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Cosan's (CZZ) Net Income Improves Y/Y on Solid Sales in Q2

Zacks Equity Research

Cosan Limited’s CZZ adjusted net income totaled R$112.8 million ($28.7 million) in second-quarter 2019 compared with the year-ago tally of R$113.7 million ($31.6 million). Net income significantly surged to R$208.4 million ($53.2 million) from R$22.7($6.3 million) recorded in the year-ago quarter.
Revenues Increase Y/Y

In the reported quarter, Cosan’s net revenues came in at R$19,338.5 million ($4,933 million), reflecting year-over-year growth of 28.3%.

Gross Margins Up Y/Y Despite Higher Costs

Cosan’s cost of sales and services sold in the June-end quarter marked a 27% year-over-year rise to R$16,998.5 million ($4,336 million). It represents 87% of net revenues versus 88% witnessed in the year-ago quarter. Gross profit increased 38.2% year over year to R$2,340 million ($597 million), while gross margin came in at 12% compared with 11.2% witnessed in the comparable period last year.

Selling, general and administrative expenses flared up 20.7% year over year to R$1,064.6 million ($271.5 million), representing 5.5% of net revenues.

Balance Sheet

Exiting the April-June quarter, Cosan’s cash and cash equivalents were R$7,071 million ($1,837.8 million), down from R$7,532 million ($2,279 million) reported at the end of the first quarter of 2019. Loans and borrowings were up 2% to R$33,626 million ($8,739.8 million) from R$32,942 million ($9,967.6 million) as of March-end 2018.

Share Price Performance

Over the past year, Cosan has outperformed its industry with respect to price performance. The stock has soared around 88.3%, while the industry has declined 3.2% during the same time frame.

Zacks Rank & Other Stocks to Consider

Cosan currently sports a Zacks Rank #1 (Strong Buy).

Few other top-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Alamos Gold Inc AGI and Arconic Inc ARNC, all flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of a whopping 140% for 2019. The company’s shares have surged 69.9% over the past year.

Alamos Gold has an outstanding projected earnings growth rate of 280% for the current year. The company’s shares have appreciated 57% in a year’s time.

Arconic has an estimated earnings growth rate of 42.7% for the ongoing year. Its shares have rallied 24.9% in the past year.

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