By Brazil Stock Guide – Raízen SA shares (RAIZ4) plunged 12.5% on Thursday to 1.05 reais, nearing penny-stock territory, after the sugar and ethanol producer posted a sharp quarterly loss. Year to date, the stock has dropped more than 40%, according to InfoMoney.
The company reported a net loss of 1.8 billion reais ($350 million) for the first quarter of the 2025/26 harvest, compared with a profit of 1.1 billion reais in the same period a year earlier. Results were hit by weaker operational performance and adverse weather, which reduced crushing volumes and limited cost dilution.
Analysts flag debt surge and operational headwinds
XP Investimentos described the quarter as challenging, citing a leverage increase after replacing supplier contracts with debt, pushing the net debt-to-Ebitda ratio to 4.5 times. The firm also pointed to non-recurring efficiency gains, fuel distribution inventory losses in Brazil, and a longer-than-expected maintenance shutdown in Argentina.
“Looking ahead, we expect an improvement in fuel distribution, while the ESB may face headwinds in sugar despite gains in ethanol — a scenario that could pressure the company toward a necessary capital increase,” XP said. Management is in early-stage talks with controlling shareholders over a potential capital raise.
Bradesco BBI trims price target amid high leverage
Bradesco BBI said adjusted Ebitda of 1.9 billion reais matched its forecast but came in below the market consensus. It noted the quarter was “cleaner” compared with the heavily distorted commercial activity of the fourth quarter of 2025.
The mobility division stood out with a margin of 149 reais per cubic meter, well above Vibra and Ultrapar’s 115 to 118 reais, reflecting efficiency gains and inventory optimization. Ebitda from the sugar and renewables segment was 862 million reais, in line with expectations but down 27% from a year earlier on lower volumes and reduced cost dilution.
Net debt climbed sharply to 49 billion reais from 34 billion reais in the previous quarter, driven by heavy cash consumption and the winding down of most supplier financing operations.
Following the results, Bradesco BBI cut its 2026 price target to 2.00 reais per share from 2.80 reais for 2025, factoring in higher debt levels and elevated costs, partially offset by better margins in mobility. The bank said recovery mode is underway, but deleveraging remains a key challenge.
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