EARNINGS RELEASE 1Q16

Transcription

1 EARNINGS RELEASE São Paulo, May 4, 2016 RUMO LOGÍSTICA OPERADORA MULTIMODAL S.A. (BM&FBovespa: RUMO3) ( Rumo ) and COSAN LOGÍSTICA S.A. (BM&FBovespa: RLOG3) ( Cosan Logística ) announce today their results for the first quarter of 2016 (). The results are consolidated in accordance with the criteria adopted in Brazil and the International Financial Reporting Standards (IFRS). Rumo Highlights in EBITDA grew 43% to R$445 million, due to higher transported and elevated volumes and increase in average yield. Total volume transported reached 10 billion RTK, up 12% from, boosted by the 22% growth in the volume of agricultural products transported and by the new commercial strategy. A total of 2.9 million tons were loaded at Rumo s terminals at the Port of Santos (SP), up 16% from, due to the loading of grains in addition to the increase on sugar volume. Capex totaled R$406 million, in line with the investment plan, and was used in the acquisition of 4 AC44 locomotives and 332 HPT freight cars, among other initiatives. Summary of Financial Information - Rumo Consolidated ¹ Net Revenue 1, % Gross Profit (Loss) % Gross Margin (%) 26.5% 27.6% -1.1 p.p. Operating Profit % EBITDA % EBITDA Margin (%) 37.5% 32.1% 5.4 p.p. Loss (185.1) (226.2) -18.2% Margin (%) -15.6% -23.3% -7.7 p.p. Capex (406.0) (301.0) 34.9% Note 1: 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 Financial Pro Forma Information. Conference Call Portuguese 2:00 p.m. (Brasilia Time) May 5, 2016 (Thursday) Phone: Code: RUMO Investor Relations ir@rumoall.com Phones: Website: ri.rumoall.com English 3:00 p.m. (Brasilia Time) May 5, 2016 (Thursday) Phone (BR): Phone (USA): Code:RUMO 1 of 17

2 1. Executive Summary Rumo s was marked by strong operating performance, which was reflected in EBITDA and margin growth. Investments made in rolling stock and rail structure during 2015 generated additional capacity, which was efficiently used thanks to the new commercial strategy, aimed at ensuring volume in the long term and maximizing the utilization of assets throughout the year. In March 2016, we completed our first year in the management of Rumo, delivering important results. This quarter, we made significant progress in several metrics, which were reflected in strong EBITDA growth. Moreover, adjusting to the accounting practices adopted by the new management, consolidated EBITDA growth was approximately 60%. This advance reflects the cost-cutting initiatives, improvement in processes and increased productivity registered throughout Volume transported in grew 12% to 10 billion RTK. North Operation posted significant volume growth of 36% in agricultural products, in line with the business plan. During the quarter, some operating processes were redesigned to improve utilization of assets and efficiency of terminal operations. In addition, the second corn crop last year moved volumes from 4Q15 to. These volumes, combined with the beginning of soybean crop, filled the months typically dedicated to the interharvest. Our market share came to 45% of total volume of grains exported through the Port of Santos. The growth in the transport of agricultural products more than compensated the fall in demand for industrial products in the quarter. Consolidated EBITDA totaled R$445 million in, up 43% from, the period before the conclusion of the merger and management change at the Company. The higher transported and elevated volumes of agricultural products and higher average yield were the main drivers of EBITDA growth in the quarter. EBITDA margin grew from 32% in to 38% in, underscoring the continuous efforts to reduce costs and expenses in diverse areas. Capex in was 35% higher than in and came to R$406 million. Maintenance Capex decreased from due to the allocation of a part of the expenditure as operating costs, which were considered investments prior to March 31, Expansion Capex increased and was focused on the acquisition of rolling stock and materials and services used to renovate the rail structure, in line with our investment plan. In, the Company registered net loss of R$185 million and broad leverage, as measured by net debt/ltm EBITDA, reached 4.98 times. The net loss was affected by: (i) higher operating costs and expenses due to the adoption of new accounting policies; and (ii) higher financial expenses due to the increase in the average balance and financial costs caused by the increase in average interest rates (CDI and TJLP) between the periods. Leverage decreased by 3% in relation to 4Q15 due to the 7% growth in EBITDA LTM. On April 13, Rumo concluded the R$2.6 billion capitalization process. The capital increase enabled the Company to sign an agreement with commercial banks to restructure a R$2.9 billion debt maturing between 2016 and 2018 for a term of 7 years, with a grace period of 3 years. In addition, BNDES committed to the approval of additional lines of credit totaling R$2.8 billion which, together with R$700 million already approved, will be used to roll out the investment plan. The completion of these three initiatives strengthens the Company s capital structure and ensures its liquidity for the next 3 years. All the comments in this report refer to the consolidated results of Rumo, but all the financial information related to Cosan Logística is available in the appendixes. We will also provide all the financial information published herein in the Investor Relations website, to facilitate the analysis of our results. 2 of 17

3 2. Consolidated Operating and Financial Indicators Operational and Financial Indicators Transported Volume (millions RTK) 10,075 9, % Agricultural Products 8,339 6, % Industrial Products 1,736 2, % Average Transportation Yield (R$/000 RTK) % Volume Loaded (TU '000) 2,855 2, % Average Loading Yield (R$/TU) % Net Operating Revenue 1, % Rail Operations % Port Elevation % Other % EBITDA % EBITDA Margin (%) 37.5% 32.1% 5.4. p.p. Adjusted EBITDA Adjustments Merger structuring costs n.a. Equalization of maintenance expenses - (72.3) n.a. Total EBITDA Adjusted % Adjusted EBITDA margin (%) 37.5% 28.6% 8.9 p.p. Note 2: Includes income for the right of way of other railways and sugar transportation revenue using other railways, as well as road. Transported Volume (millions RTK) e Average Railroad Transportation Yield (R$/000 RTK) Rumo Consolidated Transported Volume Operational Figures Transported Volume (millions RTK) 10,075 9, % Agricultural Products 8,339 6, % Soybean 4,697 4, % Soybean meal 1,099 1, % Corn 1, n.a. Sugar % Fertilizers % Wheat % Rice % Industrial Products 1,736 2, % Fuels 963 1, % Wood, Pulp and Paper % Containers % Construction % Steel and Mining % Others % 3 of 17

4 3. Result by Business Unit Business Unit The business units (reporting segments) are organized as follows: North Operation Malha Norte, Malha Paulista and Port Operation in Santos South Operation Malha Oeste and Malha Sul Container Operation Container operations including Brado Logística Results by Business Unit North Operation South Operation Containers Operation Consolidated Net Revenue ,185.9 Cost of Services (510.1) (280.7) (80.2) (871.1) Gross Profit (Loss) (55.8) (15.1) Gross Margin (%) 43.1% -24.8% -23.2% 26.5% Selling Expenses, General and Administrative Expenses (54.6) (15.2) (16.0) (85.9) Other Operating Revenues (Expenses) 6.1 (1.7) Depreciation and Amortization³ EBITDA (12.7) (14.4) EBITDA Margin (%) 52.6% -5.7% -22.1% 37.5% Results by Business Unit North South Containers Operation Operation Operation Consolidated Net Revenue Costs of Services (409.2) (203.0) (90.5) (702.6) Gross Profit (Loss) (4.1) Gross Margin (%) 37.5% 11.3% -4.7% 27.6% Selling Expenses, General and Administrative Expenses (64.2) (21.1) (13.4) (98.7) Other Operating Revenues (Expenses) (22.3) (8.8) 1.3 (29.8) Depreciation and Amortization³ EBITDA (1.0) EBITDA Margin (%) 41.1% 19.0% -1.1% 32.1% Note 3: Depreciation and amortization are allocated as cost of services provided and general and administrative expenses. 4 of 17

5 North Operation Operational Figures Transported Volume (millions RTK) 7,003 5, % Agricultural Products 6,475 4, % Soybean 3,566 3, % Soybean meal 1,010 1, % Corn 1, n.a. Sugar % Fertilizers - 1 n.a. Industrial Products % Fuels % Wood, Pulp and Paper % Average Transportation Yield (R$/000 RTK) % Volume Loaded (TU '000) 2,855 2, % Average Loading Yield (R$/TU) % The total volume transported in the North Operation was 7.0 billion RTK in, up 29.9% from, reflecting the high volume of agricultural products shipped and handled in the period. This growth was driven by the increase in capacity with the inclusion of more efficient assets in operations, as well as the adoption of new commercial agreements to fill up months typically dedicated to the interharvest. In, the volume of agricultural products transported grew 36.2% to 6.5 billion RTK, equivalent to 92% of total volume transported by the North Operation. It was possible to absorb the demand of the corn second crop, whose exports extended to January 2016, and higher volume of soybean with the start of harvest. The total volume of grains transported to the Port of Santos increased 41.3% when compared to, despite heavy rainfall at the beginning of, which caused some operational issues. Our market share came to 45% of all the grains exported through the Port of Santos. Transportation of industrial products decreased 16.6% in. The main impact was from the lower volume of pulp and paper handled as a result of the decision by an important client to not operate its terminal at the Port of Santos. This decrease was partially offset by the 11.9% growth in the volume of fuel transported with the startup of the Raízen and Ipiranga plants in Rondonópolis, in Mato Grosso, as of 2Q15. Port loading volume stood at 2.9 million tons in, up 15.6% from. This increase was mainly due to sugar shipments typical of the end of the sugar harvest towards the end of the quarter, plus the transport of grains (soybean and corn) in the quarter. Around 600,000 tons of grains were loaded during, compared to 164,000 tons in. Financial Results Net Operating Revenue % Transportation % Agricultural Products % Industrial Products % Port Elevation % Other Net Revenue % Costs of Services (510.1) (409.2) 24.7% Gross (Loss) Profit % Gross Margin (%) 43.1% 37.5% 5.5 p.p. Selling, General and Administrative Expenses (54.6) (64.2) -14.8% Other Operational Revenues (Expenses) and Equity Pickup 6.1 (22.3) n.a. Total EBITDA % EBITDA Margin (%) 52.6% 41.1% 11.6 p.p. Note 4: Includes income for the right of way of other railways and sugar transportation revenue using other railways or road transportation. Net revenue from North Operation totaled R$895.9 million in, up 36.8% from. Growth was mainly due to the revenue from transportation of agricultural products, which was 45.3% higher than in, driven by the increase in the volume of soybean and corn transported during the quarter. Average transportation yield in increased 6.6% to reach R$100.6/thousand RTK, due to the usual price adjustments agreed to with clients and the effects of changes in the product mix in the periods being compared. In addition, yield from port loading was adjusted for current and new contracts to include inflation and the increase in port tariffs. Cost of services provided totaled R$510.1 million in the quarter. The higher volume transported (+29.9%), as well as the increase in average diesel price (ANP: +11.4%) contributed to the 24.7% growth in total cost. This increase was partially offset by lower diesel consumption due to the acquisition of new GE AC44 locomotives. 5 of 17

6 The increase in costs was also driven by maintenance expenses, which include parts, services and labor dedicated to maintenance reflecting the new criteria adopted by the Company and not included in. Besides, depreciation and amortization increased in due to higher investments during EBITDA grew 75.4% in to R$471.7 million, due to the increase in the volume of agricultural products transported, as well as the increase in average yield. EBITDA from the North Operations continues to benefit from the operational improvements implemented by the Company and efforts to reduce costs. South Operation Operational Figures Transported Volume (millions RTK) 2,627 3, % Agricultural Products 1,864 2, % Soybean 1, % Soybean meal % Corn % Sugar % Fertilizers % Wheat % Rice % Industrial Products 763 1, % Fuels % Wood, Pulp and Paper % Construction % Steel and Mining % Others % Average Transportation Yield (R$/000 RTK) % The South Operation transported a total volume of 2.6 billion RTK in, down 15.6% from the transported volume in. In the quarter, heavy rainfall caused diverse operating issues that interrupted traffic in some stretches for approximately 10 days. Additionally, the economic activity slowdown negatively impacted the industrial volumes during the quarter. The volume of agricultural products decreased 10.1% to 1.9 billion RTK. Despite the higher demand for corn transportation, since grain exports extended to January and volume of soybean transported increased in February and March, the volume of agricultural products was affected in many ways. South Operations could not increase the volume of grains transported due to lower availability of assets and the impact of rainfall on the rail structure and loading and unloading operations at the terminals. Moreover, some clients decided to send volumes to port terminals that do not prioritize railway unloading, which hampered total freight car cycle time, reducing operational productivity. Transportation of industrial products declined 26.5%, due to the decrease in demand from clients as a result of the economic slowdown. In addition, the quarter was marked by diverse operating problems in Rio Grande do Sul and Paraná, which hampered traffic in some stretches and terminals. 6 of 17

7 Financial Results Net Operating Revenue % Transportation % Agricultural Products % Industrial Products % Costs of Services (280.7) (203.0) 38.3% Gross Profit (Loss) (55.8) 25.9 n.a. Gross Margin (%) -24.8% 11.3% p.p. Selling, General and Administrative Expenses (15.2) (21.1) -27.9% Other Operational Revenues (Expenses) and Equity Pickup (1.7) (8.8) -81.2% Total EBITDA (12.7) 43.5 n.a. EBITDA Margin (%) -5.7% 19.0% p.p. Net revenue from South Operation amounted to R$224.9 million in, down 1.7% from. The decline in net revenue was mainly due to the lower transported volume, partially offset by the increase in average yield in the quarter (+16.4%) as a result of contractual adjustments and improvements in the product mix and flows transported. Cost of services provided increased by 38.3% to R$280.7 million in. The decrease in transported volume influenced the reduction in variable costs, while maintenance expenses, which in were recorded as Capex, contributed to the increase in total costs. These costs consisted of parts, services and labor dedicated to maintenance, which totaled R$59.4 million in the period. In addition, depreciation and amortization increased due to the higher investments made during 2015, as well as consulting expenses for the Transformation Project aimed at streamlining processes and improving productivity of railway operations in the main corridors of the South Operation. EBITDA of the South Operation was a loss of R$12.7 million in. The negative result was mainly due to lower transported volume (-15.6%) due to heavy rainfall in January and higher costs in the quarter. Container Operation Operational Figures Total Volume (Containers '000) 15,799 19, % Average Intermodal Yield (R$ '000/containers) % Total Volume (millions RTK) % Volume of containers transported declined 20.1% in, due to the loss of important clients who used to operate in the Paraná and Rio Grande corridors, and the Company s decision to not operate on unprofitable routes in the Mercosur corridor. The volume of the operation was partially supported by the 15% increase in number of containers transported in the North Corridor, which connects Mato Grosso and São Paulo to the Port of Santos (SP). Financial Results Net Operating Revenue % Costs of Services (80.2) (90.5) -11.4% Gross Loss (15.1) (4.1) n.a. Gross Margin (%) -23.2% -4.7% p.p. Selling, General and Administrative Expenses (16.0) (13.4) 19.2% Other Operational Revenues (Expenses) % Total EBITDA (14.4) (1.0) n.a. EBITDA Margin (%) -22.1% -1.1% p.p. Note 5: Including revenues from services business unit Net revenue reached R$65.1 million in, due to the lower volume of containers handled, partially offset by the 8.0% increase in average yield. Costs of services provided decreased 11.4% in and totaled R$80.2 million in. The decline was in line with the reduction in transported volumes, since diesel expenses and port tariffs decreased. However, maintenance expenses increased in the quarter, in accordance with the new practices adopted by the Company. EBITDA from Container Operation was a loss of R$14.4 million in, impacted by lower volumes transported and higher costs and expenses in the quarter. 7 of 17

8 4. Other Result Items Breakdown of Costs of Services Provided Consolidated Costs Costs of Services (871.1) (702.6) 24.0% Fuels and Lubricants (175.6) (153.8) 14.2% Depreciation and Amortization (206.2) (172.5) 19.5% Logistics Cost (115.5) (102.7) 12.5% Maintenance (61.4) (12.7) n.a. Payroll Expenses (107.9) (99.8) 8.1% Leasing and Concession (50.8) (46.1) 10.3% Operational Leasing (14.2) (11.8) 20.6% Third Parties Services (53.5) (16.3) n.a Other Operational Costs (85.9) (86.8) -1.1% Consolidated cost of services increased 24.0% in to R$871.1 million, due to: (i) higher spending on diesel and lubricants due to the increase in average prices between the periods (ANP: +11.4% diesel), as well as higher volumes consumed, which were partially offset by lower unit consumption of diesel by the new locomotives acquired; (ii) higher depreciation and amortization costs due to the revision of the useful life of assets and investments made during 2015; and (iii) higher expenses with maintenance, personnel and outsourced services, in line with the new criteria adopted by the Company since 2Q15, and which were earlier recorded as Capex. Financial Result Financial Results Gross Debt Charges (226.1) (188.0) 20.3% Gain (loss) with derivatives (65.7) 53.6 n.a. Exchange Rate Variation 46.5 (83.5) n.a. Income from Financial Investments % (=) Subtotal: Net Debt Interests (225.5) (170.7) 32.1% Monetary variation on leases and concession lease and concession (73.4) (50.0) 46.7% Charges on Leasing and Other Monetary Variation (131.7) (115.4) 14.1% (=) Financial, Net (430.6) (336.2) 28.1% The financial result totaled R$ million in, reflecting a 28.1% increase in financial expenses compared to. The increase reflects: (i) higher gross debt charges following the increase in the outstanding balance and the hike in interest rates (CDI and TJLP) between the quarters;(ii) lower returns from financial investments caused by the reduction in the average cash balance, despite the hike in interest rates (CDI);and (iii) negative impact of approximately R$48.0 million (non cash) of exchange swaps due to volatility of interest curves. Monetary variation on leasing and concession agreements reflects the adjustment (SELIC) of the unpaid concession amounts of the Malha Oeste and Malha Paulista, which are currently under litigation. Income Tax and Social Contribution Income Tax and Social Contribution Loss before income tax (195.8) (197.1) -0.7% Theoretical rate - income tax 34% 34% n.a. Income Theoretical Tax % Adjustments to calculate the effective rate Tax losses not recognized 6 (69.8) (81.1) -13.9% The operating profit of North Network % Equity n.a. Other effects 2.1 (17.3) n.a. Income Tax Expenses 10.8 (22.4) n.a. Effective rate - current (%) -5.5% 11.4% p.p. Note 6: We did not constitute IR / CS deferred tax losses in certain companies due to the lack of prospects for future taxable income to compensate them. Note 7: On May 30, 2014, Malha Norte was granted an extension of the right to a 75% reduction in the income tax and surcharges until 2023 (SUDAM benefit) 8 of 17

9 5. Loans and financing Total gross broad debt was R$10.7 billion at the end of, up 0.5% from 4Q15. Leverage, however, declined 3.2% to 4.98 times, considering the EBITDA of R$2.1 billion in the last 12 months. The main funding transactions during the quarter were: (i) R$249.4 million through a bank credit note (CCB); (ii) R$121.1 million through Leases, (iii) R$48.9 million under the FINEM facility; (iv) R$25.0 million through Export Credit Note (NCE); and (v) R$2.7 million under the FINAME facility. In addition we had total amortizations of R$653.2 million in FINEM, FINAME, NCE, Debentures, Leases, Certificate of Real Estate Receivables and working capital lines. The 3.5% increase in the broad net debt balance is due to higher cash consumption, as well as provision for interest and payments made. All the foreign currency-denominated debt of Rumo is hedged against exchange variations. Total Indebtness 4Q15 Commercial Banks 1, % NCE % BNDES 3, , % Debentures 2, , % Total Bank Debt 8, , % Leases 1, , % Certificate of Real Estate Receivables % Total Broad Debt 10, , % Cash and Cash Equivalents and Secutities 8 (408.0) (658.5) -38.0% Net Derivatives Instruments (49.5) (98.1) -49.5% Broad Net Debt 10, , % EBITDA LTM 2, , % Leverage (Broad Net Debt / EBITDA LTM) 4.98x 5.14x -3.2% Note 8: Includes restricted cash from bank debts in the amount of R$79.8 million. The following table is a breakdown of the items that impacted the consolidated debt transactions of Rumo. Bank gross indebtness Inicial balance of consolidated bank net debt (Net of MTM) in 09/30/2015 9,855,3 Cash and cash equivalents and marketable securities iin 12/31/2015 (658,5) Net Derivatives Instruments in 12/31/2015 (98,1) Inicial Consolidated Bank Gross Debt in 12/31/ ,9 Items with impact on cash (93,7) Funding 326,0 Amortization of principal (265,8) Amortization of interest rates (153,9) Items without impact on cash 171,5 Provision for interest rates (accrual) 221,2 Exchange rate variation net of derivatives (49.7) Closing balance of consolidated bank gross Debt in 03/31/ ,5 Cash and cash equivalents and marketable securities in 03/31/2016 (408,0) Net Derivatives Instruments in 03/31/2016 (49,5) Closing Balance of Consolidated Bank Net Debt (Net of MTM) in 03/31/ In the context of changing the profile of debt maturing between 2016 and 2018, totaling R$2.9 billion, new covenants were renegotiated with commercial banks and defined for a maximum leverage of 4.5 times of broad net debt/ebitda LTM for December 31, Broad net debt includes bank debt, debentures, lease and Real Estate Receivables Certificates. BNDES granted consent to the non-compliance with covenants on December 31, 2014 and December 31, 2015 and new verification will occur on December 31, We are discussing the new covenants with BNDES, already considering the new ones agreed with commercial banks. 9 of 17

10 6. Capex Investments Total Investments % Recurring % Expansion n.a. In, Capex totaled R$406.0 million, in line with the 2016 budget. The 35.6% decline in recurring Capex is mainly due to the allocation of higher maintenance costs of rail structure and rolling stock, which, according to the new criteria, was considered maintenance and personnel costs (Opex) this quarter and investments (Capex) in the same quarter the previous year. Expansion Capex totaled R$258 million. The increase reflects: (i) the acquisition of 332 HPT freight cars and 4 GE AC44 locomotives for the North Operation; (ii) improvements made in terminals, Warehouse X and Port of Santos; (iii) continuation of the project to renovate the railway line connecting Rondonópolis and Santos, in order to eliminate bottlenecks; and (iv) continuation of the project to renovate the rail structure at the Paraná Central Corridor in the South Operation to eliminate the bottlenecks in the stretches and to improve railway safety. 7. Cash Flow The following statement shows Rumo s cash flow based on the balance reported in 4Q15 and the respective changes to reach the cash balance in.securities were considered as cash and cash equivalents in this statement. Indirect Managerial Cash Flows EBITDA Non-Cash Effects 44.7 Working Capital Variation (114.9) Operating Financial Result (20.4) (a) (=) Operating cash flows Total Capex (284.9) (b) Recurring (148.0) Expansion 9 (136.9) Dividends Received 1.7 (c) (=) Cash flows from investments (283.2) Funding Amortization of principal rates (408.1) Amortization of interest rates (244.8) Other 5.5 (d) (=) Financial cash flows (321.3) (=) Generation (Consumption) total cash (250.5) (+) Cash and cash equivalents + marketable securities + restricted cash, opening balance Rumo (=) Cash and cash equivalents + marketable securities + restricted cash 10, closing balance Rumo Metrics (=) Cash generation after recurring Capex (a+ b) (=) Cash generation after Total Capex (a+ c) 70.8 (=) Generation (Consumption) total cash (a+c+d) (250.5) Note 9: During the quarter, we acquired 332 HPT freight cars and information technology equipment through operations recorded as financial lease, in the amount of R$121.1 million. Considering this non-cash effect, expansion Capex in was R$258.0 million. Note 10: Includes restricted cash from bank debts in the amount of R$79.8 million. 10 of 17

11 8. Operating and Financial Performance Indicators Below are the changes in the main operating and financial indicators. Operational and Financial Performance Indicators 2Q15 3Q15 4Q15 Consolidated Operating Ratio (%) 86% 66% 74% 81% 81% 86% 81% -6% Diesel Consumption (Liters/ '000 GTK) % Chg. % North Operation - Rondonópolis (MT) to Port of Santos (SP) Average number freight cars loaded per day (units) % Transit time (hours) % Cycle time of freight cars (days) % South Operation - Terminals in north of Paraná to Port of Paranaguá (PR) Average number freight cars loaded per day (units) % Transit time (hours) % Cycle time of freight cars (days) % During periods of greater market demand (2Q and 3Q), the improvement in operating indicators is the reason for higher capacity. That isthey reflect how investments created the conditions to reduce time, increase average speed and, consequently, increase the volume transported. During times of lower demand (1Q and 4Q), the operating indicators are the result, that is, they reflect how much of the available capacity was used to deliver the volume required. Operating Ratio: represents the portion of operating costs and expenses (including depreciation and amortization) as a percentage of net revenue. A significant portion of railway costs is fixed. Hence, in times of lower transported volume, Operating Ratio will increase. Diesel consumption: There are significant differences in consumption levels among the networks operated due to the quality of each railway line and the rolling stock used. Whenever there is a significant change in volume among networks, average consumption can be affected regardless of improvement or deterioration in the entire system. New locomotives and freight cars tend to reduce average consumption per train due to higher energy efficiency of the locomotives. Cycle time of freight cars: considering a scenario of constant fleet, in periods of peak demand, freight car cycle is what restricts capacity, that is, higher volume will be the result of the lowest possible time cycle. In periods of lower demand, it will be a consequence, because there will be idle assets that will increase total cycle time. Transit time: reflect investments in rolling stock and in the improvement of rail structure in periods of high demand. However, in periods of lower demand, it does not necessarily reflect worse performance because scheduled maintenance is conducted, which causes interferences in the system. Freight cars loaded/day: In periods of high demand, the number of freight cars loaded/day shows the system capacity limit, while in periods of lower demand it represents market conditions. We bring an update of the Transformação (Transformation) Project as announced in 4Q15 earnings release. Through better planning of the activities performed, the productivity of maintenance and execution staff has increased over the second half of As a result, there was an improvement in the reliability and availability of rolling stock. The average kilometer between locomotives operating faults in Parana had an improvement of 49% from January to March 2016, allowing a reduction of 40% of tons lost by mechanical reasons. Through the new loading and unloading processes adopted, the freight cars time of wait in terminals has fallen significantly, reducing the cycle time of freight cars. Additionally, freight cars cycle time in northern Paraná, the largest center loading of the corridor, has shown significant reductions. 11 of 17

12 9. Guidance Short Term This section contains the guidance ranges of some of the key parameters that influence the consolidated results of Rumo in Note that other sections of this Earnings Release too may contain projections. Such projections and guidance are mere estimates and indications, and should not be taken as a guarantee of future results. Rumo 2016 EBITDA (R$ MM) 2,300 2,500 Total Capex (R$ MM) 1,700 2,100 Capex Recurring (R$ MM) Capex Expansion (R$ MM) 1,000 1,200 Long Term Due to the revision of the Investment Plan, disclosed to the market on April 23, 2015, we present below the new projections for key parameters of Rumo in nominal terms. Such projections and guidance are mere estimates and indications, and should not be taken as a guarantee of future results. VOLUMES (TKU BLN) 69 D 71 EBITDA 11 (R$ BLN) 4.5 D D 51 CAGR: +9% CAGR: +18% 2.3 D E 2020E 2016E 2020E CAPEX 11 (R$ BLN) 1.7 D % 2.3 D D % 61% 1.5 D % 1.0 D % 37% 32% 39% 52% 75% 2016E 2017E 2018E 2019E 2020E Recurring Expansion Note 11: Information on EBITDA and Capex curves mentioned above are expressed in nominal terms and is based on IGP-M with the following curve: % p.a., % p.a., % p.a. and % p.a. Any changes in these curves do not represent significant impact on Company's results. 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. 12 of 17

13 10. Appendices 10.1 Financial Instruments - Rumo Balance Sheet Balance Sheet Rumo Rumo Current Cash and cash equivalents Securities Trade receivables Derivative financial instruments Inventories Peer company receivables Income tax and social contribution Other taxes recoverable Prepaid expenses Other assets , ,308.3 Non-current Trade receivables Restricted cash Deferred income tax and social contribution 1, ,361.2 Income tax and social contribution Other taxes recoverable Judicial deposits Derivative financial instruments Other assets Investments in associates Property and equipment 9, ,404.1 Intangible 7, , , ,254.3 Total Assets 21, ,562.7 Current Loans. financing and debentures 2, ,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 Leases and concessions Payable to related parties Related parts Deferred revenue Other financial liabilities Other payables , ,480.8 Non - current Loans. financing and debentures 6, ,141.1 Leases 1, ,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 revenue Other payables , ,237.7 Equity 3, ,844.2 Total Liabilities 21, , of 17

14 Income Statement Consolidated Net Operating Revenue 1, % Costs of Services (871.1) (702.6) 24.0% Gross profit % Sales. General and Administrative Expenses (85.9) (98.7) -13.0% Other Operating Income (Expenses). Net 2.3 (29.7) n.a. Net financial result (430.6) (338.7) 27.1% Equity Pickup 3.6 (0.1) n.a. Income Tax and Social Contribution 10.8 (26.5) n.a. Net Profit (loss) (185.1) (226.2) -18.2% Cash Flow Cash Flow (Accounting) Rumo Cash flow from operating activities Profit before income tax and social contribution (195.8) (197.1) Adjustments: - - Depreciation and amortization Amortization of concessions Equity (3.6) (0.1) Provision for profit sharing and bonuses Result on disposals of fixed assets and intangible assets 4.5 (0.5) Provision for lawsuits Provision (reversal) for losses on doubtful accounts (1.3) 2.7 Stock option Leasing and Concessions Interest. monetary and exchange variations. net Others (16.6) (1.9) Variation in: Accounts receivable (22.9) (294.6) Advances from customers (2.1) (11.1) Judicial deposits (1.0) 11.6 Related parties. net 30.7 (5.4) Taxes and contributions recoverable (3.2) (36.6) Taxes and contributions payable (22.7) (9.2) Inventories 7.1 (3.9) Labor and social security obligations (18.7) (25.5) Trade accounts payable Advances to suppliers (4.7) (0.2) Leasing and Concessions payable (26.0) 20.3 Derivative financial instruments Lawsuits (17.9) (21.9) Other liabilities. net (104.5) - Other assets and liabilities. net (32.3) 15.1 (113.0) (301.0) Cash generated by (used in) operations Cash flow from investing activities Capital increase in subsidiary - - Marketable securities (124.5) Restricted cash Dividends received from subsidiaries and associates Addition to property. software and other intangibles (284.9) (284.8) Cash generated by (used in) investing activities (50.7) (409.3) Cash flow from financing activities Borrowings Payment of borrowings (376.9) (385.7) Payment of interest on borrowings (244.8) (112.7) Mortgages anticipation (31.2) (59.7) Derivative financial instruments (17.1) - Dividends payable - (300.0) Cash generated by (used in) financing activities (343.9) (527.8) 14 of 17

15 Increase (decrease) in cash and cash equivalents (40.6) (850.6) Beginning balance of cash and cash equivalents Final balance of cash and cash equivalents Financial Statements - Cosan Logística Balance Sheet Balance Sheet Cosan Logística Current Cash and cash equivalents Securities Trade receivables Derivative financial instruments Inventories Peer company receivables Income tax and social contribution recoverable Other taxes recoverable Dividends and interest on capital Other assets , ,489.6 Non-current Trade receivables Restricted cash Deferred income tax and social contribution 1, ,362.8 Income tax and social contribution Other taxes recoverable Judicial deposits Derivative financial instruments Other assets Investments in associates Property and equipment 9, ,404.1 Intangible 7, , , ,256.1 Total Assets 21, ,745.7 Current Borrowings 2, ,444.1 Leases Advances on real estate credits Derivative financial instruments Trade accounts payable Labor and social security obligations Taxes and social security contributions payable Other payable taxes Dividends and interest on capital Leases and concessions Payable to related parties Deferred revenue Other financial liabilities Other payables , ,491.6 Non - current Borrowings 6, ,141.1 Leases 1, ,202.1 Advances on real estate credits Derivative financial instruments Other payable taxes Provision for lawsuits Leases and concessions 2, ,204.0 Deferred income tax and social contribution 2, ,714.4 Deferred revenue Other payables of 17

16 13, ,237.7 Equity 3, ,016.4 Total Liabilities 21, , Income Statement Cosan Logística Consolidated Net Operating Revenue 1, Costs of Services (871.1) (146.4) Gross profit Sales. General and Administrative Expenses (88.0) (24.4) Other Operating Income (Expenses). Net 2.3 (0.5) Net financial result (427.3) (20.4) Equity Pickup Income Tax and Social Contribution 10.3 (4.8) Net Profit (loss) (184.4) Cash Flow Cash Flow Cosan Logística Cash flow from operating activities Profit before income tax and social contribution (194.7) 14.0 Adjustments: Depreciation and amortization Equity in subsidiary (3.6) - 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 (1.3) 0.0 Stock option plan Leasing and Concessions Interest. monetary and exchange variations. net Other (16.6) Variation in: Accounts receivable (22.9) (41.7) Advances from customers (2.1) (11.1) Judicial deposits (1.4) 0.0 related parties 30.5 (5.4) Taxes and contributions recoverable 2.1 (8.3) Taxes and contributions payable (28.9) (1.3) Inventories 7.1 (1.1) Labor and social security obligations (18.7) (8.2) Suppliers Advances to suppliers (4.7) (0.2) Leasing and Concessions payable (26.0) - Lawsuit (17.9) (0.4) Other liabilities (104.5) - Other assets and liabilities. net (31.5) 7.7 (113.3) (68.8) Cash generated by (used in) operations (1.0) - - Cash flow from investing activities - Marketable securities Restricted cash Gain on disposal of declared dividends Addition to property. software and other intangibles (284.9) (31.0) Cash generated by (used in) investing activities (50.7) (31.0) - - Cash flow from financing activities - Borrowings Payment of borrowings (376.9) (31.0) Payment of interest on borrowings (244.8) (11.1) Mortgages advances (31.2) - Derivative financial instruments (17.1) - Dividends payable - (75.0) 16 of 17

17 Cash generated by (used in) financing activities (343.9) Increase (decrease) in cash and cash equivalents (39.4) Beginning balance of cash and cash equivalents Final balance of cash and cash equivalents of 17