February 12, 2019 / 9:19 PM / 4 months ago

Biosev 2018/19 crop year loss up 8.4 pct through Dec

SAO PAULO, Feb 12 (Reuters) - Biosev SA, the Brazilian sugar and ethanol maker controlled by commodities trader Louis Dreyfus, said its loss in the 2018/19 cane season through December rose 8.4 percent from the previous season to 892.6 million reais ($240.40 million).

Biosev on Tuesday reported a loss of 230 million reais in the third quarter ended in December, mostly due to the depreciation of the Brazilian currency. The loss was 17 percent smaller than in the same period a year earlier.

Almost 90 percent of Biosev’s 5.94 billion reais in debt is dollar denominated. The company said the currency fluctuations have a non-cash effect, since the majority of the debt matures between 2021 and 2023, when the company plans to have enough cash to pay.

Juan José Blanchard, Biosev’s chief executive, told Reuters in a brief interview to comment on the results that the company’s performance in the quarter was positive, considering the challenging scenario of smaller cane crushing after a drought earlier in the year and low global sugar prices.

“We managed to cut operational costs and production costs, looking to improve cash generation, even in this difficult situation” he said, citing a 2.5 percentage points improvement in EBITDA margin and 30 percent reduction in general expenses.

Biosev sold two mills in Brazil’s Northeast region last year, in a move to optimize operations and cut expenses.

Blanchard said there were no negotiations currently for further divestments and asset sales, denying a recent report in Brazilian media that Biosev was talking to Cargill for a possible partnership.

The CEO said he expects an improvement in the sugar market in the second half of 2019, as the global sugar supply balance swings from a surplus to a deficit.

$1 = 3.7130 reais Reporting by Marcelo Teixeira Editing by Phil Berlowitz

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