Joint venture between Cosan and Shell already in fight for vice-leadership
Valor Econômico
The joint venture between Shell and Cosan, which creates a company with earnings near R$ 50 billion (US$ 27.8 billion), is ready to fight for the vice-leadership in the fuel market of the country. The data obtained by Valor show the two companies together had 19.1% of market share in all fuel markets (diesel, gasoline, ethanol, aviation and LNG) in April, staying in second place, while the Ultra group (Ipiranga and Texaco) had 18.9% and the Petrobras BR Distribuidora, absolute leader, had 36.7%. In February, when the joint venture was announced, the two had 18.4% of market share, Ultra had 18.7% and Br, 38%.
Should we consider only the markets of gasoline, ethanol and diesel, Cosan, under the Esso brand, and the Shell, together, had 18.2% in April, compared to 17.4% in February. The Ultra group comes in second place, with 20.8%, compared to 20.7% in February. BR continues in the leadership, with 33.6%. The two companies had growth in participation in the segments of ethanol and diesel, going from 16.5% to 19.2%, and 15.9% to 17.1%, respectively. As regards gasoline, they fell from 20% to 19.3% in the same period. The progress of the two companies, even though small, already demonstrates their aggressive profile in the market. This year, the announcement of the joint venture between Shell and Cosan was considered a daring step in the fuel sector and in the production of ethanol, taking into account the multinational only had researches in the second generation of fuels.
Last week, Cosan announced it registered net profits of R$ 308.7 million (US$ 171.5 million) in the fourth quarter of the 2009/10 harvest, reverting the loss of R$ 40.2 million (US$ 22.3 million) compared to the same period of last year. In the period, the company presented record EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of R$ 575.9 million (US$ 320 million), and net income of R$ 4.394 billion (US$ 2.4 billion), an increase of 87% compared to the same period of the previous year. In relation to the YTD, Cosan closed with net profits of R$ 986.5 million (US$ 548.1 million), compared to a net loss of R$ 473.8 million (US$ 263.2 million). The net earnings in the 12 months remained at R$ 15.3 billion (US$ 8.5 billion), 144.6% above the previous financial year, R$ 6.3 billion (US$ 3.2 billion). Cosan Combustíveis e Lubrificantes, the fuel and lubricant distribution business of the Esso and Móbil chain was the company that contributed the most for such result, with earnings of R$ 10.1 billion (US$ 5.6 billion) in the period, that is, 66.2% of the total.
This year, the company intends to invest between R$ 2 billion (US$ 1.1 billion) and R$ 2.4 billion (US$ 1.3 billion), which includes fuels, logistics, sugar and alcohol, as well as other segments in which the company operates. Cosan stared in the fuel sector in 2008, when it announced the purchase of Esso, which belonged to ExxonMobil. That segment began getting competitive again after 2000, when the Ultra group acquired Ipiranga, speeding up the movement of concentration.