Raízen (RAIZ4) reports a loss of R $ 7.3 billion in the fourth quarter, with banks warning of pressure on cash flow.

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• Raízen ended the final quarter of the 2025/26 harvest with a net loss of R $ 7.3 billion.
• Net revenue declined by 11.1% compared to the previous year, remaining at R$ 51.3 billion during the period.
• Adjusted EBITDA increased by 46% to R$ 2.9 billion, driven by the distribution sector.
• The negative free cash flow of R $ 7.6 billion for the year resulted in a leverage increase to 5.2 times.
• Bradesco BBI plans to have a cash outflow of R$ 5 to 6 billion in 2027 and a leverage ratio of 6 times.

Raízen (RAIZ4) reported a net loss of R$7.3 billion in the fourth quarter of the 2025/26 harvest, which is a notable deterioration compared to the R$2.5 billion loss in the corresponding period of the prior harvest.

Analysts emphasize that despite poor performance in the final line of the balance sheet, the company showed signs of operational enhancement, primarily due to its fuel distribution division in Brazil.

JPMorgan observes a combination of outcomes for Raízen.

Raízen’s financial results were a mix of positive and negative figures. While the net revenue decreased by 11.1% to R$ 51.3 billion, the adjusted Ebitda, which reflects operational performance, increased by 46% to R$ 2.9 billion in the annual comparison.

The bank stated that this progress was backed by the excellent performance of the fuel distribution business in Brazil.

The rise in financial spending, asset impairment-related accounting losses, and restructuring expenses influenced the overall negative impact.

Fuel distribution was a notable positive aspect.

The distribution of fuels in Brazil showed the strongest performance among the company’s segments during the quarter.

The sales volumes increased by 8.2% compared to the previous year, and the division’s adjusted Ebitda surged by 60.4%, reaching R$ 1.7 billion.

The operating margin saw a substantial increase, reaching R$ 246 per cubic meter, a 48.2% rise compared to the previous year.

Analysts remain concerned about the ongoing cash flow generation.

JPMorgan cautions that Raízen’s financial situation still warrants careful consideration, despite operational enhancements.

The negative free cash flow of R$ 7.6 billion for the year primarily resulted from increased working capital requirements and a tighter credit environment.

The company’s leverage increased to 5.2 times the ratio of net debt to adjusted Ebitda in the past 12 months, which is higher than the 3.2 times reported a year ago.

Bradesco BBI forecasts ongoing financial strain.

Analysts Vicente Falanga and Gustavo Sadka from Bradesco BBI also review the outcomes carefully.

The fuel distribution operation is changing, but Raízen (RAIZ4) still faces financial challenges due to high cash consumption, as reported by them.

The bank forecasts a cash shortfall of between R$ 5 billion and R$ 6 billion for the 2026/27 harvest, despite the company’s operational improvements and initiatives to minimize investment and capital requirements.

Analysts believe that this situation may increase the leverage to approximately six times, with cash reserves decreasing from R$ 13.6 billion to a range of R$ 7 billion to R$ 8 billion.

Asset sales are considered a significant element.

Bradesco BBI emphasizes that utilizing extrajudicial recovery processes and strategic divestitures will be crucial for the company in this situation.

One of the actions being taken by the market is the intended divestiture of Raízen’s activities in Argentina, seen as a significant step to boost cash reserves and alleviate financial strain on the company.

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• Argentina
• Bradesco BBI
• JPMorgan
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• Out-of-court debt collection