Raizen SA

BOVESPA:RAIZ4

Q2-2026 Earnings Call

[Operator]

Good evening everyone. Thank you for waiting and welcome to Raizen Second Quarter 2025-'26 Crop Year Earnings Presentation. This presentation is being recorded, and the replay will be available at the company's IR website at ir.raizen.com.br and at Raízen's official YouTube channel. [Operator Instructions]

Before proceeding, we would like to reiterate that forward-looking statements are based on the beliefs and assumptions of Raízen's Executive Board in light of the information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not materialize. Investors, analysts and journalists should bear mind that events related to the macroeconomic scenario, the industry and other factors could cause results to differ materially from those expressed in the respective forward-looking statements.

Today, we are joined by the following company executives, Mr. Nelson Gomes, CEO; Mr. Rafael Bergman, CFO; and Mr. Phillipe Casale, Head of IR. I will now turn the conference over to Mr. Casale, you may begin the presentation, Mr. Casale.

[Phillipe Casale, executive]

Good evening, everyone. Welcome to Raízen's conference call to present results for the second quarter of the 2025-'26 crop. First, I'd like to thank all of you for joining us at this somewhat unusual time. We decided to hold the conference call today, so we could share the company's developments and results in a timely manner.

So let's turn to the results. The highlight of the quarter was definitely the improvement in EBITDA from fuel distribution in Brazil, both in terms of volume sold and profitability. On the other hand, results from EAB and fuels in Argentina were under pressure both in the quarter and year-to-date due to seasonal and circumstantial effects in both segments, which I'll mention a bit later.

I would also like to highlight 2 major areas of progress in line with the transformation plan that we have implemented in the company. And we have been making structural progress in reducing expenses and investments in line with the operational and investment plan presented in May. First, recurring general and administrative expenses fell by 23% in the first half of the crop year with contributions across all segments. That means BRL 315 million in efficiency gains versus the same time last year. The second highlight is CapEx. This year, we reduced investments by 26% compared to last year, thereby reaffirming our capital discipline while continuing to invest in efficiency and improving safety in our operations.

Now let's move on to the performance highlights by segment, starting with ethanol, sugar and bioenergy. During the quarter, weather conditions helped accelerate train crushing, offsetting delays from the previous quarter. And for comparison purposes, the crushing chart on the right-hand side of the slide shows a normalized comparison base due to the hibernation of the MB and Santa Elisa mills. On a comparable basis, crushing for the semester is in line with the same period of the previous crop year, approximately 58.5 million tons. In terms of agricultural yields, we continue to see the effects of the dry weather and fires from the second half of last crop year on cane quality this year. with reduced agricultural yields in the crop year-to-date.

Regarding the mix, this has been a more sugar-heavy crop year as we have prioritized sugar production to capture the benefits of an advanced hedge position for the current crop year with practically the entire crop hedged at around BRL 111 per pound, thereby ensuring high profitability. For the next crop, 2026, '27, we have already fixed almost half of next year's sugar crop at approximately BRL 1.14 per pound, reducing exposure to the shorter-term pressure seen in screen prices. In ethanol, pricing dynamics remains healthy, supported by a favorable inventory to consumption ratio this year, and prices have been higher than last year's. Despite lower ethanol production and sales volumes, selling prices increased 11% year-on-year.

In E2G, our second-generation ethanol volumes more than doubled year-on-year with the effects of the ramp-up at Bonfim plant and the start-up of operations at the Barra and Univalem sites this year. which are in line with the plan. In Bioenergy, cogeneration volumes were lower this year, but we offset that with higher prices due to hedging instruments contracted throughout the year, which protects the power auction uncontracted volumes. As a result, the EAB EBITDA year-to-date can be explained mainly by lower production and sales volumes and pressure on unit costs, driven mainly by lower dilution of fixed costs due to the reduced agricultural yield this year.

Additionally, last year's results benefited from one-off effects related to tax credits and mark-to-market adjustments on energy contracts, which have strengthened the comparison base. These factors offset higher ethanol and cogeneration prices, as I mentioned earlier, as well as efficiency gains in OpEx from optimized structures and disciplined expense management in EAB.

Now let's move on to fuel distribution in Brazil. We have delivered yet another quarter of very consistent performance. And I'd like to highlight a couple of points. First, sales volumes have increased across all products especially diesel and lubricants, which balanced profitability gains and market share. our supply strategy operation has been highly optimized, reducing complexity and ensuring competitive supply for our customers. Another important point is that we have also strengthened our presence with resellers, enhancing the quality of the Shell network and driving stronger adherence to our integrated value proposition.

In our fuel distribution business in Brazil, we also captured structural efficiency gains, not only in commercial management but also by optimizing our structures, which also contributed to margin improvements throughout the year. The fuel sector in Brazil is undergoing an important transformation a key initiative to fight the illegal market. It is an ongoing journey that it still has a long way to go. But has already shown positive signs of how tackling unfair competition can help develop the industry and provide direct and clear benefits to society and tax revenues.

Now let's turn to fuel distribution in Argentina. We posted another quarter of sales volume increases and network expansion in Argentina. Although EBITDA has improved quarter-on-quarter over the year, performance versus the same period last year was impacted by the macroeconomic environment with the devaluation of the Argentinian peso and inflation, limiting pricing power. We continue to invest to maximize energy and operational efficiency at the Buenos Aires refinery, including the replacement of the cracking infrastructure highlighted in the earnings release, which is expected to be completed within the third quarter of the crop year.

Before we move on to cash flow I'd like to revisit the operating cash flow of Raízen's consolidated results in more detail. Once again, this quarter, we made progress in replacing short-term working capital lines with long-term debt instruments. Like we did last year even more significantly. This refinancing aims to strengthen the company's debt profile, but that does lead to a temporary working capital concentration. Therefore, if we consider the operating cash flow minus atypical movements in selected working capital elements. We would have generated BRL 1.2 billion more cash this quarter than the same period last year. We're essentially talking about the selected elements, which are a reduction in supplier agreement operations and the nonrenewal of customer advance payments. But this improvement is essentially a reflex of more efficient recurring working capital management even in a quarter with the highest concentration or the largest position of sugar and ethanol inventory levels.

Moving on to the remaining cash flow lines on the next slide, a 29% reduction in CapEx and proceeds from asset sales this quarter, have reduced investment cash flow consumption contributing to the optimization of the capital structure. Financing cash flow was in line with higher levels of net funding in the period.

On the next slide, on indebtedness. I'd first like to highlight the usual seasonality of this stage of the crop year. with EAB inventory buildup, which puts pressure on the leverage metric. As a reference, sugar and ethanol inventories totaled around BRL 7 billion and should be mostly sold by the end of this crop year. Additionally, 2 factors impacted indebtedness in the quarter. First, the replacement of working capital elements with debt, as I mentioned earlier, and higher financial expenses due both to increased debt balances and a higher CDI over the periods.

Before concluding the presentation, I'd like to reiterate that our priority is to maintain a robust liquidity position. Even with the crop season dynamics, we ended the quarter with a higher cash position than in the first quarter. Furthermore, Yesterday, we announced the signing of USD 1 billion revolving credit facility with a 5-year term.

I will now hand it over to Nelson Gomes, our CEO, for his opening remarks before we move on to the Q&A session. Thank you.

[Nelson Roseira Neto, executive]

Good evening, everyone. This is Nelson. Thank you once again for joining us on this earnings release call for the second quarter of this crop year, '25, '26. A special thanks for joining us at this somewhat unusual time, but I'm sure you understand. Well, we're holding this conference call on a Friday at the end of a working day.

Before we move on to the Q&A, I think it's important to share some of my perceptions and convictions this first transformative year here at Raízen. November marks a year since myself and Rafael and the whole leadership team took office to manage this company. And right from the start since my first interactions with you, I believe that our objective for this -- I have been saying that our objective for the cycle of the company is to create value through operating efficiency, focusing on our core business, going back to doing basics well done as this company has always done with plenty of OpEx discipline and capital allocation. Discipline without taking our eye away from safety and security. So after this year, in my opinion, we look at our recurring operating results this year on their own and compare them to the same period last year. It's clear to see that there has been progress. We're not there yet. There are still plenty of challenges ahead of us, but it's clear to see, and I am convinced that we are on the right track.

And to get to this right track and to continue on this journey, there are 3 very clear initiatives being implemented at risen since the beginning. First, we are simplifying our whole structure, our processes our decision-making process, our portfolio; second, operating efficiency across all of our businesses to extract as much value from each of our businesses as possible; and lastly, optimizing our capital structure. I wanted to share a couple of examples of what we have been doing with you. First, in simplification. That is one of our cultural pillars. And we are doing it swiftly. We're seeking to reduce complexity significantly, internally and across all fronts in the company. Our portfolio is much more streamlined. We're focusing on the core business. And an example of that in fuel distribution is the signing a couple of months ago to lead the proximity store segment, strengthening convenience stores, our Shell Select convenience store offer and sell cafe in service stations. So focusing on the company's core business, which are service stations.

We also have a trading business now focusing exclusively on selling the sugar and ethanol that we produce and also seeking to procure both ethanol, gasoline and diesel to sell to our Shell network and our B2B customers. In EAB, we have rationalized our portfolio, having reduced the number of mills from 30 sugarcane mills. At the start of these 12 months when we joined the company, down to the next crop, one will start with 24 mills. So 6 plants are either closed or have been divested in. We continue to divest in our power assets. All of our power generation assets or are being divested from. Obviously, with the exception of our cogeneration assets, which are adjacent to our mills and will continue in our portfolio. S -- with all the simplification process, we have roughly BRL 5 billion worth of resources that will go strictly to deleverage the company. So those are examples of how we are simplifying our portfolio, our processes and the company's decision-making process.

The second point I mentioned was operating efficiency. And here we have managing costs and expenses, especially in more volatile segments and commodities. This report on a second consecutive quarter of significant G&A reduction with 26% reduction this quarter, 23% reduction in the first half of this corp year and a highly detailed plan to increase agricultural yields through the EAB business through a consulting project in partnership with McKenzie and fuels in Brazil. We're managing costs and commercial expenses and especially optimizing supply, especially in primary and secondary freights, which also lead to significant cost reductions in our fuel distribution business in Brazil.

In Argentina, we've also made considerable progress in the refinery turnaround time, which will increase operating efficiency and provide us with much better product makes it to be sold as well as energy efficiency in the refinery. So we are seeking and delivering operating efficiency across our 3 main businesses. As for our capital structure, as I said deleverage continues to be our priority. So that we have the time we need. For our operational turnaround, we're in a very robust liquidity position of BRL 200 million. And we also have a revolving credit facility of $1 billion, roughly BRL 5.5 billion with a 5-year maturity, which we announced to the market yesterday.

And as Phillipe said in his presentation, we are still working on replacing short-term credit lines that are more expensive with longer-term credit lines, also increasing now maturation period as I said the total divestment has been BRL 5 billion so far, BRL 1 billion of which is already in our cash. So we still have BRL 4 billion receivable before the end of this crop year, which once again will be totally allocated to deleveraging the company.

And the last couple of points. First, with regards our divestment process in our operations in Argentina. It is ongoing. And right now, it is being assessed and proposals and binding documents are being analyzed. They were received in the last few days. One final message from our shareholders, they have led the company know that they are still looking into alternatives to strengthen Raízen's capital structure and ensure the company's sustainability in the long term. Both Shell and Cosan have been held in frequent meetings and have been reaffirming their joint commitment to the future of Raízen. And as you know, if anything relevant happens in our capital structure, based on shareholders' decision, will be clearly and so communicated to the market.

So those were my opening remarks, and we can now move on to the Q&A session. Thank you.

[Operator]

[Operator Instructions] Our first question is from [indiscernible] from BTG.

[Unknown Analyst]

My question is about NX2 in your earnings release. There's some interesting information there about estimated impact EBITDA and cash flow from asset sales and your portfolio simplification process over the last year. Could you give us more granularity on those? Just to make it clear, so is that what you imagine? What's all cash flow also assuming cost reduction and maintenance CapEx, especially from the mills that have been sold so far. So whatever granularity you can offer on those 2 estimates, that would be very helpful. I know you asked us to ask only one question, but I'd like to ask another one, a brief one. Looking at the dismantling of these working capital lines agreements, which is BRL 265 million and customer advance payments and including excluding those other ethanol lines, that's also lower, BRL 1.9 billion. Do you think using those working capital lines less will stop here? Or do you think there's still more to come next quarter and the quarters to come? Those are my questions.

[Rafael Bergman, executive]

This is Rafael. I'll take your questions. The first one just to clarify, NX2 is just regarding the impact of the closing of the operations we've announced. So the impact on EBITDA in the 6 months, that was BRL 1.41 billion, that's practically what we had this quarter. That was the negative impact owed to one of the assets having led to accounting loss versus what we had booked and a mismatch between the recognition of the sales results in the case of Santa Elisa because we have hibernated Santa Elisa when we decided that there was a negative impact and the sale of the biological assets, which was done in several tranches that will happen over time as we announced. That's why when you look at the estimated impact after concluding the transactions that were announced, the impact on EBITDA expected from these transactions will be positive. So what we're saying is out of the transactions that have been announced what we expect for the year between what's happened and what will happen before the end of the crop year. It should be practically neutral in terms of results and EBITDA. And then the cash flow will be receiving the proceeds from the sales that we have announced. So that table doesn't include the impact of recurring results loss from what was invested, especially looking at sales hibernation of the mills we you can assume that the impact between EBITDA losses and avoided recurring CapEx will be practically neutral. So from our point of view, which might be different to the asset buyers. We wouldn't be able to generate operating cash enough to pay for the recurring CapEx. Hence, the sale amount for us. I hope that's clear.

As for your second question. Since the beginning of the crop year, we have been replacing working capital lines that were shorter term and didn't have a competitive cost with longer-term lines, drive deadlines to optimize costs and especially to reduce ratio. So we're in a much more comfortable position, as Nelson mentioned, BRL 18 billion reported in September. But we don't have the commitment to refinance those short-term lines as we had in the past. So -- and those customer payment advances lines, those are operations that will be repaid as products are delivered over time and the strategy to join new operations like this will depend on the cost and risk assessment referring to each of the operations. We don't have any of that in mind now because we're in a good liquidity position, so there's no need to go into that kind of operation. Thank you, Thiago.

[Unknown Analyst]

Okay. Very clear. So if I could just stress that point. You mentioned the nominal crushing capacity at Raízen a year, I don't know if I'm allowed to ask looking at the actual crushing once all of those divested mills happen this year in terms of magnitude. Could you share an approximate volume?

[Phillipe Casale, executive]

Thiago, this is Phillipe. I'll take your question. Considering the crushing assumption we announced for this year, the range was 72 million to 75 million tons. Considering that the MB mill was already out and Santa Elisa is hibernated halfway through the crop, obviously, the sugarcane availability from Santa Elisa that was to be crushed by that mill was sold to third party. So considering the amount of available sugarcane to be crushed and the sugarcane that was to be crushed and was sold, we're still within that range from 72 million to 75 million tons. Obviously, looking to the lower point, given the impact we mentioned on agricultural yields.

[Operator]

Next question is from Monique Greco from Itaú BBA.

[Monique Greco, analyst]

My question is about Brazil mobility. Your performance over the last quarters has been fantastic, both in margins and volume. How do you see that dynamic moving forward next quarter, the beginning of next year? How do you see the trade-off between capturing share and margin in that context? Do you think it's possible to keep increasing margin and capturing share at the same time?

[Nelson Roseira Neto, executive]

This is Nelson. Thanks for the question. Well, we have to look at it 2 ways. First, we have to consider the market the Carbon Out operation that you mentioned has brought a fair dynamics to the Brazilian fuel market. The volume, which had been taken over by the legal practices in the market in the past will tend to come back over the next few months. Looking at our results all of these changes in the regular market and the fight against this, the legal markets, obviously, that will impact up until September, which is what we're announcing today. We had less of an impact on volume because of that operation. But we're very optimistic looking forward. as of September in terms of beginning to recover part of that volume that ended up going to the legal market in the last few years. That said, the other internal activities that are taking place, some of which I mentioned in my opening remarks, which enables us to continue to increase our margins and which are directly connected to, first, reducing costs; and second, to a growing Shelby power mix penetration, also power ethanol also growing. So form that helps our performance.

The other positive bias in addition to cost reduction and freight is lubricant which has been surprising us month-on-month, quarter-on-quarter with good performance and consistently improving performance. So the answer to your question is, yes, the impact of the operations to fight the illegal market thus look like it will bring more constructive volumes to the whole market. But on the other hand, there are specific initiatives that we are implementing in terms of reducing cost and improving profitability across our premium products, which will also lead to a more constructive margin.

[Operator]

The next question is from Gabriel Barra from Citi.

[Gabriel Coelho Barra, analyst]

I'll try and focus a bit more on capital structure. I'm trying to combine all my questions into one. This management mentioned lots of work fronts Nelson mentioned, is in Argentina, divesting in sugar and ethanol, but looking into the company structure and considering what was mentioned during the last conference call in the last earnings release in terms of strengthening the company's capital structure. There are lots of questions concerning how to do that if now is the time or when it should be done in the company's opinion. And if you should be bottom up or top down, that's also another question. So Nelson, could you elaborate on that? What's your opinion on that? Is that a priority for the company? So not only looking at the micro side, cutting down on cost, G&A, portfolio investments, taking the portfolio, but maybe also bringing on a new investor or maybe the current shareholders, strengthening Raízen's capital. I'd like to hear from you about that. And now that Bergman left who was taking part in that process, what's going to happen to that connection between Raízen and Cosan that Bergman went to Cosan?

[Nelson Roseira Neto, executive]

Gabriel, this is Nelson. Thanks for the question. Let me try and give you a bit more color on all of your questions and Rafael can jump in. As I said in my opening remarks, our controlling shareholders engaged and taking part in discussing the alternatives to strengthen. The company's capital structure. How that's going to happen is precisely what the shareholders are discussing. And the company is not involved at all in that discussion. Having said that, when we talk about optimizing the capital structure. Yes, a part of that comes from the discussion shareholders, it can be from a third party or existing shareholders. But on the management side even if in my own opinion, we are doing good work in rationalizing our portfolio, cutting down on expenses, managing operating efficiency, increasing operating efficiency, we still have quite a way to go in terms of self-help. We still have opportunities to reduce costs even further improve our sugarcane crop yields, both on the agricultural side and the industrial side and to continue our journey to simplify our corporate staff. So I don't think it's about finding one single solution. We all have a role to play to improve the company's capital structure.

[Operator]

The next question is from Matheus Enfeldt from UBS.

[Matheus Enfeldt, analyst]

Thinking about 3, 4, 5 years from now, especially in terms of leverage, I don't want to repeat the same questions I ask. But I think next year, the industry will be burning cash. So not just you, but the whole industry should increase their leverage. And you're starting from a much higher level than the average. Now looking at the ideal capital structure, what would be a degree of leverage that would make sense for Raízen in your opinion? So 1.5 to 2.5x, what would be ideal in your opinion, especially considering that leverage can or should increase next year to 6 to 7x? And just quick follow-up question because you haven't disclosed all the information yet, but it sounds like there's a BRL 10 billion revenue worth from EAB and trading. So if you could talk about your strategy to leave the segment still sounds quite a high level. I don't know what part of that is still legacy. So those are my questions.

[Rafael Bergman, executive]

I'll take your second question, Matheus about the trading revenue. we have to look at which specific line you're looking at, but all the operations we've been doing with sugar and ethanol, we will continue to do. But with the new scope and a different size and that will still be part of our everyday ethanol and sugar resale operation, obviously, considering what's core business to us and creates value for us. Matheus, we have been talking about our deleveraging journey, which includes many different factors. One is the operational progress. This year, we've improved the fuel distribution business in Brazil performance cost performance as well. That tends to improve based on the work that has already been done and is being done, as Nelson said, we have a consulting company helping us on that front. We also have a divestment program, which hasn't been concluded yet. We have made several announcements. But as we said before, there's still more to happen, which will contribute to a reduction of the net debt. And there's also the discussion on an operation involving the company's capital structure that would also be part of this journey.

The operational progress will tend to reflect on the EBITDA. Obviously, commodity prices a bit stricter now. But next year, roughly half of our sugar has already been hedged. So that's really good protection for us. So this will be a step-by-step journey, and we will continue to comply with all the initiatives that the management team have been setting. So reducing indebtedness, derisking our operation by reducing complexity with massive discipline in using working capital as Casale said in his presentation. If you look year-to-date, we've used BRL 4 billion less working capital than we used in the same period last year. So that is an unrestricted commitment by management. I think our leverage ideal leveraging will have to be looked into, over time, depending on the portfolio profile. We talked about that during the last call. We operate in 2 or 3 different segments. We have the Argentina operation. We have the fuel distribution operation in Brazil, which has a risk profile and a cash generation profile that is completely different. And we also have the sugar and ethanol operation, which is going through a transformation in terms of efficiency, productivity and portfolio simplification. So the company's risk profile is changing. So we need to look at leveraging within that context.

[Operator]

Next question is from Isabella Simonato from Bank of America.

[Isabella Simonato, analyst]

I have a question about CapEx. Considering all of your initiatives, we can see the CapEx reduction on all fronts, especially in EAB expansion, ethanol, sugar and bioenergy. What we're seeing this quarter and considering what you won't do in the mills that you have already sold. What can we assume as a recurring CapEx level for the company, especially considering this reduction in expansion CapEx? What's delayed? What are you going over, maybe projects that no longer make sense what will actually be structurally lower?

[Phillipe Casale, executive]

Isabella, this is Phillipe. I'll take your question. Well, specifically in ethanol, sugar and bioenergy, we've reduced investments by 10% already year-to-date, which is in line with our investment plan, which we disclosed in May. Back in May, we already announced a major investment reduction, partly because we completed some initiatives last year, for instance, in to distribution in Brazil. And in EAB, again, we looked into the priority investments, and those have been preserved, especially those linked to agricultural and industrial productivity and safety. And within the range that we announced, BRL 9 million to BRL 9.8 billion for the year. So looking at the lower end, investments have been preserved if they are a priority. Obviously, that also includes a part of efficiency. About BRL 500 million worth of efficiency is being captured in OpEx. We've already shown BRL 315 million worth of reduction in G&A this first half of the crop year. And the CapEx also includes an efficiency part. But projects, especially growth projects will be dedicated to second-generation ethanol plants in the next couple of years and completing energy efficiency improvement and operational improvement at the Bonuses refinery.

[Nelson Roseira Neto, executive]

Let me just add to Casale's comments. Let's not forget that this year, we're still making relevant investments to conclude the E2G plants, as Casale mentioned, also concluding our investments in the Buenos Aires refinery. Those investments will be greatly reduced next year. We still have some investments in May. So CapEx next year will be different because of an even greater reduction in our expansion investment reduction. As for the assets, what we have announced, we're talking about unavoided CapEx, and you can look at that as something that will probably have an impact on the comparison next year, that will be close to BRL 1 billion. So our commitment our recurring CapEx commitment with the changes in our portfolio, will tend to be reduced and is already being reduced.

[Operator]

The next question is from Leonardo Alencar from XP.

[Leonardo Alencar, analyst]

I have a follow-up question about sugar and ethanol. Bergman, you talked about turning efficiency into productivity. So considering next crop year, what would be a good number for your own sugarcane and third sugarcane? And considering different scenarios what would be the mix, cash cost that you have been considering what kind of efficiency gains are you considering? What is the level of efficiency of this industrial part for next crop? And also considering the mix, which has been challenging and cash cost. The increase in cash costs, which might even be higher considering cost. So what's going to happen looking forward in terms of impact.

[Phillipe Casale, executive]

Thank you for the question, Leonardo. This is Phillipe. There's an important journey taking place in Nelson mentioned that a consulting company will be helping us in that process, and we are already seeing results in efficiency, both in costs. And this quarter, actually, this first 6 months, there's been an increase -- an improvement of BRL 45 million in efficiency in terms of efficiency costs and expenses. And that's an ongoing process. It started this crop year and will continue until we reach an efficiency level that is more suited to our portfolio, which will also be the based on our divestment process and hibernation of mills. Now when we look at our own sugarcane and third-party sugarcane mix, that shouldn't change a great deal. We're talking about 52% to 54% of our own sugarcane, that should be make small adjustments might be made, but not much. And the main gain in cash cost will come from greater dilution, and the results were captured down the line by improving agricultural and industrial efficiency.

In agriculture, we are already seeing some benefits for the next crop year, not only in terms of the climate, but also the planting this year, especially in areas that had been more affected last year by the fires and the droughts and the dilution effect is clearly an effect will bring even more efficiency to our cost line. So we are implementing all the initiatives that are under our control and will also be counting on efficiency gains coming from the dilution of fixed costs and agriculture -- better agricultural yields.

[Leonardo Alencar, analyst]

So do you have any recovery. And if you have efficiency gains, you'll probably have record yields next year, right?

[Phillipe Casale, executive]

Well, were coming from highly affected base, right? If you remember the last crops were highly affected by the weather next year. Things are looking more favorable for yields and crushing, but we still don't have a figure. We still need to quote intercrop, we should look at the rainfall so that we can have an even better recovery. I wouldn't say a record crop, but we'll definitely have recovery based on what we're seeing right now in our sugarcane crops.

[Operator]

The Q&A session is now concluded. Questions in writing that have not been addressed during the earnings call will be answered by the Investor Relations team. I will now hand the floor back to the company for their closing remarks.

[Nelson Roseira Neto, executive]

Hello, everyone. This is Nelson again. I just wanted to highlight an announcement we made a few hours ago. It was a material fact about changes in the group CFO. I just want to say that all these changes, I hope it was all clear. This started because Rodrigo [indiscernible] left, Cosan and -- we discussed all the different options and the succession plan internally. And it was only natural for Cosan to invite Rafael to take Rodrigo's position. He was already taking part in future succession plans. We are now announcing the arrival of Lorival Luz, who you certainly know, he's a highly skilled professional with a very successful track record in all the major companies has already worked for and obviously, to me, it's not only a pleasure to welcome Lorival as of December I'm also very grateful to everything Rafael has done for the company in this year that we've been working together. Rafael's contributions in this first turnaround here are very clear in terms of setting up a team is leaving behind a world-class team. Secondly, the transparency and the way in which we've been able to communicate internally and externally to the market under Rafael's leadership and our liquidity position, which has greatly improved in the last 12 months and has given us the required time for the company's operational turnaround to take place. I've already thanked Rafael in person, and I'm doing it now again in public. Thank you for all your work and for the journey with me and with Raízen's team this year. I wish you great success on your new journey at Cosan, I'm sure it's going to be intense. And I wish all success to Lorival, who is now joining the team to continue with the company's turnaround in the next years and months to come. That's it. Thank you once again for your attention again, in a somewhat unusual time. And I'll see you at the next earnings release call. Have a great weekend.

[Operator]

Raízen's second quarter 2025-'26 corp year conference call is now concluded. The Investor Relations department is available to answer any further questions. Thank you and have a great evening.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]