November 12, 2019 / 5:33 PM / a month ago

Cosan awaits new govt in Argentina to estimate impacts for subsidiary

SAO PAULO, Nov 12 (Reuters) - Brazilian energy and logistics group Cosan SA awaits a government change in Argentina to better evaluate potentially negative impacts from fuel prices freeze to its subsidiary Raízen Combustíveis, an executive said on Tuesday.

Cosan is a partner of Royal Dutch Shell Plc in the JV Raízen, which suffered losses in Argentina with a $55 million inventory in the third-quarter after the Argentinian government decided to freeze prices in August, the company said.

In a call with investors to discuss Cosan’s third-quarter results, during which Argentina was the main topic, the head of Investors Relations Phillipe Casale said it is unclear yet how the political and macroeconomic situation will evolve after Peronist Alberto Fernández takes over the presidency.

Casale added that Raízen will “optimize” its operations in Argentina according to the political environment, without giving any further details.

He refrained from providing estimates for the fourth-quarter, as fuel prices have been gradually frozen in November.

Despite the political and economic scenario in Argentina, total sales volume grew by 14% in the third-quarter compared to the previous quarter.

In October, Raízen concluded the acquisition of downstream assets from Shell in Argentina for $916 million, including hundreds of gas stations, a refinery, a lubricant plant, among other assets.

Concerning the sale of refineries by Brazilian state-run oil company Petroleo Brasileiro SA, known as Petrobras, Casale said Cosan is considering potential business opportunities.

Cosan’ shares were trading almost 5% down on Tuesday at 57.61 reais, among the worst performances of the Brazil’s main stock index, which was falling 1.46%. (Reporting by Roberto Samora; Writing by Gabriela Mello; Editing by Sandra Maler)

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