1. Presentation of Financial and Operational Results
4Q07 and 2007
March 26, 2008
www.brasilecodiesel.com.br/ir
2. Agenda
Overview
Nelson José Côrtes da Silveira (CEO)
Results Presentition
Ricardo Vianna (Executive Officer and IRO)
Guilherme Raposo (Executive Officer)
Eduardo de Come (Financial Officer)
2
3. Economic Scenario
2007 was a good year for Brazilian Economy:
- Inflation remained under strict control, with the IPCA (consumer price index)
recording 4.46% for the year, below the National Monetary Council’s annual target of
4.5%.
- The Selic (base interest rate), which had suffered cuts since September 2005,
started the year at 13.25% and stabilized itself at 11,25% since September 2007.
This was because of the possibility of inflationary pressure and especially with the
adoption of a conservative stance to observe the impacts of international crisis on the
local economy.
- The Real appreciated by 17.2% against the dollar, closing at R$ 1.77 in 2007,
versus R$ 2.14 at the end of the previous year
- Brazil’s GDP recorded substantial annual growth of 5.4%, primarily fueled by
agriculture, versus 3.8% in 2006 (IBGE figures).
3
4. Brazilian Biodiesel Market
Sales of fuels used in diesel engines grew by 6.2%, above GDP growth.
In 2006: distributors sold 2.26 million m³ of B2.
In 2007, the total came to 12.96 million m3 of B2, equivalent to 259,180 m3 of B100.
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
Diesel Puro B2 + Bx 4
5. Brazilian Biodiesel Market
Brazilian biodiesel production in clear expansion
180,000 90.0%
158,623
160,000 80.0%
71.6%
140,000 70.0%
115,490 57.9%
120,000 60.0%
54.6% 53.3% 52.2%
100,000 49.7%
50.0%
46.0% 44.3%
80,000 71,935 40.0%
56,679
60,000 30.0%
39,138
40,000 20.0%
15,167
20,000 10.0%
3,843 10,853
0 0.0%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07
National Biodiesel Production % Produced by Brasil Ecodiesel
5
6. Brazilian Biodiesel Market
During 2007, 402,726 m3 of
450,000 90.0%
402,726 biodiesel were produced. This was
400,000 80.0%
483,6% higher than the 69,002 m3
350,000 70.0% produced in 2006.
300,000 60.0%
52.6%
250,000 50.0%
50.4% The Brasil Ecodiesel was
200,000 40.0%
responsible for 52.6% of this
150,000 30.0% production.
100,000 69,002 20.0%
50,000 10.0%
0 0.0%
2006 2007
National Biodiesel Production
% Produced by Brasil Ecodiesel
6
7. US$/ ton
02
/0
2007.
17 1/2
/0 0
1,000
1,200
1,400
1,600
0
200
400
600
800
31 1/2 07
/ 0
14 01/2 07
/0 0
01 2/2 07
/0 0
15 3/2 07
/0 0
29 3/2 07
/0 0
13 3/2 07
/ 0
27 04/2 07
/0 0
11 4/2 07
/0 0
25 5/2 07
/0 0
11 5/2 07
/0 0
25 6/2 07
/ 0
10 06/2 07
/0 0
24 7/2 07
/0 0
07 7/2 07
/0 0
21 8/2 07
/0 0
05 8/2 07
/0 0
19 9/2 07
/0 0
03 9/2 07
/1 0
17 0/2 07
/1 0
31 0/2 07
/1 0
14 0/2 07
/1 0
29 1/2 07
/1 0
13 1/2 07
/1 0
28 2/2 07
/ 1 00
2/ 7
particularly towards the end, closing at US$ 1,076/t in 2007.
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07
Palm
Soybean
Sunflower
Rapeseed
Vegetable Oil Market
7
The price of soybean oil, the main biodiesel input in Brazil, rose 66.9% during the year,
The price of the main vegetable oils produced worldwide continued to climb throughout
8. Operating Performance
Brasil Ecodiesel produced 211,910 m3 of biodiesel in 2007, 52.6% of the national total,
consolidating its outright sector lead for one more year.
In the first half of 2007, only the Floriano, Iraquara and Crateús units were operational, the
construction pace of the remaining plants having been reduced in order to align production
with biodiesel shipment volumes.
In the second half, the Porto Nacional, Rosário do Sul and Itaqui facilities started up,
concluding the Company’s first expansion phase and reaching a total annual production
capacity of 640,000 m3.
The Company has also completed the implantation of a vegetable oil crushing unit
attached to the Iraquara plant.
The soybean crushing unit acquired by Brasil Ecodiesel in São Luiz Gonzaga to supply the
Rosário do Sul plant, has also been adapted for flexible use.
8
9. Operating Performnace
Evolution of Brasil Ecodiesel’s installed biodiesel production capacity (‘000 m3)
700
640
600
500
400
'000 m 3
300
282
200
100
27
0
dec/2005 dec/06 aug/2007
9
11. Financial Performance
Adjusted gross revenue stood at R$412.6 million in 2007, 92.6% of which (or
R$381.9 million) came from the sale of 190,400 m3 of biodiesel and the remainder
from the sale of by-products, especially glycerin, fatty acids and vegetable oils.
Porto Rosário do
Biodiesel Floriano Crateús Iraquara Nacional Sul Itaquí Total
2006 26,756.10 87.86 2,884.82 - - - 29,728.78
Sales (m3)
2007 31,884.15 44,974.50 61,033.93 17,759.80 17,464.75 17,317.08 190,434.22
2006 58,060.87 201.65 6,620.83 - - - 64,883.35
Revenue (R$ ‘000)
2007 64,930.95 89,882.03 123,711.63 34,941.91 34,370.97 34,073.89 381,911.38
11
12. Financial Performance
Annual net revenue totaled R$335.6 million in 2007.
The cost of goods sold stood at R$340.4 million in 2007.
350 100.0% 2.8% 1.7% 2.5%
9.8% 4.3%
300 79.0%
250
R$ millions
200
150
100
50
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13. Financial Performance
General and Administrative Expenses : R$ 39,5 million in 2007.
Tax Expenses : R$ 5,4 million in 2007.
Other Operating Expenses : in 2007 we recorded an additional net operating
revenue of R$17.0 million related mainly to fines to be paid by our clients for failure to
remove biodiesel from our plants.
Brasil Ecodiesel recorded financial expenses of R$14.8 million in 2007. This was partially
offset by financial revenue of R$9.7 million from cash investments and gains from hedge
operations, resulting in a net financial expense of R$5.1 million for the period.
Brasil Ecodiesel posted a net loss of R$37.7 million in 2007, primarily due to the
increase in production costs against fixed contractual sale prices throughout the year as a
result of the auctions. In addition, we established an operating and administrative structure
for the large-scale operations of six biodiesel units, which in fact were operating
substantially below capacity throughout the year.
13
14. Cash and Investments
Details of Use of Funds (R$ ‘000)
Most of cash and investments are in R&D
Oil Extraction
7,6
working capital and inventories, due to the 3%
40,5
13%
higher operating volume of the company;
Transesterification
88,3 Others
Net Debt of R$ 177.662 million in 2007. 29% 19,3
6%
R$
301,5
INDEBTEDNESS millions
Indebtedness (em R$ mil) 2006 2007 Agriculture
9,8
Short Term R$ 5.730 R$ 141.245
3%
(+) Long Term R$ 49.764 R$ 36.715
Working Capital &
(=) Total Indebtedness R$ 55.494 R$ 177.960 Inventory
136,0
(-) Cash and Cash Equivalents R$ 211.855 R$ 298
46%
(=) Net Debt (R$ 156.361) R$ 177.662
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15. Capital Markets
ECOD3 performance
ECOD3 (R$ / share) 1Q07 2Q07 3Q07 4Q07 2007
Open 11.81 9.24 12.27 11.91 11.81
Low 8.77 8.80 9.51 6.01 6.01
High 12.65 14.50 15.39 12.17 15.39
Average 10.95 11.57 12.86 8.67 10.96
Close 9.15 12.27 11.89 6.89 6.89
% in the quarter -22.5% 34.0% -3.1% -42.1% -41.6%
Volume (R$ MM) 1Q07 2Q07 3Q07 4Q07 2007
Total 117.69 182.70 144.83 116.55 561.77
Daily Average 1.93 2.95 2.30 1.98 2.29
Transactions 1Q07 2Q07 3Q07 4Q07 2007
No of share (un.) 10,750,400 15,793,000 11,265,800 13,446,300 51,255,500
No of transactions (un.) 10,878 19,816 13,700 13,793 58,187
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17. Subsequents Events
6o and 7o ANP Auctions Petrobras Auction
CNPE established the holding of new auctions to implement the
compulsory addition of 2% biodiesel, altering biodiesel producres’
beginning-of-free-market expectations vis-à-vis their negotiations To build up strategic initial stocks of 100,000 m3.
with the fuel distributors.
Only companies with sufficient capacity and the
The intention to impose some discipline on the market was a proven ability to meet short-term demand could
laudable one. Companies that had never produced biodiesel or participate, prices were substantially higher,
whose plants were still under construction, took part in these indicating that real biodiesel sale prices in a free
auctions, creating a “virtual” supply greater than the actual one market will be based on the prices of the leading
and exerting downward pressure on prices. vegetable oils.
Brasil Ecodiesel sold 161,000 m3 (42,4% of total).
FOB Sales CIF Sales*
Unit Volume (m3) Average Price** Volume (m3) Average Price**
Iraquara (BA) 41,000 1,837.56 10,000 2,255.00
Itaqui (MA) 43,000 1,875.80 7,900 2,297.41
Porto Nacional (TO) 35,000 1,837.97
Rosário do Sul (RS) 42,000 1,840.17
Crateús (CE) 18,000 2,306.94
Total 161,000 1,848.54 35,900 2,290.38
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18. Subsequents Events
B3 compulsory from July 1, 2008:
On March 14, 2008, the CNPE decreed the mandatory adoption of B3 as of July 1, 2008.
O MME – Ministry of Mines and Energy, established specific rules for the holding of new auctions to
supply the B3 market between July 1 and September 30, 2008.
Two auctions will be held in April 2008, the first involving 264,000 m3 and limited to producers holging the
“Social Fuel Seall”, and the second involving 66,000 m3 for any authorized producer.
Based in these auctions volumes, we estimate that the B3 market will generate a total mandatory
demand of 1,320,000 m3 of biodiesel per year.
Petrobras indicated that should hold another auction in April for recovery the strategic stocks.
The Federal Government has new indications that the compulsory addition of B5 should be brought
forward to 2010.
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19. 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
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20. 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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