Bigger cane crop, Comgas boost Cosan's qrtly profits
SAO PAULO Feb 6 (Reuters) - Brazil's biggest sugar and ethanol producer Cosan reported a quarterly net profit of 342 million reais ($172 million) on Wednesday, up 265 percent from a year ago, buoyed by a bigger cane crop, earnings from its Comgas acquisition and strong sales of fuels.
Cosan, which has partnered with oil major Royal-Dutch Shell in a joint venture called Raizen, said its third-quarter earnings before interest, taxes, depreciation and amortization -- a broadly watched measure of cashflow known as EBITDA -- rose 141 percent to 1.19 billion reais.
The improved result was due partly to a larger cane crop this season that ended crushing in December, rather than in early November as in the year before. The volume of cane crushed by Cosan jumped 117 percent from the same quarter last year when drought and poor yields hurt the crop.
The company's production of sugar doubled in the third quarter that ended on Dec. 31, 2012 from a year ago, while production of ethanol nearly tripled. Cosan's financial year follows the cane season that starts on April and ends in March.
EBITDA margins nearly doubled to 14.2 percent and profit margins nearly tripled to 4.1 percent on a year earlier.
The increased volume of cane allowed the company to disperse its operating costs over a larger revenue stream.
Cosan's fuel distribution arm also did performed well, with net fuel sales up 13 percent at 11.4 billion reais in the quarter. Diesel sales by the company increased 20 percent.
The company also concluded the acquisition of a 60 percent stake in Comgas, a natural gas distributor with a concession in the Sao Paulo region. Comgas boosted the group's earnings, while net debt jumped from 3.62 billion reais in the third quarter of 2011 to 8.83 billion reais this quarter.
Excluding the effect of forming the joint venture with Shell during the first three quarters of this fiscal year, Cosan's non-adjusted net profit is down sharply at 608.5 million reais from 2.456 billion reais over the same quarters of 2011.