Prepared remarks
Good morning, everyone, and thank you for waiting. Welcome to Cosan's conference call to discuss the financial information for the second quarter of 2026. Please note that this conference call is being recorded and is available on the company's website at cosan.com.br. During the company's presentation, all participants will have their microphones disabled. We will then begin the question-and-answer session. We would like to emphasize that the information contained in this presentation, any statements that may be made during the conference call regarding Cosan's business outlook, projections and operating and financial metrics are based on the beliefs and assumptions of the company's management as well as information currently available. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect Cosan's future performance and lead to results that differ materially from those expressed in such forward-looking statements. I will now turn the floor over to Mr. Fernando Tinel.
Good morning, everyone, and thank you for joining our Second Quarter 2026 Earnings Call. Before we begin, I would like to refer you to our standard disclaimer regarding estimates and statements as well as trends and projections that may be addressed during this conference call. Starting with the highlights for the first half of 2026, I would like to emphasize Compass' IPO successfully carried out through a secondary offering of shares which generated BRL 2.3 billion in net proceeds for Cosan and represents another important step in the execution of our strategy to strengthen our capital structure. Moving on to our next initiatives, we announced the sale of a portion of Hadar's land portfolio located in Mato Grosso. The transaction was signed for BRL 1.85 billion, of which approximately BRL 586 million corresponds to Cosan's indirect stake to be received at closing. I would like to remind you that completion of the transaction remains subject to customary conditions precedent and is expected to occur by October 30, 2026. In the context of divestments, Cosan recently announced an exclusive letter of intent for the full divestment of its stake in the terminal of Santos. The proposal includes BRL 300 million to be paid at closing, in addition to the possibility of an indicative earn-out of BRL 50 million per additional berth linked to the future expansion of the port's capacity. It is worth noting that completion of the transaction remains subject to the fulfillment of customary conditions precedent for this type of transaction. These initiatives, together with debt prepayments totaling nearly BRL 9 billion through June, reinforced our deleveraging path and the optimization of our capital structure, as evidenced by the 20% reduction in expanded net debt compared to the first quarter of 2026 as well as by approximately a 36% decrease in general and administrative expenses, representing savings of BRL 49 million in the first six months of 2026 compared to the same period of 2025. In addition, we just announced the delisting of Cosan's ADS traded on the NYSE, with the objective of pursuing deregistration with the SEC in the future, once again aiming to further simplify the holding company. Finally, Raízen had its out-of-court reorganization plan approved with the adherence of 81.6% of its financial creditors, representing another fundamental step in the company's turnaround process. Still on this slide and moving to Cosan's final indicators in Q2 2026, we ended the period with negative net income of BRL 320 million, showing a significant improvement compared to the same period of the previous year, mainly driven by better financial results, lower effective income tax and social contribution expense, the reduction in general and administrative expenses, and finally, the nonrecognition of Raízen's results as already mentioned in the previous quarter. These effects more than offset the one-off negative impact of BRL 233 million related to the impairment of TUP San Luis. As for dividends and interest on capital, we received BRL 399 million from investees in the quarter, essentially composed of Compass. Moving to the next indicator, we reduced expanded net debt to BRL 9.2 billion, 20% below Q1 2026, reinforcing the continuous deleveraging process at the holding company. I will comment on the main drivers of this performance later. To conclude the highlights, I would like to address the debt service coverage ratio, which temporarily ended the quarter at 0.2x on an LTM basis, negatively impacted by the seasonality of dividends and equivalent distributions captured over the last 12 months, while still not fully reflecting the debt reduction initiatives and, consequently, the reduction in financial expenses. Starting this quarter, we are providing a projection for this metric looking toward December 2026 in order to provide greater visibility that we reached an inflection point this quarter and how the indicator should evolve through the end of the fiscal year. Moving now to the performance of our investees this quarter. In the second quarter of 2026, Rumo delivered strong operational performance, having transported 23.8 billion RTK in the period, a 9% increase compared to Q2 2025, mainly driven by the expansion of the grain portfolio in the North and South operations. As a result, our EBITDA reached BRL 2.3 billion, broadly stable compared to the same period of the previous year. Excluding the impacts from insurance indemnities for loss of profits and the reclassification of equity income, our EBITDA would have grown by 4%. At Compass, distributed volume remains stable compared to the same period of the previous year. Lower industrial consumption in the chemical, steel and ceramic sectors was offset by the good performance of the residential and commercial segments, which delivered higher margins. As a result, together with load optimization initiatives carried out by the team throughout the quarter, EBITDA increased by 5% year-over-year. At Moove, our EBITDA more than doubled compared to the first quarter of 2026 amid the supply crisis caused by the closure of the Strait of Hormuz. The result mainly reflected the company's inventory management strategy focused on profitability, which led to higher sales volume and growth in operating revenue. Compared to the same period of last year, EBITDA was 6% lower due to a nonrecurring comparison base that included the recognition of insurance indemnities and other one-off effects related to the fire at the industrial complex in Rio de Janeiro. Finally, at Bradar, the quarter's performance was impacted by the revaluation of part of the portfolio in view of the announced land disposal and by the reduction in net operating revenue, mainly explained by lower ATR prices observed in the period, which directly impacted the contribution from leases. Moving now to indebtedness in the second quarter of 2026, we ended the quarter with expanded gross debt of BRL 16.5 billion, a reduction of approximately BRL 9 billion compared to the fourth quarter of 2025 and BRL 2.7 billion compared to the immediately preceding quarter. This result reflected the liability management agenda we began in 2025 and have continued to execute throughout this year, including the full prepayment of the bonds maturing in 2029, 2030 and 2031, as well as the early amortization of debentures and commercial loans. Combined, these movements totaled approximately BRL 8.8 billion in principal payments since the beginning of the year. In addition to the reduction in concentration that this generated in the amortization schedule, these initiatives also contributed to reducing the concentration of maturities in the coming years. In particular, this quarter we reduced amortization scheduled for 2028 by more than BRL 2.5 billion. As a result, at the end of the period, debt had an average term of 6.2 years and an average cost of CDI plus 1.15% per year. The effects of these measures can also be seen in the evolution of the expanded net debt as shown in the chart below. We moved from BRL 11.5 billion at the end of the first quarter to BRL 9.2 billion at the close of the second quarter. This movement was mainly driven by proceeds from Compass' IPO, dividends received from investees and cash yield on financial investments. In addition, considering the recurring impact of the initiatives mentioned above, we have begun to operate at a lower level of financial expenses and without relevant nonrecurring impacts. Together, these results reinforce the progress made in executing the agenda to optimize and simplify our capital structure throughout the first half of the year. As we approach the end of our presentation, we will address the net service coverage ratio and the main factors that influenced this indicator during the quarter. In the second quarter of 2026, we reached an inflection point for this metric, which ended the period at 0.2x, down 0.2x compared to the immediately preceding quarter. This variation mainly reflects the seasonality of dividends and interest on capital received from investees with a greater concentration of distributions in the second half of the year, in addition to the fact that we are still not fully capturing the benefit from the reduction in financial expense in a meaningful way. In addition, the company is disclosing a projection for this ratio to be measured at the end of 2026. We expect to reach a range between 0.8x and 1.2x by year-end based on the following main assumptions: dividends and equivalent distributions received and to be received in 2026 are estimated between BRL 1.2 billion and BRL 1.8 billion, including those arising from the sale of Bradar in the amount of up to BRL 586 million. The projection also incorporates the effect of the liability management actions carried out since the beginning of the year, which have not yet been fully reflected in the indicator. These effects include the reduction in financial expenses resulting from prepayments, cash yield on financial investments and the cash impact of derivatives related to that. It is worth reinforcing that potential new divestments that are still under evaluation by the company are not considered in this metric. Considering all the factors previously discussed, we believe that this indicator should converge by the end of 2026 to levels closer to those historically observed by the company within the published guidance range. So with that, I conclude our presentation of the second quarter 2026 results, and thank you all for joining us. Mr. Marcelo Martins for his first remarks.
Once again, thank you for being here. I do believe that for this quarter we have a set of positive news. We show that we are in alignment with our strategy in our communications with the market regarding the continuity of our simplification efforts. So let me go over the main points. Let me talk about the management changes. In my opinion this is a very positive piece of news for the market. But of course, it's also difficult because some people who were part of our history are leaving us now. Our goal is to move toward a structure more aligned with the company's strategy and to prepare the business to operate in line with our portfolio, with significant production growth. Expenses haven't reached target levels yet. However, I do believe that we are making good progress in this direction. We announced the sale of a port stake and, of course, this is something that the market expected. We are already in negotiation with a party with a binding proposal. We also sold property from Hadar, especially in Mato Grosso. This also has to do with our goal of reducing this portfolio, something we had also announced to the market. And another big piece of news right now is the approval of Raízen's reorganization plan. Please remember that we had over 80% approval by creditors. We completed around three months of negotiation processes with creditors and we also saw exceptional results. We had strong historical results, especially in the distribution of fees. Let me share something that we haven't published to the market, but which is also important. We ran an employee climate survey at the company, and we saw that our team was on board with the recent changes and we saw great alignment with our desire and our strategy to improve our results. Not only do we want to have a healthy business, but we want a business that is in line with the goals of shareholders and potential buyers. As soon as we close these transactions, we are on a path to improve our structure, our capital structure, which is significantly important for a business that has the potential to keep generating consistent results for this market. We also achieved significant reductions in administrative expenses for Cosan. Again, this is another goal that we are pursuing. This is very much in line with what we wanted for this moment. We also announced the delisting of Cosan's ADS outside of Brazil. When we think about this cost relative to general expenses at Cosan, it does not make sense any longer. These were significant costs. So it made sense for us to pursue delisting so that we could generate more efficiency for Cosan. So I believe we shared very positive news with the market, and we do expect to see other positive news in the next quarters as we have been announcing to the market. Let me just spend a little while talking about the changes in management. Maria Rita and Rafael have decided to leave the company. This happened while we were doing optimization, reducing administrative expenses and restructuring our holding. Even though this is undesirable because both of these people have contributed historically to us — Rafael has been in the group for 25 years, including experience at Shell, and Rita has been here for 18 years, almost 20 years — they both contributed a lot to the business. Everyone here knows this. I don't have to repeat it. So it is unfortunate that this is happening right now, but this is also in alignment with our intention to reduce expenditures and make Cosan simpler. This is another important step. We're bringing Marcellus Cesario back; not only is he known to us, but he has done exceptional work at the company in the past. He spent eight years with us and left in 2017. So nine years later, he is now back to the company, and he knows it well. He knows the business well. Some time has passed, but he is respected by many people here and he is definitely welcome back. Marcellus, welcome back. Good luck. I know you're extremely competent just like Rafael and Maria Rita. And I would like to tell everyone that the sacrifices that we're experiencing right now are a full share of our goals to improve Cosan and improve its structure so that we can keep rebalancing our capital structure. So we are going to keep expecting this kind of investment, and we're going to keep expecting this kind of efficiency. Once again, I would like to thank both of these folks for their historical dedication and their extreme competence. Welcome Cesario. We can now start the Q&A session. Thank you.
Questions and answers
So let's go to our first question from Gabriel Barra, Citi.
So I'm going to focus on one question, but it's a broad one. It's about capital allocation and how to simplify the holding company. I think Marcelo spent a while today talking about these processes that you're working on to improve SG&A and to make our structure simpler. This is extremely important for the company, and it brings us questions too. Could you please dive deeper into it? I would love to understand your moves regarding Rumo and Moove. Regarding Rumo, I would love to understand how you look at this asset in the current capital structure for the company. We've seen news regarding the potential sale. We've been asking you about this for a while. So I would love to understand for the company whether a minority stake would be better, or whether to keep selling the 30% would be better. And regarding Moove's results, what do you think about this company right now? Would you consider selling this asset in the future, maybe having an IPO? How do you look at Moove in the simplification efforts for the whole holding?
This is Marcelo speaking. Starting with Rumo, we've announced to the market that we are going to be selling some of our stake in this business. So we're moving forward with it. It is going according to plan. We're talking to potential buyers. We don't have any further news to share with the market right now. If we do have something that we deem relevant, then we will let the market know. As we receive new proposals and as we reach a conclusion, we're going to be sharing news with the market. Regarding Moove, we saw an exceptional quarter. This was to be expected and truly demonstrates their ability to generate results. We knew that the big issue of the fire last year would be overcome because of the execution shown, especially commercially speaking in such a hard year, and they were in line with what we expected from them. Talking about an IPO for Moove is not appropriate right now. We don't think there's space for this in the market right now. We're not considering this, and we don't expect to sell our stake in Moove at the moment. We're very happy and we're fully supportive of their management's initiatives. The generated results are extremely strong and robust, especially after such a tough year last year. They didn't drop the ball. Some players in this market doubted that we would be able to get through, but we were sure that we would because of the team. So no, we do not consider selling our stake right now.
Next question from Thiago Duarte, BTG Pactual.
I'm also going to stick to one question. I'd love to talk about G&A. It seems like two full quarters have passed since the strategic rearrangement for your group and when we look at the first quarter, we see around BRL 170-something million for G&A. And this is not too far from what you were mentioning to the market during the follow-on in October to November of last year. So my question is, could you be a bit bolder? You just announced the delisting of ADSs, etc. So could we be a little bit more ambitious regarding what you believe would be a recurring G&A for the company if we think about the cost of the holding?
Yes, we've been experiencing good results with the expenditure management effort. This has been a mission for our team overall and what we announced on Friday has to do with really capturing the savings. As we simplify our scope at the holding — because the governance of these companies is performed within each of these companies and the team in the holding that was looking into this has already been restructured — and as I leave, as Rita leaves and Cesario comes in, we're going to really bring together these two areas, which is going to really accelerate savings. By the way, welcome Marcellus, my friend who's back home now. But yes, the delisting is something that really helps us reduce expenditures over time. For this year, 2026, we're still keeping our SEC obligations. The end of the delisting process is deregistration and this is not happening right now. But then yes, activities are going to become simpler, especially regarding documentation and controls. This is going to be allowed by the delisting. So to answer your question, yes, we could be more ambitious with the cost reduction because we are already seeing it. Everything we're doing here goes in this direction. We use each and every opportunity to reduce costs because this is indeed a cost layer that becomes significant for Cosan shareholders, and we no longer need some of this structure.
Thiago, let me add something. Yes. It is our ambition, and it is our will to present additional reductions. This is a clear goal of ours, and we should pursue it. So yes, this is possible. As Rafael said, it is possible that we'll get to lower numbers. Our internal numbers already consider lower levels than what has been reported, and this is a trend that we expect for the upcoming years; it will not stop here. We should see additional reductions for next year. So the overall expectation from the market is for us to show more efficiency, and we're definitely pursuing this.
Next question from Isabella Simonato, Bank of America.
I have two questions. Number one, regarding the interest coverage ratio, it's interesting — we were talking about the guidance, and I do think this is a significant improvement for the second quarter. Could we think about a level of financial expenses that are similar or even better than the second quarter because of liability management and because of the cash that entered in the second quarter? Should we expect this ratio to improve significantly — that's my first question. My second question: if we go back to the earnings release presentation for the last quarter, I think regarding the future of the holding, not only the deleveraging that you plan to continue but also, as mentioned, things related to Rumo and the stake that you want to have for each one of these assets. We see simplification efforts, and we see the potential removal of the ADS — could this have to do with the deleveraging of assets, or in your minds would this happen through another kind of structure? Is there another way to get even closer to operating assets in the group?
This is Rafael. Let me start with your second question, which is easier. I don't think we have any news regarding that specific process. There's consistency in our simplification efforts, as Marcelo was saying in his first remarks. Other than that, anything I could say would be speculation. Regarding the coverage ratio, I believe, yes, there is a trend to improve it. This is why we decided to start showing this forecast. And we're going to see some effects that are going to contribute to this. Number one, the seasonality of dividends harmed our indicators for the beginning of this year. But as we progress through the year, according to the planning that we have for these businesses, dividends should normalize to the standard levels that we expect to see. I would like to stress that the biggest source of deleveraging for Cosan is not necessarily an increase in dividends from these businesses. I'm not saying that this won't happen because we do see improvement in their performance. But the biggest source of deleveraging is obviously our portfolio changes. So in this sense, whatever we have already done or announced for this year will give only a partial contribution for the ratio of this year because it encompasses the last 12 months. The resources from the secondary sale that we had from the Compass IPO will be seen in the third quarter. The Bradar portfolio sale will probably conclude transactions at the beginning of the last quarter of this year. Even if we announce our intention to sell parts which could happen in the future, we're only going to reap a partial contribution from all of this in the near term. And this goes to show that we have reached a point of inflection for this indicator. So yes, to answer your question, there is a significant positive contribution from these changes, but this is only partially captured in the metrics for this year.
Next question.
Congratulations, Rafael and Rita, for your history in this company. I have a question for Bradar regarding the announcement. I would love to understand your strategies to monetize Bradar in a better way. Are you still going to sell clusters and increase dividends? I would love to understand how this split of the asset is going to help with this kind of change and the potential of this first change. I would love to understand where you're putting your efforts to monetize this asset. My second question is on Moove. It's clear to understand the resilience of the results that we saw in the last earnings release. But I would love to talk about fuel normalization. How is this going back to normal in the future? Of course, we saw some strong results and some sectorial tailwinds that may not repeat. But when we think about 2027, if the expectation is around 1.3% to 1.5% of EBITDA growth or similar, it's hard to reconcile the BRL 500 million in the quarter compared to that. I would like to understand how this would go back to normal from now on. So I would love to understand the normalization of Moove either upwards or downwards. I think we're feeling a bit lost regarding recurring results for Moove from now on.
Regarding Bradar, the intention for the spin-off has to do with efficiency. It's about corporate efficiency because we want to eliminate a corporate layer; each corporate layer means more work for the holding. Of course, this is an important change, but we've been doing a lot of other things to eliminate different corporate entities or even corporate entities abroad if they are unnecessary. And this has been improving our team's work and our journey to reduce expenses. Now having said that, the changes with Bradar that we have announced are in line with what we had mentioned. It is a very valuable portfolio in terms of the quality of these assets. As we have the opportunity to do so, we also have the intention to monetize this portfolio, but of course we take valuation into account. We don't have any intentions to liquidate assets at any cost. We don't need to do this. Since this is a high-quality portfolio, as we see the opportunity, we're going to continue on our monetization journey. Regarding Moove, we have a very constructive story if we think about what the team has been doing. Yes, in the second quarter there were tailwinds — you're right. The team has been consistently showing an ability to adapt to complex scenarios and to generate value not only for clients but also for shareholders. It's not the first time this happens. The team has faced adverse scenarios before and has been able to adapt really well. In the second quarter, I believe that the team was able to work with this scenario in advance of the scenario restrictions when it comes to supply. They were able to make the necessary changes to ensure supply for our clients. And of course, this led to benefits in profitability because we had enough product to supply our clients during an adverse circumstance. As the costs of raw materials go up, that will obviously have an impact on the profitability of this company from now on. So I do believe the last quarter was really strong. However, if we compare our journey to prior quarters, we are talking about evolution. We have operational evolution and commercial evolution. So we expect consistency from Moove going forward. We're going to see better or worse quarters, but we do believe that they are going to surpass our expectations. It's important to say that even in the scenario of an increase in working capital because of the high cost of raw materials, in addition to delivering results, Moove was also able to deliver 1.4x leverage — one of the lowest levels since the acquisition of PetroChoice — which is a landmark for this company. This goes to show that this team has the discipline to execute a growth strategy with profitability and good risk management for leverage.
This is the end of our question-and-answer session. Let me now hand it over to Mr. Rafael Bergman for his closing remarks.
Well, I would like to take this opportunity to thank you on my behalf and on behalf of Maria Rita. Thank you for your support during this journey. We wish Marcellus Cesario and everyone at Cosan an extremely successful journey. We believe in the company's path and the measures that we took during this quarter are in line with that. Finally, I would like to thank our shareholders and analysts for their support. Analysts have been contributing with very straightforward conversations and questions for us. Thank you all once again. I wish you all the success. This is the end of the earnings call presentation for the second quarter of 2026. Our Investor Relations department is available to answer further questions. Thank you all for being here, and have a great day.