OREANDA-NEWS. COSAN LIMITED (NYSE: CZZ; BM&FBovespa: CZLQ33) and COSAN S.A. INDUSTRIA E COMERCIO (BM&FBovespa: CSAN3) are announcing their results for the first quarter of 2014 (1Q14), comprising of January, February and March. The results are consolidated in accordance with national and international accounting principles (IFRS).

"Cosan's results for this quarter show good performance across all operations of the company in the period and reflect its consolidation in the infrastructure and energy sectors", says Cosan's CEO, Marcos Lutz.

Cosan's Consolidated Result

In 1Q14, Cosan's pro forma consolidated net revenue was BRL 9.6 billion, compared to BRL 8.5 billion during the same period last year. Pro forma EBITDA reached BRL 1 billion, against BRL 911.5 million in 1Q13, and the EBITDA margin was 10.7%. Net income totaled BRL 256.1 million. The main drivers of this change were:

- An improvement of BRL 71.3 million in the financial results, due mainly to the foreign exchange rate variation and amortization of transaction costs during the quarters;

- An increase in the equity accounting result line of BRL 129.2 million due to Raizen's results;

- EBIT's reduction and profit of non-controlling shareholders of BRL 54.5 million.

At the end of 1Q14, cash available totaled BRL 2.8 billion against BRL 2.3 billion in 4Q13. Net pro forma debt totaled BRL 9.6 billion for the quarter, compared to BRL 10.3 billion in the previous quarter, equal to a leverage of 2.4x pro forma LTM EBITDA (BRL 4.1 billion).

Due to the adoption of IFRS 11, as of April 2013, Raizen Energia's and Raizen Combustiveis's results are reported in the “Equity Accounting Result” line. For a better comparison of the market and due to the importance of Raizen's operations to the company, Cosan's consolidated figures are presented in a proforma way, therefore showing a proportionate interest of Cosan (50%) in Raizen in all result lines.

See below for the results of each business:

Raizen Combustiveis Raizen Combustiveis's net revenue totaled BRL 13 billion in 1Q14, 18.9% higher than the same period last year. The result is due to the 9.6% increase in the total fuel sales volume, especially ethanol and gasoline, which grew by 22.7% and 11% respectively. This increase is justified by the expansion of the network of service stations and the growth of the vehicle fleet. The average price of the product, which rose 8.5% between 1Q13 and 1Q14, also influenced the result.

Raizen Combustiveis's EBITDA reached BRL 521.2 million, an increase of 23.2% year-over-year. The EBITDA margin was 4% in the period. In the first quarter, Raizen Combustiveis's capex totaled BRL 277.8 million, which was related to accelerated conversion of service stations, logistics, distribution and trading. This amount is 81% higher than in 1Q13. The network of franchised Shell service stations ended the period with about 4,970 stations and 900 convenience stores.

Raizen Energia

The company is reporting Raizen Energia's performance in 1Q14 as well as over the twelve month period to March 2014, which includes the results for the crop year 2013/14. For comparison purposes, the data recorded during the crop year 2012/13 will also be presented.

Raizen Energia's net revenue in 1Q14 totaled BRL 2.6 billion, an increase of 10.8% over the same period last year. The result is due to the higher volume of all products sold, as well as an increase in the average ethanol prices - in the domestic and foreign markets - and energy (electricity) prices.

Revenue from sugar sales totaled BRL 1.2 billion, 4.1% higher than in 1Q13. Ethanol sales generated BRL 1.3 billion, an increase of 17.6%. During the same period, net revenue from energy sales totaled BRL 27.3 million, 107.5% higher than 1Q13. The total volume of electricity sold reached 71,100 MWh, 32.4% higher compared to the previous quarter, a reflection of extended cogeneration initiatives in the period between harvests. The average price of energy was BRL 384/MWh, 56.8% higher, an increase caused by a higher volume of transactions in the spot market.

Raizen Energia's EBITDA grew by 78.8% in 1Q14 between the quarters and totaled BRL 734 million, a significant result which demonstrates the successful strategy of building and carrying over stocks of sugar and ethanol from 4Q13 to 1Q14, which were sold at higher prices. The total capex of BRL 1 billion is in line with the value invested in the same period last year and was focused on biological assets, agricultural and industrial interharvest maintenance, crushing expansion projects in Paraguacu and Caarapo, and 2G Ethanol.

In the 2013/14 harvest, Raizen Energia's net revenue was BRL 9.5 billion, 11.7% higher than the previous harvest, due to higher sales volume, as well as an increase in the average ethanol prices. Net revenue from sugar sales totaled BRL 4.4 billion, in line with the crop year 2012/13. Ethanol sales reached BRL 4.5 billion, an increase of 34.7% related to sales volume and price, as already mentioned. Regarding energy sales, net revenue totaled BRL 403.8 million.

EBITDA remained stable compared to the previous harvest, registering BRL 2.4 billion, an increase of 1.1%. Capex totaled BRL 2.5 billion, with a positive variation of 4.9%.

Comgas

Comgas's business strategy is focused on growing the residential and commercial segments, and on developing the cogeneration and VNG segments. In 1Q14, the Company's distribution network totaled 11,300 km, of which 335 km were added in this quarter.

Comgas's net revenue from sales and service totaled BRL 1.5 billion in 1Q14, 4.8% higher than the previous quarter. Increases in sales rate, as approved by ARSESP no. 421 and 455, were mainly responsible for the variation.

Comgas's EBITDA during the period reached BRL 342 million, 8.8% higher than the same quarter last year. Normalized by the regulatory current account, EBITDA totaled BRL 282.8 million for the quarter, 7.9% higher than 1Q13. The regulatory current account represents a receivable or payable balance according to the difference between the price of the natural gas acquired by Comgas and the price rate fixed by the regulatory agency (ARSESP). This balance is not accounted for, but the normalization term helps create a more open and transparent process for results purposes.

Comgas's capex totaled BRL 155.8 million in the quarter, a decrease of 10.7% compared to the same period last year, justified by high investments in the RETAP project performed in 2013. Of the total investments made during the quarter, approximately 69% was in the expansion of the gas distribution network.

Rumo

Due to higher transportation and elevation volumes, Rumo's net revenue in 1Q14 was BRL 207.9 million, 23.5% higher compared to 1Q13. Net revenue from transportation grew 20.6%, reaching BRL 154.9 million due mainly to growth of approximately 60% of the sugar volume transported following the sale of inventories built in the fourth quarter of 2013 by leading producers. Revenue from elevation increased 34.9% to BRL 49.4 million in the comparative period due to new contracts. Rumo's sugar elevation volume totaled 2.7 million tons.

Rumo's EBITDA was BRL 92.8 million, 34.2% higher than reported in 1Q13, and the EBITDA margin was 44.7%, up 3.6 percentage points in the same comparison. Rumo's capital expenditure totaled BRL 14 million, due to investments in improvements to the port terminal of Santos and Itirapina, and the maintenance of assets.

Cosan Lubrificantes

Net revenues from the sales of lubricants, resale of base oil and other products and services of Cosan Lubrificantes in 1Q14 totaled BRL 368.3 million, 3% higher than 1Q13, due to the increase of international business sales. The total unit average revenue grew 2.4% in the quarter, to BRL 5,050/m?. EBITDA totaled BRL 23.2 million.

Radar

Radar closed 1Q14 with a land portfolio of BRL 2.5 billion, and total area of 106.3 thousand hectares (262.5 thousand acres), distributed throughout six Brazilian states (Sao Paulo, Maranhao, Mato Grosso, Bahia, Goias and Mato Grosso do Sul). Considering third-party assets managed by Radar, the total area under management is 235.3 thousand hectares (581.2 thousand acres), equivalent to BRL 4.2 billion. Radar's net revenue was BRL 63.6 million in the quarter. EBITDA was negative by BRL 5.9 million in the period, impacted by the devaluation of 0.9% of its land portfolio, following the change in market indices.