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1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
1Q08 presentation
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1Q08 presentation

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  • 1. Agenda Results Presentation Ricardo Vianna (CFO and IRO) Eduardo de Come (Financial Officer)
  • 2. Brazilian Biodiesel Market With the mandatory adoption of B2, all diesel sold in Brazil as from January 1st, 2008contains a blend of at least 2% biodiesel. In the first three months of 2008, 10.38 million m³ of (B2 or Bx) diesel were sold. We canperceive a 7.6% increase in the total sales volume of diesel fuels. It was necessary to increase the imported volume of diesel, which amounted to 402,600 m³. 45.000.000 40.000.000 35.000.000 30.000.000 25.000.000 20.000.000 15.000.000 10.000.000 5.000.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Diesel B2
  • 3. Brazilian Biodiesel Market Brasil Ecodiesel’s sales were 14.79% higher compared with the 4Q07, totaling 86,968 m³. The increased consumption of B2 in the beginning of 2008 forced Petrobras to held anotherauction for acquisition of biodiesel for strategic inventories – the second auction, in which theCompany’s selling price presented a 14% increase in relation to the prior auction carried out byPetrobras. FOB Sales CIF Sales* CIF Sales* ANP Auction Petrobras Auction I Petrobras Auction II Delivery 01/01 to 06/30 01/01 to 02/29 04/07 to 06/20 Vol Average Average Vol Average Unit 3 (m ) Price** Vol (m3) Price** (m3) Price** Iraquara (BA) 41,000 1,837.56 10,000 2,255.00 4,000 2,560.00 Itaqui (MA) 43,000 1,875.80 7,900 2,297.41 9,000 2,623.33 Porto Nacional (TO) 35,000 1,837.97 Rosário do Sul (RS) 42,000 1,840.17 Crateús (CE) 18,000 2,306.94 Floriano (PI) 2,000 2,665.00 Total 161,000 1,848.54 35,900 2,290.38 15,000 2,612.00 * Deliveries in basis DECAL (EP) and Candeias (BA). ** Without ICMS tax.
  • 4. Brazilian Biodiesel Market On March 14 the CNPE raised the biodiesel ratio in the diesel blend to 3% as from July 1this year. On April 10 and 11, the ANP held new auctions for biodiesel supply in the 3Q08. Theaverage selling price of Brasil Ecodiesel was 48.2% higher than in the auctions of November2007. FOB Sales ANP Auction Average Unit Vol (m 3) Price* Iraquara (BA) 21,600 2,739.99 Itaqui (MA) 19,800 2,739.99 Rosário do Sul (RS) 21,600 2,738.99 Total 63,000 2,739.65 *Delivery until 09/30/2008. The Ministry of Mines and Energy (MME) estimates that the B3 blend will result in anannual demand of approximately 1.3 million m³ of biodiesel, with a positive impact on Brazil’sbalance of trade through the reduction in imported diesel fuel.
  • 5. Brazilian Biodiesel MarketBrazilian biodiesel production in clear expansion The domestic production of biodiesel in the first two months of 2008 amounted to 144,5 m³, 37% of which were produced by Brasil Ecodiesel. In accordance with preliminary estimates by the MME, biodiesel production totaled 80,000 72,721 90% 238,000 m³ from January to March 2008. 71,825 70,000 80% 60,000 66% 70% 61% 55,052 62% 57% 56% 60% 50,000 45,370 47% 55% 50% 40,000 43% 46% 40% 42% 39% 30,000 26,005 26,718 39% 31% 36% 30% 18,773 20,000 17,109 16,933 20% 10,000 10% 0 0% 07 08 07 7 7 07 7 7 07 07 7 08 07 7 r/0 t/0 /0 l/ 0 t/0 /0 v/ v/ v/ o/ n/ n/ n/ z/ ar ai ju se ab ou fe fe no ja ju ja ag de m m National Biodiesel Production % Produced by Ecodiesel Source: ANP
  • 6. 2008. US$/ ton02 /17 01 / / 2 1,000 1,200 1,400 1,600 1,800 0 200 400 600 80031 01 / 007 / 214 01 / 007 / 201 02 / 007 / 215 03 / 007 / 229 03 / 007 / 213 03 / 007 / 227 04 / 007 / 211 04 / 007 / 225 05 / 007 / 211 05 / 007 Vegetable Oil Market / 225 06 / 007 / 210 06 / 007 / 224 07 / 007 / 207 07 / 007 / 221 08 / 007 / 205 08 / 007 / 219 09 / 007 / 203 09 / 007 / 217 10 / 007 / 231 10 / 007 / 214 10 / 007 / 229 11 / 007 / 213 11 / 007 / 228 12 / 007 / 214 12 / 007 / 229 01 / 007 / 212 01 / 008 / 227 02 / 008 / 212 02 / 008 / 231 03 / 008 /0 20 3 / 08 20 08 Brazilian prices was partially offset by the 33.4% period appreciation of the Real. Palm Castor Soybean Sunflower Rapessed 5.38% in 1Q08. Over the past 12 months, soybean oil appreciated 56.3%. The impact on The market for the main vegetable oils produced worldwide continued to climb in early- Soybean oil, the main oil used for production of biodiesel in Brazil, showed an increase of
  • 7. Vegetable Oil Market According to Abiove, Brazilian soybean production should reach 61.3 million tonnes in the2008/2009 harvest, showing a 4% growth when compared to the previous harvest. With this production, it would be possible to produce nearly 11.5 million m³ of soybean oil,however the Brazilian demand is only 4.0 million, of which approximately 3.0 million aredestined to the food market and only 1.0 to biodiesel production, according to MME (Ministryof Mines and Energy). Grains 2008/ Meal 2008/ Oil 2008/ 2006/ 2007/ 2008/ 2009 2006/ 2007/ 2008/ 2009 2006/ 2007/ 2008/ 2009 2007 2008 2009 F % 2007 2008 2009 F % 2007 2008 2009 F % Initial Stock 1,220 2,289 2,027 -11% 818 864 862 0% 272 311 291 -6% Production 56,942 58,726 61,300 4% 22,021 24,111 24,800 3% 5,512 6,047 6,200 3% Importation 40 108 100 -7% 193 111 100 -10% 26 101 50 -50% Internal Consumption 9,944 11,325 11,800 4% 3,238 3,647 4,100 12% Seeds/ Losses 1,220 2,700 2,700 0% Export 56,942 23,805 27,300 15% 12,224 12,899 13,100 2% 2,261 2,521 2,150 -15% Processing 40 31,511 32,400 3% Stocks End 2,289 2,027 1,500 -26% 864 862 862 0% 311 291 291 0%
  • 8. Energy x Food Over the past months, the discussion on energy x food grew stronger concerning the destination to agricultural production. The biofuels are not the cause to the increase in food prices. The factors which determined such an increase are much more structural, such as:1. The higher food demand and the increase in population in a lot of places, like China;2. Increases in oil prices, impacting production costs (fertilizer and transport);3. Some of the main international producers, such as Australia, have undergone severe draughts that affected the production;4. The growth of production of ethanol from corn in the US, reducing the corn used to food and replacing land.5. The history of subsidies to the agricultural sector and import fees imposed by developed countries, especially the USA and the European Union.6. The speculative component – the operation of speculative funds in the commodities sector as a way to maintain profitability; According to IBGE (Brazilian Institute for Geography and Statistics), Brazil has 152 million hectares of agricultural land, 62 million of which in use; therefore, there are 90 million hectares left to expand agriculture with no need for deforestation.
  • 9. Plantations We concluded the summer planting of 5,300 hectares of jatropha curcas on our own land, giving a total of 7,945 hectares planted with this crop, part of which jointly with castor, especially on some of the land acquired in 2007 in the state of Bahia. City Total Area Legal Reserve Planted Area Area available for planting Crateús / CE 3.980 ha. 796 ha. 899 ha. 2.285 ha. Parambu / CE 12.394 ha. 2.479 ha. 205 ha. 9.710 ha. Alvorada / PI 7.754 ha. 1.550 ha. 1.426 ha. 4.778 ha. Setubinha / MG 2.622 ha. 524 ha. 515 ha. 1.583 ha. Irecê / BA 19.802 ha. 3.960 ha. 4.900 ha. 10.942 ha. 46.552 ha. 9.309 ha. 7.945 ha. 29.298 ha. We emphasize our strategy of its own production of vegetable oils for alternative cropsaimed at reducing our exposure to soybean oil.
  • 10. Plantations Jatropha Curcas Plantation in our farms Bahia Minas Gerais
  • 11. Plantations Minas Gerais
  • 12. Operating Performance Brasil Ecodiesel produced 70,719 m³ of biodiesel and sold 86,968 m³ in 1Q08, supplied with stocks maintained by the Company at the end of 2007. Despite the increased sales and the higher prices seen last quarter, with a consequent increase in revenue, the upturn in the cost of vegetable oil, pushed up production costs, jeopardizing financial results. 1Q07 4Q07(*) 1Q08(*) % 1Q08 / 4Q07 Gross Revenue 61,130 160,517 202,794 26.33% Net Revenue 48,290 134,277 167,264 24.57% COGS -44,762 -139,457 -180,313 29.30% Gross Income 3,528 -5,181 -13,049 151.86% Gross Margin 7.30% -3.90% -7.80% 100.00% Lucro (Prejuízo) Líquido -526 -24,352 -14,925 -38.71% Margem Líquida -1.10% -18.10% -8.90% -50.83% Sales (m³) 27,697 75,763 86,968 14.79% Average price (with ICMS) 2,165.31 1,967.00 2,290.20 16.43%
  • 13. Operating Performance• Adjusted gross revenue stood at R$202.8 million in 1Q08, of which 98.2% (or R$199.2 million) came from the sale of 86,968 m³ of biodiesel and the remainder from the sale of byproducts, especially glycerin and fatty acids. Porto Rosário Biodiesel Floriano Crateús Iraquara Itaquí Total Nacional do Sul 1Q07 9,243.1 8,124.4 10,329.6 - - - 27,697.1 Sales 3 4Q07 6,947.41 12,357.19 18,520.36 10,690.42 13,717.82 13,529.81 75,763.00 (m ) 1Q08 2.00 16,274.49 23,700.74 11,516.23 14,521.49 20,953.45 86,968.41 1Q07 19,954.10 7,177.00 22,841.70 - - - 59,972.9 Revenue 4Q07 13,670.52 24,293.13 36,409.36 21,020.00 27,004.83 26,628.22 149,026.05 (R$ ‘000) 1Q08 9.42 42,337.97 54,033.34 24,052.79 30,613.11 48,128.64 199,175.27
  • 14. Operating Performance Net Revenue totaled R$167.3 million in the first quarter. The Cost of Goods Sold stood at R$180.3 million in 1Q08, R$179.8 million of which from biodiesel sales. In 1Q08, General and Administrative Expenses stood at nearly 14.2% below the previous quarter, mainly due to the nationalization of the Company’s expenses. Tax expenses : R$1.6 million in 1Q08. Other Operating Revenues: we recorded an additional net operating revenue of R$20.0 million in the 1Q08, 90% of which related to fines to be paid by our clients for failure to remove biodiesel from our plants. We recorded net financial expenses of R$9.9 million in 1Q08, chiefly due to the payment of charges related to short term loans (working capital). We posted a net loss of R$14.9 million in 1Q08, primarily due to the increase in production costs, especially in vegetable oil, against low average sale prices, due mainly to the outcome of auctions held by ANP in November 2007.
  • 15. Cash and Investments Details of Use of Funds (R$ ‘000) Most of cash and investments are in workingcapital due to the higher operating volume of Otherthe company; 4% The Company’s net debt totaled R$229.9million on March 30th. Oil Extraction 17% INDEBTEDNESS R$ 40,7 R&D millions 4% Working Capital Units of & Inventory Biodiesel 68% 2% Agriculture 5% Indebtedness (R$ ‘000) 4Q07 1Q08 Short term R$ 141,245 R$ 205,022 (+) Long term R$ 36,715 R$ 30,778 (=) Total Indebtedness R$ 177,960 R$ 235,800 (-) Cash and cash equivalents R$ 298 R$ 5,898 (=) Net Debt R$ 177,662 R$ 229,902
  • 16. Capital MarketsECOD3 performance ECOD3 (R$ /share) 1Q07 2Q07 3Q07 4Q07 1Q08 Open 11,81 9,24 12,27 11,91 6,99 Low 8,77 8,80 9,51 6,01 3,84 High 12,65 14,50 15,39 12,17 7,01 Average 10,95 11,57 12,86 8,67 Close 9,15 12,27 11,89 6,89 4,55 % in quater -22,5% 34,0% -3,1% -42,1% -34,0% Volume (R$ MM) 1Q07 2Q07 3Q07 4Q07 1Q08 Total 117,69 182,70 144,83 116,55 170,08 Daily Average 1,93 2,95 2,30 1,98 2,83 Transactions 1Q07 2Q07 3Q07 4Q07 1Q08 Nº of share (un.) 10.750.400 15.793.000 11.265.800 13.446.300 34.075.000 Nº of transaction (un.) 10.878 19.816 13.700 13.793 25.994
  • 17. 2/ 1/ 2 0,00 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 8/ 00 1 8 14 /20 /1 0 8 18 /20 /1 08 24 /20 /1 08 / Capital Markets 31 20 /1 08 /2 8/ 0 0 2 8 ECOD3 performance in the 4Q07 14 /20 /2 0 8 / 20 20 /2 08 26 /20ECOD3 /2 08 /2 3/ 0 0 3/ 8 2 7/ 00 3 8 13 /20IBOV /3 0 8 19 /20 /3 08 / 26 20 /3 08 /2 00 8 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000
  • 18. Investor Relations Ricardo Luis de Lima Vianna CFO and IRO Marcos Leite Investor relations Phone: +55 21 2546-5031 Website: www.brasilecodiesel.com.br/ir
  • 19. Disclosure• This document may contain prospective statements, which are subject to risks and uncertainties, as they were based on the expectations of Company’s management and on available information. These prospects include statements concerning the Company’s current intensions or expectations for our clients; this presentation will also be available on our website www.brasilecodiesel.com.br/ir and also in the IPE system at the Brazilian Security Exchange Commission – CVM.• Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside Company’s control or expectation. The reader/investor is prevented not to completely rely on the information above .• The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are intended to identify affirmations. Such estimates refer only to the date in which they were expressed, therefore Company has no obligation to update said statements.• This presentation does not consist of offering, invitation or request of subscription offer or purchase of any marketable securities. And, this statement or any other information herein, does not consist of a contract base or commitment of any kind.

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