EARNINGS RELEASE 2016

Transcription

1 EARNINGS RELEASE 2016 São Paulo, February 16, 2017 RUMO S/A (BM&FBovespa: RUMO3) ( Rumo ) and COSAN LOGÍSTICA S.A. (BM&FBovespa: RLOG3) ( Cosan Logística ) announce today its results for the fourth quarter of 2016 () and the year The results are consolidated in accordance with the accounting criteria adopted in Brazil and the International Financial Reporting Standards (IFRS). Rumo Highlights in and 2016 EBITDA reached R$348 million in, down 26% from 4Q15. In 2016, however, EBITDA grew 6% to R$2.0 billion, due to initiatives to mitigate lower transportation volumes. Total volume transported in reached 7.5 billion RTK, and was impacted by the drop in demand for grain transportation caused by the shortfall in the second corn crop. Total volume transported in the year was 40.3 billion RTK, 10% lower than in A total of 2.6 million tons were loaded at Rumo's terminals at the Port of Santos, in, 26% lower than in 4Q15, due to the postponement of sugar shipments during the quarter and the strong comparison basis in the previous year due to loading of grains. In 2016, loaded volume reached 13 million tons, up 12% from Capex totaled R$480 million in and was focused on capacity expansion initiatives. In 2016, Capex totaled R$1.9 billion, in line with the projections for the year. Summmary of Financial Information - Rumo Consolidated Q15 ¹ Combined² 1, , % Net Revenue 5, , % % Gross Profit 1, , % 13.4% 25.2% p.p. Gross Margin (%) 24.8% 29.2% -4.4 p.p. (85.4) (82.6) 3.5% Selling Expenses, General and Administrative Expenses (344.4) (360.7) -4.5% % Other Operating Revenues (Expenses) and Equity Pickup % % Operational Profit , % % Depreciation and Amortization 1, % % EBITDA 2, , % 34.3% 37.3% -3.0 p.p. EBITDA Margin (%) 40.5% 39.9% 0.5 p.p. (319.0) (162.7) 96.0% Net profit (loss) (733.5) (469.5) 56.2% -45.0% -13.0% p.p. Margin (%) -14.6% -9.8% -4.9 p.p % Capex 1, , % Note 1: The pro forma results refer to the results of Rumo S.A. plus the results of Rumo Logística S.A., the company that resulted from the reverse merger carried out on December 31, For more details, see page 6 of this report. Note 2: The combined results mentioned in this report refer to the sum of Rumo and ALL consolidated with the appropriate eliminations of transactions with related parties, not necessarily fulfilling all the requirements of OCPC 06 - Presentation of Pro Forma Financial Information. Conference Call Investor Relations Portuguese 2:00 p.m. (Brasília time) February 17, 2017 (Friday) Phone: Code: RUMO ir@rumolog.com Phones: Website: ri.rumolog.com English 3:00 p.m. (Brasília time) February 17, 2017 (Friday) Phone (BR): Phone (U.S.): Code: RUMO 1 of 21

2 and Letter from the CEO We can say that 2016 will be remembered as a challenging year in many aspects. We went through a moment of political and economic turbulence that brought volatility to the markets. In our business, we faced a significant crop shortfall and, consequently, a sharp decline in exports, resulting in a decrease in volume transported, also impacting other sectors of the economy. We also faced a credit constrain period in the Brazilian market, adding obstacles to the execution of our investment plan. Despite this scenario, we registered important achievements at Rumo in the second year of our turnaround process. We overcome strategic and operational challenges through a railroad culture and greater engagement from our employees. We focused our efforts on variables under our control, providing better quality services, controlling costs and maximizing the use of our assets. We implemented the Zero Accident Program and invested in innovation and technology pursuing higher operating efficiency. We reached new markets and made investments in accordance with our business plan. Initiated a long-term relationship with our clients, establishing greater commitment on both sides. Our shareholders reinforced their confidence in our project through a capitalization of R$2.6 billion, which strengthened our balance sheet and provided greater liquidity to our operations. We also reprofiled R$2.9 billion in debt with our creditors and, in the beginning of 2017 we inaugurated our access to the international debt market through a bond issuance of US$ 750 (seven hundred and fifty) million. We also advanced in the renewing process of Paulista Network concession, which began with the opening of the public hearing by the regulatory agency, which is one of the main stages for the concession agreement extension. This asset is strategic, since this is part of the main soybean and corn export corridor in Brazil. We remain convinced that growth resumption will depend on investments in infrastructure, efficiency and productivity. In this context, we remain committed to the logistics infrastructure development in Brazil. The year 2017 is an opportunity for better results due to market forecast and investments ripeness. All our efforts remain focused on value creation to our shareholders. Thank you very much. Julio Fontana Neto CEO of Rumo 2 of 21

3 and Executive Summary and 2016 Rumo s consolidated result in 2016 grew in comparison with 2015, despite the drop in grain export volume. was particularly affected, with net revenue decreasing by 19%. According to Agroconsult, consolidated data on the 2015/2016 crop pointed to a decrease of approximately 17% in total corn production. The effect of this decrease was harder on export volumes, since domestic consumption remained unchanged, leading to lower demand for railroad transportation in export corridors. Total volume transported in 2016 reached 40.3 billion RTK, down 10% from The decline in the quarter was even higher (-39%) due to low export volumes. The market scenario in the year was quite challenging, especially in the company s two main cargo types: soybean and corn. Soybean had an unusual shipment dynamics, with concentration in 1Q16, occupying all Rumo s available capacity and with additional transportation demand that was not served. Corn registered a shortfall of 18% in second-crop production, which, together with the higher demand in the domestic market, led to a reduction of approximately 60% (Agroconsult) in exports in the second half of Even though the volume projected in the business plan for the year was not reached, the adoption of a new commercial strategy with long-term agreements (three years) with our main grain clients was key to secure revenue and market share gains even in a scenario of declining truck freight prices, as shown in the charts below. Source: IMEA, Agência Marítima and Rumo System In 2016, EBITDA totaled R$2.0 billion (+6%) due to the initiatives to offset lower transport volumes. In the quarter, EBITDA decreased 26% to R$348.1 million. Efforts to reduce costs (both fixed and variable), increase operating efficiency, and higher sugar transportation using the idle capacity of our assets were key to partially compensate the decline in transportation demand caused by crop shortfall. In the year, there was recognition of R$258.4 million from take-or-pay clauses on commercial contracts. In 2016, Rumo registered a loss of R$733.5 million and leverage, as measured by broad net debt/ebitda, reached 4.4 times. Despite EBITDA growth, the higher financial expenses, as well as higher depreciation and amortization, led to a loss increase of R$264 million in Leverage increased due to the decline in EBITDA over the last 12 months on account of the weaker performance in compared to 4Q15. The outlook for the 2016/2017 grain crop is quite positive. Updated market estimates point to a total increase of approximately 12% and 32%, respectively, in Brazil s soybean and corn crops. Considering only the state of Mato Grosso, the scenario is more promising, with growth of about 15% and 42% for soybean and corn crops, respectively. 3 of 21

4 and 2016 Forecast for soybean production in Brazil (Million tons) Forecast for corn production in Brazil (Million tons) Source: Agroconsult All the comments in this report refer to the consolidated results of Rumo. However, the and 2016 financial information related to Cosan Logística is available in the appendixes. 4 of 21

5 and Consolidated Operating and Financial Indicators Operational and Financial Figures Q15 (Amounts in R$MM) Combined 7,460 12, % Transported Volume (millions RTK) 40,270 44, % 5,551 10, % Agricultural Products 32,613 35, % 1,909 2, % Industrial Products 7,656 8, % % Average Transportation Yield (R$/000 RTK) % 2,593 3, % Volume Loaded (TU '000) 13,114 11, % % Average Loading Yield (R$/TU) % 1, , % Net Operating Revenue 5, , % , % Rail Operations 3, , % % Port Elevation % % Other³ % % Depreciation and Amortization 1, % % EBITDA 2, , % 34.3% 37.3% -3.0 p.p. EBITDA Margin (%) 40.5% 39.9% 0.5p.p. Note 3: Includes revenue from the right of way of other railways, revenue from sugar transportation using other railways or road transportation and revenue from volumes contracted but not executed according to commercial agreements (take or pay). Rumo Consolidated Transported Volume Transported Volume (millions RTK) and Average Railroad Transportation Yield (R$/000 RTK) 4Q15 Operational Figures Combined 7,460 12, % Transported Volume (millions RTK) 40,270 44, % 5,551 10, % Agricultural Products 32,613 35, % % Soybean 11,381 10, % 1, % Soybean meal 4,849 5, % 1,861 7, % Corn 10,215 14, % 1,807 1, % Sugar 5,274 4, % % Fertilizers % % Wheat % - 44 n.a. Rice % 1,909 2, % Industrial Products 7,656 8, % 1,093 1, % Fuels 4,330 4, % % Wood, Pulp and Paper 844 1, % % Containers 1,638 2, % % Construction % n.a. Steel and Mining % % Others % 5 of 21

6 and 2016 Results by Business Unit Business Units The business units (reporting segments) are organized as follows: North Operation Malha Norte, Malha Paulista and Port Operations in Santos South Operation Malha Oeste and Malha Sul Container Operations Container operations including Brado Logística Results by Business Unit North South Containers Operation Operation Operation Consolidated Net Revenue ,014.6 Costs of Services (494.9) (303.2) (80.4) (878.5) Gross Profit (Loss) (55.2) (19.9) Gross Margin(%) 29.9% -22.3% -32.9% 13.4% Selling Expenses, General and Administrative Expenses (62.0) (15.2) (8.2) (85.4) Other Operating Revenues (Expenses) (7.9) Depreciation and Amortization EBITDA (7.6) EBITDA Margin (%) 46.7% 10.6% -12.5% 34.3% Results by Business Unit North South Containers 2016 Operation Operation Operation Consolidated Net Revenue 3, , ,014.6 Costs of Services (2,175.1) (1,272.6) (321.4) (3,769.1) Gross Profit (Loss) 1,476.4 (174.9) (56.0) 1,245.4 Gross Margin(%) 40.4% -15.9% -21.1% 24.8% Selling Expenses, General and Administrative Expenses (237.8) (63.7) (42.9) (344.4) Other Operating Revenues (Expenses) (1.2) (7.1) Depreciation and Amortization ,120.0 EBITDA 1, (30.8) 2,028.6 EBITDA Margin (%) 52.7% 12.1% -11.6% 40.5% Note 4: Depreciation and amortization are allocated as cost of services provided and as general and administrative expenses. On December 19, 2016, the merger of Rumo Logística with Rumo S.A. ( Merger ) was approved. The corporate reorganization was concluded on December 31, 2016 and resulted in the dissolution of Rumo Logística, with Rumo S.A. succeeding to all its assets, rights and obligations, pursuant to Articles 224 to 227 of Federal Law 6,404/76 ( Brazilian Corporation Law ). As part of the corporate reorganization, Rumo S.A. also allocated the assets and liabilities related to port operations to a new direct subsidiary. Rumo S.A. also allocated assets (rail cars and locomotives) to the direct subsidiary ALL Malha Norte. The accounting effects of the corporate reorganization are explained in Note 3.b to the financial statements and the financial position and consolidated operating results of Rumo S.A. for the current period and fiscal years following the reorganization are not necessarily comparable with the information provided in previous years. Due to this process, the financial information in this Earnings Release is pro forma, eliminating any effects of corporate reorganization. Furthermore, the depreciation and amortization amounts for the initial quarters of 2016 are being restated. 6 of 21

7 and 2016 North Operation 4Q15 Operational Figures Combined 4,474 8, % Transported Volume (millions RTK) 26,593 28, % 3,870 7, % Agricultural Products 24,241 25, % n.a. Soybean 7,884 7, % 1, % Soybean meal 4,423 4, % 1,680 6, % Corn 9,280 12, % % Sugar 2,655 1, % % Industrial Products 2,351 2, % % Fuels 2,323 2, % - 43 n.a. Wood, Pulp and Paper % Steel and Mining 1 - n.a % Average Transportation Yield (R$/000 RTK) % 2,593 3, % Volume Loaded (TU '000) 13,114 11, % % Average Loading Yield (R$/TU) % Total volume transported in the North Operations was 4.5 billion RTK in, resulting in 27 billion RTK in The shortfall in the second corn crop and the consequent reduction in demand for transportation was the main reason for the 45.3% decrease in total volume transported in the quarter and 7% in the year. In, transportation of agricultural products decreased 48.3%, reaching 3.9 billion RTK. In the year, total volume transported was 24 billion RTK. Demand for agricultural transportation in was lower due to the sharp shortfall in second corn crop (Agroconsult: -18%), the main product transported in the second half. Also worth noting is the strong comparison basis with 4Q15, due to the record corn crop in that quarter, which resulted in strong demand for corn transportation until the end of the fourth quarter. However, the consolidation of the commercial strategy resulted in a 22% growth in Rumo s market share in transportation of grains to the Port of Santos, which reached 70% in despite the lower average price of truck freight (IMEA: -26%). Sugar transportation grew significantly (+96.2%) from 4Q15, as a result of: (i) the favorable scenario for sugar exports, which lasted until October; (ii) the higher capacity generated by Rumo s investments; and (iii) the use of idle capacity caused by lower corn transported volume. Transportation of industrial products decreased 12.6% in reaching 603 million RTK. Total volume transported in the year was 2 billion RTK. The quarter s result was due to: (i) the decrease in market demand for fuel, also reflecting the shortfall in the second corn crop, which impacts both agricultural machinery consumption and truck transportation; and (ii) the termination, in 2Q16, of an important agreement to transport pulp to the Port of Santos. Port loading volume totaled 2.6 million tons in, down 26.2% from 4Q15. In 2016, loaded volume reached 13 million tons, up 12% from In, the market scenario for sugar exports encouraged exporters to wait for better prices in 2017, postponing shipments. Financial Results Q15 Combined % Net Operating Revenue 3, , % % Transportation 2, , % % Agricultural Products 2, , % % Industrial Products % % Port Elevation % Other Net Revenues % (494.9) (560.0) -11.6% Costs of Services (2,175.1) (1,979.7) 9.9% % Gross (Loss) Profit 1, , % 29.9% 39.9% -0.2p.p. Gross Margin (%) 40.4% 41.3% -0.9 p.p. (62.0) (59.2) 4.7% Selling, General and Administrative Expenses (237.8) (242.4) -1.9% (7.9) 10.8 n.a. Other Operational Revenues (Expenses) and Equity Pickup (1.2) 37.7 n.a % Depreciation and Amortization % % Total EBITDA 1, , % 46.7% 50.6% -0.1 p.p. EBITDA Margin (%) 52.7% 51.0% 1.7 p.p Note 5: Includes revenue from the right of way of other railways, revenue from sugar transportation using other railways or road transportation and revenue from volumes contracted but not executed according to commercial agreements (take or pay). 7 of 21

8 and 2016 Net revenue from North Operation totaled R$706 million in, down 24.2% from 4Q15. In the year, net revenue grew 8.2% from 2015 to reach R$3.7 billion. The revenue decrease in resulted mainly from lower volumes transported and loaded, and was partially offset by the 33.3% growth in other revenue, with the recognition of R$117.9 million from take-or-pay agreements. Average Transportation Yield in, excluding the effects of take-or-pay revenue, grew 12.2% to R$95.0/thousand RTK due to contractual adjustments. Average yield from port loading grew 14.1%, due to the renegotiation of sugar agreements in 2Q16 by which logistics costs and port tariffs were passed on to clients. Cost of services provided totaled R$494.9 million in the quarter, down 11.6% from 4Q15. In 2016, cost of services provided was R$2.2 billion, down 9.9% from the previous year. The cost reduction in the quarter was due to the decrease in variable costs resulting from lower volume transported (-45.3%) and other initiatives to capture operating efficiency. The higher utilization of the Rumo s own fleet to transport sugar instead of contracting trucks and other railroads contributed to the reduction in logistics costs. Fixed costs increased, though below initial projections. Additionally, depreciation and amortization increased in due to higher investments over the last two years, replacing less efficient assets, in accordance with the Business Plan. EBITDA reached R$329.4 million in, down 30.1% from 4Q15. In the year, EBITDA totaled R$1.9 billion. The results were impacted by the sharp decline in agricultural volume for export and were partially offset by cost cutting efforts and the recognition of revenue from take-or-pay agreements, established in commercial agreements. South Operation Operational Figures Q15 Combined 2,630 3, % Transported Volume (millions RTK) 12,038 14, % 1,681 2, % Agricultural Products 8,372 10, % % Soybean 3,497 3, % % Soybean meal % 181 1, % Corn 936 2, % % Sugar 2,619 2, % % Fertilizers % % Wheat % - 44 n.a. Rice % % Industrial Products 3,666 4, % % Fuels 2,007 2, % % Wood, Pulp and Paper % % Construction % n.a. Steel and Mining % % Others % % Average Transportation Yield (R$/000 RTK) % The South Operation transported a total volume of 2.6 billion RTK in, down 22.8% from 4Q15. Total volume transported in the year was 12.0 billion RTK, down 14.5% from The results were impacted by lower agricultural volumes, reflecting the lower demand for transportation of corn for exports, which worsened at the end of The volume of agricultural products fell 33.6% to 1.7 billion RTK in. Total volume transported in the year was 8.4 billion RTK, down 16,9% compared to The reduction in corn volume in the quarter continued to reflect the scenario of weak demand for exports in Paraná. Rumo sought alternatives to mitigate the decrease in agricultural volume, such as additional volumes of soybean meal and fertilizers in the period. In addition, the consolidation of our long-term relationship with sugar clients, led to higher volumes in, partially offsetting the decrease in grain volume. Transportation of industrial products in was 949 million RTK, up 8.3%, mainly due to the investments made. Total volume transported in the year was 3.7 billion RTK. Pulp volume grew 28.3% in, due to the supply made to Klabin s new plant in Ortigueira, Paraná. Fuel volume remained stable when compared to 4Q15, while the decrease in 2016 was 8.4%, mainly due to operating issues in the beginning of the year. 8 of 21

9 and 2016 Financial Results Q15 % Combined % Net Operating Revenue 1, , % % Transportation 1, , % % Agricultural Products % % Industrial Products % Other Net Revenues (303.2) (279.9) 8.3% Costs of Services (1,272.6) (1,042.5) 22.1% (55.2) (29.4) 87.8% Gross (Loss) Profit (174.9) 74.9 n.a % -11.7% 0.9 p.p Gross Margin (%) -15.9% 6.7% p.p. (15.2) (11.8) 28.6% Selling, General and Adm. Expenses (63.7) (63.8) -0.2% % Other Operational Revenues (Expenses) and Equity Pickup (7.1) (1.5) n.a % Depreciation and Amortization % n.a. Total EBITDA % 10.6% 5.0% 1.1 p.p EBITDA Margin (%) 12.1% 22.2% p.p. Note 6: Includes revenue from volumes contracted and not executed according to commercial agreements (take-or-pay). Net revenue from the South Operation amounted to R$248.0 million in, down 1.0% from 4Q15. In 2016, total net revenue was R$1.1 billion, down 1.8% from The decrease in the quarter was due to lower volumes of grains, partially offset by the higher volume of sugar and industrial products transported. Additionally, the higher average yields and revenue of R$30.2 million from take-or-pay agreements boosted net revenue. In, the cost of services provided increased by 8.3% to R$303.2 million. In 2016, total cost was R$1.3 billion. The growth in was mainly due to the increase in depreciation and amortization, resulting from higher investments in the last two years in the Paraná corridor, replacing less efficient assets. The lower volume transported (-22.8%) contributed to the decrease in variable costs, and fixed costs also dropped due to productivity improvements. EBITDA of the South Operation was R$26.2 million in and R$133.4 million in The increase in EBITDA compared to 4Q15 was mainly due to the recognition of take-or-pay amounts, which do not incur the respective variable costs associated with transportation. The results are a combination of EBITDA growth in the Paraná corridor, partially offset by decreases in the Rio Grande do Sul and Malha Oeste corridors. In the annual comparison, EBITDA was 46% lower, mainly due to lower volumes transported in the first half of 2016 as a result of operating issues caused by rainfall and other incidents that affected the main export corridors. Container Operation 4Q15 Operational Figures Combined 14,059 17, % Total Volume (Containers '000) 62,025 77, % % Average Yield (R$ '000/containers) % % Total Volume (millions RTK) 1,638 2, % Volume of containers transported decreased by 21.4% in to 14,059 containers. In 2016, transported volume was 62,025 containers, down 20.2% from Volume in the quarter was mainly impacted by the shortfall in the second corn crop, since the Rumo serves a demand from specific clients for transportation of the commodity in containers. Additionally, the rationalization of non-profitable routes, especially in the Rio Grande do Sul and Mercosur corridors resulted in further decrease in volume. Container Operation has been pursuing operational improvements by reducing its dependency on certain segments and seeking growth in import and domestic market routes. Transportation of products such as sugar, fertilizers, wood, paper and pulp continues to expand, maintaining the strategy of focusing on products with higher added value and better margins. Financial Results Chg. 4Q15 Combined % % Net Operating Revenue % (80.4) (98.2) -18.1% Costs of Services (321.4) (375.7) -14.4% (19.9) (25.5) -21.9% Gross Profit (56.0) (65.0) -13.8% -32.9% -35.1% 2.2 p.p Gross Margin (%) -21.1% -20.9% -0.2p.p. (8.2) (11.5) 28.6% Selling, General and Administrative Expenses (42.9) (54.5) -21.3% % Other Operational Revenues (Expenses) n.a % Depreciation and Amortization % (7.6) (16.1) 53.2% Total EBITDA (30.8) (52.6) 41.6% -12.5% -22.2% -0.4p.p. EBITDA Margin (%) -11.6% -16.9% -0.3p.p. Chg. % 9 of 21

10 and 2016 Note 7: Includes revenue from service units and revenue from volumes contracted and not executed according to commercial agreements (takeor-pay). In the quarter, net revenue fell by 16.7% to R$60.5 million. In the year, total net revenue was R$265.4 million, down 15% from The lower volume of containers handled (-21.4%) in the quarter was partially offset by the increase in average yield (+5.6%) in the period, reflecting the strategy of prioritizing more profitable routes. The cost of services provided totaled R$80.4 million in, down 18.1% in the period. In 2016, cost amounted to R$321.4 million. The cost decrease in reflects the 21.4% decrease in containers handled. EBITDA from the Container Operation was a loss of R$7.6 million in and a loss of R$30.8 million in the year. Despite the negative result, the 53% increase in EBITDA from 4Q15 was mainly due to the rationalization of non-profitable routes and to cost reduction. 4. Other Result Items Breakdown of Costs of Services Provided Consolidated Costs Q15 (Amounts in R$MM) Combined (878.5) (938.1) -6.3% Consolidated Costs (3,769.1) (3,398.0) 10.9% (226.3) (400.1) -43.4% Variable costs (1,207.4) (1,330.7) -9.3% (134.8) (211.9) -36.4% Fuel (686.0) (751.7) -8.7% (32.4) (69.3) -53.3% Own Logistic costs 8 (156.1) (221.6) -29.6% (59.1) (118.8) -50.2% Third Paties freight costs 9 (365.3) (357.4) 2.2% (652.2) (538.0) 21.2% Fixed Costs (2,561.7) (2,067.3) 23.9% (298.0) (213.3) 39.7% Depreciation and Amortization (1,113.5) (821.2) 35.6% (60.2) (67.3) -10.6% Maintenence (224.1) (181.2) 23.7% (118.7) (114.7) 3.5% Payroll Expenses (493.3) (473.5) 4.2% (49.6) (52.1) -4.8% Leasings and Concessions (201.6) (193.1) 4.4% (12.7) (13.6) -7.1% Operational Leasings (63.8) (53.9) 18.4% (51.0) (29.0) 75.6% Third Paties Services (217.0) (94.1) n.a. (62.1) (48.0) 29.5% Other Operational Costs (248.6) (250.3) -0.7% Note 8: Own logistics costs include sand, trackage, terminals and other variable costs Note 9: Third-party freight costs include contracts for road and rail freight with other operators Variable costs totaled R$226.3 million, down 41.6% from 4Q15. In the year, variable costs reached R$1.2 billion. Fuel expenses fell 36.4% in the quarter, due to the 38.5% decrease in transported volume and the efficiency of the new locomotives acquired. These effects were partially offset by the higher share of sugar volumes in the North Operation, which incurs in higher unitary diesel consumption. During the quarter, own logistics costs, which represent transshipment costs in terminals and other activities, also decreased. Moreover, since Rumo transported a higher volume of sugar using its own fleet, expenses with transportation through other railroads or road freight were reduced. Fixed costs totaled R$652.2 million in, up 21.2% from 4Q15, mainly due to higher depreciation and amortization. In the year, fixed costs totaled R$2.6 billion. In the quarter, depreciation and amortization increased 39.7% due to higher investments in the last two years, replacing less efficient assets, in accordance with the Business Plan. In addition, there was an increase in expenses with outsourced and consulting services, due to a few projects to improve operating efficiency. Furthermore, personnel costs increased due to the collective bargaining agreement (8.0% on average) and were partially offset by the process of optimizing structures. Excluding depreciation and amortization, fixed costs increased 5.1%. Financial Result Financial Result Q15 (Amounts in R$MM) Combined (257.0) (241.2) 6.5% Cost of Gross Bank Debt (1,026.7) (934.7) 9.8% % Financial Invest Income % (212.7) (215.7) -1.4% (=) Sub-total: Cost of Net Bank Debt (828.2) (797.0) 3.9% (74.4) (64.1) 16.1% Monetary variation on Liabilities of Concessions (296.1) (230.3) 28.6% (49.6) (51.8) -4.2% Charges on Leasings (207.7) (183.1) 13.4% (8.4) (28.4) -70.6% Charges on Certificates of Real Estate Receivables (39.7) (52.5) -24.5% (70.7) (68.2) 3.6% Other Variations (301.8) (238.0) 26.8% (415.8) (428.2) -2.9% (=) Net Financial (1,673.5) (1,501.0) 11.5% 10 of 21

11 and 2016 Financial result in was a net expense of R$415.6 million, down 2.9% from 4Q15. In 2016, net financial expenses reached R$1.6 billion, up 11.5% from In, there was an increase of 6.5% in the cost of bank debt, totaling R$257.0 million, mainly due to the marginal increase in both the cost and the average debt balance in the period. This increase was offset by financial revenues on cash position related to the capital increase concluded in 2Q16. Monetary variation on lease and concession agreements reflects the adjustment (SELIC) of the unpaid concession amounts of Malha Oeste and Malha Paulista, which are currently under litigation. Other financial expenses include costs with bank-issued guarantees, inflation adjustments of contingencies and other financial operations. Income Tax and Social Contribution Income tax and Social Contribution Q15 Combined (362.8) (178.0) n.a. Income (loss) before IR / SC (768.3) (415.0) 85.1% 34% 34% 0.0% Theoretical rate IR / SC 34% 34% 0.0% n.a. Income (Expenses) Theoretical with IR / SC % Adjustments to calculate the effective rate (25.6) (41.3) -38.2% Tax losses not recognized 10 (225.5) (186.4) 21.0% (17.4) (0.7) n.a. Tax incentives arising from the North Network % (0.1) - - Equity Pickup (36.4) (3.2) n.a. Other Effects (13.9) (26.2) -47.0% n.a. Income (Expenses) with IR / SC 34.8 (42.9) n.a % -8.6% -3.5 p.p. Theoretical rate IR / SC -4.5% 10.3% p.p % IR/SC current % (1,236.6) (1,353.1) -8.6% IR/SC deferred (1,236.6) (1,353.1) -8.6% Note 10: We did not constitute IR / SC deferred tax losses in certain companies due to the lack of prospects for future taxable income to compensate them. Note 11: North Network enjoys the Amazon Development Office (SUDAM) benefit that gives it the right to a 75% reduction in corporate income tax (rate of 25%) until Loans and financing Broad gross debt at the end of was R$10.1 billion, up 3.2% from 3Q16, while leverage increased 13.0% to 4.4 times (broad net debt/ebitda), considering EBITDA of R$2.0 billion in the last 12 months. The 6.6% increase in the balance of broad net debt is due to cash burn in investments, in accordance with the Business Plan, which was partially offset by operational cash flow, and interest accruals in the period. All the foreign currency-denominated debt of Rumo is hedged against exchange variations. Total Indebtness 3Q16 Commercial Banks % NCE 1, % BNDES 3, , % Debentures 3, , % Total Bank Debt 8, , % Leases 1, , % Certificate of Real Estate Receivables % Total Gross Broad Debt 10, , % Cash and Cash Equivalents and Securities 12 ( ) (1,511.1) -16.4% Net Derivative Instruments % Total Net Broad Debt 8, , % EBITDA LTM 2, , % Leverage (Net Broad Debt / EBITDA LTM ) 4.37x 3.87x 13.0% Note 12: In 3Q16, includes restricted cash bound to bank debts in the amount of R$84.2 million. For, includes restricted cash bound to bank debts in the amount of R$85.9 million. 11 of 21

12 and 2016 The following table gives a breakdown of the items that impacted the consolidated debt of Rumo. Bank Gross Indebtness Inicial balance of consolidated bank net debt (Net of MTM) in 09/30/2016 8,310.3 Cash and Cash Equivalents and marketable securities in 09/30/2016 (1,511.1) Net derivative instruments in 09/30/ Inicial Consolidated Bank Gross Debt in 09/30/2016 9,807.2 Itens with impact on cash 33.6 Funding Amortization of principal (328.5) Amortization of interest rates (427.7) Itens without impact on cash Provision for interest rates (accrual) Net exchage variation of derivatives 9.0 Others (22.9) Closing Balance of Consolidated Bank Gross Debt (in 12/31/2016) 10,116.5 Cash and Cash Equivalents and Marketable Securities in 12/31/2016 (1,263.0) Net derivative Instruments in 12/31/ Closing Balance of Consolidated Bank Net Debt (Net of MTM) in 12/31/2016 8,862.1 With regard to the rescheduling of debts maturing between 2016 and 2018, totaling R$2.9 billion, the covenants were renegotiated with commercial banks and defined for a maximum leverage of 4.5 times broad net debt/ebitda LTM and minimum interest coverage ratio of 1.1 times the EBITDA/Financial Result for December 31, Broad net debt includes bank loans, debentures, leases and real estate receivables certificates minus cash and cash equivalents, as well as marketable securities and derivative instruments related to loan operations. As announced in a notice to the market on February 2, 2017, Rumo priced and placed bonds in the international market, Senior Notes 2024 issued by its subsidiary Rumo Luxembourg S.A., in the total amount of US$750 million, maturing in February 2024 and with interest of 7.375% per year, paid bi-annually. The funds will be hedged for BRL, in accordance with Rumo s policy of not having exposure in foreign currency. The internalization and use of funds still depends on approval from ANTT so that ALL Malha Norte can be a joint and several guarantor of said issue, making the funds available for Malha Norte to renegotiate existing debts, among other purposes. 6. Capex Investiments Q15 (Amounts in R$MM) Combined % Total Investments 1, , % % Recurring % % Expansion 1, , % In, Capex totaled R$480.1 million, down 6.8% from 4Q15. Recurring capex reached R$162.1 million, down 27.4% due to the reduction in expenses as a result of the drop in volume. Expansion capex totaled R$318.0 million, reflecting higher investments in capacity expansion, such as: (i) the acquisition of 1 GE AC44 locomotive, 2 GE ES-43 locomotives and 195 HPT railcars; (ii) improvements in the Rondonópolis terminal, such as paving and drainage; (iii) renovation of the rail structure line along the right bank of the Port of Santos, contributing to better reception of trains at the port; and (iv) recovery of stretches, replacing sleepers in some of them, replacing tracks and renovating the infrastructure, so as to eliminate restrictions and reduce the need for maintenance in the long term. Capex totaled R$1.9 billion in 2016, down 1.3% from Total disbursements reached the midpoint of the capex expected for the year, in line with Rumo's investment plan. Due to the lower volume transported, a portion of recurring Capex in the second half, allocated to rolling stock, was postponed, causing a 23% decrease from However, expansion Capex increased 15.2% in the year, mainly due to: (i) the acquisition of 39 GE AC44 locomotives, 16 GE ES-43 locomotives and 925 HPT rail cars; (ii) the project for improvements in the rails of the Port of Santos region; (iii) revitalization of stretches; and (iv) renovations, improvements and recovery of some rail yards and the main terminals operated by the company, in order to increase productivity. 12 of 21

13 and Cash Flow Statement The following statement shows Rumo s consolidated cash flow based on the balance reported in 3Q16 and the respective changes to arrive at the cash balance in. Securities were considered as cash and cash equivalents in this statement. Pro Forma 4Q15 Chg.% Cash Flow Combined Chg.% % EBITDA 2, , % (122.9) 82.9 n.a. Non-cash effects (56.1) n.a. (46.0) (134.4) -65.8% Working Capital Variation (364.9) (455.7) -20% (14.3) (11.7) 22.6% Operational Final Result (4.1) 31.7 n.a. (a) % (=) Operating Cash Flows 1, , % (434.3) (515.3) -15.7% Total Capex (1,699.2) (1,950.6) -13% (b) (162.1) (223.1) -27.3% Recurring (646.3) (839.7) -23% (272.2) (292.2) -6.8% Expansion (1,052.9) (1,110.9) -5% Investments and Acquisitions (0.4) Dividends Received (c) (434.3) (511.3) -15.1% (=) Cash Flow from Investments (1,691.4) (1,946.6) -13% % Fundings 3, , % (508.4) (464.7) 9.4% Amortization of Principal (4,317.5) (3,237.7) 33% (247.8) (232.6) 6.6% Amortization of Interest Rates (1,246.1) (582.4) n.a. (0.9) - - Dividends Paid (1.7) - - (0.7) - - Capital Integralization 2, (5.0) (111.6) -95.5% Derivative Financial Instruments and others 0.3 (275.0) - (5.5) - - Restrict Cash (d) 19.9 (260.8) n.a. (=) Financial Cash Flows (992.7) n.a. (249.7) (367.4) -32.0% (=) Generation (Consuption) Total Cash (1,219.8) n.a. 1, % (+) Total Cash + Markeratble Securites, Opening Balance Rumo Consolidated , % 1, n.a. (+) Total Cash + Markertable Securites, Closing Balance Rumo Consolidated 1, n.a. Metrics % (=) Cash generation after recurring Capex (a+ b) % (269.6) (110.6) -75.0% (=) Cash generation after total Capex (a+ c) (95.7) (231.2) -59% (249.7) (367.4) n.a. (=) Generation (Consumption) total cash (a+c+d) (1,219.8) n.a. 13 of 21

14 and Operating and Financial Performance Indicators Below are the changes in the main operating and financial indicators. Operational and Financial Performance Indicators 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q15 Consolidated Operating Ratio (%) 93% 66% 74% 81% 81% 73% 71% 112% 112% 81% 39% Diesel Comsuption (Liters/ '000 TKB) % North Operation Grains from Rondonópolis (MT) to Port ofsantos (SP) Average number of freight cars loaded per day (units % Transit time (hours) % Cycle time of freight cars (days) % South Operation Grains from terminals in north of Paraná to Port of Paranaguá (PR) and Port of São Francisco do Sul (SC) Average number of freight cars loaded per day (units) % Transit time (hours) % Cycle time of freight cars (days) % Note 13: Due to the restatement of depreciation for other periods in 2016, the table shows the restated Operating Ratio, already reflecting these changes. Operating Ratio: the reduction in net revenue in the quarter due to lower demand for corn transportation and the higher depreciation were the main reasons for the worsening of this indicator, which increased by 17%. Efforts to reduce costs partially offset the result, which represents the portion of costs and expenses as a percentage of net revenue. Diesel consumption: the 3% impact on the indicator results from the lower volume of grains from Mato Grosso and the increase in sugar transported in the North Operation, since the route for this commodity has a higher average diesel consumption/rtk when compared to grains from Rondonópolis. However, Rumo continued to adjust the operating model of trains to the lower demand over the course of the quarter. Cycle time of rail cars: as in the previous quarter, the decrease in demand for transportation of grains due to the shortfall in the second corn crop adversely impacted the cycle time of bulk freight cars, especially in the North Operation. Additionally, we took advantage of lower demand to perform maintenance of rail structure to prepare the operations 2017 harvest peak, thus limiting our capacity and impacting the indicator. Transit time: Due to the concentration of demand for sugar and grains on the right bank of the Port of Santos, trains were run with the purpose of maintaining availability for unloading at the port terminals, often parked on the railroad, affecting transit time but avoiding trains congestion on the port when unloading. Freight cars loaded/day: This indicator reflects the lower demand for transportation of grains, which significantly reduced the quantity of loading at the terminals of Rondonópolis and in the North of Paraná. However, grain loading was partially offset by higher sugar volume. 14 of 21

15 and Guidance This section contains the guidance ranges of some of the key parameters that influence the consolidated results of Rumo in 2017, as well as a comparison with the 2016 guidance. Note that other sections of this Earnings Release also may contain projections. Such projections and guidance are mere estimates and indications, and should not be taken as a guarantee of future results. Short Term Rumo 2016 Achieved 2016 Updated Guidance 2017 Guidance EBITDA (R$ MM) 2,028 2,000 2,200 2,600 2,800 Total Capex (R$ MM) 1,926 1,800 2,000 2,000 2,200 Recurring Capex (R$ MM) Expansion Capex (R$ MM) 1,280 1,150 1,250 1,300 1,400 Long Term 14 Note 14: EBITDA and CAPEX curves above mentioned are expressed in nominal terms and have as a reference the IGP-M index with the following figures: % p.y., % p.y., % p.y. and % p.y.. Any deviations from these figures do not represent major impact in the company s result. Disclaimer This document contains forward-looking statements and information. These forward-looking statements and information are solely forecasts and are not guarantees of future performance. All stakeholders are advised that these forward-looking statements and information are and will be, as applicable, subject to risks, uncertainties and factors related to the operations and business environment of Cosan and its subsidiaries, and hence actual results of these companies could differ significantly from the future results expressed or implied by said forward-looking statements and information. 15 of 21

16 and Attachments 10.1 Financial Instruments - Rumo Balance Sheet Balance Sheet Rumo Combined Current 2, ,308.3 Cash and Cash Equivalents Securities Trade Receivables Derivative Financial Instruments Inventories Peer Company Receivables Income Tax and Social Contribution Other Taxes Recoverable Other Assets Non-Current 20, ,254.3 Trade Receivable Restrict Cash Deferred Income Tax and Social Contribution 1, ,361.2 Income Tax and Social Contribution Other taxes recoverable Judicial Deposits Derivative and Financial Instruments Other Assets Investments in Associates Property and Equipment 10, ,404.1 Intangible 7, ,862.4 Total Assets 23, ,562.7 Current 3, ,480.8 Loans, Financing and Debentures 1, ,444.1 Leases Certified Real Estate Receivables - CRI Derivative Financial Instruments Trade Accounts Payable Labor and Social Security Obligations Income Tax and Social Contribution Taxes Other Payable Taxes Dividends Payables Leases and Concessions Payable to Related Patties Deferred Revenue Other Financial Liabilities Other Payables Non - Current 13, ,237.7 Loans, Financing and Debentures 7, ,141.1 Leases ,202.1 Certified Real Estate Receivables - CRI Derivative Financial Instruments Other Payables Provision for lawsuits Leases and Concessions 2, ,204.0 Deferred Income Tax and Social Contribution 2, ,714.4 Deferred Revenues Other Payables Equity 5, ,844.2 Total Liabilities 23, , of 21

17 and Income Statement Consolidated Q15 Combined 1, , % Net Operating Revenue 5, , % (878.5) (938.1) -6.4% Cost of Services (3,769.1) (3,398.0) 10.9% % Gross Profit 1, , % (85.4) (82.6) 3.5% Sales, General and Administrative Expenses (344.4) (360.7) -4.5% % Other Net Operating Income (Expenses) (0.9) 31.1 n.a. (415.6) (428.2) -2.9% Net Financial Result (1,676.8) (1,501.0) 11.7% (0.4) 6.9 n.a. Equity Pickup % n.a. Income Tax and Social Contribution 34.8 (42.9) n.a. (319.0) (162.7) 96.1% Net Profit (Loss) (733.5) (457.9) 60.2% Cash Flow Combined Cash Flow 4Q15 Rumo Combined Cash Flow from Operating Activities Profit Before Income Tax and Social Contribution (362.8) (184.2) (768.3) (133.5) Adjustments: Depreciation and Amortization , Amortization of Concessions Equity 0.4 (6.9) (8.4) (11.2) Provision for profit sharing and bonuses Result on disposals of fixed assets and intangible assets Provision for lawsuits Provision (reversal) for losses on doubtful accounts 0.9 (4.1) 1.4 (3.7) Stock Option Leases and Concessions Differed Revenues (2.6) - (16.2) Interests, Monetary and Exchange Variation, Net , ,190.7 Others (179.2) 37.3 (296.8) , ,858.0 Variation in: Accounts Receivable: (11.4) Advances from Customers Judicial deposits (15.9) (11.2) (28.8) (13.9) Related Patties, Net (11.8) Variation in: 49.2 (28.9) (28.2) Accounts Receivable: (22.0) (6.6) (97.0) (49.9) Advances from Customers 18.1 (44.5) (49.2) (125.6) Labor and Social Security Obligations (29.6) (25.6) (70.2) (17.8) Trade Accounts Payable (115.4) (74.3) (22.4) (219.7) Advances to suppliers (20.8) Leases and Concessions Payable (27.0) - (107.7) - Lawsuits (54.1) 43.7 Other financial liabilities (9.1) - (50.7) 63.2 Other Liabilities, Net (29.0) (128.8) (81.8) (197.7) (46.0) (134.4) (365.4) (354.6) Cash generated by (used in) operations , ,503.4 Cash Flow from investing activities Net cash acquired on business acquisition (0.2) - (0.2) Capital Increase in Subsidiary - - (0.2) - Marketable Securities (407.7) Restrict Cash (5.5) (107.7) (0.1) 22.8 Dividends received from subsidiaries and associates Additions to property, plant and equipment, software and other intangibles (434.3) (515.3) (1,699.2) (1,405.5) Cash generated by (used in) investing activities 28.6 (248.8) (2,099.2) (1,000.2) Cash flow from financing activities Borrowings , ,086.0 Payment of borrowings (492.0) (365.3) (4,301.0) (2,418.9) Payment of interest on Borrowings (231.0) (232.6) (1,133.6) (786.1) Capital Internalization (0.7) - 2, Mortgages anticipation (33.2) (99.4) (128.9) (99.4) Derivative Financial Instruments (5.0) (3.5) Related Parties - Mutual Dividends Payable (0.9) - (1.7) (301.5) Cash generated by (used in) financing activities 25.4 (152.7) (515.6) Net increase (decrease) in cash and cash equivalents (12.5) Beginning balance of cash and cash equivalents Final balance of cash and cash equivalents of 21

18 and Cash Flow Net Debt Reconciliation Cash Flow ,310.3 Opening Balance of Broad Net Debt 9, ,862.1 Closing Balance of Broad Net Debt 8,862.1 (551.8) (=) Variation in net debt Items without impact on cash 1, Provision for interest rates (accrual) 1, Funding of financial leasing Monetary variation and MTM adjustment of debt 61.8 (24.6) Exchange variation, net of derivatives 41.8 (274.6) (=) Variation in cash net debt 2,444.2 Reconciliation generation /(consumption) of net cash debt EBITDA 2,028.6 (122.9) Non-cash effects in EBITDA (56.1) (46.0) Working capital variation (364.9) (14.3) Operational Financial Result (4.1) (=) Operational cash flow 1,603.4 (434.2) Total Capex (1,699.2) (0.2) Others 7.8 (434.4) (=) Investiments cash flow (1,691.4) (0.9) Dividends payed (1.7) (0.7) Capital internalization 2,533.6 (3.3) Derivative instruments and others 0.3 (274.6) (=) Generation (Consumption) total of cash 2, of 21

19 and Financial Statements - Cosan Logística Balance Sheet Balance Sheet Cosan Logística Current 2, ,489.6 Cash and Cash Equivalents Securities Trade Receivables Derivative Financial Instruments Inventories Peer Company Receivables Income Tax and Social Contribution Other Taxes Recoverable Other Assets Non-Current 20, ,256.1 Trade Receivable Restrict Cash Deferred Income Tax and Social Contribution 1, ,362.8 Income Tax and Social Contribution Other taxes recoverable Lawsuits Derivative and Financial Instruments Other Assets Investments in Associates Property and Equipment 10, ,404.1 Intangible 7, ,862.4 Total Assets 23, ,745.7 Current 3, ,491.6 Loans, Financing and Debentures 1, ,444.1 Leases Certified Real Estate Receivables - CRI Derivative Financial Instruments Trade Accounts Payable Labor and Social Security Obligations Income Tax ad Social Contribution Taxes Other Payable Taxes Dividends Payable Leases and Concessions Payable to Related Patties Deferred Revenue Other Financial Liabilities Other Payables Non - Current 13, ,237.7 Loans, Financing and Debentures 7, ,141.1 Leases ,202.1 Certified Real Estate Receivables - CRI Derivative Financial Instruments Other Payables Provision for lawsuits Leases and Concessions 2, ,204.0 Deferred Income Tax and Social Contribution 2, ,714.4 Defered Revenues Other Payables Equity 5, ,016.4 Liabilities 23, , of 21