794 | 294.90% | Non-cash Transactions This section highlights significant non-cash transactions, including right-of-use asset recognition, installment payments, and the Compagas acquisition balance - Non-cash transactions for the period ended March 31, 2025, included the recognition of right-of-use as a counterpart to the lease liability in the amount of R$135,098 thousand[36] - Acquisition of property, plant and equipment and intangible assets with payment in installments totaled R$567,019 thousand[36] - The remaining balance of the acquisition of Compagas amounted to R$613,385 thousand, to be settled by September 2026[36] Statement of Value Added This section presents the consolidated and parent company statements of value added, detailing the distribution of wealth generated by the company Consolidated Value Added The consolidated entity showed an increase in gross value added and value added to be distributed for Q1 2025, despite a slight decrease in net sales Consolidated Value Added (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Net sales | 10,946,098 | 11,515,795 | (569,697) | -4.95% | | Gross value added | 4,788,187 | 4,614,185 | 174,002 | 3.77% | | Net value added | 3,820,293 | 3,706,921 | 113,372 | 3.06% | | Value added to be distributed | 5,532,160 | 4,379,537 | 1,152,623 | 26.32% | | Equity remuneration (Retained losses) | (1,787,895) | (192,175) | (1,595,720) | 830.34% | Parent Company Value Added The parent company's value added metrics showed significant positive shifts from prior year negative figures, with increased gross value added and distribution Parent Company Value Added (Three months ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Revenue | 218,008 | (1,192) | 219,200 | -18390.94% | | Gross value added | 178,260 | (41,685) | 219,945 | -527.69% | | Net value added | 173,547 | (45,536) | 219,083 | -481.10% | | Value added to be distributed | 855,943 | 790,941 | 65,002 | 8.22% | | Equity remuneration (Retained losses) | (1,787,895) | (192,175) | (1,595,720) | 830.34% | 1. Operations This section provides an overview of Cosan S.A.'s business operations, corporate structure, and the activities of its corporate segment Company Overview and Corporate Structure Cosan S.A. is a publicly traded Brazilian company with ADSs listed on the NYSE, controlled by Mr. Rubens Ometto Silveira Mello, managing equity interests and financial results - Cosan S.A. is a publicly traded company on B3 (CSAN3) and NYSE (CSAN), incorporated under Brazilian laws, with Mr. Rubens Ometto Silveira Mello as the ultimate controlling shareholder[39] - Cosan Corporate's main activities include managing general and administrative expenses, contingencies, equity income from investments, and financial results from parent company and intermediate holding company debts[42] - Bradesco BBI S.A. holds 23.20% preferred shares in Cosan Dez Participações S.A., which has an 88% stake in Compass, while Itaú Unibanco S.A. holds 12.73% preferred shares in Cosan Nove Participações S.A., which has a 39.09% stake in Raízen S.A.[42] 2. Relevant Events During the Period This section details significant events during the period, including key investment activities, acquisitions, disposals, and new debt issuances 2.1 Investments This section details key investment activities, including Moove's acquisition of DIPI Holdings and the partial sale of Vale S.A. shares - Cosan Lubrificantes e Especialidades S.A. (CLE) acquired 100% of DIPI Holdings Ltda. for R$329,006 thousand, aiming to increase synergies, expand the product portfolio, and gain access to the packaging market[43][145] - The Company sold 173,073,795 common shares of Vale S.A., representing 4.05% of Vale's share capital, for a net commission of R$8,892,802 thousand[45] - A fire at Moove's Industrial Complex affected 10% of the production area, with estimated asset losses between R$190,413 thousand and R$285,620 thousand, covered by comprehensive insurance up to R$1,200,000 thousand[48][53][54] - The Company redeemed 1,087,179,567 preferred shares of Cosan Nove from Banco Itaú for R$2,169,000 thousand, increasing its stake in Cosan Nove to 87.27%[59] 2.2 New Debts This section outlines the company's debt management activities, including significant early redemptions and the issuance of new debts across segments - The Company requested optional early redemption of the 1st Series of the 3rd Issue of Simple Debentures (maturity 2028) for R$750,000 thousand plus remuneration and premium[61] - The 2027 Bond (U.S.$392,000 thousand, equivalent to R$2,250,825 thousand) was fully redeemed on March 14, 2025, at face value[62] - Loan 4.131 (U.S.$600,000 thousand, equivalent to R$3,462,660 thousand) and a debenture (U.S.$300,000 thousand, equivalent to R$1,733,640 thousand) were settled in advance in February 2025[64] New Debts Issued (Q1 2025) | Segment / Modalities | Value (in thousands of Reais) | Maturity | Index | | :------------------- | :---------------------------- | :--------- | :------------------ | | Cosan Corporate Debenture | 1,500,000 | 01/27/2029 | CDI + 0.60% p.a. | | Cosan Corporate Debenture | 500,000 | 03/27/2030 | CDI + 0.70% p.a. | | Cosan Corporate Debenture | 500,000 | 03/27/2032 | CDI + 1.00% p.a. | | Compass Debenture | 410,000 | 01/07/2027 | DI + spread 0.50% p.a. | | Compass Debenture | 800,000 | 01/15/2033 | IPCA + 7.44% p.a. | | Compass Loan 4.131 | 350,000 | 03/20/2026 | CDI + 0.78% | | Rumo Debenture | 434,949 | 03/28/2037 | IPCA + 7.47% p.a. | | Rumo Debenture | 1,365,051 | 03/28/2040 | IPCA + 7.53% p.a. | | Moove Loan 4.131 | 500,000 | 01/18/2028 | CDI + 0.45% p.a. | 3. Statement of Compliance and Material Accounting Policies This section confirms compliance with accounting standards and Brazilian corporate law, outlining the basis and material accounting policies used for the interim financial statements Compliance and Accounting Principles This section confirms interim financial statements comply with Brazilian and International Accounting Standards and Brazilian corporate law, with the Statement of Value-Added as supplementary information - The interim financial statements are prepared in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Statements, International Accounting Standard (IAS 34) - Interim Financial Reporting, Brazilian Corporation Law, and CVM rules[66] - The Statement of Value-Added (VAS) is presented as supplementary information, as it is required by Brazilian corporate law but not by IFRS[68] - These interim financial statements were prepared using the same basis and accounting policies adopted in the preparation of the financial statements as of December 31, 2024[69] 4. Segment Information This section provides detailed financial information for the company's operating segments, including net sales, EBITDA, and net profit or loss Operating Segments Overview This section outlines the company's five main operating segments: Raízen, Compass, Moove, Rumo, and Radar, with performance evaluated by senior management - The company reports on five main operating segments: Raízen (ethanol, sugar, bioenergy, fuels), Compass (natural gas distribution, electricity), Moove (lubricants, base oils), Rumo (rail logistics, port storage), and Radar (agricultural property management)[76] - EBITDA is used by the Company to evaluate the performance of its operating segments[73] Consolidated Segment Performance (Q1 2025) Consolidated segment performance for Q1 2025 shows Raízen as the largest contributor to net sales but also the largest net loss Consolidated Net Sales by Segment (Q1 2025) | Segment | Net Sales (in thousands of Reais) | | :------ | :-------------------------------- | | Raízen | 57,726,722 | | Compass | 4,209,600 | | Moove | 2,341,582 | | Rumo | 2,966,750 | | Radar | 152,078 | | Cosan Corporate | 48 | | Consolidated Total | 9,662,601 | Consolidated EBITDA by Segment (Q1 2025) | Segment | EBITDA (in thousands of Reais) | | :------ | :----------------------------- | | Raízen | 1,780,065 | | Compass | 1,297,043 | | Moove | 232,499 | | Rumo | 1,349,579 | | Radar | 140,860 | | Cosan Corporate | (646,670) | | Consolidated Total | 1,982,026 | Consolidated Net Profit (Loss) by Segment (Q1 2025) | Segment | Net Profit (Loss) (in thousands of Reais) | | :------ | :---------------------------------------- | | Raízen | (2,556,378) | | Compass | 420,452 | | Moove | 30,036 | | Rumo | (97,178) | | Radar | 134,188 | | Cosan Corporate | (2,031,611) | | Consolidated Total | (1,935,398) | Consolidated Segment Performance (Q1 2024) Consolidated segment performance for Q1 2024 shows Raízen as the largest contributor to net sales and EBITDA, with most segments reporting positive net profit Consolidated Net Sales by Segment (Q1 2024) | Segment | Net Sales (in thousands of Reais) | | :------ | :-------------------------------- | | Raízen | 53,657,046 | | Compass | 4,135,168 | | Moove | 2,439,592 | | Rumo | 3,146,017 | | Radar | 136,567 | | Cosan Corporate | 7 | | Consolidated Total | 9,842,056 | Consolidated EBITDA by Segment (Q1 2024) | Segment | EBITDA (in thousands of Reais) | | :------ | :----------------------------- | | Raízen | 3,879,847 | | Compass | 893,268 | | Moove | 328,940 | | Rumo | 1,688,860 | | Radar | 136,033 | | Cosan Corporate | 423,613 | | Consolidated Total | 2,934,500 | Consolidated Net Profit (Loss) by Segment (Q1 2024) | Segment | Net Profit (Loss) (in thousands of Reais) | | :------ | :---------------------------------------- | | Raízen | (907,496) | | Compass | 318,103 | | Moove | 180,656 | | Rumo | 368,337 | | Radar | 126,046 | | Cosan Corporate | (193,384) | | Consolidated Total | 263,544 | Consolidated Segment Balance Sheet (March 31, 2025) The consolidated balance sheet by segment as of March 31, 2025, shows Raízen with the largest total assets and Rumo with significant loans Consolidated Total Assets by Segment (March 31, 2025) | Segment | Total Assets (in thousands of Reais) | | :------ | :----------------------------------- | | Raízen | 148,157,446 | | Compass | 32,030,013 | | Moove | 8,602,183 | | Rumo | 51,422,655 | | Radar | 17,784,486 | | Cosan Corporate | 34,200,217 | | Consolidated Total | 127,486,217 | Consolidated Loans, Borrowings and Debentures by Segment (March 31, 2025) | Segment | Loans, Borrowings and Debentures (in thousands of Reais) | | :------ | :------------------------------------------------------- | | Raízen | (57,970,370) | | Compass | (13,908,996) | | Moove | (3,893,194) | | Rumo | (20,969,942) | | Cosan Corporate | (21,908,522) | | Consolidated Total | (60,680,654) | 4.1 Net Sales to External Customers by Product/Customer Type This section disaggregates net sales revenue by product/customer type for each segment, providing insight into primary revenue drivers Raízen Net Sales by Product (Q1 2025 vs. 2024) | Product | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :-------- | :------------------------------------- | :------------------------------------- | :--------- | | Ethanol | 6,807,576 | 5,609,583 | 21.36% | | Sugar | 6,562,652 | 7,761,595 | -15.44% | | Gasoline | 16,819,588 | 15,572,382 | 8.01% | | Diesel | 23,238,684 | 21,612,340 | 7.52% | | Cogeneration | 1,637,922 | 860,599 | 90.33% | | Other | 2,660,300 | 2,240,547 | 18.73% | | Total | 57,726,722 | 53,657,046 | 7.59% | Compass Net Sales by Product/Service (Q1 2025 vs. 2024) | Product/Service | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :---------------- | :------------------------------------- | :------------------------------------- | :--------- | | Natural gas distribution (Industrial) | 2,469,442 | 2,800,989 | -11.70% | | Natural gas distribution (Residential) | 524,343 | 458,892 | 14.26% | | Gas commercialization | 386,964 | — | N/A | | Total | 4,209,600 | 4,135,168 | 1.80% | Moove Net Sales by Product/Service (Q1 2025 vs. 2024) | Product/Service | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :---------------- | :------------------------------------- | :------------------------------------- | :--------- | | Finished product | 2,045,129 | 2,102,621 | -2.73% | | Base oil | 141,743 | 168,941 | -16.10% | | Services | 154,710 | 168,030 | -7.93% | | Total | 2,341,582 | 2,439,592 | -4.02% | Rumo Net Sales by Operations (Q1 2025 vs. 2024) | Operations | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :---------------- | :------------------------------------- | :------------------------------------- | :--------- | | North operations | 2,387,684 | 2,434,633 | -1.93% | | South operations | 406,410 | 563,131 | -27.72% | | Container operations | 172,656 | 148,253 | 16.46% | | Total | 2,966,750 | 3,146,017 | -5.69% | 4.2 Information on Geographical Area This section provides a geographical breakdown of the company's net sales, indicating Brazil as the largest market, followed by Europe and the United States Net Sales by Geographical Area (Q1 2025 vs. 2024) | Region | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (in thousands of Reais) | Change (%) | | :------------------ | :------------------------------------- | :------------------------------------- | :----------------------------- | :--------- | | Brazil | 8,166,677 | 8,518,307 | (351,630) | -4.13% | | Europe | 818,667 | 696,739 | 121,928 | 17.50% | | Latin America | 109,769 | 56,416 | 53,353 | 94.57% | | United States of America | 567,488 | 570,594 | (3,106) | -0.54% | | Total | 9,662,601 | 9,842,056 | (179,455) | -1.82% | 5. Financial Assets and Liabilities This section provides an overview of the company's financial assets and liabilities, categorized by fair value through profit or loss and amortized cost Financial Assets and Liabilities Overview This section provides an overview of financial assets and liabilities, categorized by fair value and amortized cost, showing overall decreases for the consolidated entity Consolidated Financial Assets (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Fair value through profit or loss | 6,022,457 | 9,312,566 | -35.33% | | Amortized cost | 20,944,303 | 21,292,906 | -1.64% | | Total Assets | 26,966,760 | 30,605,472 | -11.99% | Consolidated Financial Liabilities (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Amortized cost | (50,214,873) | (56,213,794) | -10.67% | | Fair value through profit or loss | (28,848,082) | (31,764,238) | -9.18% | | Total Liabilities | (79,062,955) | (87,978,032) | -10.13% | Parent Company Financial Assets (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Fair value through profit or loss | 1,435,911 | 3,357,108 | -57.22% | | Amortized cost | 3,288,596 | 3,072,030 | 7.05% | | Total Assets | 4,724,507 | 6,429,138 | -26.51% | Parent Company Financial Liabilities (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Amortized cost | (21,991,685) | (28,863,862) | -23.79% | | Fair value through profit or loss | (192,379) | (1,104,874) | -82.50% | | Total Liabilities | (22,184,064) | (29,968,736) | -25.98% | 5.1 Cash and Cash Equivalents This section details the composition of cash and cash equivalents for both parent and consolidated entities, showing a decrease in consolidated cash and financial investments Consolidated Cash and Cash Equivalents (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Cash and bank accounts | 952,971 | 958,738 | -0.60% | | Savings account | 734,502 | 485,393 | 51.32% | | Financial Investments | 13,121,610 | 15,459,411 | -15.12% | | Total | 14,809,083 | 16,903,542 | -12.39% | Parent Company Cash and Cash Equivalents (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Cash and bank accounts | 280 | 414 | -32.37% | | Savings account | 45,689 | 48,831 | -6.43% | | Financial Investments | 2,686,553 | 2,152,022 | 24.84% | | Total | 2,732,522 | 2,201,267 | 24.13% | 5.2 Loans, Borrowings and Debentures This section details the composition and changes in loans, borrowings, and debentures for both parent and consolidated entities, highlighting a significant debt reduction Consolidated Loans, Borrowings and Debentures (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total | 60,680,654 | 66,455,426 | -8.69% | | Current | 2,628,017 | 4,403,148 | -40.32% | | Non-current | 58,052,637 | 62,052,278 | -6.45% | Parent Company Loans, Borrowings and Debentures (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total | 16,092,111 | 21,350,555 | -24.62% | | Current | 360,607 | 347,032 | 3.91% | | Non-current | 15,731,504 | 21,003,523 | -25.09% | - Consolidated loans, borrowings, and debentures decreased by R$5,774,772 thousand from January 1, 2025, to March 31, 2025, primarily due to significant principal repayments of R$11,504,819 thousand[93] - As of March 31, 2025, the Company and its subsidiaries were in compliance with all financial and non-financial restrictive covenants[96] 5.3 Derivative Financial Instruments This section details the company's use of derivative financial instruments, primarily swaps, for economic hedging against foreign exchange, interest, and inflation risks Consolidated Derivative Financial Instruments (Fair Value, March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total financial instruments | (288,825) | 329,124 | -187.75% | | Current assets | 78,582 | 905,341 | -91.32% | | Non-current assets | 2,012,456 | 2,893,987 | -30.40% | | Current liabilities | (1,820,126) | (2,504,117) | -27.31% | | Non-current liabilities | (559,737) | (966,087) | -42.06% | - Derivatives are used solely for economic hedging purposes and not for speculative investments[97] - The Company adopts fair value hedge accounting for operations where interest and FX rate swaps correspond to fixed-rate loan terms, maintaining a 1:1 hedge ratio[99] - Subsidiaries like Edge Comercialização S.A. and TRSP Terminal de Regaseificação de São Paulo utilize cash flow hedges to mitigate risks from natural gas price fluctuations and exchange rate volatility on US dollar revenues[105][107] 5.4 Related Parties This section details related party receivables, payables, transactions, and compensation for managers and directors, highlighting financial and commercial operations Consolidated Related Parties Receivables (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total current assets | 232,553 | 197,063 | 18.01% | | Total non-current assets | 132,110 | 202,826 | -34.86% | | Total Receivables | 364,663 | 399,889 | -8.79% | Consolidated Related Parties Payables (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total current liabilities | 434,093 | 416,410 | 4.25% | | Total non-current liabilities | 1,078 | 1,078 | 0.00% | | Total Payables | 435,171 | 417,488 | 4.23% | Consolidated Transactions with Related Parties (Q1 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Operating income | 136,732 | 259,742 | -47.36% | | Purchase of goods / inputs / services | (508,877) | (522,714) | -2.65% | | Shared income (expenses) | (49,407) | (45,831) | 7.80% | | Finance result | (5,336) | — | N/A | | Total | (426,888) | (308,803) | 38.24% | Consolidated Managers' and Directors' Compensation (Q1 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Short-term benefits | 39,992 | 30,643 | 30.53% | | Share-based compensation | 7,632 | 18,915 | -59.65% | | Post-employment benefits | 602 | 538 | 11.89% | | Total | 48,712 | 52,631 | -7.45% | 5.5 Trade Payables This section provides a breakdown of consolidated and parent company trade payables, showing a significant decrease in consolidated payables from material and services suppliers Consolidated Trade Payables (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :--------- | | Material and services suppliers | 2,713,926 | 4,205,516 | -35.47% | | Natural gas / transport and logistics suppliers | 1,192,176 | 982,333 | 21.36% | | Total | 3,906,102 | 5,187,849 | -24.70% | Parent Company Trade Payables (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :------------------------------------ | :------------------------------------- | :------------------------------------- | :--------- | | Material and services suppliers | 1,304 | 2,744 | -52.55% | | Natural gas / transport and logistics suppliers | — | 156 | -100.00% | | Total | 1,304 | 2,900 | -55.03% | 5.6 Recognized Fair Value Measurements This section outlines fair value measurements of consolidated assets and liabilities, primarily Level 2, with investment properties as the main Level 3 item Consolidated Assets Measured at Fair Value (March 31, 2025) | Asset Category | Level 1 (in thousands of Reais) | Level 2 (in thousands of Reais) | Level 3 (in thousands of Reais) | | :--------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Investment funds | — | 746,406 | — | | Marketable securities | 242,036 | 2,938,329 | — | | Other financial assets | 4,648 | — | — | | Investment properties | — | — | 16,824,078 | | Derivative financial instruments | — | 2,091,038 | — | | Total | 246,684 | 5,775,773 | 16,824,078 | Consolidated Liabilities Measured at Fair Value (March 31, 2025) | Liability Category | Level 1 (in thousands of Reais) | Level 2 (in thousands of Reais) | Level 3 (in thousands of Reais) | | :----------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Loans, financing and debentures | — | (26,468,219) | — | | Derivative financial instruments | — | (2,379,863) | — | | Total | — | (28,848,082) | — | - The fair value of investment properties was determined using the direct comparative method of market data and sales quotes for similar properties, with discount rates between 6.06% p.a. and 10.40% p.a.[121] 5.7 Financial Risk Management This section details the company's financial risk management strategies, covering market, credit, and liquidity risks, along with sensitivity analyses Net Foreign Exchange Exposure (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Foreign exchange exposure, net | (2,524,980) | (2,848,721) | -11.36% | - The probable scenario for foreign exchange risk indicates an impact on profit or loss before tax of R$545,197 thousand[120] - The probable scenario for interest rate risk indicates an impact on income (loss) before taxes of (R$15,310,819) thousand[124] Credit Risk Exposure (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total Credit Risk Exposure | 24,889,785 | 28,817,140 | -13.63% | Liquidity Risk (Total Financial Liabilities, March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total Financial Liabilities | (89,545,840) | (92,930,623) | -3.64% | 6. Investments in Subsidiaries and Associates This section details the company's direct and indirect equity interests in subsidiaries and associates, including ownership percentages and investment balance movements 6.1 Investments in Subsidiaries and Associates This section lists direct and indirect equity interests in subsidiaries and associates, detailing ownership percentages and investment balance movements Parent Company Ownership Interests in Key Subsidiaries (March 31, 2025) | Subsidiary | Ownership Interest (%) | Economic Benefit (%) | | :------------------------------------ | :--------------------- | :------------------- | | Cosan Corretora de Seguros Ltda. | 100.00% | 100.00% | | Cosan Nove Participações S.A. | 87.27% | 66.16% | | Cosan Luxembourg S.A. | 100.00% | 100.00% | | Cosan Overseas Limited | 100.00% | 100.00% | | Cosan Dez Participações S.A. | 76.80% | 72.00% | | Moove Lubricants Holdings | 70.00% | 70.00% | | Rumo S.A. | 30.39% | 30.39% | Consolidated Material Investments in Associates (March 31, 2025) | Investee | Equity Stake (%) | | :------------------------------------ | :----------------- | | CEG Rio S.A. | 37.41% | | Companhia de Gás de Mato Grosso do Sul - Msgás | 49.00% | | Companhia de Gás de Santa Catarina - Scgás | 41.00% | - The parent company's total investments in subsidiaries decreased by 27.19% from R$31,308,696 thousand on January 1, 2025, to R$22,796,530 thousand on March 31, 2025[137] - Cosan Luxembourg S.A. reported an uncovered liability of R$346,975 thousand as of March 31, 2025[133][137] 6.2 Non-controlling Interest in Subsidiaries This section summarizes information on subsidiaries with material non-controlling interests, detailing shares held and impact on profit and equity Non-controlling Interest in Key Subsidiaries (March 31, 2025) | Subsidiary | Non-controlling Interest (%) | | :------------------------------------ | :--------------------------- | | Tellus Brasil Participações S.A. | 80.00% | | Janus Brasil Participações S.A. | 80.00% | | Rumo S.A. | 69.61% | | Moove Lubricants Holdings | 30.00% | | Cosan Nove Participações S.A. | 12.73% | | Cosan Dez Participações S.A. | 23.20% | - The consolidated balance of non-controlling interest decreased by 5.70% from R$28,494,598 thousand on January 1, 2025, to R$26,879,315 thousand on March 31, 2025[142] - Profit attributable to non-controlling interests was (R$147,503) thousand for the period ended March 31, 2025[142] 6.3 Acquisition of Subsidiaries This section details CLE's acquisition of DIPI Holding Ltda., outlining transaction price, payment structure, strategic rationale, and asset allocation - CLE acquired 100% of DIPI Holding Ltda. (PAX Group) for R$329,006 thousand, with R$232,886 thousand paid upfront and the remainder in installments[143] - The net cash effect on consolidated financials from the acquisition was R$213,086 thousand[143] - The acquisition aims to increase supply chain synergies, expand the product portfolio, gain access to the restricted packaging market, and incorporate grease technologies[145] - Preliminary goodwill of R$236,469 thousand was recognized, representing expected future economic benefits and synergies[145] Identifiable Assets Acquired and Liabilities Assumed (Acquisition Date) | Item | Value (in thousands of Reais) | | :-------------------------- | :---------------------------- | | Cash and cash equivalents | 2,503 | | Trade receivables | 18,455 | | Inventories | 36,576 | | Property, plant and equipment | 70,491 | | Intangible assets and goodwill | 313,378 | | Loans, financing and debentures | (77,002) | | Deferred tax liabilities | (38,409) | | Net assets acquired | 329,006 | 7. Investment in Joint Venture This section details the company's investments in joint ventures, primarily Raízen S.A., outlining ownership interests and movements in investment balances Joint Venture Investments Overview This section details investments in joint ventures, primarily Raízen S.A., outlining ownership interests and investment balance movements Parent Company Investment in Joint Ventures (March 31, 2025 vs. January 1, 2025) | Joint Venture | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Raízen S.A. | 1,184,466 | 1,068,941 | -9.60% | | Radar Gestão de Invest. S.A. | 8,606 | 9,508 | 10.48% | | Total | 1,193,072 | 1,078,449 | -9.59% | Consolidated Investment in Joint Ventures (March 31, 2025 vs. January 1, 2025) | Joint Venture | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Raízen S.A. | 10,495,317 | 9,478,132 | -9.69% | | Terminal Alvorada S.A. | 41,121 | 52,830 | 28.47% | | Radar Gestão de Invest. S.A. | 8,606 | 9,508 | 10.48% | | Total | 10,545,044 | 9,540,470 | -9.43% | - The Company's total interest in Raízen S.A. is 30.87% (5.01% direct and 25.86% indirect through Cosan Nove)[151] - As of March 31, 2025, the Company was in compliance with the covenants of the agreement governing the joint venture[152] 8. Property, Plant and Equipment, Intangible, Assets and Goodwill, Contract Assets, Right-of-Use and Investment Properties This section details the company's property, plant and equipment, intangible assets, goodwill, and right-of-use assets, including their cost, depreciation, and movements 8.1 Property, Plant and Equipment This section details consolidated and parent company property, plant and equipment, including cost, depreciation, and movements, noting an impairment loss at Rumo Malha Sul Consolidated Property, Plant and Equipment (March 31, 2025 vs. January 1, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Cost | 37,399,482 | 39,022,211 | 4.34% | | Depreciation | (14,380,466) | (15,261,522) | 6.13% | | Net Balance | 23,019,016 | 23,760,689 | 3.22% | - Rumo Malha Sul recognized a provision of R$285,608 thousand for impairment due to assets destroyed or rendered unfeasible by extreme weather events[154] 8.2 Intangible Assets and Goodwill This section provides a breakdown of consolidated and parent company intangible assets and goodwill, including cost, amortization, and movements Consolidated Intangible Assets and Goodwill (March 31, 2025 vs. January 1, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Cost | 35,397,804 | 35,937,333 | 1.52% | | Amortization | (9,067,019) | (9,346,945) | 3.09% | | Net Balance | 26,330,785 | 26,590,388 | 0.99% | 8.3 Right-of-Use Assets This section details consolidated and parent company right-of-use assets, including their cost, accumulated amortization, and movements Consolidated Right-of-Use Assets (March 31, 2025 vs. January 1, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Cost | 13,031,936 | 12,446,302 | -4.49% | | Amortization | (3,073,185) | (2,849,495) | -7.30% | | Net Balance | 9,958,751 | 9,596,807 | -3.59% | 9. Income Taxes This section details the company's income tax and social contribution expenses, deferred tax assets and liabilities, and their reconciliation a) Reconciliation of Income Tax and Social Contribution Expenses This section reconciles income tax and social contribution expenses for both parent and consolidated entities, highlighting changes in effective tax rates and tax losses Consolidated Income Tax and Social Contribution (Q1 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :--------- | | Profit (loss) before taxes | (888,863) | 247,907 | -458.55% | | Income tax and social contribution (current and deferred) | (1,046,535) | 15,637 | -6792.69% | | Effective rate - % | 117.74% | 6.31% | 1765.93% | Parent Company Income Tax and Social Contribution (Q1 2025 vs. 2024) | Metric | March 31, 2025 (in thousands of Reais) | March 31, 2024 (in thousands of Reais) | Change (%) | | :------------------------------------------ | :------------------------------------- | :------------------------------------- | :--------- | | Profit (loss) before taxes | (1,128,676) | (662,337) | 70.41% | | Income tax and social contribution (current and deferred) | (659,219) | 470,162 | -2402.10% | | Effective rate - % | 58.41% | (70.99%) | -182.26% | - Consolidated tax losses not recorded amounted to (R$1,058,913) thousand in Q1 2025, a significant increase from (R$67,150) thousand in Q1 2024[158] b) Deferred Income Tax Assets and Liabilities This section presents tax effects of temporary differences giving rise to deferred tax assets and liabilities, showing a decrease for the consolidated entity Consolidated Deferred Tax Assets (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total Deferred Tax Assets | 6,630,831 | 7,624,513 | -12.90% | Consolidated Deferred Tax Liabilities (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Total Deferred Tax Liabilities | (8,901,846) | (9,102,723) | -2.21% | - Consolidated deferred tax assets from income tax losses increased to R$1,757,642 thousand in Q1 2025 from R$1,699,262 thousand in Q4 2024[159] - Consolidated deferred tax liabilities from business combination – intangible assets remained the largest component, at (R$5,016,172) thousand in Q1 2025[159] c) Changes in Deferred Tax Assets and Liabilities This section details changes in deferred tax assets and liabilities for both parent and consolidated entities, showing the impact of income, foreign exchange, and business combinations - Parent Company deferred tax assets increased by R$272,942 thousand due to income for the period, but decreased by R$860,743 thousand due to foreign exchange differences[160] - Consolidated deferred tax assets were credited R$171,557 thousand from income for the period, but reduced by R$1,115,807 thousand due to foreign exchange differences[161] 10. Provision for Proceedings and Judicial Deposits This section details the company's provisions for legal proceedings and judicial deposits, categorized by tax, civil, environmental, regulatory, and labor claims Provisions and Judicial Deposits Overview This section details provisions for legal proceedings and judicial deposits, categorized by tax, civil, environmental, regulatory, and labor claims Consolidated Provision for Lawsuits (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Tax | 802,279 | 745,896 | 7.56% | | Civil, environmental and regulatory | 890,170 | 818,422 | 8.77% | | Labor | 503,769 | 480,315 | 4.88% | | Total | 2,196,218 | 2,044,633 | 7.41% | Consolidated Judicial Deposits (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Tax | 828,550 | 801,723 | 3.35% | | Civil, environmental and regulatory | 136,692 | 134,058 | 1.97% | | Labor | 119,843 | 120,909 | -0.88% | | Total | 1,085,085 | 1,056,690 | 2.69% | a) Probable Losses This section details main tax, civil, environmental, regulatory, and labor proceedings with probable loss risk, including FINSOCIAL and INSS claims Consolidated Probable Tax Losses (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Compensation with FINSOCIAL | 340,505 | 337,351 | 0.94% | | INSS | 110,924 | 101,399 | 9.40% | | PIS and COFINS | 81,205 | 34,412 | 135.97% | | Total | 802,279 | 745,896 | 7.56% | - The Company has probable indemnity lawsuits in addition to those mentioned; as they represent contingent assets, they have not been reported[167] b) Possible Losses This section outlines main lawsuits with possible loss risk, covering tax, civil, environmental, regulatory, and labor claims, with tax claims being the largest Consolidated Possible Losses (March 31, 2025 vs. December 31, 2024) | Category | March 31, 2025 (in thousands of Reais) | December 31, 2024 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Tax | 8,190,560 | 8,815,036 | -7.10% | | Civil, environmental and regulatory | 6,729,481 | 6,569,528 | 2.43% | | Labor | 687,920 | 690,535 | -0.38% | | Total | 15,607,961 | 16,075,099 | -2.84% | - The total amount of assessed and disputed values with tax authorities for which it is likely that the tax authority will accept the uncertain tax treatment was R$6,704,852 thousand as of March 31, 2025[173] 11. Shareholders' Equity This section details the company's shareholders' equity, including treasury share activities and changes in payable dividends a) Treasury Shares This section details the company's treasury share activities, including repurchases and the total number of shares held - As of January 14, 2025, the Company repurchased 4,200,000 treasury shares for R$34,022 thousand at an average cost of R$8.10 per share[176] - As of March 31, 2025, the Company held 7,925,940 shares in treasury, with a market price of R$7.39 per share[176] b) Payable Dividends This section outlines changes in consolidated and parent company dividends payable, reflecting declared and paid amounts Consolidated Dividends Payable (March 31, 2025 vs. January 1, 2025) | Metric | January 1, 2025 (in thousands of Reais) | March 31, 2025 (in thousands of Reais) | Change (%) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :--------- | | Balance as of | 96,722 | 55,086 | -43.04% | | Declared dividends | — | 375,782 | N/A | | Dividends paid to preferred shareholders | — | (371,000) | N/A | | Dividends paid | — | (44,032) | N/A | 12. Earnings Per Share This section presents the calculation of basic and diluted earnings per share for the consolidated entity, showing a significant increase in loss per share Earnings Per Share Calculation This section presents the calculation of basic and diluted earnings per share for the consolidated entity, showing a significant increase in loss per share Consolidated Earnings Per Share (Q1 2025 vs. 2024) | Metric | March 31, 2025 | March 31, 2024 | Change | Change (%) | | :------------------------------------------------ | :------------- | :------------- | :----- | :--------- | | Loss attributable to holders of common shares of the Company used in calculating basic earnings per share (in thousands of Reais) | (1,787,895) | (192,175) | (1,595,720) | 830.34% | | Basic Loss per share (R$) | (R$0.96) | (R$0.10) | (R$0.86) | 860.00% | | Diluted Loss per share (R$) | (R$0.96) | (R$0.10) | (R$0.86) | 860.00% | - The weighted average number of common shares outstanding (basic) was 1,858,633 thousand shares for Q1 2025, down from 1,865,733 thousand shares in Q1 2024[178] - Share repurchases (378,748 shares) were considered diluting instruments for Q1 2025, as they increased the loss per share[179] - Share-based payment plan shares (4,932,983 shares for Q1 2025) were considered anti-dilution instruments as they increased earnings per share[180] 13. Net Sales This section provides a detailed breakdown of the company's consolidated net sales by product and service lines, and timing of revenue recognition Consolidated Net Sales Breakdown This section provides a detailed breakdown of consolidated net sales by product, s