Reuters: Mergers News: UPDATE 1-Brazil's Cosan qtrly net plummets 69 pct

Reuters: Mergers News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Brazil's Cosan qtrly net plummets 69 pct May 31st 2012, 11:33 Thu May 31, 2012 7:33am EDT * Net operating revenue rises to 5.79 bln reais vs 4.61 bln yr ago * EBITDA sinks to 367.4 mln reais from 1.03 bln yr ago * Company on buying spree to diversify out of cane sector SAO PAULO, May 31 (Reuters) - Quarterly net earnings for Cosan , Brazil's largest sugar and ethanol producer, plunged 69 percent to 149.6 million reais from a year earlier, the company said in a market filing on Thursday. While operating revenues rose to 5.79 billion reais from 4.61 billion in the first three months of 2011, earnings before interest, taxes, depreciation and amortization -- a measure of cash flow known as EBITDA -- fell to 367.4 million reais from 1.03 billion. EBITDA as a percentage of net revenues fell to 6.3 percent from 22.3 percent, which corresponds to the company's fourth fiscal quarter, the end of the center-south cane crush. Net earnings fell to 149.6 million reais from 480.9 million reais over the January-March quarter a year ago, the company said. Over the past year, Cosan has embarked on a massive buying spree to diversify its revenue stream from its traditional area of cane, sugar, ethanol and biomass energy generation. After sealing a joint venture with Royal Dutch Shell Plc in July 2011, Cosan's lubricants division began acquiring assets in Bolivia, Uruguay and Paraguay in October 2011 in a move to internationalize its business. In March 2012, it acquired England's Comma Oil and Chemicals Ltd, which was controlled by Exxon Mobil Corp. In February, the company bid on a stake in the controlling block of Brazil's largest railway operator America Latina Logistica SA. It then announced it signed a deal to take a controlling stake of local natural gas distributor Comgas off BG Group's hands. Finally, the company announced earlier this week it would form a partnership with Brazil's biggest retailer of rice Camil to create a leader in Brazil's food sector. Meanwhile, Brazil's sugar and ethanol sector is suffering from a shortfall in sugarcane due to poor weather and mismanagement of the crop in past years. This is dragging on mills' earnings as they try to cope with rising costs from idle crushing capacity and the high cost of cane. To make matters worse, the government's policy to hold down fuel prices has squeezed margins to near zero and into the negative in the ethanol sector. Link this Share this Digg this Email Reprints

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