PROSPECTUS
SUPPLEMENT
|
|
(To
Prospectus dated March 4, 2008)
|
|
Quarterly Financial
Letter
|
|||
3rd Quarter of Fiscal Year
2008 – November, December and January
|
As
expected, negative bottom line temporarily amplified by marking to market
adjustment
|
||
•
|
This section
provides a summary of the quarterly performance of Cosan Ltd. (NYSE: CZZ),
the parent company of the Cosan
Group. The financial information in this section is expressed in U.S.
dollars, in accordance with U.S. GAAP. For comparison purposes, the data
for the period prior to the constitution of Cosan Ltd were prepared on a
pro-forma basis based on Cosan S.A., as if Cosan Ltd. had existed before
the date of its constitution. More information on the financial statements
of Cosan Ltd. is provided at the end of the section.
|
|
•
|
In 3Q’08, the
situation in the world sugar market remained intact, with excess supply
and the continuation of depressed prices, although with concrete signs
emerging of a recovery in prices. At the same time, Cosan continued to
follow its previously announced approach, favoring a temporary
deceleration in sugar sales. Consequently, the 625.4 thousand tonnes of
sugar shipped in the 3Q’08 were 31.7% lower year on year, while the
average sugar sale price in the quarter was US¢11.54/lb, 15.2% below the
average price in the 3Q’07.
|
|
•
|
In the ethanol
operations, in contrast to the situation in sugar, Cosan accelerated its
exports with the aim of better balancing supply in the domestic market. As
a result, sales totaled 123.0 million gallons, up 17.9% on the total sales
volume in 3Q’07, while the average sales price of US$1.64/gallon was 22.1%
higher than in 3Q’07. However, bear in mind that part of this price
increase merely represents the foreign-exchange effects on domestic sales,
converted into dollars in the quarter at the average exchange rate of
R$1.7745/US$, 17.4% lower than the average of R$2.1484/US$ in the 3Q’07,
given the continued depreciation in the dollar.
|
|
ri@cosan.com.br
www.cosan.com.br
|
Summary of Financial and Operating
Information
|
|||||||||||||||||||
3Q'07
|
3Q'08
|
(In millions of U.S.
dollars)
|
YTD'07
|
YTD'08
|
|||||||||||||||
104.3 | 123.0 |
Ethanol Sold (millions of
gallons)
|
270.4 | 265.0 | |||||||||||||||
915.7 | 625.4 |
Sugar Sold (thousand
tonnes)
|
2,624.2 | 2,273.2 | |||||||||||||||
463.2 | 376.7 |
Net sales
|
1,350.9 | 1,005.9 | |||||||||||||||
124.4 | 33.2 | l |
Gross
profit
|
418.4 | 78.8 | ||||||||||||||
26.9 | % | 8.8 | % |
Gross
Margin
|
31.0 | % | 7.8 | % | |||||||||||
62.5 | (38.6 | ) | l |
Operating income
(loss)
|
247.2 | (129.6 | ) | ||||||||||||
13.5 | % | -10.2 | % |
Operating
margin
|
18.3 | % | -12.9 | % | |||||||||||
76.9 | 11.8 | l |
EBITDA
|
363.2 | 79.3 | ||||||||||||||
16.6 | % | 3.1 | % |
EBITDA
Margin
|
26.9 | % | 7.9 | % | |||||||||||
33.1 | (114.8 | ) | l |
Income (loss) before minority
interest
|
225.7 | (88.8 | ) | ||||||||||||
16.7 | (59.7 | ) | l |
Net income
(loss)
|
114.1 | (40.7 | ) | ||||||||||||
3.6 | % | -15.8 | % |
Profit (loss)
Margin
|
8.4 | % | -4.0 | % | |||||||||||
62.5 | 157.3 |
Capex
|
113.7 | 342.1 | |||||||||||||||
682.3 | (123.2 | ) | l |
Net Debt
|
682.3 | (123.2 | ) | ||||||||||||
810.4 | 2,509.0 | l |
Shareholders' & Minorities
Equity
|
810.4 | 2,509.0 |
Definitions:
FY’08
- fiscal year begun May 1,
2007
and ending April
30,
2008
FY’07
- fiscal year begun May 1,
2006
and ended April 30,
2007
3Q’08
- quarter ended January
31,
2008
3Q’07
- quarter ended January
31,
2007
YTD’08
-period begun on the same date as the FY’08 and ended at the close of the
3Q’08
YTD’07
-period begun on the same date as the FY’07 and ended at the close of the
3Q’07
|
•
|
Thus, the net
operating revenue of US$376.7 million in the 3Q’08 was 18.7% lower year on
year. Moreover, the lower volumes led to lower costs and the lower prices
were partially passed through to unit costs via the Consecana mechanism.
However, the extended harvest period, which because of the heavy rains
that lasted through December, resulted in low yields and low productivity.
These effects, together with the foreign-exchange impact on costs
denominated in Brazilian real, resulted in a slight increase in costs and
consequently in gross margin compression from 26.9% in the 3Q’07 to 8.8%
in the 3Q’08.
|
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
•
|
Selling
expenses and general and administrative expenses in 3Q’08 posted
year-on-year increases of 17.3% and 13.8%, respectively, reflecting the
foreign-exchange effect of 17.4%. However, in their source currency, these
expenses followed the same pattern as a year ago, with slight variations
from efficiency gains on the one hand, and higher wages on the other.
Driven by these factors, in the 3Q'08 Cosan posted EBITDA of US$11.8
million with margin of 3.1%, contracting from the US$76.9 million recorded
in the 3Q’07.
|
|
•
|
The net
financial expenses of US$131.8 million in the 3Q’08, significantly higher
than the expense of US$13.4 million in the 3Q’07, was heavily influenced
by the sharp increase in sugar prices in the futures market at the end of
the quarter. As a result, given the positions in sugar derivatives of
2,175.1 thousand tonnes at an average price of US¢11.38, Cosan ended up
registering non-cash expenses of US$107.5 million related to the marking
to market of this portfolio and operations with foreign-exchange
derivatives. Thus, given the depressed EBITDA and the inflated financial
expenses due to the marking to market of the portfolio, the bottom line
was a net loss of US$59.7 million, which compares with net income of
US$16.7 million in the 3Q’07. The loss in the third quarter reversed the
cumulative income in the first two quarters of the fiscal year, leading to
a year-to-date net loss in fiscal year 2008 of US$40.7 million, which was
fully in line with expectations and signaled to the market at the time of
the IPO issue by Cosan Ltd. (see page 58 of the offering memorandum,
“Outlook for Fiscal Year 2008”), when the company was anticipating a net
loss in FY'08.
|
|
•
|
The strong
pace of investments at the group continued, with the first two
cogeneration plants advancing, with the operational tests expected in the
upcoming fiscal year. Similarly, the expansion of the Gasa unit, which
crushed 1.2 million tonnes of sugarcane, is practically concluded, and
already in the next harvest is expected to crush 2.85 million tonnes. In
the greenfield project in Goiás state, a further US$28.0 million were
disbursed to plant sugarcane and for industrial equipment. Also in the
3Q’08, a total of 21 mechanical harvesters were acquired as part of the
mechanization program. The combination of these investments represented
total disbursement of US$157.3 million in the quarter.
|
|
•
|
Regarding its
financial situation, Cosan ended the 3Q’08 with a comfortable negative net
debt position of US$123.2 million, benefited by the massive adherence of
minority shareholders to the capital increase carried out by Cosan S.A. in
the period.
|
The major
asset of Cosan Ltd. on its constitution was its equity interest in Cosan
S.A. Its operating results are therefore substantially based on those of
its subsidiary, Cosan S.A.
Cosan Ltd.
uses the US$ as its reporting currency and the R$ as its functional
currency.
The financial
statements of Cosan Ltd. are drawn up primarily in US GAAP, while those of
its subsidiary Cosan S.A. are drawn up primarily in BR GAAP. The main
differences between the accounting practices of US GAAP and BR GAAP that
affect the results of Cosan Ltd. are:
· evaluation of
acquired companies at their fair market value instead of their book value,
increasing the value of fixed assets and, consequently, depreciation
expenses;
· the
non-existence of asset revaluation and, consequently, depreciation of the
revalued portion;
· the
non-existence of amortization of goodwill;
· capitalization
of interest on financings for fixed assets under
construction;
· mark-to-market
of hedge instruments recorded directly in the result;
· the booking of
remuneration from the executives’ stock option plan under general and
administrative expenses;
· the
non-existence of deferred expenses and;
· the booking of
goods acquired through leasing under
assets.
|
2 of
20
|
Quarterly Financial
Letter
|
|||
3rd Quarter of Fiscal Year
2008 – November, December and January
|
Paulo
Diniz,
CFO
& IRO
|
No
surprises: negative result, in line with
expectations
|
|
Luiz
Felipe Jansen de Mello,
Investor
Relations
Alexandre
Sirihal,
Financial
Planning
|
•
|
Cosan S.A.
(BOVESPA: CSAN3) ended up experiencing a break in the 3Q’08: despite the
recent healthy change in price levels in the industry, the quarter ended
up reflecting the weak market conditions in place prior to the quarter,
marked by excess sugar supply and low sugar prices. Consequently, Cosan
sold only 629.0 thousand tonnes of sugar, 31.3% less than in 3Q’07, and at
an average price of R$441/tonne, 31.4% lower than the average price in the
3Q’07. As a result, the company built substantial sugar stocks of 865.3
thousand tonnes at the end of the quarter, 38.8% higher than the ending
stocks in 3Q’07.
|
Guilherme
A. Prado,
Treasury
Mauricio
Sartorelli,
Controller
|
•
|
In the ethanol
operations the situation was the opposite, with Cosan taking advantage of
the external market as an outlet to boost ethanol sales while also
regulating supply and supporting prices in the domestic market. As a
result, sales in the quarter totaled 482.4 million liters, 22.2% more than
in 3Q’07, at an average price of R$738/m3,
11.4% lower year on year, though relatively higher than the sugar price.
Reflecting the strategy adopted of slower sales in the first two quarters
of the year, Cosan ended the quarter with stocks of 507.7 million liters,
69.1% higher than ending stocks in the 3Q’07.
|
|
•
|
As a result,
net operating revenue in the quarter was R$674.0 million, 30.6% higher
than in 3Q’07. However, most of this reduction in revenue was minimized by
the market risk management actions adopted by Cosan that enabled it
minimize the adverse operating results through operations to hedge prices
and the exchange rate. As a result, Cosan generated revenue of R$93.2
million in derivative operations in the 3Q’08, 2.6 times more than in the
3Q’07.
|
ri@cosan.com.br
www.cosan.com.br
|
3Q'07
|
3Q'08
|
Financial Highlights
(R$MM)
|
YTD'07
|
YTD'08
|
970.8
|
674.0
|
Net Operating
Revenue
|
2,923.0
|
1,893.2
|
290.6
|
79.6
|
Gross
Profit
|
953.7
|
199.6
|
29.9%
|
11.8%
|
Gross
Margin
|
32.6%
|
10.5%
|
197.9
|
1.3
|
EBITDA
|
799.6
|
126.7
|
20.4%
|
0.2%
|
EBITDA
Margin
|
27.4%
|
6.7%
|
233.2
|
94.4
|
EBITDAH (Adjusted by
Hedge)
|
717.3
|
370.5
|
23.2%
|
12.3%
|
EBITDAH
Margin
|
25.2%
|
17.3%
|
63.4
|
(71.4)
|
Net Profit
(Loss)
|
192.5
|
(42.5)
|
6.5%
|
-10.6%
|
Net Margin
|
6.6%
|
-2.2%
|
Definitions:
FY’08
- fiscal year begun May 1, 2007 and ending April 30,
2008
FY’07
- fiscal year begun May 1, 2006 and ended April 30,
2007
3Q’08
- quarter ended January 31, 2008
3Q’07
- quarter ended January 31, 2007
YTD’08
-period begun on the same date as the FY’08 and ended at the close of the
3Q’08
YTD’07
-period begun on the same date as the FY’07 and ended at the close of the
3Q’07
|
•
•
|
Another
negative impact was the extended duration of the 2007-08 harvest through
December due to weather factors, which resulted in low crop yields and low
productivity in production processes. Thus, the average cost of goods sold
remained at high levels, resulting in near zero EBITDA in the quarter. As
a result, the EBITDAH in the quarter of R$94.4 million basically reflected
the hedge operations, with EBITDAH margin of 12.3%, but were 59.5% lower
in relation to the 3Q’07.
Given the
slight appreciation in the U.S. dollar in the quarter, the net financial
result in the quarter was affected by the impacts of foreign-exchange
losses on dollar-denominated debt, which compares with foreign-exchange
gains in the 3Q'07. Accordingly, in the 3Q’08 Cosan reported a net loss of
R$71.4 million, versus net income of R$63.4 million in the 3Q’07, and
reversing the year-to-date gain in the first two quarters into a
year-to-date loss of R$42.5 million. However, note that this negative
result is fully aligned with the company’s plans, and was even expected,
as stated in the IPO prospectus of Cosan Ltd in August last year and also
in the company’s guidance.
|
3 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
•
|
Lastly,
despite the extremely adverse conditions in the capital markets, the
quarter was marked by the successful capital increase of R$1,736.7 million
at Cosan S.A., an operation that was structured to enable the proceeds
from the IPO carried out by Cosan Ltd. to be used for Cosan’s expansion
projects in Brazil. The capital increase enjoyed excellent participation
by minority shareholders, which ended up contributing R$547.9 million to
the total value raised. Another important mark was the acquisition of
Benálcool in February, which reaffirmed Cosan’s commitment to growth
through acquisitions exclusively at fair prices, with the acquisition made
at a multiple of US$59 per tonne of crushing capacity.
|
|
A.
Market Overview
|
||
•
|
According to
ÚNICA, a total of 431.8 million tonnes of sugarcane were crushed in the
Central-South region of Brazil in the 07/08 harvest, 15.8% more than in
the 06/07 harvest. Sugar production increased slightly to 26.2 million
tonnes, 1.5% higher than in the previous harvest. Meanwhile, ethanol
output grew by 26.6% year on year, surpassing the mark of 20 billion
liters. Ethanol output comprised 12.9 billion liters of hydrated ethanol,
44% more than the 8.9 billion liters produced in 06/07, while anhydrous
ethanol production remained practically flat at 7.3 billion tonnes. The
production mix favored ethanol, which consumed 56% of sugarcane volumes,
while sugar accounted for 44%.
|
|
•
|
This bias
towards ethanol production is also expected in the 08/09 harvest.
Preliminary estimates point to an increase in sugarcane production in the
next harvest in the Central-South region of approximately 50 million
tonnes, bringing total sugarcane crushed to 487 million tonnes. Of this
total, roughly 30 million tonnes should come from the startup of 32 new
units, with 14 of these units located in the state of São Paulo, 10 in
Goiás state, and the remaining units in the states of Minas Gerais and
Mato Grosso do Sul. The majority of this additional crushing capacity will
be allocated to ethanol production, expanding the ethanol mix to
approximately 60%. However, due to the high sugar prices in the past
month, there is some uncertainty concerning a potential increase in sugar
production that could lead to downward revisions in these forecasts
calling for an increase in the ethanol mix.
|
|
•
|
Reports from
international markets in the quarter reinforce somewhat the supply and
demand fundamentals in the market, in particular the reports out of India.
Forecasts for India’s 07/08 harvest suggest output will be slightly lower
than previously projected, due to two factors: I) delays at the start of
the harvest due to disputes over sugarcane prices between mills, state
governments and producers; and ii) a decline in sugarcane output from
producers due to lack of investment. However, given the high level of
stocks, this drop in production will not impact exports, which could
exceed 3 million tonnes. Two other important factors were caused by two
large sugar importers: Russia and China. In Russia, high wheat prices
promoted the migration of other crops, which should lead to contraction in
the sugar beet area planted in 2008, while in China, the impact of the
blizzard at the start of the year will certainly impact the 08/09 harvest,
although the full extent has not yet been fully
measured.
|
|
•
|
In the futures
market, the past few weeks were marked by high volatility in sugar prices,
with steep increases accompanied by sharp falls. To quantify this trend
and provide a better idea of the intensity, at the start of the 3Q’08, raw
sugar was quoted at US¢9.91/lb in international markets. However, in less
than two months, this price has risen to US¢14.27/lb, an increase of
40%!
|
|
•
|
This movement in sugar prices suggests
a weakening in the dependence of sugar futures prices on
supply-demand fundamentals, which remain weak,
|
4 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
accompanied by the growing influence of exogenous factors, such as the behavior of funds operating in the commodity market. During the 3Q’08, however, this price rally had not yet intensified. The average price of raw sugar on the international market in the quarter was US¢10.63/lb, or 6.4% below the average price in the 3Q’07. However, in relation to the previous quarter there was some recovery, with the average price 9.9% higher than the US¢9.67/lb in 2Q’08. |
Raw Sugar Prices - Last 24 Months
(NY11)
|
•
|
In the 3Q’08,
major hedge funds as well as small funds and speculators significantly
increased their net long positions, which in November stood at 136,000
lots, compared with approximately 228,000 lots at end January, or 22% of
all open contracts. The net long position currently stands at 264,000
lots, or 26% of all open contracts. This sharp increase in funds’ long
position corroborates the view outlined above.
|
|
•
|
Historically,
investors' interest in commodities basically has been due to their
negative correlation to stocks and the effects of growth in
emerging-market countries on commodity prices. However, recently, the main
driver of investment in commodities has been their growing use as a hedge
against inflation.
|
Funds Position (volume%) vs. Price
NY11
(cents/pound)
|
5 of
20
|
•
|
The average
price of refined sugar on international markets was US$306.93/tonne in the
3Q’08, down 13% in relation to the US$352.98/tonne in the same period a
year earlier. In relation to the 2Q’08, the average price observed was 10%
higher. The white premium registered solid improvement, quoted at the end
of the 2Q’08 at US$77 per tonne, an increase of 30% quarter on quarter.
The improvement in the white premium was due to reports from the European
Union on the continued reform of its sugar regimes.
|
|
•
|
An important
factor impacting Brazil’s sugar exports was high freight costs. Freights
from Brazil’s Central-South region to Black Sea and Persian Gulf
refineries reached the record level of US$80/tonne, almost three times
higher than the level only two years ago. This sharp increase in freight
prices was due to two main factors: i) the improvement in the competitive
position of Middle East exporters in relation to Brazilian exporters, and
ii) the high freight costs led to lower demand from importers, which opted
to not rebuild stocks.
|
Refined Sugar Prices - Last 24
Months (LIFFE nº 5)
|
•
|
The average
price of crystal sugar (ESALQ price) in the domestic market in 3Q’08 was
R$23.90 per 50-kg sack (or R$478.07/tonne), a decline of 35% in relation
to the R$36.67 per 50-kg sack (or R$733.47/tonne) in the 3Q’07. In
relation to the 2Q’08, crystal sugar was 3.3% less expensive. Bear in mind
that sugar prices in the domestic market that are not directly influenced
by the action of speculators fund remained stable in the
period.
|
6 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
Crystal Sugar Prices - Last 24
Months (ESALQ 50 kg bags)
|
|
||
•
|
In the
domestic ethanol market, the average price of hydrated ethanol (ESALQ) in
the 3Q’08 was R$0.724 /liter, down 8.8% in relation to the R$0.794/liter
in the 3Q’07. The average price of anhydrous ethanol was R$0.815/liter in
the quarter, 5.3% less than the R$0.861/liter in the 3Q’07. Against the
2Q’08, hydrated and anhydrous ethanol prices were 24.6% and 23.1% higher,
respectively. Although these increases appear significant, ethanol prices
are lower than in the inter-harvest periods of previous years, when prices
typically surpassed R$1/liter.
|
|
•
|
Even though
international oil prices do not have an immediate impact on Brazilian
gasoline prices, in the United States this effect has already been felt by
consumers. The hike in gasoline prices in that country, which are already
near US$3/gal, is positive for the U.S. ethanol industry, which has seen
its margins compressed by high corn prices. Another positive driver for
the U.S. ethanol industry is the new energy law taking effect, which will
boost demand for ethanol in 2008 to 9 billion gallons.
|
|
•
|
The higher
prices of corn and especially wheat have compressed the margins of
European ethanol producers, and, given the relatively low price of
Brazilian ethanol, this has fueled Brazil’s ethanol exports. In 2007,
Brazil’s exports to Europe totaled 1 billion liters, up 80% in relation to
2006, when some 550 million liters were shipped. Note that currently only
four European countries – Germany, France, United Kingdom and Holland –
have mandated the addition of biofuel to their fuel
blends.
|
7 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better World
|
Ethanol Prices - Last 24 Months
(ESALQ)
|
•
|
According to
Brazil’s National Petroleum Agency (ANP), domestic retail gasoline prices
averaged R$2.461/liter in the quarter, while hydrated ethanol prices
averaged R$1.521/liter, for parity of 61.8%. Based on a survey conducted
on January 30 in only three Brazilian states (Amana, Pará and Rorem), the
parity of ethanol prices to gasoline prices was above 75%. In São Paulo,
the country’s largest consumption center, this parity stood at
53.6%.
|
|
•
|
According to
the ANP, hydrated ethanol consumption in Brazil in 2007 was almost 50%
higher than in 2006, which compares with growth in the fuel market as a
whole of 7.57% in the same period, and for the first time since the
extinction of the pro-ethanol program known as Proálcool, Brazil’s ethanol
consumption is almost equal to its gasoline consumption. In January (last
available data), 948 million liters of hydrated ethanol and 504 million
liters of anhydrous ethanol were sold, for a total of 1.45 billion liters.
Gasoline sales in the same month totaled 1.51 billion liters, for a
difference of only 60 million
liters.
|
Flex-fuel Vehicles Sales
Evolution
|
•
|
Solid economic
growth and the higher availability of credit have continued to drive new
car sales. In 3Q’08, sales of flex-fuel vehicles stood at 577,000 units,
accounting for 87% of new car sales. There are now approximately 5 million
flex-
|
8 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
fuel vehicles on Brazilian roads, representing approximately 20% of all light passenger vehicles in the country. |
Exchange Rate Evolution - Last 24
Months (R$/US$)
|
•
|
At the close
of the 3Q’08, the local exchange rate stood at R$1.7603/US$, for local
currency depreciation against the U.S. dollar of 0.9% in relation to the
end of 2Q’08. However, since the close of the quarter, the dollar has
depreciated against major currencies, particularly against the real, with
the local exchange rate reaching its lowest level in nine years, at below
R$1.70/US$.
|
|
B.
Operating Performance
|
||
•
|
In line with
the company’s guidance, market prices were lower than in FY2007, leading
to net operating revenue of R$674.0 million in the 3Q’08, down 30.6% in
relation to the 3Q’07. Part of this revenue contraction ended up
translating into lower prices paid for sugarcane acquired from suppliers,
in turn leading to a decline of 12.6% in cost of goods sold in the 3Q’08
(R$594.4 million.) The combination of these two effects resulted in EBITDA
close to breakeven. However, adjusting for the gains in derivative
operations contracted to hedge sugar sale prices and the exchange rate
used to convert exports into Brazilian real resulted in EBITDAH of R$94.4
million with margin of 12.3%, although 59.5% lower than the EBITDAH of
R$233.2 million in the 3Q’07. The amortization of goodwill of R$48.2
million in the quarter, as well as the net financial expense with foreign
exchange variation on USD-denominated debt reversed the gain to an EBITDAH
loss in the quarter of R$71.4 million, which compares with a net gain of
R$63.4 million in the 3Q’07.
|
9 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
3Q'07
|
3Q'08
|
Income Statement
(R$MM)
|
YTD'07
|
YTD'08
|
970.8
|
674.0
|
Net Operating
Revenue
|
2,923.0
|
1,893.2
|
(680.2)
|
(594.4)
|
Cost of Goods
Sold
|
(1,969.3)
|
(1,693.5)
|
(30.6)
|
(47.8)
|
with Depreciation &
Amortization
|
(160.5)
|
(312.2)
|
290.6
|
79.6
|
Gross
Profit
|
953.7
|
199.6
|
29.9%
|
11.8%
|
Gross
Margin
|
32.6%
|
10.5%
|
(71.2)
|
(73.4)
|
Selling
Expenses
|
(206.9)
|
(226.5)
|
(52.8)
|
(49.9)
|
General & Adm.
Expenses
|
(148.4)
|
(152.5)
|
0.7
|
(2.7)
|
Other Operating
Expenses
|
40.7
|
(6.2)
|
197.9
|
1.3
|
EBITDA
|
799.6
|
126.7
|
20.4%
|
0.2%
|
EBITDA
Margin
|
27.4%
|
6.7%
|
233.2
|
94.4
|
EBITDAH (Adjusted by
Hedge)
|
717.3
|
370.5
|
23.2%
|
12.3%
|
EBITDAH
Margin
|
25.2%
|
17.3%
|
(17.6)
|
(11.9)
|
Net Financial
Expenses
|
(175.6)
|
283.3
|
0.1
|
0.1
|
Equity
Income
|
0.5
|
0.2
|
(55.9)
|
(48.2)
|
Goodwill
Amortization
|
(167.8)
|
(160.8)
|
0.1
|
1.1
|
Other
Non-Operat.Result/Extraordinary
|
1.6
|
6.3
|
94.0
|
(105.5)
|
Profit Before Income
Tax
|
297.8
|
(56.5)
|
(30.0)
|
33.5
|
Income Tax
|
(101.3)
|
12.1
|
(0.6)
|
0.6
|
Minority
Interests
|
(3.9)
|
1.9
|
63.4
|
(71.4)
|
Net Profit
(Loss)
|
192.5
|
(42.5)
|
6.5%
|
-10.6%
|
Net Margin
|
6.6%
|
-2.2%
|
Lower
VHP sugar exports alter the typical revenue mix
|
•
|
The sharp
reduction in VHP sugar sales in the quarter had two important effects on
the revenue mix: i) the decline in the relative importance sugar, which
accounted for only 41.2% of net revenue (60.6% in the 3Q’07), while
ethanol, which posted accelerating sales growth, accounted for 52.8% of
total sales (33.9% in the 3Q’07); and ii) likewise, the share of exports
declined from 59.1% of overall sales revenue in the 3Q’07 to 45.4% in the
3Q’08. Of course, the low volumes ended up further penalizing the ability
to dilute fixed costs in the company’s
results.
|
3Q'07
|
3Q'08
|
Sales Composition
(R$MM)
|
YTD'07
|
YTD'08
|
970.8
|
674.0
|
Net Operating
Revenue
|
2,923.0
|
1,893.2
|
588.3
|
277.4
|
Sugar
Revenue
|
1,834.9
|
1,019.0
|
81.1
|
60.9
|
Local
|
270.5
|
183.9
|
507.2
|
216.6
|
Export
|
1,564.4
|
835.1
|
329.0
|
356.2
|
Ethanol
Revenue
|
916.4
|
718.9
|
265.1
|
270.0
|
Local
|
651.5
|
538.4
|
64.0
|
86.2
|
Export
|
264.8
|
180.5
|
53.4
|
40.3
|
Other
Revenue
|
171.7
|
155.3
|
51.3
|
37.3
|
Local
|
164.9
|
143.7
|
2.2
|
3.1
|
Export
|
6.9
|
11.6
|
•
|
The reduction
in VHP sugar export volumes led sugar sales volume to contract by 31.3% to
629.0 thousand tonnes, from 915.7 thousand tonnes in the 3Q’07. On the
other hand, ending sugar stocks totaled 865.3 thousand tonnes, 38.8%
higher than at the close of 3Q’07.
|
3Q'07
|
3Q'08
|
Sugar
Business
|
YTD'07
|
YTD'08
|
Volume Sold (thousand
tons)
|
||||
915.7
|
629.0
|
Total Local &
Export
|
2,624.2
|
2,295.1
|
115.0
|
126.4
|
Local
|
341.9
|
360.9
|
800.7
|
502.7
|
Export
|
2,282.3
|
1,934.2
|
Average Unit Price
(R$/ton)
|
||||
643
|
441
|
Total Local &
Export
|
699
|
444
|
706
|
482
|
Local
|
791
|
510
|
633
|
431
|
Export
|
685
|
432
|
•
|
Average sugar
prices once again posted significant declines of 31.8% in the domestic
market and of 32.0% in the world market. In the world market, the decline
in average prices was attenuated by the mix, which had a much higher
|
10 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
weighting of refined sugar, due to the sharp drops in VHP sugar volumes. In the 3Q’08, refined sugar accounted for 22.8% of exports, versus only 14.3% of exports in the 3Q’07. Compared with NY11 prices, the average sugar price in the quarter was US¢11.26/lb, while the average NY11 price was US¢10.68/lb. Incorporating the hedge adjustments resulted in an average price of US¢12.56/lb. | ||
•
|
In ethanol, in
accordance with the strategy released in the 2Q’08, Cosan sold record
ethanol volumes of 482.4 million liters in the 3Q’08, 22.2% more than in
the 3Q’07. Nevertheless, given the high ethanol bias of this sugarcane
harvest, ending stocks in the 3Q’08 were still 69.1% higher than at the
end of 3Q’07, growing to 507.7 million liters. The high ethanol volumes
were also boosted by exports, which rose to 115.5 million liters in the
3Q’08 (vs. 65.7 million liters in the
3Q’07).
|
3Q'07
|
3Q'08
|
Ethanol
Business
|
YTD'07
|
YTD'08
|
Volume Sold (million
liters)
|
||||
394.8
|
482.4
|
Total Local &
Export
|
1,023.6
|
1,033.0
|
329.1
|
366.9
|
Local
|
782.5
|
783.8
|
65.7
|
115.5
|
Export
|
241.1
|
249.2
|
Average Unit Price (R$/thousand
liters)
|
||||
833
|
738
|
Total Local &
Export
|
895
|
696
|
805
|
736
|
Local
|
833
|
687
|
973
|
746
|
Export
|
1,099
|
724
|
Record
ethanol volumes with better prices than at the start of the crop
year
|
•
|
Although the
average unit price of ethanol was lower than in the 3Q’07 (-8.6% in the
domestic market and -23.3% for exports), it continued its upward trend,
increasing by 16.4% in relation to the previous quarter (+20.3% higher in
the domestic market and +3.6% in the world market).
|
•
|
The cost of
goods and services sold totaled R$594.4 million, down 12.6% in relation to
3Q’07, with sugar costs 35.0% lower and ethanol costs 15.3% higher. The
paths of costs of goods sold for each product reflect the volumes
effectively sold, however unit costs registered important
variations.
|
3Q'07
|
3Q'08
|
COGS per
Product
|
YTD'07
|
YTD'08
|
(680.2)
|
(594.4)
|
Cost of Good Sold
(R$MM)
|
(1,969.3)
|
(1,693.5)
|
(383.9)
|
(249.6)
|
Sugar
|
(1,135.3)
|
(913.1)
|
(265.3)
|
(306.0)
|
Ethanol
|
(690.1)
|
(660.8)
|
(31.0)
|
(38.8)
|
Other
Products/Services
|
(144.0)
|
(119.6)
|
Average Unit Cost
(R$)
|
||||
419
|
397
|
Unit COGS of Sugar
(R$/ton)
|
433
|
398
|
672
|
634
|
Unit COGS of Ethanol (R$/thousand
liters)
|
674
|
640
|
n.a.
|
n.a.
|
Unit COGS of Other
Products/Services
|
n.a.
|
n.a.
|
Own
sugarcane units costs at high levels
|
•
|
For sugarcane
acquired from suppliers and leases, the average sugarcane price measured
by Consecana declined by 30.9% to R$0.2423 per kilogram of TRS, which
represents a reduction in the average cost of production from third-party
sugarcane. On the other hand, the extended harvest that lasted through
December, a month marked by heavy rainfall, as was the case of November,
ended up incorporating into sugar and ethanol costs a significant part of
the idle capacity in the fields and at the mills. Furthermore, the slight
shortfall in own sugarcane production of approximately 800 thousand
tonnes, of which 200 thousand tonnes was effectively shortfall and 600
thousand tonnes was cane not harvested. This shortfall led to higher unit
costs in sugar and ethanol production, due to the lower dilution of
planting costs inter-harvest maintenance expenses.
|
Also worth
mention is the significant volume of sugar trading in the quarter, which
is usually a low-margin operation. In fact, 40.7 thousand tons, or 6.5%,
of the total sugar sales were through trading operations at an average
cost R$427
|
11 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
per ton. In the 3Q’07, 15.2 thousand tons, or 1.3%, were sold at average cost of R$646 per ton. As for ethanol, 24.1 million liters of the total sales of 482.4 million in the quarter, that is, 5% of the volume sold, were through trading operations at the average cost of R$682 per m³, against 39.4 million liters, or 9.9% of the total volume at average cost of R$880 per m³ in the 3Q’07. | ||
Selling
expenses reflect accounting reclassifications
|
•
|
Selling
expenses stood at R$73.4 million in the 3Q’08, 3.1% higher than in the
3Q’07, and were adversely affected (as already announced in the previous
quarter) by the accounting reclassification of port expenses related to
own sugar, which previously was allocated to costs of other goods and
services. Furthermore, an expense of R$2.0 million related to a provision
for commercial discounts to large retail chains was booked in the quarter,
which did not occur in the 3Q’07. Lastly, selling expenses were also
boosted by the reallocation of personnel involved with in-house logistics,
which in FY'07 were allocated to industrial production costs, but in FY'08
were allocated to selling expenses. In other words, the sales department
now has strategic responsibility over finished product stocks (previously
the responsibility of the industrial area), putting the company in more
direct contact with market needs. As a result, unit selling expenses,
measured per tonne of TRS (converting ethanol into sugar equivalent by the
parameters determined by Consecana) increased by 13.6%, from R$45 to R$52
per tonne of sugar equivalent.
|
3Q'07
|
3Q'08
|
Selling
Expenses
|
YTD'07
|
YTD'08
|
|
(71.2)
|
(73.4)
|
Selling Expenses
(R$MM)
|
(206.9)
|
(226.5)
|
|
(43.1)
|
(30.2)
|
Sugar
|
(129.8)
|
(121.9)
|
|
(24.1)
|
(38.8)
|
Ethanol
|
(64.8)
|
(86.0)
|
|
(3.9)
|
(4.4)
|
Other
Products/Services
|
(12.2)
|
(18.6)
|
|
Avg. Unit Selling Cost
(R$)
|
|||||
47
|
48
|
Unit Sale Cost of Sugar
(R$/ton)
|
49
|
53
|
|
61
|
80
|
Unit Sale Cost of Ethanol
(R$/thousand liters)
|
63
|
83
|
|
n.a.
|
n.a.
|
Unit Sale Cost of Other
Products/Revenues
|
n.a.
|
n.a.
|
•
|
General and
administrative expenses in the 3Q’08 were R$49.9 million, down 5.4% versus
the 3Q’07 result, although higher than in the 2Q’08. In the comparison
with the 3Q’07, the reduction was due to the conclusion of the consulting
services involving the management of market risk and the preparation of
financial statements under US GAAP. In the comparison with 2Q’08, the
increase was primarily due to the onset of expenses with accounting audits
as of October 2007 and consulting services related to the budget process
for the next fiscal year. In unit terms, given the low sugar sales
volumes, general and administrative expenses increased by 4.1% from R$34
to R$35 per tonne of sugar
equivalent.
|
3Q'07
|
3Q'08
|
General & Administrative
Expenses
|
YTD'07
|
YTD'08
|
|
(52.8)
|
(49.9)
|
G&A Expenses
(R$MM)
|
(148.4)
|
(152.5)
|
|
(32.0)
|
(20.6)
|
Sugar
|
(93.2)
|
(82.1)
|
|
(17.9)
|
(26.4)
|
Ethanol
|
(46.5)
|
(57.9)
|
|
(2.9)
|
(3.0)
|
Other
Products/Services
|
(8.7)
|
(12.5)
|
|
Avg. Unit. G&A Cost
(R$)
|
|||||
35
|
33
|
Unit G&A Cost of Sugar
(R$/ton)
|
36
|
36
|
|
45
|
55
|
Unit G&A Cost of Ethanol
(R$/thousand liters)
|
45
|
56
|
|
n.a.
|
n.a.
|
Unit G&A Cost of Other
Products/Services
|
n.a.
|
n.a.
|
•
|
The other
operating expenses of R$2.7 million in the quarter were caused primarily
by the adjustment of provisions for contingencies, which compares with
almost insignificant other operating expenses in the
3Q’07.
|
|
Financial results impacted by FX variations
|
•
|
The net
financial expenses of R$11.9 million in the quarter were 32.7% lower than
in the 3Q’07. While charges on gross debt increased chiefly as a result of
the acceleration in inflation as measured by the IGP-M index, which
generates higher costs with debt restructured under the Financial Assets
Rehabilitation
|
12 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
•
|
Program - PESA (although with no cash effect), the income from short-term investments were also higher, reflecting the greater average cash position in the period. The foreign exchange variation on, in particular, dollar-denominated debt follows the path of exchange-rate variation at end of period, and thus in the 3Q’08 represented a negative result. The residual value of the premium paid to repurchase 2009 bonds reflects the commissions paid to the bank acting as lead manager in the offer after its conclusion, which was effected over the course of the quarter. The interest on action for damages reflects the monetary restatement applicable on the assets constituted under the line credits from actions for damages. The result of other interest and monetary variations includes R$30.2 million from the reclassification of results booked unduly in the 2Q’08 (with a balancing item in the line results of derivative operations), and after this adjustment remained in line with the 3Q’07 result. |
3Q'07
|
3Q'08
|
Financial Expenses, Net
(R$MM)
|
YTD'07
|
YTD'08
|
(58.7)
|
(64.3)
|
Interest on Financial
Debt
|
(185.8)
|
(185.3)
|
8.6
|
13.7
|
Financial Investments
Income
|
53.0
|
57.8
|
(50.1)
|
(50.6)
|
Sub-total: Interest on Net
Financial Debt
|
(132.8)
|
(127.6)
|
(7.1)
|
(38.4)
|
Other interest and monetary
variation
|
(37.7)
|
(60.3)
|
12.4
|
(14.2)
|
Exchange
Variation
|
(31.6)
|
260.3
|
35.3
|
93.2
|
Gains (losses) with
Derivatives
|
(82.3)
|
243.8
|
(8.1)
|
(8.4)
|
CPMF Taxes, Banking Fees and
Other
|
(25.1)
|
(21.0)
|
-
|
-
|
Discounts in Promissory
Notes
|
25.6
|
-
|
-
|
-
|
Discounts in VAT - Law
12,399/06
|
65.4
|
-
|
-
|
-
|
Recalc. Provision Interest
IAA
|
42.8
|
-
|
-
|
(1.2)
|
Premium Paid in Bond Tender
Offer
|
-
|
(31.4)
|
-
|
7.8
|
Interest on Indemnity from
Government
|
-
|
19.3
|
(17.6)
|
(11.9)
|
Net Financial
Expenses
|
(175.6)
|
283.3
|
•
|
Derivative
operations to hedge sale prices generated financial revenue of R$93.2
million in the quarter, comprised of R$54.7 from foreign-currency hedges
and R$38.5 million from sugar and ethanol price hedges. At the close of
the 3Q’08, Cosan had 2,152.6 thousand tonnes of VHP sugar based on the
NY11 contract with an average price of US¢11.35/lb (with 472.5 thousand
tonnes in this harvest at US¢10.73/lb), with an estimated negative market
value of R$154.9 million, and 58.5 thousand tonnes of refined sugar based
on the No. 5 Contract in London hedged at the average price of US$337.48
per tonne and with a negative market value estimated at R$2.4 million. The
company has 6.8 million liters of ethanol based on the NYMEX gasoline
contract at an average price of US$2.09 per gallon and with an estimated
negative market value of R$1.2 million, and, lastly, US$450.0 million
hedged at an average exchange rate of R$1.8847/US$ and with an estimated
market value of R$22.4 million. Taking
advantage of the high sugar prices recently, Cosan continued its program
of fixing prices after the end of the quarter. By March 12, it had fixed
the price of additional 1,836.0 thousand tonnes of VHP sugar referenced in
the NY11 agreement at the average price of US¢14.43/lb.
|
|
•
|
Expenses with
amortization of goodwill, with no cash effect, totaled R$48.2 million in
the 3Q’08, adequately reflecting the amortization schedule, adjusted to
the paralysis of the amortization of the goodwill paid in the acquisition
of the interest in the Santa Luiza Group, given the plant’s restructuring
by the controlling groups.
|
|
•
|
Revenue with
income tax and social contribution tax was R$33.5 million, which primarily
came from the creation of active tax credits related to tax losses and the
negative base of accrued social contribution tax, which totaled R$92.0
million at the end of 3Q’08 and will be recovered over the coming fiscal
years.
|
|
•
|
In view of the
above results, the company posted a net loss of R$71.4 million, which
exceeded the accrued net income in the first two quarters of the year, for
|
13 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
net income year to date of R$42.5 million, which was fully aligned with the company’s planning. In the 3Q’07, Cosan posted a net loss of R$63.4 million. | ||
C.
Financial Situation
|
||
•
|
Gross debt
stood at R$2,356.7 million at the close of the 3Q’08, down substantially
from the R$3,129.4 million at the close of the 3Q’07, driven by
foreign-exchange effects and the prepayment of US$164.2 million in the
2009 Senior Notes mentioned previously in the 2Q’08. Considering the cash
and cash equivalents and financial assets, net debt totaled R$465.6
million in the 3Q’08, compared to R$1,490.7 million in the 3Q’07. In this
comparison, the main difference is due to the solid cash position obtained
from the capital increase approved at the Extraordinary Shareholders’
Meeting held on December 5, 2007. Excluding the debt that does not involve
cash transactions, i.e., the debentures settled through the transfer of
land and the PESA debt settled against National Treasury Notes (CTNs) held
as assets, the net debt position was practically insignificant, at only
R$71.3 million in the quarter, versus R$1,112.1 million in the
3Q’07.
|
Debt per Type
(R$MM)
|
3Q'07
|
%
|
3Q'08
|
%
|
Var.
|
||||||
Senior Notes
2009
|
440.4
|
14.1
|
68.7
|
2.9
|
(371.6)
|
||||||
Senior Notes
2017
|
850.5
|
27.2
|
704.0
|
29.9
|
(146.6)
|
||||||
Perpetual
Notes
|
975.1
|
31.2
|
807.7
|
34.3
|
(167.4)
|
||||||
PESA
Securitization
|
497.4
|
15.9
|
539.1
|
22.9
|
41.7
|
||||||
Finame
(BNDES)
|
9.7
|
0.3
|
11.3
|
0.5
|
1.7
|
||||||
Working
Capital
|
32.5
|
1.0
|
40.6
|
1.7
|
8.1
|
||||||
IFC
|
139.0
|
4.4
|
100.3
|
4.3
|
(38.7)
|
||||||
Debentures
|
55.4
|
1.8
|
55.1
|
2.3
|
-
|
||||||
Advances from
Customers
|
125.7
|
4.0
|
30.0
|
1.3
|
(95.7)
|
||||||
Promissory
Notes
|
3.7
|
0.1
|
-
|
-
|
(3.7)
|
||||||
Related
Parties
|
-
|
-
|
-
|
-
|
-
|
||||||
Gross Debt
|
3,129.4
|
100.0
|
2,356.7
|
100.0
|
(772.3)
|
||||||
Cash & Marketable
Securities
|
1,280.5
|
40.9
|
1,448.2
|
61.4
|
167.7
|
||||||
Advances to
Suppliers
|
184.0
|
5.9
|
243.1
|
10.3
|
59.1
|
||||||
CTN's - Brazilian Treasury
Bills
|
119.2
|
3.8
|
144.9
|
6.1
|
25.7
|
||||||
Land related to the
Debentures
|
55.1
|
1.8
|
55.1
|
2.3
|
-
|
||||||
Net Debt
|
1,490.7
|
47.6
|
465.6
|
19.8
|
(1,025.1)
|
||||||
Total Debt without
PESA/Debentures
|
2,576.5
|
82.3
|
1,762.6
|
74.8
|
(813.9)
|
||||||
Net Debt without
PESA/Debentures
|
1,112.1
|
35.5
|
71.3
|
3.0
|
(1,040.7)
|
•
|
Short-term
debt remained at minimal levels, accounting for only 4.5% of total debt at
the end of the 3Q’08. In terms of currency denomination, with the partial
prepayment of the 2009 Senior Notes, the weighting of dollar-denominated
debt declined from 79.2% to 72.0%, and continued to offer an attractive
natural hedge for Cosan’s export
revenue.
|
Debt Profile
(R$MM)
|
3Q'07
|
%
|
3Q'08
|
%
|
Var.
|
Total
Debt
|
3,129.4
|
100.0
|
2,356.7
|
100.0
|
(772.6)
|
Short-Term
|
163.1
|
5.2
|
104.9
|
4.5
|
(10.4)
|
Long-Term
|
2,966.2
|
94.8
|
2,251.8
|
95.5
|
(714.4)
|
Real -
R$
|
650.5
|
20.8
|
660.9
|
28.0
|
(58.2)
|
Dollar -
US$
|
2,478.9
|
79.2
|
1,695.8
|
72.0
|
(783.0)
|
D.
Investment
|
||
•
|
Operating
capex totaled R$270.8 million in the quarter, 143.4% higher than in the
same period a year ago. The funds were mainly invested in the planting of
sugarcane, in projects to expand capacity, and in cogeneration projects to
produce electricity from sugarcane
bagasse.
|
14 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
3Q'07
|
3Q'08
|
Capex
(R$MM)
|
YTD'07
|
YTD'08
|
|
0.0
|
0.4
|
New
Investments, including Goodwill
|
3.7
|
4.6
|
|
0.0
|
0.2
|
Deferred
Charges & Other
|
0.3
|
1.3
|
|
-
|
-
|
Incorporated
PP&E and Land Acquisition
|
-
|
3.3
|
|
31.6
|
72.5
|
Sugar Cane
Planting Costs
|
109.6
|
178.3
|
|
32.8
|
24.4
|
Co-generation
Projects
|
73.0
|
100.4
|
|
-
|
37.4
|
Inter-harvest
Maintenance Costs
|
-
|
41.0
|
|
46.8
|
136.4
|
Investments in
P,P&E
|
135.8
|
254.9
|
|
111.3
|
271.4
|
Capex
|
322.4
|
583.8
|
|
111.2
|
270.8
|
Operating
Capex
|
318.4
|
574.6
|
•
|
Investments in
the planting of sugarcane totaled R$72.5 million, of which R$25.0 million
was exclusively related to the cost of cuttings to replicate new fields in
the greenfield projects in Goiás state. Other important drivers of this
high investment was the conclusion of the works to prepare fields for the
expansion of the Gasa plant, as well as works to renew the fields of other
mills.
|
|
•
|
In the 3Q’08, Cosan invested R$24.4
million in electricity cogeneration plants at the Rafard, Costa Pinto and
Bonfim units. Investment in cogeneration already total R$187.9 million.
The works, which are advancing on schedule, should be concluded by the
start of the next fiscal year, enabling electricity generation to start on
an experimental basis already in FY'09.
|
|
Agricultural mechanization among key
investments
|
•
|
Of the total
investment of R$136.4 million in fixed assets in general, R$24.8 million
already reflects the disbursements of advances related to the greenfield
project in Goiás state. An important part of this investment is also to
expand the Gasa plant. Lastly, another important investment was the R$14.8
million used to acquire 21 mechanized harvesters in the process to
increase mechanization.
|
•
|
The
inter-harvest maintenance activities began later than usual, due to the
extended duration of the 2007-08 harvest, and consume R$37.4 million in
the 3Q’08. In FY’07, these expenses were only registered as operating
capex in 4Q07 when the accounting criteria were changed, in accordance
with Brazilian accounting standards.
|
|
E. Material Facts | ||
•
|
An important development in the period
was the partnership formed last November with Promon Engenharia, a leading
company specializing in the development, consulting, integration and
implementation of infrastructure solutions for key sectors of Brazil’s
economy. Through a contract for EPC-M services (management of engineering,
procurement and construction), Promon will be responsible for managing the
construction of the greenfield project in Goiás state, providing an
additional level of guarantee to this important initiative by Cosan, which
represents an increase in sugarcane crushing capacity of 10 to 12 million
tonnes for the group, with a subsequent increase in ethanol production, as
well as own cogeneration projects to generate electricity using sugarcane
bagasse and leaves. Through this partnership, Cosan seeks to innovate
production of ethanol and energy, by adding its knowledge of the
production process to Promon’s engineering expertise. With this, Cosan
expects to produce with greater efficiency and at lower costs, through the
most modern plants in the world.
|
|
•
|
Seeking to strengthen its commercial structure, on November 1, 2007, Cosan acquired, for the symbolic price of US$4,500.00, a 50% interest in the trading house Vertical UK LLP, with the remaining 50% interest held by its principal executives, who continue to manage the company. Vertical is a trading company specialized in renewable products, and operates primarily selling and distributing ethanol and biodiesel. The most important objective of this investment is to |
15 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
accelerate the group’s intenationalization process and develop new ethanol markets, and to achieve this goal Cosan now has the indirect support of a team of professionals who are highly qualified and specialized in this market. | ||
•
|
On January 23,
2008, Cosan concluded yet another phase of its restructuring plant,
through a capital increase of R$1,736,700,000.00 (one billion, seven
hundred and thirty-six million and seven hundred reais) with the issue of
82,700,000 registered book-entry common shares with no par value at the
issue price of R$21.00 (twenty-one reais) per share. The capital increase
enjoyed excellent participation by minority shareholders, which exercised
64.1% of their subscription rights, representing R$547,944,684.00
Consequently, Cosan Limited subscribed to the remaining shares, and now
holds an interest of 56.11% in Cosan S.A.
|
|
•
|
On February
14, 2008, Cosan announced the acquisition of 100% of the shares in Usina
Benálcool. The acquisition was worth R$106.9 million, to be paid primarily
through own funds. On January 31, 2008, Usina Benálcool had R$34.0 million
in debt, and a balance of cash and cash equivalents of R$6.5 million.
Usina Benálcool has installed sugarcane capacity of 1.3 million tonnes and
is located in the region of Araçatuba, where the Cosan Group already has
four other production units. The acquisition will strengthen the group's
presence in the region, in line with its strategy of forming
clusters.
|
|
F.
Guidance for FY’08
|
||
•
|
This section
presents guidance by range of variation for the same key parameters for
the company, including non-relevant variations below 5%, medium variations
of up to 15%, material variations of up to 30% and significant variations
of over 30%. In addition, other statements within this letter may be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934 as
well as amendments to same. Such forward-looking statements are only
predictions and are not guarantees of future performance. Investors are
cautioned that any such forward-looking statements are subject to various
risks, uncertainties and factors related to the market and operations of
Cosan and its subsidiaries that may cause the actual results of the
Company to be significantly different from any future results expressed or
implied by such predictions. Although Cosan believes that the expectations
and assumptions reflected in the forward-looking statements are fair,
based on information currently available to its management, it cannot
guarantee future results or events. Cosan also expressly disclaims any
responsibility for updating any of the forward-looking
statements.
|
Guidance
|
2006FY
|
2007FY
|
2008FY
|
Changes from
previous
guidance
|
|||
FX Rate - EoP
(R$:US$)
|
2.0892
|
2.0339
|
▼▼
|
-
|
|||
Crushed Cane
Volume (thousand tons)
|
27,891
|
36,154
|
▲
|
-
|
|||
Sugar Volume
Sold (thousand tons)
|
2,469
|
3,241
|
=
|
-
|
|||
Ethanol Volume
Sold (million liters)
|
1,016
|
1,322
|
▲
|
-
|
|||
Avg. Sugar
Price (R$/ton)
|
603
|
683
|
▼▼
|
-
|
|||
Avg. Ethanol
Price (R$/thousand liter)
|
844
|
897
|
▼▼
|
-
|
|||
Revenues
(R$MM)
|
2,478
|
3,605
|
▼▼
|
-
|
|||
COGS
(R$MM)
|
1,721
|
2,481
|
▼
|
-
|
|||
EBITDA
(R$MM)
|
518
|
928
|
▼▼▼
|
-
|
|||
Net
Profit/Loss (R$MM)
|
(65)
|
357
|
▼▼▼
|
-
|
|||
Operating
Capex (R$MM)
|
209
|
575
|
▲▲▲
|
-
|
16 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
G.
Financial Statements of Cosan S.A. – BR
GAAP
|
Income
Statement
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
million of reais)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Gross
Operating Revenue
|
2,048.3
|
2,702.4
|
3,902.9
|
818.0
|
1,014.7
|
1,084.3
|
1,048.5
|
755.4
|
636.4
|
678.3
|
747.5
|
|
(-)
|
Sales
Taxes and Deductions
|
(147.9)
|
(224.5)
|
(297.8)
|
(70.6)
|
(70.6)
|
(76.2)
|
(77.7)
|
(73.3)
|
(44.7)
|
(50.8)
|
(73.5)
|
(=)
|
Net
Operating Revenue
|
1,900.4
|
2,477.9
|
3,605.1
|
747.5
|
944.1
|
1,008.1
|
970.8
|
682.1
|
591.7
|
627.5
|
674.0
|
(-)
|
Cost
of Goods Sold and Services Rendered
|
(1,338.5)
|
(1,721.3)
|
(2,481.1)
|
(507.3)
|
(576.0)
|
(713.1)
|
(680.2)
|
(511.8)
|
(548.0)
|
(551.1)
|
(594.4)
|
(=)
|
Gross
Profit
|
561.8
|
756.6
|
1,123.9
|
240.2
|
368.2
|
294.9
|
290.6
|
170.3
|
43.7
|
76.4
|
79.6
|
Margin
|
29.6%
|
30.5%
|
31.2%
|
32.1%
|
39.0%
|
29.3%
|
29.9%
|
25.0%
|
7.4%
|
12.2%
|
11.8%
|
|
(-)
|
Operating
Income (Expenses):
|
(528.5)
|
(819.1)
|
(558.6)
|
(234.7)
|
(351.2)
|
(109.7)
|
(196.7)
|
98.9
|
(24.6)
|
(51.8)
|
(186.1)
|
(-)
|
Selling
|
(171.7)
|
(217.1)
|
(282.0)
|
(46.4)
|
(60.1)
|
(75.6)
|
(71.2)
|
(75.2)
|
(61.1)
|
(91.9)
|
(73.4)
|
(-)
|
General
and Administrative
|
(121.9)
|
(150.0)
|
(246.2)
|
(44.9)
|
(46.3)
|
(49.4)
|
(52.8)
|
(97.7)
|
(57.0)
|
(45.5)
|
(49.9)
|
(-)
|
Financial
Income (Expenses), Net
|
(102.0)
|
(245.2)
|
158.0
|
(85.4)
|
(185.7)
|
27.7
|
(17.6)
|
333.6
|
150.8
|
144.3
|
(11.9)
|
(±)
|
Earnings
(Losses) on Equity Investments
|
-
|
0.6
|
(0.1)
|
0.1
|
0.3
|
0.1
|
0.1
|
(0.5)
|
0.1
|
0.0
|
0.1
|
(-)
|
Goodwill
Amortization
|
(93.2)
|
(142.8)
|
(223.7)
|
(50.0)
|
(56.4)
|
(55.6)
|
(55.9)
|
(55.9)
|
(56.0)
|
(56.6)
|
(48.2)
|
(±)
|
Other
Operating Income (Expenses), Net
|
(39.7)
|
(11.8)
|
35.3
|
(5.5)
|
(3.0)
|
43.1
|
0.7
|
(5.4)
|
(1.5)
|
(2.0)
|
(2.7)
|
(-)
|
Expenses
with Placement of Shares
|
-
|
(52.8)
|
-
|
(2.6)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(=)
|
Operating
Income (Loss)
|
33.3
|
(62.5)
|
565.3
|
5.5
|
17.0
|
185.3
|
93.9
|
269.1
|
19.1
|
24.6
|
(106.6)
|
Margin
|
1.8%
|
-2.5%
|
15.7%
|
0.7%
|
1.8%
|
18.4%
|
9.7%
|
39.5%
|
3.2%
|
3.9%
|
-15.8%
|
|
(±)
|
Non-operating
Result, Net
|
2.7
|
(1.0)
|
2.0
|
2.1
|
1.2
|
0.3
|
0.1
|
0.4
|
3.0
|
2.3
|
1.1
|
(=)
|
Income
(Loss) before Taxes
|
36.0
|
(63.5)
|
567.3
|
7.6
|
18.2
|
185.6
|
94.0
|
269.5
|
22.1
|
26.9
|
(105.5)
|
(±)
|
Income
and Social Contribution Taxes
|
(22.2)
|
5.8
|
(203.9)
|
(2.6)
|
(11.2)
|
(60.1)
|
(30.0)
|
(102.5)
|
(9.0)
|
(12.3)
|
33.5
|
(±)
|
Minority
Interest
|
3.3
|
(6.9)
|
(6.2)
|
(5.8)
|
(1.6)
|
(1.8)
|
(0.6)
|
(2.3)
|
0.6
|
0.7
|
0.6
|
(=)
|
Net
Income (Loss) for the Year
|
17.1
|
(64.6)
|
357.3
|
(0.9)
|
5.4
|
123.8
|
63.4
|
164.7
|
13.7
|
15.2
|
(71.4)
|
Margin
|
0.9%
|
-2.6%
|
9.9%
|
-0.1%
|
0.6%
|
12.3%
|
6.5%
|
24.2%
|
2.3%
|
2.4%
|
-10.6%
|
|
l
|
EBITDA
|
340.9
|
517.7
|
928.0
|
168.5
|
329.1
|
272.6
|
197.9
|
128.4
|
49.5
|
75.9
|
1.3
|
Margin
|
17.9%
|
20.9%
|
25.7%
|
22.5%
|
34.9%
|
27.0%
|
20.4%
|
18.8%
|
8.4%
|
12.1%
|
0.2%
|
|
l
|
EBITDAH
(Ebitda adjusted by Hedge)
|
275.6
|
308.6
|
853.7
|
56.4
|
203.2
|
280.9
|
233.2
|
136.4
|
133.3
|
142.7
|
94.4
|
Margin
|
15.0%
|
13.6%
|
24.2%
|
8.9%
|
24.8%
|
27.6%
|
23.2%
|
19.8%
|
19.7%
|
20.6%
|
12.3%
|
|
l
|
Depreciation
& Amortization
|
112.3
|
139.9
|
297.0
|
25.0
|
70.3
|
59.5
|
30.6
|
136.5
|
125.4
|
139.0
|
47.8
|
Balance
Sheet
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
million of reais)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Cash
and Cash Equivalents
|
35.2
|
61.0
|
643.8
|
61.0
|
176.2
|
56.7
|
976.8
|
643.8
|
579.0
|
135.1
|
115.7
|
|
Marketable
Securities
|
3.9
|
770.5
|
573.3
|
770.5
|
633.6
|
345.7
|
303.7
|
573.3
|
237.4
|
6.5
|
1,332.5
|
|
Derivative
Financial Instruments
|
0.9
|
288.6
|
37.6
|
288.6
|
72.8
|
15.2
|
8.5
|
37.6
|
94.0
|
3.6
|
67.3
|
|
Trade
Accounts Receivable
|
119.1
|
212.6
|
112.3
|
212.6
|
232.2
|
277.4
|
212.1
|
112.3
|
140.4
|
107.3
|
105.4
|
|
Inventories
|
339.8
|
390.8
|
503.4
|
390.8
|
876.2
|
1,221.2
|
857.9
|
503.4
|
790.2
|
1,194.8
|
1,019.7
|
|
Advances
to Suppliers
|
94.6
|
132.7
|
211.4
|
132.7
|
167.3
|
174.2
|
184.0
|
211.4
|
308.6
|
304.5
|
243.1
|
|
Related
Parties
|
44.8
|
0.0
|
-
|
0.0
|
0.1
|
-
|
0.1
|
-
|
-
|
-
|
-
|
|
Deferred
Income and Social Contribution Taxes
|
14.2
|
41.4
|
38.1
|
41.4
|
58.3
|
56.9
|
144.9
|
38.1
|
26.9
|
24.2
|
26.0
|
|
Other
Assets
|
61.4
|
115.7
|
104.9
|
115.7
|
133.3
|
124.7
|
121.7
|
104.9
|
94.2
|
75.1
|
79.7
|
|
Current
Assets
|
713.9
|
2,013.4
|
2,224.7
|
2,013.4
|
2,350.1
|
2,272.0
|
2,809.6
|
2,224.7
|
2,270.8
|
1,851.1
|
2,989.4
|
|
Accounts
Receivable from Federal Government
|
-
|
-
|
318.4
|
-
|
-
|
-
|
-
|
318.4
|
318.4
|
331.4
|
339.2
|
|
CTN's-Restricted
Brazilian Treasury Bills
|
47.0
|
104.9
|
123.3
|
104.9
|
109.6
|
114.0
|
119.2
|
123.3
|
127.8
|
135.9
|
144.9
|
|
Deferred
Income and Social Contribution Taxes
|
51.5
|
361.8
|
242.5
|
361.8
|
342.9
|
299.3
|
214.0
|
242.5
|
261.6
|
277.1
|
297.9
|
|
Other
Assets
|
17.7
|
99.5
|
112.4
|
99.5
|
96.5
|
93.7
|
113.0
|
112.4
|
108.1
|
105.8
|
151.8
|
|
Investments
|
13.1
|
13.4
|
93.2
|
13.4
|
13.6
|
13.6
|
13.7
|
93.2
|
13.8
|
13.9
|
14.0
|
|
Property,
Plant and Equipment
|
1,481.6
|
1,656.4
|
2,013.1
|
1,656.4
|
1,603.7
|
1,600.3
|
1,732.1
|
2,013.1
|
2,076.7
|
2,070.3
|
2,293.3
|
|
Goodwill
|
357.6
|
1,353.0
|
1,133.2
|
1,353.0
|
1,300.5
|
1,245.0
|
1,189.1
|
1,133.2
|
1,146.6
|
1,090.2
|
1,042.4
|
|
Deferred
Charges
|
2.4
|
2.3
|
2.6
|
2.3
|
2.4
|
2.3
|
2.2
|
2.6
|
3.2
|
3.6
|
3.7
|
|
Permanent
Assets
|
1,970.9
|
3,591.3
|
4,038.6
|
3,591.3
|
3,469.1
|
3,368.2
|
3,383.2
|
4,038.6
|
4,056.2
|
4,028.1
|
4,287.1
|
|
(=)
|
Total
Assets
|
2,684.8
|
5,604.8
|
6,263.4
|
5,604.8
|
5,819.2
|
5,640.2
|
6,192.8
|
6,263.4
|
6,327.0
|
5,879.2
|
7,276.4
|
Loans
and Financings
|
38.1
|
68.8
|
89.0
|
68.8
|
75.0
|
73.4
|
75.9
|
89.0
|
116.5
|
105.1
|
74.9
|
|
Derivatives
Financial Instruments
|
3.2
|
65.4
|
35.5
|
65.4
|
32.5
|
20.5
|
2.5
|
35.5
|
48.0
|
31.2
|
20.5
|
|
Trade
Accounts Payable
|
94.9
|
201.7
|
113.8
|
201.7
|
379.6
|
348.0
|
197.2
|
113.8
|
315.2
|
373.3
|
196.3
|
|
Salaries
Payable
|
30.1
|
49.7
|
63.3
|
49.7
|
77.2
|
92.0
|
37.5
|
63.3
|
91.7
|
113.4
|
51.7
|
|
Taxes
and Social Contributions Payable
|
88.1
|
111.1
|
126.2
|
111.1
|
134.8
|
107.3
|
114.8
|
126.2
|
131.5
|
101.0
|
93.3
|
|
Advances
from Customers
|
188.1
|
79.2
|
49.4
|
79.2
|
55.1
|
98.4
|
83.2
|
49.4
|
41.0
|
28.7
|
30.0
|
|
Promissory
Notes
|
14.6
|
55.8
|
1.3
|
55.8
|
41.0
|
37.8
|
3.7
|
1.3
|
1.3
|
-
|
-
|
|
Related
Parties
|
1.4
|
0.1
|
0.7
|
0.1
|
0.1
|
0.7
|
-
|
0.7
|
-
|
-
|
-
|
|
Deferred
Income and Social Contribution Taxes
|
4.9
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
5.5
|
|
Other
Liabilities
|
30.8
|
32.8
|
107.2
|
32.8
|
64.7
|
64.9
|
27.2
|
107.2
|
87.3
|
12.3
|
8.3
|
|
Current
Liabilities
|
494.1
|
670.0
|
591.7
|
670.0
|
865.3
|
848.4
|
547.5
|
591.7
|
838.1
|
770.5
|
480.5
|
|
Loans
and Financing
|
798.4
|
2,002.7
|
2,770.4
|
2,002.7
|
2,060.2
|
2,040.6
|
2,868.7
|
2,770.4
|
2,591.1
|
2,178.8
|
2,196.8
|
|
Taxes
and Social Contributions Payable
|
217.4
|
446.9
|
338.5
|
446.9
|
435.2
|
355.8
|
346.2
|
338.5
|
336.5
|
345.0
|
340.1
|
|
Promissory
Notes
|
48.1
|
12.7
|
-
|
12.7
|
3.6
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Provision
for Contingencies
|
245.9
|
907.4
|
728.0
|
907.4
|
886.5
|
705.4
|
717.4
|
728.0
|
741.0
|
757.5
|
775.3
|
|
Advances
from Customers
|
80.8
|
86.9
|
49.5
|
86.9
|
89.6
|
87.1
|
42.5
|
49.5
|
15.6
|
14.5
|
-
|
|
Deferred
Taxes on Revaluation Reserves
|
25.2
|
40.8
|
33.4
|
40.8
|
39.0
|
37.2
|
35.4
|
33.4
|
30.9
|
28.3
|
27.4
|
|
Other
Liabilities
|
8.4
|
67.9
|
100.6
|
67.9
|
63.5
|
63.8
|
62.4
|
100.6
|
109.6
|
105.9
|
107.0
|
|
Noncurrent
Liabilities
|
1,424.3
|
3,565.4
|
4,020.4
|
3,565.4
|
3,577.6
|
3,289.9
|
4,072.5
|
4,020.4
|
3,824.7
|
3,429.9
|
3,446.7
|
|
Minority
Shareholders' Interest
|
3.5
|
14.0
|
20.2
|
14.0
|
15.6
|
17.4
|
17.9
|
20.2
|
19.6
|
18.9
|
18.2
|
|
Capital
|
301.0
|
1,185.8
|
1,192.7
|
1,185.8
|
1,185.8
|
1,185.8
|
1,192.7
|
1,192.7
|
1,192.7
|
1,192.7
|
2,935.3
|
|
Profits
Reserve
|
-
|
-
|
227.3
|
-
|
-
|
-
|
-
|
227.3
|
227.3
|
227.3
|
16.0
|
|
Legal
Reserve
|
7.1
|
-
|
16.0
|
-
|
-
|
-
|
-
|
16.0
|
16.0
|
16.0
|
227.3
|
|
Revaluation
Reserves
|
326.6
|
195.9
|
195.0
|
195.9
|
195.6
|
195.4
|
195.2
|
195.0
|
194.7
|
194.5
|
194.4
|
|
Accumulated
losses
|
128.2
|
(26.2)
|
-
|
(26.2)
|
(20.6)
|
103.4
|
167.0
|
-
|
13.9
|
29.4
|
(41.9)
|
|
Shareholders'
Equity
|
762.9
|
1,355.4
|
1,631.0
|
1,355.4
|
1,360.8
|
1,484.6
|
1,554.9
|
1,631.0
|
1,644.7
|
1,659.9
|
3,331.1
|
|
(=)
|
Total
Liabilities & Shareholders' Equity
|
2,684.8
|
5,604.8
|
6,263.4
|
5,604.8
|
5,819.2
|
5,640.2
|
6,192.8
|
6,263.4
|
6,327.0
|
5,879.2
|
7,276.4
|
17 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
Cash
Flow Statement
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
millions of reais)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Net
Income (Loss) for the Year
|
17.1
|
(64.6)
|
357.3
|
(0.9)
|
5.4
|
123.8
|
63.4
|
164.7
|
13.7
|
15.2
|
(71.4)
|
|
Non-cash
Adjustments:
|
||||||||||||
Earnings
(Losses) from Equity Investments
|
-
|
(0.6)
|
0.1
|
(0.1)
|
(0.3)
|
(0.1)
|
(0.1)
|
0.5
|
(0.1)
|
(0.0)
|
(0.1)
|
|
Depreciation
& Amortization
|
112.3
|
139.9
|
297.0
|
25.0
|
70.3
|
59.5
|
30.6
|
136.5
|
125.4
|
139.0
|
47.8
|
|
Residual
Value of Permanent Assets Disposals
|
10.6
|
6.7
|
8.4
|
3.1
|
2.0
|
1.6
|
1.0
|
3.8
|
2.6
|
4.2
|
0.1
|
|
Goodwill
Amortization
|
93.2
|
142.8
|
223.7
|
50.0
|
56.4
|
55.6
|
55.9
|
55.9
|
56.0
|
56.6
|
48.2
|
|
Accrued
Financial Expenses
|
22.3
|
48.7
|
(190.6)
|
(14.2)
|
91.2
|
(1.8)
|
65.0
|
(344.9)
|
(103.0)
|
(63.2)
|
87.5
|
|
Other
Non-cash Items
|
6.4
|
(25.6)
|
119.7
|
(9.4)
|
6.9
|
3.1
|
(7.3)
|
117.0
|
(9.9)
|
(17.0)
|
(17.6)
|
|
(=)
|
Adjusted
Net Profit (Loss)
|
262.0
|
247.4
|
815.5
|
53.6
|
231.9
|
241.7
|
208.4
|
133.5
|
84.5
|
134.8
|
94.5
|
(±)
|
Decrease
(Increase) in Assets
|
(88.8)
|
(366.5)
|
165.0
|
(177.0)
|
(269.9)
|
(263.8)
|
356.6
|
342.1
|
(441.8)
|
(272.1)
|
31.9
|
(±)
|
Increase
(Decrease) in Liabilities
|
15.1
|
51.7
|
(237.2)
|
73.8
|
204.6
|
(232.7)
|
(264.3)
|
55.3
|
217.1
|
(34.6)
|
(184.5)
|
(=)
|
Cash
Flow from Operating Activities
|
188.3
|
(67.4)
|
743.3
|
(49.6)
|
166.6
|
(254.8)
|
300.7
|
530.8
|
(140.2)
|
(171.8)
|
(58.1)
|
Marketable
Securities
|
40.8
|
(766.6)
|
197.2
|
(350.1)
|
136.9
|
287.9
|
42.0
|
(269.6)
|
338.7
|
230.9
|
(1,326.0)
|
|
Goodwill
Paid in Equity Investment Acquisitions
|
(101.2)
|
(536.1)
|
(3.7)
|
(536.1)
|
(3.7)
|
-
|
-
|
-
|
(1.8)
|
(0.3)
|
(0.4)
|
|
Acquisition
of Investments
|
(8.3)
|
-
|
(80.0)
|
61.0
|
-
|
-
|
(0.0)
|
(80.0)
|
(2.1)
|
-
|
(0.0)
|
|
Acquisition
of Property, Plant and Equipment
|
(200.2)
|
(208.9)
|
(683.5)
|
(109.0)
|
(84.4)
|
(122.7)
|
(111.2)
|
(365.1)
|
(170.3)
|
(136.8)
|
(270.8)
|
|
Additions
to Deferred Charges and Other
|
-
|
0.2
|
(0.6)
|
(0.1)
|
(0.2)
|
(0.0)
|
(0.0)
|
(0.4)
|
(0.1)
|
(0.4)
|
(0.2)
|
|
(=)
|
Cash
Flow from Investment Activities
|
(268.8)
|
(1,511.4)
|
(570.7)
|
(934.3)
|
48.5
|
165.2
|
(69.3)
|
(715.1)
|
164.3
|
93.4
|
(1,597.4)
|
Additions
of Debt
|
1,304.3
|
1,878.8
|
854.7
|
1,162.7
|
3.2
|
46.3
|
852.1
|
(47.0)
|
6.3
|
0.1
|
213.0
|
|
Payments
of Principal and Interest on Debt
|
(1,319.4)
|
(1,159.9)
|
(375.6)
|
(177.8)
|
(103.2)
|
(76.2)
|
(170.3)
|
(25.9)
|
(97.7)
|
(370.0)
|
(319.6)
|
|
Capital
Increase
|
64.4
|
885.8
|
6.9
|
-
|
-
|
-
|
6.9
|
-
|
-
|
-
|
1,742.6
|
|
Proposed
Dividends
|
(1.6)
|
-
|
(75.8)
|
-
|
-
|
-
|
-
|
(75.8)
|
-
|
-
|
-
|
|
Other
|
-
|
-
|
-
|
(2.1)
|
-
|
-
|
-
|
-
|
2.4
|
-
|
-
|
|
(=)
|
Cash
Flows from Financing Activities
|
47.7
|
1,604.6
|
410.2
|
982.8
|
(100.0)
|
(29.9)
|
688.7
|
(148.7)
|
(88.9)
|
(369.9)
|
1,636.0
|
(=)
|
Total
Cash Flow
|
(32.8)
|
25.8
|
582.8
|
(1.2)
|
115.2
|
(119.5)
|
920.1
|
(333.0)
|
(64.8)
|
(448.2)
|
(19.4)
|
(+)
|
Cash
& Equivalents, Beginning
|
68.0
|
35.2
|
61.0
|
62.2
|
61.0
|
176.2
|
56.7
|
976.8
|
643.8
|
579.0
|
130.7
|
(=)
|
Cash
& Equivalents, Closing
|
35.2
|
61.0
|
643.8
|
61.0
|
176.2
|
56.7
|
976.8
|
643.8
|
579.0
|
130.7
|
111.3
|
Credit
Statistics (LTM)
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
million of reais)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Net Operating
Revenues
|
1,900.4
|
2,477.9
|
3,605.1
|
2,477.9
|
2,851.0
|
3,356.2
|
3,670.4
|
3,605.1
|
3,252.7
|
2,872.1
|
2,575.2
|
|
l
|
Gross
Profit
|
561.8
|
756.6
|
1,123.9
|
756.6
|
972.9
|
1,112.1
|
1,193.9
|
1,123.9
|
799.5
|
580.9
|
369.9
|
l
|
EBITDA
|
340.9
|
517.7
|
928.0
|
517.7
|
737.5
|
903.0
|
968.1
|
928.0
|
648.5
|
451.8
|
255.1
|
l
|
EBIT
|
228.6
|
377.8
|
631.1
|
377.8
|
579.3
|
726.0
|
782.6
|
631.1
|
296.4
|
20.3
|
(193.6)
|
l
|
Net Financial
Expenses
|
102.0
|
245.2
|
(158.0)
|
245.2
|
407.8
|
331.0
|
261.0
|
(158.0)
|
(494.5)
|
(611.1)
|
(616.9)
|
l
|
Net
Profit
|
17.1
|
(64.6)
|
357.3
|
(64.6)
|
(53.0)
|
87.1
|
191.7
|
357.3
|
365.6
|
257.0
|
122.2
|
Liquid
Funds
|
180.7
|
1,124.2
|
1,607.0
|
1,124.2
|
1,141.7
|
745.7
|
1,638.7
|
1,607.0
|
1,307.9
|
637.0
|
1,891.2
|
|
l
|
Cash &
Marketable Securities
|
39.1
|
831.5
|
1,217.1
|
831.5
|
809.8
|
402.4
|
1,280.5
|
1,217.1
|
816.4
|
141.6
|
1,448.2
|
l
|
Advances to
Suppliers
|
94.6
|
132.7
|
211.4
|
132.7
|
167.3
|
174.2
|
184.0
|
211.4
|
308.6
|
304.5
|
243.1
|
l
|
CTN's-Brazilian
Treasury Bills
|
47.0
|
104.9
|
123.3
|
104.9
|
109.6
|
114.0
|
119.2
|
123.3
|
127.8
|
135.9
|
144.9
|
l
|
Land related to
the Debentures
|
-
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
Short-Term
Debt
|
242.2
|
203.8
|
140.3
|
203.8
|
171.1
|
210.3
|
162.7
|
140.3
|
158.8
|
133.7
|
104.9
|
|
l
|
Loans and
Financings
|
38.1
|
68.8
|
89.0
|
68.8
|
75.0
|
73.4
|
75.9
|
89.0
|
116.5
|
105.1
|
74.9
|
l
|
Advances from
Customers
|
188.1
|
79.2
|
49.4
|
79.2
|
55.1
|
98.4
|
83.2
|
49.4
|
41.0
|
28.7
|
30.0
|
l
|
Promissory
Notes
|
14.6
|
55.8
|
1.3
|
55.8
|
41.0
|
37.8
|
3.7
|
1.3
|
1.3
|
-
|
-
|
l
|
Related
Parties
|
1.4
|
0.1
|
0.7
|
0.1
|
0.1
|
0.7
|
-
|
0.7
|
-
|
-
|
-
|
Long-Term
Debt
|
927.9
|
2,158.8
|
2,875.0
|
2,158.8
|
2,209.9
|
2,184.5
|
2,966.2
|
2,875.0
|
2,661.8
|
2,248.4
|
2,251.8
|
|
l
|
Loans and
Financings
|
798.4
|
2,002.7
|
2,770.4
|
2,002.7
|
2,060.2
|
2,040.6
|
2,868.7
|
2,770.4
|
2,591.1
|
2,178.8
|
2,196.8
|
l
|
Debentures
|
-
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
55.1
|
l
|
Advances from
Trading Co's
|
80.8
|
86.9
|
49.5
|
86.9
|
89.6
|
87.1
|
42.5
|
49.5
|
15.6
|
14.5
|
-
|
l
|
Promissory
Notes
|
48.1
|
12.7
|
-
|
12.7
|
3.6
|
-
|
-
|
-
|
-
|
-
|
-
|
l
|
Related
Parties
|
0.6
|
1.4
|
-
|
1.4
|
1.4
|
1.7
|
-
|
-
|
-
|
-
|
-
|
Total
Debt
|
1,170.1
|
2,362.6
|
3,015.3
|
2,362.6
|
2,381.0
|
2,394.8
|
3,129.0
|
3,015.3
|
2,820.7
|
2,382.1
|
2,356.7
|
|
Net
Debt
|
989.4
|
1,238.3
|
1,408.3
|
1,238.3
|
1,239.3
|
1,649.2
|
1,490.3
|
1,408.3
|
1,512.8
|
1,745.1
|
465.6
|
|
l
|
Net Debt excl.
PESA/Debentures
|
799.9
|
863.5
|
1,028.3
|
863.5
|
860.3
|
1,267.4
|
1,112.1
|
1,028.3
|
1,131.4
|
1,354.1
|
71.3
|
Current
Assets
|
713.9
|
2,013.4
|
2,224.7
|
2,013.4
|
2,350.1
|
2,272.0
|
2,809.6
|
2,224.7
|
2,270.8
|
1,851.1
|
2,989.4
|
|
Current
Liabilities
|
494.1
|
670.0
|
591.7
|
670.0
|
865.3
|
848.4
|
547.5
|
591.7
|
838.1
|
770.5
|
480.5
|
|
Shareholders'
Equity
|
762.9
|
1,355.4
|
1,631.0
|
1,355.4
|
1,360.8
|
1,484.6
|
1,554.9
|
1,631.0
|
1,644.7
|
1,659.9
|
3,331.1
|
|
Capex - Property,
Plant and Equipment
|
268.8
|
1,511.4
|
570.7
|
1,511.4
|
1,412.3
|
1,225.2
|
789.9
|
570.7
|
455.0
|
526.8
|
2,054.8
|
|
l
|
Capex -
Operational
|
122.0
|
208.9
|
475.1
|
208.9
|
243.2
|
302.6
|
354.4
|
475.1
|
557.9
|
612.0
|
742.5
|
EBITDA
Margin
|
17.9%
|
20.9%
|
25.7%
|
20.9%
|
25.9%
|
26.9%
|
26.4%
|
25.7%
|
19.9%
|
15.7%
|
9.9%
|
|
l
|
Gross Profit
Margin
|
29.6%
|
30.5%
|
31.2%
|
30.5%
|
34.1%
|
33.1%
|
32.5%
|
31.2%
|
24.6%
|
20.2%
|
14.4%
|
l
|
EBIT
Margin
|
12.0%
|
15.2%
|
17.5%
|
15.2%
|
20.3%
|
21.6%
|
21.3%
|
17.5%
|
9.1%
|
0.7%
|
-7.5%
|
l
|
Net Profit
Margin
|
0.9%
|
-2.6%
|
9.9%
|
-2.6%
|
-1.9%
|
2.6%
|
5.2%
|
9.9%
|
11.2%
|
8.9%
|
4.7%
|
Net Debt ÷
Shareholders' Equity
|
||||||||||||
l
|
Net Debt
%
|
56.5%
|
47.7%
|
46.3%
|
47.7%
|
47.7%
|
52.6%
|
48.9%
|
46.3%
|
47.9%
|
51.3%
|
12.3%
|
l
|
Shareholders'
Equity %
|
43.5%
|
52.3%
|
53.7%
|
52.3%
|
52.3%
|
47.4%
|
51.1%
|
53.7%
|
52.1%
|
48.7%
|
87.7%
|
Net Debt excl.
PESA ÷ Equity
|
||||||||||||
l
|
Net Debt excl.
PESA %
|
51.2%
|
38.9%
|
38.7%
|
38.9%
|
38.7%
|
46.1%
|
41.7%
|
38.7%
|
40.8%
|
44.9%
|
2.1%
|
l
|
Shareholders'
Equity %
|
48.8%
|
61.1%
|
61.3%
|
61.1%
|
61.3%
|
53.9%
|
58.3%
|
61.3%
|
59.2%
|
55.1%
|
97.9%
|
Long-Term Payable
Debt to Equity Ratio
|
0.9x
|
0.5x
|
0.9x
|
0.5x
|
0.5x
|
0.5x
|
1.0x
|
0.9x
|
0.8x
|
0.6x
|
0.3x
|
|
Liquidity Ratio
(Current Assets ÷ Current Liabilities)
|
1.4x
|
3.0x
|
3.8x
|
3.0x
|
2.7x
|
2.7x
|
5.1x
|
3.8x
|
2.7x
|
2.4x
|
6.2x
|
|
Net Debt ÷
EBITDA
|
2.9x
|
2.4x
|
1.5x
|
2.4x
|
1.7x
|
1.8x
|
1.5x
|
1.5x
|
2.3x
|
3.9x
|
1.8x
|
|
l
|
Net Debt excl.
PESA ÷ EBITDA
|
2.3x
|
1.7x
|
1.1x
|
1.7x
|
1.2x
|
1.4x
|
1.1x
|
1.1x
|
1.7x
|
3.0x
|
0.3x
|
l
|
Short-Term Net
Debt ÷ EBITDA
|
0.7x
|
0.4x
|
0.2x
|
0.4x
|
0.2x
|
0.2x
|
0.2x
|
0.2x
|
0.2x
|
0.3x
|
0.4x
|
Net Debt ÷ (EBITDA
- Capex)
|
13.7x
|
-1.2x
|
3.9x
|
-1.2x
|
-1.8x
|
-5.1x
|
8.4x
|
3.9x
|
7.8x
|
-23.3x
|
-0.3x
|
|
l
|
Net Debt ÷ (EBITDA
- Operational Capex)
|
4.5x
|
4.0x
|
3.1x
|
4.0x
|
2.5x
|
2.7x
|
2.4x
|
3.1x
|
16.7x
|
-10.9x
|
-1.0x
|
Interest Cover
(EBITDA ÷ Net Financial Exp.)
|
3.3x
|
2.1x
|
-5.9x
|
2.1x
|
1.8x
|
2.7x
|
3.7x
|
-5.9x
|
-1.3x
|
-0.7x
|
-0.4x
|
|
l
|
Interest Cover
(EBITDA - Op.Capes)÷Net Fin.)
|
2.1x
|
1.3x
|
-2.9x
|
1.3x
|
1.2x
|
1.8x
|
2.4x
|
-2.9x
|
-0.2x
|
0.3x
|
0.8x
|
Avg. Debt Cost
(Net.Fin.Exp. ÷ Net Debt)
|
10.3%
|
19.8%
|
-11.2%
|
19.8%
|
32.9%
|
20.1%
|
17.5%
|
-11.2%
|
-32.7%
|
-35.0%
|
-132.5%
|
18 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
H.
Financial Statements of Cosan Ltd. – US
GAAP
|
Income
Statement
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
millions of U.S. dollars)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Net
sales
|
644.4
|
1,096.6
|
1,679.1
|
348.9
|
425.0
|
462.7
|
463.2
|
328.1
|
301.3
|
328.0
|
376.7
|
|
(-)
|
Cost of goods
sold
|
(456.6)
|
(796.3)
|
(1,191.3)
|
(265.8)
|
(263.3)
|
(330.5)
|
(338.7)
|
(258.7)
|
(288.2)
|
(295.5)
|
(343.5)
|
(=)
|
Gross
profit
|
187.8
|
300.3
|
487.8
|
83.1
|
161.8
|
132.2
|
124.4
|
69.4
|
13.1
|
32.5
|
33.2
|
(-)
|
Selling
expenses
|
(57.8)
|
(97.8)
|
(133.8)
|
(22.1)
|
(27.9)
|
(35.3)
|
(35.5)
|
(35.2)
|
(32.0)
|
(50.2)
|
(41.6)
|
(-)
|
General and
administrative expenses
|
(40.0)
|
(72.0)
|
(121.1)
|
(23.3)
|
(21.9)
|
(24.1)
|
(26.5)
|
(48.6)
|
(30.1)
|
(24.4)
|
(30.2)
|
(=)
|
Operating income
(loss)
|
90.0
|
130.5
|
232.9
|
37.6
|
112.0
|
72.8
|
62.5
|
(14.3)
|
(49.0)
|
(42.0)
|
(38.6)
|
Operating
margin
|
14.0%
|
11.9%
|
13.9%
|
10.8%
|
26.3%
|
15.7%
|
13.5%
|
-4.4%
|
-16.3%
|
-12.8%
|
-10.2%
|
|
(-)
|
Other income
(expense):
|
|||||||||||
Financial
|
(39.2)
|
(226.6)
|
289.4
|
(1.6)
|
22.8
|
66.5
|
(13.4)
|
213.4
|
53.7
|
75.6
|
(131.8)
|
|
Other
|
(16.4)
|
(5.5)
|
16.3
|
(2.6)
|
(1.4)
|
19.8
|
0.5
|
(2.6)
|
(0.5)
|
0.1
|
(1.4)
|
|
(=)
|
Income (loss)
before income taxes, equity in income of affiliates and minority
interest
|
34.5
|
(101.6)
|
538.5
|
33.5
|
133.4
|
159.1
|
49.6
|
196.5
|
4.2
|
33.7
|
(171.9)
|
(-)
|
Income taxes
expense (benefit)
|
(14.9)
|
29.7
|
(188.8)
|
(10.6)
|
(47.4)
|
(52.6)
|
(16.6)
|
(72.2)
|
(1.7)
|
(8.1)
|
57.5
|
(=)
|
Income (loss)
before equity in income of affiliates and minority
interest
|
19.6
|
(71.8)
|
349.7
|
23.0
|
86.0
|
106.4
|
33.1
|
124.2
|
2.5
|
25.6
|
(114.3)
|
(±)
|
Equity in income
of affiliates
|
3.4
|
1.6
|
(0.0)
|
0.1
|
0.1
|
0.0
|
0.1
|
(0.2)
|
(0.2)
|
(1.8)
|
(0.5)
|
(±)
|
Minority interest
in net (income) loss of subsidiaries
|
(11.5)
|
33.1
|
(173.0)
|
(12.7)
|
(42.6)
|
(52.6)
|
(16.4)
|
(61.4)
|
(1.0)
|
(6.1)
|
55.2
|
(=)
|
Net income
(loss)
|
11.6
|
(37.1)
|
176.7
|
10.4
|
43.5
|
53.9
|
16.7
|
62.6
|
1.2
|
17.7
|
(59.7)
|
Margin
|
1.8%
|
-3.4%
|
10.5%
|
3.0%
|
10.2%
|
11.6%
|
3.6%
|
19.1%
|
0.4%
|
5.4%
|
-15.8%
|
|
l
|
EBITDA
|
107.3
|
258.3
|
263.5
|
62.3
|
105.1
|
86.1
|
60.6
|
11.7
|
24.5
|
34.0
|
66.4
|
Margin
|
16.7%
|
23.6%
|
15.7%
|
17.9%
|
24.7%
|
18.6%
|
13.1%
|
3.6%
|
8.1%
|
10.4%
|
17.6%
|
|
l
|
EBIT
|
65.6
|
159.7
|
76.2
|
22.5
|
68.1
|
40.0
|
46.7
|
(78.6)
|
(50.8)
|
(49.8)
|
14.6
|
Margin
|
10.2%
|
14.6%
|
4.5%
|
6.5%
|
16.0%
|
8.6%
|
10.1%
|
-23.9%
|
-16.8%
|
-15.2%
|
3.9%
|
|
l
|
Depreciation and
amortization
|
41.7
|
98.6
|
187.4
|
39.8
|
37.0
|
46.1
|
13.9
|
90.3
|
75.2
|
83.8
|
51.8
|
Cash
Flow Statement
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
millions of U.S. dollars)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
l
|
Cash flow from
operating activities:
|
|||||||||||
Net income (loss)
for the year/quarter
|
11.6
|
(37.1)
|
176.7
|
10.4
|
43.5
|
53.9
|
16.7
|
62.6
|
1.2
|
17.7
|
(59.7)
|
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
||||||||||||
Depreciation and
amortization
|
41.7
|
98.6
|
187.4
|
39.8
|
37.0
|
46.1
|
13.9
|
90.3
|
75.2
|
83.8
|
51.8
|
|
Deferred income
and social contribution taxes
|
(2.3)
|
(53.0)
|
150.2
|
(0.5)
|
42.4
|
45.8
|
(14.2)
|
76.3
|
(8.6)
|
(5.9)
|
(51.9)
|
|
Interest, monetary
and exchange variation
|
8.1
|
24.3
|
116.3
|
(9.4)
|
56.0
|
40.1
|
(4.6)
|
24.7
|
(53.1)
|
(44.5)
|
56.5
|
|
Minority interest
in net income of subsidiaries
|
11.5
|
(33.1)
|
173.0
|
12.7
|
42.6
|
52.6
|
16.4
|
61.4
|
1.0
|
6.1
|
(55.2)
|
|
Others
|
9.8
|
15.9
|
(176.8)
|
5.9
|
3.6
|
(16.7)
|
0.5
|
(164.1)
|
5.8
|
6.9
|
(6.2)
|
|
80.4
|
15.6
|
626.8
|
58.8
|
225.2
|
221.7
|
28.7
|
151.2
|
21.5
|
63.9
|
(64.6)
|
||
Decrease/increase
in operating assets and liabilities:
|
||||||||||||
Trade accounts
receivable, net
|
(18.5)
|
(35.4)
|
48.2
|
(18.1)
|
(8.1)
|
(21.2)
|
29.9
|
47.7
|
(16.7)
|
15.4
|
6.4
|
|
Inventories
|
(20.7)
|
30.9
|
(54.1)
|
133.1
|
(222.9)
|
(165.5)
|
168.7
|
165.6
|
(147.8)
|
(240.5)
|
103.1
|
|
Advances to
suppliers
|
(1.9)
|
(10.7)
|
(38.7)
|
(8.2)
|
(15.9)
|
(3.5)
|
(4.7)
|
(14.6)
|
(50.9)
|
(1.3)
|
35.2
|
|
Trade accounts
payable
|
14.8
|
28.7
|
(43.2)
|
7.9
|
81.7
|
(13.5)
|
(70.4)
|
(41.1)
|
106.0
|
40.8
|
(100.9)
|
|
Derivative
financial instruments
|
(16.0)
|
83.5
|
(155.0)
|
(77.4)
|
(86.0)
|
(45.3)
|
15.1
|
(38.7)
|
33.5
|
9.0
|
127.4
|
|
Taxes
payable
|
(9.1)
|
(37.6)
|
(36.6)
|
(21.5)
|
2.3
|
(54.8)
|
25.4
|
(9.5)
|
(0.8)
|
(15.4)
|
13.7
|
|
Other assets and
liabilities, net
|
(21.2)
|
11.0
|
(63.4)
|
(20.6)
|
17.4
|
(59.9)
|
(29.0)
|
8.2
|
11.1
|
(25.6)
|
(107.9)
|
|
(72.8)
|
70.4
|
(342.8)
|
(4.8)
|
(231.6)
|
(363.8)
|
135.0
|
117.6
|
(65.6)
|
(217.7)
|
77.1
|
||
(=)
|
Net cash provided
by operating actitivities
|
7.6
|
86.0
|
284.0
|
54.0
|
(6.4)
|
(142.1)
|
163.7
|
268.7
|
(44.0)
|
(153.8)
|
12.5
|
l
|
Cash flow from
investing activities:
|
|||||||||||
Restricted
cash
|
5.1
|
(62.6)
|
47.0
|
68.2
|
59.2
|
0.6
|
(0.3)
|
(12.6)
|
(30.0)
|
48.9
|
(33.6)
|
|
Marketable
securities
|
9.5
|
(366.9)
|
97.0
|
(279.8)
|
62.9
|
135.3
|
23.1
|
(124.4)
|
180.8
|
(972.6)
|
(71.0)
|
|
Acquisition of
property, plant and equipment
|
(68.8)
|
(135.2)
|
(356.2)
|
(102.9)
|
(10.4)
|
(40.7)
|
(62.5)
|
(242.6)
|
(94.4)
|
(90.5)
|
(157.3)
|
|
Acquisitions, net
of cash acquired
|
(8.5)
|
(260.9)
|
(39.4)
|
(232.6)
|
-
|
(0.1)
|
0.1
|
(39.4)
|
(1.1)
|
(0.1)
|
0.0
|
|
(=)
|
Net cash used in
investing actitivities
|
(62.7)
|
(825.5)
|
(251.6)
|
(547.1)
|
111.8
|
95.2
|
(39.6)
|
(419.0)
|
55.3
|
(1,014.3)
|
(261.9)
|
l
|
Cash flow from
financing activities:
|
|||||||||||
Proceeds from
issuance of common stock
|
23.3
|
383.1
|
3.2
|
(0.8)
|
-
|
-
|
3.2
|
-
|
-
|
1,118.4
|
-
|
|
Capital increase
on subsidiary from minority interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
312.7
|
|
Dividends
Paid
|
(0.6)
|
-
|
-
|
-
|
-
|
-
|
423.8
|
(423.8)
|
-
|
-
|
-
|
|
Additions of
long-term debts
|
539.0
|
899.3
|
424.6
|
610.3
|
1.5
|
23.8
|
(25.3)
|
424.6
|
-
|
-
|
-
|
|
Payments of
long-term debts
|
(528.1)
|
(556.5)
|
(205.0)
|
(141.5)
|
(59.2)
|
(36.5)
|
(86.9)
|
(22.4)
|
(47.1)
|
(213.3)
|
(60.4)
|
|
Other
|
-
|
-
|
-
|
(1.0)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
(=)
|
Net cash provided
by financing actitivities
|
33.6
|
725.9
|
222.8
|
467.1
|
(57.7)
|
(12.7)
|
314.8
|
(21.6)
|
(47.1)
|
905.1
|
252.3
|
Effect of exchange
rate changes on cash and cash equivalents
|
12.8
|
29.6
|
32.1
|
27.8
|
4.0
|
5.1
|
(5.6)
|
28.7
|
27.0
|
32.2
|
3.6
|
|
(=)
|
Net increase
(decrease) in cash and cash
equivalents
|
(8.8)
|
16.1
|
287.3
|
1.7
|
51.8
|
(54.5)
|
433.3
|
(143.2)
|
(8.8)
|
(230.7)
|
6.4
|
(+)
|
Cash and cash
equivalents at beginning of year
|
21.9
|
13.2
|
29.2
|
27.5
|
29.2
|
81.0
|
26.5
|
459.7
|
316.5
|
307.7
|
77.0
|
(=)
|
Cash and cash
equivalents at end of year
|
13.2
|
29.2
|
316.5
|
29.2
|
81.0
|
26.5
|
459.7
|
316.5
|
307.7
|
77.0
|
83.4
|
19 of
20
|
March, 2008 Cosan
| Renewable Energy
for a Better
World
|
Balance
Sheet
|
Apr'05
|
Apr'06
|
Apr'07
|
Apr'06
|
Jul'06
|
Oct'06
|
Jan'07
|
Apr'07
|
Jul'07
|
Oct'07
|
Jan'08
|
|
(In
millions of U.S. dollars)
|
FY'05
|
FY'06
|
FY'07
|
4Q'06
|
1Q'07
|
2Q'07
|
3Q'07
|
4Q'07
|
1Q'08
|
2Q'08
|
3Q'08
|
|
Assets
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents
|
13.2
|
29.2
|
316.5
|
29.2
|
81.0
|
26.5
|
459.7
|
316.5
|
307.7
|
77.0
|
83.4
|
|
Restricted
cash
|
0.4
|
63.0
|
17.7
|
63.0
|
1.2
|
1.5
|
2.4
|
17.7
|
49.2
|
1.8
|
35.2
|
|
Marketable
securities
|
2.0
|
368.8
|
281.9
|
368.8
|
291.1
|
161.3
|
142.9
|
281.9
|
124.5
|
1,131.6
|
1,188.5
|
|
Trade
accounts receivable, net
|
45.2
|
101.8
|
55.2
|
101.8
|
106.7
|
129.4
|
99.8
|
55.2
|
74.6
|
61.4
|
59.8
|
|
Inventories
|
122.2
|
187.2
|
247.5
|
187.2
|
402.6
|
569.9
|
403.8
|
247.5
|
415.9
|
677.0
|
571.2
|
|
Advances
to suppliers
|
34.7
|
63.5
|
104.0
|
63.5
|
76.9
|
81.3
|
86.6
|
104.0
|
163.5
|
173.4
|
137.1
|
|
Deferred
income taxes
|
12.8
|
74.8
|
-
|
74.8
|
37.6
|
19.0
|
61.5
|
-
|
-
|
-
|
-
|
|
Other
current assets
|
62.2
|
72.0
|
116.8
|
72.0
|
84.6
|
98.5
|
93.3
|
116.8
|
93.5
|
90.6
|
57.3
|
|
292.6
|
960.3
|
1,139.5
|
960.3
|
1,081.8
|
1,087.5
|
1,350.0
|
1,139.5
|
1,228.9
|
2,212.8
|
2,132.6
|
||
Noncurrent
assets:
|
||||||||||||
Property,
plant and equipment, net
|
401.8
|
1,008.1
|
1,194.1
|
1,008.1
|
941.2
|
952.4
|
1,009.2
|
1,194.1
|
1,311.0
|
1,405.1
|
1,514.3
|
|
Goodwill
|
166.6
|
497.9
|
491.9
|
497.9
|
473.5
|
476.4
|
475.3
|
491.9
|
527.7
|
562.7
|
626.3
|
|
Intangible
assets, net
|
30.3
|
98.9
|
94.0
|
98.9
|
93.2
|
92.8
|
91.8
|
94.0
|
99.7
|
105.2
|
102.0
|
|
Accounts
Receivable from Federal Government
|
-
|
-
|
156.5
|
-
|
-
|
-
|
-
|
156.5
|
169.6
|
190.0
|
192.7
|
|
Other
non-current assets
|
68.9
|
126.6
|
177.5
|
126.6
|
123.0
|
118.0
|
130.4
|
177.5
|
192.3
|
209.0
|
237.9
|
|
667.7
|
1,731.4
|
2,113.9
|
1,731.4
|
1,630.9
|
1,639.6
|
1,706.7
|
2,113.9
|
2,300.3
|
2,472.0
|
2,673.3
|
||
(=)
|
Total
assets
|
960.2
|
2,691.8
|
3,253.4
|
2,691.8
|
2,712.7
|
2,727.0
|
3,056.7
|
3,253.4
|
3,529.1
|
4,684.8
|
4,805.9
|
Liabilities
and shareholders' equity
|
||||||||||||
Current
liabilities:
|
||||||||||||
Trade
accounts payable
|
33.6
|
96.6
|
55.9
|
96.6
|
174.4
|
162.4
|
92.8
|
55.9
|
166.6
|
212.0
|
110.5
|
|
Advances
from customers
|
74.2
|
37.9
|
24.3
|
37.9
|
25.3
|
45.9
|
39.1
|
24.3
|
21.9
|
16.4
|
17.0
|
|
Taxes
payable
|
31.3
|
40.0
|
57.5
|
40.0
|
49.7
|
45.7
|
49.0
|
57.5
|
64.8
|
51.7
|
47.1
|
|
Salaries
payable
|
10.8
|
23.8
|
31.1
|
23.8
|
35.5
|
42.9
|
17.7
|
31.1
|
47.9
|
63.8
|
29.2
|
|
Current
portion of long-term debt
|
7.6
|
46.6
|
36.1
|
46.6
|
46.3
|
41.9
|
31.9
|
36.1
|
51.8
|
44.0
|
27.9
|
|
Derivative
financial instruments
|
34.4
|
133.4
|
9.8
|
133.4
|
44.0
|
22.7
|
15.5
|
9.8
|
15.0
|
26.8
|
102.3
|
|
Dividends
payable
|
-
|
-
|
37.3
|
-
|
-
|
-
|
-
|
37.3
|
40.4
|
-
|
-
|
|
Other
liabilities
|
15.9
|
18.9
|
22.2
|
18.9
|
32.6
|
33.4
|
15.6
|
22.2
|
10.2
|
7.3
|
7.8
|
|
207.8
|
397.1
|
274.2
|
397.1
|
407.8
|
395.0
|
261.7
|
274.2
|
418.5
|
422.0
|
342.0
|
||
Long-term
liabilities:
|
||||||||||||
Long-term
debt
|
314.7
|
941.7
|
1,342.5
|
941.7
|
933.0
|
931.7
|
1,330.4
|
1,342.5
|
1,357.2
|
1,226.2
|
1,226.5
|
|
Estimated
liability for legal proceedings and labor claims
|
101.7
|
462.2
|
379.2
|
462.2
|
433.4
|
348.3
|
357.0
|
379.2
|
417.8
|
459.8
|
442.0
|
|
Taxes
payable
|
71.5
|
152.4
|
106.9
|
152.4
|
141.9
|
107.0
|
105.1
|
106.9
|
115.7
|
130.5
|
127.7
|
|
Advances
from customers
|
31.9
|
41.6
|
24.3
|
41.6
|
41.2
|
40.7
|
20.0
|
24.3
|
8.3
|
8.3
|
-
|
|
Deferred
income taxes
|
17.9
|
81.6
|
141.6
|
81.6
|
83.2
|
106.5
|
143.7
|
141.6
|
142.2
|
144.7
|
85.9
|
|
Other
long-term liabilities
|
23.8
|
33.1
|
47.5
|
33.1
|
23.9
|
29.5
|
28.4
|
47.5
|
50.3
|
51.0
|
72.8
|
|
561.6
|
1,712.7
|
2,042.0
|
1,712.7
|
1,656.6
|
1,563.8
|
1,984.6
|
2,042.0
|
2,091.5
|
2,020.4
|
1,954.9
|
||
Minority
interest in consolidated subsidiaries
|
93.7
|
287.6
|
463.6
|
287.6
|
320.5
|
379.8
|
400.6
|
463.6
|
504.0
|
550.0
|
873.4
|
|
Shareholders'
equity:
|
||||||||||||
Common
stock
|
1.0
|
1.0
|
1.0
|
1.0
|
1.0
|
1.0
|
1.0
|
1.0
|
1.0
|
2.1
|
2.1
|
|
Additional
paid-in capital
|
144.4
|
349.2
|
354.0
|
349.2
|
326.8
|
387.5
|
408.8
|
354.0
|
514.2
|
1,473.3
|
1,471.0
|
|
Accumulated
other comprehensive income
|
(14.2)
|
19.8
|
36.7
|
19.8
|
-
|
-
|
-
|
36.7
|
-
|
116.0
|
121.3
|
|
Retained
earnings (losses)
|
(34.0)
|
(75.8)
|
81.9
|
(75.8)
|
-
|
-
|
-
|
81.9
|
-
|
100.9
|
41.2
|
|
Total
shareholders' equity
|
97.1
|
294.2
|
473.6
|
294.2
|
327.8
|
388.5
|
409.8
|
473.6
|
515.2
|
1,692.2
|
1,635.6
|
|
(=)
|
Total
liabilities and shareholders' equity
|
960.2
|
2,691.8
|
3,253.4
|
2,691.8
|
2,712.7
|
2,727.0
|
3,056.7
|
3,253.4
|
3,529.1
|
4,684.8
|
4,805.9
|
20 of
20
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
1 |
Condensed
Consolidated Balance Sheets at January 31, 2008 (Unaudited)
and
April 30, 2007
|
2 |
Condensed
Consolidated Statements of Income for the nine-month periods
ended
January 31, 2008 and 2007 (Unaudited)
|
4 |
Condensed
Consolidated Statements of Shareholders’ Equity for the
nine-month
period ended January 31, 2008 (Unaudited)
|
5 |
Condensed
Consolidated Statements of Cash Flows for the nine-month
periods
ended January 31, 2008 and 2007 (Unaudited)
|
6 |
Notes
to the Condensed Consolidated Financial Statements
(Unaudited)
January
31, 2008
|
7 |
(Unaudited)
January
31,
2008
|
April
30,
2007
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
83,412 | 316,542 | ||||||
Restricted
cash
|
35,206 | 17,672 | ||||||
Marketable
securities
|
1,188,494 | 281,879 | ||||||
Trade
accounts receivable, less allowances: January, 31, 2008 – 3,113; April 30,
2007 – 4,013
|
59,846 | 55,206 | ||||||
Inventories
|
571,204 | 247,480 | ||||||
Advances
to suppliers
|
137,130 | 103,961 | ||||||
Deferred
income taxes
|
47,909 | - | ||||||
Other
current assets
|
57,265 | 116,763 | ||||||
2,180,466 | 1,139,503 | |||||||
Property,
plant and equipment, net
|
1,514,286 | 1,194,050 | ||||||
Goodwill
|
626,344 | 491,857 | ||||||
Intangible
assets, net
|
102,016 | 93,973 | ||||||
Accounts
receivable from Federal Government
|
192,713 | 156,526 | ||||||
Other
non-current assets
|
237,938 | 177,461 | ||||||
2,673,297 | 2,113,867 | |||||||
Total
assets
|
4,853,763 | 3,253,370 |
(Unaudited)
January
31,
2008
|
April
30,
2007
|
|||||||
Liabilities
and shareholders’ equity
|
||||||||
Current
liabilities:
|
||||||||
Trade
accounts payable
|
110,523 | 55,938 | ||||||
Advances
from customers
|
17,014 | 24,275 | ||||||
Taxes
payable
|
47,139 | 57,543 | ||||||
Salaries
payable
|
29,232 | 31,109 | ||||||
Current
portion of long-term debt
|
27,875 | 36,076 | ||||||
Derivative
financial instruments
|
102,332 | 9,779 | ||||||
Dividends
payable
|
- | 37,261 | ||||||
Other
liabilities
|
7,838 | 22,238 | ||||||
341,953 | 274,219 | |||||||
Long-term
liabilities:
|
||||||||
Long-term
debt
|
1,226,478 | 1,342,496 | ||||||
Estimated
liability for legal proceedings and labor claims
|
441,969 | 379,191 | ||||||
Taxes
payable
|
150,115 | 106,897 | ||||||
Advances
from customers
|
- | 24,333 | ||||||
Deferred
income taxes
|
133,792 | 141,587 | ||||||
Other
long-term liabilities
|
50,413 | 47,485 | ||||||
2,002,767 | 2,041,989 | |||||||
Minority
interest in consolidated subsidiaries
|
873,419 | 463,551 | ||||||
Shareholders’
equity
|
||||||||
Common
stock class A, $.01 par value, 1,000,000,000 shares authorized;
111,678,000 shares issued and outstanding
|
1,117 | - | ||||||
Common
stock class B1, $.01 par value, 96,332,044 shares authorized, issued and
outstanding
|
963 | 963 | ||||||
Common
stock class B2, $.01 par value, 92,554,316 shares authorized; no shares
issued
|
- | - | ||||||
Additional
paid-in capital
|
1,471,039 | 354,022 | ||||||
Accumulated
other comprehensive income
|
121,288 | 36,696 | ||||||
Retained
earnings
|
41,217 | 81,930 | ||||||
Total
shareholders’ equity
|
1,635,624 | 473,611 | ||||||
Total
liabilities and shareholders' equity
|
4,853,763 | 3,253,370 |
Nine months
|
||||||||
ended January
31,
|
||||||||
2008
|
2007
|
|||||||
(restated)
|
||||||||
Net sales
|
1,005,932 | 1,350,901 | ||||||
Cost of goods sold
|
(927,170 | ) | (932,509 | ) | ||||
Gross
profit
|
78,762 | 418,392 | ||||||
Selling
expenses
|
(123,714 | ) | (98,648 | ) | ||||
General and administrative
expenses
|
(84,658 | ) | (72,517 | ) | ||||
Operating income
(loss)
|
(129,610 | ) | 247,227 | |||||
Other income
(expense):
|
||||||||
Financial
income
|
188,245 | 315,802 | ||||||
Financial
expenses
|
(190,771 | ) | (239,845 | ) | ||||
Other
|
(1,849 | ) | 18,909 | |||||
Income (loss) before income taxes,
equity in income (loss) of affiliates and minority
interest
|
(133,985 | ) | 342,093 | |||||
Income
taxes
|
47,711 | (116,587 | ) | |||||
Income (loss) before equity in
income (loss) of affiliates and minority
interest
|
(86,274 | ) | 225,506 | |||||
Equity in income (loss) of
affiliates
|
(2,551 | ) | 210 | |||||
Minority interest in (net income)
loss of subsidiaries
|
48,112 | (111,618 | ) | |||||
Net income
(loss)
|
(40,713 | ) | 114,098 | |||||
Earnings (losses) per
share:
|
||||||||
Basic and
Diluted
|
(0.25 | ) | 1.18 | |||||
Weighted average number of shares
outstanding:
|
||||||||
Basic and
Diluted
|
163,250,273 | 97,039,181 |
Class
A Common number
|
Class
A Common amount
|
Class
B Common
number
|
Class
B Common
amount
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive income
|
Retained
earnings
|
Total
shareholders’
equity
|
|||||||||||||||||||||||||
Balance
at May 1, 2007
|
- | - | 1,000 | - | - | - | - | - | ||||||||||||||||||||||||
Contribution
of 51% of Cosan S.A. equity
|
- | - | 96,331,044 | 963 | 354,872 | 76,159 | 81,930 | 513,924 | ||||||||||||||||||||||||
Issuance
of common shares class A for cash
|
100,000,000 | 1,000 | - | - | 994,814 | - | - | 995,814 | ||||||||||||||||||||||||
Issuance
of common shares class A for cash
|
11,678,000 | 117 | - | - | 122,502 | - | - | 122,619 | ||||||||||||||||||||||||
Stock
compensation
|
- | - | - | - | 2,139 | 2,139 | ||||||||||||||||||||||||||
Dilution
upon exercise of Cosan S.A. stock options
|
(3,288 | ) | (3,288 | ) | ||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | (40,713 | ) | (40,713 | ) | ||||||||||||||||||||||||
Currency
translation adjustment
|
- | - | - | - | 45,129 | 45,129 | ||||||||||||||||||||||||||
Total
comprehensive income
|
4,416 | |||||||||||||||||||||||||||||||
Balances
at January 31, 2008
|
111,678,000 | 1,117 | 96,332,044 | 963 | 1,471,039 | 121,288 | 41,217 | 1,635,624 |
Nine
months
|
||||||||
Ended
January 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flow from operating activities
|
(restated)
|
|||||||
Net
income (loss)
|
(40,713 | ) | 114,098 | |||||
Adjustments
to reconcile net income (loss) to cash provided (used in) by operating
activities
|
||||||||
Depreciation
and amortization
|
210,766 | 97,051 | ||||||
Deferred
income and social contribution taxes
|
(66,432 | ) | 73,938 | |||||
Interest,
monetary and exchange variation
|
(41,142 | ) | 91,583 | |||||
Minority
interest in net income (loss) of subsidiaries
|
(48,112 | ) | 111,618 | |||||
Others
|
6,499 | (12,674 | ) | |||||
Decrease
(increase) in operating assets and liabilities
|
||||||||
Trade
accounts receivable, net
|
5,135 | 533 | ||||||
Inventories
|
(285,258 | ) | (219,736 | ) | ||||
Advances
to suppliers
|
(17,010 | ) | (24,122 | ) | ||||
Trade
accounts payable
|
45,891 | (2,118 | ) | |||||
Derivative
financial instruments
|
169,938 | (116,292 | ) | |||||
Taxes
payable
|
(2,481 | ) | (27,106 | ) | ||||
Other
assets and liabilities, net
|
(122,399 | ) | (71,565 | ) | ||||
Net
cash provided by (used in) operating activities
|
(185,318 | ) | 15,208 | |||||
Cash
flows from investing activities
|
||||||||
Restricted
cash
|
(14,787 | ) | 59,594 | |||||
Marketable
securities
|
(862,803 | ) | 221,428 | |||||
Acquisition
of property, plant and equipment
|
(342,113 | ) | (113,651 | ) | ||||
Others
|
(1,200 | ) | - | |||||
Net
cash provided by (used in) investing activities
|
(1,220,903 | ) | 167,371 | |||||
Cash
flows from financing activities
|
||||||||
Proceeds
from issuance of common stock
|
1,118,433 | 3,201 | ||||||
Capital
increase on subsidiary from minority interest
|
312,673 | - | ||||||
Additions
of long-term debt
|
- | 423,803 | ||||||
Payments
of long-term debt
|
(320,836 | ) | (182,555 | ) | ||||
Net
cash provided by financing activities
|
1,110,270 | 244,449 | ||||||
Effect
of exchange rate changes on cash and
|
||||||||
cash
equivalents
|
62,821 | 3,487 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
(233,130 | ) | 430,515 | |||||
Cash
and cash equivalents at beginning of period
|
316,542 | 29,215 | ||||||
Cash
and cash equivalents at end of period
|
83,412 | 459,730 |
1.
|
Operations
and Purpose
|
1.
|
Operations and
Purpose--Continued
|
Class B
Common stock
number
|
Class B
Common stock
amount
|
Additional paid-in
capital
|
Accumulated other comprehensive income
|
Retained
earnings
|
Total shareholders’
equity
|
|||||||||||||||||||
As stated
|
||||||||||||||||||||||||
Cosan
Limited
|
1,000 | - | - | - | - | - | ||||||||||||||||||
Cosan S.A.
Indústria e Comércio
|
- | 535,105 | 160,944 | 71,953 | 160,648 | 928,650 | ||||||||||||||||||
Contribution of 51% of Cosan S.A.
equity as of April
30, 2007
|
96,331,044 | 272,904 | 82,081 | 36,696 | 81,930 | 473,611 | ||||||||||||||||||
Reclassification from common
stock
|
- | (271,941 | ) | 271,941 | - | - | - | |||||||||||||||||
As restated
|
96,332,044 | 963 | 354,022 | 36,696 | 81,930 | 473,611 |
2.
|
Presentation
of the Consolidated Financial
Statements
|
2.
|
Presentation of the
Consolidated Financial
Statements--Continued
|
2.
|
Presentation of the
Consolidated Financial
Statements--Continued
|
3.
|
Cash
and Cash Equivalents
|
January
31, 2008
|
April
30, 2007
|
|||||||
Local
currency
|
||||||||
Cash
and bank accounts
|
67,068 | 16,208 | ||||||
Foreign
currency
|
||||||||
Cash
and bank accounts
|
16,344 | 300,334 | ||||||
83,412 | 316,542 |
4.
|
Marketable
Securities
|
January
31, 2008
|
April
30, 2007
|
|||||||
Investment
funds
|
431,514 | - | ||||||
Bank
Deposits Certificate
|
756,974 | 281,873 | ||||||
Other
|
6 | 6 | ||||||
1,188,494 | 281,879 |
5.
|
Derivative
Financial Instruments
|
Notional
amounts
|
Carrying
value asset (liability)
|
|||||||||||||||
January
31, 2008
|
April
30, 2007
|
January
31, 2008
|
April
30, 2007
|
|||||||||||||
Commodities
derivatives
|
||||||||||||||||
Future
contracts:
|
||||||||||||||||
Purchase
commitments
|
222 | - | 27 | - | ||||||||||||
Sell
commitments
|
455,561 | 247,882 | (63,262 | ) | 47,427 | |||||||||||
Options:
|
||||||||||||||||
Purchased
|
- | 58,587 | - | 4,502 | ||||||||||||
Written
|
136,746 | - | (26,836 | ) | - | |||||||||||
Foreign
exchange derivatives
|
||||||||||||||||
Forward
contracts:
|
||||||||||||||||
Sale
commitments
|
481,808 | 153,824 | 12,712 | 13,274 | ||||||||||||
Swap
agreements
|
324,206 | 328,419 | (12,234 | ) | (9,779 | ) | ||||||||||
Total
assets
|
12,739 | 65,203 | ||||||||||||||
Total
liabilities
|
(102,332 | ) | (9,779 | ) |
5.
|
Derivative Financial
Instruments--Continued
|
6.
|
Inventories
|
January
31,
2008
|
April
30,
2007
|
|||||||
Finished
goods:
|
||||||||
Sugar
|
182,397 | 5,730 | ||||||
Ethanol
|
173,641 | 8,731 | ||||||
Others
|
2,122 | 1,681 | ||||||
358,160 | 16,142 | |||||||
Annual
maintenance cost of growing crops
|
147,702 | 183,157 | ||||||
Others
|
65,342 | 48,181 | ||||||
571,204 | 247,480 |
7.
|
Long-term
Debt
|
Financial
charges
|
|||||||||||||
Index
|
Average
annual interest rate
|
January
31, 2008
|
April
30,
2007
|
||||||||||
Resolution
2471 (PESA)
|
IGP-M
|
3.95 | % | 250,866 | 196,545 | ||||||||
Corn
price variation
|
12.50 | % | 412 | 685 | |||||||||
Senior
notes due 2009
|
US
Dollar
|
9.0 | % | 34,418 | 200,000 | ||||||||
Senior
notes due 2017
|
US
Dollar
|
7.0 | % | 399,922 | 407,311 | ||||||||
IFC
|
US
Dollar
|
7.44 | % | 56,972 | 67,677 | ||||||||
Perpetual
notes
|
US
Dollar
|
8.25 | % | 458,839 | 459,035 | ||||||||
Others
|
Various
|
Various
|
52,924 | 47,319 | |||||||||
1,254,353 | 1,378,572 | ||||||||||||
Current
portion
|
(27,875 | ) | (36,076 | ) | |||||||||
Long-term
debt
|
1,226,478 | 1,342,496 |
7.
|
Long-term
Debt--Continued
|
January
31,
|
||||
2010
|
47,688 | |||
2011
|
7,632 | |||
2012
|
38,705 | |||
2013
|
10,408 | |||
2014
|
1,353 | |||
2015
|
1,353 | |||
2016
and thereafter
|
1,119,339 | |||
Total
|
1,226,478 |
7.
|
Long-term
Debt--Continued
|
7.
|
Long-term
Debt--Continued
|
8.
|
Estimated
Liability for Legal Proceedings and Labor
Claims
|
January
31,
2008
|
April
30,
2007
|
|||||||
Tax
contingencies
|
386,138 | 329,493 | ||||||
Civil
and labor contingencies
|
55,831 | 49,698 | ||||||
441,969 | 379,191 |
8.
|
Estimated Liability for Legal
Proceedings and Labor
Claims--Continued
|
January
31,
2008
|
April
30,
2007
|
|||||||
Tax
assessment – Withholding Income Tax
|
87,162 | 73,037 | ||||||
IPI
Premium Credit resulting from Regulatory Ruling No. 67/98
|
84,740 | 70,860 | ||||||
ICMS
- State value added tax
|
41,163 | 28,964 | ||||||
IAA
– Sugar and Ethanol Institute
|
26,706 | 23,706 | ||||||
IPI
– Federal value-added tax
|
41,999 | 31,921 | ||||||
Others
|
35,482 | 18,574 | ||||||
317,252 | 247,062 |
9.
|
Income
Taxes
|
Balance
at May 1, 2007
|
21,824 | |||
Accrued
interest on unrecognized tax benefit
|
597 | |||
Settlements
|
(22 | ) | ||
Balance
at January 31, 2008
|
22,399 |
10.
|
Share-based
Compensation
|
10.
|
Share-based
Compensation--Continued
|
Awards
granted on September 22, 2005
|
Awards
granted on September 11, 2007
|
|||||||
Grant
price – US$
|
3.47 | 3.47 | ||||||
Expected
life (in years)
|
7.5 | 7.5 | ||||||
Interest
rate
|
14.52 | % | 9.34 | % | ||||
Volatility
|
34.00 | % | 46.45 | % | ||||
Dividend
yield
|
1.25 | % | 1.47 | % | ||||
Weighted-average
fair value at grant date – US$
|
7.02 | 10.33 |
11.
|
Other
Comprehensive Income
|
Nine
months ended
January
31,
|
||||||||
2008
|
2007
|
|||||||
Net
income (loss)
|
(40,713 | ) | 114,098 | |||||
Currency
translation adjustment
|
45,129 | (2,478 | ) | |||||
Total
comprehensive income
|
4,416 | 111,620 |
12.
|
Segment
Information
|
12.
|
Segment
Information--Continued
|
January
31,
|
||||||||
2008
|
2007
|
|||||||
Net
sales — Brazilian GAAP:
|
||||||||
Sugar
|
542,721 | 846,005 | ||||||
Ethanol
|
379,389 | 422,509 | ||||||
Others
|
81,715 | 79,183 | ||||||
Total
|
1,003,825 | 1,347,697 | ||||||
Reconciling
item to U.S. GAAP
|
||||||||
Sugar
|
2,107 | 3,204 | ||||||
Ethanol
|
- | - | ||||||
Others
|
- | - | ||||||
Total
|
2,107 | 3,204 | ||||||
Total
net sales
|
1,005,932 | 1,350,901 |
12.
|
Segment
Information--Continued
|
January
31,
|
||||||||
2008
|
2007
|
|||||||
Segment
operating income - Brazilian GAAP
|
||||||||
Sugar
|
(124,722 | ) | 124,746 | |||||
Ethanol
|
(87,187 | ) | 62,301 | |||||
Others
|
(18,779 | ) | 11,676 | |||||
Operating
income (loss) under Brazilian GAAP
|
(230,688 | ) | 198,723 | |||||
Reconciling
items to U.S. GAAP
|
||||||||
Depreciation
and amortization expenses
|
||||||||
Sugar
|
27,673 | 32,096 | ||||||
Ethanol
|
19,345 | 15,460 | ||||||
Others
|
4,166 | 2,987 | ||||||
51,184 | 50,543 | |||||||
Other
adjustments
|
||||||||
Sugar
|
27,937 | (87 | ) | |||||
Ethanol
|
18,066 | (1,644 | ) | |||||
Others
|
3,891 | (308 | ) | |||||
49,894 | (2,039 | ) | ||||||
Total
sugar
|
(69,113 | ) | 156,755 | |||||
Total
ethanol
|
(49,776 | ) | 76,117 | |||||
Total
others
|
(10,721 | ) | 14,355 | |||||
Operating
income (loss) under U.S. GAAP
|
(129,610 | ) | 247,227 |
12.
|
Segment
Information--Continued
|
Market
|
Customer
|
2008
|
2007
|
|||
International
|
Sucres
et Denrées
|
19.7%
|
34.2%
|
|||
S.A.
Fluxo
|
15.2%
|
15.6%
|
||||
Tate
& Lyle International
|
14.8%
|
6.4%
|
||||
Cane
International Corporation
|
12.2%
|
2.7%
|
||||
Coimex
Trading Ltd
|
8.0%
|
11.7%
|
||||
Domestic
|
Atacadão
Distr. Com. Ind. Ltda.
|
10.0%
|
8.3%
|
|||
Minascucar
S/A
|
4.1%
|
1.3%
|
||||
Companhia
Brasileira de Distribuição
|
4.1%
|
9.9%
|
||||
Ajinomoto
Biolatina Ind. Com. Ltda.
|
3.7%
|
2.3%
|
||||
Nova
América S/A - Agroenergia
|
3.4%
|
5.1%
|
Market
|
Customer
|
2008
|
2007
|
|||
International
|
Vertical
UK LLP
|
51.1%
|
44.7%
|
|||
Vitol
Inc.
|
15.6%
|
-
|
||||
Noble
Americas Corporation
|
7.8%
|
-
|
||||
Kolmar
Petrochemical AG
|
-
|
23.4%
|
||||
Domestic
|
Shell
Brasil Ltda
|
26.1%
|
29.3%
|
|||
Euro
Petróleo do Brasil Ltda.
|
18.6%
|
0.1%
|
||||
Tux
Distribuidora de Combustíveis Ltda.
|
8.1%
|
3.6%
|
||||
Cia.
Brasileira de Petróleo Ipiranga
|
9.3%
|
3.7%
|
||||
Manancial
Distribuidora de Petróleo Ltda
|
-
|
14.4%
|
||||
Petrobrás
Distribuidora S.A.
|
7.8%
|
9.9%
|
||||
Flag
Distribuidora de Petróleo Ltda
|
-
|
7.6%
|
13.
|
Subsequent
Event
|