In the third quarter of the 2024/25 season, Raizen posted a net loss of 2.57 billion reais, contrasting sharply with a 793 million reais profit from the previous year. The company experienced a nearly 27% decline in sugarcane crushing and decreased EBITDA by 20.5%. Although net revenue increased by 14%, it remained below analyst expectations, reflecting substantial operational and financial challenges.
Brazil’s Raizen has reported a significant financial downturn in its third quarter for the 2024/25 season, posting a net loss of 2.57 billion reais ($450.5 million). This stark contrast to the previous year’s profit of 793 million reais reflects the challenges faced by the leading sugarcane processor, which is jointly owned by Cosan and Shell.
The firm, recognized as the largest sugarcane processor globally, not only produces sugar and ethanol but also functions as a fuel distributor. In January, Raizen indicated a nearly 27% decline in sugarcane crushing year-over-year, which has resulted in the suspension of its financial forecasts for the ongoing crop year, negatively impacting its share prices.
Despite these challenges, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to 3.12 billion reais, representing a 20.5% year-on-year drop and falling short of the 3.42 billion reais predicted by analysts. However, net revenue climbed approximately 14% to reach 66.9 billion reais, surpassing analyst expectations of 62.3 billion reais for the quarter.
Raizen commented that the net profit decline stems from diminished operational contributions and an increase in financial expenses tied to non-recurring impacts, highlighting the financial stress affecting the company during this period.
In summary, Raizen’s financial results for the third quarter reflect a significant loss primarily due to operational challenges and rising financial expenses. Despite an increase in net revenue, the overall performance was severely impacted by a considerable drop in sugarcane crushing and the discontinuation of financial guidance, causing its shares to reach record lows.
Original Source: www.marketscreener.com
