Good morning, everyone, and thank you for holding. Welcome to the video conference to discuss the results of the fourth quarter of 2025 of Aeris Energy. Those who need simultaneous translation, we have this tool available on the platform. To access it, click on the interpretation button in the globe icon at the bottom of the screen and choose your preferred language, Portuguese or English. For those listening to the video conference in English, there is the option to mute the original Portuguese audio by clicking on Mute Original Audio. This video conference is being recorded and will be made available at the company's RI website at www.ri.aerisenergy.com.br, where the complete material for the video conference is available. You can also download the presentation from the chat icon, including slides in English. During the company's presentation, participants will have their microphones disabled.
After that, we'll start the Q&A session. To ask questions, click on the Q&A icon at the bottom of the screen and write your question to join the queue. When you are announced, a prompt to enable your microphone will appear on the screen, and then you unmute your mic to ask questions. We kindly ask that all questions be asked at once. We emphasize that the information contained in this presentation and any statements that may be made during the video conference relating to business prospects, projections, operational and financial goals of Aeris are based on the beliefs and assumptions of the company's management, as well as on currently available information. Forward-looking statements 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.
Investors should understand that general economic conditions, market conditions, and other operating factors may affect Aeris' future performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, we are joined by the company's executives, Alexandre Sarnes Negrão, CEO, and José Ricardo Elbel Simão, CFO. Before beginning the presentation, I would like to invite you to follow the day's agenda, which is on slide three of the presentation. We'll start with Mr. Negrão, who will address topics one and two, bringing the market outlook and commenting on operational performance. After that, we'll turn the floor to Mr. Simão, who will address topic three, presenting the company's results. Once this part is finished, we'll start the Q&A session. Finally, Mr. Negrão will return to make his final remarks. You may proceed, Mr. Negrão. Thank you. Good morning, everyone.
Let's start another conference call of earnings of Aeris, the first of this year. Now, moving on to slide number four, let's talk about the market outlook, the macro and micro things that happened in the last quarter. We had the announcement of the data centers for TikTok, which is a project that includes TikTok, Casa dos Ventos, and Pátria, and a part of the supply of these projects will be made by Vestas and Aeris, as we announced in the end of the year. I think this is a positive aspect. Among the negative points we had in 2025, we see that Brazil has a potential.
The need for data centers started to grow, we said that Brazil, especially the State of Ceará, had lots of potentials for the installation of data centers, and we see this becoming a reality as a first step. This is a good indicator, and it shows that Brazil has potential for other projects, other similar projects. We believe that more projects of this size and in this industry will be made in Brazil, as well as the green hydrogen, that we haven't seen any significant project so far, but I believe we'll see something happening in this area, either the end of this year or beginning of next year. About curtailment.
Those who keep track of this industry know that this is a core issue for wind companies, and that has really affected the performance of wind farms throughout the year. There is no short-term solution so far. The good side is that the long-term solution is being addressed. We have more than 390,000 km of transmission lines that have been auctioned in recent years. This year, the government promised to make the first auction for batteries that would highly improve curtailment. These are long-term measures, but we, as an industry, have to address the short-term factor that is affecting all the companies. Those who keep track of this industry know how much this has affected the companies in 2025.
Another point that affects our industry regarding new projects is the interest rate. I believe we were for almost two years with a 15% per year interest rate. Yesterday, we had a reduction of 0.25 percentage points, which is still low compared to what we need in order to grow consistently because we are a capital-intensive industry. When we talk about 14.75% interest rate, plus the bank spread, plus curtailment and the price of energy, it renders it very complex to have new energy projects. This is reflected in the amount of new blades that are being produced in Brazil, which is very low. Now, talking about the pipeline for Aeris.
This project with Vestas and Casa dos Ventos amounts to 850 MW , along with the continuing project for exports that adds up to the pipeline of Aeris and Vestas to 1.3 GB. Today, we have one more GB that's in advanced negotiation with another client. This shows that the worst is over. I believe Aeris has been through its worst year, and now that's in the past. We believe that new projects will appear. There will be a resumption of business, you know, although slow. Rio Grande do Sul has a large potential. We see some signs of resumption of economic activity and, you know, for the industry, which is something we had not seen last year.
Now, moving on to slide number five, we talk about the production lines. We started the last quarter with two operating lines in operation only. Again, that was the worst year ever in terms of production lines because we operated with only two production lines. The last time we operated with only two production lines were 2013. We ended the last quarter with two production lines active. With this new project of Vestas, we'll probably activate four lines throughout the year. At the beginning, we won't have the four lines active. They will mature during the year. Moving on to slide six, we talk about delivered mw and blade sets produced. We delivered 108 sets in 2025, which highly affected our operational efficiency.
In 2025, we went from 700-something machines in 2020 to 720 to 108 in 2025. That's the same number of sets and megawatts produced in 2015. We went back 10 years in terms of productivity. Now, moving on to slide seven, I would like to turn the floor over to our CFO, José Simão, and I'll be right back.
Thank you, Alexandre. Good morning, everyone. I'll start with slide seven with the financial highlights for the year. The fourth quarter of 2025, we had a net revenue of BRL 114.5 million, reflecting reduced level of activity in the wind energy sector of Brazil.
For the full year, total revenue was BRL 746 million, a drop of 51% compared to 2024, mainly due to the lower demand for new wind farms and lower production of blades. The adjusted EBITDA for the quarter was -BRL 60.6 million, with a negative margin of 52.9%, which reflects the lower level of utilization of production lines and consequent lower dilution of fixed costs. For the full year, adjusted EBITDA was -BRL 115.7 million. The net loss for the quarter was BRL 477.5 million. Here, the impairment, in addition to EBITDA, there's also an impairment in accounts receivable and inventory totaling BRL 233.9 million, as well as in deferred assets.
For the year, the net loss was BRL 901 million. Number eight, slide number eight, talk about the revenue breakdown. In the quarter, net revenue was BRL 114.5 million, a reduction of 36% compared to the third quarter of 2025. This drop mainly reflects the lower production of blade sets during the period, in line with the reduced level of activity in the wind energy sector in Brazil. We also observed a significant change in the revenue mix. The fourth quarter exports accounted for 56% of revenue, while services, 27.7% of the total revenue of the quarter, reinforcing company's move to diversify its revenue streams.
For the full year, the revenue amounted to BRL 746 million, mainly impacted by the reduction in blade production for the domestic market, partially offset by the growth in exports and the greater contribution from the services sector. Moving on to operating expenses for the year on slide nine. In 2025, operating expenses totaled BRL 506 million, with a significant reduction of BRL 886 million recorded in 2024. This difference is mainly explained by an impairment of BRL 751 million recorded in 2024, which significantly raised the base of comparison from the previous year. Excluding non-recurring effects, there was a reduction of BRL 29 million in adjusted operating expenses, reflecting lower industrial activity, reduced personnel expenses, and greater cost discipline throughout the year.
Sales expenses shown here are BRL 10 million related to export of blades and have an associated revenue. The depreciation of around BRL 35 million shown on the slide is due to the change in the location of this line, which is usually in cost of goods sold. When the production lines are idle, it goes to operating expenses. The depreciation line of the company as a whole does not change, so but it changes the place it appears. On slide number 10, we talk about operating expenses. In the quarterly analysis, operating expenses totaled BRL 294 million in Q4 2025, and then there was an increase compared to the previous quarter, mainly due to the impairment that was recognized in the period of BRL 233.9 million.
Excluding this effect and other non-recurring items, recurring operating expenses increased by BRL 5 million in the quarter, explained by occasional variations in warranties, third-party services, and depreciation. On Slide 11, I'll show a snapshot of EBITDA in the year and the quarter, which is a consequence of previous slides' expenses and revenue. The adjusted EBITDA in the fourth quarter was - BRL 60.6 million, with a negative margin of 52.9% compared to BRL 48 million in the third quarter of 2025. For the full year, the adjusted EBITDA totaled BRL 115.7 million negative compared to positive figure of BRL 122 million in 2024. This reflects the lowest production volume and the lowest dilution of fixed costs. On Slide 12, we show the debt and capital structure.
At the end of the fourth quarter, the company had a gross debt of approximately BRL 1.79 billion and free cash of BRL 28.7 million. It's important to remember that in May 2025, we completed a restructuring of approximately 90% of the debt with extension of the maturity profile and elimination of the obligation to monitor financial covenants. This significantly improved the debt profile and brought greater financial predictability to the company with greater repayments in 2026. The summary, the 2025 results reflect the challenging period for the wind energy sector in Brazil, with a lower volume of projects and a direct impact on the use of production capacity of the company. During 2025, the main areas we focused on cash preservation, debt restructuring on May 2025, and adapting the operational structure to the level of demand.
When we see the improved investment prospects in the sector and the visibility of newly contracted projects, we believe we are well-positioned to capture this next growth cycle. Let's move to the Q&A session.
We'll now start the Q&A session. In order to ask a question, please click on the Q&A icon at the bottom of the screen and type your question to enter the queue. The first question is from Marcelo. How do you see the prospects of new contracts for 2026?
Well, good morning, Marcelo. As I told you, we've seen a resumption of conversations, you know, and negotiations are now, you know, done on a more effective way with this client that we've gone over the commercial barrier. We're now discussing the terms of the contract, the agreement.
Of course, there is an issue about volume because all the contracts are of medium volumes, not high volumes. For our industry, for those who manufacture components, having a higher consistent volume is very important for us to be competitive and be able to reduce costs. We know that a project takes some time to mature. There's a need for working capital in the beginning, and then we enter a more effective stage. The prospects are good. We've seen many Chinese players entering the market. These are new players, so that shows there are more companies interested in Brazil. Again, Aeris is the main option for all the companies that come to Brazil in terms of blade supply, as a blade supplier.
Something I didn't mention a lot, but it's worth pointing out that the positive aspect about 2025 is that we had more exports than local market. We exported more than provided to the local market in terms of blades, which shows it's a very positive sign because we are resuming exports. In 2022, 2023, we didn't export much. It shows that we are competitive in terms of exports. For this year, we'll maintain the export flow at significant volumes. There are new conversations and prospects, you know, for new contracts also focused on exports. Although we are living through a turmoil in terms of geopolitical aspects, but the positive side is that there is a high demand for energy, globally speaking.
Although there are other sources, the wind energy is still one of the cheapest sources of energy, also one of the sources of energy that's quicker to install. There are conversations about contracts in Brazil as well as for exports. I would like to remind you that we have exported 50% of our production of blades, actually 60%. In 2026, we're likely to have a similar figure.
Next question is from Talita Aragaki from G5 Partners. When will the new contract signed will become a revenue for the company, and how much do they account in terms of gross revenue and EBITDA?
Good morning, Talita. The new contract is an amendment to the previous agreement.
We are going to reactivate inactive lines, but within the scope of a new contract. This will start in the first quarter and will become a more consistent source of revenue by the last quarter of 2025. It's like I said, this is a project that will be 100% domestic, and when talking about Brazil and exports will not be half and half for blades. About the EBITDA, we're not giving guidance. We cannot disclose this information. The agreement will start to begin a revenue for the company in the third quarter, but will stabilize in the last quarter of 2026. It will be a source of revenue, but the production will be stabilized by the third quarter of 2026.
Next question from Julio Coelho from Lapin Capital.
How is this first quarter of 2026? Is there any prospect for short-term improvement? In addition, with the current contracts, is there any outlook to go back to repaying the debts in the next two years?
This is Simon speaking. Julio, thank you for the question. About the first quarter, as mentioned by Alexandre, we're mobilizing the company to resume production in some of the lines, and this is the time when we are mobilizing the teams. As for outlook for start to repay the debt, you probably saw in the slide where we show financial capital structure. We have no financial obligations for 2026 given the renegotiation of last year, but we'll start to repay interest in 2027. We are focused on the discipline of capital allocation and the gradual improvement of cash generation as production is resumed.
We had a relief in 2026 to start generating cash in being able to honor our liabilities in 2027.
The Q&A session has now ended. I would like now to turn the floor to Mr. Negrão for his final remarks.
Thank you, Lais. Thank you all for attending the call. 2025, as expected, was a very challenging year with a very low level and of course, with the operational efficiency negatively affected. The positive point about it was the demand that started in the end of the year, and I believe that this shows that the worst is in the past in terms of the worst period in terms of demand is in the past. As I said, now new these lines are being reactivated and will become mature by the last quarter of this year.
Until then, we'll continue to suffer with challenging results. In addition, as I said also in my presentation and in the Q&A, we are in negotiation to have new projects, which indicates a growing period for the industry, although slow and gradual, especially with specific projects that were mentioned. We expect 2026 will be a year when we'll resume production and with working capital challenges. With the second half of the year more stable in terms of productivity and the last quarter with a generation of cash from operations at more reasonable levels. I would also like to take this opportunity to say that in this call, there are many people, many employees and partners of Aeris who are here attending this call. I would like to take this opportunity to thank you all.
All of you who believed in the company and continue to believe that we'll you know resume our activity, and you've been key in this journey. Thank you very much for your trust. Thank you all, and have a good day.
The earnings conference call for the fourth quarter has now ended. We thank you all for attending, and have a good day.