Financial results

Raízen Energia

We ended the year with 59.6 million tons of sugarcane crushed. The volume processed, slightly lower compared to the previous harvest (59.7 million tons), was partially offset by a 4.3% improvement in agricultural productivity, as measured by the combination of TRS (Total Recoverable Sugar by ton of sugarcane crushed, in kilograms) and TSH (Tons of Sugarcane Harvested per Hectare), which was 9.6 tons of TRS/hectare.

Adjusted net revenue reached R$ 30.7 billion in the harvest, up 37% over 2018/2019, mainly due to the higher volume of ethanol sold and the higher average prices for both ethanol and sugar.

Cost of products sold totaled R$ 28.3 billion, 37% higher in the same comparison due to the greater volume of resale and trading of oil products and ethanol. The unit cash cost of company products sold, in sugar-equivalent, reached R$ 753 per ton. Adjusted by the impact of CONSECANA's average cost on sugarcane supplied by third parties and on land leases for the period, sales unit cash cost would be R$ 705 per ton, affected by inflation for the period and the sugar production mix.

Selling, general, and administrative expenses totaled R$ 1.5 billion, in line with the previous crop year.

Adjusted EBITDA reached R$ 3.4 billion as a result of the higher sales volume associated with the sales strategy and higher average prices of all products throughout the harvest.

Investments totaled R$ 2.8 billion, an amount mostly allocated to tillage due to the larger farming area and adequacy of the renewal level of sugarcane fields in certain regions, as well as investments related to maintenance of industrial plants.

Raízen Combustíveis

Raízen Combustíveis Brasil

The volume of fuel sales grew in the Brazilian market (ANP base), reflecting the recovery, albeit slow, of economic activity in the country, with an emphasis on Otto Cycle sales.

Despite the negative effects of the last quarter, mainly related to COVID-19 and the cyber-attack, the total volume sold increased by 4% compared to the previous harvest, driven by greater demand in Otto Cycle and as a result of the expansion in the number of service stations and a focus on long-term customer relationships. The aviation segment, however, was impacted by the interruption of the activities of one of the players in the sector and by COVID-19.

Net operating revenue reached R$ 89 billion, up 7% compared to the previous harvest, reflecting the higher volumes and average price of products sold.

The cost of goods sold totaled R$ 83 billion, and general sales and administrative expenses totaled R$ 2 billion due to the higher volume sold and inflation in the period.

In the crop year, the adjusted EBITDA totaled R$ 2.7 billion (-1%), given the higher volume sold over the period and gains from the supply and sales strategy, which partially offset the impacts in the last quarter.

Investments totaled R$ 1 billion, mainly allocated to the procurement and distribution infrastructure, in line with the plan for the year. The Shell service station network ended 2019 with 6,578 service stations.

Raízen Combustíveis Argentina ¹⁴

Sales volume for the 2019/2020 harvest was 6.1 billion liters. Even in a challenging year, with price freezes in Argentina, the fuel segment remained resilient throughout the crop year, maintaining the level of volume sold.

Net operating revenue totaled US$ 3 billion and the cost of goods sold totaled US$ 2.7 billion. General sales and administrative expenses were US$ 216 million.

Adjusted EBITDA reached US$ 166 million during the harvest period, affected by the freezing of oil and fuel prices, partially offset by the resilience of sales volume.

Investments totaled US$ 75 million for maintenance and improvements to the refining complex.

14 The functional currency of the downstream operation is the US dollar and, for this reason, all results will be reported using this currency. In this section we will present the operational data of the comparative periods in a managerial manner and not audited. Financial information for periods prior to the acquisition will not be reported, since the upstream and downstream operations were consolidated without the necessary segregation for comparison purposes.