an S.A.(US:CSAN)2019-08-13 19:09Financial Data and Key Metrics Changes - Cosan reported consolidated EBITDA growth despite economic slowdown, with a focus on portfolio diversification [6] - Adjusted EBITDA totaled R$402 million in the quarter, down 18% from Q2 2018, mainly due to reduced sugar and bioenergy volumes [22] - Pro forma gross debt rose by 7% in the quarter, with a leverage ratio of 2.2 times net debt to EBITDA [33] Business Line Data and Key Metrics Changes - Raízen Combustíveis saw an 8% increase in sales volume and a 5% increase in EBITDA, reflecting solid operations [10] - Raízen Energia's sugar production mix prioritized ethanol, with ethanol sales up 8% and average prices rising by 9% compared to the previous year [18] - Comgás reported a 3% increase in natural gas sales across all segments, with normalized EBITDA up 19% due to increased volume sold [27] Market Data and Key Metrics Changes - In Argentina, diesel and gasoline sales were approximately 5% lower than in Q2 2018, while aviation fuel volume grew nearly 20% year-over-year [15] - The average sugarcane yield was 9.3 kilos of TRS per hectare, with a focus on maximizing higher return products [16] - The price scenario for sugar remains pressured, particularly due to expected strong crop years in India [24] Company Strategy and Development Direction - The company is focusing on expanding its convenience store business through a joint venture with Femsa, aiming to add 500 new stores [8] - Investments in Raízen increased by 30% to R$630 million, aimed at renewing sugarcane fields to enhance agricultural yield [25] - The company is exploring opportunities in the natural gas market, leveraging its existing operations in Comgás [44] Management's Comments on Operating Environment and Future Outlook - Management confirmed guidance for the year despite economic volatility in Argentina, emphasizing stability in EBITDA [40] - The second half of the year is expected to show a rebound in margins for Raízen Combustíveis, although the focus is now on the lower end of guidance [43] - The company reiterated its commitment to optimizing sugarcane fields and maintaining productivity to meet EBITDA guidance [57] Other Important Information - The completion of the fourth tariff review cycle for Comgás has restored regulatory stability and improved the business environment [26] - The company paid R$392 million in dividends to shareholders in May 2019 [33] Q&A Session Summary Question: Impact of currency depreciation in Argentina on fuel pricing and EBITDA guidance - Management stated that the company will adjust prices in peso terms, confirming guidance for the year despite economic volatility [39][40] Question: Distribution margins in Brazil for Raízen Combustíveis - Management noted that the second quarter typically sees margin impacts due to ethanol pricing, with expectations for a rebound in the second half [41][43] Question: Potential investments in new businesses, particularly in natural gas - Management indicated that Cosan is exploring opportunities in the natural gas market, leveraging its existing operations in Comgás [44] Question: Expectations for the JV with FEMSA - Management outlined plans for the JV to develop convenience stores and proximity markets, aiming to add 500 new stores [52] Question: Perspectives for sugar and ethanol business - Management reiterated guidance for the full crop year, focusing on efficient planting and harvesting to achieve productivity [57]