UPDATE 1-Brazil's Cosan to focus on preserving cash in prudent tack
(Recasts adding details on cash strategy, CEO comments)
SAO PAULO Aug 13 (Reuters) - Cosan SA Industria e Comercio , Brazil's largest sugar and ethanol maker, plans to focus on preserving cash, in a sign that the company will hold off on acquisitions or investments in new projects as the country's economy struggles.
Executives at Cosan said in a conference call on Thursday that a worsening unemployment outlook in Brazil in coming months could further weigh on per capita fuel consumption, reducing the company's appetite for growth.
After a long period of low ethanol prices in Brazil and with global sugar prices at their lowest in more than six years, speculation has mounted about a wave of consolidation in the industry. Remarks by executives at Cosan indicate that the company is not willing to increase its size for now.
Cosan, which also operates natural gas and fuel distribution, on Wednesday posted net income of 49.4 million reais ($14 million) in the second quarter, down 52.5 percent from the year-earlier period.
"We don't see macroeconomic conditions improving in the near term", Chief Executive Officer Nelson Gomes said on the call.
Cosan has a 50 percent share in the joint venture Raízen, which controls cane processing and fuels distribution. Shell owns the other half.
Gomes said he expects higher ethanol prices in the second half of the year as the early crop pressure on values fade.
Cosan sold 545,000 tonnes of sugar in the second quarter, 15 percent less than in 2014, for an average price of 854 reais per tonne compared with 908 reais per tonne a year earlier. Continuación...