Good morning, and welcome to EcoRodovias's third quarter of 2022 earnings conference call. With us here today are Mr. Marcello Guidotti, CEO, and Andrea Fernandes, Director of Corporate Finance. 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. 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's 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 over to Ms. Andrea Fernandes, who will discuss the third quarter of 2022's results. Ms. Andrea, you may proceed. Good morning. Welcome to Grupo EcoRodovias's conference call to discuss today the earnings of the third quarter of 2022.
We thank you all for your interest and participation. Moving to the highlights, this quarter, the company won the auction of the concession of the Northwest Lot Highway System, which will generate EBITDA from the start of the concession and lengthens the duration of the company's portfolio to over 20 years. Another highlight occurred in September with the start of toll collection in 3 plazas at EcoRioMinas, which jointly represent approximately 34% of the concessionaire's total toll revenue. On October third, the start of toll collection at the 9 plazas at Ecovias do Araguaia. It is also worth noting that the regulatory agency recognized the contractual imbalance at Ecopistas, referring to the Taubaté extension work.
Moving now to operations performance on slide 5, consolidated traffic had a 7% decrease in the third quarter due to the termination of the contract at Ecocataratas and Ecovia Caminho do Mar. Comparable traffic was up 4% in the quarter, a reflex of the commodity exports such as soy and corn, industrial recovery, the flexibilization of restrictive measures, and the progress in COVID-19 vaccination. The highlight of the quarter was heavy vehicles with an increase of 5%. As for the group's consolidated financial performance on slide 6, we see the evolution of gross revenue with an increase of 29% in the third quarter. Net of construction revenue, gross revenue decreased 3%, mostly due to the termination of concession contracts at Ecocataratas and Ecovia Caminho do Mar in November 2021.
Comparable gross revenue was up 18% due to traffic increase and toll tariff adjustments. It is important to note that in July, there was a toll adjustment of 22.5% at Ecoponte, and in November, the tariff adjustment of 23.6% at Ecosul was applied. Ecovias dos Imigrantes and Ecopistas have signed a collective amendment to the contract ten for the economic and financial rebalancing of concession agreements since the tariff adjustment of July 2022 was not applied. The rebalance is occurring through bimonthly payments. The amounts for August and October have already been received, and the final payment is estimated for December 2022. The collective amendment also includes the 11.7% adjustment to be applied in December. On slide 7, we show comparable gross revenue for the first 9 months of 2022, up 14%.
Moving on to slide 8, about digital transformation, we highlight the 8.4 percentage points increase in toll collection through AVI, self-service, and digital means in the quarter year-on-year, reaching 74% of toll revenue. Another highlight is the multi-lane free flow, a research and development project implemented at Ecopistas in 2021 through an international cooperation agreement approved by the concession authority without charging users for the moment. Through this project, EcoRodovias analyzes the technological efficiency of the solution and potential risks and opportunities in the toll collection process. In the third quarter of 2022, 4.2 million vehicles were detected with a precision rate of 99% when compared to the manual toll plaza in Itaquaquecetuba at Ecopistas. On slide 9, comparable net revenue was up 18% in the quarter due to comparable traffic increase and toll tariff adjustments.
The increase in cash costs adjusted at 7.4%, in line with the inflation in the period, is due mainly to the expenses with personnel due to the provision for severance pay and salary adjustments, and third-party services due to variable transportation and temporary labor costs resulting from the growth in warehousing operations at Ecoporto. Note that the increase in cash costs at the highway concessions was a 4.3%, a variation below the inflation in the period. On slide 10, comparable EBITDA in the third quarter amounted to BRL 563 million, with EBITDA margin at 67% due to traffic increase and toll tariff adjustments. Comparable EBITDA for the first nine months of 2022 was BRL 1.5 billion, a 12% increase in EBITDA margin of 66%, as we can see on slide 11.
On slide 12, we present the evolution of recurring net income in the quarter with a 30% increase explained by lower depreciation and amortization due to the termination of the concession agreements at Ecovia Caminho do Mar and Ecocataratas and the better financial result, mainly due to lower debt adjustment on account of lower IPCA in the quarter. Recurring net income of the first nine months of 2022 was impacted mostly by the termination of the concession agreements at Ecovia Caminho do Mar and Ecocataratas and by the financial result as we see on slide 13. Investments in the first nine months of 2022 on slide 15 totaled BRL 2.2 million.
The main investments were made in the initial works at Ecovias do Araguaia and expansion improvements and maintenance at Ecovias dos Imigrantes, Ecopistas, Eco101, Eco135, Eco050, and Ecovias do Cerrado, as well as maintenance works at Ecosul and Ecoponte. The investments were allocated to 107 kilometers of road widening, 53 kilometers of additional lanes, 109 improvements at access roads, and more than 1,100 kilometers of road restoration, as well as contractual maintenance obligations, demonstrating our capacity to execute and deliver works at our highway concessions. On slide 16, the company highlights at Ecovias do Araguaia the delivery of nine toll plazas, 19 operational bases, and pavement restoration works on 460 kilometers.
All meeting the highway concession requirement parameters and the start of toll collection on October 3, 2022, overcoming the challenges of accelerated degradation of roads due to the heavier than average rainfall in the region between the end of 2021 and early 2022, which resulted in the advancement of works that were initially scheduled for 2023. Moving to slide 17. We closed the quarter with leverage of 4.6 times, in line with the company's expectations due to the termination of the concession agreements at Ecovia Caminho do Mar and Ecocataratas, which accumulated by September 10 months without contributing to the consolidated EBITDA, CapEx realization and the no-toll collection at Ecovias do Araguaia, which started on October 3, 2022. The net debt over adjusted EBITDA indicator for EcoRodovias Concessões e Serviços is 4.2 times.
It is important to note that the company has prepared for this growth cycle and has also adjusted financial covenants to annualize the EBITDA of new concessions. The start of toll collection at EcoRioMinas and Ecovias do Araguaia, along with a good operational performance and the recent toll tariff adjustments, will allow the company to maintain the level of leverage in sustainable levels in the medium term. Moving on to slide 18. We closed the quarter with cash balance of BRL 2.6 billion. It's important to note that the maturities of the fourth quarter are already equated and approximately 40% of maturities are allocated for after 2026. On slide 20, we present the main highlights of our ESG agenda.
The conclusion of the materiality assessment, seeking continuous improvement and best practices. The installation of photovoltaic panels at Eco135, which helps reduce greenhouse gas emissions. The company's commitment to have 50% of women and 35% of black people in leadership positions by 2030, and the application to obtain the Fomento Infra Mais Integridade 2022 seal from the Ministry of Infrastructure. More details of our ESG agenda are available in our earnings release. To conclude this conference call, we stress that EcoRodovias has been successful in executing its growth strategy over the last five years, winning five highway concessions through auctions and the acquisition of one concession in the secondary market, which have contributed to increase the duration of the portfolio for more than 20 years.
The company will remain watchful, albeit more selective, of new growth opportunities, given that the agenda for new auctions will continue to develop in the medium and long terms. The focus of the company shall remain in the execution of investments in the new concessions, the search for efficiency and innovation to maximize the creation of value for its stakeholders. This concludes our presentation, and we would like to move on to the questions and answer session. Operator, we are ready for the questions from our analysts and investors. Thank you. Thank you. We will now begin the questions and answers session for investors and analysts. If you have a question, please press star one on your telephone. If your question is answered during the session, you may remove it from the line by pressing the star two key.
The questions will be answered in the order they are received. We ask that you use the handset when asking the question in order to maintain excellent sound quality. Please stand by while we collect the questions. Our first question, Matheus Sant'Anna, XP Investimentos. Please, Matheus, go ahead. Good morning. Thank you for taking my question. I have two. First, I'd like to know if you could give us more color on what you expect on the ramp up of the highway, the Northwest Lot Highway System and the impact in the short and medium term. Can I ask the second question and then you can answer? Yes, go ahead. You can ask your second question, Matheus. The second question would be how you see the government's concession pipeline, considering the current leverage and the success you've had with concessions this year, what's your position for new projects?
Good morning, Matheus. Thanks for the questions. About the ramp up of Northwest Lot. We had the signature of the contract and the concession for the middle of next year, July, and then it starts to be 100% operational. Technically, there's no ramp up. It starts already operational, and the CapEx cycle will be extended in the first five or six years, the main CapEx. About leverage, as Andrea said, we already have 10 months without the EBITDA of Ecovias and Ecocataratas. We have another 10 months in the fourth quarter, but made up with Araguaia, and we expect a net debt over EBITDA ratio stable in the fourth quarter, also stable in 2023, 2024 and starting to go down in 2025.
The consideration is that if we annualize revenues and EBITDA of the two concessions that started now with their respective investments in comparable basis, the net debt over EBITDA expected for 2022 is close to 4x. If it's maintained, also annualizing the Noroeste Paulista concession, maintaining this level in 2023 and 2024, going below 4x in 2025. That's to explain that the concessions register CapEx but will also bring important EBITDA in coming years. In my view, the company's leverage, considering the operational concessions and annualizing the flow with the investments and their concession fees. We're at the level of 4x for 2022 and in 2024, starting to go down below 4x in 2025. About the pipeline, we're prepared for the federal programs, the lots in Paraná.
BR-381 is also something we're studying, but the company understands that for 2022, maybe there will be no more opportunities. We will look at the programs of the coming government and some federal programs, some state programs. Being selective and continuing to look at inorganic growth. As you said, we expect that growth opportunities will come and remain present in the medium and long terms. The company doesn't need. I mean, we've done a lot, and we'll continue to look and grow inorganically, but being very cautious. Thank you. Thank you. Next question, Victor Mizusaki, Bradesco BBI. Good morning. I have two questions. The first, if you can talk a little bit more about the balance at Ecopistas.
If I'm not mistaken, this process EcoRodovias need to judicialize last year, but if you can talk about it and if it makes sense for us to, although it's not decided, but if it would make sense for us to consider the likelihood is that the maturity would be extended considering the differential of the tariff price at Ecopistas compared to Rio, São Paulo. The second question about the regulatory side. If we run a comparison between the federal model and the state model with the result of the election, if we can expect a change for the state highways, maybe for new bids that could be adjusted, considering the comparison with the federal regulatory model. Thank you.
Victor Mizusaki, about the imbalance of the extension of Carvalho Pinto Road, its works from 2008 concluded with extra cost, which was recognized by the justice system and the agency, and last week it was formalized. Almost BRL 500 million. It's already in use considering costs and amortization. If there's a rebalance, we expect that it will be by extending the deadline and the concession until 2045. It's long, five or six year. At the end, the result has been positive. I think that's how we're going to face all contractual challenges. Whenever not possible to, we will move forward judicially. It's important to do things well and be informed results will come. About the regulatory side in Brazil, I don't see any major change between federal and state levels. The agencies tend to be, they are independent.
They have been for some time in Brazil, in the highway industry and other industries, and I don't see any major changes in terms of approach. What we've seen in recent years, it's an agreement of the regulatory side from a solid contract being maintained, rebalanced. The agency has been attentive and capable of regulating, so we're comfortable with the change of government. We've had government changes in the past, and it's not really going to change what's already happening. Thank you. If I can just add a follow-up. Correct me if I'm mistaken, but I think recently we started to see the federal government talking about integrating a higher return rate for projects. Is there still a delay in São Paulo compared to other projects? Could this maybe have a positive impact for the new São Paulo highways?
The federal government has integrated. In São Paulo, there's an interest increase defined, calculated based on long-term interest rates. That's reasonable. In São Paulo, some projects have lower risk, are more mature, may have a lower return in some cases, but it's not behind. In São Paulo, we're balanced. Our contract amendments with all the toll rates. I don't think there's any difference. Great. Thank you. Next question, Julia Orsi, J.P. Morgan. Good morning. I have a question. If you can give us an update about the rebidding process of Eco101. If you can update us. Julia, thank you for your question. Eco101 had the request for return. It's being analyzed with the entity. We understand that by the end of the year, we may have the approval and acceptance of this process.
Start discussion of the amendment term we expect for 2023. That opened the third phase for the rebidding of the concession. We are at ANTT and we understand that the first phase, that's the authorization for the process, is achieved by the end of the year. Great. Thank you. Next question will be asked in English by Stephen Trent from Citi.
Hi, good morning, and thanks very much for taking my question. Just 2 from me. The first, I missed what you said about financial covenants over the short term, and I was wondering if you could just let us know what are those financial covenants. Then the second question, you know, intrigued by your ESG goals about leadership positions by 2030, and I presume that these leadership commentary applies to the executive team and the board of directors. Just wanted to make sure. Thank you.
Thank you, Stephen. Stephen was asking about the company's leverage, especially the level of covenants in the short term. The second question about the ESG leadership targets, what leadership positions are being considered. About your first question, I mentioned the leverage that today is at 4.6 and tends to remain stable in the fourth quarter, and in 2023 and 2024, and it will start to go down in 2025. Annualizing revenues and EBITDA of what's already entered and what will enter in 2023, new toll plazas at EcoRioMinas, and some covenants that already consider the annualization of this flow will have values of around 4 in 2022, and holding this level in 2023 and 2024, and going below 4x in 2025. We have covenants that are already at 4.75, 5.15. We'll be...
This makes us comfortable with the CapEx extension cycle that we have ahead of us. About the leadership position targets. Leaderships we're considering as of starting at C-level. Managers, coordinators, directors, those are our leadership positions start on coordinators and go all the way up to C-levels, and that's going to be the positions that are on our ESG target for diversity. Thank you, Stephen.
Thank you very much.
If there are no further questions, I will turn over to Ms. Andrea Fernandes for her final comments. I would like to thank you all for the presence in this conference call and wish you a great week. Myself and my team remain available for any additional questions. Thank you.