By Brazil Stock Guide – The never-ending crisis. Raízen S.A. (B3: RAIZ4) posted a net loss of R$ 15.6 billion in the third quarter of the 2025/26 crop year, underscoring mounting financial stress as leverage climbs and credit metrics deteriorate. The result was driven largely by a R$ 11.1 billion non-cash impairment following rating downgrades and a reassessment of accounting assumptions. Net debt rose to R$ 55.3 billion, pushing leverage to 5.3 times adjusted EBITDA over the last twelve months, compared with 3.0x a year earlier. The company’s international bonds are now trading at distressed levels, widely viewed by the market as reflecting a heightened risk of default.
Adjusted EBITDA totaled R$ 3.15 billion in the quarter, down 3.3% year on year. Performance was weighed down by the Sugar, Ethanol and Bioenergy (EAB) segment, where cane crushing fell 23.2%, sugar production declined 17.9% and ethanol output dropped 19.3%. Lower fixed-cost dilution and weaker sugar prices compressed margins.
By contrast, Brazil fuel distribution delivered stronger results. Adjusted EBITDA rose 50.5% to R$ 1.63 billion, supported by an 11.6% increase in volumes and improved margins of R$ 215 per cubic meter. In Argentina, adjusted EBITDA was broadly stable at $108 million, helped by the operational recovery of the refinery, though still pressured by inflation and currency volatility.
The R$ 11.1 billion impairment reflects provisions related to deferred taxes, goodwill and other non-financial assets. The company stressed that the adjustment has no cash impact and could be reversed in the future, depending on macroeconomic conditions and progress in stabilizing its capital structure.
For the first nine months of the crop year, net losses totaled R$ 19.8 billion. Adjusted EBITDA fell 12.3% to R$ 8.4 billion, while net revenue declined 11.7% to R$ 174.5 billion.
Cash and equivalents stood at R$ 17.3 billion at quarter-end, with more than 90% in immediate liquidity. Even so, higher financial expenses—amid an average CDI benchmark rate of 14.9%—have intensified pressure on earnings and cash flow.
Investors are closely watching the stance of Raízen’s controlling shareholders. Shell, its partner in the joint venture, has so far refrained from injecting additional capital, maintaining a cautious position as credit risk escalates. Cosan, the other controlling shareholder, is still evaluating strategic alternatives regarding its exposure and the company’s capital structure, according to people familiar with the matter. Raízen said it has hired financial and legal advisers to assess structural solutions aimed at preserving long-term viability.