Cosan (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.
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: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.
