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Q1 09/10 Results
August 18th, 2009
2
Disclaimer
This presentation contains forward-looking statements related to the prospects of our
business and estimates ...
300
500
700
900
Q107/08
Q207/08
Q307/08
Q407/08
Q108/09
Q208/09
Q308/09
Q408/09
Q109/10
3
Growth in sugar prices as a
cons...
400
600
800
1000
Q107/08
Q207/08
Q307/08
Q407/08
Q108/09
Q208/09
Q308/09
Q408/09
Q109/10
4
Increase of 25% in volume of
hy...
5
9.5% Increase in Volume of Sugarcane
Crushed in Q1 09/10
Sugarcane
Crushed (MM t)
Increase due to own sugar cane crushed...
96
146
145
90
37 33
Q1 08/09 Q1 09/10
Refined Crystal VHP
278 269
6
Strong Increase in Refined Sugar
Production and Solid ...
7
Net Revenue
(R$ MM)
Growth in net revenue driven mainly by:
• Increase in average sugar prices in Reais
(+50.8%), reachi...
8
Adjusted EBITDA
(R$ MM)
Sharp increase in Adjusted EBITDA due to higher
sugar prices and controlled costs and G&A
expens...
9
Net Profit
(R$ MM)
Net Profit: R$ 14.3 million in Q1 09/10, compared
with a net loss of R$26.6 million in the same perio...
10
Net debt at R$ 1.1 billion, up 6.4% over the
previous quarter, due to working capital
requirements
Short-term debt net ...
11
CAPEX: Focus on Sugarcane Plantation,
Cost Reduction and Efficiency Programs
CAPEX
(R$ MM)1
Continued selectivity on CA...
100
120
140
160
180
30
40
50
60
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09E
09/10E
Production/Consu...
0
50
100
150
200
250
300
350
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
'000units
Ethanol + Flex-Fuel Gas + Diesel
Q209 Q110Q109 Q...
14
Outlook: Guarani Solidly Positioned to Seize
Opportunities and Benefit from a Market Upturn
Sugarcane crushed expected ...
Thank You!
Reynaldo F. Benitez
CFO and Investor Relations Officer
Alexandre L. Menezio
Investor Relations Manager
Felipe F...
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Transcript of "1 q 0910 conference call presentation"

  1. 1. Q1 09/10 Results August 18th, 2009
  2. 2. 2 Disclaimer This presentation contains forward-looking statements related to the prospects of our business and estimates for operating and financial results. Those related to growth prospects of Açúcar Guarani S.A. are merely projections and, as such, based exclusively on the expectations of the management concerning the future of the business. Such forward- looking statements depend substantially on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian and international economies and the industry and are therefore subject to change without prior notice.
  3. 3. 300 500 700 900 Q107/08 Q207/08 Q307/08 Q407/08 Q108/09 Q208/09 Q308/09 Q408/09 Q109/10 3 Growth in sugar prices as a consequence of the decrease in production by major producers, such as India and EU Sugar prices closing the quarter at the highest level in three years, both in US$ and in R$ terms Increase in sugar prices also supported by the increased net position of index-funds, speculative funds and the trading sector Q1 09/10 Sugar Market Overview Guarani’s Sugar Average Prices (R$/ton)
  4. 4. 400 600 800 1000 Q107/08 Q207/08 Q307/08 Q407/08 Q108/09 Q208/09 Q308/09 Q408/09 Q109/10 4 Increase of 25% in volume of hydrous ethanol sold in the domestic market (Brazilian Center-south), compared to Q1 08/09, sustained by the increased flex fuel vehicle fleet Q1 09/10 ethanol prices were lower in comparison to the previous year due to high offer caused by cash requirements of Brazilian producers Exports slightly lower: 1 billion litres (-9.4% compared to Q1 08/09) due to reduction in US imports, but with increase in deliveries to Japan, India and South Korea Q1 09/10 Ethanol Market Overview Guarani’s Ethanol Average Prices (R$/m³)
  5. 5. 5 9.5% Increase in Volume of Sugarcane Crushed in Q1 09/10 Sugarcane Crushed (MM t) Increase due to own sugar cane crushed • Strategy to increase plantation last year allowed additional supply of own sugarcane • Third party sugarcane strategy timely due to credit crisis 2009/10 Crushing target at 14.8 million tons • Brazil: 14.2 million tons • Mozambique: 0.6 million tons 1.4 1.8 2.7 2.7 Q1 08/09 Q1 09/10 Own 3rd Party 4.5 4.1
  6. 6. 96 146 145 90 37 33 Q1 08/09 Q1 09/10 Refined Crystal VHP 278 269 6 Strong Increase in Refined Sugar Production and Solid Ethanol Production Sugar Production (‘000 t) Ethanol Production (‘000 m³) Increased refined sugar production to address industrial markets and benefit from white premium Ethanol production increase in Q1 due to weather conditions that favored sugarcane allocation to ethanol Mix to shift towards sugar to benefit from high prices during the crop 22 29 107 122 Q1 08/09 Q1 09/10 Anhydrous Hydrous 151 129
  7. 7. 7 Net Revenue (R$ MM) Growth in net revenue driven mainly by: • Increase in average sugar prices in Reais (+50.8%), reaching 703.3 R$/ton • Increase in sugar sales by 1.7% • Concentration of sugar sales in the domestic market (67.7%) Ethanol revenue down by 18.6% Guarani’s Net Revenue breakdown was: Sugar: 64.3% Ethanol: 28.1% Energy: 1.7% Other products: 5.9% 18.1% Increase in Net Revenue Driven by Higher Sugar Prices in Q1 09/10 98 151 81 6619 18 Q1 08/09 Q1 09/10 Sugar Ethanol Others 198 234
  8. 8. 8 Adjusted EBITDA (R$ MM) Sharp increase in Adjusted EBITDA due to higher sugar prices and controlled costs and G&A expenses Adjusted EBITDA Margin of 21.3% versus 8.8% in Q1 08/09 Adjusted EBITDA measured by ton of TRS sold of R$122.5 in Q1 09/10 (+194.5%) Sharp Rise in Adjusted EBITDA: R$49.9 Million, +185.1% over Q1 08/09 Adjusted EBITDA Margin1 (1) 2007/08 figures have been reclassified and changed due to law 11638/07, as compared to figures previously disclosed. 17.5 49.9 8.8% 21.3% 5,0% 7,0% 9,0% 11,0% 13,0% 15,0% 17,0% 19,0% 21,0% 23,0% 0 20 40 60 80 100 Q1 08/09 Q1 09/10 Adjusted EBITDA Adjusted EBITDA Margin 0% 10% 20% 30% 40% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 07/08 08/09 09/10
  9. 9. 9 Net Profit (R$ MM) Net Profit: R$ 14.3 million in Q1 09/10, compared with a net loss of R$26.6 million in the same period of the prior year Net profit impacted mainly by: • Strong price recovery for sugar (+50.8%) • Net non-cash FOREX effect of R$86.0 million Net Profit of R$14.3 million Driven by Strong Prices and Positive FOREX Impact (27) 14 Q1 08/09 Q1 09/10
  10. 10. 10 Net debt at R$ 1.1 billion, up 6.4% over the previous quarter, due to working capital requirements Short-term debt net of cash and cash-equivalents totaled R$ 233.5 million, representing 37% of total Net Debt, excluding intercompany loans The increase in Guarani’s net debt is mainly due to increased finished products inventories Net Debt/Adjusted EBTIDA ratio at 4.1x in June, 2009 versus 4.3x in March, 09. Excluding intercompany loans, Net Debt/Adjusted EBITDA ratio stood at 2.4x Net Debt per Term1 Net Debt per Currency1 (1) Excludes intercompany loans and cash & cash equivalent (1) Includes R$112.1 million related to SHL in Mozambique Net Debt Up but Improved Indebtedness Ratios Foreign Currency 61% BRL 39% Current 37% Non- Current 63%
  11. 11. 11 CAPEX: Focus on Sugarcane Plantation, Cost Reduction and Efficiency Programs CAPEX (R$ MM)1 Continued selectivity on CAPEX: R$52 million in Q1 09/10 compared to R$91 million in Q1 08/09 Focus on plantation CAPEX (R$30 million) to ensure adequate raw material availability and productivity for next crop Selective industrial CAPEX (R$22 million) to eliminate bottlenecks and further develop marginal capacity to lower fixed costs at São José and Tanabi plants CAPEX approved to allow sugar production in Tanabi as from next crop 1) CAPEX does not consider maintenance. 61 22 30 30 Q1 08/09 Q1 09/10 PPE Planting 91 52
  12. 12. 100 120 140 160 180 30 40 50 60 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09E 09/10E Production/Consumption(MMton) Inventories(MMton) Inventories Production Consumption Source: LMC 15 18 21 24 27 30 33 36 8 10 12 14 16 18 01-Apr-08 01-Jul-08 01-Oct-08 01-Jan-09 01-Apr-09 01-Jul-09 centsR$/lb centsUS$/lb cents US$/lb cents R$/lb Q209 Q110Q109 Q309 Q409 Source: ICE 12 Global sugar deficit expected to continue supporting sugar prices Brazilian position favoured by lower output of major producers such as India, China and EU Weather driving crop yields in India (drought caused by weak Monsoons) and in Brazil (heavy rains during winter) Strong growth in global demand, unaffected by crisis Raw Sugar Prices (NY 11) World Sugar Balance Sugar Market Outlook: Positive Trend in 08/09 and 09/10 World Crops
  13. 13. 0 50 100 150 200 250 300 350 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 '000units Ethanol + Flex-Fuel Gas + Diesel Q209 Q110Q109 Q309 Q409 Source: Anfavea 13 Ethanol Market Outlook: Consumption Growth Supported by Higher Sales of Flex-Fuel Vehicles Vehicles Sales per Fuel Type (Brazil) Domestic Market Sustained demand from strong sales of flex fuel vehicles Increased hydrous ethanol consumption due to the competitive price parity to gasoline at the pump Prices expected to recover beginning in Q2 09/10 International Market Increased ethanol prices in the US market due to stronger corn, gasoline and oil prices Increased exports to Asia and stable sales to the European market
  14. 14. 14 Outlook: Guarani Solidly Positioned to Seize Opportunities and Benefit from a Market Upturn Sugarcane crushed expected to reach 14.8 million tons in 2009/10 crop versus 14.4 million tons in previous crop Production mix geared towards sugar to allow Guarani to take advantage of the upturn in sugar prices Increased demand for ethanol due to attractive ratio between ethanol and gasoline prices at the pump. Positive price outlook as of second half of 09/10 Plants to take advantage of increased volumes and lower fixed costs per ton produced Disciplined CAPEX allocation in order to ensure expected sugarcane availability and profit from rapid pay-back programs Continued focus on balance sheet strengthening Positive non-cash effect in P&L of Brazilian Real appreciation vis-à-vis the US Dollar Strong commitment and support from Tereos, Guarani’s controlling shareholder, to seize opportunities
  15. 15. Thank You! Reynaldo F. Benitez CFO and Investor Relations Officer Alexandre L. Menezio Investor Relations Manager Felipe F. Mendes Investor Relations Analyst Renato N. Zanetti Neto Investor Relations Analyst Leonardo T. Goes Investor Relations Assistant phone: +55 (11) 3544-4900 e-mail: ri@aguarani.com.br website:www.acucarguarani.com.br/ir
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