The 2018/2019 crop year was undoubtedly one of the most challenging in our history. This is due to the political and economic outlook, marked by the slow recovery of the economy amidst the natural uncertainty of an electoral process, among other factors, felt not only by us, but by the sectors in which we operate.

In our fuel distribution businesses, the greatest impacts were caused by the truck drivers' strike and the high volatility of international prices. To minimize these impacts, we highlight our efforts to optimize the procurement and marketing strategy and to prioritize the sustainable relationship with our partner dealers.

In the ethanol, sugar and bioenergy production business, we also faced an adverse scenario: we are experiencing climate adversities in this harvest. It rained at the "wrong time"—we had severe drought in the first four months of the harvest, which impacted our productivity, and a period of heavy rains, above the historical average in recent months, which caused industrial shutdowns and delayed the end of the harvest.

But the quest for excellence in everything we do reinforced the resilience of our business model even in this outlook, and we continue to deliver consistent results. Total ethanol sales offset declines in sugar and gasoline sales. In the consolidated results, our adjusted EBITDA totaled BRL 6,112.6 million and net income was BRL 2,235 million.

Our growth platform is based on internal experience in logistics, brand management and value adding, regional and international trading, efficiency and productivity, and in the relationship with our customers and partners. We look forward to competitively addressing global trends such as the growing demand for clean energy, the advancement in the digital revolution, new habits connected consumer, hybrid and electric car technology, and the prospect of distributed power generation.

Basically, we are investing resources to support our leadership in fuel distribution, as a private player, and in the production of sugar, ethanol and bioenergy, to extend our leading role in the transition to an energy source with lower carbon footprint, advancing on fronts such as second-generation ethanol, the use of biomass in production and trading of energy and diversification of energy sources.

We will therefore seek maximum efficiency in the agricultural and industrial areas of our 26 ethanol, sugar and bioenergy production facilities, with state-of-the-art technology from planting to harvesting and crushing sugarcane. And with the support of the dealer network, we will invest more and more in digital transformation in the fuel market, in which we will completely change the fueling experience, reshaping the experience of the Shell Select stores and offering Shell Box as an alternative that goes beyond a simple payment App, creating a relationship ecosystem with our customers.

With these purposes, despite the volatile scenario of the fiscal year, we remained focused on obtaining good results, reflecting the strength and integration of a team that works to deliver today, with an eye on the future and on our long-term strategies.

Last year, we set the cornerstone of the biogas plant at the Bonfim Unit, in Guariba (SP). With operations expected to begin in the middle of the 2020/2021 crop year, it will be possible to increase the unit's power generation by up to 40%. Also in line with our commitment to collaborating for a low-carbon economy, we plan to initiate, in May 2019, in Piracicaba (SP), the operation of a pilot solar power plant directly connected to the distribution grid. The idea for the coming years is to grow in the Distributed Generation (DG) market, while diversifying our operations with renewable sources.

As an integrated energy company, we also announced, in the crop year, a joint venture with WX Energy to trade this resource in the free market, which increases our portfolio in the electricity segment.

We keep our eyes on the future, but we do not lose sight of the current demands to drive our growth today. As one of Brazil's leading fuel distributors, we have identified a business opportunity in Argentina, where we acquired Shell's assets. Considering this operation alone, we projected, as previously disclosed, to achieve EBITDA in excess of USD 200 million in 2019/2020.

The new operations in Brazil and abroad did not divert our focus on what is already our area of expertise. We have maintained our leadership in global exports of sugar, of which we are the world's largest producer. Also in 2018/2019, we worked on the construction of six sugar warehouses, which, compared with the previous year, increased by 40% our storage capacity for trading in the off season, especially in times of lower supply and better prices.

During another crop year, we did not fail to share the message that life is what matters. We remain focused on the goal of Zero Accidents, and there is no doubt that the new Raízen University, restructured in 2018/2019, will increase safety and add even more strength to this endeavor.

We also demonstrated the conduction of the business in an integral and socially responsible manner. In 2018/2019, we obtained the Bonsucro certification for the Rafard and Barra Units—the latter became the largest production unit in the world, by volume, to obtain the seal, indicating compliance with best practices related to sustainability in the sugar and ethanol sector. We are now responsible for the largest certified area on the planet, which includes 21 plants.

We expect to see better results in the coming harvest, even in a more competitive scenario, given the higher sugar production in Asian countries, mainly India, and the international newcomers in the fuel distribution market in Brazil. In this scenario, we want to compete with ethics and social responsibility, reinforcing the purpose of making a difference in the lives of people who trail this path with us.

Enjoy your reading!

Luis Henrique Guimarães

Tell us who you are

This is just a survey and the content will be the same for all profiles.