Andrea Fernandes, CFO. This presentation is being recorded, and all participants will be in listen-only mode during the presentation. After that, we will begin the question and answer session for analysts and investors only, when further instructions will be provided. The slides of this presentation are available on the company's Investor Relations website in the Results Center section at ri.ecorodovias.com.br. After the end of the earnings presentation, the recording will be available in the same section. Before proceeding, we would like to clarify that the forward-looking statements that may be made during this presentation 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 Andrea Fernandes, who will make the comments about the company's earnings. Please, Andrea, you may proceed.
Good morning. Welcome to EcoRodovias' earnings presentation on the first quarter of 2024. We thank you all for your interest and participation. Before we begin, we would like to offer our solidarity and support to the people of Rio Grande do Sul in this very difficult moment due to the floods. Our concessionaire, located in the state, Ecosul, continues to work with teams, machinery, fleet, and mechanical and medical assistants in the preventive actions at the Pelotas highway hub.
EcoRodovias also provided engineers to support the development of projects for the reconstruction of the infrastructure through an action coordinated by the state of Rio Grande do Sul. Since Monday, May 6th, Ecosul is also granting exemptions to users who travel transporting donations and in humanitarian actions, in addition to receiving donations at its user service stations. We inform that despite the rains in the state, the infrastructure of the highways managed by Ecosul was not affected. In the period between May 1st and 7th, the concessionaire's vehicle traffic decreased by 32%, and gross revenue dropped 11%. Ecosul's traffic represents approximately 4% of EcoRodovias' total traffic, and in April, showed growth of almost 9%. In our ESG 2030 agenda, we prioritize the construction of a plan to adapt and mitigate climate change, considering future scenarios and action plans as well as control systems.
To support the construction of this plan, climate risk studies are being prepared to identify which areas will be the most affected by climate threat in the medium and long terms. Based on these results, we'll draft adaptation action, thus reducing the risk to our assets and our users. In addition, we have also developed a decarbonization plan with a series of mitigating measures to reduce our emissions, as well as our supply chains' emissions, contributing to the fight against the worsening of climate change. Starting the presentation on slide three, we would like to highlight the adjusted EBITDA of BRL 1.1 billion in the quarter, the growth in adjusted cash costs lower than the inflation recorded in the last twelve months, which demonstrates our cost discipline, and the adjusted EBITDA margin of highway concession that reached 73% in the quarter.
Consolidated net income reached BRL 237.6 million in the quarter, a growth of 110% compared to the first quarter of 2023. It is worth noting that the growth in adjusted EBITDA contributed to a leverage at 3.4 x, a reduction of 0.5x when compared to the first quarter of 2023, and 0.1x compared to December of 2023. In terms of CapEx, we invested BRL 805 million in our assets, mainly in road widening work, capacity expansion, special pavement conservation works, and the implementation of operational buildings. Another highlight is the approval by the board of directors of the payment of dividend of BRL 135 million, to be paid as of July 29, 2024.
The first quarter, we concluded the funding of BRL 1.6 billion at Ecovias dos Imigrantes. On slide five, we demonstrate operational performance. Consolidated traffic grew by 28.2% in the first quarter, mainly due to the start of toll collection by EcoRioMinas and EcoNoroeste. Comparable traffic grew 5.8% in the quarter, driven by an 8.3% increase in heavy vehicle traffic due to the increase in exports of soybean, corn, and sugar, an increase in industrial production, and the induction of traffic due to the delivery of road widening in some of our concessions. We also highlight the strong 9.4% increase in comparable traffic in April 2024. On slide six, we present the evolution of adjusted growth revenue, reaching BRL 1.7 billion, up 29%.
Highlight for the BRL 446 million increase in gross revenue from highway concessions. The table on the right shows toll collection by electronic means, self-service, and digital payment means, which totaled 80.3% of toll revenue in the quarter, an increase of 5.5 percentage points compared to the same period of the previous year, demonstrating the growing engagement of our users with these payment modalities, ensuring better flow on the highways and, at the same time, reducing the cost of cash management. On slide seven, adjusted net revenue increased 34.7% in the quarter, while cash costs grew 23.5%.
We highlight that comparable net revenue, excluding EcoNoroeste and EcoRioMinas, grew 9.1% in the quarter, while adjusted cash costs increased 3.8%, a variation that is lower than the inflation observed in the last twelve months, reflecting for another quarter, the efficient and optimized management of our assets. Moving on to slide eight, we highlight the results of the EcoRodovias Value Agenda program, EVA, after identifying and implementing operational efficiencies achieved since 2022. We highlight the evolution of the indicator of the percentage of cash costs in relation to adjusted net revenue, which decreased by 6.9 percentage points since the beginning of the program in 2022, reaching 28.5% in the fourth quarter of 2024.
On the right, we highlight some of the EVA's programs initiative, such as the consolidation of synergy between the organizational structures of the concession, the optimization of internal and external processes such as digital HR and Req-to-Pay. And it's worth mentioning that EcoRodovias was a pioneer in the implementation of the electronic manifesto of fiscal documents, MDFe, to collect tolls for suspended axles of non-empty trucks. On slide nine, we show the evolution of adjusted EBITDA, which reached BRL 1.1 billion in the fourth quarter of 2024, a growth of 35.3% with a margin of 71.5%. Adjusted EBITDA from highway concessions increased by 42.6% and margin by 73%, demonstrating the resilient, efficient cost management, and the potential for growth of our concessions.
On slide 10, we highlight the increase in net income, reaching BRL 237.6 million, compared to BRL 113 million for the same quarter of the previous year, mainly due to the increase in adjusted EBITDA. On slide 12, we highlight investments of BRL 805 million made in the first quarter of the year, mainly aimed at investments in the expansion and maintenance of our highways. This quarter, 61% of investments were allocated to five concessions in the CapEx expansion cycle: Eco135 and Ecovias do Cerrado in the final phase of delivery of the expansion works, and EcoRioMinas, EcoNoroeste, and Ecovias do Araguaia, starting their investments in expansion. On the right side of the slide, we highlight the main deliveries of 2024.
On slide 13, we ended the quarter with consolidated leverage of 3.4x , down 0.1 x from December 2023, due to the excellent operating performance of our highway concessions. Leverage for EcoRodovias Concessões e Serviços ended the quarter at 3.3 x, stable compared to December 2023. EcoRodovias worked hard in 2023 on the optimization of capital structure and tax efficiency. In March 2024, the share of net debt at the holdings was 45%, a reduction of 24 percentage points when compared to the share in December 2022.
On slide 14, we ended the quarter with a cash balance of BRL 5.5 billion. The maturities of BRL 3.2 billion in the second quarter of 2024 were concentrated in Ecovias dos Imigrantes, BRL 1.4 billion, and in EcoRodovias Concessões e Serviços, BRL 1.2 billion, which were already paid in April. On slide 16, we present highlights of our ESG agenda. The progress of our Safety Always program, which brings actions to further strengthen our safety culture. This program is aligned with the safety pathway of our ESG 2030 agenda, with goals aimed at improving our occupational and road safety indicators. In line with our climate strategy, we also highlight the installation of 11 electric chargers at EcoNoroeste to support users of electric cars.
Another important point in our agenda is innovation and technology, and EcoRodovias was recognized as the fourth most innovative company in Brazil in information technology, an award from the IT firm. We close this presentation by reinforcing that EcoRodovias is focused on the efficient cost management and execution of its investments, carrying out expansion works and important deliveries at its concessions. In addition, the company will continue to advance and prioritize occupational safety, innovation and sustainability. We also highlight that the company will continue to monitor and evaluate opportunities, albeit more selectively, for new growth opportunities, since the agenda of new auctions is promising for the medium and long term in Brazil. With that, we conclude our presentation, and we would like to turn to the Q&A session. Operator, we are ready for the questions from our analysts and investors.
Thank you. We will now begin the questions and answers session for investors and analysts. To ask a question, please click on the Raise Hand button. Our first question, Fernanda Recchia, BTG. Please, Fernanda, go ahead.
Good morning. Thank you for taking my question. I have two points to discuss with you. First, in capital allocation, Andrea, you mentioned that there's a robust pipeline again. I'd like to understand, EcoRodovias' mind for these coming auctions. On the last auctions, we saw EcoRodovias being, having a more conservative approach. We have some important assets, BR-381, Rota Sorocabana, Paraná. So if you can talk about your view, how you're looking at it, if there's any specific auction that raises more interest from you than others, that would be helpful. And the second point, I'd like to talk a little bit about traffic. We've seen the numbers from April, traffic growing almost 7% year to date.
Looking forward, if you can give us an idea of what we could expect in terms of traffic, if this pace of mid-single digit is sustainable throughout the year, despite a perspective of slightly worse agribusiness growth and the effect of the rains in Rio Grande do Sul. Thank you.
Good morning, Fernanda. This is Marcello. About the new auction that you mentioned, they're the ones you mentioned are definitely part of the opportunities that EcoRodovias has mapped, not because they're coming up, but as you have mentioned, because they're assets that are close, somehow close to our assets in Minas Gerais, and the assets being prepared in Paraná as well. One of them is a former concession, EcoRodovias, so they're part of our list of projects chosen for us to look into carefully.
We maintain the strategy of being assertive, having a view towards the medium to the longer term. As Andrea said, we have opportunities this year and the other opportunities that we'll also have next year and so on. So what I can say is that we're going to study this to see if there are projects that make sense for us, if they're sustainable for EcoRodovias, and we'll make the decision at the appropriate time. About traffic, traffic in April was very good. In May, the first few days, of course, including Ecosul, because they're having a few complicated couple of weeks. The traffic in May, comparable traffic, is already more than 4% in these first days, and that should be more or less the level that we could expect. F or 2024, 4.45% in the consolidated traffic growth is what we expect. Thank you.
Great, Guidotti. Thank you.
Next question, Guilherme Mendes, JP Morgan.
Good morning, Guidotti, Andrea. I have two points here. First, about margins and costs. We see a very strong performance in terms of cost. Actually, congratulations on your work. But my question is to understand whether there is anything else relevant still to happen. If could think in terms of the margin the company's been delivering in recent quarters, if it'd be a more normalized level of margin? And the second part, on the regulatory part, if you can update us in the evolution of the discussions of Eco101 and Ecoporto. Thank you.
Good morning, Guilherme. About cost management, my answer is yes, we have more to deliver, but this is all based in the review and the digitalization of the processes, the technologies that have been constantly replacing and improving and increasing the efficiency of our processes.
But also in the—not only in the point of view of cost, but collection. MDFe is one of them, but of course, there's other technologies that we're testing. Some of them are actually in operation, such as Free Flow. And even though there's not a lot of movements, there's the HS-WIM, that are technologies that will revolutionize toll collection in Brazil, and of course, increase margins and efficiency. HS-WIM is the high speed weight in motion system that is capable of weighing 100% of the trucks, and of course, they can redistribute excess cargo through more axles. So these are technologies, innovations, digitalization, that will certainly support margin expansion, obviously, along with the good performance of traffic. About your second question, Ecoporto and Eco101. Eco101, negotiations are well advanced. I believe we'll have some definitions soon. Fortunately or unfortunately, everything's still confidential.
The negotiation cannot be disclosed yet. But what I can tell you, I can assure you, is that the discussions have been fair. We had a detailed renegotiation, and the result will certainly be positive for society, for the state of Espírito Santo, for the users, and for the company. So I think we're, we're quite satisfied with the progress. We have to wait until it's formalized, and we are allowed to disclose details. About Ecoporto, we're in discussion with the Santos Port Authority or the business plan for renewal at the port. We're working for now with an active concession contract, and within 180 days after the second period that is concluded in July, we're waiting for a renewal for another 180 days so that we can continue negotiations. Thank you.
Very clear, Guidotti. Thank you.
Next question, Victor Mizusaki, Bradesco BBI.
Good morning. Congratulations on the earnings. Two questions, more of a follow-up. About Guilherme's question on Ecoporto, Guidotti, in the past, the government had re-recognized part of the requests for rebalancing. Do you have any update if the other part, if the government has already recognized or if it's something that's still under discussion? And the second question, about the Free Flow. We've been seeing some discussions, and there's a concern in terms of the regulatory risk, in terms of fines. How have you been seeing this discussion, and how is this protected within your EcoRodovias' concession agreements?
Good morning, Victor. About Ecoporto, just to make it clear, we have a credit to be recognized.
The depreciation types that was not concluded of the investments made in the first stage of our agreement, those are already recognized, and they're in the balance sheet and should be somehow liquidated by the grantor, by the government. How they'll be liquidated has not been decided, but they have been recognized. We have other liabilities that are not regulatory, because we are judicializing these discussions. These discussions are happening in court, so there's still... In the administrative phase, they were denied. The imbalance of the smaller areas received in the first contract at Ecoporto. We're discussing it in court, in the legal level, judicial level.
About Free Flow, Free Flow is a well-known technology, but of course, what challenges Free Flow is the back office process behind Free Flow, collection of fines, and of course, there has to be some it must be robust. And what we're preparing internally at EcoRodovias, and, I mean, our systems, our back office processes, we're prepared to start collection at Free Flow at EcoNoroeste this year, which is the contract where all toll plazas will have to be replaced. The contract, of course, protects delinquency very clearly, but still, we're preparing to be consistent in treating the data and sending fines, and there's a whole process. It's very complex, it's not simple, but it exists in other countries, and it can be done, and I believe that that's what's happening. We had some initial issues, but I'd say I'm optimistic.
Free Flow will be good, and it will be an advance in the toll collection system for the highways in Brazil.
Great. Thank you.
Next question, Filipe Nielsen, Citibank.
Good morning. Thank you for taking my question and for this opportunity. I'd just like to explore two points on CapEx. One, related to the pace of the works, I'd like to understand how you've been seeing the progress of these works. Is it evolving as expected? Is it possible that there'll be a delay of some of it to next year, or if the ramp-up should continue to accelerate during the year? And the second question about the contracting environment for the work, if you've felt any pressure in terms of demands for construction works in Brazil, pressuring prices, or if you've seen any level of challenge in terms of new contracting looking forward?
Thank you. Hi, Filipe. About CapEx, the pace of the works, we'll maintain it at a constant, at BRL 4 billion-4.5 billion in coming year.
That's the pace of the works that we already have contracted, so there's not going to be an abrupt growth. New works will start in Rio Minas, and others are concluded in other highways, and one will replace the other. And the idea is to maintain this pace of 4-4.5 for the coming years, so that it's a sustainable pace, and that also accord is in agreement with the concession contract. So all of that, and the timeline for our concessions is organized. The schedule is planned to be realized, it is sustained, sustainable. And jumping to your next question, it is something to be possible to be absorbed by the company. We do not see any major challenge in that sense. I believe the market, our works are not complex.
It's possible to do it with construction companies that are medium-sized, even smaller-sized companies, and regionally and locally, they exist. So it's not major construction works with high complexity that require big players. So we do not see, and we're supported by our related counterpart, that in some major construction works, they act aligned with the company's strategy as well, so.
Thank you.
Next question, Andressa Varotto, UBS BB.
Good morning, Guidotti, Andrea. Thank you. Just a quick question. This quarter, we saw a reduction of the tax rate compared to what the company's been presenting in past quarters. So I'd like to know whether there has been any impact this quarter, and what to expect looking forward. Thank you.
I think that the accounts, quarter by quarter, don't have necessarily a linear progression. We are working on the most efficient debt management possible, trying to reduce debt at the holdings and debt that doesn't have tax shields. As we saw in the release, we're increasing debt in the project level. But I'd say the average rate will be stable. This quarter there has been an improvement, but we expect it to remain stable, basically, at around that level.
Of course, we're always going to try to optimize capital structure, and we're working in the holding in Araguaia and on the Araguaia itself, to try and optimize this financial structure that was inefficient. So we are already in discussions with ANTT to be able to advance, to move forward. So that's it.
Excellent. Thank you.
Next question, Luiz Capistrano, Itaú BBA .
Good morning. In the recent past, at some point, we talked about a possibility of partnerships of a minority sale of assets or some of the assets. I remember that there was a call where we talked about this. So this discussion was coupled with the discussion of getting into new assets, but I'd like to know two things: How have you been evolving in the conversations? Is there a good demand for that? Is it something that the company is looking at? And this discussion, is it really coupled with a new asset? I mean, is there a situation where you would do a minority stake sale in some of the highways, even if it is not to enter into a new asset? Thank you.
So, Luiz, these discussions of equity solutions through partnerships or M&As, they're continuous, they're ongoing.
I think that coupling it with a growth strategy is complex. It's not something that we can couple perfectly. So just as we maintain and continue to study opportunities that could be interesting assets, even if we don't decide to go in, we're still studying. At the same time, we continue to discuss and looking at players in the market and hearing from them to maybe consider solutions in that sense. So these are discussions that run parallel to each other, and EcoRodovias also has to look at the alternatives, and there's no timeline of coupling, of going in a new thing, or... These two topics, inorganic growth and an improvement of the capital structure, are parallel. Of course, occasionally, things are a match, and there's also new businesses, and the idea and the financial flows is not immediate.
We always have 2-3 years, so we can run both things at the same time. And if good alternatives, good solutions, good projects come up, of course, things fall into place. Thank you.
Very clear. Thank you, Guidotti.
The question and answer session is concluded. We will turn the floor to Andrea Fernandes for her final remarks.
I would like to thank you all for your participation. My team and I remain available to any doubts you may have after the call. Have a great weekend.
EcoRodovias' earnings conference call is concluded. We thank you all for your participation. Have a great day.