Brazilian sugar and ethanol producer, Cosan Limited (CZZ) released its fourth quarter and fiscal year 2012 financial results on May 30. Fourth quarter net income plummeted 66% to R$102.5 million (US$57.9 million).
In the fiscal year 2012, the company registered a 151% year-over-year increase with net income settling at R$1,181.3 million (US$699.0 million).
Cosan’s net operating revenue jumped 25.7% year over year to R$5,793.9 million (US$3,273.4 million).
Sugar revenue in the quarter decreased 32.4% to R$665.6 million (US$376.0 million) in the quarter while Ethanol sales went down by 25.0% to R$501.5 million (US$283.3 million).
In the fiscal year 2012, total revenue settled at R$24,096.9 million (US$14,258.5 million), an increase of 33.4% year over year. However, results failed to gain momentum and lagged behind the Zacks Consensus Estimate of US$24,033 million.
In the fiscal year 2012, sugar production inched up 1.2% year over year to 3.969 million tons. However, adverse weather conditions in the fourth quarter resulted in a 2.4% decline in crushed sugar volume. All of the 24 mills remained closed in the fourth quarter registering nil crushed volumes.
Cost of goods, as a percentage of revenue, soared 13.6 percentage points to 88.9% and also registered a 48.4% increase year over year, leading to gross margin of 11.1% in the fourth quarter. Selling and general and administrative expenses, as a percentage of revenue, plummeted 80 basis points to 8.4%. Operating margins declined 13.2% percentage points to 2.5% in the quarter.
Balance Sheet/Cash Flow
Exiting the fourth quarter of 2012, Cosan’s cash and cash equivalents (including restricted cash) increased 27.5% sequentially to R$1,748.4 million (US$960.7 million) while long-term debt increased 1.5% to R$4,659.2 million (US$2,560.0 million).
Cash flow from operations in the quarter was $1,174.3 million (US$663.4 million), down 23.8% year over year. Capital spending went down by 46.0% to R$503.4 million (US$284.4 million).
For fiscal year 2013, management anticipates that consolidated net revenue would be in the range of R$26.0-R$29.0 billion; EBITDA in the range of R$2.2-R$2.5 billion and capital expenditure in the range of R$2.1-R$2.4 billion.
Raizen Energia: For the fiscal year 2013, management expects crushed sugarcane volumes to range within 52-55 million tons, sugar volume sold within 3.9-4.2 million tons, and ethanol volume sold within 1.85-2.05 billion litres. Volume of energy sold is expected to range within 1.65-1.85 million MW. EBITDA is likely to be within R$2.2-R$2.5 billion range.
Raizen Combustiveis: For the fiscal year 2013, management expects fuel volume sold to be within the 21.0-23.0 billion litre range and EBITDA to be within R$1.3-R$1.5 billion range.
Rumo: For the fiscal year 2013, management feels that volume of loading would range within 8.0-10.0 million tons and EBITDA in the range of R$0.28-R$0.31 billion range.
Other Business: For the fiscal year 2013, management estimates volume of lubricants and base oil sold to be within 0.22-0.26 billion litres.Read the Full Research Report on CZZ
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