Brazil’s Cosan raises 2012-2013 sugarcane harvest projections

Cosan said on Thursday it has raised its projections of crushed sugarcane volumes during the 2012-2013 harvest period as the wet weather of the first few months of the season increased productivity.

Sugarcane volumes were expected to range between 54m-56m tonnes, an increase on the previous estimate of 52m-55m tonnes, Brazil’s largest sugar and ethanol producer said.

There was no revision to estimated ethanol sales in the fiscal year 2013, which remained in the range of 1.85bn-2.05bn litres, the company said.

Cosan said that the lower ethanol sales forecast was due to inferior theoretically recoverable sugar (TRS) compared with the previous harvest.

“We’ve had a very good quarter in terms of crushing performance, but that increase in crushing will be offset by a reduction in TSR over this crop year,” said Cosan CFO Marcelo Martins during an earnings call with investors.

“We do not predict any increase in the volume of sugar or ethanol sold until the end of this fiscal year of 2013,” Martins added.

Cosan reported on Wednesday a jump in fiscal second-quarter net profits, driven by an increase in gross profit because of operational efficiency and favourable exchange rates.

Profits stood at Brazilian reais (R) 283.2m (€108.9m, $138.8m), up from R63.2m reported for the same period last year.

Quarterly revenues were R7.0bn, a 3.4% increase over R6.8bn recorded in the same quarter last year, driven by higher sales of petroleum-based fuels.

Revenues from ethanol sales and production fell, however, due to lower sales volumes and a 12.8% lower ethanol price on the domestic market.

Cosan confirmed the completion this week of the acquisition of a 60.1% stake in Brazilian natural gas distributor Comgas for R3.4bn.

Cosan said it continues to make progress in the acquisition of Brazil’s largest logistics and railway firm, America Latina Logistica.

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