Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to Cosan S.A. First Quarter of 2018 Results Conference Call. Today with us, we have Mr. Phillipe Casale, Investor Relations Executive Manager; and Mr. Joao Arthur Sosa, Head of Finance. We would like to inform you that this event is recorded and all participants will be in a listen only mode during the company’s presentation. After the Cosan’s remarks, there will be a question-and-answer session for industry analysts. At that time, further instructions will be given. [Operator Instructions] The audio and slideshow of this presentation are available through a live webcast at ir.cosan.com.br. The slides can also be downloaded from the webcast platform. Before proceeding, let me mention that forward-looking statements will be made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Cosan’s management, and on information currently available to the company. They involve risks, uncertainties and assumptions, because they relate to future events, and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Cosan and could cause results to differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Phillipe Casale. Mr. Casale, you may begin the call.

Good morning, everyone. And welcome to Cosan S.A. First Quarter of 2018 Earnings Conference Call. I will start the presentation talking about the results from each business unit and then we will discuss the consolidated numbers. We can now move on to slide number 4 and look at Raízen Combustíveis, our fuels division. Before we start, I would like to remind everyone that on April 24, Raízen Combustíveis financed the acquisition of Shell’s downstream business in Argentina for a total amount of $950 million, of which $100 million was paid on the date we announced the transaction. We expect the closing of this transaction in the second half of this year, when we will pay the remaining installment subject to adjustments of change in working capital and by the amount of net debt in the closing date. And now, talking about the results proper, in the first month of the year, we could see the evidence of the challenges presented by Brazil’s economic recovery. Once again, the consistency of our strategy and the focus on expansion in long-term relationships with our service stations network yielded results with above industry sales volume performance. There still high unemployment rate and the pace of economic recovery had impacted the sales of Otto cycle during the quarter. Brazilian sales volumes of gasoline equivalent adjusted by the energy purely fell by 4% year-over-year in Brazil according to the Plural database, formerly known as Sindicom. While Raízen’s sales volume declined by 3% year-over-year in the same comparison basis. It is worth mentioning that the sales mix was strongly influenced by the change in gasoline price dynamics in the Brazil -- in the Brazilian market and sharply increasing biofuel demand in the quarter. As a result, Raízen ethanol sales grew 55% in the quarter, while gasoline sales…

Thank you. [Operator Instructions] First question Petr Grishchenko, Barclays.

Good morning. This is Petr Grishchenko from Barclays and thanks a lot for taking the questions. First, I just wanted to touch a little bit more on Shell Argentina purchase. It’s been reported this week that Raízen also issued about $750 million of a new bond and I was wondering if you have any comments on that. How would you expect leverage to increase post transaction, and just generally, if you think that the recent events in Argentina perhaps somewhat undermined the value of the deal, any comment there would be very helpful.

Hi, Petr. Thank you. Thanks for the question. First in regards to the news of a possible bond issues at Raízen, there is no definition yet with -- we are going to access the market for a possible bond issues. We have already hired, secured the funding for this transaction in the Brazilian market. So there is a possibility that we will analyze back close that or more close to the closing of this transaction, but there is no definition yet of a possible bond issues we have included. Talking about leverage, this acquisition does not change much the idea of having Raízen as an investment grade. It doesn’t change much in terms of the leveraging, because as well as the debt coming for that acquisition will also accommodate the EBITDA and there is not going to be much churn in terms of the leverage. Cosan reached 1.5 times net debt to EBIDTA this quarter that is highly impacted by the R$1.2 billion of cash that entered due to the credit sales that we did on the 4Q ‘17. But the cash position or the cash just was recognized in January and that we see them on January. And in terms of the market conditions, while we have reached -- this recent event does not change our view on this acquisition. This is an asset of high quality asset. We have been evaluating it for a while. We are looking at these acquisitions as an important avenue of growth for our fuel division in the entire group, specifically speaking for Raízen Combustíveis and this does not change our view -- our long-term view for the deal.

Yeah. And that’s helpful. And I know you mentioned anything on the Comgas strategic alternative, has there been any progress since you made that announcement?

There is no change in Comgas in the carrying good process. There is no news in that. In terms of further restructuring, there is no change since our last call.

Okay. Great. And it’s my last question, we see clearly sugar prices being crushed with the global oversupply, but on the other hand, oil prices rallying essentially, which should in theory translate into higher gasoline prices in Brazil and so ethanol prices up as well. So how do you expect this trend to affect your profitability, and perhaps, product mix -- production mix between ethanol and sugar this year, assuming prices for sugar and oil/ethanol to stay at this level?

Well, clearly, we saw the pressure on sugar prices in the last couple of months and that’s, of course, due to the higher crops in India and Thailand mainly, right? Brazil will indeed be a more ethanol or we will have a more ethanol mix this year due to the profitability of the ethanol compared to the sugar ones, definitely the sugar’s spot prices is up now. Raízen will maximize the ethanol production in the year, as well as the other players in the industry. We changed a little bit guidance on crushing from 63 million tons to 67 million tons to 62 million tons to 66 million tons. This is due to the dryer weather in the beginning of the season, which impacted a little bit of productivity in the beginning of the crop, but we haven’t changed anything on our EBITDA guidance. We maintained at the same level. We do know that sugar spot prices are lower now than what we have embedded in our guidance, but we have a better expectation for the ethanol prices and the ethanol industry as a whole. We still capture the efficiencies from all the processes and all the technology we implemented in the sugar and ethanol business, which really results in effectively cost reductions and improvement of the ROIC. I believe will still be the case. And also with all this negativity, we are looking at better opportunities for the sale and trading of all the products basically, right. We are talking here about sugar, about the ethanol and about energy. So, all of these gave us confidence now to keep the same EBITDA guidance for 2018, ‘19 crop year.

Great. Excellent. And sorry, just remembered the last question I wanted to ask on your credit ratings, clearly we have very strong deleveraging in cash generation. You guys are [ID] like corporate, but in terms of the ratings, have you spoken to the agencies and are there any like metrics or targets that agencies are expected to meet before get upgraded, any color will be very helpful? Thank you.

I will pass you to Joao, our Head of Finance here to answer you, Petr.

Two comments about your question, the first is that the 1.5 times leverage that we had at the end of the first quarter is a situation that it will not happen at the end of the year, because March is the lowest point for Raízen in terms of working capital, so this will change until December. The second point is that we received last in January the cash for the sale of the credit receivables from the government that used our EBITDA in December. So, in December, we believe the EBITDA will be roughly in the last 12 months. So we expect that the 1.5 times leverage will be around 1.9 times at the end of the year. But even this, it’s a very good leverage compared to what we expect. The problem is that the Cosan is capped by the sovereign rating, so even that 1.5 times the credit agencies will not change our rating.

Got it. Thank you very much and best of luck.

Thank you.

[Operator Instructions] Thank you. That concludes the question-and-answer session for investors and analysts. I would like to pass the floor to Mr. Phillipe Casale.

Thank you all for joining us in this conference call and I hope to see you in the next following conference calls and also make the IR team here available for any Q&A or any questions you have about the company. Thank you very much.

That does conclude Cosan’s audio conference for today. Thank you very much.