Hello. Good morning to all. I am Amabile Silva, Investor Relations Manager for CBA. Welcome to our first call for the first quarter of 2025. We have Luciano Alves, CEO of CBA, and Camila Abel, who is our Director and Investor Relations. Important to say, the video conference is being recorded, and all participants are participating as listeners during the presentation. After that, we will begin our questions and answers session. Participants can ask their questions online or click on the Q&A button and have their questions sent through there. The presentation of our event will also be available on the CBA Investor Relations website, where we will make the recording available as well.
Before continuing, I would like to say that some of the information which is contained in this presentation may include declarations depending on the expectations of the event and future results, depending substantially on the economic, political, and macroeconomic scenario in Brazil, as well as global markets and future regulations. Operational changes may affect the performance of CBA and conduct results that will affect the future considerations. We can now go to the presentation. I will pass to Luciano Alves now. Thank you, Luciano Alves. Once again, thank you so much for your participation in another video conference of CBA's great results. I would like to start here by highlighting some of the changes this quarter. We saw really great results for the aluminum business, which has improved ever since the second quarter.
The best result in the second quarter of 2022, BRL 517 million, which reflects the increase of average aluminum price as well as the valuation of the dollar. Net, we saw BRL 335 million, BRL 400. We also saw in the capital approval of BRL 410 million for accumulated losses. The idea here is that we now have the option to pay dividends when profit is once again on the table, like we saw this quarter, and this will happen starting up. As part of our strategy for deleveraging the company, CBA, this quarter, we also liquidated debt with our own resources, a total of BRL 525 million, which contributed to the outstretching of our deadline for paying debt, as well as the cost of debt over time.
Camila will go into details about that deleveraging throughout the presentation, but with that, we go from a leverage of 7.89 net debt at every job level in March 2024 to 2.15 in March 2025. On the next slide, I'll share some of the ESG highlights, which are very important in consolidating CBA's market position. In terms of our climate agenda, we just concluded our greenhouse gas inventory. Our aluminum refinery has still demonstrated the best carbon performance with 0.21 tons of CO2 for every aluminum oxide produced, and this is measured according to the tool from the CRU Group consultant. In our Sela furnaces, the result was of 2.87 tons of CO2 per ton of liquid aluminum, which is 3.9 times lower than the rest of the SEC.
About ratings and prizes, CBA started to integrate the S&P Global Sustainability Yearbook in 2025, an annual year which recognizes companies with the most sustainable practices around the world. We were also selected to compose for the third consecutive year the B3 ISE portfolio, and this year we are in the 12th position in that. Also, for the second consecutive year, CBA's annual report was recognized by Reporting Matters Brazil as one of the 15 best reports in the country. It's important to highlight here that we have also launched our 2024 Climate Agenda report April this year. They're both available on the Investor Relations website, and you can check it out. Check them out there. Talking about the market now, in this first quarter of 2025, the global market of aluminum started with a super rapid after three quarters, where you can see which were very low.
This demonstrates the impact of Chinese New Year. Besides this, despite this, the super rapid was lower than the same period last year. The demand for primary aluminum in China saw a drop in the last quarter, but reached the best historical rates for this period, showing the resilience of this market, the Chinese market, even with the uncertainties that we have seen, the macroeconomic uncertainties. The incentives from the Chinese government continue to feed into the key sectors, especially those connected to energy transition, which has complemented or added on to the slight deacceleration of the building sector. We have also seen a better result.
Now, on the next slide, you'll see that the seasonal increase, given this Chinese New Year that I mentioned, made stocks and consumption go up to 52 in the first quarter of 52 days in the first quarter of 2025. Even despite this, the indicator remains lower regarding initial stocks and maintains itself since the first quarter, demonstrating the best value since the first quarter of 2023. The volumes in stocks have dropped to the lowest levels ever since the fourth quarter of 2022. On the other end, in China, the SHFE demonstrated a seasonal increase encouraged by the Chinese New Year, as I mentioned. The next slide, you'll see how LME has behaved itself in this quarter.
I would say that in the first quarter, LME Aluminum has closed the quarter with $2,627, which priced dollars per ton, which is the highest average price in the second quarter of 2022. The average price has also been maintained over the quarter with a peak of $2,500-$2,700, peaking before then dropping again at the end of March, beginning of April. In this retraction, we saw this was basically caused by the tariff announcements made by the U.S., which demonstrated a new scale in the tariff war during that period. The global scenario continues to be very volatile. We have been discussing this with you, discussing economic policy, especially the economic policy connected to tariffs and how those affect the price of commodities.
Regarding the prices, I would highlight Midwest in the United States, which saw a big increase during this quarter, reflecting on the impact of the tariff war. After the 25% tariffs were imposed by the United States on aluminum in February, that's when that premium started rising, reaching a total of or an average of $861 per ton in March, reflecting the additional costs of imports and concerns with domestic supply. Now, the Rotterdam premium retracted during this period, had the opposite behavior, but it was pressured by the fear of the redirection of the volumes of aluminum in the United States to Europe, which may end up generating a super demand or extra supply in the region. There is a concern with that on the near future. Slide nine, I'll go into the Brazilian market.
We see those are the dynamics of the global market, but even with all of the uncertainties from the global scenario, especially in the United States, the demand for aluminum in Brazil continues to be strong, solid, and following a positive growth, which reflected on our numbers. What we see is still a very positive scenario. I would like to start by highlighting the automobile industry, which grew 8% first quarter. Thanks to the renewal of the industry, as well as the renewal of the fleets, which ingots and billets continue to be on high demand for those sectors. We see the resilience of that market, billets and ingots. Despite the economic challenges of the sector, for example, the cost in manpower. In terms of urban mobility, buses had the best results when compared to the period of 2023 and 2024.
This shows the importance of the sector and also programs like the path to school or Caminho da Escola, which also helped to heat that market up. I would also highlight here the evolution of the energy matrix in Brazil. New projects and improvement in the infrastructure network of infrastructure, which is encouraging the demand for aluminum cables, are strengthening another sector of opportunities for the sector. Despite the more uncertain global scenario outside of Brazil, the main sectors in Brazil continue demonstrating strength, even though there's more concern for Brazil on our end. We're still very careful regarding what could happen in the future. In the short term, there are some uncertainties, but we are looking forward regarding what we may expect moving forward.
I would like to call Camila now, our CFO and CBA Investor Relations, so we can talk a bit about our financial results in this first quarter. Thank you. Thank you so much. Following the presentation and discussing our volume, our volume of sales in general has maintained a great level. We sold 120,000 tons this quarter, a volume aligned with what we expected for the first quarter of 2024, strengthening the seasonality of the period. In primary, you'll see the reduction in the slide is connected basically to the drop in sales of the billets, which has the seasonal effect, but I would also remind you that the first quarter of 2024 was also a bit unstable in terms of billets because we were coming back to production after 2023. Growth of transformed aluminum came through the sale of aluminum sheets, which happened basically thanks to the packages market.
The recycling sector is more volatile. We compare this period by period because it is more sensitive and reacts more to very specific market effects. Our total allocation of sales here was maintained mostly very strong in the domestic market. You will see in this slide, you can see the volumes, but the information is also valid when we discuss revenue. Finally, you can see the assessment of volume in quarters, which also followed this seasonality, also within normal rates. Now, in the energy balance, I will first talk about volume. The increase of the volume of contracts in 50 megawatts averaged, it refers to a new contract, which, as we mentioned, starting last quarter, was a contract which was installed for 14 years and which started in 2025. Very competitive. Besides having a very interesting long-term price, it is in dollars and prefixed.
The goal of that new contract is connected to the strategy of compensating the water capacity that has new rules being discussed, as well as sustaining our potential growth. We also hired some specific packages of energy connected to short-term sales. In terms of our own generation, our volume was a bit lower when we compared to the annual generation, and that's because of the lack of rain. It was a drier period this year when we compare year by year to last year in our Juquia water reservoirs. Now, going a little bit into pricing, the increase in the average term of contracts was a result of the readjustment of prices of the long-term contract, which continues to be in our portfolio and which sold in 2028. The volume is 100 megawatts average, and it went from $45 per megawatt per hour in 2023-2024.
By 2025, increased $28 to $100 per megawatt per hour, which is also a reflection of the swap peak part. Along those lines, the contract values, which we have communicated with you in terms of our generation, this is due to the less generation of the reservoir. Let's go into cost. Our average cost of aluminum liquid, net cost of aluminum in Reais for the first quarter, this is because of cost of energy, the fact that we generated less on our own, a more dry year, as well as the fact that we had to buy more energy for the aluminum. A less rainy period, generating less water and using some of our contracts to compose the cost.
Another factor, which is very important, there was an increase in the price of alumina, 16% due to a reduction of that availability in the global market and also the negative effects of the exchange rate. When we compare this to the fourth quarter of 2024, the increase was lower. There was an impact of exchange on imported products and gas and soda. Between the moment of the purchase of our inputs and the way we use them in production, we are still consuming this more expensive stock, and it's important to consider the lags in that. Regarding our fixed costs, the effect was basically a decrease of 9% in terms of the volume of production. The price continues to be very competitive in dollar.
You see that we're still very well positioned in the industry's global curve of cost, which favors our integrated model, and regarding the costs of aluminum and the other factors as well as the exchange rates, which favor us in the curve. Talking now about some of the products which are sold and the increase of 18% when compared to the first quarter last year was also a reflection of the cost of production of aluminum. As we've mentioned, between CBA and CPV and the increase of 31% in costs, the business cost was mainly because of what was explained in the increase in prices of contracts given the scenario. Now, regarding the fourth quarter of 2024, CPV and the aluminum business became almost stable, and the energy business reduced or saw a reduction.
Here, there was something very specific which impacted this, the impact of BRL 270 million in the reclassification of the hedge accounting in the mark-to-market of the swap energy market. It went from CI, where it was being accounted for in a patrimonial account, and was then included in the cost of sold price on December 31, 2024. That will continue impacting results of CPV. Now, looking at some of the consolidated results, strong, BRL 2.3 billion this quarter as a consequence of the increase of the price of aluminum and the devaluation of the Real exchange, even though our operations stayed strong. 97% of our total revenue comes from the cost of aluminum and has all of its costs connected in dollar. Only a part of our cost is dollared.
The devaluation of the Real has increased our competitive upper hand, not only increasing the individual results of CBA, but also the comparative costs in the curves when compared to our peers in the global industry. Adjusted EBITDA reached BRL 430 million the first quarter of 2025, being almost three times higher than first quarter of 2024, with a margin of 18%, reflecting strong results for the aluminum business, as was mentioned. Regarding CapEx, the concentration of investments in this quarter followed a flow of project maintenance and of modernization of our expansion, which is well known. Everything was up to date along the plan for modernization and expansion for the year. For the next three quarters, I would also say it's worth mentioning that we look at an increase of CapEx connected to the maintenance of the alumina refinery.
We will maintain our prediction of CapEx estimated for the year because we're going to compensate with other investments in modernization and expansion. Once that maintenance of the refinery is concluded and the market, which has also been very heated in the last few months, together, we bought 231,000 tons of alumina in the market to adjust our stock and also anticipated reforming our ovens for producing aluminum, which will then start reducing and get closer to about 80,000 tons for the second quarter of 2025, once again reaching in the third quarter back to the level of 90,000. For our cash flow, there was a negative generation of BRL 163 million. This was BRL 163 million. This is basically because of an investment in working capital, which is seasonal and is going to be rebalanced after the stocking period.
It is common for stocking period. We will go to the beginning of the second quarter, beginning of the third, with a higher level of stock, but this is also seasonal between quarters. About debt, we continue very committed to deleveraging, which fell from 2.8 net debt EBITDA, adjusted net debt EBITDA to 2.15 in this quarter, as well as our lower net debt, which was a reflection of the positive exchange rate, which decreased the level of debt derivatives due to the strong EBITDA generation. Besides this, we reduced cross-debt, export credit and contracts for exporting credit, which were negotiated with the banks, and the prepayment was in this amount of BRL 525 million. With that, regarding our schedule for amortizing the debt, we continue to improve our debt profile, always following deadlines and improving the average cost whenever possible.
Prepayments are made, as we saw was the case, using the exceeding cash and the cash flow. The prepayment that we were able to do also reduced the short-term cost, and the average cost in dollar was reduced to 6% a year, which is a great level for that debt. To close our presentation, I would like to highlight our main points. First of all, the global supply of primary aluminum is stable, and the trend is that it will become more and more restricted. Mainly because there is a limit of 45 million tons of capacity, which is still imposed by China, which keeps the global market more narrow and tight.
The other point is that even though there was a recent drop in the price of alumina, CBA continues to be well positioned as one of the most competitive operations in the world in the global cost curve. That is one of the highlights of our integrated model. Besides that, CBA continues to be very competitive by generating cash and dollar, and having a part of the cost of production only connected in dollar. In the Mexican market, the demand continues strong. In the domestic market, the demand continues strong, given the fact that our energy matrix is very much based on aluminum consumption. About what points we need to be careful with? There is the increase of the geopolitical tensions.
Let's say those points of tension are points that I think everyone is monitoring a lot, so very volatile, even though there may not be a relevant impact in our business in terms of volume because of the representation of the portfolio as a whole. It generates a feeling of fear in the market in the short-term price of commodities and also a point of attention, given the redirection of commercial flows here that needs to be monitored. The macroeconomic scenario challenges in Brazil and the world. Lots of things are happening in that aspect, and the recent drops in the price of alumina, which were focused on mainly because of the normalization of supply and with the temporary de-acceleration of demand, this caused the whole global curve to drop.
Even then, we continue to be competitive, even though the cost of the curve did reduce when we compare to the level we were at last year. Thank you. To close, our inputs connected to the dollar. These are still important and will continue to remain in the levels we've seen in the last quarters and future quarters, considering that period between purchase and the consumption of the inputs in production. Thank you very much for your attention. That very brief and quick overview. We'll pass the word now to Amabile, so she can open our Q&A. Thank you, Camila. Okay, let's go to questions and answers, and we already have a few people in line for questions. I'm going to start with Edgar Souza from Itaú BBA. Please, Edgar, go ahead. Good morning. Good morning, Camila. Good morning, Luciano. Good morning, Amabile.
Thank you so much for taking my questions. I wanted to start by discussing cost of production. We saw that there was an increase in the cost of production with that price of energy dropping, as you mentioned, because of the lower consumption in contracts in the aluminum business and division. My question regarding costs then may break out into two different points. First, I would like to understand how you see this cost of production over the next quarters. Is there room for reducing this or a more stable scenario or even an increase? Also, how can we expect to see the increase of this cost on impacting the company? Cost of production has increased over the last few quarters.
This was mitigated by an increase in the price of aluminum over the last few quarters, but now we see the price of aluminum becoming more stable or falling over the next quarters. I just wanted to understand if there is any specific quarter and regarding the cost and results that we should be more careful about or pay more attention to, maybe the next quarter or even the next few quarters. How do you see the higher cost of production and lower cost of aluminum over time on results? My next question would be more regarding energy. We saw costs of contracts that are higher and a more negative result in this quarter than what was expected, not only because of contracts, but also because of consumption of contracts, cost of contracts on consumption and aluminum.
How do you see this trajectory of EBITDA over the year? I know in the last call, you mentioned that there was some room for a possible improvement or for results not to be as negative, the price of energy itself improving in the market. Would you have anything to say about this trajectory of the results of energy over time? That would also be great to hear. Thanks so much. Thank you for those questions. I can definitely add some color to your remarks. I think if we talk about the lag, yes, CPV starts to see higher impact starting second quarter, and then it recovers closer, moving into the end of the year.
I would say this new level of energy that we have noticed in the second quarter last year, which improved a little bit in the fourth, but then started the second quarter a little bit more negatively, is really the highest level of energy for this year. I would say that the reference for second quarter last year is the same reference for this year, and there is also the increase of inputs. The price was a bit higher for soda and the market has also improved a bit for the coal-char pitch. I would say in terms of we can think about cost and Reais a bit higher than they were last year. If the dollar favors us in this comparison, then you can imagine about 50% of influence on price. When we convert the rest of the margin, that helps us quite a bit.
A recovery after all of this, more in line with the fourth quarter, recovery more for the fourth quarter, you could expect. That is about CPV in general. Now, when we think about energy, which you asked about the price of energy, yes, did privilege us quite a bit. In fact, I have already sold the exceeding amount last year. When the price of energy increased or changed levels, we already were able to sell about 30% of what was the exceeding cost. I think ever since first quarter, our risk management is very conservative in terms of the fact that we cannot run the risk of shortage in the last quarter, which could be critical. We only sell what could be exceeding, but we are able to also take advantage of a good part of this price.
It is possible that you'll see an improvement of this energy EBITDA in the next few quarters, which already influences the improvement given this brusk increase in price and average sales. Since we negotiated this new contract in the house of 30 megawatts per hour, it is a very competitive prefix and helping with the average price because of the energy swap, the other contract ended up higher. This average cost with TLD, which is the price of commercialization over the next few months, we were able to achieve and hope to achieve a better margin. Starting the second, third, and fourth quarter of CBA energy EBITDA for the year for energy is hopefully going to be a bit better than we started off predicting beginning of this year. We end off better than we started, let's say, in terms of EBITDA. Thank you. Very clear.
Just to remind you also, there's another point. If we have a lower level of sales, as I mentioned, because of the maintenance to the systems, then we will increase the surplus energy. If the price is good for that surplus energy, this can definitely benefit our EBITDA margins. Thank you, Edgar. The next question is from Marcelo Arazzi from BTG Pactual. Please, Marcelo, look forward. Word is with you. Hi. Good morning. Two questions here on my end. The first is about leveraging. We saw that the company's leverage has improved quite a bit in this quarter, I think mainly thanks to the improvement in the EBITDA.
I want to know if you see a target for this, have a target for this to understand at what moment should we expect to see a more comfortable CBA in terms of leverage and even accelerating through distributing dividends or accelerating CapEx. That is one question that I would like to cover. Another question would be to understand how your negotiation with your American client went, where you have a product that you sell. There were tariff discussions. Were you able to pass on this in terms of price? Just a question regarding that. Thank you. I can start maybe answering about leverage, and then you can answer after. Definitely, the significant cost reduction was because of two factors. First, there was a strong exchange of EBITDA for the beginning of this quarter when compared to last first quarter. Stronger EBITDA this quarter.
We hope to have a great year with a stronger EBITDA throughout 2025. Obviously, that will depend on all of the X factors, but since that talks about an EBITDA level that could sustain a similar EBITDA starting second quarter. There is also the exchange rate, which influences debt. We had a return of almost $620, and this exchange variation benefited us quite a bit regarding our dollar debt and the derivatives market. Considering that exchange stays at this level and we are able to generate cash, this cash can then be redirected to prioritize deleveraging, which is our plan. As you prepare a more expensive debt and improve flow, it also improves the financial result.
The strong generation and stable exchange rates and also the EBITDA being actually reverted into cash flow so we can make payments and reduce our net debt has improved our debt profile, and that's definitely where we're headed. Our financial policy has a limit of two times net debt EBITDA levels. Even though we've reduced this, we're still above it. We don't have financial covenants. It's an issue of management also requesting internal waivers regarding our policy. We're able to readjust below this into what we understand is an excellent deleveraging target, which would be 1.5 times EBITDA. That's where we want to get, and we'll get there eventually depending on the different levels. Thank you, Camila. Marcelo, first of all, good morning, Marcelo.
Talking about discussing the United States, we talked in the last quarter about the fact that we were expecting reduced impact because of CBA, given that situation, and what we discussed in the last quarter was a bit of what happened. It is a mix of two factors, really. First of all, there was a reduction in sales, which is natural. We expected this to happen in this moment, but it did not go down to zero. We continued; our clients kept buying. They kept buying those smaller volumes, but for this amount that they buy, they are still tariffed, which is the responsibility of the client to then maybe bring that tariff back in his American market. That is a bit of the dynamic. We sell for market price. There are tariffs, and then they have to try to pass on those tariffs.
It is more of our client's challenge than our challenge ourselves. Even though we lost this volume to the United States, we were able to compensate this with our stronger domestic market. You saw there was an increase in sales to Brazil and also to other places like Europe. We were able to compensate the loss in this volume with sales to other markets. Also reminding you what is happening in the United States, some of our clients, or at least most of the clients we have discussed to, understanding that this was a possibility, they stocked up at the end of last year. I think that there is a level of stock which is higher than normal, which was built in the beginning of last year in light of what is happening.
I would say they also have a few months of stocks where they're able to hold up with this lower level of sales. That's what we understand, that while the market uncertainty remains and these clients remain with their stock, we'll continue to see the behavior we saw this quarter. On our end, a minimal impact, we were able to compensate this sales to Europe and the United States, and we will continue to fight this fight until things become more stable. Thank you so much. Really understood. If you allow me to ask another question, I would say a market-oriented question. We saw the price of aluminum suffering a bit with this.
Given tariff discussions and everything, there was also an impact of, I mean, the other factors you mentioned, but would like to hear from you what you understand to be the support for your cost price, for the cost of price. We've seen more recent weakening, but things seem to be stabilizing. Are there any—do you have any price support that you think would be interesting to sort of keep the market with its head above water? Marcelo, I can't give you this number, but it's obviously a volatile number. It depends a lot on cost factors. And as you can see, there was a big variation in cost from last quarter to this year.
You can see that aluminum stayed in a level between $2,300 to $2,400 almost all of last year, then jumped to $2,700 this year because of this Chinese impact and then a certain instability of the market before the tariff war started. With a market that had a trend towards a capacity cap, which shot the price up to $2,700, there was also the fact that there was alumina at this price cost. The price moved back, but it moved back to a level I would say is quite healthy. It is level of $2,350 today, $2,350 today. I would say for industry, that's a good price. It used to have a lower price than that, I think, $2,200, but then it hit that and shot up again.
I think because of the behavior of price over these last few years, we can consider that this is a healthy level and a level that you could count on, that it could be more stable between this $2,400 and if it stays at around this $2,400, it is positive. It is good. It is stable. It is good for the market as well. When you look at market, this price offers an adequate profitability for a good part of the cost curve. On our end, once again, when we look forward, it is difficult to predict expressive drops in this price, but obviously, this would depend on the uncertainties in the market. For it to go up, it will depend on removing these uncertainties in terms of tariffs and helping us to have an increase in demand. Remember, supply is not an issue at the moment. Supply exists.
Supply is safe, and it has this ceiling expenditure cap, which will not be reached some of the moments this year. Paying attention to the price of demand, really, be it China impacted or the rest of the world, because any more expressive impacts of demand that we might see moving forward, supply is more restricted than that. Let's see. You have a moment for a positive impact of price, but this positive impact will depend on demand increasing as well. Thanks for those great answers. Next question comes from Guilherme Nipes from XP. Good morning, Luciano. Luciano, Amabile, and Camila. Two questions here. My first question comes from the energy cycle. We saw an increase in the cost of contracts of over 50%, but this was basically expected.
Of course, this higher cost of contract has an effect on the energy business as a whole, which you already explained very well. You went into very well, as well as a better, higher consumption of energy and contracts in the aluminum business. I would like to understand moving forward two main issues. First, what can we expect from the perspective of energy balance between your own generation and your contract generation? We can try to estimate what is consumption in the energy business versus consumption in the aluminum business. The second point, also considering this energy issue, is regarding price. Could we maybe see if the price of the contract that we are seeing now is a price that would somehow be more normalized? Would there be a more negative or positive impact looking forward, thinking about the cost of energy?
We could project that as well moving forward. Balance of our generation contracts and prices and contracts. Second question would be regarding CapEx, that there was some maintenance in the refinery, etc. I would like to understand if, following up CapEx-wise, something we have always commented about, BRL 800 million a year. This number is maintained or also within a context of buying more alumina, a higher volume of alumina. Would we see any impacts in the production of alumina moving forward and then possible cost changes in this line? Also, if that CapEx, if it changes the pathway of CapEx over the year, considering you might then use CapEx to do the maintenance of the refinery and hold off investments moving forward. Those are my two questions regarding that. Thanks. Thank you, Guilherme, for those questions. First of all, about energy.
Discussing our contracts in the portfolio today, you can see our normalized number by 2028. I'm disconsidering any new contracts, which we will always communicate to you as needed. What we see up to now is included in this level until 2028. This is the volume of contracts of 150 megawatts average. Big older contract that ended 2028. Also reminding you that ever since we did the swap, it is corrected in dollars and it is predictable CPI. It is a swap from $45 to $100 starting 2025. $100 per CPI for average megawatts until 2028. That is the basic count. Besides this, there is this new contract of 50 megawatts average with a fixed price for the next 14 years. It is clear to us what the average cost is for the volume of contracts in the balance.
About the allocation, we're optimistic because our reservoirs are full. The price is high, which helps us to sell energy, and we can then strategically optimize that margin, helping to protect us from risk, as I mentioned. A very dry year for the country, a lot of drought. This gives us that little bit of leeway there since we ended up accumulating energy over time, a very positive surplus of water in our reservoirs. That gave us a little more space and gives us a lot of flexibility for selling energy and maximizing that energy EBITDA over the next three quarters. This gives us, let's say, a little bit of room to not see a drop that's much worse for 2024 and 2025.
From 2024 to 2025, starting 2023 was a dry year, and then maximizing that with this higher price for the part that was not sold yet. Thanks. Perfect. Thanks for the answer. I'm sorry, you also asked about, and that was about energy. Now, you asked about alumina. Yes, we will have a higher cost on that, on alumina for the second quarter because there is a lower production. If there is a lower production, there is a decrease of the fixed cost and the KPIs. When there is a drop in maintenance or something of the sort, it takes some time to reestablish the main operational KPIs. I talked about the refinery, and in consequence of that, a reduction of that. We hope all of this can be very—will be very specific to the second quarter.
The CapEx for the ramp-up back that will be involved will be managed in the year's plan. We still do not—still not clear to us if we are going to have to postpone one of the modernization expansion projects for this year because there is always this natural dislocation from the budget that we expect for the year in terms of timing and value. The upgrade of the technology itself is very phased out. The other one is the modernization of our production for the fin sheets, which this year is CBA, and this is the one that is further still on and will continue full throughout the year as predicted. We have a flexibility of timing in our schedule, which can then naturally be adjusted regarding what we need for the cap maintenance CapEx that I just mentioned.
We're still not clear to us if it will be necessary to postpone this compared to the dates that we had originally presented. If it is, we will communicate this to you in the next few quarters, for sure. Hi, good morning to you all. Thank you so much for questions. First, about premiums. I think that was a big surprise for us this quarter. When we talk about the primary, when we talk about premiums for primary, this increased 40%. What happened for you to be able to capture such high premiums? Was this because of some anticipation of purchases, global uncertainty, or—also, do you see this as something sustainable for the next few quarters? For the next few quarters, when we model, can we also model that these premiums that were above $500 per ton—is that sustainable? Is that something we can keep?
The second question is about the volumes and productive capacity for the company. Have you been able to sell this amount of tons per year? Also, do you see today this as the potential for CBA's sales? Do you see room for any type of increase for 2025? What would be the amount that you are able to understand that CBA reaches the demand, the market? Thanks, Camila. I'll answer this one about premiums. I would say it was not so much the impact of premiums that happened this quarter, maybe more of a mix of sales. We have a much richer mix of sales. I mean, obviously, you have better averages. Caio, you mentioned very well, the beginning of the year was super strong. We always have that concern with some sort of negative impacts in the market, but we have not felt them so much.
I would say maybe one of the factors where we saw some more negative impacts was building, civil construction, but it is very marginal. So very low cost, very low reduction. It is natural that moving forward, even because of this and because of the premiums and the prices for the—which we use as a reference—the ingress. We cannot predict it so much, but the market in Europe and here is demonstrating lower premiums as a reflection of what is happening in the market. It is natural to have this impacted and see the market impacted by and see some of those volumes impacted as well. Thank you. That is really some of the idea that, well, some of what we expect. Speaking of volume, I think 500 is a good number here. It is a good number, as you mentioned, Caio.
We're at the limit of what we can produce in terms of liquid aluminum. Scrap is one of the areas where we also can have a good margin. Scrap is not only an issue where we have the capacity to produce, but depending on the price of scrap and if we're going to add or not add scrap to the mix, at this moment, what's happening is that there's an increase in the price of scrap. We look at possible changes in this mix. Why? Because of an increase, because scrap doesn't have tariffs. Scrap is tariff-free. There was and has been a higher demand of scrap for the United States, which ends up impacting the market.
For us, scrap is a part of our production or of our consumption, of our main consumption. Of course, there is this impact, but we continue to buy, looking at trade-offs, looking at what can or cannot be done. I think moving back to your question, 500 for this year is a good expectation. Great, Luciano. Just an issue on those premiums, what we can expect for the second quarter. Our lower premiums are because of the market references. With your mix, I had the impression that that mix can be maintained at a higher level for the second quarter. Yes, I think yes, Caio, but just careful with this issue that I just mentioned. Our visibility at the moment is that we can keep those sales.
There are still two more months, May and June, to look at the market and so that the market can in fact prove this to us. I would say that yes, in general. Remember, if everything remains the way it is, you have this double issue in revenue, so the drop in LME, and this can potentially happen this quarter as well. Thank you, Luciano. Thanks, Caio. There is another question here from Ricardo. Hi, good morning. Can you hear me now? Yes, we can. Sorry about that. Good morning, Luciano. Camila, good morning. Congratulations for your great result. Good to see you had solid results in prices. Energy a little better than we expected, so good pathway so far. Some questions.
When we think about cash generation, there were some comments about your main lines that I would like to understand if here in the next quarter we can already think of positive cash generation, maybe some working capital reversion, anything that could help with cash generation flow for the next quarter. First question. My second question is energy, obviously. I thought it was very interesting to listen to you talk about some in some way connecting the exceeding energy to negotiation at a more profitable price. Do you think this is a chance to see also new contracts for energy generation at prefix prices over the next quarters? My last question to end would be a question from the market regarding the aluminum market. If you look at demand at the end, end user, is it really already dropping?
Because if we look for the quarter, for the whole quarter, stocks in China fell, and so there was actually positive demand. How do you understand this demand actually falling at the edge, let's say? Could this together allied with alumina explain this drop in the price of commodities or etc.? Thanks. The first one is about, thank you for your question. First question about working capital right here. Our seasonality always demonstrates higher investment in stocks in the first quarter, brings us closer to neutral in the second quarter, and gives us more space over the second quarter. The second quarter is even more neutral. We always look at the fact that there are a lot of opportunities for tax credits, but we still do not have any predictability on that.
We're working operationally in those credits, especially the ICMS, almost BRL 400,000 in our balance that we are unable to work with the accumulation of credit for monetization of our operation, especially because of our prices and the sale of primaries in the case of São Paulo being exempt, and also something that the tax reform would help us a lot with over time. We're very excited to advance this. There's a transition period, but this generates a value generation for CBA results plus working capital. I think the other issues are well managed without big high hopes or anything. There's always something in terms of receipt of holes in payments, but it's not where we see a lot of recovery for CBA. I would say probably some gains, but that we don't see in the short term.
This may be an upside we can expect for the second quarter, and also the stocks that because of seasonality also will recover better in the second quarter. Another thing you mentioned here, the better energy moment than what was expected, and the commercialization has room to be done, improving the results of the second quarter. There was some improvement in March, but I would say a good part of that, the price improvement comes over the next quarters, compensating the average price of exceeding contracts. Finally, the ability to have new contracts, new energy contracts, we are seeing this in the market. We had also commented a bit about this because in the end, energy is our strategic upper hand, the competitive advantage in the price for the renewables market, and also the long-term dollarized contract is very competitive.
We see it as a good moment for the market for this. We are looking at it always as an opportunity, and we are going to need energy because there is a year of growth ahead. We have to renew concessions, obviously, which is great for our portfolio. If we are able to renew competitively as we have today, that is great. Some are under risk, which are those 100 megawatts contracts, and then there are some that have less chances of, and also so that we can secure ourselves that we are still being competitive in case our water portfolio goes down, and also assuring the growth that we need for the next few years, and a series of other options that we always have available at the business, we would prefer to already allocate the exceeding volume for these competitive factors.
When we do so, we can follow two paths, which are positive. The first is to curb a cost if we use aluminum more competitively, and the second, if I do not use it because my growth only comes in three, four, five years because of the 50,000 tons, which is looking like it is a bit more forward, then we will leave it as exceeding, and with the volatility of prices that we have over time in Brazil, we can make money. We will make a margin off of that by selling energy at some point with a price of over $30-something per megawatt per water. This can be really good for the price of aluminum as well as for sales, which gives us the security to grow. Thanks. That is how we see things moving forward.
That's why we continue to work on new contracts, and we'll continue to communicate with you in the correct moments. Ricardo, talking about the market, you're very correct. First quarter was good, and that's how we were understanding things of some increase in demand than a more restricted supply. What happened now is that with price and demand, there's much more an expectation of things getting worse than in fact them getting worse. If we look at the tariff which was imposed in the United States in terms of aluminum, what impact is that going to have on the American demand for aluminum? Because the Americans are going to have to buy metals, not only from us in Brazil, from other countries abroad, also at 25%. Will they sell it at that? Will that impact demand?
Will there be a substitution of aluminum for other materials in the United States, which are not tariffed? Because tariff material right now is basically steel and aluminum, and 10% for countries. That is some of the uncertainty at the moment, which ended up impacting our prices. With everything that is happening, how will this reflect in China's demand or China's production? It was an important market for the United States, not only in terms of the products that demand aluminum, but also the market as a whole. Look at the financial position also of LME. Remember, LME has an important financial component. We went from a few months with longer contracts than short contracts, and this just swapped in the last few weeks. We started having more short contracts than long contracts. This obviously puts price pressure, brings price pressure to the table.
Just telling you that what happened to price is connected to those two factors and also to the market expectation of what could happen much more than what is happening. We are always playing on the safe side looking forward. Thank you very much, Camila, Luciano. Great point in terms of short and long. I think we can monitor that moving forward. Thanks so much. Okay, guys. Thanks, Ricardo. We reached the end of our call. Another CBA first quarter 2025 results call. Thanks for coming, and we will see each other soon in the next quarter, 7th of August. Pass the word to Luciano for any closing remarks. Thanks, Amabile. Thanks, everyone. Thanks for the questions. Very welcome always. Very interesting. We love this debate. It is a super good debate for us, and fortunate that we keep it flowing.
I invite you to keep relating with us, with our investor relations team, and connecting to our next conference next quarter. Thank you. Bye-bye.