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Cosan (NYSE:CSAN) reported a narrower net loss for the second quarter of 2026 as the Brazilian conglomerate advanced debt-reduction, divestment and cost-cutting efforts designed to simplify its holding-company structure.

Net loss totaled BRL 320 million for the quarter, an improvement from the prior-year period. Fernando Tinel attributed the improvement primarily to better financial results, lower effective income-tax and social-contribution expenses, reduced general and administrative costs, and the continued non-recognition of Raízen’s results. Those factors more than offset a BRL 233 million one-time impairment related to the Terminal de Uso Privado São Luís.

Debt Reduction and Asset Sales Cosan said expanded net debt declined 20% from the first quarter to BRL 9.2 billion at the end of June. Expanded gross debt fell to BRL 16.5 billion, down about BRL 2.7 billion from the prior quarter and roughly BRL 9 billion from the end of 2025. The company said it made approximately BRL 8.8 billion in principal payments since the beginning of the year, including full prepayments of bonds maturing in 2029, 2030 and 2031, along with early amortization of debentures and commercial notes. The actions reduced debt maturities scheduled for 2028 by more than BRL 2.5 billion, Cosan said.

At quarter-end, the company’s debt had an average maturity of 6.2 years and an average cost of CDI plus 1.15% annually. Tinel said the decline in net debt was driven by proceeds from Compass’ initial public offering, dividends from investees and yields on financial investments.

Compass’ IPO, completed through a secondary share offering, generated BRL 2.3 billion in net proceeds for Cosan during the first half. The company also announced an agreement to sell part of Radar’s Mato Grosso land portfolio for BRL 1.85 billion. Cosan expects its indirect share of proceeds to total approximately BRL 586 million at closing, which is expected by Oct. 30, subject to customary conditions.

Separately, Cosan signed an exclusive letter of intent to fully divest its stake in the Terminal de Uso Privado Porto São Luís. The proposal calls for BRL 300 million at closing and could include an indicative earn-out of BRL 50 million for each additional berth added through future port-capacity expansion.

Coverage Outlook and Lower Overhead Cosan’s debt service coverage ratio stood at 0.2 times on a last-12-month basis, down 0.2 times from the prior quarter. Management said the result reflected the timing of dividend and equivalent distributions from investees, which are more heavily concentrated in the second half of the year, and the fact that lower financial expenses from debt prepayments have not yet been fully reflected in the metric.

The company began providing a year-end outlook for the ratio and expects it to reach between 0.8 times and 1.2 times by December. The forecast assumes BRL 1.2 billion to BRL 1.8 billion in dividends and equivalent distributions during 2026, including up to BRL 586 million related to the Radar transaction. Potential future divestments under evaluation are not included in the projection.

Cosan also reported a roughly 36% decline in general and administrative expenses, or BRL 49 million in savings, during the first six months of 2026 versus the same period a year earlier. The company announced plans to delist its American depositary shares from the New York Stock Exchange and intends to pursue SEC deregistration in the future as part of its simplification agenda.

Marcelo Martins said management expects to pursue further reductions in overhead as the holding company becomes leaner. Rafael Bergmann said the ADS delisting should make operations simpler over time, although Cosan will continue meeting SEC obligations during 2026 while the deregistration process is not complete.

Investee Performance Rumo: Transported 23.8 billion revenue ton-kilometers, up 9% year over year, supported by grain volumes in its North and South operations. EBITDA was BRL 2.3 billion, broadly stable from the prior-year period. Excluding insurance indemnities and an equity-income reclassification, EBITDA would have risen 4%, Cosan said. Compass: Distributed volume was stable year over year. Weaker industrial demand in chemicals, steel and ceramics was offset by residential and commercial performance with higher margins. EBITDA increased 5%, supported by Edge’s load-optimization initiatives. Moove: EBITDA more than doubled from the first quarter amid supply disruptions associated with the closure of the Strait of Hormuz. Management cited inventory management, higher sales volume and revenue growth. EBITDA was down 6% from a year earlier because the comparison period included insurance recoveries and other one-time effects tied to a fire at an industrial complex in Rio de Janeiro. Radar: Performance was affected by the revaluation of part of its portfolio following the announced land disposal and lower net operating revenue, with lower ATR prices affecting lease contributions. Management also noted that Raízen’s out-of-court reorganization plan was approved by 81.6% of its financial creditors. Martins described the approval as an important step in Raízen’s turnaround process.

Portfolio and Management Changes During the question-and-answer session, Martins said Cosan continues to pursue the previously announced sale of part of its Rumo stake and is in discussions with potential buyers, but did not provide additional details. He said the company is not currently considering an IPO for Moove or a sale of its Moove stake.

Management said Radar remains a valuable portfolio and that Cosan intends to monetize assets when valuations are appropriate, rather than liquidating them at any cost.

Martins also discussed leadership changes, saying Maria Rita and Rafael Bergmann decided to leave amid the restructuring and reduction of holding-company expenses. He welcomed Cesario back to the company, saying he had previously spent eight years with Cosan before leaving in 2017.

About Cosan (NYSE:CSAN) Cosan Limited (NYSE: CSAN) is a Brazilian diversified energy and logistics group focused on agribusiness, fuels, and infrastructure. Its core activities include the cultivation of sugarcane, production of ethanol and sugar, generation of bioelectricity from bagasse, and distribution of fuels under the Raízen joint venture with Shell. Through its subsidiary Moove, Cosan is a leading global producer of base oils and lubricants, while Comgás serves as one of Brazil’s largest natural gas distributors.

Founded in 1936 in the state of São Paulo, Cosan has grown through organic expansion and strategic acquisitions.

Cosan S.A. (CSAN) Q2 2026 Earnings Call Transcript

Cosan (NYSE: CSAN) management on its fourth-quarter 2025 earnings call emphasized balance sheet actions taken during 2025, discussed operating performance across its portfolio companies, and addressed investor questions around Raízen's capital structure and Cosan's deleveraging strategy. Quarterly results and portfolio performance Cosan reported managed EBITDA of BRL 7.8 billion for the quarter, described as broadly in

10 best sugar stocks to buy nowCosan NYSE: CSAN reported a narrower first-quarter net loss and highlighted a series of debt-reduction measures, while management said the holding company remains focused on deleveraging and simplifying its portfolio.

Fernando Tinel, Cosan’s Head of Investor Relations and ESG, said the company ended Q1 2026 with a net loss of BRL 1.6 billion, an improvement of BRL 0.2 billion compared with Q1 2025. The result included an approximately BRL 1 billion impact tied to the prepayment of 2029 and 2031 bonds, recorded in financial results and deferred income tax lines, with no cash effect. Tinel said the impact was partially offset by improved portfolio performance.

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Expanded net debt rose 18% quarter-over-quarter, which Tinel attributed mainly to the absence of relevant dividends in the period and the impact of debt prepayments carried out during the quarter. Compared with the same period in 2025, expanded net debt declined 34%, reflecting proceeds from a capital increase received in the final quarter of last year.

The company’s interest coverage ratio fell to 0.4 times from 0.9 times in the previous quarter. Tinel said the decline was mainly due to lower dividends received over the last 12 months, as the effect of Compass’ capital reduction no longer contributes to the metric’s numerator.

Debt Reduction Remains Central Focus Cosan said it reduced expanded gross debt by BRL 6.5 billion during the quarter and extended its average maturity to 6.1 years. Tinel said the average cost of debt, excluding the perpetual bond, stood at CDI plus 1.15% per year.

The company also ended the quarter with BRL 7.7 billion in cash. Key cash uses included the early redemption of the first series of its fourth and sixth debenture issuances, totaling about BRL 566 million in gross debt reduction, and the full redemption of bonds maturing in 2029 and 2031, totaling about BRL 5.6 billion. Together, those moves reduced indebtedness by BRL 6.2 billion, according to Tinel.

As a subsequent event, Cosan completed a secondary public offering of common shares in Compass. Tinel said Cosan sold part of its stake at BRL 28 per share and may receive approximately BRL 2.5 billion in cash proceeds if supplementary shares are fully placed. He emphasized that Cosan remains Compass’ controlling shareholder.

Portfolio Companies Post Mixed Operating Trends Tinel said Cosan’s investees delivered solid results that were largely in line with Q1 2025. He highlighted Rumo’s record transported volumes, which rose 25%, supported by strong performance in its northern operation, fixed-cost dilution and market share gains, particularly at the Port of Santos. Rumo’s reported EBITDA was up 7% year-over-year.

Compass recorded slightly higher distributed gas volumes and EBITDA growth of 2% versus Q1 2025, supported by an improved distribution mix and higher volumes at Edge. Tinel also cited the start-up of new off-grid B2B LNG operations and Onebio’s biomethane plant.

At Moove, Tinel said the company continued its post-fire optimization cycle. Higher sales volumes and a 10% increase in lubricant sales, mainly in South America, helped EBITDA come in slightly above the prior-year period. He said Moove continued to recover market share in Brazil, reaching 16.4% according to IBP.

Raízen’s EBITDA declined 27% versus Q1 2025, which Tinel said mainly reflected lower income from land leases tied to lower ATR and soybean prices. Cosan also said it no longer recognizes Raízen’s results in its financial statements because the carrying amount of the investment was reduced to zero after impairments recognized at the end of 2025.

Management Addresses Cash Flow and Divestment Levers During the question-and-answer session, UBS analyst Matheus Enfeldt asked about expanded net debt movements and the company’s ability to improve cash generation over the next 12 to 24 months.

Rafael Bergman, Cosan’s CFO and Investor Relations Officer, said much of the quarterly net debt movement was tied to one-off effects from liability management, including premiums and early accruals related to debt prepayments. He also said Cosan dismantled its TRS strategy related to Cosan treasury shares, with part of the cash effect occurring in the second quarter.

Bergman said the company’s deleveraging plan is not primarily dependent on dividends from subsidiaries. “The main initiative to deleverage the holdco is not through the subsidiary's dividends,” he said. “It is by selling stake in the group's assets.”

Asked by BTG Pactual analyst Thiago Duarte about Radar and Moove, Bergman said Radar has a recurring asset recycling process and is currently more focused on selling properties than buying new ones. He said Cosan and its partners are considering broader portfolio perimeters, though he called a full transaction involving Radar unlikely because of the portfolio’s heterogeneous nature.

On Moove, Bergman said the company still has opportunities to restore profitability, including further recovery in Brazil and improvements tied to its multi-site operating model. He also said the U.S. business has opportunities through contract negotiations.

Cosan Signals Longer-Term Holding Company Wind-Down Goldman Sachs analyst Bruno Amorim asked about Rumo and Cosan’s derivative-based share exposure. Bergman said the company disposed of about 10% of Rumo shares through derivatives at the end of last year to pursue liquidity and efficiency, bringing cash into Cosan at low cost and supporting its liability management strategy. He said broader portfolio decisions remain separate and that there was “nothing concrete to share” on potential additional actions.

Morgan Stanley analyst Bruno Montanari asked about Raízen’s future role in the portfolio. Marcelo Martins, Cosan’s CEO, said Cosan does not intend to put more money into Raízen. He said a contribution involving partner Shell would likely result in significant dilution of Cosan’s stake and that Raízen “will no longer be a relevant investment for Cosan.” Martins added that Cosan does not intend to remain in a shareholders’ agreement with Shell after a future conversion process.

In response to a broader question from Enfeldt about Cosan’s role as a holding company, Martins said the company’s current plan is centered on reducing leverage and that it no longer makes sense for Cosan to continue as a portfolio investment vehicle. He said future growth and investment should be handled by the operating companies themselves.

“It’s very reasonable to say that Cosan will no longer exist” over a three- to five-year period, Martins said, adding that after divestments and deleveraging, the company could distribute shares of invested companies directly to Cosan shareholders. He said the first step remains reducing indebtedness and that any further actions would depend on market conditions and feasibility.

About Cosan NYSE: CSANCosan Limited NYSE: CSAN is a Brazilian diversified energy and logistics group focused on agribusiness, fuels, and infrastructure. Its core activities include the cultivation of sugarcane, production of ethanol and sugar, generation of bioelectricity from bagasse, and distribution of fuels under the Raízen joint venture with Shell. Through its subsidiary Moove, Cosan is a leading global producer of base oils and lubricants, while Comgás serves as one of Brazil's largest natural gas distributors.

Founded in 1936 in the state of São Paulo, Cosan has grown through organic expansion and strategic acquisitions.

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