As Q4 losses and debt rise, Raizen seeks refuge in its core business

Nelson Gomes, the CEO of Brazil's Raizen, said that the company is returning to its core business, including sugar and alcohol production. This was a day after Raizen reported a net loss for its fourth quarter of 2,5 billion reais (444.2 million dollars).

Raizen's Net Debt jumped by nearly 80% in the year ending March 31 to over 34 billion reais, the company announced on Tuesday. It cited a number of large investments and its operational result.

Gomes stated that Raizen, one of Brazil's largest fuel distributors and the world's leading sugarcane processor, had made the necessary adjustments to its staffing, strategy, and culture in order to overcome their problems.

What can we expect this harvest from Raizen? Gomes summarized the situation by saying, "If I could sum it up, it is a focus on our core business and discipline in simplifying both the EAB (ethanol and sugar) operation as well as in fuel distribution."

He added that the company would also reduce expenses, rationalize its investments, and lower debt.

Gomes stated that Raizen, the joint venture between Shell, listed on London's Stock Exchange, and Brazilian conglomerate Cosan will divest assets they no longer consider important.

Raizen announced this week that it will sell its Leme factory for 425 millions reais.

Gomes, in an interview after Raizen announced its results and citing distributed energy generation, said that the company was moving forward with its sale of its assets.

Gomes stated that "all of this - this portfolio recycling, and asset sales, which we are implementing, and will continue to do - has two main objectives: the most important and primary, is to reduce our debt. But, it also seeks to simplify our management of our business."

Raizen has begun crushing the sugarcane harvest for 2025/26. The company is negatively affected by the dry weather in 2024 and the fires. Some fields are still recovering from the blazes.

In 2025/26 the company expects to process 72-75 million metric tonnes of sugarcane, which is less than the 78.2 millions tons processed the previous year.

Raizen's crushing capability exceeds 100 millions tons of sugarcane each year.

(source: Reuters)