UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
of the Securities Exchange Act of 1934
For the month of November, 2019
Commission File Number: 1-33659
COSAN LIMITED
(Translation of registrant’s name into English)
Av. Brigadeiro Faria Lima, 4100, – 16th floor
São Paulo, SP 04538-132 Brazil
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F X | Form 40-F |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes | No X |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes | No X |
3Q19 Earnings Release
São Paulo, November 13, 2019–COSAN LIMITED (“CZZ” or “Company”) (NYSE: CZZ)announces today its results for the third quarter (July, August, and September) of 2019 (3Q19). The results are presented on a consolidated basis, in accordance with the accounting practices adopted in Brazil and with International Financial Reporting Standards (IFRS). Comparisons in this report take into consideration 3Q19 and 3Q18, except where indicated differently.
Summary of Financial Information
Executive Summary—Cosan Pro forma¹ | 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | |||||||||||||||
BRL mln | (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | |||||||||||||||
Net Revenue | 20,866.2 | 17,219.3 | 21.2 | % | 19,338.5 | 7.9 | % | |||||||||||||
Gross profit | 2,755.8 | 1,983.1 | 39.0 | % | 2,340.0 | 17.8 | % | |||||||||||||
EBIT | 2,313.8 | 1,046.3 | n/a | 1,351.8 | 71.2 | % | ||||||||||||||
EBITDA² | 3,373.3 | 1,872.6 | 80.1 | % | 2,313.3 | 45.8 | % | |||||||||||||
Adjusted EBITDA³ | 2,590.2 | 2,147.2 | 20.6 | % | 2,040.5 | 26.9 | % | |||||||||||||
Net Income | 560.8 | 63.0 | n/a | 208.4 | n/a | |||||||||||||||
Adjusted Net Income | 135.1 | 191.9 | -29.6 | % | 105.2 | 28.5 | % | |||||||||||||
Note 1: Considering 50% of the results of Raízen Combustíveis and Raízen Energia.
Note 2: As of 1Q18, EBITDA excludes asset amortization arising from contracts with clients at Raízen Combustíveis.
Note 3: Adjusted EBITDA and Net Income does not includenon-recurring effects in Cosan S.A., as detailed in its earnings release.
Message from the CEO
Is Brazil ready to grow for real? Yes, but not yet.US-China trade war will probably converge to an agreement at least regarding import tariffs, as both governments fear recession and its political consequences. Some argue impacts to date are limited and delayed effects are not attracting much attention. Ano-deal Brexit also seems unlikely. Meanwhile, Brazilian congress approved Pension reform, opening room for further interest rate cuts and announcement of a broader reform pack, targeting fiscal and administrative issues, and paving the way for growth to finally unfold. But although signs of recovery were present, overall economic indicators in 3Q do not reflect that, at least not yet.
CZZ consolidated adjusted EBITDA increased 20% yearly in 3Q19, mostly driven by better results at Rumo, Comgás and Raízen Energia. Record-high corn crop in Brazil combined with favorable commercial conditions for the commodity boosted exports throughout the quarter and contributed to increase in transported volume by Rumo. Sugar hedging strategy along with higher ethanol volumes and prices allowed Raízen Energia to present better results. Comgás and Moove keep delivering great results on the back of expansion strategy and mix. Raízen Combustíveis also delivered decent increase in sales volumes, with sequential improvement in business environment translating into growing results. Fuel price freeze announced by the Argentinean government last August resulted in US$55 million inventory loss, hurting Raízen Argentina performance.
CZZ tendered USD 159 million worth of shares.From outstanding cash position of ~USD 350 million post liability management/tender offer, CZZ acquired additional R$ 14 million worth of CSAN3 shares in the market and CSAN3 cancelled 4.7 million shares outstanding. CZZ therefore increased its stake to 60.1% of Cosan S.A. reinforcing our high-conviction in the intrinsic value of our portfolio. Raízen’s sale of 50% stake of its Convenience stores business in Brazil to FEMSA (at R$ 1.12 billion implied EV) was concluded during the quarter and Rumo signedNorte-Sul concession contract.
We remain confident in delivering 2019 consolidated guidance for energy and logistics, established earlier in the year on the basis of higher GDP forecasts.Slower-than-expected economic rebound, postponing industrial activity recovery and fuel sales pick up will likely be compensated by good results from Raízen Energia and above-originally expected results at Moove and Comgás, while Rumo ison-track regarding performance. And we keep on finding alternatives beyond recurring results to increase further Consolidated EBITDA, earnings and free cash generation—Cosan S.A. sale of R$400 million in credit rights is a good example.
Marcos Marinho Lutz
CZZ CEO
Investor Relations E-mail: ri@cosan.com.br Tel: +55 11 3897-9797 | +1 646 849-9960 Website: ir.cosanlimited.com |  |
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Business Units
Cosan S.A. (B3: CSAN3) and Cosan Logística S.A. (B3: RLOG3), companies controlled by the Company,reported its results on November 11, 2019 and November 12, 2019, respectively. Its Earnings Releases containing the comments from the main financial and operational information, besides its Financial Statements, can be found at the websites below:
| • | Cosan S.A. (CSAN3): ir.cosan.com.br |
| • | Cosan Logística (RLOG3): ir.cosanlogistica.com |
Cosan S.A. and Cosan Logística S.A. business units that compose Cosan Limited and interest in each reportable segment are shown below:
| • | Cosan S.A. (CSAN3) (60%) |
| Raízen Combustíveis (50%) | Fuel Distribution & Downstream Argentina | |
| Raízen Energia (50%) | Sugar, Ethanol & Bioenergy Production and Commercialization | |
| Comgás (99%) | Natural Gas Distribution | |
| Moove (70%) | Lubricants, Base Oils & Specialties | |
| Cosan Corporativo (100%) | Corporate and Other Investments |
| • | Cosan Logística S.A. (RLOG3) (73%) |
| Rumo S.A. (RAIL3) (28%) | Logistics Operator |
Executive Summary 3Q19
Macroeconomic environment is improving in Brazil, but GDP increase has been mild so far, despite falling interest and unemployment rates and lower inflation. This notwithstanding, Otto-cycle sales posted sequential and yearly significant improvements, 3% and 6% respectively. The quarter was also marked by Brazilian real devaluation against the US dollar and fluctuations in international oil and agricultural commodities prices.
CZZ pro forma adjusted EBITDA expanded 20% in 3Q19, reaching R$ 2.6 billion, with positive contributions from the businesses, highlighting Comgás, Raízen Energia and Rumo. Net Income totaled R$ 561 million, up almost 9x from 3Q18, and Adjusted Net Debt/EBITDA closed the quarter at 2.1x.
Cosan S.A. (CSAN3):
Cosan S.A. Proforma: The pro forma adjusted EBITDA reached R$1.6 billion (+30%) in 3Q19,reflecting better results at Comgás, Raízen Energia and Moove. Net income reached R$819 million, including a nonrecurring gain from the sale of credit rights at Cosan. Operating cash generation totalled R$1.4 billion in the period, Leverage (net debt/pro forma EBITDA, normalized by Comgás’ Regulatory Account and lease effects—IFRS 16) fell to 1.9x at the end of 3Q19.
Raízen Combustíveis
RC Brazil: Adjusted EBITDA reached R$640 million(-6%) in 3Q19, negatively affected by fuel price fluctuations during the quarter, pressuring inventory management. This effect was partially offset by sales expansion. Sales volume increased 5% in 3Q19 reflecting Otto cycle volume growth (+7%), measured in gasoline equivalent. Diesel volume came in 6% higher, again reflecting higher demand from clients, particularly in agribusiness.When compared to 2Q19, adjusted EBITDA rose 13%, bolstered by higher volume sold (+6%) and improving business environment. Andwhen considering thenon-recurring effects, EBITDA reached R$772 million (+37%) in 3Q19.
RC Argentina: Adjusted EBITDA totaled US$6 million (R$21 million) in 3Q19, as fuel price freeze announced by the Argentinean federal government in August 2019 resulted in US$55 million (R$227 million) worth of inventory loss in the period. Despite the political and economic turmoil in Argentina, total sales volume came in 14% higher than in 2Q19, with a processed volume of 84 kbpd (refining utilization ratio of 73%).
Raízen Energia: Adjusted EBITDA reached R$848 million (+32%) in 3Q19, driven by increased sales volume of own ethanol at higher sales prices, combined with improvement in the realized price of sugar, following successful hedging strategy. These effects were partially offset by lower volumes of sugar sold, in line with the crop commercialization strategy. The volume of processed sugarcane totaled 26.7 million tons (+10%) in 3Q19, with a 4% recovery of agricultural yields, offsetting the delay in the 2019/20 harvest. Unit cash cost of own products sales was mainly affected by an increase in CONSECANA in the period.
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Comgás: Normalized adjusted EBITDA stood at R$653 million (+20%) in 3Q19, driven by higher volume sold in the residential segment and margins adjusted by inflation. Industrial segment sales were affected by adverse events impacting large clients demand. Residential segment’s higher sales volume reflected the addition of 92,000 clients in the last 12 months. 765 clients were added to the commercial segment base, partially offsetting lower demand from large consumers.
Moove: Adjusted EBITDA reflects another quarter of robust growth across all regions, totaling R$80 million (+33%) in the quarter.3Q19 higher performance was due to higher sales volume (+16%) in Brazil and abroad, following the maturation of international operations.
Cosan Logística S.A. (RLOG3):
Rumo’s transported volumes increased 8% during 3T19 when compared to same period last year reaching 17 Billion RTK.Record-high corn crop in Brazil combined with favorable commercial conditions for the commodity and a stronger USD boosted exports throughout the quarter. Operational performance enabled record transported volumes in July (6 bln RTK). August was also a good month. September, however, was negatively affected by above-average rains along the coast hitting port operations and operational restrictions due to accidents along the railway. North operations transported volumes increased 10% yearly, 22% in July alone, reflecting corn exports and fertilizers’ back hauling, which totaled 2 billion RTKyear-to-date. In fact, our growth was capped by capacity constraints, as market volumes were even stronger, translating into lower market share (55%) in Santos Port. South operations grew only 1%, being the main highlight the 14% increase in fuels transportation, which was partially offset by weaker performance of agricultural products, particularly sugar. Strong corn crop is expected to secure volumes for 4Q19 while record-high soybean crop forecasts for Brazil in general, and Mato Grosso in particular, call for good exports next year.
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Rumo EBITDA (including IFRS 16) reached R$ 1,206 million (+18%) in 3Q19 with 59% EBITDA margin (+4 p.p.).Stronger results reflect higher transported volumes and further efficiency gains reflected in both costs and expenses. Variable costs increased only 1% on the back of continued efforts to reduce fuel consumption(-6% liters/TKB). In turn, operational leverage allowed fixed costs to increase 4%, well below volume expansion plus inflation, resulting in EBITDA margin expansion. Net profit reached R$ 369 million in 3Q19, 61% higher compared to last year figures. FCFF totaled 489 million, following strong operational performance and lower investments in the period, causing Net Debt/EBITDA to close the quarter at 1.8x. (broad leverage adjusted for IFRS16).
The following tables present the key operating and financial metrics of our businesses. Historical data for the information presented can be found on our Investor Relations website (ir.cosanlimited.com) in the Results Center.
Main Operational and Financial Metrics
Raízen Combustíveis—Brazil
| 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | ||||||||||||||||
| (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | ||||||||||||||||
Otto Cycle Volume (Gasoline+ Ethanol) (‘000 cbm) | 3,049 | 2,856 | 7 | % | 2,977 | 3 | % | |||||||||||||
Gasoline Equivalent4Volume (‘000 cbm) | 2,746 | 2,566 | 7 | % | 2,675 | 3 | % | |||||||||||||
Diesel Volume (‘000 cbm) | 3,346 | 3,158 | 6 | % | 3,094 | 8 | % | |||||||||||||
Adjusted EBITDA Margin5 (BRL/cbm) | 91 | 102 | -11 | % | 85 | 7 | % | |||||||||||||
Adjusted EBIT5 (BRL/cbm) | 63 | 76 | -17 | % | 56 | 13 | % | |||||||||||||
Note 4: Sum of gasoline and ethanol volumes, adjusted by the energy coefficient of 0.7221.
Note 5: Excludes asset sale and othernon-recurring items. From 1Q18 onwards includes asset amortization arising from contracts with clients.
Raízen Combustíveis – Argentina
| 3Q19 | 2Q19 | Var.% | ||||||||||
| (Jul-Sep) | (Apr-Jun) | 3Q19x2Q19 | ||||||||||
Processed Volume (‘000 BBL/day) | 84 | 88 | -5 | % | ||||||||
Total Volume Sold (‘000 cbm) | 1,696 | 1,490 | 14 | % | ||||||||
EBITDA (USD mIn) | 6 | 47 | -88 | % | ||||||||
Raízen Energia
Indicators | 3Q19 | 3Q18 | Chg.% | ||||||||||||
| (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | |||||||||||||
Sugarcane Crushed (mln mt) | 26.7 | 24.3 | 10 | % | |||||||||||
TRS/ha | 9.9 | 9.6 | 4 | % | |||||||||||
Sugar/Ethanol Production Mix | 50% x 50% | 49% x 51% | n/a | ||||||||||||
Adjusted EBITDA6 (BRL mln) | 848 | 641 | 32 | % | |||||||||||
Note 6: Excludes effects from biological assets variation, debt hedge accounting effects, foreign exchange hedge on sugar exports and nonrecurring gains/losses where applicable.
Comgás
| 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | ||||||||||||||||
| (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | ||||||||||||||||
Total Sales Volume (cbm)Ex-Thermal | 1,147 | 1,209 | -5 | % | 1,144 | 0 | % | |||||||||||||
Normalized EBITDA7 (BRL mln) | 653 | 546 | 20 | % | 583 | 12 | % | |||||||||||||
IFRS EBITDA (BRL mln) | 761 | 388 | 96 | % | 679 | 12 | % | |||||||||||||
Note 7: Includes the effect from the regulatory Current Account.
Moove
| 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | ||||||||||||||||
| (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | ||||||||||||||||
Total Sales Volume8 (‘000 cbm) | 106 | 92 | 16 | % | 102 | 5 | % | |||||||||||||
EBITDA (BRL mln) | 80 | 60 | 33 | % | 78 | 3 | % | |||||||||||||
Note 8: Considering the volume sold of lubricants and base oil.
Rumo
| 3Q18 | 3Q19 | Chg. % | 9M18 | 9M19 | Chg. % | |||||||||||||||||||
Operating and Financial Performance Index | (Jul-Sep) | (Jul-Sep) | 3Q18/3Q19 | (Jan-Sep) | (Jan-Sep) | 9M18/9M19 | ||||||||||||||||||
Consolidated | ||||||||||||||||||||||||
Operating ratio9 | 66 | % | 65 | % | -1.5 | % | 69 | % | 70 | % | 0.9 | % | ||||||||||||
Diesel consumption (liters/ ‘000 GTK) | 4.1 | 3.8 | -6.2 | % | 4.2 | 4.0 | -5.5 | % | ||||||||||||||||
Rail accidents (MM Train/Km) | 15.2 | 17.0 | 12.3 | % | 15.0 | 17.0 | 13.6 | % | ||||||||||||||||
Personal accidents (accidents /MM MHW) | 0.4 | 0.5 | 17.4 | % | 0.6 | 0.5 | -16.2 | % | ||||||||||||||||
North Operation | ||||||||||||||||||||||||
Cycle of railcars (days) | 9.3 | 9.1 | -2.2 | % | 10 | 11 | 7.0 | % | ||||||||||||||||
South Operation | ||||||||||||||||||||||||
Cycle of railcars (days) | 7.0 | 7.0 | 0.0 | % | 7.7 | 7.9 | 2.6 | % | ||||||||||||||||
Note 9: Operating Ratio calculation considers proportional allocation of part of 4Q16 depreciation in prior quarters from the same year.
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Cosan Corporate Results
The following table provides a breakdown of the 3Q19 results by business unit for all segments detailed previously. All information reflects 100% of their financial performance, regardless of the interest held by Cosan. For the purpose of reconciling EBITDA in the column “Cosan S.A. Accounting”, the “Adjustments & Eliminations” column reflects the eliminations from operations among all Cosan subsidiaries for consolidation purposes.
Earnings by Business Unit10 | Raízen Combustíveis | Raízen Energia | Comgás | Moove | Cosan S.A. Corporate | Deconsolidation Raízen | Adjustments and Elimination | Cosan S.A. Accounting | Cosan Logistica | Cosan Limited Corporate | Adjustments and Elimination | CZZ | ||||||||||||||||||||||||||||||||||||
3Q19 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue | 25,544.0 | 7,698.7 | 2,585.5 | 1,100.7 | 0.0 | (33,242.6 | ) | 0.0 | 3,686.3 | 2,059.9 | 0.0 | (14.9 | ) | 5,731.2 | ||||||||||||||||||||||||||||||||||
Cost of Goods and Services Sold | (24,501.0 | ) | (7,162.7 | ) | (1,666.2 | ) | (875.2 | ) | (0.0 | ) | 31,663.7 | (0.0 | ) | (2,541.4 | ) | (1,238.3 | ) | (0.0 | ) | 14.9 | (3,764.8 | ) | ||||||||||||||||||||||||||
Gross Profit | 1,042.9 | 536.0 | 919.3 | 225.5 | 0.0 | (1,578.9 | ) | — | 1,144.8 | 821.5 | (0.0 | ) | — | 1,966.4 | ||||||||||||||||||||||||||||||||||
Gross Margin (%) | 4.1 | % | 7.0 | % | 35.6 | % | 20.5 | % | 37.0 | % | 4.7 | % | 0.0 | % | 31.1 | % | 39.9 | % | -39,5 | % | — | 34,3 | %! | |||||||||||||||||||||||||
Selling Expenses | (554.1 | ) | (209.9 | ) | (154.5 | ) | (136.5 | ) | (3.0 | ) | 763.9 | — | (294.0 | ) | (6.6 | ) | (0.0 | ) | �� | — | (300.6 | ) | ||||||||||||||||||||||||||
General and Administrative Expenses | (165.6 | ) | (172.3 | ) | (98.3 | ) | (45.1 | ) | (76.6 | ) | 337.9 | — | (220.0 | ) | (98.5 | ) | (17.6 | ) | — | (336.0 | ) | |||||||||||||||||||||||||||
Other Operating Income (Expenses) | 333.4 | 84.2 | (18.2 | ) | (0.1 | ) | 519.6 | (417.6 | ) | — | 501.2 | 35.5 | 0.0 | — | 536.7 | |||||||||||||||||||||||||||||||||
EquityPick-up | (0.0 | ) | 1.2 | — | (0.0 | ) | 558.7 | (1.2 | ) | (408.8 | ) | 150.0 | 7.7 | 530.0 | (529.9 | ) | 157.9 | |||||||||||||||||||||||||||||||
Depreciation and Amortization | 193.9 | 721.8 | 112.8 | 36.2 | 2.6 | (915.7 | ) | — | 151.6 | 442.9 | 0.3 | — | 594.8 | |||||||||||||||||||||||||||||||||||
EBITDA | 850.5 | 961.0 | 761.1 | 80.0 | 1,001.3 | (1,811.6 | ) | (408.8 | ) | 1,433.7 | 1,202.5 | 512.8 | (529.9 | ) | 2,619.1 | |||||||||||||||||||||||||||||||||
EBITDA Margin (%) | 3.3 | % | 12.5 | % | 29.4 | % | 7.3 | % | n/a | 5.4 | % | n/a | 38.9 | % | 58.4 | % | n/a | n/a | 45,7 | %! | ||||||||||||||||||||||||||||
Financial result | (160.2 | ) | (193.5 | ) | (26.7 | ) | (50.7 | ) | (56.8 | ) | 353.7 | — | (134.2 | ) | (300.1 | ) | 49.9 | (103.9 | ) | (488.2 | ) | |||||||||||||||||||||||||||
Income and Social Contribution Taxes | (197.5 | ) | 1.7 | (202.4 | ) | (1.9 | ) | (124.0 | ) | 195.8 | — | (328.3 | ) | (94.1 | ) | (0.4 | ) | 35.3 | (387.5 | ) | ||||||||||||||||||||||||||||
Non-controlling Interest | (14.9 | ) | (28.3 | ) | — | (0.9 | ) | 1.0 | 43.1 | (0.9 | ) | (0.7 | ) | (264.6 | ) | (1.2 | ) | (321.2 | ) | (587.8 | ) | |||||||||||||||||||||||||||
Net Income | 284.0 | 19.2 | 419.2 | (9.6 | ) | 818.9 | (303.2 | ) | (409.6 | ) | 818.9 | 100.8 | 560.8 | (919.7 | ) | 560.8 | ||||||||||||||||||||||||||||||||
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Earnings by | Raízen Combustíveis | Raízen Energia | Comgás | Moove | Cosan S.A. Corporate | Deconsolidation Raízen | Adjustments and Elimination | Cosan S.A. Accounting | Cosan Logistica | Cosan Limited Corporate | Adjustments and Elimination | CZZ | ||||||||||||||||||||||||||||||||||||
9M19 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue | 73,816.2 | 20,902.8 | 6,984.4 | 3,139.5 | 0.3 | (94,719.0 | ) | -0.0 | 10,124.2 | 5,423.5 | — | (23.5 | ) | 15,524.3 | ||||||||||||||||||||||||||||||||||
Cost of Goods and Services Sold | (70,416.4 | ) | (19,504.1 | ) | (4,716.0 | ) | (2,486.5 | ) | (0.0 | ) | 89,920.6 | 0.0 | (7,202.5 | ) | (3,532.5 | ) | — | 23.5 | (10,711.5 | ) | ||||||||||||||||||||||||||||
Gross Profit | 3,399.8 | 1,398.7 | 2,268.4 | 653.1 | 0.3 | (4,798.5 | ) | — | 2,921.7 | 1,891.1 | — | — | 4,812.8 | |||||||||||||||||||||||||||||||||||
Gross Margin (%) | 4.6 | % | 6.7 | % | 32.5 | % | 20.8 | % | 89.7 | % | 5.1 | % | 0.0 | % | 28.9 | % | 34.9 | % | n/a | — | 31.0 | % | ||||||||||||||||||||||||||
Selling Expenses | (1,613.4 | ) | (617.5 | ) | (455.9 | ) | (369.3 | ) | (5.2 | ) | 2,231.0 | — | (830.3 | ) | (2.2 | ) | — | — | (832.6 | ) | ||||||||||||||||||||||||||||
General and Administrative Expenses | (480.6 | ) | (447.7 | ) | (271.4 | ) | (122.5 | ) | (160.4 | ) | 928.3 | — | (554.2 | ) | (270.1 | ) | (52.7 | ) | — | (877.2 | ) | |||||||||||||||||||||||||||
Other Operating Income (Expenses) | 760.1 | 132.7 | 2.7 | (0.0 | ) | 523.9 | (892.8 | ) | — | 526.6 | 8.4 | 0.0 | — | 535.0 | ||||||||||||||||||||||||||||||||||
EquityPick-up | — | (3.1 | ) | — | 0.9 | 1,453.2 | 3.1 | (970.2 | ) | 483.9 | 16.3 | 1,022.2 | (1,022.3 | ) | 500.4 | |||||||||||||||||||||||||||||||||
Depreciation and Amortization | 567.0 | 2,076.6 | 343.4 | 77.3 | 9.4 | (2,643.6 | ) | — | 430.2 | 1,282.3 | 1.0 | — | 1,713.5 | |||||||||||||||||||||||||||||||||||
EBITDA | 2,632.8 | 2,539.6 | 1,887.3 | 239.5 | 1,821.2 | (5,172.4 | ) | (970.2 | ) | 2,977.8 | 2,925.8 | 970.5 | (1,022.3 | ) | 5,851.9 | |||||||||||||||||||||||||||||||||
EBITDA Margin (%) | 3.6 | % | 12.1 | % | 27.0 | % | 7.6 | % | n/a | 5.5 | % | n/a | 29.4 | % | 53.9 | % | n/a | n/a | 37.7 | % | ||||||||||||||||||||||||||||
Financial result | (357.0 | ) | (592.5 | ) | (116.1 | ) | (40.7 | ) | (89.9 | ) | 949.5 | — | (246.6 | ) | (883.2 | ) | 2.2 | (199.0 | ) | (1,326.6 | ) | |||||||||||||||||||||||||||
Income and Social Contribution Taxes | (514.1 | ) | 65.5 | (482.2 | ) | (34.8 | ) | (90.0 | ) | 448.6 | — | (607.0 | ) | (183.5 | ) | (3.2 | ) | 67.7 | (726.2 | ) | ||||||||||||||||||||||||||||
Non-controlling Interest | (50.0 | ) | (42.7 | ) | — | (2.5 | ) | 1.0 | 92.7 | (59.7 | ) | (61.1 | ) | (418.3 | ) | (9.1 | ) | (637.8 | ) | (1,126.2 | ) | |||||||||||||||||||||||||||
Net Income | 1,144.6 | (106.6 | ) | 945.6 | 84.2 | 1,632.9 | (1,038.0 | ) | (1,029.8 | ) | 1,632.9 | 158.5 | 959.4 | (1,791.4 | ) | 959.4 | ||||||||||||||||||||||||||||||||
Note 10: As of 1Q18, the results of Cosan and its Business Units were impacted by the adoption of the new accounting standards (IFRS 15 and IFRS 9), as detailed in the quarterly financial statements as of March 31, 2018
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Loans and Financing
In September 30, 2019, Cosan Limited’s (CZZ Corporate) gross debt totaled R$ 3.7 billion, compared to R$ 1.9 billion in 2Q19. Cash and cash equivalents came to R$ 1.4 billion in 3Q19, compared to R$ 365 million at the close of the 2Q19. The increase in both CZZ Corporate gross debt and cash position in the end of the quarter reflects the liability management performed by the Company, with the issuance of USD 750 million in Bonds due to 2029, partially offset by the tender of approximately USD 300 million of Bond 2024.
CZZ Corporate’s net debt ended the period at R$ 2.2 billion(ex-IRFS 16).
Loans and Financing 3Q19 BRL mln | Comgás | Moove | Cosan S.A. Corporate | Cosan S.A. Consolidated | Raízen Energia (50%) | Raízen Combustíveis (50%) | Cosan S.A. Consolidated Pro forma | Cosan Logística | Cosan Limited Corporate | CZZ Pro forma | ||||||||||||||||||||||||||||||
Opening balance of pro forma net debt | 1,041.3 | 102.3 | 4,692.3 | 5,835.9 | 4,274.7 | 1,876.7 | 11,987.3 | 6,877.6 | 1,494.1 | 20,359.0 | ||||||||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | 2,157.0 | 634.4 | 1,510.9 | 4,302.2 | 1,402.2 | 917.8 | 6,622.2 | 2,539.6 | 365.3 | 9,527.1 | ||||||||||||||||||||||||||||||
Gross Debt | 3,198.3 | 736.6 | 6,203.1 | 10,138.1 | 5,676.8 | 2,794.6 | 18,609.5 | 9,417.2 | 1,859.4 | 29,886.1 | ||||||||||||||||||||||||||||||
Cash items | (239.1 | ) | (17.3 | ) | (171.4 | ) | (427.9 | ) | 403.7 | 175.7 | 151.5 | (490.3 | ) | 1,519.8 | 1,224.1 | |||||||||||||||||||||||||
Funding | 1.8 | 0.2 | 8.7 | 10.8 | 495.3 | 245.1 | 751.2 | 0.1 | 2,812.0 | 3,563.3 | ||||||||||||||||||||||||||||||
Payment of principal on loans and borrowings | (255.3 | ) | (15.4 | ) | — | (270.7 | ) | (42.7 | ) | (47.8 | ) | (361.1 | ) | (202.4 | ) | (1,190.7 | ) | (1,754.2 | ) | |||||||||||||||||||||
Payment of Interest on loans borrowings | (23.5 | ) | (1.5 | ) | (197.1 | ) | (222.1 | ) | (49.0 | ) | (21.6 | ) | (292.6 | ) | (262.8 | ) | (50.7 | ) | (606.1 | ) | ||||||||||||||||||||
Derivatives | 37.8 | (0.6 | ) | 16.9 | 54.1 | — | — | 54.1 | (25.3 | ) | (7.7 | ) | 21.0 | |||||||||||||||||||||||||||
Noncash items | 64.7 | 28.2 | 253.6 | 346.5 | 349.1 | (41.5 | ) | 654.1 | 156.1 | 2,179.3 | 1,087.1 | |||||||||||||||||||||||||||||
Provision for interest (accrual) | 52.1 | 4.6 | 123.0 | 179.6 | 71.8 | 30.8 | 282.3 | 169.7 | 46.2 | 498.2 | ||||||||||||||||||||||||||||||
Monetary variation and MTM adjustment of debt | 22.0 | 10.0 | 40.4 | 72.4 | 20.9 | (22.6 | ) | 70.8 | 90.1 | 245.9 | 406.8 | |||||||||||||||||||||||||||||
Exchange variation, net of derivatives | (9.4 | ) | 13.6 | 90.2 | 94.5 | 256.4 | (49.8 | ) | 301.1 | (103.6 | ) | (15.4 | ) | 182.1 | ||||||||||||||||||||||||||
Closing balance of gross debt | 3,023.9 | 747.5 | 6,285.4 | 10,056.7 | 6,429.6 | 2,928.8 | 19,415.1 | 9,083.0 | 3,699.1 | 32,197.3 | ||||||||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | 2,675.8 | 743.6 | 1,323.8 | 4,743.1 | 1,490.5 | 967.4 | 7,201.0 | 2,578.1 | 1,445.3 | 11,224.5 | ||||||||||||||||||||||||||||||
Closing balance of pro forma net debt | 348.1 | 3.9 | 4,961.6 | 5,313.6 | 4,939.1 | 1,961.4 | 12,214.1 | 6,505.0 | 2,253.8 | 20,972.8 | ||||||||||||||||||||||||||||||
Obligations due to preferred shareholders of subsidiaries | — | — | 744.5 | 744.5 | — | — | 744.5 | — | — | 744.5 | ||||||||||||||||||||||||||||||
Leasing (IFRS 16) | 11.4 | 33.3 | 24.6 | 69.3 | 1,726.7 | 288.9 | 2,084.9 | 4,082.2 | 8.3 | 6,175.3 | ||||||||||||||||||||||||||||||
Total pro forma net debt and obligations due to preferred shareholders of subsidiaries | 359.6 | 37.2 | 5,730.6 | 6,127.4 | 6,665.7 | 2,250.3 | 15,043.4 | 10,587.1 | 2,262.0 | 27,892.6 | ||||||||||||||||||||||||||||||
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Cash Flow Reconciliation
Cash Flow Statement BRL mln | Comgás | Moove | Cosan S.A. Corporate | Eliminations | Cosan S.A. Consolidated | Raízen Combined (50%) | Eliminations | Cosan S.A. Pro forma | Cosan Logística | Cosan Limited Corporate | Eliminations/ Adjusted | CZZ Proforma | ||||||||||||||||||||||||||||||||||||
| EBITDA | 761.1 | 80.0 | 1,001.3 | (408.8 | ) | 1,433.7 | 905.8 | (151.6 | ) | 2,187.9 | 1,202.5 | 512.6 | (529.6 | ) | 3,373.3 | |||||||||||||||||||||||||||||||||
Noncash impacts on EBITDA | 128.5 | 21.5 | (1,094.8 | ) | 408.8 | (536.0 | ) | (37.2 | ) | 151.6 | (421.6 | ) | (15.6 | ) | (516.9 | ) | 529.6 | (424.5 | ) | |||||||||||||||||||||||||||||
Changes in assets and liabilities | 44.5 | (22.6 | ) | 34.7 | — | 56.5 | (293.0 | ) | — | (236.5 | ) | (3.3 | ) | (1.9 | ) | — | (241.7 | ) | ||||||||||||||||||||||||||||||
Operating financial result | 32.6 | 4.8 | 13.6 | — | 51.1 | (204.2 | ) | — | (153.1 | ) | 34.9 | 2.8 | — | (115.5 | ) | |||||||||||||||||||||||||||||||||
| Operating Cash Flow | 966.8 | 83.8 | (45.2 | ) | — | 1,005.3 | 371.4 | — | 1,376.6 | 1,218.5 | (3.5 | ) | — | 2,591.6 | ||||||||||||||||||||||||||||||||||
| CAPEX | (207.8 | ) | (9.0 | ) | (2.6 | ) | — | (219.4 | ) | (368.6 | ) | — | (588.1 | ) | (396.7 | ) | (0.0 | ) | — | (984.8 | ) | |||||||||||||||||||||||||||
| Other | — | (1.0 | ) | 2.5 | — | 1.5 | (86.1 | ) | — | (84.6 | ) | 14.5 | (5.0 | ) | — | (75.1 | ) | |||||||||||||||||||||||||||||||
Cash Flow from Investing Activities | (207.8 | ) | (10.1 | ) | (0.0 | ) | — | (217.9 | ) | (454.8 | ) | — | (672.7 | ) | (382.2 | ) | (5.0 | ) | — | (1,059.9 | ) | |||||||||||||||||||||||||||
| Funding | 1.8 | — | 8.7 | — | 10.6 | 740.4 | — | 751.0 | 0.1 | 2,812.0 | — | 3,563.1 | ||||||||||||||||||||||||||||||||||||
Loans amortization (Principal) | (255.3 | ) | (26.7 | ) | — | — | (282.0 | ) | (90.5 | ) | — | (372.4 | ) | (235.2 | ) | (1,265.0 | ) | — | (1,872.6 | ) | ||||||||||||||||||||||||||||
Loans amortization (Interest) | (23.5 | ) | 9.9 | (197.1 | ) | — | (210.7 | ) | (72.3 | ) | — | (283.0 | ) | (280.0 | ) | (50.7 | ) | — | (613.6 | ) | ||||||||||||||||||||||||||||
Leasing amortization (IFRS16) | (0.9 | ) | (0.8 | ) | (0.3 | ) | — | (2.0 | ) | (157.4 | ) | — | (159.4 | ) | (261.4 | ) | (0.1 | ) | — | (420.9 | ) | |||||||||||||||||||||||||||
| Derivatives | 37.8 | (0.6 | ) | 16.9 | — | 54.1 | — | — | 54.1 | (25.3 | ) | (7.7 | ) | — | 21.0 | |||||||||||||||||||||||||||||||||
| Other | (0.2 | ) | 20.4 | (38.6 | ) | — | (18.4 | ) | 1.7 | — | (16.7 | ) | 0.0 | (649.2 | ) | — | (665.9 | ) | ||||||||||||||||||||||||||||||
Cash Flow from Financing Activities | (240.1 | ) | 2.1 | (210.4 | ) | — | (448.4 | ) | 422.0 | — | (26.4 | ) | (801.7 | ) | 839.2 | — | 11.1 | |||||||||||||||||||||||||||||||
| Dividends received | — | — | 187.3 | — | 187.3 | — | (187.3 | ) | 0.0 | 2.0 | 0.1 | — | 2.1 | |||||||||||||||||||||||||||||||||||
Free Cash Flow to Equity | 518.8 | 75.8 | (68.4 | ) | — | 526.3 | 338.6 | (187.3 | ) | 677.6 | 36.6 | 830.7 | — | 1,544.9 | ||||||||||||||||||||||||||||||||||
Cosan S.A | — | — | (152.9 | ) | — | (152.9 | ) | — | 187.3 | 34.4 | 0.8 | (12.5 | ) | — | 22.7 | |||||||||||||||||||||||||||||||||
Comgas | — | 0 | 0 | — | — | — | — | — | 0 | 0 | 0 | — | ||||||||||||||||||||||||||||||||||||
Raízen | — | — | — | — | — | (268.0 | ) | — | (268.0 | ) | — | — | — | (268.0 | ) | |||||||||||||||||||||||||||||||||
| Dividends paid | — | — | (152.9 | ) | — | (152.9 | ) | (268.0 | ) | 187.3 | (233.6 | ) | 0.8 | (12.5 | ) | — | (245.3 | ) | ||||||||||||||||||||||||||||||
Exchange variation impact on cash and cash equivalents | — | 33.4 | 34.1 | — | 67.5 | 67.4 | — | 134.9 | 1.1 | 261.8 | — | 397.7 | ||||||||||||||||||||||||||||||||||||
Cash Generation (Burn) in the Period | 518.8 | 109.2 | (187.1 | ) | — | 440.9 | 138.0 | — | 578.9 | 38.4 | 1,080.0 | — | 1,697.3 | |||||||||||||||||||||||||||||||||||
8 de 9
Financial Statements
Cosan Limited—Accounting
Indicators | 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | |||||||||||||||
BRL mln | (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | |||||||||||||||
EBITDA | 2,619.1 | 1,411.2 | 85.6 | % | 1,669.6 | 56.9 | % | |||||||||||||
CAPEX | 619.1 | 704.6 | -12.1 | % | 648.6 | -4.6 | % | |||||||||||||
Income Statement for the Period | 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | |||||||||||||||
BRL mln | (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | |||||||||||||||
Net Revenue | 5,731.2 | 4,778.4 | 19.9 | % | 5,072.9 | 13.0 | % | |||||||||||||
Cost of Goods and Services Sold | (3,764.8 | ) | (3,406.2 | ) | 10.5 | % | (3,477.3 | ) | 8.3 | % | ||||||||||
Gross profit | 1,966.4 | 1,372.2 | 43.3 | % | 1,595.5 | 23.2 | % | |||||||||||||
Selling, general & administrative expenses | (636.7 | ) | (497.7 | ) | 27.9 | % | (550.6 | ) | 15.6 | % | ||||||||||
Other net operating income (expenses) | 536.7 | (44.7 | ) | n/a | 3.4 | n/a | ||||||||||||||
Financial results | (488.2 | ) | (523.7 | ) | -6.8 | % | (315.8 | ) | 54.6 | % | ||||||||||
EquityPick-up | 157.9 | 85.5 | 84.7 | % | 65.5 | n/a | ||||||||||||||
Expenses with income and social contribution taxes | (387.5 | ) | (103.7 | ) | n/a | (257.4 | ) | 50.6 | % | |||||||||||
Non-controlling interest | (587.8 | ) | (224.9 | ) | n/a | (332.3 | ) | 76.9 | % | |||||||||||
Net Income | 560.8 | 63.0 | n/a | 208.4 | n/a | |||||||||||||||
Balance Sheet | 3Q19 | 2Q19 | ||||||||||||||||||
BRL mln | 09/30/19 | 06/30/19 | ||||||||||||||||||
Cash and cash equivalents | 6,413 | 5,003 | ||||||||||||||||||
Marketable Securities | 2,353 | 2,204 | ||||||||||||||||||
Trade accounts receivable | 2,025 | 2,064 | ||||||||||||||||||
Inventories | 806 | 809 | ||||||||||||||||||
Derivative financial instruments | 4,332 | 3,218 | ||||||||||||||||||
Other current assets | 2,060 | 1,713 | ||||||||||||||||||
Othernon-current assets | 9,187 | 6,270 | ||||||||||||||||||
Investments | 7,942 | 7,954 | ||||||||||||||||||
Property, plant and equipment | 11,928 | 11,852 | ||||||||||||||||||
Intangible assets | 16,880 | 16,903 | ||||||||||||||||||
Total Assets | 63,927 | 57,992 | ||||||||||||||||||
Loans and borrowings | 27,008 | 24,486 | ||||||||||||||||||
Financial instruments and derivatives | 56 | 44 | ||||||||||||||||||
Trade accounts payable | 2,198 | 2,046 | ||||||||||||||||||
Payroll | 394 | 301 | ||||||||||||||||||
Other current liabilities | 2,575 | 1,933 | ||||||||||||||||||
Othernon-current liabilities | 15,096 | 12,989 | ||||||||||||||||||
Shareholders’ Equity | 16,600 | 16,192 | ||||||||||||||||||
Total Liabilities | 63,927 | 57,992 | ||||||||||||||||||
Financial Statement including Raízen
Cosan Limited Proforma (including 50% of Raízen)
Indicators | 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | |||||||||||||||
BRL mln | (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | |||||||||||||||
EBITDA | 3,373.3 | 1,872.6 | 80.1 | % | 2,313.3 | 45.8 | % | |||||||||||||
Adjusted EBITDA | 2,590.2 | 2,147.2 | 20.6 | % | 2,040.5 | 26.9 | % | |||||||||||||
Investments | 1,069.7 | 865.7 | 23.6 | % | 1,099.1 | -2.7 | % | |||||||||||||
Income Statement for the Period | 3Q19 | 3Q18 | Chg.% | 2Q19 | Chg.% | |||||||||||||||
BRL mln | (Jul-Sep) | (Jul-Sep) | 3Q19/3Q18 | (Apr-Jun) | 3Q19/2Q19 | |||||||||||||||
Net Revenue | 20,866.2 | 17,219.3 | 21.2 | % | 19,338.5 | 7.9 | % | |||||||||||||
Cost of Goods and Services Sold | (18,110.4 | ) | (15,236.1 | ) | 18.9 | % | (16,998.5 | ) | 6.5 | % | ||||||||||
Gross profit | 2,755.8 | 1,983.1 | 39.0 | % | 2,340.0 | 17.8 | % | |||||||||||||
Selling, general & administrative expenses | (1,187.3 | ) | (929.5 | ) | 27.7 | % | (1,064.6 | ) | 11.5 | % | ||||||||||
Other net operating income (expenses) | 745.2 | (7.3 | ) | n/a | 76.4 | n/a | ||||||||||||||
Financial results | (665.1 | ) | (671.5 | ) | -1.0 | % | (500.6 | ) | 32.9 | % | ||||||||||
EquityPick-up | 6.9 | (2.3 | ) | n/a | (1.1 | ) | n/a | |||||||||||||
Expenses with income and social contribution taxes | (485.4 | ) | (74.4 | ) | n/a | (295.5 | ) | 64.3 | % | |||||||||||
Non-controlling interest | (609.3 | ) | (235.1 | ) | n/a | (346.3 | ) | 76.0 | % | |||||||||||
Net Income | 560.8 | 63.0 | n/a | 208.4 | n/a | |||||||||||||||
Balance Sheet | 3Q19 | 2Q19 | ||||||||||||||||||
BRL mln | 09/30/19 | 06/30/19 | ||||||||||||||||||
Cash and cash equivalents | 8,762 | 7,071 | ||||||||||||||||||
Marketable Securities | 2,462 | 2,456 | ||||||||||||||||||
Trade accounts receivable | 3,837 | 3,931 | ||||||||||||||||||
Inventories | 4,780 | 3,719 | ||||||||||||||||||
Derivative financial instruments | 5,766 | 4,175 | ||||||||||||||||||
Other current assets | 4,768 | 4,396 | ||||||||||||||||||
Othernon-current assets | 14,797 | 11,545 | ||||||||||||||||||
Investments | 654 | 635 | ||||||||||||||||||
Property, plant and equipment | 20,573 | 20,563 | ||||||||||||||||||
Intangible assets | 19,969 | 19,974 | ||||||||||||||||||
Total Assets | 86,368 | 78,466 | ||||||||||||||||||
Loans and borrowings | 37,274 | 33,626 | ||||||||||||||||||
Financial instruments and derivatives | 553 | 479 | ||||||||||||||||||
Trade accounts payable | 6,509 | 6,056 | ||||||||||||||||||
Payroll | 657 | 628 | ||||||||||||||||||
Other current liabilities | 5,956 | 4,893 | ||||||||||||||||||
Othernon-current liabilities | 18,654 | 16,438 | ||||||||||||||||||
Shareholders’ Equity | 16,764 | 16,344 | ||||||||||||||||||
Total Liabilities | 86,368 | 78,466 | ||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 13, 2019
| COSAN LIMITED | ||
| By: | /s/ Marcelo Eduardo Martins | |
Name: Marcelo Eduardo Martins Title: Chief Financial and Investor Relations Officer | ||