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Raízen Debt Rises After Ending Discounted Risk and Adopting Working Capital, Increasing Financial Leverage in Fuel Distribution.
The Raízen debt recorded a strong increase between 2024 and 2025 after the company changed its operational financing strategy in the fuel distribution area.
The change began in early 2025 in Brazil when the company decided to replace discounted risk operations with traditional working capital lines from banks.
The decision came from the current management with the goal of reducing total financial costs and improving operational margins.
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However, the move raised the financial leverage by transferring commercial liabilities to the debt balance sheet.
Switching Discounted Risk for Working Capital Increased Raízen Debt
Since the beginning of the 2025/26 harvest, the company unwound R$ 10.9 billion in discounted risk operations.
This amount was converted into bank debts for working capital, directly impacting the Raízen debt.
Practically speaking, a significant portion of the debt surge came from this accounting reclassification.
In other words, it was not about accelerated expansion or a significant rise in operational costs.
Thus, gross debt grew by R$ 18 billion in 12 months, jumping from R$ 52 billion to R$ 70 billion.
Financial Leverage Doubled in a Year and a Half
The increase in financial leverage is noteworthy for its pace.
About a year and a half ago, total debt was R$ 35 billion during the transition from the 2023/24 harvest to 2024/25.
Today, that amount has nearly doubled.
Therefore, the increase is much more related to the management of liabilities than to new structural investments.
This perspective is reinforced by the strategy adopted by the company.
Strategy Aimed to Reduce Total Financial Costs
The management logic was simple: to replace interest paid to suppliers with interest paid to banks.
Previously, with the discounted risk, suppliers received payments in advance through financial institutions.
Afterward, the company paid the bank by the agreed deadline.
Now, with working capital lines, Raízen pays suppliers upfront — often with a discount — and assumes the debt directly in the financial system.
The calculation indicated that bank interest rates would be lower than those embedded in commercial negotiations.
Understand How Discounted Risk Works
The discounted risk operation consists of a bank advancing payment to the supplier, and then the company paying the bank under the agreed payment conditions.
Since these are short-term operations, they do not count formally as debt.
Therefore, their removal elevated the Raízen debt from an accounting perspective, even though part of the liability had already existed economically.
Operational Margin Increased in Fuel Distribution
The first reflections appeared in the operational result.
The adjusted EBITDA for the fuel distribution area rose by R$ 56 per cubic meter year-on-year.
The indicator reached R$ 215 per cubic meter in the third quarter of the harvest.
Therefore, there is evidence of improved commercial efficiency with the new financial structure.
Hidden Carbon Operation Also Influenced Results
However, external factors also contributed to performance.
The Hidden Carbon Operation, which fought fraud in the fuel market related to organized crime, reduced unfair competition.
As a result, large distributors gained market share and increased pricing power.
Thus, part of the margin improvement cannot be attributed solely to the end of the discounted risk.
Comparison with Competitors Will Still Determine Real Impact
The structural effect of the strategy will only be fully measured when competitors release their results.
Companies like Vibra and Ultra (Ipiranga) will present their reports in March.
The comparison will show whether the gain was sector-wide or specific to Raízen.
E2G Does Not Explain Increase in Raízen Debt
Another relevant point involves second-generation ethanol.
Investments in E2G had already been contracted and accounted for earlier. Therefore, they do not explain the recent rise in Raízen debt.
This reinforces that the main driver was the restructuring of liabilities.
Investments Decreased in the Current Harvest
In fact, investments decreased.
Between April and December, the company invested R$ 5.4 billion.
In the same period of the previous harvest, it was R$ 7.1 billion — a drop of 23%.
Thus, there was no aggressive expansion that would justify greater financial leverage.
High Interest Rates Pressured Debt Service
The macroeconomic environment also weighed heavily.
The rise in Selic increased the cost of indebtedness.
The so-called accrual — the incorporation of interest into the debt balance — added about R$ 7 billion to gross debt.
Debt Service Grew Strongly
In the nine months of the current harvest, the company disbursed R$ 7.6 billion for debt service.
The amount is R$ 3.7 billion higher than recorded in the same previous period.
Therefore, in addition to the increase in the stock of Raízen debt, there was significant pressure on financial cash flow.
Accounting Reclassification Changed Assessment of Indebtedness
In summary, the surge in Raízen debt results mainly from the end of discounted risk and the migration to working capital lines.
The strategy raised financial leverage in the short term but sought to improve margins in fuel distribution.
The next industry reports will be decisive in measuring whether the decision generated a sustainable competitive advantage or just a temporary accounting effect.
See more at: End of Discounted Risk (and Not E2G) Explains Surge in Raízen Debt
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