Good morning, and welcome to EcoRodovias fourth quarter of 2021 earnings conference call. With us here today are Mr. Marcello Guidotti, the CEO, and Andrea Fernandes, IR Director. This presentation is being recorded and all participants will be in listen-only mode during the presentation. After that, we will begin the questions and answers session for analysts and investors only, at which time further instructions will be provided. Should you need assistance during the call, please press star zero to reach the operator. The audio and the slides of this conference call are being broadcast simultaneously at ri.ecorodovias.com.br, where you will find the presentation for download from the webcast platform in the Investor Relations section.
Before proceeding, we would like to clarify that the forward-looking statements that may be made during this conference call relating to EcoRodovias' business prospects, projections, and operational and financial targets are based on the management's beliefs and assumptions as well as on currently available information. They involve risks, uncertainties, and assumptions as they refer to future events and hence depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors may affect the future performance of EcoRodovias and lead to results that differ materially from those expressed in such forward-looking statements. I will now turn the floor to Ms. Andrea Fernandes, who will discuss the fourth quarter of 2021's results. Ms. Andrea, you may proceed.
Good morning. Welcome to Grupo EcoRodovias' conference call, today discussing the earnings results of the fourth quarter of 2021. We thank you all for your interest and participation. This quarter was marked by some important achievements, such as signing the concession agreement for BR-153, Tocantins-Goiás, to operate it for 35 years, and Ecovias dos Imigrantes signing the definitive amendment, TAM, which extended the concession agreement term to November 2033, rebalanced regulatory liabilities, ended lawsuits, and included investments. In addition, as of 2024, using the marginal cash flow methodology, the concessionaire will no longer have a revenue risk. These two achievements have increased the duration of the portfolio and are in line with the company's growth strategy. Moving on to operations performance on slide three, consolidated traffic posted an increase of 4.4% in the fourth quarter and of 16.8% in 2021.
Excluding the operation of Ecovias do Cerrado, which began toll collection in November 2020, and concessions Ecovia Caminho do Mar and Ecocataratas, which had their concession contracts terminated in November 2021, comparable traffic posted an increase of 3% in the quarter and 10.2% in the year 2021. The highlight of the quarter was heavy vehicles with an increase of 5%. As for the group's consolidated financial performance, on slide four, we see the evolution of gross revenue with an increase of 19.5% in the fourth quarter. Excluding construction revenues, gross revenue increased by 5.5%, driven by traffic increase and tariff adjustments, in particular the increase of BRL 72.2 million in electronic toll collection. On slide five, we show the gross revenue for 2021 with a 16.2% increase excluding construction revenues.
Note the increase of BRL 453 million in revenue for highway concessions. On slide six, net revenue, excluding construction revenue, grew 4.9% in the quarter, and adjusted cash costs amounted to BRL 272 million. This increase is due mainly to the expenses with consulting, technical, and legal advisory services for the studies of new businesses for the Dutra, Triângulo Mineiro, CRT, and Paraná concession auctions, and specialized corporate consulting services to reassess the operating model and propose actions to drive competitiveness and sustainable growth to be implemented throughout 2022. Adjusted cash costs, excluding these effects, increased 11.3%, influenced by the inflation increase and the variable costs at Ecoporto. On slide seven, adjusted EBITDA amounted to BRL 544.7 million in the fourth quarter, with an EBITDA margin of 62.4%.
A slight decrease due to the termination of the concession agreements for Ecovia Caminho do Mar and Ecocataratas. The adjusted EBITDA for 2021 was BRL 2.3 billion, a 14.2% increase and EBITDA margin of 66.7%, as we can see on slide eight. On slide nine, we see the evolution of recurring net income in the fourth quarter of 2021, of 25.5% compared to the fourth quarter of 2020. This is mainly due to a lower provision for maintenance and better financial result. Recurring net income in 2021 amounted to BRL 381.3 million, due mainly to the increase on EBITDA as shown on slide 10.
Investments in the fourth quarter of 2021 on slide 12 amounted to BRL 1.3 billion, including the payment of BRL 631 million by Ecovias dos Imigrantes to end the lawsuit in the terms of TAM 19, which extended the term of the concession agreement to November of 2033. Excluding this payment, CapEx amounted to BRL 644.1 million. The main investments were for the road duplication and pavement conservation works at Eco135 and Eco050, and pavement conservation works at Ecovias do Cerrado. On slide 13, we closed the quarter with net debt of BRL 7.6 billion, an increase quarter-on-quarter, mainly due to the investments made in the quarter.
Leverage measured by the net debt over adjusted EBITDA indicator was 3.3 x compared to 3.1x in the third quarter of 2021. Moving on to slide 14. We closed 2021 with cash balance of BRL 2.3 billion. In 2022, maturities in the first half of the year are already equated with the issues of the holding and of Ecovias dos Imigrantes in the amount of BRL 1.9 billion. Cash availability and the company's cash generation in the second half, the main maturity is at EcoRodovias Concessões, and it will be settled through new funding. On slide 15, we highlight the highways that the company is studying. Federal concessions in Paraná, CRT and Triângulo Mineiro in the state of Minas Gerais and EcoRodovias' drivers of growth.
The capitalization of the company in the amount of BRL 1.7 billion, as well as partnerships and future bids, target projects that generate cash already on D-zero. Extension of the contract for Ecovias dos Imigrantes. Dividend distribution in line with the growth cycle and future cash generation shall enable the search for opportunities to invest in the Brazilian highway market with capital discipline in a sustainable manner. We take this opportunity to mention that Ecovias do Araguaia continues to invest in pavement conservation works and in the toll plazas, and toll collection is expected to begin in the fourth quarter of 2022. On slide 17 through 21, we present the main ESG indicators, highlighting the conclusion of the study on climate vulnerabilities and the B score on CDP above the global average.
The strategic plan was revised and we have included ESG goals linked to the leadership's variable remuneration, representing up to 8% of individual target plans, which have been expanded to include relevant topics such as diversity and inclusion. The ESG practices adopted by the company guaranteed its presence for the eleventh consecutive year in B3's Corporate Sustainability Index, which selects the companies with the best performance on sustainability, corporate governance, commitment to the community, environmental and climate strategies, among other criteria. More details on our ESG agenda are available on our earnings release. This concludes our presentation, and we would like to move on to the question and answer session. Operator, we are ready to take questions from our analysts and investors. Thank you.
Thank you. We will now begin the question and answer session for investors and analysts. First question, Lucas Steves, Santander.
Good morning, Guidotti, Andrea. Congratulations on the result, and thank you for taking my question. We know that toll collection hasn't started in Araguaia yet, but can you give us an idea of the current behavior of traffic there, and if you believe that the central network has any impact in the projects that the company planned at the time of the auction? Thank you.
Lucas, good morning. Thank you for your question. This is Marcello. About traffic at Araguaia, we are monitoring it. The traffic behavior is completely in line with what we had seen at the time of the proposal. I don't think we'll have any surprise in that sense in Araguaia. About Rumo, on the network impact, it was considered in the studies, of course. It was not an impact because Araguaia is not a crop flow. It's not a relevant traffic, so the impact would not be large. It was already considered. It was already included in the Araguaia study.
Thank you. Have a good day.
Our second question, Victor Mizusaki, Bradesco BBI.
Good morning. Congratulations on the result. Guidotti, congratulations on the appointment as the new CEO of the EcoRodovias Group. I have two questions. The first is related to CapEx, the update now on the fourth quarter. One point that you mentioned in the release, it shows some savings in the CapEx options. In our math, if you take the realized CapEx and how much you were able to save, we're talking about a savings of about 20% of CapEx. My first question is if it's possible to consider in this contracted CapEx, any additional savings? The second question, also related to traffic, how do you see traffic evolution for 2022?
Good morning, Victor. Thank you for your question. About CapEx, the actual CapEx was referring to 2021. The cost reductions are future reductions, changes in projects on the long term, but they're all changes in projects, in estimated quantities that have been detected and funded.
When you compare the actual with the reductions indicated there on the work at EcoRodovias in the evaluation of future CapEx as soon as possible, and as the projects advance from functional to advanced functional projects through executives and the hiring phase, we will find savings. We continue on that process. About traffic, the evolution has been positive. The most recent data indicates a traffic of 6% above 2021. That indicates a performance that will be above the guidance as expected for 2021. The mix of light vehicles, industrial vehicles, and cargo vehicles are giving good results. Traffic results and all the tariff adjustment side and the concession contract. The first impression we have of the year and the expectation we have are good.
Great. Thank you.
Our next question comes from Felipe Husein, Citibank. Good morning.
I have a question about the debt. I saw that you increased the leverage in this quarter. There's this perspective of continuing increasing the leverage, but there was a change in the debt profile. Increase the IPCA-linked debt, reduction the CDI-linked debt, and the debt that was issued to refinance the ones that are maturing now have been maintained on CDI. I'd like to understand whether there's been a change in strategy allocating the indices in the debt profile and whether you have any idea of a projection of how much you intend to place on CDI on the short term or long term considering the increase on the rates in the short term.
Felipe, good morning. Thank you for your question. The company, as a strategy, tends to maintain a debt level linked to the IPCA that is higher.
We have a flow of revenues all linked to IPCA, so it doesn't make sense. It does make sense to have this predominance of IPCA on the projects and future projections. Of course, we also have to analyze the market conditions. Sometimes the IPCA market may not be too open or vice versa, but it increased, and we need to see the issues of Ecovias do Araguaia. That's 3.6, considering today's value, for 15 years. At the holdings, we have more access to the CDI, so the debt of holdings are linked to the CDI. We have to roll out one yesterday at EcoRodovias Infraestrutura e Logística, canceling a debt that was funded CDI plus four, and rolling the smaller one now, already paying some of the debt at CDI plus 2.5 years.
The strategy is that the holding has more access to the CDI and the operational, where the debt is related to the projects. With the revenue linked to IPCA, we prefer to maintain it on IPCA for that reason.
Thank you. I have another question, if you allow me, about competition. If you could give us some color, how much competition do you see for the coming bids? What's the foreign participation or share in this competition? What are the factors if they tend to be very present or not participating at this time?
Felipe, the competition level will depend on the type of project. Smaller projects, state programs may have the participation of more regional projects and companies that join, and construction companies that may participate in programs in Mato Grosso, Rio Grande do Sul, Minas. The federal programs saw little competition last year.
It was us and other known players. It tends to remain like that. We are not seeing a lot of movement from foreigners coming in. The major operators or foreign operators are already in Brazil. Our controllers, Ardian and others, are already concerned with foreign investors because they already operate in Brazil. We do not anticipate the entry of international players. This is in the highway industry, in the highway sector. The highways already have the main or the major international players.
Excellent. Thank you.
The next question, Guilherme Mendes, JP Morgan.
I have a question about the COVID balancing. Are you still in discussions if you have a timing expectation to resolve this?
Thank you for your question, Guilherme. In the federal level, the discussions are advanced. There's a methodology regulation, and the discussions are moving on. They may be rebalanced. In the São Paulo level, the discussion has been delayed a little bit, but in our case, we had a very busy agenda to sign the TAM in recent months with the Ecovias concession, and that changed their focus a little bit, but we will resume these discussions in São Paulo.
Thank you, Guidotti. To clarify, will it only be through tariffs on the federal level? If you can give us an indication of the magnitude of the increase.
No, the means of rebalancing can be on tariffs or scaled. There are relevant values. Luckily, in the federal level, different than some concessions in São Paulo, but in the federal level, most of the concessions had a relatively good performance during the pandemic, so the values are not that relevant.
Excellent. Thank you, Guidotti.
Please stand by once again while we collect the questions. Next question, Henrique Simões, Credit Suisse.
Good morning, Guidotti, Andrea. I'd like to ask about the adjustments of inputs of prices. What were the assumptions used if you're considering higher prices throughout the curve, if it is normalizing? I'd expect maybe a higher value than close something to 1% of the total CapEx balance. Thank you.
Good morning. Thank you for the question, Henrique. These adjustments are calculated in the entire CapEx value today, of course. They capture the variation up to date. We have a beginning as a return in the medium term to normalize inflation values. Of course, we'll need to monitor and see whether the increase will last, if it will continue increasing more. The adjustment that was done on prices so far, especially in the CapEx amount.
We'll resume a confluence of values in line with the inflation. We have this coverage on revenue as well. We'll keep track of it, of course, but we work in the efficiencies and economies and savings that, as I said, as we advance in the projects, they tend to appear, a way of controlling these variations year-over-year. As you see, it's nothing too relevant, nothing large. Our CapEx is under control. We have full capacity to react and manage these movements without major impacts to the company.
Thank you.
If there are no further questions, we now conclude our questions and answer sessions. I would like to turn the floor over to Ms. Andrea Fernandes for her final considerations. Andrea, you may go ahead.
I thank you all for your participation. The team and I are available for any doubts. Have a great week. Thank you.
EcoRodovias' conference call is now closed. Thank you very much for your participation. We wish you a very good day.