Financial performance of the Brazilian sugar-energy sector between 2001 and 2019

Abstract

In the last years, the light fuel market in Brazil has experienced moments of intense change. The Brazilian sugar-energy industry grew at high rates, followed by one of the biggest crises in its history during the period 2008-2014. The objective of this study was to evaluate the evolution of the economic-financial situation of the sugar-energy industry in Brazil. A cluster analysis and a support- vector machine (SVM) classification were applied to carry out a multidimensional evaluation of the financial indices of companies and to identify representative groups in the sector. Four different clusters of companies were identified, and the analysis of the financial ratios of the last 19 years indicates the existence of four distinct periods for the financial health of the companies, and for the representativeness of the clusters which were in line with the conditions prevailing in the market, technological shifts and, more important, with the changes in public policies associated with the ethanol market. Besides, after 5 years of the 2014/2015 crop season, which seemed to be the peak of the worst crisis in the history of the Brazilian sugar-energy industry, more than 40% of the companies were still in a critical situation in the 2019/2020 harvest season and with a low potential for the short-term expansion of production.