an S.A.(US:CSAN)2021-08-16 18:13Financial Data and Key Metrics Changes - Cosan reported a significant increase in adjusted EBITDA, with pro forma EBITDA and net income showing strong growth compared to the second quarter of 2020 [25][26]. - The company's leverage reduced to 2.8 times net debt-to-EBITDA, approaching the ideal range of 2 to 2.5 times for the group [26][28]. - Free cash flow to equity reached almost R$800 million, supported by improved operating cash flow despite seasonal working capital impacts [28]. Business Line Data and Key Metrics Changes - Raízen's adjusted EBITDA more than doubled year-on-year, driven by higher biofuel prices and increased sales volume despite lower production due to adverse weather [10][11]. - The sugar segment also saw adjusted EBITDA more than double, supported by a favorable commodity cycle and effective pricing strategies [11]. - Compass experienced robust growth in adjusted EBITDA, although there was a quarter-over-quarter reduction due to lower gains from supply and commercialization strategies [15][18]. - Moove's lubricants business reported significant EBITDA expansion, benefiting from increased sales volumes across all geographies [21]. Market Data and Key Metrics Changes - The demand for fuel in Brazil and Argentina increased due to the resumption of economic activity and vaccination progress, leading to market share growth for Cosan [14][15]. - Comgás reported growth in distributed volumes across all segments, particularly in industrial consumption, due to higher demand from various sectors [17]. Company Strategy and Development Direction - Cosan aims to enhance its capital structure by listing subsidiaries at the right moment, with Raízen's IPO being a significant step [8]. - The company is focused on expanding its renewable energy offerings and has made strategic acquisitions, such as Biosev and a leading fuels network in Paraguay [13][16]. - Cosan is committed to sustainability and has made significant progress in its EESG agenda, including the development of second-generation ethanol and biomethane [30][32]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the vaccination process in Brazil and its positive impact on business volumes, despite concerns regarding the Delta variant [39]. - The company is focused on building strong foundations for future growth, emphasizing the importance of regulatory certainty and infrastructure investment [56][62]. Other Important Information - Cosan's corporate structure has been simplified, and the company is actively managing its liabilities, including a recent issuance of R$2 billion in long-term debentures [26][28]. - The company has made strides in diversity and governance, receiving recognition for its ESG practices [30][32]. Q&A Session Summary Question: Future growth and capital allocation for the group - Management highlighted solid growth plans across all business lines, with a focus on synergies and decarbonization efforts [41][43][48]. Question: Acquisition of Gaspetro and regulatory concerns - Management acknowledged the complexities surrounding the acquisition and expressed optimism about regulatory developments favoring privatization [42][49][50]. Question: Regulatory discussions and competitive landscape - Management emphasized the need for regulatory certainty to encourage infrastructure investment and maintain competitive markets [55][62]. Question: Compass's significant loss and future business plan - Management clarified that the loss was due to market volatility, and the focus will shift to balanced trading strategies moving forward [69][76]. Question: Cosan's role and capital allocation strategy - Management indicated that Cosan will continue to support its subsidiaries while exploring buybacks and liability management as part of its capital allocation strategy [75][82].