Good morning, everyone. Thank you for waiting. And welcome to Cosan's Earnings Conference Call for the First Quarter 2023. [Operator Instructions] This video conference is being recorded and will be made available on the Company's IR Web site at cosan.com.br where the complete material of our earnings call can be found. You can also download the presentation in English from the chat icon. During the Company’s presentation, all participants will have their microphones disabled. The question-and-answer session will start after the presentation. Please note that, the information contained in this presentation and in statements that maybe made during the earnings call regarding Cosan's business prospects, projections and operating and financial goals constitute the beliefs and assumptions of the Company's management, as well as information currently available. Forward-looking considerations are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Overall economic conditions, market conditions and other operating factors may affect Cosan's future performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, with us we have Mr. Luis Henrique, CEO; and Mr. Ricardo Lewin, CFO and IRO. I will now turn it over to Mr. Ricardo.

Good morning, everyone. And thank you for participating in Cosan's earnings conference call for the first quarter of 2023. We started the year with strong results in the portfolio with contributions from all businesses. Let's now go through the main financials and operational highlights of each business, starting with Raizen on Slide number 3. Since this quarter closes the 2022-2023 record year and Raizen has already held each conference call, I will focus on the highlights for the year. Raizen ended their crop year with expansion in all segments, achieving record global income and adjusted EBITDA of BRL15.3 billion. The year was also marked by the focus on operational excellence, continuity of the renewables expansion cycle and record E2G production in the pilot plant reaching 30 million liters. In the renewables segment, EBITDA increase reflected the sales expansion, highlighting the increasing global customers for both industrial and fuel applications. We have also significantly advanced it in the power agenda. We became the fifth largest energy trader in Brazil with more than 24,000 connected customers. In sugar, the year’s result was boosted by the greater volume sold with higher prices due to better pricing amid a more positive scenario for the commodity, which compensated the pressure on margins due to higher costs. Marketing and service EBITDA also present growth considering the impact of the tax credit in the period. In Brazil, sales remained stable and the operation was affected by better operational margins nesides pressure from business environment due to greater supply of products on the market and inventory losses. Latm operations, the year was marked by an increase in volume, market share and profitability despite a complex macroeconomic scenario and a scheduled stoppage of the refinery in Argentina. Let's now move to Slide number 4 to present Rumo. We had…

[Operator Instructions] Our first question is from Pedro Soares, sell side analysts from BTG Pactual.

I have a couple of questions, please. To Luis and Ricky, they're about Vale. Could you give us some more color on how much you would say you're devoting of your time to Vale? What was the situation you found at the company like, how different was it to what you imagined when you acquired the asset? And another question on the same topic is, have you got any additional information for us about the 1.6% additional stake that could or could not have been exercised, have you made any decisions on that?

Considering what we shared with you when we made the investment, one of the main points was to be part of the company's Board with other board members and shareholders. So I'm very happy because the company led this initiative very well. The governance committee did it very transparently very clearly, there was a Shareholders Meeting and there were no major issues. And in my opinion, in our opinion, we have elected some very solid members of the board with diversified expertise. So I have been a member of the Board since the 1st of May. And what we'll do from now on we'll be sharing with you on the sell side, buy side, we have Leo Pontes, who's responsible for Cosan's investments in Vale’s and will cover shareholders’ issues. It's important to make everything clear about governance and my role as member of the Board and the company's opinions with regard to that will be exercised by the person who manages that investment, which is Leo, and company issues will be managed by the company itself. But generally speaking, we're very excited. We're still very excited. This is a very important stage for us. Having a Board and a team working together and to have the privilege of being part of that and to make sure that we are all working for the best and to generate value for the company. So in short, nothing has changed in terms of our conviction of when we made this investment six or seven months ago. Now as a Board member, we'll have the opportunity to make closer contributions to the management together with other members of the Board. Right now about your second question, we won't exercise. We are very happy with the 4.9 that we have currently. And as we said from the beginning, our position includes different optionality triggers, among which we will be proving our thesis along the way, and there are stages still to come. So far, we have kept with the stages we had proposed and we’ll be part of the Board, we’ll be part of other committees that will be set up by the Board, and we will be sharing that with you over the coming days.

Next question is from Guilherme Palhares, sell side analyst from Bank of America.

We have a couple, a little more on the financial side. Lewin, you talked about the provisions for this half of the year. And looking forward, what are those reserves like, what can we assume and what are the implications of that on the dividends flow from Comgás all the way to Cosan, considering the Supreme Court of Justice’s ruling? Could we say that the company would rather pay taxes on full results considering the tax benefits instead of creating that legal reserve for the tax benefits to make sure that those dividends continue to flow all the way up to the holding level? And the second question about the dividends flow as well. To understand those dividends you have received from Vale from Raízen this quarter, how much of that has gone up to the holding so far and how much of the subsidiaries are under Cosan, 8 or 9, which are the main ones to be affected by that?

Could you take that, Lewin, would you like to take that?

Yes. I'll start with the second. Actually, Vale is very clear. We received about BRL400 million, BRL215 million of which were passed on to the banks that were part of the operation structure. Why? If we had kept the dividends that the strike price would have changed, as in the theory, there would be a change in the strike price of the derivative. So we prefer to pass that on to the banks and to keep the strike prices of the derivatives the same. In terms of the preferential, there is a grace period of six months in the dividends payout. So dividends will flow up to the two holding companies Cosan 9 and 10, but they haven't gone all the way up to the holding companies. So all dividends have stopped at Cosan 9 and 10. With regards to your first question, it's interesting because our intention is to go back to the way things were before 2021 when we took advantage of these tax benefits, that's what everybody was used to seeing at Comgás. And we believe dividends will flow as per usual, obviously, if the tax benefits can't be used, then there won't be an effect on the dividends going up. But the idea is to continue to take those dividends up, respecting the tax benefits decision, because we need to pay for our preferred structure for Cosan 9 and 10 and to take up the dividends to the holding company in order to pay for the principal and interests. I hope, I've answered your questions. But if you have any more, please feel free to ask them.

Yes, that was very clear, Lewin, thank you. So let me just make sure I got it right. The dividends flow will continue. And at the same time, as we look at the dividends, dividends have stopped at Cosan 9 and Raízen. Now Cosan 9 and 10, 10 from Compass. Actually, let me take this opportunity to reiterate this, because I think it's important to all investors. These tax benefits and provisions will not affect Comgás’ fundamentals. Comgás has always been a strong dividends payer, the business has been growing in terms of volume, in terms of sales mix. And let's not forget that it has a very strong portfolio with Commit, Sulgás as part of the portfolio. And as I said, during the presentation, there are many dividend payout levers that can be used inside Compass. I just wanted to reiterate that as a segue.

Our next question is from Luiz Carvalho.

I also have two. Last time we spoke in person, Luis, at the end of last year, you talked about many of the group's challenges, you addressed those. If we look at all the company's projects start many relevant projects, the challenge at Vale, Rumo's project at Compass as well and Raízen. You mentioned that the company's main challenge was to deliver on all these projects on schedule, on budget and with quality. Could you update me on what the priorities are right now, what are you and your executives devoting most of your time to and what are the main challenges you see as part of this process? Second question is on a macro level. It's been about five months of this new administration and I'm not about to ask you a political question. But there have been some discussions on the tax framework. So what part of that tax framework will make a contribution? We’ll have a contribution from the private sector. So we've seen tax on oil exports, we're also seeing -- I don't know if that was the case or not, but more appetite on the side of this administration to tax things. There are ongoing tax negotiations. So I'd like to hear from you about key topics, such as the [indiscernible] discussion, royalties on mining. How do you see this macro scenario and what kind of an impact, if any, will it have on the company’s group -- on the group's companies?

Well, I'll start by talking about our projects and our time allocation, because that's very relevant. As you know, we've shared with you over the past few years, we've reiterated the importance of the partnership among the group's executives and the connection with our chairman, the founder and shareholder of the company to create the ability to continue to take leaps, both in terms of the sizes of the operations and opportunities to complement our portfolio in the five areas that are key to this company, to the future of Brazil and the world. As you can see in terms of becoming a member of the Board, I have left Rumo and Compass and Leo Pontes has taken on that responsibility. So he's devoting some quality time to that, all of us, myself, Rita and Leo, are required at the holding company and Musa at the company, Nelson, Phillipe and Peto at the companies to make sure that we have the right time balance, obviously, supported by Marina, Lewein and Paula, playing their own roles. So we have rebalanced that in order to free up some time so I can devote more time to Raízen and to Vale. Obviously, always looking at Moove’s international expansion and providing support to Leo at Cosan Investments. But myself, Marcelo and we’ll have rebalanced our time so that we can devote more time and energy to each of our investments. As to your second point about the projects, they're on track. Obviously, you know that, we spoke to you, but I will reiterate it. Engineering is still a challenge in Brazil. The installed capacity in this country for works is a challenge. So we're using different strategies in our projects, obviously, major construction companies that were around in the past have been greatly reduced…

That's very clear. It was almost like a lesson.

Our next question is from Gabriel Barra, sell side analyst from Citi.

I have a question, and two quick follow-up questions. First question is about what we've been talking to the market about Cosan. We've been seeing major changes in the company since the corporate structure was simplified, the capital allocation, your investment at Valley. And one of the things we've been discussing is your portfolio. Please correct me if I'm wrong, Luis, but it's a long duration portfolio with major investments being made. Now that we have higher interest rates, one of the things that we have been discussing is the company's consistent revisions to its portfolio. So could you share with us what you've been discussing at the company? With regards to that, the IPO window is slightly tighter this year, there are some uncertainties, the market is a bit tougher. How could we possibly think about that portfolio management via private placement as you did at Compass or maybe a direct M&A investment through [player]? What have you been discussing at the company for this year, it’d be great to hear about that? And the two follow-up questions, are, first about the 1.5 billion provision. A couple of points, I'd like to clarify the impact of that, looking forward. What will be recurring out of that 1.5 looking on a monthly basis or an annual basis so that we can understand the impact on results and the monetization of that impact? As you said, this is not a cash provision, it's an accounting provision but it might become cash at some point. Do you have a timeline for that? And on Compass, could you talk a bit more about the decision? A lot has been said about [indiscernible]. You're talking to the regulatory agencies, a lot has been discussed about transportation, gas pipes or distribution gas pipes. If you could give us some color on that that would be great.

I'll start with the last one, and then I'll turn it over to Lewin. Well, the discussion among the regulatory agencies are still going on. [SSP] in São Paulo and [A&P] in Rio. They are discussing a harmonization process. And they're trying to come to a definition based on everything that's happened, the legal proceedings, public hearing, about the investments and the gas issues or the decrease. There are no updates. The agencies are working hard on it and they're working responsibly on it to try and find the best solution. The whole investments and construction process has been conducted by the company as was announced in the tariff review in 2019. So the company is in compliance with everything that was agreed on in terms of regulation processes. Obviously, now the terminal will be concluded in the second half of the year, that's another important piece of the state and national optionality of supply. It will increase competitiveness, it will encourage the free gas market. So we are confident that both agencies are competent and responsible, and they will look at Brazil as a whole to deal with these infrastructure challenges we have in Brazil. Everything in Brazil takes a while to be conceived, implemented and built. And Comgas and Compass are role models of companies in the gas industry that have been making relevant investments and positioning themselves so as to make sure that their clients and as a consequence, the gas market, always goes in the best direction possible. So no news, no material news to share with you. We just believe these conversations between the very competent agencies is very important. As for the portfolio, you are absolutely right, Gabriel. We constantly discuss that, Compass and Moove, will always be ready for IPO or private placement…

Yes, let me share the figures with Barra and the investors. It's important to say that there have been no losses. We will not have an upside that we used to have from the additional credit that we used to take out. So considering Compass and Moove, we're talking about roughly BRL200 million a year at the companies. Then you need to do the math to go all the way to Cosan, because the cash impact on Cosan would be less than that, not in accounting terms, cash impact. And just to reiterate what Luis said about monetization. The Supreme Court of Justice has not made a ruling yet, so it's hard to know what of that will actually materialize. So our legal counsel is monitoring the situation and we will share any news with the market as soon as we have it.

Next question is from Bruno Montanari, sell side analysts from Morgan Stanley.

If we can go back to Vale please. We know that this is a long duration structure, it's well protected with derivatives. But could you give us some idea about what you'll see happening over the years to make the decision to convert that into an effective stake outside the derivatives or unbundling the operation, what are the decision-making factors that you will consider over the year, so that this investment can be realized? Second question is, could you give us a more color on the final stages of the regas terminal, and what will be the early ramp up for this project?

With regards to Vale, as we've been saying since October last year when we made the announcement, it will be to check if our value unlocking thesis come to fruition and as a minority shareholder at the company, we are in constant dialog with the Board, with other shareholders, and that will take the company in the direction that will unlock the most value potential. It's a different model to what we've done in the past, it’s control or co-control as is the case of Raízen. But given the size of the company and the size of the opportunity, in our opinion, we had to choose a different tack to work collaboratively and to align our objectives for the company. And to see if that will work and if production value generation through agreements that need to be signed, progress, also value generation through new technologies, there's a whole set of attributes that the company does have based on the quality of the assets and everything it has to offer. So we'll see if they evolve at the speed. We believe they can, as investors, obviously, not as members of the Board, and so we have the option to do that. If they do then we'll turn that into a direct stake. If not, we'll take the required time and then we will undo the operation. As for the regas terminal, as I said, the latest good news is that we have drill on both sides to connect the terminal underwater all the way through to the coast until to the receiving point, which is the integration gas pipe connecting the terminal to the city gate. That's a key stage and it was concluded a few weeks ago. So we're now moving to the final stretch. We'll be commissioning it in the second half of the year and the ramp up stage will start at the beginning of next year. So that will be the agreement with Comgás and Compass' team is negotiating with other clients, three clients, other gas suppliers, other trading companies so that we can ramp up the terminal based on our optionality agreements at the end with the product availability. Everything is on track. This drilling was a bit harder than we had expected in terms of geology, but projects like that are always the same, there's always a surprise. But we did have time available in terms of monetizing on part of the contract that happened in that period, whilst it's still not in operation and it will -- the physical ramp up will begin at the end of this year, beginning of next year. So we'll be using the second semester of this year to run tests, configurations to train the team and to commission so that it can deliver on Comgás’ contract, which is key to complement the offer and for Comgás to comply with [D24].

Next question is from André Vidal, sell side analyst from XP. André Vidal: The first one is to Luis. The market has been saying a lot about potential Petrobras changes in the last two weeks in terms of derivative pricing. Today, there was an official announcement of the new policy at the end of the day, not much has changed. But not many people talk about gas and that's another topic the government has been talking about. It's been saying that it wants to use Petrobras to reduce the price of gas in the country, and it's much harder to have a gas benchmark in the market than for diesel or gasoline. So how do you see that possibility of Petrobras reducing the price of gas and what kind of benefits and risks do you see on Cosan's different businesses? My second question is to Lewin. How do you see the company's need for funding in our opinion, and please correct me if I'm wrong? You have raised debentures in '23, so everything seems to have been addressed. But in '24, maybe to address Vale's maturing installment, you may need to raise some funds in the markets or to sell assets? How do you see the company's need for funding over 2023 and 2024?

To your first question, there is not much to add than what we have heard from the company itself and what they have said to the press. It's always a controversial subject and it needs to be translated into practice, into a pricing policy that will allow Petrobras to send a sign to the market, as to what the model will be. Minister Alexandre Silveira wants to grow the gas market and has captured Brazil's potential in that segment from the pre-salt. The challenge now is how to turn that into a pricing policy. You always need to instruct the market, because if you don't it won't encourage investments. We don't believe in miracles. So they need to make sure that there is the right infrastructure for transportation, distribution. The LNG pipes need to be created along the Brazilian coast to provide options, flexibility and competition. If you consider import prices and opportunities in the market, we went through a war last year. The market is only now getting back to a normal, people are thinking, prices are going to be terrible, it's never going to go back to normal. There are cycles, sometimes prices are competitive, sometimes they are not. And the infrastructure is created so that you have options, so that you can ensure supply to your clients and value generation optionality, so that you can move margins and optionalities posed by the market. I feel very optimistic when it comes to this whole conversation about gas, the secretaries, the Ministry of Mines and Energy, which has made this topic a priority, and Petrobras will, at some point, have to do define something as they've done for diesel and gasoline. They're saying they will compete with the best alternative for each of these supply areas, which in my opinion, is the right way of looking at it. Each administration will have their own mechanisms and it's an important position for distributors, because in this case, we offer service optionalities but we don't run the molecule risk, which is great, because it means we can make the most of opportunities as they appear. In fuels, at Compass, all the time, there are molecule opportunities, parachute opportunities, from suppliers, from clients, that's the beauty of being involved in fuel and gas distribution, in our opinion.

You saw that we issued a five year debenture with a bullet principle worth BRL1 billion that was about two or three weeks ago. And the clear message here is that we haven't exercised any firm bank guarantees everything was done through the market. So it goes to show that the companies have good credit, a good debt profile and therefore, access to liquidity. We shared a debt amortization chart with you during the presentation. This year, we have BRL6 million of the principle to be amortized. And in addition to that, there's the second are logged debenture installment and the Vale installment. The first point is that we have set up this finance structure, because it renforces our flexible structure and it gives us optionality. So this structure can be brought forward if the time is right or it can also be delayed if it's convenient when amortization time comes. So there's a lot of flexibility, there's no pressure in 2024. But obviously, we want to have options, we want to have the optionality. And to do that we have some capital sources, as we said during the call about Vale. The first one is the land management through the local market or the external international bond market. So that we're ready whenever there's a window we can access those markets. The other alternatives, as Luis said, companies are constantly looking at their management portfolio -- portfolio management, so that they can invest and pay out more dividends. A classic example of that is the sale of 80% of T16 and 19 at Rumo. And if there is a window we might do our portfolio management at our main portfolio as long as we don't lose control over any of the companies. But I just want to reiterate that the structure that we have set up allows us not to be pressured by the market.

Next question is from Regis Cardoso, sell side analyst, Credit Suisse.

I'll try and be objective. Could you give us an update on Compass, especially Commit? What kind of potential have you mapped to replicate Comgás' experience the different regulatory frameworks? If you could give me a general update that would be great, and what about the other distribution companies as well? And a follow-up question about ICMS and the provision, just to make sure I got it right. So the recurring effect looking forward will be 0.2 billion on a pretax basis, right? And also about Vale, that 1.6, wouldn't it make sense to convert that into a structure that will give you the right to vote, considering the cost difference between the two structures. And still about Vale, considering the color maturity in 2024, is renewing that structure a net cost or net premium, because I got the impression that you were giving up on an upside at a higher price. And you would only make something at the top range, and sounded like it was a net premium to receive -- as a receivable not payable. So what is the instrument to rollover that instrument if required?

So an update on Commit and then I'll talk about the 1.6, and Lewin can talk about the ICMS, the provision and the maturity. Everything goes well, at Commit, we have all the teams in place. Obviously, they are different models in the different geographies, we have Sulgas, we have the other distribution companies, which have the state's stake involved. We've been welcomed by Mitsui and all the states where we're present. We do see a clear potential that we mapped when we made the acquisition to grow among the residential and commercial segments and considering the regulatory framework and that is reflected in the company's figures. Their ability to solve existing problems in the many different states, pending issues with clients, regulatory issues are all being addressed by Commit’s team and obviously, the opportunity to replicate the technology model to reduce the cost of connection by using more modern material, different methodologies, suppliers, safety practices. We are very confident and very excited, obviously. Realities and speeds will be different depending on the corporate structure we have at each of the companies below. But so far, so good. I think this quarter's results were very good. The profitability is in line. Actually, it's above our business case when we approve the investment. Considering the company's spin-off and exercising our preference, our idea is to conclude that divestment still in 2023. Obviously, it's not just up to us but it's part of our portfolio management to monetize on these five distribution companies. As for the 1.6, if we convert that into a different structure then it will become a debt. And right now we are carrying a smaller debt than most of you had projected when we made the acquisition. We don't think now is the right time to do it. We feel comfortable with the 4.9% from an economic and from an stake point of view with other shareholders. And so far, as I said, so good. We will continue with our 4.9%, because we don't want any more debt pressure and we believe that to be a comfortable position right now on all aspects, economic, governance and stake.

I'll start with Vale's structure. Obviously, if we want to renew that, there is a negotiation of the strikes. We could keep the same strike values but it might generate a premium to be paid or received depending on the market. So I couldn't tell you now whether that's a net cost or net price. There will be a premium to be paid or received depending on what the market looks like down the line. What we are renewing is the financing. And in order to be a risk free operation, the put option net present value is the value of the debt. So they will be making that adjustment. In terms of the provision, you are talking about the BRL200 million recurring effect. Yes, that's precisely it. But as I said on a different question, it's not that we are giving up something. If you look back, we didn't have that benefit. So we are not using that benefit anymore. So the BRL200 million isn't before tax, it is the tax, so it's BRL200 million. And let me take a wild guess. Let's say, it's roughly BRL150 million to BRL180 million at Compass and the rest at Moove, but that's at the company base. As I said, the cash is that relates to Cosan, you need to do the math to get to that. This is the consolidated accounting effect on the companies at the top. Is that clear?

Yes, that's great. Thank you, Luis. Thank you, Lewin, for your answers.

The Q&A session is now concluded. I will now turn it over to Mr. Ricardo Lewin for his closing remarks.

I just want to say thanks to all the investors, to all the sell side investors for joining us. If there is any news, we will be sharing it with the market. Otherwise, I'll see you during our next earnings call. Thank you and have a great week.

Cosan's first quarter 2023 earnings video conference is now concluded. For further questions, please contact the Investor Relations Department. Thank you so much for joining us and have a great day.