Cosan S.A. (NYSE:CSAN) Q1 2023 Results Conference Call May 16, 2023 9:00 AM ET

Company Participants

Luis Henrique - CEO

Ricardo Lewin - CFO and IRO

Conference Call Participants

Pedro Soares - BTG Pactual

Guilherme Palhares - Bank of America

Luiz Carvalho - UBS

Gabriel Barra - Citi

Bruno Montanari - Morgan Stanley

André Vidal - XP Investimentos

Regis Cardoso - Credit Suisse

Operator

Good morning, everyone. Thank you for waiting. And welcome to Cosan's Earnings Conference Call for the First Quarter 2023. [Operator Instructions]

This video conference is being recorded and will be made available on the Company's IR Web site at cosan.com.br where the complete material of our earnings call can be found. You can also download the presentation in English from the chat icon. During the Company’s presentation, all participants will have their microphones disabled. The question-and-answer session will start after the presentation.

Please note that, the information contained in this presentation and in statements that maybe made during the earnings call regarding Cosan's business prospects, projections and operating and financial goals constitute the beliefs and assumptions of the Company's management, as well as information currently available. Forward-looking considerations are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Overall economic conditions, market conditions and other operating factors may affect Cosan's future performance and lead to results that differ materially from those expressed in such forward-looking statements.

Today, with us we have Mr. Luis Henrique, CEO; and Mr. Ricardo Lewin, CFO and IRO.

I will now turn it over to Mr. Ricardo.

Ricardo Lewin

Good morning, everyone. And thank you for participating in Cosan's earnings conference call for the first quarter of 2023. We started the year with strong results in the portfolio with contributions from all businesses. Let's now go through the main financials and operational highlights of each business, starting with Raizen on Slide number 3. Since this quarter closes the 2022-2023 record year and Raizen has already held each conference call, I will focus on the highlights for the year. Raizen ended their crop year with expansion in all segments, achieving record global income and adjusted EBITDA of BRL15.3 billion. The year was also marked by the focus on operational excellence, continuity of the renewables expansion cycle and record E2G production in the pilot plant reaching 30 million liters. In the renewables segment, EBITDA increase reflected the sales expansion, highlighting the increasing global customers for both industrial and fuel applications. We have also significantly advanced it in the power agenda. We became the fifth largest energy trader in Brazil with more than 24,000 connected customers. In sugar, the year’s result was boosted by the greater volume sold with higher prices due to better pricing amid a more positive scenario for the commodity, which compensated the pressure on margins due to higher costs. Marketing and service EBITDA also present growth considering the impact of the tax credit in the period. In Brazil, sales remained stable and the operation was affected by better operational margins nesides pressure from business environment due to greater supply of products on the market and inventory losses. Latm operations, the year was marked by an increase in volume, market share and profitability despite a complex macroeconomic scenario and a scheduled stoppage of the refinery in Argentina.