Brazil's Raízen 3rd-qtr profit soars on strong ethanol sales
SAO PAULO Feb 15 (Reuters) - Brazil's Raízen, the world's largest processor of sugar cane, on Monday reported that quarterly profit soared 230 percent as sales of higher-priced ethanol jumped 25 percent.
Raízen, a joint venture between Royal Dutch Shell Plc and Brazil's Cosan SA Indústria e Comércio, earned 1.05 billion reais ($263 million) in the third quarter of the 2015/16 crop year (October-December) as revenues rose 19 percent to 20.22 billion reais.
Raízen's sugar sales reached 1.6 billion reais in the quarter, 26 percent more than last year, while ethanol sales jumped 52 percent to 1.86 billion reais.
The joint venture comprises the sugar, ethanol and cogeneration assets formerly owned by Cosan as well as fuel distribution infrastructure and the filling stations from Shell's Brazil operations.
Cane crushing in the quarter was 40 percent more than last year, when a very dry weather led the company to finish processing much earlier than normal. That resulted in higher sugar and ethanol volumes to be sold in the quarter compared to last year.
While revenues in the sugar and ethanol business (Raízen Energia) jumped due to larger volumes and much better prices than last year, the fuels division (Raízen Combustíveis) suffered due to reduced economic activity in Brazil.
Although the local ethanol market usually absorbs most of the production, the company sold more ethanol abroad than in Brazil in the three months from October to December, a period when local demand for the biofuel usually falls due to the relative higher price compared to that of gasoline.
The two fuels compete in Brazil, where car engines are totally flexible.
Raízen sold 555 million liters of ethanol to foreign markets and 483 million in Brazil. "Ethanol volumes went up mainly due to good use of opportunity windows to ship abroad," the company said, without elaborating.
Brazil's real lost 40 percent against the dollar in the last 12 months, making sugar and ethanol produced locally more competitive in foreign markets. ($1 = 3.988 reais) (Reporting by Marcelo Teixeira; Editing by Jeffrey Benkoe)
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