Good morning, ladies and gentlemen. Welcome to RMC's conference call to discuss results regarding the third quarter of 2025. This video conference is being recorded and the replay can be accessed on the company's website, ri.rmc.com.br. The presentation is also available for download on the platform. We would like to inform that the participants attending the conference call will be in listen-only mode during the presentation. We will then open the Q and A session when further instructions will be provided. We would like to inform you that the presentation is being recorded and translated simultaneously. The translation is available by clicking on the interpretation button. For those listening to the video conference in English, there is an option to mute the original audio in Portuguese by clicking on Mute original audio.
Before proceeding, we would like to clarify that any forward looking statements are based on the beliefs and assumptions of Armac's management and current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists must understand that events related to the macroeconomic environment, industry and other factors could cause results to differ materially from those expressed in their respective forward looking statements. Joining us today are Mr. Fernando Aragão, CEO of Armac, and Marcos Pinheiro, CFO and Investor Relations Officer. Now I would like to give the floor to you, Mr. Fernando Aragão, Armac CEO. Please, Mr. Fernando Aragão, you may proceed. Thank you. Good morning everyone. Thank you for attending our conference call to discuss the results of the third quarter of 2025.
It's a quarter with satisfactory results as the management sees them. Margin five points superior, leading to good cash generation. First, I would like to thank our team, especially those who worked hard to deliver their budgets. I would also like to thank our clients for trusting in what we do. Without you, this improvement would not be possible. As a shareholder, son of the founder and in love with the company above everything else, the highlight is on the quarter itself. Its quarter is a very short horizon and I've learned that companies hardly have a trajectory in a linear line, quarter over quarter. The major highlight for me is that after two years of hard work with a team of which I'm very proud, we came to a management model that is able to develop people as owners of the business.
This culture of being an owner is a model that has to be executed with discipline, ensuring consistency in the deliveries and the results, and allow us to go back to growing and talking about growth. This quarter we are once again working towards this direction. In the short term, we are preferring to do something that we do well, which is to partner with other executives and entrepreneurs. Since we work with machines since we were children, we have relationship with people in different sectors in different niches. We have the objective of contributing with our management model and our scale will make those companies become what they have as best considering their regional strategies and cultures. We are very confident with this growth model.
We announced a recent transaction with MacNUS supplier who is a leader operating in the northeastern region for more than 75 years. Growth in the region is owned to this model. We work with the purchase of parts and providing our management models and that unlocks some growth of our partners and they are highly qualified people. This is the growth model which is very interesting, which has a lot of value to generate value for our Armac shareholders as well as to future executives and partners who will be together with us in our ecosystems that will be favored in a mutual way into the growth in scale. Lastly, once again I would like to thank everyone who has been working with us. Our suppliers, our employees. Without you there would be no point in going on this journey.
We are ready for the quarters to come. Thank you very much. I will turn the floor to Marcos who will present the financial numbers. Thank you, Fernando. Good morning everyone. First of all, I would like to thank you for participating in our earnings conference for the third quarter of 2025. This has been a very important quarter. It seems to be the quarter that reflects clearly the results from the efforts we have been making to consolidate the models about which we believe. I am going to go over the main highlights and draw your attention to some progresses and some points that still require some discipline on our part. We are confident that we are going to manage to position Armac in an ever more consistent manner in the cycle of value creation. We start from the highlights of the quarter.
We delivered gross revenue of BRL 535 million. An advance of 11% when compared to the second quarter of 2025. Gross rental revenue amounted to BRL 435.6 million. A growth of 6.4% in the same comparison basis. Rental EBITDA amounted to more than BRL 200 million for the quarter and a margin higher than 50% and expansion of 4.9 percentage points when compared to the second quarter of 2024-2025. This is a reflect of the more efficient allocation of our resources. We ended the period with more than BRL 196 million of asset sales in a margin of more than 10% and the operating cash flow was higher than BRL 196 million. Moving on to the next slide, I'm going to discuss the rental fleet.
As to the fleet, we ended with a bit advance in its size, nearly 11,900 pieces of equipment, a growth of 1.3% when compared to the previous quarter. We realized an amount of BRL 180 million of Capex with BRL 34 million in new agreements and BRL 37 million in sustaining Capex and BRL 96 million for renewal fleet. We'd like to make some qualifications here. First, renewal has a very relevant role in the competitive area. It allows us to use categories that we can ensure better returns. First, a newer fleet is a very positive environment when the frequency of maintenance will be reduced and as a consequence we'll have cost reductions indirectly and directly. Third, it's always important to mention that our investments in innovation come from the proven capacity of our stores that ensure the liquidity of the fleet and we can have discipline in the initiative.
In the next slides, talking about utilization rate, we managed to reach 74%, 1 percentage point in relation to the previous quarter. As to productivity, we ended at 58.8%, an advance of 2.9 percentage points in relation to the second quarter of 2025. Those indicators start to show that the adjustments to agreement and renewal of the assets and improvement of processes started to be translated into operating efficiencies. There is room for improvement, but this is the direction that we believe to be correct. Talking about revenues, we can see traction in our business units with gross revenue ending at BRL 535 million. In the rental mix, continuous operation accounted for 73% and spot stood at 27%. This composition is a balance between profitability and. We would like to draw attention to BRL 82 million of asset sales. It is a strategic lever in our capital discipline.
Moving on to next slide. Rental EBITDA amounted to BRL 200 million, 11% increase in compared to the previous quarter and the margin was 50.5%. Those results reflect the capture of efficiency, the gradual recomposition of our spreads and the better utilization of our assets. At no time does it exempt from the responsibility of ensuring the continuity of the execution of those initiatives. Next slide, we show the evolution of the adjusted ROIC. In the third quarter we ended at 18.6% in terms of ROIC spread of 7.9 percentage points. A very positive result compared to the 3.3 of the previous quarter. Next slide, I have some news. The managerial operational cash flow reconciled based on the EBITDA. As a base, the numbers of the third quarter we came from EBITDA of BRL 200 million that are reduced to 196.5 as managerial cash flow.
The next block shows the financial results. The BRL 196 million need to be enough to honor the creditors. After the payment of interest, BRL 82 million are left free to be allocated in the initiatives that our management believe to be able to create more value to our shareholders. BRL 34 million were allocated in growth Capex. In other words, investments in new agreements and BRL 9.5 million are associated to the payment of acquisitions that we made in previous periods. We come to a delta net debt of BRL 36.9 million. In other words, it was a quarter where we managed to deleverage the Armac in nearly BRL 37 million. My last slide, before we start the Q and A session, we talk about the debt of the company. We enter the quarter with BRL 1,756,000,000 of net debt and we maintain a cash position of BRL 630,000,000.
We continue with a schedule of debts in a very comfortable way when the relevant maturities will only happen as of 2028. With the slide, end my presentation, I would like to thank everybody's attention and I would like to start the Q and A session now. Thank you. We are now going to start the Q and A session. To ask a question, please click on raise hand. If your question is answered, you can leave the queue by clicking on lower hand. To ask a question via text, simply send it using the Q and A icon stating your name and company. Our first question comes from Mr. Andre Feheira with Bradesco BBI. Your line is open, sir. Hello, good morning. Thank you very much for the opportunity and congratulations on the results. That shows the result of the optimization that you implemented.
I have two questions here. When we look at the rental EBITDA margin, it's above 50%, which is a level that we haven't seen since the half of 2023. My question is the following. How recurring do you believe this level will be? Of course, we have to make adjustments according to the seasonality, and it would be fair to consider something around 49% for the quarters to come. Considering the seasonality, that would be a margin for a quarter that would be expected. The second point, in relation to the asset stores, the intention is to open new stores, 20 stores up to the end of the year. Can we believe that the capacity of sales of those stores would be BRL 700 million per year? Would you expect Armac to end the idonez level of 750?
Or do you think this is too optimistic? Since we are not, you will not be able to make the sales of BRL 700 million. But Andre, good morning. Thank you very much for the questions. I am going to answer the first part in relation to the margin. The first topic was, you asked if it is recurring. All the efforts we have been making are in the direction of having recurrent gains. That is how we manage the company at large. There is no sacred process, there is nothing that cannot be improved. We are exposed to seasonality. As you said, we are very aware of the challenge we have ahead of us. Every morning, me, Fernando, and our colleagues, we pursue with a lot of enthusiasm keeping good results such as those that we observed this quarter and probably better.
It's not going to be easy. We understand the fourth quarter and the first quarter have the seasonality against us, but the results that we got make us very confident. I can even connect it to your second question, still related to EBITDA. We do not provide formal guidance in relation to our results for 2026, but we believe that the levels that you mentioned of 48%, 48% for the whole year, it's not a wild dream. They are very close to our reality. I myself, I really believe in the capacity of execution of the team. I believe that we are not going to let you down. I will turn the floor to Fernando to talk about the assets. Thank you Andrea for the question. I believe that the company is going to reach a sales capacity of BRL 7,700 million per year. Maybe not in 2026.
Maybe we need more time to get the model mature. Considering the model that we have been developing, there's a curve for the right positioning of what we believe we can deliver to the client in relation to idle assets. It would be fair to assume that within two years we are going to be able to recycle all this capital. There is a mix. The mix that we have is not the same mix that the stores have. We believe we can recycle half of this capital next year and the other half will be executed in 2027 and reallocate in equipment that will have support from the data providing better margins, the ones that provide better margins. Thank you. Our next question comes from Pedro Tineo with Itaú DDA. Your microphone is open, sir. Good morning. Thank you very much for taking my question.
I have two questions on my side. I want to talk about new agreements so I can see the implementation of Capex in the short and medium term. What are the segments you've been seizing? Mining was a segment that we resumed, especially services. I would like you to provide some visibility about which segments you're going to seize in the short and medium term. Also, if you could talk about leverage, I know that you do not provide guidance but as we see the EBITDA margin reached more than 50%. What can we expect in terms of reduction of leverage as a result of those better results? Thank you, Pedro. Thank you very much for the question. I'm going to start from growth of contracts or agreements. We spent a lot of time, we made a lot of effort in consolidating the management model.
We used our technology tools, we changed our routines, our processes, and we made some agreements with the department so that they can be many CEOs of the company. There is an allocation of those assets which is very valuable. On our side, me, Fernando, and our friends who take part in the committees, we try to allocate in the projects that provide returns higher than hurdle rate, which is 20% real and deleveraged. In this way, we believe in the capacity of those mini presidents to go after the best results in their operating areas. What I can tell you today is that our mindset has been very directed with those opportunities. We have a lot of dedication and scrutiny whenever we have a proposal. We have received proposals that are not associated with the mining area.
Most proposals that are being discussed in the committees are more associated to port and industry logistics. Once again we have a real business platform implemented and this management model has allowed many presence for the companies to go for the best opportunity in their sectors. They are encouraged in their compensation program by the way. Moving on to your second question in relation to the leverage. This is something that makes us very proud, that is to maintain the company deleveraging in an environment of high interest rates, in a tough environment in terms of market as a whole. It brings a lot of joy when we see that we have been receiving good results and quick answers. Our plan is to have network deleveraged along the months in 2026. We can expect the company to deleverage as a result of the cash improvement.
This is a very important role. The fleet renewal also brings about a very positive cycle and we increase the production capacity of the fleet. A newer fleet works better, operates better, it is easier to lease them and decreases the complexity that the company has and reduces the possibility of problems that can happen every day. This is something we cannot ignore. Armac has been growing at a time when the fleet age was more reduced. There is a reason why after this capital recycling capacity of the stores provides that we should not have, should not improve this average age of the equipment as a strategic movement. I hope I answered your question. I would also add as we are going to grow most. We evolved in the management model so that the returns are delivered properly.
In the last year, the board and the executive board devoted themselves to provide a better pricing of the company using market intelligence, implementing continuous improvement considering what's really happening in the operations. Today we have a different level of pricing model that allows the company to grow comfortably even in the business units that are more complex in the operational viewpoint. By providing better pricing and also implementing discipline in the monitoring of the results on a monthly basis to check if the deliveries are according to what was planned. This is a discipline that the company hadn't developed when it grew very happily in the past. We now have this confidence and even for mining contracts, that we see the possibility of growth with consistent growth. As Marcos said, the number of proposals are not the ones where most contracts lie.
I would also like to talk about organic growth. We grew in smaller clients in the past. We had a commercial area that only worked with the surface level. We had some accounts that could make a difference in the results. Now with these owners of the business units, they understand that if there is a client that does not have a lot of scale, they will be able to add more value to the client. Sometimes what we have to offer makes more difference to the smaller clients than to a giant client. Since they are focused on their business units and they have lots of relationships, networks, and different channels and different levels of each individual company, we believe that this new phase of growth will capture clients in a pulverized way in offering our products to clients where we can create higher value.
That was very clear. Thank you. Our next question comes from Rogerio Araujo with Bank of America. Your line is open, sir. Hello, Fernando, Marcos, good morning. Thank you very much for the opportunity. I have two questions on my side. First, in relation to the option of purchase of Tehra, I would like to know which line it's included. Is it in financial result lease? Could you explain the terms a little bit more and then I'll ask my second question. Thank you very much for the question. The option purchase update of Tehra happened in the financial result. When you open the financial revenues, you can see a relevant impact of this business. So it's a gross impact of the two instruments was BRL 20 million. And we remove the impact of the taxes associated to this transaction.
You come to a net effect of about BRL 15 million. This is what is reflected in financial result with the reduction of the obligation that we had. The update is related to the viewpoint of the following. We said let's compare the 2025 results in the model and have an update now that we have a different operating level, a different interest rate considering the expansion. The expansion has been very successful, as Fernando Aragão mentioned. Introduction. This introduction with Tehra has been very positive to us. It created a very important relationship that would solidify both businesses in a scale management model and a very solid result in the business in relation to specific terms of the operation. I cannot provide you this information now because we do not disclose this to anyone.
This updating process of the terms of acquisition happens from time to time. You're going to see this happening over again, not necessarily next quarter, but you're going to see this next year. Oh, that was very clear. Thank you. My second question in relation to the CapEx of maintenance of BRL 37 million for the quarter, this accounts for 5% of the gross annualized fleet and nearly the rental revenue. My question in relation to this is the following. Because of the sub guidance that was provided in the last call of approximately 3% of the value of the gross fleet, it is a line which is very low volatile. It's the second quarter where it was provided, was open.
If you could provide an update on the expectation of the company, what to expect in the next quarters, and just confirm that does not happen. The rental line, the terms did not change in terms of capitalization of what is done in relation to the past, right? Yes, perfect. I'm going to answer by parts. First, yes. The criteria of capitalization hasn't changed in terms of how much you spend in maintenance, what happened in the quarter. Add that two important factors. When I can provide more color, I needed to record expenses for the preparation of different equipment that will be sold. Some pieces of equipment are being reconditioned and maintained in such a way that the residual values will be maintained to ensure the liquidity of our assets. This quarter specifically, we had BRL 5 million or BRL 6 million allocated for this purpose.
In this modality for maintenance purposes, meaning that we're preparing the assets to be sold. In addition, I do not think we should revise any information that we provided before. With the evolution of our systems, we are very confident that except for the fluctuations that may happen quarter on quarter, the maintenance costs are not going to be very different from the number that you mentioned. Okay, there is the seasonal effect, but the year as a whole will not show a lot of a difference. I would add to what Marcos has already said. This year we completed the review of contract portfolio. Naturally, our workshops have many of the pieces of equipment that are waiting for maintenance. This erratic behavior comes from the mix of equipment that the workshops are working on at this moment.
You start to maintain heavier equipment and more expensive pieces, so it's more expensive. This erratic behavior may happen for some other quarters until this necessary maintenance comes to an end. When we sell the assets, we're very confident that this is what the company has been doing for a long time. We should look at this line downward. We are making this. May we be making this major effort nowadays so that we can recycle the capital as soon as possible. We have this theoretic behavior, as we said. In the medium term, this line of investment and maintenance will go down compared to what we recorded this quarter. Very clear, Fernando. Thank you, Marcos. Our next question comes from Lucas Meloche with Banco Safra. Safra Bank. Your line is open, sir. Go ahead. Good morning everyone. Can you hear me?
I hope so, yes. Congratulations on the results and thank you for. Thank you very much for the opportunity. I have a very quick question on my side. Could you tell us what's the ramp up of the asset sales? Is there anyone still to be open or have you reached the goal of 20 stores? Are they already selling or do they have to grow in this ramp up? The improvement of margins when you sell assets has any relationship with the ramp up of the stores or are there other factors that contributed? This is a question I had. Lucas, thank you for the question. Good morning. The 20 stores planned are not open yet. We continue implementing our plan. The vision is still to open 20 stores. This is something that we will review from time to time.
The investments associated to the opening of every store are not significant. The first store that we opened required an investment of nearly BRL 3 million. The last one required an investment of about BRL 600,000. We worked very well on how we could scale up this journey. Geographical presence in an efficient manner. We have management challenge ahead of us, especially in terms of having the right inventory for those stores. We have to evaluate the return of the equipment, which are already located in different geographies to the spot of those stores in such a way that I do not have to bring it back to São Paulo for maintenance and pay another freight in order to include in the inventory of the stores.
The Management of Assets has a platform that is updated online and that includes all the inventory of the equipment that is available for sale. It does not matter if physically the equipment is in a place or not. The sales team can prospect businesses. Of course, I have to give the stores the right importance because the physical inventory helps the sales process. A local client would have the purchase decision very easily made if the equipment is already there physically at the store. We have this challenge. Answering your question, not all stores are selling 100%. This is due to the fact that much of the inventory is still being formed in those stores. We expect to reorganize this in the months to come and we have a very good expectation in terms of fleet renewal. Yeah, that was very clear.
Just to follow up on the question of the margins of asset sales. Is there any relationship with those stores? We saw an EBITDA loss in the past, and now we see something more flat in terms of margin. There is an effective factor, which are the items that are actually being sold. As we said before, the sales volume has to be scaled up in order to dilute the fixed costs of this initiative. In relation to fixed costs, as I answered in the beginning of the Q and A session, me, Fernando, and the leaders do not accept the costs of the company. Whenever there is opportunity, we are going to seize the opportunity. It is not because the asset structure has been performing well as we see the result of the work of the group of professionals. We always try to go for lower costs.
The gross margins, which was the factor that helped contribute to the margin of assets, was impacted by those sales. We are building those stores and we are maturing those stores. We are creating this market in Brazil of asset stores and we did not have that before. We have the positioning and creation challenges, but fundamental tasks that we, for us, were thinking in the long term is to get to a model which is safe, replicable. This part of the capital recycling was something that we missed so that we could have this safe decision, so that we could continue growing the long term. I would like to ask you for patience in the short term, because the numbers are behaving in an erratic manner because of the volume and considering everything that is happening nowadays.
One hundred million for a quarter is very little. The stores are not mature. They do not have the long-term mix that they will have in the future. There is a lot to happen until we reach this continuous level where numbers are going to be less erratic and more stable. I know this is not an ideal request to shareholders, but I would like you to be patient in terms of the margin of the stores as well as the investment that we are making for maintenance of the assets that are going to be sold. We are still at a level that will reach a better level condition. It is fair to believe that those stores will not sell 30 million per month, but 100 million per month. When we get to this point, the numbers are going to be much, much more stable.
We have not reached this level. Okay, perfect. Thank you very much. Our next question comes in writing from Jean Festas with Ori Capital. What's the average age of the assets sold in the quarter? Was the SG&A reduction? What were the adjustments? Joo, thank you very much for the question. Average age. We do not disclose this information because this is very strategic information. So we are not going to provide you with that. Sorry. In relation to the SG&A reduction. Yes. We have been doing our homework in the main accounts and payroll was the highest in terms of magnitude. We restructured the process, the structures, and that provides more competitiveness to the company. Me and my business partners say that whatever is saved has to be reflected in competitiveness and higher value. There was a lot of rationality in the travel policies and expenses we had.
The efficiency in technology, you know, the search for different technology platforms and some platforms that we did not use and continued paying. We saw opportunities in different places. There is room for more things to happen here. This is a continuous effort. Okay. We adopted artificial intelligence in different processes. This started back then and we have already seen the impact on this quarter. There is a big journey ahead of us. Marcos took the leading role in this effort. The Q and A session has come to an end. We would now like to turn the floor over to Mr. Fernando Aragão for his final remarks. Thank you very much for attending the conference, for the patience with us in this period where we wanted to reach a management model which is capable to deliver consistent results and grow.
I really thank you for all of those who have been with us along this journey. What I can say now is that we really believe in what we do. It is a major market with many opportunities and we can meet the demands of the clients in a better way than we already do. What I can say is that Armac has the most specialized team in the yellow line and we are always in love with this. This is all we do. We grew by doing this. The sales team is very much in love, passionate about what they do and we are always trying to meet the demands of the client and there are many people who are very knowledgeable of this topic and this all allows us to dream of a major growth in the long term.
We are always trying to reach this discipline in the deliveries and this is something that we have been growing in the past years. Again, thank you very much for taking part in the conference and have a good day everyone. The video conference of Armac is closed. We would like to thank you for your participation and have a nice day.