Good morning and welcome to EcoRodovias' second quarter of 2025 earnings presentation. With us here today are Marcello Guidotti, CEO, and 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, and further instructions will be provided. The slides of this presentation are available on the company's investor relations website, ri.ecorodovias.com.br, in the Results Center section. 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 discuss the results. Andrea, you may proceed.
Good morning. Welcome to EcoRodovias' earnings presentation for the second quarter of 2025. We thank you all for attending. We start the presentation with the main highlights of the period: comparable traffic grew by 3.3% in the quarter and 4.6% in the first half of 2025. This is mainly due to the performance of heavy vehicles. For comparison purposes, the ABCR index recorded a growth of 2.8% in the second quarter and 2.4% in the first half of 2025. Adjusted cash costs, excluding Ecoporto, whose operation is under a transition agreement, increased by 5.4% in the quarter in line with inflation. It is worth mentioning the reduction of 1.1% in the first half of the year as a result of the efficiency initiatives.
The consistent operational performance and discipline in cost management resulted in an adjusted EBITDA of BRL 1.4 billion in the quarter and BRL 2.6 billion in the first half, with an EBITDA margin of 75%. Net income was BRL 204 million in the quarter and BRL 351 million in the half-year, while investments totaled BRL 2.1 billion in the first half, maintaining our focus on investments aimed at expansion, innovation, and operational safety. We also highlight the company's participation in the bidding process of Ecovias 101, which ensured continuity in the management of the concessionaire, enabled the extension of the concession term to 2049, the optimization of contractual conditions allowing for new investments in the region, and contributing to the generation of value to shareholders. Finally, yesterday, the Board of Directors approved the payment of dividends in the amount of BRL 215 million as of August 29, 2025. On slide 5, we demonstrate the operational performance.
Comparable traffic grew by 3.3% in the quarter and 4.6% in the first half of 2025, driven by heavy vehicle traffic. Highlights include the growth at Ecovias Leste Paulista of 7.9% in the quarter and 14.6% in the first half of 2025, mainly due to the increase in handling at the port of São Sebastião, and at Ecovias Norte Minas, an increase of 13.5% in the quarter and 14.5% in the first 6 months, reflecting the increase in traffic following the capacity expansion, particularly 122 km of widened roads in the period between 2023 and the first half of 2025. Moving on to slide 6, we present the evolution of adjusted net revenue, which reached BRL 1.8 billion in the quarter and BRL 3.5 billion in the first half of 2025.
To the right of the slide, we highlight the growth of 9.7 percentage points in total action by AVI and digital means of payment, which reached approximately 92%, underscoring the increase of digital payments in our operation. Some of our concessionaires are already approaching 95% of collection through AVI and digital means of payment. On slide seven, we show cash costs, highlighting the growth in line with inflation in the quarter and a reduction of 1.1% in the first half of 2025 when we excluded Ecoporto, whose operation is under the transition agreement. On the right side of the slide, the indicator of cash costs in relation to adjusted net revenue reached 25% in the quarter, down 2.5 percentage points compared to 2024 and 10.3 percentage points compared to 2022. This cost reduction confirms the advances generated by the efficiency initiatives adopted by the company over the last few years.
On slide 8, we show consolidated adjusted EBITDA of BRL 1.4 billion in the quarter and BRL 2.6 billion in the half-year, up 19% and 17% respectively, an adjusted EBITDA margin of 75% in both periods. The highlight was the adjusted EBITDA margin of highway concessions, which reached 76% in the first half of the year. On the next slide, we present the net income of BRL 204 million in the quarter and BRL 351 million in the half-year. This robust operating performance and efficient cost management continue to boost EBITDA, while the investment in expansion and the high-interest rate scenario are reflected in the income for the period. On slide 11, we show the investments of BRL 1.2 billion in the quarter and BRL 2.1 billion year- to- date, highlighting the delivery of 34 km of road widening, additional lanes, and frontage roads, in addition to the implementation of 2 overpasses and 11 intersections.
It is worth mentioning that 58% of the total invested in the quarter was directed to 3 highway concessions, reflecting the progress in the works of the expansion cycle of the new concessions. On the next slide, the progress of road widening works and addition of third lanes in order to ensure better flow and more safety for users. Slide 13 highlights the evolution of debt of highway concessions, which in 2022 represented 41% of total net debt and in June was 71%, reflecting a more efficient capital structure aligned with cash generation from assets. In addition, we ended the quarter with consolidated leverage of 3.9%, stable compared to the previous quarter, due to the funding raised for the payment of the concession fee by Ecovias Raposo Castello, which started operation at the end of March.
Pro forma leverage calculated based on Ecovias Raposo Castello's annualized EBITDA reached 3.6% in line with expectations. On the next slide, we present the debt amortization schedule. The main maturity for the next quarter will be Ecovias Noroeste Paulista, whose bridge loan is due in September, and the structuring of the long-term financing is at an advanced stage. We will continue to work on operations that will further contribute to the extension of the company's debt profile. Finally, on slide 16, reflecting the progress of our sustainability agenda, some recent highlights. We were winners in the transport and logistics category of the Best of ESG 2025 award promoted by EXAME Magazine, one of the most relevant recognitions in corporate sustainability in the country. In addition, our federal concessionaires were among the best in the country in environmental management according to the ANTT Environmental Performance Index.
More information about our initiatives is detailed in the earnings release and our integrated report. We conclude this presentation by reaffirming the company's focus on the execution and delivery of the works to expand capacity and improve highway concessions, as well as on the valuing of opportunities that the current assets in the portfolio have to offer. We reinforce our commitment to operational efficiency, innovation, and safety. We would now like to move on to the questions and answers session. Thank you.
Thank you. We will now begin our Q&A session for investors and analysts. To ask a question, please click on the "Raise Hand" button. If your question is answered, you may leave the queue by clicking "Lower Hand." Our first question comes from Guilherme Mendes at JPMorgan. Please, Guilherme, your microphone is open.
Good morning, Guidotti, Andrea. Thank you for this opportunity. Two points, please. First, in the portfolio management, Andrea, you mentioned at the end that you had the opportunity from assets in the portfolio. I'd like to hear from you, please, what exactly you mean by that. If you see room for maybe growth opportunities or divestments, these are things we discussed in the past, whether this remains in the pipeline in your mindset. The second point in margin, I think, first of all, congratulations on the results in this second quarter and the consistency on the cost aspect. I'd like to see how you see a normalized level of EBITDA margin from now on. Thank you.
Hi, Guilherme. This is Marcello. Good morning. Thank you for your question. Good morning, everyone. About our portfolio, it's important. As it's known, we have investment opportunities in our highways. Some of our highways are mature, located in regions that require more investments, markedly São Paulo, obviously. The third connection from São Paulo to Santos, this road is a very important project for us, and we're dedicating to it. Other opportunities also in São Paulo exist. The message is that we are looking at our portfolio and the possibilities to increase investments in some cases, and that's the priority. We also have the case of Ecosul, whose concession is valid until next year, and the government is working for the rebidding. We don't know exactly when it's going to be, if it's going to be next year, but potentially, this could be a target for EcoRodovias.
Of course, Ecovias 101, that was just concluded the bidding process, and we are preparing to sign the amendment. That's also part of our portfolio and offers a very good opportunity. That is the message. It doesn't mean that we're completely closed to considering new bidding processes. We monitor everything. There are a lot of opportunities, and we understand that these opportunities will continue to appear in coming years. Of course, we'll keep monitoring this program. About margins, margins continue to raise. To increase, the expectation is that we reach 80% and maybe even more. It's normal. It's part of the cycle of concessions. We're headed towards 80%, definitely, and maybe more, 82%, 83%. That's part of it.
That's all the technologies, the fact that we can use, as Andrea said, automatic payments reduce a lot of costs at toll plazas, the cost of those scales, the weighing systems that will be replaced with the automatic weighing in motion. Other technologies also bring great margins to increase.
Great, Guidotti. Thank you. If I may, just a follow-up on the first point. The part of divestment is something that you still consider or not?
Divestment, we made an attempt to restructure the project, but I think now we don't have a lot of interest in that alternative. The market is, although we've heard, we've been hearing about M&As and so on, I don't think it's the right time for that due to interest rates and everything for capital recycling opportunities. It remains in EcoRodovias' radar, of course, is more opportunistically, but it remains in our radar.
Excellent. Very clear. Thank you. Have a great day.
Our next question, Pedro Tineo, Itaú BBA. Please, Pedro, you may go ahead.
Good morning, Guidotti, everyone. Thank you for taking our question. I have a doubt here about the traffic dynamics in the first half or had the dynamics that slightly. I'd like to hear about the company's mindset about the second half of the year. In terms of CapEx, we saw a reduction, at least in terms of the average dollar. I'd like to understand a little bit more of how you see the CapEx dynamics in the medium term considering this reduction. Thank you.
Hello, Pedro. In terms of traffic, the second half, we estimate we're starting already with the beginning of the year, traffic in 2025 at 4%. The second half of the year will certainly be less compared to the first.
The first was surprising, also because the comparison base with last year is, oh, by last year, the second half grew 5%. To think we'll continue to grow 3%, 4% above last year is too much. We estimate we'll conclude the year at around 4%. This indicates probably a reduction in growth for the coming months compared to the same months of last year. Last year, the growth was too big. The simple fact that we continue to grow compared to last year is positive. Now, about your CapEx question, we have been making investments. Some concessions had delays in environmental licensing. In any case, these licenses have already been achieved. We expect to see CapEx acceleration in the second half, with a target to invest this year close to BRL 5 billion.
Great. Thank you. That's clear.
You're welcome.
Next question, Felipe Newson at Citi. Please, Felipe, you may go ahead.
Hello. Good morning. Thank you for taking my question. My question is more about leverage. You maintain a ratio that was below four times, and you also mentioned when we annualized Raposo Castello, it's a ratio of close to 3.6x . I'd like to understand, looking forward, as we have a CapEx ramp-up, if you also ramp up EBITDA and with Raposo Castello, if we should continue to see 3.9, is it going to get close to a little bit higher than 4x as we already expected, or if it would be closer to 3.6 over time? That's my first question. The second question, just to talk a little bit more, more details within what you can discuss about the conditions of this roll-out of the bridge loan at Noroeste, the rolling after debt, if you can give us any additional detail. Thank you.
Thank you for your question. About the first question, Raposo Castello had an effect of deleveraging in the first years. As you know, the works at Ecovias Raposo Castello start as of 2028, 2029. Until then, there will be a deleveraging effect. On the other hand, the CapEx cycle gains, as Andrea mentioned, gains momentum because the two effects will be super-exposed. We understand that close to 3.9 continues to grow slowly over the next years until we get close to 4%- 4.5%. After that, that would be the expected peak. From that moment, with Raposo Castello starting the works, the other highways will start to deleverage. Raposo Castello has an effect of almost buffering in the next few years, and then we will be reversed. We see this of 3.9, even though Castello is generating cash.
We have investments going on, but nothing too accelerated until we get to 4.5%, the peak, and then we will start decreasing again. Everything is well under control, not presenting any type of surprises. Now, about Ecovias Noroeste Paulista, over the next few weeks, we will probably be able to disclose. We're now at the silence period about this funding. Over the next few weeks, the conditions will be made public, and we will have the takeout for the long-term financing customized with the flows of the concession in adequate conditions for the market that we understand to be competitive. As soon as we can disclose the information on this operation, we'll communicate to the market in coming weeks. It's already almost all concluded. It's only the red tape now.
Excellent. Very clear. Thank you.
Next question, Matheus Sant'Anna from XP. Please, Matheus, you may go ahead.
Hello, Marcello. Andrea, good morning. I have two questions. First, I'd like to continue on the liability management aspect. What do you see in the credit market at this point? What would be the average price of a marginal issuance? In this point, talking about the holding, we see that that's been going down in the quarters. What do you see in terms of a reduction of this indicator? My second question about Ecoporto, how do you see the contract renewals? Probably this contract will remain solid until the end of the STS10 bid. What would be the term to get the rebalancing of what the government owes? It would be close to the conclusion of the contract. These are my questions. Thank you.
Good morning. Thank you for your question. In terms of the liability management, the company will continue doing that.
Some operations are already being worked on by the company. The market is very net, and with great liquidity, we've been able to raise funds, and we're capturing that with CDI+1. We're also, the infrastructure, the ventures funding, that's probably going to be something very similar to what we raised recently with Rio Minas. I think it's a good moment for companies to have good quality of credit and assets like EcoRodovias to access the market and increase the average duration of debt. That's what we're going to do in the coming months.
Now, about Ecoporto and the holding, Pedro also,
it's about the level, the percentage of the debt that will be allocated for the holding and the concessions. It tends to increase. It tends to reduce the percentage of the holdings as BNDES and the long lines at the units will be dispersed.
We estimate we'll get to a normalized situation of 75% total debt at the units and 15% at the holding. Today, we're close to 71%, 70%-71%. There's still room for growth there, for increasing there. This will happen, obviously, with the increase of debts at the holding. Remember that the funding with the BNDES, we signed at around BRL 8 billion at Rio Minas, but the disbursement will occur along with the CapEx realization. As we make the disbursement for the BNDES lines, we will see the improvements of the debt percentage at the concessions. The same thing will happen with Ecovias Noroeste Paulista, as I mentioned, in coming weeks. We will likely announce the long-term takeout. Other concessions, like Araguaia, for example, we already have a contracted funding with BNDES, and it will also be disbursed as the CapEx is being realized.
In any case, we've also been trying to work with other operations that may improve this indicator. As Guidotti mentioned, there will probably be room for us to improve and get close to 75%. About Ecoporto, you're correct. Ecoporto is already with a temporary contract that expires next year in May, and it will certainly follow the new bidding. We expect to continue operating until then in this temporary regime. The timeline of the next concession is still not very clear. There are still some ongoing discussions. Until then, we will certainly continue operating. The credit of assets that are not amortized will be resolved in our expectation once the bidding occurs. After the bidding, we will have the definition of how this credit will be paid off. It all depends on the bidding timeline.
That's very clear. Thank you.
Next question, Andre Ferreira, Bradesco BBI.
Please, Andrea, you may go ahead. Good morning. Thank you for this opportunity and congratulations on strong results again. I have two points. Going back to two topics. First, in CapEx, even though you had the okay of the licenses, my doubt is whether there's a possibility for the CapEx this year to be lower than BRL 5 billion due to the delays, at least so far. The second is, I don't know if it was only cut off for me, but about the EBITDA margin that you believe you can reach, that Guidotti mentioned. I heard something about 80%. If I'm mistaken, please correct me. On that point, the improvement of cash costs has been a point of attention, very positive over the last quarters and years. There's been a series of initiatives in efficiency that you mentioned.
If you can, I'd like to hear first where you see incremental efficiency grades, for example, weight in motion, but what else you're looking at that we may not know about. The second point is on new concessions. There's an increase allowed in the new Ecovias 101. What you already see in terms of possible efficiency gains outside of the government, but instead, it's already existing in your portfolio that could improve the returns. Thank you.
About the first question, the answer, whether there's a possibility of the BRL 5 billion for us not reaching 100%. That's our objective. Despite the calendar, the timeline, for us, that's still the execution. We started a little bit late, but we have a goal. There is the possibility of being slightly under BRL 5 billion. There's the rain period as well that may affect. Definitely, it's not going to be too far from that.
Nothing relevant. Yes, there is a possibility that part of this CapEx will be for next year and so on. Normally, we say it's between 80%- 85% being met, a little bit more, a little bit less, but that's the expectation. About the EBITDA margin, we estimate we'll get in 2, 3 years, we'll get to 80%. We'll continue to grow. With the maturity of the projects and tariff adjustments, we'll continue on the long term as well. We still have fast growth in the coming 3 years until we get to 80%. Part of that, also addressing your third question, the increase in margin is due to cost controls, yes, but also the increase in tariffs. More mature highways tend to have a bigger margin. Cash costs remain an object of analysis and attention.
Maybe next year, with the exit of Ecosul, there may be a slight difference, but we soon resume reduction and increase of that. There are a lot of activities, but digitalization of operations is the main avenue for improvement. There's a series of things that we're applying, and long-distance cameras, weight in motion, digital toll collection, so many different things that can be done and are being done. Also, the administrative costs, administrative processes that are complex today are done a lot more quickly and efficiently through artificial intelligence applications. Everything is being employed. Along with the good performance of traffic and tariff adjustments, the margins expand. Ecovias 101 was a renegotiation, optimization of the contract, so to speak. We start with a well-discussed structure. The next 3 years will be a transition. Obviously, EcoRodovias will now apply all possible levers in this contract.
There are, it's a little bit outside of the manual of how to exceed a typical highway. We will, from now on, apply a modernized contract, modernized in various aspects. Now it allows us, with this modern contract, to apply all of the technologies that we were already employing in other contracts. The original Ecovias 101 contract had a lot of inefficient parameters that did not allow for this type of approach. Now, we will be able to use all of our levers and also extract from Ecovias 101 the margins we already have at other concessions. Also, because Ecovias 101 in its program will have tariff increases consistently in coming years, and obviously, a high CapEx concentrated for road widening that will also increase traffic. There's a whole set of aspects that will allow Ecovias 101 to become a concessionaire at the same level or even better than others. Thank you.
Thank you. Have a great day.
Next question. Alberto Valerio at UBS. Please, Alberto. You may go ahead.
[Foreign language].
Good morning, Guidotti, Andrea. Thank you for this opportunity. I'd like to ask first about yesterday's results and then a couple about the future. From yesterday, in addition to the CapEx being slightly below, but you explained it will accelerate in the second half to get close to the BRL 5 billion we had. There's a very good margin at Nova Raposo, about 3% higher than what we had. Is it something that's not recurring, or should we consider this margin looking forward? In the future, there are some good auctions coming in the pipeline, some good repatriations at Regis and Perdón. Díaz, the two bids in Paraná. Is there room in your balance sheet? Would you be interested in these assets? The last one would be about the third lane at Imigrantes, the third road in Imigrantes, if you have any update in this asset. Thank you.
Valerio, thank you. About the margins at Ecovias in Raposo Castello, that's correct. Those are the margins. It's an asset that that's one of the reasons why we mentioned that they have very good leverage with the capacity of cash generation that is very high, and that favors financing. We have the margins aligned. About the bids, combine this question to the third lane. The third lane, we have just concluded the bid for Ecovias 101. The third road is a big project that's going well. We're advancing with the studies, projects, environmental licenses, structuring of the contract. Everything is moving along, and that's our priority. The new bids that you mentioned that are definitely important, they are being monitored. One of them being studies, but the priority for EcoRodovias will be more on contract amendments in existing contracts.
One of them, as I mentioned, just quickly, to put Ecovias 101 in the good track of value generation and monitor Ecosul's rebid if it does take place in 2026. Just reiterating our position a little bit, even though the auctions, as I said, there are many, but they will also continue in coming years. I think there's enough for all types of investors, and we'll remain in our portfolio.
Excellent. Just a follow-up, Guidotti, if I may. The third lane or the third road at Imigrantes, if you have a balance sheet to do it yourself, are you looking for partners? What's the strategy for that asset?
This third road at Imigrantes, if it is done and there's an amendment to EcoRodovias' contract, we'll have to look at the conditions, whether there'll be, if this new investment will be balanced.
Depending on the type of solution for the contract, there will be a need for a financial structure that may include equity. We don't have a final decision about the solution yet. Ecovias has the capacity to leverage. There's a low net debt/EBITDA, but depending on the type of amendment, if it's going to be via tariff, probably not, if there's going to be an extension of the contracts or government investment and to what extent, all of that will be coming up and will guide us towards the decision to be made. It could be more or less need for it, but it's still too early. I think we still need to conclude the studies, get to a value structure, and think about a way to include that in the contract and then see the best way to fund it.
Very clear. Thank you for the explanations.
Next question. Ricardo Belo. Ricardo Belo, Genial Investimentos. Please, Ricardo, you may go ahead.
[Foreign language].
Ricardo, please, you may go ahead.
[Foreign language].
Can you hear me now?
[Foreign language].
My first question is about traffic.
[Foreign language].
Especially heavy vehicle traffic.
[Foreign language].
We saw here an increase of 4% in this segment. We see a lot about the export of soybean, palm, both on the agribusiness and industrial sides. I'd also like to know now for the second half of the year, you mentioned in a previous question.
[Foreign language].
Something about a decrease.
[Foreign language].
The effects of comparable bases as well. Okay. I'd like to know more about the perspective, the outlook you have on the macro aspect of the dynamics for the second half of the year and 2026. Also, how much, and I imagine it's not a lot, but how much the exemptions done on that big tariff implementation, if it mitigates the risk or does not, and what you had in mind, or whether this is an agenda you have in your radar for traffic, especially of heavy vehicles. My second question is related to capital structure.
[Foreign language].
The payment and payout of distribution of dividends, we know, we understand.
[Foreign language].
A minimum of dividends you shall pay out of 25%. I'd like to know more about this type of remuneration to shareholders, even considering the possibility of the buyback programs. We know that the company has performed quite well this year already. I'd like to learn from your mindset about that. If there's a.
[Foreign language].
A possible macroeconomic slowdown, if there's an impact of interest next year with the uncertainties we have at the radar. Those are my questions.
Thank you for your question. Uncertainties we have been having for a long time. I think it's normal. It's a dynamic economy and it affects traffic. Starting with traffic, heavy vehicle traffic in the second half of the year, it's normally not a period where heavy vehicle traffic grows. We're getting closer to summer, and we get more growth from light vehicles. We still continue to see heavy traffic at 3.2% above last year. What I talked about traffic is that there's not going to be a decrease in traffic. There will be an increase, but the increase will be smaller than what we saw in the first half, given the great performance of traffic last year.
All of that indicates that traffic is resilient, even to unclear potential macroeconomic shocks. We don't have it clear what the impact could be of the big tariffs that are being implemented, that were redimensioned in some aspects, but we don't. Initially, we don't see that they seem very impacting. Initially, maybe one input or another that may be of high added value, but small volume that could be affected. I think indirectly, the impact in Brazil's GDP will affect traffic. We are elastic to the GDP. The more the GDP grows, the more it impacts our elasticity, our traffic. The analysis that were done not only by yourself, but other analysts show that there's no expected major impact in the medium to long term. These cargoes will probably be reallocated. We are monitoring and keeping track. Obviously, everything needs to be monitored.
We feel that the business model, our business model, our assets, our OpEx structure, our balance sheet allows us to be quite comfortable in delivering the results expected. We also get to the second answer. The payout of dividends, the minimum dividend is an important value for us. It's a way for us to also generate cash. We have the capacity to pay out a certain amount of dividends and to establish some predictability as well. The minimum dividend will remain until the CapEx cycle slows down, but it's the part of dividend. No other operations that may happen in opportune conditions are not in our radar. Over the past few quarters, we have been capable of meeting the guidances provided to the market. We expect that the minimum dividend payout will remain. All of that makes it easier to understand. Other operations are not being considered. Thank you.
The questions and answers section is concluded. I will turn the floor to Andrea Fernandes for her closing remarks.
I would like to thank you all for attending our call. Myself and the Investor Relations team remain available for any additional questions. Thank you. Have a great day.