Cosan S.A. ADS

Good morning, ladies and gentlemen, and thank you for waiting. Welcome to the COSAMS conference call to discuss the results of the second quarter of 2022. Today with us, we have Mr. Luiz Henrique Guimarães, CEO, Mr. Ricardo Lewin, CFO and IRO, and Mrs. Ana Luisa Perina, IR Manager. We would like to inform you that this event is being recorded and has simultaneous translation to English. During this event, all participants will be able to listen to the presentation. Afterwards, we will begin the question and answer session when further instructions will be given. Before proceeding, let me mention that forward-looking statements that may be made during this presentation regarding the company's business projects, operating and financial projections and goals are based on beliefs and assumptions of the COSAMS management. as well as in 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 futures 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 Lewin. Please, Mr. Ricardo Lewin, you may proceed.

Good morning, everyone, and thank you for participating in COSAN's Earnings Conference Call for the second quarter 2022. With me today, I have Luiz Henrique Guimarães, our CEO, and Ana Perina, our IR manager. Before starting the presentation, I would like to point out that we achieved strong results this quarter, consistent with our strategy. Let's now go through the main financial and operational highlights of each business. Let's start on slide four with high easing. This quarter that marks the start of 2022-2023 raisin crop year delivered strong operational performance and significant growth in adjusted EBITDA, in line with our guidance. In renewables, the quarter was leveraged by the combination of higher sales volumes and better pricing. In the sugar segment, EBITDA also grew in the quarters. supported by greater sales of third-party products and by the better average price, reflecting the effective pricing strategy and higher share of direct sales to destination. Meanwhile, the marketing and service segment delivered very robust EBITDA growth. In Brazil, Raizen quickly adjusted its supply and sales strategy to ensure the sourcing and competitiveness of its clients. In the LATAM operations, the record result in the quarter was driven by stronger demand, operating efficiency gains, and a recovery in profitability at the pump. In addition, Raizen continued to advance in new businesses, such as the incorporation of Shell's lubricant business, and leveraged its renewable agenda, delivering a record E2G production. Let's turn now to slide 5, which shows humus figures. The better EBITDA's performance was due to transported volumes growth in the north operation, which was neutralized by adverse effects of soybean crop setback on the south operation. Humo also captured market share in grain exports from the port of Santos, reflecting competitiveness gains and the ramp-up in volumes in the central network. Costs and expenses lagged inflation in the period, attesting the company's commitment to cost control discipline. Margins improved compared to the first quarter of 2022, but still showed a retraction year on year due to the higher fuel prices that were not fully offset by tariffs increase. In July, therefore an event after the reporting period, Puma announced the divestment of port assets as part of its portfolio management process. Let's turn to slide six, which shows the highlights of Compass. In Compass, Congas and Sugas, our natural gas distribution operations, posted higher volumes in the residential, commercial, and automotive segments. which offset the decline in the industrial segment due to scheduled maintenance stoppages that were already expected and lower activity. Once again, we recorded EBITDA expansion leveraged by higher margins as a result of the adjustment by inflation, as well as the continuous efficiency gains and the consolidation of SUGAR's results. In July, after the end of the quarter, we had another great achievement with the closing of the acquisition of 51% of Comit Gas, the current name of Gaspetro. Considering this, we revised our EBITDA guidance for the year, raising our expectations. CAPEX projections remain unchanged. Also in July, Comit concluded the sale of minority interest held in certain distributors as a result of the exercise of preemptive rights of other shareholders. We remain confident in our journey of building an increasingly free gas market. Moving on to slide 7 shows the result of MOVE. MOVE delivered record high EBITDA in the quarter, greased by higher sales volume and profitability increase. It's worth noting that in June, we consolidated the results from the acquisition of Petrochoice in the United States and of Terreno in Brazil. These moves were in line with the portfolio expansion strategy. MOVE's performance continues to demonstrate the success and excellent execution of its supply and operational strategies. Turning to slide 8, you can see the consolidated results of COSAN. At Cozum Investimentos, the highest contribution to EBITDA came from Hadar, which in this quarter was occasionally leveraged by the market-to-market adjustment for the price appreciation of its agricultural properties. At Cozum Corporate, G&A expenses fell. But we had a gain when compared to the second quarter 2021 due to the exclusion of ECMS tax from the calculation base of fiscal fin taxes on imports for lubricants operations from that period. We posted record high pro forma adjusted EBITDA driven by the excellent operational performance of all companies in the portfolio led by high easing. The adjusted net income was affected by the additional non-cash financial expenses at Kazan Corporate and the higher debt costs at all companies in the group, following the cumulative increase in interest rates. Regarding Kazan's consolidation investments, we continued with our usual capital disciplines. We had a capex increase compared to the prior period, which is mainly explained by raising with the incorporation of BioSav and construction of a new E2G plant, which offsets the lower capex at Humu, already forecasted by the guidance. Let's go to slide number nine, where we present the group's financial highlights. We continue to carry out our usual liability management actions in the parkers. The increase in gross debt is expanded by the new debt issuance at Raisin, by the funding transaction at Booth for the Petrochoices acquisition, and by the new debentures issued at Cousin Corporate, as well as by the effect of exchange variation due to the weaker Brazilian real in relation to the U.S. dollar. The free cash flow to equity can be explained mostly by seasonal effects on Haizen's working capital and by greater investments that were partially offset by the higher operational cash generation at the other businesses. Leverage ratio fell to 2.4 times within the ideal range for the group and reflecting the significant EBITDA growth in the last 12 months. Although it's not related to the quarter, I want to highlight that as part of our capital management process, we redeemed all of the 2023 bonds at the beginning of this month. Before closing, I want to go over some recent developments in our EESG agenda, which are advancing every day. Let's please turn to slide number 10. In May, we re-elected the members of our Strategy and Sustainability Committee, which is chaired by a woman independent member. We also published the sustainability reports of Rumo, Move, and Raizen, reporting achievements such as Rumo's inclusion in the Portfolio of 2022 Corporate Sustainability Index of the B3, MOVE becoming a signatory of the UN Global Compact, and Haizen figuring on the A-list of this CDP. In June, Congas and Haizen were recognized by the Exame Guide Best in ESG 2022. Congas was recognized for its actions on valuing people, increasing its consumption of clean energy, and expanding its infrastructures. And Raizen was featured for promoting the decarbonization of various sectors in Brazil and the world. Lastly, Cozum was once again selected for the FTSE for Good portfolio, an important international sustainability index. That concludes my presentation, and we can now move on to the Q&A session. Thank you very much.

Thank you. We will now start the Q&A session. Live questions can be asked by clicking on the raise hand button. We request that participants limit their questions to two. To send your question by text, please click on the Q&A icon, also available at the bottom of the screen. Participants connected by phone, please press star nine and star six to unmute yourself. Questions in English will only be received by text. Our first question comes from Ms. Isabella Simonato from Bank of America. Good morning, Levin. Good morning, Louise. Can you hear me? Yes. Hi. Good morning. Great. Thank you. Good morning. My question is about the company's cash. As Living Mansard, there was an increase in financial expenses due to interest rates, and there were some derivative issues. And at the same time, I think there are prospects for results improving this year compared to last year based on the guidance. of the companies and their performance so far. So, could you talk a little bit about the cash equation for the year? I know you're restricting your allocation given the increase in interest rates, but how about dividends, buybacks, and financial expenses in this equation for 2022? Hi, Isa. Good morning, and thanks for your question. I'll start by answering, and Louise can help me out. We have lots of options to use our cash, as you said yourself. We have buybacks. We also have our usual commitments, G&A. We also have an installment of Radar's payments, which is $300 million. in November, and there are other options in other businesses as well. And we can also prepay some debt. You saw that as a subsequent effect, we bought back the bond 23 ahead of time. So there are many, many options for us to use our cash. As we said in the previous call, this is a conservative year in terms of cash consumption. So that's what we're doing. corporatively speaking, we consider that we have to have a minimum cash level and we use what's left over to do everything I mentioned. And then we do the math of what's in our portfolio, how we can use cash, and then we decide on what we would prefer to do. So as a subsequent effect, we'll be paying for the bond 23. We also can have an open share buyback program, including 110 million shares. We've bought back 80 million already. So there's still some room for use if there are any interesting opportunities when the time is right. And there are also some potential opportunities where we may use our cash. But there's nothing specific in addition to payment, Radar's installment. That's 300 million November this year. And in the second quarter, as we disclosed, there was some additional cash consumption at Raisin, but that's due to the period as was explained during Raisin's call. There was greater sales to destination, higher sugar inventories, and better payment terms for suppliers. So financial costs, market opportunities and better profitability. But when you look at the end of the fiscal year and the end of the crop year for raisin, whatever was habitat turning into cash is being maintained in line with Compass's guidance as well. And I didn't talk about dividends. We've paid out $800 million in dividends this year and there is no plan to pay out any new dividends this year in 2022. All right, Isa, did we answer your questions? Yes, sorry, I forgot to unmute myself. Yeah, that's very clear. May I ask a follow-up question? Following the same rationale, we're talking about numbers that won't deleverage the controlling company that much. So there's no great deleveraging going on. Are you considering reducing your share in some things or going in the opposite direction of what you've been doing the last few years to offset that? Or is that not part of the debates you've been having? No, no. We're not discussing that. We've just done a few important things at Move and Compass. That was also a subsequent effect to the acquisition of gas petrol assets and turning that into Comet. We're very happy with our portfolio position and everything we've been doing. These are things that have been coming a long time. You know, we've been talking about it internally, acquiring PetroChoice, everything we've done in gas, preparing to expand Rumo's north network, the divestment we carried out at Rumo that will start as soon as Caddy approves that in the Port of Santos warehouse. So we're very comfortable with our current levels. As we know, CapEx has been adjusted more conservatively at the companies, but our main strategic goal initiatives that have value over time are continued very, very steady. And as for deleveraging, as we said, we're not deleveraging, but our leverage piggybacks on everything we did last year, especially Rumo, which had a poor second half of the year. With the improvements we've seen, as you can see, our results over the last 12 months, and naturally, there should be some subsequent deleveraging. Fantastic, thank you. Our next question comes from Tiago Duarte from BTG Pactual. Hello, good morning. Louise, good morning. Livin, good morning, everyone. So a couple of questions, please. First, at radar, I just want to try and understand things a little bit better. Radar's EBITDA includes two components, right? So you've accrued your land portfolio figures and your lease receivables, right? Could you break down those two figures, please? Because they're very different in nature. So it would be interesting to understand them independently considering the EBITDA for this quarter and the following quarters. And my second question is, you've already announced the subsequent result of the shareholders preemptive right in the distribution companies at Comet. So Levin, you mentioned that there's still an installment to be paid by radar. So in addition to the $726 billion of the shares that already have an MOU either signed or to be signed, could you mention what is expected additionally? How much more will Compass receive once Comet's portfolio has been equalized? So those are my two questions. Thank you. Thanks, Tiago. So very simple. At Raider, we have a result recurrence of at least between 40 and 50 million per quarter. And so the difference this quarter is considerable in terms of land appreciation. As for Compass, our estimates are that once we've made the investments of the 12 listed ones, the total will be 900 million, which will be raised by those sales. Fantastic. That's very clear. Thanks, Luis. No worries. Next question comes from Vicente Neto from Bradesco BBI. Thank you, Luis. Thank you, Ana. Thank you, Levine. I also have a couple of questions. Could you talk a little bit about your strategy in terms of gas distribution across Brazil? What is your order of priority, which states within Comet will you be prioritizing for development? Is there any regulatory work to be carried out? We're also coming closer to a new tariff review round by Congas. Are you already talking to the regulatory agency about that? So you have a lot on your plate as usual. Could you talk a little bit about your strategy moving forward? And secondly, how do you see, generally speaking, The drop in fuel prices, again, for the distribution segment, obviously considering quality, parity. Do you think that's a good thing, a positive thing? And cheaper fuel prices will also reduce pressure on margin and will also release some working capital, will impact demand, but parity is coming back. So maybe there will be some competition with imported products. Could you give us some color on the pros and cons? That would be great. Thank you. Thanks. Thank you for the questions. I'll start with Compass. Obviously, our priority right now is Sao Paulo because it's disproportionately stronger. We have Fongas and we'll continue to focus on that. We incorporated full gas, and we'll be looking after the portfolio, obviously. We have distribution companies where we haven't divested yet. So they are our responsibility. And there are still some processes to go through. So as soon as we can disclose the portfolio to you, which ones we'll be keeping, we will. So I think it's important to understand that since the beginning, we went from 19 to 17. Precisely because we want to keep our focus, and we will continue to keep our focus. Obviously, Sao Paulo, because of its relevance in terms of portfolio, will have our main focus. But we're very happy about going into other companies. We have some really good people. There are fantastic opportunities to be shared and achieved. We have know-how sharing from Congas, market approach, construction methods, marketing. agenda, partnerships with construction, civil construction companies with fantastic know-how which has a great impact on the residential market. So there are lots of opportunities and in a few weeks we'll be with the new companies and we've been in SOGAS for over six months and we reiterate that our thesis will work and now with full focus on execution. You said we have a lot on our plate. That is true, but You know, all the M&A and the need to build that, to construct that, we are now at that stage. We do have the divestment tail, but we have a fantastic team, fully focused. We're concluding the TRSP in Santos, very important. First quarter of next year, we'll conclude construction over the next few months and then execution in distributions. which will bring about a lot of transformation ability in the States. We will remain, and new players that will come in looking forward. So that's it about Compass. As for fuel, well, you know, it's a volatile world right now, and I cannot affirm that this drop trend will continue. There are so many geopolitical variables, and There may be an increase in demand coming from China after full lockdown, although despite the market signals. But, you know, China might come back very quickly. And there's the war, which is still going on. The winter is coming. So before the winter, there may be a pickup. Diesel is very short still all over the world. And we believe that Petrobras will continue to make adjustments though that parity remains. You have very valid points. On the one hand, we have price reduction that helps consumption, reduces pressure on working capital, especially in the resale chain links. But on the other hand, we're still not convinced that this is a structural price drop scenario. There's still a lot of volatility to come. And Raisin has also stood out in in terms of being able to deal with volatility, working on supply, and making sure that our resellers and clients who have contracts with us get what they need so that we can keep our competitiveness in the market. Thank you, Luis. Our next question comes from Luis Carvalho from UBS. Hi, Luis. Hi, Anna. Hi, Levine. Thanks for taking my question. Louise, still on compass stroke comets, looking at what you mentioned, you know, that was quite a relevant acquisition in Rio Grande do Sul with Solgas, Gas Brasiliano, an important asset. Would it make sense, considering recent events, considering the preemptive rights of states, would it make sense to consider a spinoff with assets in a specific region like the north or the northeast and to focus in the center-south region? Could that be the objective? And also on capital allocation, there is a debate. You know, there have been some news that Ryazan is taking part or looking at BP's assets more closely. So... From the holding side, how do you see that capital allocation? I know that's part of the company's decision-making process, but I would like to hear from you how you see some additional movement in the sugar and ethanol business. And also, if you could comment, a few quarters ago, in our view, you did the right thing. You know, interest rates have gone up and you decided to talk a few things, you canceled that deal you had with Porto Seguro, and basically you were trying to protect the company's cash. So leverage is still above two times, and as Isa said, we shouldn't be seeing any quick deleveraging. So how do you see the interest rate scenario vis-a-vis the company's leveraging level looking forward. Thank you. Thank you, Louise. Yes, you have credit with us. You're allowed three questions. Thank you. You said two questions, but one of them included two questions. Anyway, compass. We will be concentrating, but I can't tell you yet because we're still concluding negotiations. actually preemptive rights and the whole process. But at the end of it, we'll have the number of distributors we have disclosed to you. Seven are out. Gas Brasiliano belongs to Comet 100%, and now with Compass Share and 51%. Then we'll have Gas Brasiliano and Sogas. But at the end, our geographical position will completely make sense, in our opinion, in terms of effort, potential growth, and our ability to generate results. So nothing's changed since we spoke last time to today, but there's a ritual to be followed, which is part of the process. As for the investment, as I said to Tiago, it's about 900 million reais to be raised, and we will be deleveraging compass's balance sheet, and as a consequence, Cozum's balance sheet. In terms of sugar and ethanol, we talked, we heard a lot about that during Remo's call on Friday. We'll be filling the gap with raisin. We have a BP bungie inside raisin, and we're working hard to deliver on that. Obviously, in whatever segment we are, we are affected, so it's our obligation to look at it. But we are still focusing on our priority, which are people, capital allocation, and delivering on our ability to execute. And all the great results we've been getting with first cut, second cut sugar cane, there's still some things to be corrected with the older sugar cane, but we should get to 90 to 100 million tons. And The third question concerning capital discipline and interest rates and conservative position, we will continue to do the same. Apparently, everything points to the fact that interest rates will no longer go up, but considering inflation, cost pressure, and global volatility, that's still happening. So we will continue to be conservative. And first question about deal averaging, there's not a lot of room for that. Let's remember that there is seasonality in the second half of the year, and our leveraging is at 2.4, but as Levin said, we do have results coming in. We have stronger prospects for the second half, so we will continue with our guidance up to 2.5, and maybe reducing that in the next quarter. We feel comfortable with that. That's where we want to operate, as you see. Results are still strong and prospects for second half of the year are no different. But we will continue to be conservative given the global scenario and also the scenario in Brazil. Great. That's very clear. Thanks. During the next call, I'll ask one question, okay? Thanks, Louise. Next question is from Bruno Montanari from Morgan Stanley. Good morning, everyone. Thanks for taking my questions. The first question is about the TRFP construction. Could you give us an update on that? How did it go during this quarter? And considering 2023, we know the size of each company within the holding company, each one has its own relevance, but which part of the business is more sensitive Next year, which one will the holding be looking more closely to? So TRSP, on time, on budget, addressing satisfactorily. Obviously there are always engineering challenges, but nothing that will compromise our objective to commission it for the first half of next year. Everything's on track and as expected. As for our focus, well, it's always important to reiterate that. Each company has its own management team focusing on its specific priorities. So the holding company doesn't need to follow each company's results so closely. If everybody is responsible for their own results. They all have what they need to make results happen. So we will continue to monitor things closely and to provide whatever support is needed or required and wherever we can add more value. They're all achieving great results, moves international expansion continues to be the priority, incorporating the distribution companies, divestment, delivering e2g at rising and consolidating our business and marketing and services and expanding rumors north network and consolidating our market share gains and operating gains in the central network and starting discussions on renewing south network so those are all important topics topics and there's a great opportunity at goes on investment there's a carbon opportunity we think there's a great opportunity to create carbon credit at radar. So you'll be hearing more about that as things develop and to consolidate the final studies and divestments at the St. Louis port. So that's our agenda. We're executing on it and they all generate considerable value for the company, all driven by people. Our main challenge is in terms of growth right now, is to make sure we have high-quality resources, high-performing teams in all the businesses we have been building. For each of these new businesses, we need new talent, often new skills. We have the CRSTC coming in as a new challenge for us. It requires qualified skills. And this also moves international expansion. We're always looking for synergies in our portfolio, especially in terms of acquiring resources and material. Groups, companies have been working together to tackle cost increases and to rationalize everything in terms of investment and controlling the capex and investments we're making. Okay, that's great. Thank you, Lucy. Thanks. The next question is from Gabrielle Barra from Citi. Hi, Louise. Hi, Living. Hi, Anna. I'll try to focus on Compass because we've heard a lot about the other businesses during their calls. There are two main points. I'd like to discuss with you about Compass, please. The first one is, considering the IPO, I may be wrong, but we have gas markets, and the free market is the cherry on the cake in this new gas market segment. So when we looked at companies' prospects at the time with the approval of gas, saw that the market moved forward, but not as much. as we would have expected for this new gas market and probably mainly due to regulations. So my first question is, how have you been dealing with the government and regulatory agencies about state regulations for free consumers in this context of the new gas market? And as a follow-up question, I don't know if you've touched on this, I think it's interesting. We heard some recent news that you might be near to update us on how things are going. How do things look for Compass right now? And if I may ask another question, sorry, in terms of the TRFSD, do you see any opportunity to have a similar project to that in other places in Brazil? Because there isn't a gas undersupply, potentially, in Brazil. And I think LNG would be key for that in Brazil. My question is, would it be possible to consider other TRSBs in other places in Brazil, perhaps in places where you have gas distribution. I'll start by the last one because I think it will be helpful when we talk about the other items. So in our opinion, Brazil has significant reserves to increase gas supply in Brazil. The pre-salt, you know, the level of rejection is quite high obviously, Brazil's challenges to create demand. So that is the thesis Compass has always based itself on. And that's why we focus on distribution and gas sales, which obviously has its challenges. So 60% of the market, the gas market in Brazil, is already regulated for free consumers. So 60% of the volume could be free consumers. clients if everyone were to migrate to that mode. So Compass is making a huge effort, as we did in Kongas' region, but now we'll be replicating the same thing in the distribution companies we're working with so that clients can, if they so wish, migrate to the free market. It's not a simple thing. There are challenges. When you change, you do take on new risks, but there are also benefits. That is the direction, and that encompasses advocacy with its clients, with the regulatory agency, and other stakeholders. Any consumer who wishes to migrate to the free market should be able to do so and to buy its gas directly from producers. Brazil has a great deal of gas, but it needs to migrate to the coast, so we need infrastructure. Some of it is being concluded right now, but some of it is being designed and should be concluded in the near future. Hopefully that will take off. And especially now that there's this geopolitical change in the world, there's an opportunity for the national industrial sector to expand its capacity and fill that redistribution gap. Near shoring, friendly shoring, that's happening all over the world given the geopolitical issues, war, China versus the States, Taiwan. So to our mind, there are plenty of opportunities for gas to flow from national production in the pre-salt region, which is abundant. And CRSP, to your other question, plays a key role. It's at the core of Brazil's consumption in the southeast. In our opinion, this is a structural investment for Brazil because it provides flexibility and optionality. We talk a lot about that. So any new terminal along the coast will be a matter of optionality and opportunity, and it doesn't have to be done by compiles. It could be a partnership with some of the businesses that have been looking into those projects. But I'd like to reiterate the fact that Brazil has plenty of gas that can be brought to land and can be used to leverage the growth of the gas market in Brazil. And Compass will always be close by, whether it be through direct investments, investments with partners, or sales agreements, so that this can be feasible, so that there are more optionalities and more supply choices, which are essential to grow that market in Brazil. and the connection with the free market, it's also an effort on Compass side. Things are moving forward as the market develops. And the last point about going up the hill, these issues are being discussed by Sao Paulo state regulators, ANP, that's a regulatory matter. So we're waiting for the decision And whatever comes to pass, we'll continue to do our homework following whatever has been approved, whatever has been established within the regulatory framework and continuing with investment and construction work. But that's something that is up to the decision of the regulatory agencies, SS and ANP. Great. Great. That's great. Thank you. Our next question comes from Mr. Regis Cardozo from Credit Suisse. Good morning, Luis. Hello, Levin. Can you hear me? Yes. Just a couple of follow-up questions, please. You mentioned that you expected $900 million to come in from Comet's divestments. If you could clarify, please, those 900 million, is that COSAN's stake or is that the overall amount for Comet? And is that before or after any income tax from the sale of those assets and the capital? And another follow-up question is about corporate debt. know that your intent is not to deleverage the consolidated company, but considering where that debt is, it leads to fiscal inefficiencies at the holding level. So since the debt is bigger and interest rates are higher, the size of the opportunity or the tax shield that you could potentially benefit from is harder. because your chance to make the most of the whole tax shield at the holding level is smaller. Are you considering reducing the debt at the holding level or perhaps redistributing it across the companies? Thank you. Thanks. Your first question, Regis, the 900 is the overall amount. That's what we'll be getting, cash. for the payment of the share we're selling and the two distribution companies which already have a signed sale agreement considering prior conditions, preemptive rights, and others. But that is the total amount we'll be receiving. Levin, would you like to take the second one? Yes, well, we need to separate the company's debt and the holding debt. The holding's debt comes from investments in new businesses. Our idea is to have both things quite separate. And the debt we're taking on, for instance, the debentures went to liability management. And if we require, we'll do it for new investments to be made, not at the holding level, but at the company's level. I answered that question during Cozum Day. You, as analysts, could be looking at the fact that we're making the most 100% of our tax losses in the last five or six years. And our fiscal, our tax department is extremely skillful. Selling assets, we shape our loss so that we can make the most of it. And we're doing the same analysis for the next few years. So in your models, it's important that you consider The way we've been using that, whenever we take on new debt, that's what we do. So from making the most of it and tax inefficiency, that is not the case. Obviously, if we had the opportunity to do it, we would do it. But it's not that simple giving company structures and from a net position on the investor side, there is no inefficiency. Obviously, the future will depend on our accumulated tax losses and other operations that we can deploy to make sure we continue that way. But we're consistently paying attention to that. We won't leave any money on the table if there's any chance to generate benefit to the companies and the shareholders. In terms of acquiring that at our invested companies and the leverage, the holding, I mean, that's just business as usual. That's great. Very clear. Thank you, Louise. May I ask a quick follow-up question? Yeah, sure. As always, there's a lot going on in the company's portfolio, but there are some catalyst events coming forward, it seems to me. Could you help me understand your timeline? Okay. Considering Compass, you have the TRF SP will go into operation and are you expecting to consolidate your controlling share in other companies or will you be having an investor day to talk a little bit more about Compass's plans or was Cozum day it? If I think of those are investments. You have the mining JV. What would the timeline be considering new milestones? Rumo and Raisin, we heard enough about that during their own earnings release calls. I don't know if I was clear. I'd like to hear about milestones that investors can expect in terms of catalyst events at other assets in the group's portfolio. Yeah, it's clear. Well, Compass is focusing completely on delivering the TRFSB and the new distribution companies and how we're going to do it, the culture together with Mitsui, our partner. So backstage, there has been a lot of work into building Comet and we were very happy to start day one with an established company, which is the result of all the prepping we did Obviously, Compass, when the time is right, will be talking to the market, as it always does on Cozanne Day. And if we need to disclose any additional information, we'll do that. The team will be doing that. But we have been able to do everything we wanted to, all the milestones we wanted, renewing our contract with Congas. speeded up the construction of TRFSP, turned gas petrol into Comet. That's what the group had been focusing on, and now we'll be focusing on an even more diligent execution. The only thing we're missing is the divestment, but that is an ongoing process. We're going to be consuming some resources, but we're taking care of that too. As for Pozan investments, especially mining, well, next year, We'll be confirming the reserves, our partners, reserves, our asset. It's the port. It's 100% under our control. And we're focusing on developing executive projects for the port to get it ready for when the time is right. So the port is a very important asset. We're very happy with the progress the team has been making there. And everything to do with planning the port capacity because the port meets all the requirements we could possibly want in terms of capacity, future capacity, and considering the different construction phases, expansion phases, the births, and that's what we're focusing on. Developing the executive project, that's our side and our partner is focusing on the pilot plant, which has been performing extremely well. So the negotiations that are ongoing in terms of future logistics, transportation, and the confirmation of mining resources according to the schedule. Thanks, Louise. That's very clear. Next question comes from Lucas Herrera from J.P. Morgan. Hi, everyone. Thanks. Louise. as you said, things are still quite volatile, right? My question is about capital allocation. Do you think CapEx at the subsidiary you'd slow down investments and looking at other opportunities, or do you think there's still value in buyback? The Cozen's shares or the group's shares. Also, could you talk a little bit about how the IPO of maybe Compass and MOVE But does that come in terms of your priorities? Well, even with a more conservative position, you know, since we spoke to you last quarter, last year, we haven't stopped doing anything that is important for the companies. There are opportunities for growth that generate value. We're doing all that. We're expanding the North Network. phases. We have acquired PetroChoice, and we've turned gas petrol into Comet, TRFSP. We've announced three new E2G plants, a new biogas plant. So all the projects that generate value in our pipeline will be implemented. They are being implemented. It's important to mention that. So there won't be any change in that sense if the interest rate curve slows down We won't change our discipline. All of these plans are based on market positions, contracts, or demands that allow them to be taking place and to be giving return on the investments that we expected. That's not going to change. Things will continue along those lines, and so we don't see any change taking place in the short term. As for opportunities, you've mentioned them. You know, as Livin said, we have an open buyback program and both at the holding level and at the subsidiary level and we will be exercising it whenever there's value generation, whenever it makes sense to do so. So we're very happy with the different opportunities in each of the portfolio because then Investment, Arising, Move, Rumo, and Compass. Compass and Move will always be looking at the opportunity of an IPO when the time is right, when investments are mature. Of course, there has to be a market window. We always try to find the right time to do it. You know how we operate. That's the same thing we've been doing for the past 15 years. So we try to make the most of the best market windows. And in order to do that, we have to be ready. So in your assumption, you can always consider that we are ready to do what's right when there is an opportunity in the market, when it generates value to shareholders, and whenever there's an opportunity to grow our companies. Thank you, Louise. Thank you. This concludes the question and answer session. I will now turn the floor to Mr. Luis Enrique for his closing remarks. Thank you, everyone, for joining us. Thank you for your questions. It's always wonderful to hear what you have to say, to hear your questions, because it's food for thought. It makes us think about new opportunities that we can take the most of. As you can see, it's been a great quarter for all companies, and quarter results, most of all, are important to reiterate our conviction about what we're doing. And many structural things have been concluded. So we are keeping our agenda for growth, consolidation, and execution. And that's what drives us forward. Continue to be bullish during the world's geopolitical changes. Our portfolio does have the comparative and competitive advantages because we're in Brazil. And not only in our current portfolio, but portfolios we're bringing in as well. And we do have the ability to execute on those projects on time, on budget, with more efficiency, less cost, and ensuring our penetration in various segments. You saw that we have reiterated the guidances for the rest of the year. It's not an easy year. It's quite volatile. We're going into elections now. As of tomorrow, campaigns will be taking place. There will be volatility, but we will be monitoring things closely to make sure that we don't only look at opportunities, manage risks, but also continue with our purpose to generate opportunities and driving an energy transition that will continue to accelerate the decarbonization of the companies in our portfolios, our clients, and our partners. Thank you so much for the last few months for being there with us. And we'll definitely have the 2022, we promise, to the market with some positive surprises to come. Thanks and have a great day. Thank you. This concludes COSAN's conference call. Thank you and have a nice day.