Cosan S.A. ADS

Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to the COSANZ conference call to discuss the results of the first quarter of 2022. Today with us we have Mr. Luiz Henrique Guimarães, CEO, Mr. Ricardo Levin, CFO and IRO, and Mrs. Ana Luisa Pelina, IR Manager. We would like to inform you that this event is being recorded and has simultaneous translations in English. During this event, our participants will be able to listen to the presentation. Afterwards, we will begin the question and answer session. Before proceeding, let me mention the forward-looking statements that may be made during this presentation regarding the company's business prospects operating in financial projections and goals are based on beliefs and assumptions of Cousin's management, as well as information currently available to the company. forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions as they relate to future events and therefore depend on circumstances that may or may not occur. General economic conditions, industry conditions, and other operating factors may affect the company's future results and may lead to results that differ materially from those expressed in such forward-looking statements. Now, I would like to turn the conference over to Mr. Ricardo Levy. Please, Mr. Ricardo, you may proceed.

Good afternoon, and thank you for joining us in COSAN's Earnings Conference Call for the first quarter of 2022. With me today, we have Luiz Henrique, our CEO, and Andaluisa Perina, our IR Manager. Let's start today's presentation with the financial and operating highlights of each business. Our presentation is very concise, since our listed subsidiaries have already reported their results and held their calls with the market. Let's start on slide number 4 with Raising. Since this quarter closes the 21-22 crop year, I will focus on the highlights for the year. We set a new record for adjusted EBITDA, supported by a significant improvement in the operational performance of high easing, within the guidance range shared with the market. In renewables, the better prices and maximization of gains from sales boosted the strong result. And as you all are aware, we are advancing in our plan to expand the supply of clean and renewable energy. With the recent announcements, our pipeline already includes the construction of a second biogas plant scheduled for 2023, as well as another three E2G plants in addition to the one already operating on a commercial scale, which should be ready in 2023 and 2024. In sugar, we also had important rise in sales price and continued to increase our share of direct sales to destination. This partially offset the lower volumes, which were affected by the crop setback and by the carryover of inventories to the coming month, seeking to maximize profitability. In marketing and services, IBDA grew over 50%, with better returns and higher volumes across all segments, benefiting from the good opportunities to expand the network in Brazil and in the Latin America operations. Let's go to slide number 5, which shows the results of COMPAS, GAS and ENERGIA. The slight reduction in congas sales volume in the quarter reflects the weaker demand from the industrial segment, caused by already expected scheduled maintenance shutdowns at clients. This impact was offset by growth in the commercial, residential and automotive segments, and by the addition of the volumes distributed by SUGAS, consolidated from January on. Meanwhile, EBITDA growth was driven by better margins, adjusted by inflation and ongoing operating efficiency gains at Congas, as well as by the incorporation of SUGAS. Going now to slide number 6, you can see the results of MUVI. The period was marked by the recovery in lubricant sales volume, despite the decline on a year-over-year basis. Remember that the first quarter of last year represents a strong comparison base for lubricant sales volume, since its performance was leveraged by the economic recovery after the most critical months of the pandemic, especially in Brazil. Meanwhile, IBDA captured the continuous improvement in profitability, evidencing moves effective cost control and sharp sourcing and pricing strategy, despite the more challenging demand scenario in early 2022. Let's go to slide number 7 to talk about Humo. Transported volumes registered strong growth in the quarter, mainly in the north operation. The result reflects the anticipation of the soybean season, operating efficiency gains and the ramp-up of the central network operation. As a result, Humu captured market share gains in the grain export from the port of Santos, aligned with our marketing strategy. Meanwhile, EBITDA margins fell from the first quarter last year. The increase in average tariffs wasn't enough to offset the higher variable costs in the quarter, which were pressured mainly by diesel. Even so, the higher fixed costs and expenses lagged inflation, reinforcing the company's capital discipline. Moving on, slide number 8 shows the results of COSAN. As discussed in each business, our portfolio delivered solid results in the quarter despite the challenges. In corporate, the expenses were in line with expectations. At COSAN Investimentos, EBITDA was represented mainly by the revenues from the leasing of agricultural land by Hadar. The other companies are startups and projects in the pre-operational stage and therefore, on a combined basis, represent negative EBITDA which offset part of HADAE. As a result, Proforma IBDA grew due to the better operating performance of HUMO and COMPAS. Meanwhile, the net income was affected by higher financial expenses in all COSAM businesses, which accompanied the rise of interest rates. And COSAN's consolidated investments in the quarter increased year over year, mainly due to the higher expenditures at Raizen, including now Biosave, and at Compass, partially offset by lower capex at Rumo. Let's go to slide number 9, which shows our group's financial highlights. We conducted liability-major actions throughout the entire group. The sequential reductions in gross debt is explained by the prepayment of 2025 bonds at Rumo and by amortizations at Raizen. The net debt EBITDA came true two times, within the ideal range for the group, reflecting the significant EBITDA growth in the last 12 months. Meanwhile, cash flow registered nearly half the burn in the first quarter last year, representing important improvements supported by funding operations at Compass and higher operating cash generation at Raizen from sales of inventory. These effects were partially offset by the expenditures with the acquisition of Sulgaz and with the second installment for the acquisition of the Porto of São Luís by Cozã Investimentos. Although not related to the quarter, I would like to reinforce some subsequent events for that quarter. First, the shareholders' meeting in April approved the distribution of R$ 800 million in dividends for 2021 that will be paid on May 20, complementing the R$ 700 million in interim dividends paid in December. We also concluded COSAN's fourth debenture issue, raising R$ 1.5 billion in two series, one for 6 years and the other for 10 years. The proceeds will be used to replace and reinforce our cash position following the transactions carried out in recent months, such as the acquisitions of Radar and the port of São Luís. Also in May, a new stock buyback program was approved to replace the previous one, which provides for the maximum repurchase of 110 billion shares over the next 18 months. Remember that part of this quantity of shares was contracted through Total Return Swap operations, as reported monthly. Before closing, I want to go over some research agenda on slide number 10. In April, we published our annual sustainability report, which will keep readers up to date on the progress made in our ESG journey during 2021. I invite you to read the report, which is available on our website. In addition to COSAN, COMPAS also published its report, and soon the reports of other businesses will be made available. We also celebrated all companies in our portfolio becoming signatories to the Global Compact, a UN initiative to encourage companies to adopt responsible corporate social and sustainability policies. In April, Raizen carried out its first issue of sustainability-linked adventures, linked to ESG targets, which raised R$ 1.2 billion. And Rumo made important advances in the risk rating of ESG performance, assigned by Sustainalytics, which improved from high to medium. Lastly, I want to invite you all again to participate in our Kozan Day on May 26th, which will be live streamed with simultaneously translation. And that concludes my presentation and we are all available to clarify your questions. Thank you.

Thank you. We will now start our Q&A session. You may ask your questions by clicking on the raise your hand icon, which is at the bottom of your screen. At this point, a request to open the microphone will appear on your screen and you should click on unmute. For participants connected by telephone, just press star nine to send your question. And if your question is answered, dial star six just to unmute yourself. To send your question by text, just click on the Q&A icon also available at the bottom of the screen and type your question. Please wait while we collect the questions. Questions in English will only be received by text. First question is from Ms. Isabella Simonato. Ms. Simonato, you may proceed. Good morning, Louise. Good morning, Ricardo. Good morning. Actually, good afternoon, everyone. Thank you for the call. I have a question about Kozan Corporate, the holding company. It's interesting because when we look at the dividend payout compared to what you have in terms of debt service and potential investments, obviously, one quarter is not enough to give you a good reading of the whole year. So that's why I wanted to ask you, could you let us know how you see that equation at the level of the holding company in terms of dividends flow that it can receive versus a more expensive debt service with higher interest rates? You also mentioned you'll be making more investments this year, but there's CapEx. from investments and there are also buybacks as well as other things that you can do. So could you give us an overview of how you're seeing that? And also as a follow-up question, there's a liquidity and float size issue at Raisin. Could you give us an update on how you're thinking about that structure? Thank you. Thank you, Levin. Please help me out and add anything you might think is necessary. Thanks everyone for joining on this call. As you know, the presentation was short, so we're here to answer your questions, myself and Livi. We're keeping the same discipline as always. We've done everything to make sure that we can address the debt service and there's room for buybacks as well. As you will have noted, we have approved our buyback program at the level of the subsidiaries and the holding company. We can continue with the buybacks as soon as it's unblocked. In terms of investments, there are no major investments at the holding level with the exception of the radar payment installments. In terms of mining, we have concluded the ports and the next capitalization event is further down the line if and when the mining quality issues and everything else is sorted. So that's what we have ahead of us in 2022. And the rest of the CAPEX has been resolved with all the other companies with cash generation, fundraising and growth at move. Compacts, Raizen and Rumo with very good liquidity level. In terms of Raizen's liquidity, that's always something we look at very careful. We want to get at 15% float at the company and we're working with B3. When the time is right, we have some commitments And there are also sales by shareholders that may have bought something via BioServe. We're also keeping an eye on that. We have Kozan and partners as Shell and the company. So it's an opportunity. It will be done at the right time. And we'll make sure that our receivables flow minus the debt service and Radar's capex are all addressed. with the opportunities we see in our portfolio companies and the holding company. Levin, would you like to add anything? Yeah, just about the first point, Louise. Obviously, we have the three pillars, new investments, share buyback and dividends at the holding company. And as you said, we do have that new buyback program. We have 30 million in shares, which are open. We have the commitment at the TRS. And if we have any opportunities, obviously, when these programs are open, we do buy back when good opportunities present themselves. And what we're missing is the fact that we're also looking at the company's leveraging. We have those three fronts, but we look at our leveraging And we always keep it at 2.5, which is what we always set as our limit. And let's not forget that we concluded the quarter with very low leveraging of two times the EBITDA. That's very clear. Just as a follow-up, please, considering... that equation, can we think there will be a drop in COSAN corporate net debt, or would that be marginal? No. Well, let's think in terms of leveraging ISA. Obviously we're not disclosing a guidance, but the objective is to keep it at the level I mentioned. What we did do recently was and I talked about this in other events was to issue some additional debt, but with that, we should do our liability management considering some of the debts we have. So we will be keeping a similar level of indebtedness. That's great, thank you. Thank you. Next question. is from Mr. Christian Audi from Santander. Mr. Christian, you may proceed. Thank you, Luis. Thank you, Ricardo. Thank you, Anna. Luis, I have a question about the market dynamics as a whole. We now see high inflation rate pressure going on. So I'd like to hear from you. what your concerns are when it comes to this inflation pressure and what you have been doing to make sure your strategy can face this dynamics, which looks like we'll continue for the rest of the year. That's a great question, Christian. It's almost like you've been attending our management team meeting because we've been talking about that for a long time. Marcelo talked about some of our capital allocation decisions. leaving some of the businesses we were intending to do, which we really liked, and that had to do with the capital increase and concerns about costs. Obviously, also the ability to make sure that our management, and that this is a key topic for all companies, not only in Brazil, but around the world, and our inflation memory, you know, we're trained for that. Any manager who's younger than 40 Doesn't know what inflation. We've been discussing what we're going to do. We're looking at costs and we're also looking at passing this over. This is key freight competitiveness in case of Romo turnover in case of raising. So sometimes they take a while to happen, but they end up happening in the market as a whole. So over the last few years, given our investments, our projects, and how we've been developing our procurement, always focusing on improving quality, amount, competence systems, We've been putting a lot of effort into increasing synergy among the companies that buy shared items, so services ranging from IT, security services. We've been capturing significant savings and there's been relevant cost avoidance as well. So we've been reducing since the last pricing. So that's our number one priority, not just for the CEO, but for everyone in the company in terms of allocation of resources and the cost of opportunities is something we consider competition repricing to make sure that we have the right thing that is compatible with the return on investment for the industry we operate in. So that's our number one priority. It's not just in Brazil. It's around the world. We're here to stay. This is here to stay for a while. So I can tell you that both in our long-term projects as well as recurring cost activities, we will be doing our homework to mitigate these cost effects and to accelerate whenever possible and wherever the competitive environment allows us to pass on the margins to the business. Great. The second question is, there is a risk that the administration might be changing. So I'd like to hear from you whether there are any industries that you're more concerned about if there is a change in government and any ensuing regulatory changes that might make some businesses harder. So do you see any risk in that sense? Well, once again, this looks like an election between two former presidents. So it's something we've seen before in terms of direction, ways of thinking. We're familiar with it. We've been through it before. And the reality is that we operate in industries that have an impact on society as a whole. It's a structural industry that allows Brazil to be more competitive in different business areas. So we look at a glass half full. So despite the global challenges, Brazil is in a very relevant competitive position considering the planet's decarbonization, Nobody has any doubt that it is necessary. It's already happening. There's also the war between Russia and Ukraine, which will take a while. And so Brazil is very well positioned because it is the main protein and food additional supplier. Rumo has a very good strategic position in renewables, in oil, So we're in a great position. There's no risk of war, polarization, moving from A to B outside the internal situation, obviously. And these are industry that when commodity prices go up, they are affected, obviously, but since in most cases, our companies add value to the equation. So logistics, credit, I'm not... directly impacted. We don't own the land. We don't own specific assets. We have control over the land lease. So that's a very relevant position. If there are any major interventions, which we don't think will happen, but we are in a position that doesn't make us that exposed in terms of import taxes, export taxes, or any other artificial pricing mechanisms, because that sometimes can be a temptation. We're well positioned in terms of regulatory issues, the railway authorizations, both local and federal, and gas policies as well. We also have our concessions in the Paulista network or with Congas. So lots of things have happened over the last two or three years that have reduced our exposure to these risks. So I don't really think whether A wins or B wins, that we'll have a problem. I think there's a great opportunity for Brazil to consolidate its position as a great supplier of major commodities of the future in this new geopolitical design and configuration we see happening around the world. But obviously, we're paying attention to all that. We have a close dialogue with the different levels of the legislative and the executive branches. And I'd say it's business as usual at the moment. It doesn't matter whether they're orthodox or heterodox ideas, and it doesn't matter where they come from. If you look at what's happened over the last many years, these things tend to move towards a solution that makes sense along the way. Sometimes it's not the most direct way, you know, the tax on diesel. There are different opinions on different sides, but I believe it will converge towards something that makes sense. There will be a correction cycle with some instability. But the state and federal governments will strike a balance, I'm sure. But only the debate and the fact that things are evolving is very positive. It's like Brazil, two steps forward, one step back. But at least in the areas where we operate, things to be moving forward, and I believe they will continue to do so. That's great. Thank you. Just as a follow-up to Ricardo, in terms of buyback, how do you see calls on buybacks? You said you might buy some Raisin shares. How do you see that? dynamics between buying back Khozan shares versus Raisin shares. Could you give us some color on that, please? Of course. Thank you. Well, the buyback decision, obviously we could do Khozan share buybacks, Romo and Raisin. This is publicly held information. We did 250 million reais worth of share buybacks by ruble. This is a financial decision. We have our models and we'll buy as we see opportunities to get attractive returns, obviously. So whenever we see attractive returns in a specific company, we buy back based on our models. Okay, great. Thank you, Luis. Thank you, Ricardo. Thank you. Thank you. Next question is from Mr. Marcello from Credit Suisse. Mr. Marcello, you may proceed. Hello, good afternoon, everyone. Hi, Louise. Hi, Ricardo. Hi, Anna. Congratulations on the results. And thank you for answering my questions. I have a couple of questions. One is a follow-up to Christian's question about Gandariga's terminal. You've already... mentioned that COMPAS adds value. So it's not necessarily linked to the price of the molecule, but given the level of volatility international prices, do you see any challenges or difficulties for that terminal to be successful, to be installed, and to be up and running according to what you had thought originally. And my other question is about Compass in terms of the DOD gas petrol. Do you have any update in terms of timing of the deal? Now it's at the competition authority, at CADE, and obviously you're moving forward and selling some of gas petrol subsidiaries. So my question is the strategy behind that. Do you see potential expansion of the network in some places or will you keep the distributing companies that already have an installed network and therefore it would make it easier to implement Congas successful model? So those are my questions. Thank you, Marcelo. I'll start by the second, because I think it's faster. The divestment in assets It has to do with consistence. We've always said that. We've always said that we weren't acquiring gas petrol to keep 100% of the operations. It's a key operation, you know, power, and it's very healthy to have other players to develop the distribution market because it's an underdeveloped market in Brazil with the exception of and the other company in Rio de Janeiro, it's an underdeveloped market. So there are lots of opportunities, but one single player cannot make it happen. So it's about consistency. So we selected the areas and regions that have the most synergy and ability to absorb our model. And also that makes sense for other players to acquire and will make sense to the negotiation deal that we have already concluded. and the negotiation, obviously the deal is pending Caddy's approval. So this should happen by the end of July. That's Caddy's deadline to assess this acquisition. It's now left the superintendents with a recommendation with unrestricted approval. We're very optimistic about it, but obviously CADI's decision is sovereign in terms of the approval of the deal. But it's been approved by the superintendents. So we'll continue to work with the agency to clarify any questions and to provide them with anything they might need to help the Brazilian market develop and meet the rising demand. So as a segue to your first question, obviously all of our plays have a key structural component. It's the same thing we've been doing the last few years. The extension to Lucas do Rio Verde, Congas extension, the Pakistan network extension, the natural gas terminal in Sao Paulo, These are key and unique assets in our portfolio. They have great cash generation and results generation for a very long time. So we're very happy about the Vita generation in the last few years because of the positions that we have consolidated and which are so important to grow with good results in all of these companies. The terminal, we're talking about a six month, a year trade. It's got a strategic position and it will allow us flexibility, local price negotiation. And let's not forget that all of these deals, the FRS deal, the regas units and the long-term gas supply agreements have done with the commercial conditions of that time. So it's a long term asset, but it's positive because right now we have costs that are much more competitive than they would be if we were starting now, for instance, but we want to maximize the returns of these assets during the cycle as a whole over the years. So we don't see any difficulties ahead, quite the contrary. That position was built before the crisis and it's a winning position. So we just need to deliver a working terminal in the first half of next year. So we will continue to have good results and we're confident that we will do it within the deadline that we have agreed on with the market, our clients, suppliers, and to have another unique position in terms of strategy. We'll have Brazil develop, we'll have Sao Paulo develop, and we will improve the supply of natural gas to the Brazilian energy matrix, which is key. Great, thank you. Thank you. Our next question. is from Mr. Lucas Ferreira from JPMorgan. You may go ahead, Mr. Lucas. Hi, everyone. Good afternoon. So as far as I understand it, you've decided to have another official guidance. In general terms and qualitative terms, what can we expect for both standalone businesses, Compass and Move, for 2022 in terms of both CapEx. As a CapEx acceleration in all businesses, Ken, we expect to see that acceleration in the other businesses as well. If you could comment on that in general terms, I'd be grateful. Thank you. Well, Move and Compass have had compound growth over the last few years that are quite relevant and we don't see that slowing down. It will continue. So for over a year, looking forward, we will continue to grow. That's what we've been doing. That's how it's been performing. These are fantastic assets. We've been working together with resources that we brought to both businesses whenever required. And there's great opportunity for growth. It's no secret that we want to increase MOVE's international share to grow in the Americas, in North America, and in Europe. And we hope to have news soon for everyone. The company is ready for that step. We've had consistent deliveries in the last few years. in our Latin business, Europe business, and our small business in the US. So we have won the right to grow even more. We just need to match that with a market opportunity. So that's what you can expect from MOVE, continued growth and continued expansion in our international presence. At Compass, we want to conclude Gas Petro's acquisition, hopefully by the end of July, together with the divestments So making an acquisition and divesting from two assets at the same time. And so we'll start replicating KONGAS successful model, which is what we have already started to do with SOGAS in Rio Grande do Sul. We're already seeing relevant results in terms of expanding the network, residential connections, and so on and so forth. And in 2023, we'll have the terminal, which will provide our clients in Sao Paulo with more benefits, as well as future thermal projects by third parties. Third party thermal projects will have an opportunity to give us competitive projects in the Southeast. So we continue to deliver growth and the additional capex At move will be for potential acquisition. And in COMPAS, there is no change. So we'll continue with the regulatory CAPEX. And we'll also have the CAPEX for the new companies when they are under our management, coupled with the states that are part of the partnership in both businesses. So that's a summary. There's huge growth capacity. They've been delivering and COMPAS, is a good dividend payer, and it delivers substantial growth as well. I don't know if I answered your question. Hi, thanks, Louise. This is Anna. I'd just like to add something. Even though Compass's shares are not listed on the stock exchange, we do disclose our results. So in February this year, we did disclose our EBITDA and CAPEX projections for Compass, and the EBITDA we expect for 2022 3 billion, it was 3.3 EBITDA and CAPEX 1.6 to 1.8. As Louise said, these are the numbers for the ongoing operations, but they exclude the results of potential acquisitions, okay? That's a great point, Anna. Let me just reiterate a couple of things. that are very important and we take into consideration, especially with regards to capital allocation. It's the unique position of each of these assets because we consider competition, the markets we supply and so on. So when I look at that right now, myself, Marcelo, Levin, everyone at the holding company, it's the same as I said about compass and move. They have a clear avenue for growth and the same applies to what was built in regulatory terms at Rumo in the last few years and a stronger crop and repricing of the cost of capital, the cost of businesses moving towards traditional freight. And the same applies to Raisin with the expansion of 2G and Petrobras model to position itself and supply the market. So when we look at all this, obviously there are concerns about the inflation rate and the country's growth, but our strategic positioning, considering everything that's going on around the world is very strong. We are in a very strong position. Thank you. Thank you. The next question is from Mr. Bruno Montanari. Mr. Montanari, you can go ahead. Good afternoon. Thank you for answering my questions. I have a couple of follow-up questions, one about Compass and another one about capital allocation. You were very fortunate in the terminal timing at Compass. Do you think that the commercial company in the short to the midterm might be better than you had expected because of this high natural gas volatility. And in terms of capital allocation, when might you think to start reinvesting again? Would it be when you see that inflation rates are going down or interest rates, or when you see improvements in the macro economy? Because that might be a long process. So I'd like to hear about timing. When the situation improves, at what point of the cycle do you think you'll start investing again? Thank you. I'll start by your first question. Traders and commercial companies love volatility. Brazil and the world are not worried about the price and price levels. It's about having different molecules and for the market to develop faster. The main accelerator or de-accelerator for the short-term, it is much better than we had thought because there are no other molecules available in the market. And there aren't enough clients in the market despite the regulation in Sao Paulo, which is our main market, allows it so, but I wouldn't, attribute that to price volatility because price volatility means opportunity for the commercial companies. What's happening is that the market's ability to have free clients on the supply side or on the other side to take on the risk that have potential benefits, but there are risks as well as demand generation, Second instance, suppliers, it takes time for the market to develop. And in our opinion, we've been talking to the regulatory agencies and the ministry, our focus in terms of the market and the industry is that issues that are blocking the expansion of the free market should be unblocked. Compact Scosan were very favorable towards having as many free clients as possible, as soon as the molecule issue is addressed. And we're focused on distribution efficiency because that's our core business. And commercial company does have a small share where it makes sense. We'll have lots of others where it makes sense. It's not happening because it doesn't make sense at the moment. But the origin of the molecule with different pricing, different indexes, so that that market can develop. That's the limiting factor to me. Not price volatility, because price volatility can be very productive. And before this crisis, we would be highly competitive, as we can see in ComGas' deal to have a share of the supply via the terminal, which is highly competitive. About your second question, Since the end of last year, we had been seeing an acceleration of the cost curve and the curve of cost of capital, but there is an investment by the companies below that. So there's return to investing as required, but there's enough capital allocated to projects that we do see and that, place us in a key strategic position. So Raisins Biogas, the Lucas do Rio Verde extension at Rumo, moves entry into Europe and the acceleration of the replication of CommGas' model at the other companies with Gaspetrol, Solgas. So we have allocated CapEx is relevant CapEx and will generate double digit returns in all of these businesses. And they will remain at that level. It's about being conservative. Where we can see that certain risks are not worthwhile taking out, but obviously we will continue to grow responsibly. and to get assets where we see competitive advantage and an ability to generate results and continue to grow. That's very clear. Thank you. Thank you. Next question is from Mr. Matheus from UBS. You may proceed, Mr. Matheus. Hi, good afternoon, Louise, Ricardo, Anna. Thanks for taking my questions. I have a couple of follow-up questions. I might rephrase the question. First, I'd like to understand how you see Compass as a platform for natural gas. We had talked about natural gas price volatility, Petrobras strong presence in the natural gas market with commercial companies falling short of what was expected. So what's changed in the mid to the long term term for Compass, considering the portfolio that was presented a couple of years ago, considering new opportunities in energy or other gas businesses. So that's my first question. The second question is also a follow-up question to what has already been said. Considering the whole group, and I know there's a few different ways of looking at it, how does the company come to the holding discount? You've made it clear that There is an expectation to buy back at the company or the subsidiaries. Does the company see this as a good moment to buy back considering the discount levels we're seeing? How do you see that? Thank you. I'll start by the second question because it's quite simple. The holding discount is determined by the market. We're not going to dispute whether it's right or wrong, but our portfolio assets view is that the discount should be close to zero. That's part of our portfolio and risk considerations. There's lots of uncertainties around the world. The quality of our assets are all linked to Brazil's competitive advantage, which is are independent from the administration. They're all very well positioned considering the profitable decarbonization agenda that we see around the world. So we'll check market prices and if they make sense or if they don't make sense. And at current levels, we think the market is wrong in terms of pricing, but the market is sovereign. So we will do what we deem important to do. We'll do what we have to do. We have the authorization to buy all three papers. You know, there are blocking issues, silent periods, but we will continue to be active as we have been in the last two years to make the most of opportunities. Our view is that the current discount is the discount that the market thinks is right. We're not going to argue about whether that's right or wrong. and the arbitration, we'll see it, whether it's papers from the companies or the holding company. What was your second question again? Compass in the mid to the long term. Oh yes, clear, thank you. Well, if I look at Compass's main promises of the last two years, it was the Sao Paulo renewal and extension, which was done, the natural gas, Extension is ongoing and it will end within the deadline and geographical expansion to replicate Comgas' model. We've taken the first steps and we hope to be successful with the conclusion of our investment and divestment in gas petrol. Obviously, we also have important matters to address with the commercial company. Unfortunately, because of the market issues we have raised, it's not evolving, but we will be ready when market opportunities arise. We'll continue on the lookout for opportunities and energy generation projects. We've always thought about gas project, pipeline projects. It's not our core business to be the main investor in other projects. That comes with our ability to generate the short that we require whenever we have new gas positions in the regions where we operate. Our core business is distribution with high efficiency. The efficiency that Comgas offers is a great opportunity for Brazil, focusing on clients, focusing on efficiency and a balanced portfolio. It will be more balanced than the current portfolio we see in distribution companies with an industrial component, but considering other types of consumption that makes our portfolio so robust. And whenever there's an opportunity for natural gas, which can be competitive, as we see in Sao Paulo with the current gas and ethanol prices, natural gas is very important for heavy users in terms of number of kilometers. So we have been focusing on the main deliverables. We have high quality partners coming in, Atmos. They're very happy. We're very happy with them. We've been able to capitalize the company to make relevant investments and the divestment as well, which gives us a healthy balance sheet and how we want to deliver these levers with these three components that the project will bring us over the next few years. That's great. Thank you. Thank you. Next question is from Mr. Gabriel Vargas from Citibank. You may proceed, Mr. Gabriel. Hi, Louise. Hi, Anna. Hi, Levine. Thank you for taking my question. Most of the questions have been asked. you've been able to simplify your portfolio and looking forward, one of the main steps to make the portfolio simpler will be to list Compass. As Luisa said, you've brought in some partners via price placement to Compass. So my question is, It's hard to say, but what are you missing to resume that plan? I think that will continue. Please correct me if I'm wrong, but I believe that would be advantageous to the company. So obviously the economy is very volatile at the moment. You have delivered on some of the plans that you had mentioned in the IPO. So I'd like to hear from you. how you're seeing the future. What would be the sweet spot to continue with your plan? Thank you. Thanks for the question. Yes. Having Cozum open and listed companies below it is our plan, continues to be so. That's why we listed Ryzen. That's why it went public. And Compass has been delivering what it needs to so that the market can see the value in September 2020. We had the terminal capacity and being part of successful privatizations such as Sobhraj, the extension of the Sao Paulo concession to be able to continue investments and position Sao Paulo as a fantastic in a fantastic position with renewables and energy mix. So we want to have a market that makes sense and these projects need to be mature. We have assets delivering good results that can be reported and that will allow us and the market to have a better understanding. It will be down the line, but we haven't changed our plan for Compass or for Move, the right time will be when the projects have delivered, things have been happening concretely, and we're reporting growing results about these projects. So we need pricing to improve. And Move, Expanding internationally, that needs to become more mature. And then we'll be able to report results. And together with our partner, CVC, we'll find the right time. But the plan is for all four companies to be listed. We haven't changed our plan. That's great. Thank you. Thank you. This concludes the question and answer session. I will now turn the floor to Mr. Ruizin Hickey for his closing remarks. Thanks, everyone. Thanks for joining us. Thanks for your questions. Excellent questions. Thanks for allowing us to talk about the future of the companies. Bottom line, you've heard it. Ruizin's call, Rumor's call. We talked a lot about Compass. We talked a lot about Move. We continue to be very happy with our strategic position. We have a competitive advantage when compared to our main players, each in their own segment, with unique opportunities and projects to be developed or which are being developed. We have two E2G plants being built. The biogas plant will be ready soon. We'll have our final licenses move soon. It's doing its international expansion. So strong growth agenda, despite the fact that we are being conservative when it comes to cost of capital, but capital to projects and initiatives that can generate attractive return to our shareholders. We are completely focused on people because our growth is all about people. We have people in nine different geographies now with Soulgas. You know, we're present through Raisin, but it used to be downstream. So strong presence in our gas business. So we want to attract people, develop people, so that we can continue to grow our people and talent pipeline and completely focused on executing projects. our projects. We will deliver these projects to you and to the market at the right time so that we can continue to lead in unique and non replicable positions in the market. We're very excited in a very complex global scenario, but I think Brazil can come out stronger and we have a very good strategic position in terms of commodities and clean energy mix, in terms of decarbonization and with companies such as ours and so many others in the country that know how to deal with inflation, know how to deal with volatility and can actually benefit from that or into our ability to know how to deal with that kind of risk. It's a complex year, but we're very excited with our results. and to be able to deliver these results and continue on our growth journey. Thank you for your trust. Thank you for your support. And I'll see you next autumn. Thank you. This concludes COSAN's conference call. Have a nice day.