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Release 2010 inglês Release 2010 inglês Document Transcript

  • 2010 ANNUAL AND 4Q10 RESULTSSão Paulo, March 29, 2011 - Brasil Ecodiesel Indústria e Comércio de Biocombustíveis e Óleos VegetaisS.A. (“Brasil Ecodiesel” or “Company”) and (Bovespa: ECOD3), pioneer in the production of biodieselin Brazil and currently transformed into a quite diversified agribusiness corporation, herebyannounces its results for 4Q10 and 2010 and informs its shareholders on the Company’sperformance. The Company’s financial statements are prepared in accordance with BrazilianCorporation Law and presented on a consolidated grounds in accordance with Brazilian accountingpractices. CONTACTS CONFERENCE CALL José Carlos Aguilera CEO Portuguese Eduardo de Come EXECUTIVE AND INVESTOR RELATIONS OFFICER São Paulo, March 30,2011 10:00 am (Brasília)/ 9:00 am (US-ET) Guilherme Raposo EXECUTIVE OFFICER Telephone: 55 (11) 4688-6361 www.brasilecodiesel.com.br/ri Code: Brasil Ecodiesel E-mail: ri@brasilecodiesel.com.br Webcast: www.ccall.com.br/brecodiesel/4t10.htm Telephone: +55 (11) 3137-3114 1
  • Message from the Board of DirectorsFor Brasil Ecodiesel, 2010 will be marked as a turning point in the Company’s business.We passed from a biodiesel producing company to an agribusiness corporation,operating in renewable energy and food sectors. To the Company it means a growthopportunity and possibility of obtaining better profitability in its business already inshort term.Year 2010 was characterized by a greater competitiveness in the biodiesel sector. Bothan increase in the number of participants and a growth in their production capacityoccurred in the sector. In this race for investments, excess idle capacity ended up bybecoming the greatest concern of the mills and, indeed, by the end of 2010, accordingto data of the National Petroleum Agency (ANP) itself, installed capacity of biodieselcompanies was 6.2 million cubic meters, a 2.6 times greater volume than marketdemand, which was 2.35 million. In practice, the biodiesel sector works with idlenessat the rate of 60%.In line with company creation motivation, we understand that the biofuel sector ishighly promising and market expansion opportunities are huge. However, as observedin biodiesel auctions held in 2010, this excess offering caused the search for volume tobring as a consequence, a price reduction. Today, the industry pleads a new regulatorymilestone that will allow growth in gradual manner of biodiesel mixing in diesel, as hasoccurred in Argentina and several European Community countries.As since establishment and up to 2010 we were a single product company, low marginsimpacted our revenues and results in 2010, especially in the 4th Quarter of 2010. Inorder to offset revenue loss, the Company has taken some initiatives for costreduction, as well as soybean crushing volume increase, which contributes to rawmaterial cost reduction.The conclusion is that although the renewable energy sector, in Brazil, alreadyconstitutes a reality, it is necessary to observe the right time to act in more aggressivemanner in expanding our share in the sector.In this scenario, the Board of Directors has established the following for the Company:(i) diversifying the product portfolio, reaching new markets and customers; (ii) notbeing solely dependent on operating in a regulated market; (iii) staying in ECO sector(so-called “green products”), company primary focus; (iv) Exploiting the opportunitiesof a publicly held company; (v) optimizing cash in projects that allow quick revenueand income growth; and (vi) focusing on short, medium and long-term growth marketsthat represent natural diversification. 2
  • In October 2010, company directors identified the opportunity to enter agribusiness, inbroad sense, with diversification and a first step toward verticalization of operations.Such decision had as motivating elements: (i) growing demand for food in the domesticand foreign market; (ii) economic development of still underdeveloped countriescreating a large consumer market; (iii) comparative and competitive advantages ofBrazilian edaphoclimatic conditions; (iv) knowledge, productivity and competitivenessin an agribusiness without subsidies; and (v) potential business intersection, which maybe completely exploited when this strategic mosaic has been completed (primaryagricultural product generation, industrialization, energy production, transportationand storage). Within this context, on 12/23/2010 the merger of Maeda S.A.Agroindustrial (“Maeda”) shares was approved, which became a wholly ownedsubsidiary of Brasil Ecodiesel.Maeda is an agricultural company with expertise in oleaginous planting, especiallycotton, soybean and corn, having under management 86 thousand-hectare plantationin 2010/11 harvest, in addition to minority interests in agricultural land valuationcompany (Jaborandi Agrícola) and a sugar and ethanol mill (Tropical Bioenergia).With this initiative, Brasil Ecodiesel has taken a decisive step toward its future Brazilianand international reference in renewable energy and food. In the stage where itstands, the Company has been transformed into a quite diversified agribusinesscorporation, at the strict level of corporate governance that BMF&BOVESPA NewMarket is.Furthermore, aiming to seek new markets, in December 2010, TAM, Curcas DieselBrasil and Brasil Ecodiesel formed a company group aiming to analyze the feasibility ofimplementing an integrated aviation bio-kerosene sustainable production project inBrazil, from agricultural and industrial production to distribution, aimed at partial,gradual replacement of fossil renewable fuel. This project is in initial research phaseand technology choice, but we understand that it may be promising after definition ofbio-kerosene specification by international regulatory agencies.On account of all this transformation at the company from this report, the Companywill split its activities into Renewable Energy, which will contain the company’sindustrial areas (biodiesel, vegetable oil and ethanol) and Food and AgriculturalCommodities, which will contain agricultural activities.In March 2011, Brasil Ecodiesel and Petrobras executed an agreement concluding anexisting process between the companies. Based on the agreement, the partiesmutually waived charging penalties regarding Biodiesel Purchase and Sale Agreements 3
  • entered into between them. To the Company, the agreement conclusion was positive,because we closed a dispute with our main customer.At last, it is worth saying that we believe that this is the best way for value generationto the company and its shareholders. We thank our customers, shareholders,collaborators and suppliers for the commitment, dedication and trust in the success ofthis Company . The Board of Directors 4
  • 1. Market Outlook 1.1. Renewable Energy 1.1.1. Biodiesel The biodiesel industry operates in a fully regulated market. Negotiations take place at quarterly auctions coordinated by ANP. Biodiesel producers rely on a single customer, Petrobras, which is responsible for selling biodiesel to fuel distributors, which in turn are responsible for mixing. In this context, the biodiesel sector has to grow and to develop into a new regulatory milestone that will ensure increasing mandatory biodiesel mixing in diesel, set today at 5%. The scenario we had in 2010 for the biodiesel industry was a strong vegetable oil price hike and large discounts at ANP (National Petroleum, Natural Gas and Biofuels Agency) auctions, which negatively impacted biodiesel producers’ profit margins. We were able to observe in the year strong discounts in auctions referring to the second semester of 2010. The 18th and 19th auctions had average discounts of, respectively, 9.24% and 24.86%, quite high rates, which prove the previous assertion. Brazil closed 2010 with a 2.4 million m³ of biodiesel production, which stands for a 49% growth against 2009. Production increase occurred due to biodiesel in diesel mixing increase in early 2010, which passed from 4% to 5%, three years before the forecast. Currently, Brazil has and authorized 6.2 million m³ production capacity, which means to say that we only produce 40% of our operating capacity. Some studies state that Brazil is already prepared to fill an eventual demand generated by a new regulatory milestone, even if it will determine a mix increase to 10%. Analysts, however, suggest that this increase will occur in gradual manner until it reaches 20% by 2020, bringing in this way positive externalities to the country. 5
  • Source: ANPOil originating from a broad range of oleaginous such as, for example, palm,soybean, cotton and other vegetables can be used for biodiesel production, inaddition to animal origin fats. Currently, this market is closely connected tosoybean production chain, which stands for on average 80% of raw materialused for biodiesel production, followed by animal fat (approx. 18%) and others(approx. 2%). It is not by chance that soybean is the main character of thisscript, because it is an already consolidated crop in the country and ininternational scope, which enables its large-scale production, making it capableof covering current needs of this biofuel in Brazil. However, this reality is liableto be altered in gradual manner in the years ahead , because there is already inof studies and researches that analyze the entrance of other more productivegrains than soybean itself, and equally sustainable. 6
  • 1.2. Food/Agricultural Commodities The macroeconomic conjuncture for agricultural commodities is quite positive, because the international market, after the outbreak of the world financial crisis that had its apex in 2008, starts to present a new breath, having developing countries in the forefront of economic growth. The good moment through which the agricultural sector has been passing recently is largely due to the greater appetite of these developing countries that have pressured demand against a supply that has not grown in the same magnitude. The result was predictable, with effects on prices to mark out consumption. The latest world supply and demand report (March 2011) published by the USDA (U.S. Department of Agriculture) draws a still high price outlook for this year, on account of production and consumption forecasts of some oleaginous. It is estimated, for example, that world soybean production is 258 million tons in 2010/2011 and consumption will reach 257 million tons. For cotton, the estimate is that production will reach 25 million tons in this harvest, consumption will be a little greater, which may reach 25.4 million tons. For corn, the estimate is an 814 million ton production opposite a projected consumption of 835 million tons. As we can see, the space between supply and demand is quite tight. 7
  • Production (Million Tons) 2009/10 2010/11* Variation (%) Soybean 260 258 -0.77 Cotton 22 25 13.64 Corn 812 814 0.25 Consuption (Million Ton) 2009/10 2010/11* Variation (%) Soybean 238 257 7.98 Cotton 26 25 -1.55 Corn 816 835 2.33*Projection Source USDA In order to demonstrate price dynamics in 2010, cotton presented a 104% appreciation. Likewise, corn and soybean respectively appreciated 50% and 34% last year. This price hike of agricultural commodities has several explanations. Among them are: (i) climatic effects that have negatively affected grain supply of relevant producers such as Russia and India, affecting harvest productivity; (ii) low inventories of most agricultural products; and (iii) strong demand against existing commodities supply. In the chart below, we use indexes prepared by ESALQ –Luiz de Queiroz College of Agriculture of the University of São Paulo, to illustrate price evolution in Brazil of three selected oleaginous:The advantage of Brazil against other agricultural powers is that we have a hugearea available for agriculture and appropriate climate for the development of 8
  • several crops. Additionally, the country relies on advanced technology to handleseveral agricultural products. In the crops that we operate, we are on the frontierof what is considered the most advanced in international agribusiness.Agricultural production growth in the country, in the past few years, can beexplained by greater productivity, result of adopting the best tillage practices,harvesting mechanization and using more efficient technologies. The chart belowdemonstrates that production has been growing at a greater speed than plantedarea expansion, which leads us to conclude that Brazilian land productivity in thelast years has been increasing. Source: CONABAccording to the 6th grain survey prepared by CONAB (National Supply Company)and published in March/2011, it is estimated that planted area in 2010/11 harvestwill 48.86 million hectares, i.e., 3.1% greater than planted area in 2009/2010. Asregards production, a 154.2 million ton figure is expected in 2010/2011 harvest,3.4% over the previous harvest. This figure, according to the Ministry ofAgriculture, makes 2010/ 2011 grain harvest the greatest in history.The tables below present estimated figures for planted area and soybean, corn andcotton production (2010/11 harvest). 9
  • Table: Production Estimate in Brazil – 2010/2011 harvest Grain Production (thousand ton) Cotton - seed 3,040.1 cotton - plume 1,950.2 Corn 55,021.3 Soybean 70,296.9 Table: Planted Area Estimate in Brazil – 2010/2011 harvest Grains Area (thousand ha) Cotton 1,304.7 Corn 13,166.7 Soybean 24,033.9 Source: CONAB (National Supply Company) – March/2011 2. Consolidated Headline ResultFinancial statements have been drafted and are presented on consolidated basisaccording to accounting practices adopted in Brazil, while complying with theprovisions contained in the Corporation Law and incorporate amendments brought byLaws No. 11.638/07 and 11.941/09.As the merger of Maeda’s shares by Brasil Ecodiesel was concluded on December 23,2010, were considered, in the results of the Company, seven days of operation of thesubsidiary mentioned above. 10
  • Book Values Adjusted Values Description 2010 VA (%) 2009 VA (%) HA (%) 2010 (**) VA (%) 2009 (*) VA (%) HA (%)Volume of biodiesel sold (m³) 172,247 151,966 13.35% 172,247 151,966 13.35%Gross Revenue 465,009 117.8% 404,919 115.9% 14.84% 465,009 117.8% 404,919 115.9% 14.84%Net Revenue 394,792 100.0% 349,322 100.0% 13.02% 394,792 100.0% 349,322 100.0% 13.02%(-) Biological Asset Fair Value Variation 2,646 0.7% 1,591 0.5% 66.31% 2,646 0.7% 1,591 0.5% 66.31%(-) COGS 350,328 88.7% 312,031 89.3% 12.27% 350,328 88.7% 312,031 89.3% 12.27%Gross Profit (Loss) 41,818 10.6% 38,882 11.1% 7.55% 41,818 10.6% 38,882 11.1% 7.55%(-) Operating expenses 62,488 15.8% 42,053 12.0% 48.59% 50,379 12.8% 36,159 10.4% 39.33%General and Administratives 45,550 34,877 30.60% 45,550 34,877 30.60%Taxes (tributárias) 756 1,282 -41.03% 756 1,282 -41.03%Others operating Income (expenses) 16,182 5,894 174.55% 16,182 5,894 174.55% Other non recurrent Expenses 9,003 Strategic new target adjustment (14,897) Petrobras Agreement (12,109)Operating Income (EBIT) (20,670) -5.2% (3,171) -0.9% 551.79% (8,561) -2.2% 2,723 0.8%Financial Income (2,240) -0.6% (31,707) -9.1% 4,155 1.1% (31,707) -9.1% Reversal correction of client payment in advance (6,395)New profit (loss) (22,910) -5.8% (34,879) -10.0% -34.32% (4,406) -1.1% (28,985) -8.3%Net Margin -5.80% -9.98% -1.12% -8.30% EBITDA (9,340) -2.4% 22,793 6.5% 2,769 0.7% 28,687 8.2% -90.35%EBITDA Margin -2.37% 6.52% 0.70% 8.21%Note: Adjusted data disregard the following amounts:(*) Other revenues/non-recurring expenses referring right of use assignment and raw material inventory amountadjustment(*) Strategic new target adjustment(**)Reversal of fines referring to the agreement with Petrobrás(**) Correction of advance to customers received in 20073. Operational Performance 3.1. Renewable Energy 3.1.1. Industrial Units Currently, Brasil Ecodiesel has in operation four transesterification units, with 518.4 thousand m3/year biodiesel production capacity. In addition to the transesterification units, Brasil Ecodiesel has and intends to operate this year vegetable oil extraction units, where vegetable oil is extracted from agricultural production originating from own chain and partnerships. The map below presents the location of plants and crushers. 11
  • 3.1.2. BiodieselIn the fourth quarter of 2010 (4Q10), Brasil Ecodiesel both sales and revenuesdecreased in relation to the previous quarter, on account of the low volumesold at the 19th Biodiesel Auction, which presented high discount. In 2010aggregate, the Company sold 172.2 thousand m3 of biodiesel, 13.4% highervolume than in 2009, which was 151.9 thousand m3. 2010 billing also washigher by 6.6%, when compared to the previous year.It is relevant to recall that in December 2009 Crateús and Floriano mills weredeactivated because of the complexity and logistics costs involved in rawmaterial purchase and handling.The table below presents biodiesel sales and billing, ranked by mill. It isrelevant to emphasize that, in March 2010, Iraquara and Itaqui mills had theSocial Fuel Stamp suspended for a one-year period. 12
  • Porto Rosário do Biodiesel Floriano Crateús Iraquara Itaquí Total Nacional Sul 2009 4,053 7,031 30,238 26,793 52,666 31,183 151,966 3Q10 - - - 23,969 17,714 - 41,683 Revenue B100 (m3) 4Q10 - - 124 11,546 9,572 217 21,459 2010 122 120 17,437 74,070 62,890 17,608 172,247 2009 10,939 19,114 79,349 71,023 138,196 81,703 400,325 3Q10 - - - 57,397 41,365 - 98,762 Revenue from B100 (R$ mil) 4Q10 - - 231 22,462 18,749 422 41,864 2010 323 318 45,812 180,627 152,973 46,644 426,696 3.1.3. Vegetable Oil While the entire biodiesel sector is committed to obtaining a new regulatory milestone, aiming at resuming investments in biodiesel expansion, Brasil Ecodiesel directs its actions toward produced biodiesel cost reduction. It achieves this reduction by Rio Grande do Sul soybean grain crushing and also by improvements in the industrial process. In 2010, the Company crushed, in outsourced manner, 71,461 tons of soybean grains purchased from family farming, generating revenues amounting to R$ 35.5 million with bran sale. It is relevant to emphasize that family farming involvement in the origination process, mainly aims to obtain the Social Fuel Stamp, a necessary requirement for us to participate in the biodiesel auction solely intended for companies having the Social Fuel Stamp. 3.1.4. Sugar/Ethanol With Maeda merger, Brasil Ecodiesel became the holder a 25% interest in Tropical Bioenergia, in a partnership with BP Biofuels (50%), and LDC-SEV Bioenergia (25%). Tropical has a sugar and ethanol production unit in the Goiás State city of Edéia. Tropical Bioenergia has a 2.4 million ton grinding capacity, with 60%/40% sugar and ethanol production flexibility, and vice-versa.3.2. Food/Agricultural Commodities 3.2.1. Planted Area 13
  • Maeda merger adds to Brasil Ecodiesel the experience of one of the most traditional agricultural producers in the Brazilian market. Agricultural Calendar The Agricultural Calendar is different from the fiscal calendar and varies depending on the planting site and crop to be grown. We place below the agricultural calendar of the areas that we produce.Harvest Sep Oct Dec Feb Apr May Aug Sep Sep DecSoybean (MA)Soybean (BA)Soybean (GO)Cotton (MT)Cotton (BA)Corn (MT)Corn (CA) Planting Treatment Harvest Total planted area for 2010/2011 harvest is 85,811 hectares, according to the table below. Planted Area (ha) State 2010/2011 BA 25,819 MT 47,705 GO 12,287 Total 85,811 14
  • 3.2.2. Land Portfolio AREAS STATEMENTS - CROP 2010-11 (ha) Distribution per crop Farms State Available Area Planting Total Cotton Soybean Corn OthersDom Pedro BA 16,966 15,921 8,742 6,390 - 789 Amizade BA 11,298 9,898 2,269 6,418 - 1,211 Sucesso BA 12,682 - -Guapirama MT 9,001 9,374 4,299 5,075 - - São José MT 29,207 38,331 3,442 24,228 10,032 629 Catalão GO 3,923 3,877 - 3,006 456 415Bartolomeu GO 8,486 8,410 - 7,652 758 - Total 91,563 85,811 18,752 52,769 11,246 3,044 15
  • 4. Adoption of New Accounting Procedures and Economic and Financial Performance (2010 x 2009) 4.1. Adoption of new accounting procedures issued by the Accounting Statement Committee (CPC) and international accounting practices, according to the International Financial Reporting Standards As authorized by Securities Commission in article 1 of CVM Decision 603, Brasil has chosen to present its Quarterly Information Forms – ITR during 2010 according to accounting standards effective up to December 31, 2009. According to referred decision, in 2010 year statements, the Company adopted all statements issued by the CPC applicable to its operations, which consistent with international accounting practices – IFRS. In this manner, certain balances relative to 2009 year, previously published, were adjusted in order to reflect alterations resulting from new statements and allow comparability between presented periods. The adjustments resulting from adopting these statements, which affected Company results in years that ended on December 31, 2010 and December 31, 2009, were as follows: 16
  • 4.2. Economic and Financial Performance 4.2.1. Gross Revenue In 4Q10, Gross Revenue was R$ Gross Revenue 60.9 million, being that R$ 41.8 million (68.6% of this total) originated from 21.5 thousand m3 biodiesel sale. This amount includes soybean meal sale revenue resulting from outsourced grain crushing operations, obtaining thereby an R$ 18,9 million revenue (31.0% of total). In 2010, Gross Revenue reached R$ 465.0 million, a 14.8 % higher amount than obtained in 2009. Of the total, R$ 428.1 million came from the sale of 172.2 thousand m3 biodiesel. It is relevant to highlight the revenue coming from soybean meal sale, which accounted for 7.6% of the revenue for the year. Soybean meal sale started in 2010 by purchasing soybean grains and from outsourced crushing operations in Rio Grande do Sul. 4.2.2. Deductions In the year, deduction total reached R$ 70.2 million, against R$ 55.6 million amount in the previous year. When we compare this amount in relation to net revenue, it is observed that this percentage passed from 15.9% in 2009 to 17.8% in 2010. R$ 51.4 million in ICMS were recorded, being that out of this total R$ 19,5 million state tax incentive credits were deducted. R$ 27.1 million of COFINS and R$ 5.9 million of PIS also were recorded, already deducted from the benefit resulting from PIS and COFINS aliquot reduction levied on biodiesel resulting from using raw material originating from family farming . 17
  • 4.2.3. Net Revenue4Q10 Net Revenue was R$ 46.1million, 51,0% less than the R$ 94.2million of 3Q10, as a consequence oflow volume sold by the Company atthe 19th ANP Auction, which presenteda high discount, as already informed inthis report.Notwithstanding the low performanceobserved in 4Q10, in 2010, net revenue presented a 13.01% growth whencompared to 2009, passing from R$ 349.3 million in 2009 to R$ 394.8 million in2010.4.2.4. Cost of Goods Sold (COGS)The company’s costs structure did not change significantly. Vegetal oil andmethanol represented 89.5% of the cost of products sold regarding biodiesel.Biodiesel CPS evolution as percentage of net income was of: 82.2% in 2009 to78.8% in 2010.The Company has a Risk Management Policy providing for the fixation of oilprices and physical volumes with delivery schedule for suppliers, right after thebiodiesel auction. This has been the strategy to fix the prices for the rawmaterial and protect from the risk of soy bean price volatility in theinternational market.In respect to the company’s total cost, in 2010 the soybean meal startedparticipating, as result from the outsourced operations of the bean crushing.The year featured the commercialization of 71,461 tons of bran, and the cost ofsuch sales represented 8.2% of the company’s total cost, as shown in the chartbelow. 18
  • 4.2.5. Operating ExpensesGeneral and AdministrativeIn the year of 2010, the general and administrative expenses reached R$ 45.5million, representing 11.52% of net operating revenue. Such expenses regard tothe general administration, including salaries and benefits paid to ouremployees, expenses with outsourced services, travels, telecommunications,leases, and provisions for contingencies, among others.We had the presence of several non-recurring expenses, such as: (i) theCompany’s administrative head office moving to São Paulo; (ii) increase in thedemand of audit and consulting services contracting; (iii) increase in theexpenses with personnel due to the dismissal of employees from Rio de Janeiroand Fortaleza and new hires in São Paulo; and (iv) Freight over Sales expenses,due to the deliveries resulting from the stocks replacement auction, held in theCIF modality. These events totaled approximately R$ 9.3 million. Forcomparison, if we consider the deduction of these amounts of general andadministrative expenses in 2010 will have a value of $ 36.2 million, equivalentto 9.17% of net operating revenues, comparable to R$ 34.9 million in 2009which represented 9.98% of net operating revenue.Other operating revenues/expensesRegard to the expenses incurred, provisions made or income gained during theyear, in activities not directly related to the Company’s operating activity. 19
  • In 2010, we presented in the account of other operating revenues (expenses),an expense of R$ 16.2 million, related primarily to Petrobras Agreement.In 2009, this value was negative at R$ 5.9 million, mainly influenced by non-recurring revenue from amortization of the rescinded of the contract of Enguiaand non-recurring expense strategic redirection.4.2.6. Financial IncomeIn the 4Q10, we had a negative NetFinancial Income of R$ 4.6 million, againsta positive financial income of R$ 1.1million registered in the previous quarter.In the 4Q10, we have had a FinancialIncome of R$ 3.6 million (compensationfrom financial investments) against aFinancial Expense of R$ 1.7 million(interests over loans). Moreover, thevalue of the financial expense was affectedby the accounting of the extraordinary value resulting from the updating ofcustomers advance payments in the amount of R$ 6.4 million.In the year of 2010, we presented a negative net financial income of R$ 2.2million. As compensation to our financial investments, we have had a financialincome of R$ 14.0 and an expense of R$ 9.9 million resulting from the moneyadjustment of our debts. However, due to the accounting of the extraordinaryamount abovementioned, we have had a negative impact of R$ 6.4 million,leaving the financial income with debt balance. Not considering this event, thenet financial income would be positive in R$ 4.1 million. 3Q10 4Q10 2009 2010 2010 (*)Financial Result 1,171 (4,572) (31,707) (2,240) 4,155 Financial Income 4,213 3,557 9,149 13,992 13,992 Financial Expense (3,042) (8,129) (40,856) (16,232) (9,837)4.2.7. DebtOn December 31, 2010, Brasil Ecodiesel’s and its controlled company Maeda’sdebt represented the amount of R$ 231.5 million, divided in R$ 125.9 in theshort term and R$ 105.6 in the long term. 20
  • The short term debt still did not accounted the effects of the reorganization of Maeda’s debt with the banks ING, BNB and Banco do Brasil, already commercially agreed but still in the formalization phase. In the end of that process, the debt will be more concentrated in the long term. Maeda’s current debt will be amortized with the resources from the sale of assets already made in 2010 in the amount of R$ 77,8 million, wich will reduce the net debt of the company. For analysis purposes, the following is the net debt position considering that amortization.Note: Controller. Disconsidering the consolidated data of companies Tropical Bioenergia, JaborandiAgrócila e Jaborandi Propriedade. 4.2.8. Income for the Period In the end of the year, the Net Loss totaled R$ 22.9 million in relation to a loss of R$ 34.9 million in 2009. The income for 2010 was influenced mainly by non recurrent events regarding the agreement made with a Petrobras and the devolution of the customers advance payment affecting the income in R$ 18.5 million. The Net Adjusted Loss totaled R$ 4.4 million, a relevant improvement of the amount presented in 2009, whose net loss totaled R$ 28.9 million. In the 4Q10, the Net Adjusted Loss was of R$ 15.9 million, compared to the loss of R$ 2.5 million in the 3Q10. The adjustments made in the 4Q10 were the same mentioned above. The costs of plants, crushers and farms idleness, which used to be rated as non operating expenses, were transferred to the cost of products sold, according to the CPS provisions. 21
  • The Net Margin Adjusted was improved in 2010, reaching 1.12%, against -8.30%as observed in the accrued to 2009. 2009 2010 2009 (*) 2010 (*)Net Income (Loss) (34,879) (22,910) (28,985) (4,406)Net Margin -9.98% -5.80% -8.30% -1.12%Note: Adjusted data disregard the following amounts:(*) Other revenues/non-recurring expenses referring right of use assignment and raw material inventoryamount adjustment(*) Strategic new target adjustment(**)Reversal of fines referring to the agreement with Petrobrás(**) Correction of advance to customers received in 20074.2.9. EBITDAThe Adjusted EBITDA for the year of 2010 was of R$ 2.8 million, with adjustedmargin of 0.70%. Regarding 2009, there was variation of R$ 28.7 million for R$2.8 million. The EBITDA margin ranged from 8.21%, in 2009, to 0.70% in 2010.There follows the table with the history evolution of the accounts included inthe calculation of the EBITDA Adjusted.Note: Adjusted data disregard the following amounts:(*) Other revenues/non-recurring expenses referring right of use assignment and raw material inventoryamount adjustment(*) Strategic new target adjustment(**)Reversal of fines referring to the agreement with Petrobrás(**) Correction of advance to customers received in 2007In order to represent the specific income for the period more clearly, therefollows the Company’s EBITDA Adjusted. 22
  • Note: Adjusted data disregard the following amounts: (*) Other revenues/non-recurring expenses referring right of use assignment and raw material inventory amount adjustment (*) Strategic new target adjustment (**)Reversal of fines referring to the agreement with Petrobrás (**) Correction of advance to customers received in 20075. Stock Market5.1. Shares PerformanceBrasil Ecodiesel’s shares (ECOD3) ended 2010 quoted at R$ 1, totaling a marketvalue for the company of R$ 1,084.2 million, in relation to a Shareholders’ Equity ofR$ 698.7 million – Market Value/Equity Value of 1.55. ECOD3 shares presented adecrease of 8.26%, ranging from R$ 1.09/share in the end of December 2009 to R$1.00/share in the end of December 2010. Ibovespa performance for the sameperiod increased in 1.04%.5.2. Shares Liquidity 23
  • Brasil Ecodiesel’s shares were 100% present in the auctions of 2010. That yearregistered a daily average volume of R$ 32.7 million and 2,923 businesses per day,respectively, 72% and 103% higher than the figures for 2009. Source: Agência EstadoIn October, the Company, aimed at raising the liquidity of its shares, contracted XPInvestimentos CCTVM S.A. for exercising the role of market maker for its shares.5.3. Participation in the IndexesIn December, Brasil Ecodiesel (ECOD3) started integrating the first theoreticalportfolio of the Efficient Carbon Index (ICO2), created by BM&FBOVESPA andBNDES – The Development Bank, aimed at encouraging companies that issueshares to rate, disclosure and monitor its greenhouse gases (GHG) emissions. ICO2,made of the shares of the companies participating in the index IBrX-50 that agreedto participate in this initiative by adopting transparent practices regarding theirgreenhouse gases (GHG) emissions, considers, for measuring the participatingcompanies’ actions, their GHG emissions efficiency level and free float.By adhering voluntarily to the Efficient Carbon Index, Brasil Ecodiesel committed tomake its greenhouse gases (GHG) inventory every year. Because of that, aspecialized consulting was contracted to help us in the accomplishment of the firstinventory, for the year of 2010. This initiative strengthens the company’scompliance with the environment and the respect to the practice of transparencyregarding its emissions.Brasil Ecodiesel’s shares are also part of the following indexes: Bovespa Index -Ibovespa; Brasil 50 Index – IBrX-50; Brasil Index - IBrX; Valor Bovespa Index - IVBX- 24
  • 2; Small Cap Index - SMLL; Differentiated Tag Along Shares Index - ITAG; and Differentiated Corporate Governance Shares Index - IGC. 5.4. Capital and Shares Wide Holding In December, due to the incorporation of Maeda’s shares, resulting in capital increase through the issuance of new shares, subscribed by Maeda shareholders and paid up, Brasil Ecodiesel’s capital was made of 1,084,192,282 shares. Out of this total, 32% are owned by individuals, 50.9% by institutional investors and 17.1% by foreign investors, making the total of 24,158 investors. On December 31, the quantity of ordinary shares owned by shareholders holding more than 5% of shares was: Number of Shares Capital % Vila Rica I - Mutual Fund 243,141,995 22.43 Bonsucex Holding 73,610,204 6.79 Others Shareholders 767,438,083 70.78 Total 1,084,190,282 1006. EstimatesThe Company, based on the existing Relevant Disclosures Policy, and in compliancewith the CVM Instruction no. 480/2009 will now, from this date, disclose every yearthe estimates below, which are to be reviewed at every quarter, upon the disclosure ofthe quarterly results, or upon any relevant event making the management review theestimates.The estimates below do not include the results from the equity of the companiesTropical Bioenergia S.A, Jaborandi Agrícola Ltda and Jaborandi Propriedades S.A.6.1. Sales Revenue Estimates (million R$) Sales Revenue 2011 Crop year 11/12*Brasil Ecodiesel 654 654 Maeda 289 370 Total 952 1,024 25
  • Crop Year 11/12 – Corresponds to September 2011 to August 2012.6.2. Net Income Estimates (million R$) Net Income 2011 Crop year 11/12* Brasil Ecodiesel 569 569 Maeda 277 342 Total 846 911*Crop Year 11/12 – Corresponds to September 2011 to August 20126.3. EBITDA Estimates (million R$) EBITDA 2011 Crop year 11/12* Brasil Ecodiesel 12 12 Maeda 38 52 Total 50 64*Crop Year 11/12 – Corresponds to September 2011 to August 20126.4. Planted Area Estimates (hectares) AREAS STATEMENTS - CROP 2011-12 (ha) Distribution per crop Farms State Available Area Planting Total Cotton Soybean Corn OthersDom Pedro BA 16,968 16,237 8,351 6,780 - 1,103 Amizade BA 12,398 10,998 2,741 5,946 - 2,311 Sucesso BA 12,682 - - - - -Guapirama MT 9,001 10,496 4,915 5,583 - - São José MT 29,208 42,494 7,066 24,723 10,076 629 Catalão GO 3,923 3,877 - 3,114 348 415Bartolomeu GO 8,486 8,410 2,975 4,621 815 - Total 92,666 92,512 26,048 50,767 11,239 4,458The estimates above related to the Company’s business perspectives, operating andfinancial income estimates, and references to the Company’s growth potential, areonly estimates, based on the best expectations of the Management regarding itsfuture performance. Those expectations are highly dependent on the market, the 26
  • Company’s performance in the biofuel sale auctions, the economic status of Brazil, theindustry and the international markets. They are, thus, subject to changes.6.5. Investing Activities EstimatesIn order to reach the estimates above for 2011, we intend to invest in assets andworking capital around R$ 124.8 million, in the following projects: Project Description Investments (Millions R$) Assets Working Capital TotalGlycerin Burning • Use of glycerin and wood for supplying the boilers of Rosário do Sul, in replacement to R$ 2.60 R$ 2.60 the fuel oil.Crusher - São Luis Gonzaga Operation of the crushing unit of São Luiz Gonzaga in order to operate with soy R$ 1.70 R$ 43.00 R$ 44.70 purchased in the RS.Agricultural Machinery • Purchase of machinery (19 tractors, 19 seeders, 9 pulverizers and 5 cotton R$ 20.00 R$ 20.00 harvesters).Crusher Itumbiara - GO • Operation of the cotton crushing unit R$ 41.00 R$ 41.00Mix Improvement • Improvement to the products mix and R$ 16.50 R$ 16.50 higher advantage from the planted areaTOTAL INVESTMENTS R$ 24.30 R$ 100.50 R$ 124.80The investments resources above will be achieved through the company’s cash, inaddition to resources catchment.Brief description to the projects:Glycerin BurningThe glycerin burning project is the reapplication of a program already operating in theBiodiesel Unit, in Porto Nacional- TO. This program enables using glycerin as fuel toboilers, reducing the costs with disposal and purchase of fuel to boilers.Crusher of São Luiz Gonzaga – RSOperation of the crusher of São Luiz Gonzaga, purchased in 2006. This investment willenable the Company to operate, in the second semester, the crushing unit of São LuizGonzaga-RS, capable of crushing 900 t/day of soy, considering an operation of 300days/year.The operation of this unit enables the Company crushing up to 270,000 tons of soybeans per year, enabling the sales revenue of 200,000 tons of soybean meal and thesupply of 48,000 tons of soy oil.Machinery 27
  • Purchase of agricultural equipment (19 tractors, 19 seeders, 9 pulverizers and 5 cottonharvesters).The purchase of that equipment enables renewing the fleet, improving the Company’soperating efficiency and outsourcing costs reduction.Crusher of Itumbiara - GOOperation of the cotton core improvement unit, in Itumbiara-GO, Maeda’s unit. Thisunit is capable of making 10,512 tons of linters, 88,153 cotton meal and 25,865 cottonoil, per year.Improvement to Products MixThe investments in the improvement to the mix is the improvement of agriculturallands of the company in two ways: (i) increase in the use of the land, making the 2ndharvest whenever possible; (ii) increase in the planting of cultures with more valueadded, requiring higher investments. 28
  • Attachment I – Income Statement 29
  • Attachment II – Balance Sheet 30
  • INVESTOR RELATIONS CONTACTSInvestor Relations Officer: Eduardo de ComeInvestor Relation Analyst: Maria Luisa Soares de AlmeidaE-mail: ri@brasilecodiesel.com.brWebsite: www.brasilecodiesel.com.br/irTelephone: (00XX11) 3137-3114 31