Good afternoon, ladies and gentlemen. Welcome to our conference to discuss the results regarding the fourth quarter of 2024. This conference is being recorded, and you can access the recording at the website of the company afterwards. This presentation also will be available for download, and after this presentation, we will have a Q&A session. More instructions will be provided at the beginning of the Q&A session. Before we continue, I would like to reinforce that the prospective declarations are based on the beliefs of the administration of Eternit and the current information available to the company. These operations can have a risk since they involve future events and depend on circumstances that may or may not happen. Everybody, journalists might take into consideration that everything regarding the environment can make that the results are different from the prospective declarations done here.
With us here we have Mr. Paulo Andrade, the CEO, Carisa Portela Cristal, the CFO, and Saulo Martini, IR Manager. Now, I would like to invite to the floor Mr. Paulo Andrade.
Good afternoon. Thank you for your presence here with us and for being here in the presentation of the results of the fourth quarter of Eternit in 2024. I'd like to begin this presentation talking about our business. We are so proud of our company. It's a company that is 85 years old. We're celebrating 85 years. We have always been a leader in the construction building material segment. We have around 30% of the market regarding fiber cement roofing panels. We are very proud also of our 1,800 workers that are spread in our different states, several sales offices. Also, we have more than 250 commercial representatives spread out throughout Brazil.
We have a very diversified portfolio. We have a polypropylene plant in Manaus. In Ceará also, we have the newest plants of the company built in Caucaia, launched in March. We have two plants in Goiás State, a mine in Minaçu City for chrysotile, and a plant in Goiânia for roofing. Also, we have Colombo, a plant in Paraná State, and the two units in São Paulo, the Hortolândia plant, Confibra, that we have purchased two years ago. Atibaia's plant where we have the concrete roofing tiles. In Rio de Janeiro also, we have a plant for roofing. In Simões Filho also, our fiber cement plant as well. We are all over Brazil. We are really a national player. Here's some highlights for you regarding our operations in 2024. We launched the Caucaia plant in March 2024.
It's a plant that began producing a lot. We have 500,000 tons per month. It was a very nice investment done in the Northeast of Brazil. Also, we had the expansion of our Manaus plant. Before we had 1,000 tons of capacity, and now we are operating with 1,500 tons. We consume most of it internally, and we sell the rest to the competitors. Also during 2024, we have a diversification with the construction systems. We've launched a new line of tiles that is being very successful. But we have also a piece of news that is not that nice. We are not continuing with our line of photovoltaic products. We insisted, we tried to find solutions. We then began with a product that it was a leaf. It was a leaf of photovoltaic cells.
But even this product that was really much better, we could not compete against our Chinese friends, because they have prices that are beyond competition. They are really far from what we could compete against. We are officially announcing today that we are not going to continue with the production of photovoltaic products in the company. And we are going to focus on the innovation and we are going to continue with the building systems because we believe that as it is in Japan, Europe, U.S., also here it's going to be as such, as you know, in the Brazilian market as well. In the commercial part, we've reached 30% of market share. We are market leaders in front of the competitors. We are trying to repositioning our brand. We are investing in marketing to really be able to make our brand stronger.
Also we have a growth in sales, a volume of fiber cement of 2.5% approximately, versus 2023, and also have increase of the volume of above 20% year-after-year. In the financial realm, also we have very interesting news. I think the main one is that we have really concluded the court-supervised reorganization plan of the judicial recovery. We could do everything according to what was planned. And now it's much easier to operate a company outside this recovery plan. We can renegotiate with clients, suppliers, we can sell assets, and we don't have the bad name, because nobody wants to have someone with a bad name in the family. So we are stronger now, leaving this judicial recovery than when we entered in it. Also we had the conclusion of the phase one of a corporate simplification. We are going to have a second phase.
So we've incorporated CNPJs to use more smartly the credits. Also, I've talked about the debt already. We are controlling really the debt, in terms of EBITDA multiples, it's amazing compared to the past. And also our administrative and commercial expenses, we are working on it. Me, myself, we've been following the company for the last five years, first as an advisor and now as the CEO, and we try to keep the expenses in the same level. We haven't had a real increase in the admin expenses. We try to be a Spartan. So these are the highlights for 2024, the summary of the year. And now talking about the fourth quarter. We had a net revenue of BRL 286.6 million, is 1.5% growth. It's small. We had October and November, very nice months.
December, it's a month to be forgotten, not only for us, but the whole market behaved badly in December. But at the end, we had a quarter that was better than 2023. Our recurring EBITDA was BRL 16.2 million. It's small, almost 29% below the fourth quarter of 2023. And the problem here were the margins. There were increases in raw material that we could not pass on to the market. We did a pricing review on the beginning of the year. But last year, we had already increased the prices in 5% approximately in October. We were successful with at least half of it, but it didn't have an effect really. And we are recovering now in the first month of this year. In terms of sales, it was stable, 165 metric tons. And construction systems is really growing.
In the quarter, we had around 22% of growth comparing to same quarter of 2023. We are going to pay an additional of dividends. We are declaring it in this first quarter. We are going to pay BRL 7.7 million in dividends. Inside the quarter is BRL 12.3 million. These are the main highlights of the fourth quarter. Now I am going to invite Carisa who is going to talk a little bit about the market, the results that we had in the fourth quarter, and delve into details. Afterwards, we are going to have a Q&A session.
Thank you, Paulo. Good afternoon. I would like to begin my presentation talking about the market and the building segment as a whole. It is impacted by the economic situation of the people and the capacity of Brazilian families.
With the rising interest and with the default levels, these all can influence significantly the demand. We have been perceiving this, and the demand has decreased, and impacted the prices of the company. Now on slide 7, we perceive that even facing this challenging scenario, Eternit sales had an increase of 2.5% in the sales volume. We totalized BRL 633 million in the year. We have a retraction in the quarter. With the increase that we have in the services prices, the increase in the labor cost, and also with some other things, we had in our fiber cement margin, a retraction of 7 percentage points compared to the same period of last year. Well, now to the right, you can see that we had a record in sales. We had almost 24,000 tons of sales in the quarter.
This is an increase of 20% in the volume sales. We believe that dry construction systems is the future for the country, and we expect to be in the forefront of this market, always presenting new solutions. Now, the performance of chrysotile and concrete roofing panels. In 2024, we had some operational problems that impacted the mining of chrysotile, impacting in the reduction of the exports volume that decreased 11.6% in the year, 37,000 tons in the fourth quarter. Even so, with this reduction in volume, we had an increase in the gross profit. The operation of chrysotile was favored by the exchange rate, creating a gross margin that was high. It was above in 1.3 regarding 2023. Now talking about concrete roofing tiles.
We see that the accumulated in the year was okay, but the gross margin was 15.7% with a retraction of 3 percentage points impacted really by the average price. Now we have the financial performance. BRL 1 billion, BRL 160 million and BRL 286,000 in the fourth trimester in the internal market. It was impacted by the sales of building systems and the improvement in the average price of chrysotile. Here to the right, we see the gross profit with a retraction of 15% in the year. In the fourth trimester, it was BRL 49 million. The reduction in the gross profit and gross margin in 2024 is mainly because of the price stability and the increase in the cost of the sold products with an increase of 9%, totalizing BRL 914 million in the year.
The increase in costs are concentrated in the fiber cement segment and is related to the increase in labor cost, services cost, and the increase in depreciation in the period. I mention again our commitment with the search for performance in our processes. We have 0% practically in the increase of admin and operational costs in 2024. In the fourth quarter, we see a small increase in these expenses because we had some concentrations regarding legal and attorneys' fees. I present the recurring EBITDA of the company. This EBITDA excludes the non-recurring events. In the year, we have BRL 79 million, in the year and the fourth quarter, BRL 16 million. This reduction is due to the compression of the margins from the fiber segment. In the net income, we have BRL 38 million. It's a reduction in the profit.
Additionally, the profit also was marked by some non-recurring events. The sale of the Goiânia land, also the provision of the discontinuity of the photovoltaic segment that we are announcing today. To face this event, we have a provision of BRL 17 million that is going to be part of the results of 2024. Also, we had some positive issues, some smaller indemnization costs and also the deferred taxes.
We had some differences that were not recorded in the previous periods. I bring you the picture of the debt of the company. We have BRL 110 million of net debt, a reduction of 12% regarding 2023. This reduction is due to the lower recovery of short-term debt. We had to control the leverage at the end of 2024. We had a longer-term recovery of CCE of BRL 17 million that was given to the investment to SAMA for mining.
Our company's constantly assessing the structure of capital to improve the results. To conclude my presentation, I would like to mention that we continue stable at the highest level of governance. We have 24,000 shareholders. In March, as Paulo mentioned, we've announced a distribution of dividends, and so during the year we've totalized BRL 7.7 million of distribution of earnings, BRL 0.12 per share, per stock. Also, the company forces to pay 25% of the net profit with payments concentrated in the month of March and September. Paulo, the floor is yours.
Thank you, Carisa, for your presentation. What can I tell you? This was really a challenging year with a lot to be done. A year in which we had to run after the margins. We had increases in prices and we think that this is a cycle that the building market is going through.
We see it all over. Our competitors also are experiencing very strict margins also in the other sub-segments of the building material area. Even so, I think we had a lot of important things that also happened. We concluded the judicial recovery, we did our new plant. In these last five years, we had a lot of investments, BRL 500 million. Part was done with our own capital, part was done with the increase in capital with the shareholders. This was a very interesting cycle for the company. We believe that from now on, we are going to start reaping the fruits. Part of our strategy is to use the capacity that we have now with all the investments that we've done. It's almost 100,000 tons and we are using around 60%- 70% of the capacity.
We have this potential to use this capacity in a country that we believe is going to continue growing and we are going to ride the wave of the improvement of the economy. Well, thank you all of you. We hope to have been very clear in our explanations and now we open for our Q&A session. Saulo, can you please help us with it?
Good afternoon. Now we are going to proceed with the Q&A session. Please say your name, where you are from, and make all the questions through the chat. You can insert the question over there. Well, we have received two questions from the Clube de Investimento Valor Futuro. I am going to pass them on to Carisa. Carisa, regarding the finishing of the photovoltaic line, I think it was correct. It is difficult to compete with this technology here in Brazil.
Can you detail this BRL 17 million accrued due to the termination of this line?
Thank you, Fábio. Yes, indeed. What is in this provision? The main values refer to the equipment of this production line, and the other is a guarantee provision in case it is necessary to do some repairs in the projects that were sold. Also, we have a provision in the stocks of raw material and finished products that can be used in an eventual reposition. Also, we had to terminate the team that worked for this line.
Thank you, Carisa. The second question is for Paulo. Regarding the chrysotile operation, can we return to the 45,000 tons per quarter soon? Can you detail which were the operational problems that we had in the last quarter?
Saulo, thank you for the question. Flavio, thank you for it.
You are right, our budget is 45,000 tons of production per quarter. We searched for 190 tons of production, so we need more production to have a mix for selling, because we have three types of fibers, the short, the average, and the long one. So we have to have this mix for our customers, mainly from Asia. What happened last year so that we could not reach the 180, 190 tons that we aimed to reach? Well, we began the year with a very heavy rainfall. We had floodings in our mine, so we had to pump out more water. This delayed production. Afterwards, in the half of the year, more or less, we had a fire. It was not severe. It was in an electric panel in the outside of the plant.
This affected the input of energy to the initial part of the fabrication of the ore process. We were lucky because we were able to replace the panel. Even so, we lost one month. These were the two problems. Apart from these, we invested in the maintenance. After the fire, we had a good year. The last quarter was very good. So December, we had 18, 19 tons of production. So we bet that this year we are going to reach 180,000. In January this year, we had a downtime. So now the sales in January and February were not that good, but from March on, we have no planned maintenance. So we are going to speed up production and we are going to reach this 180 tons. Okay. Let us wait to see if we have any more questions. Just a minute.
Saulo, meanwhile, regarding photovoltaic, it is nice to see how the market is perceiving this. It is really a challenging segment. We know about some companies that tried to do the solar panel, the commodity in the market, and everybody is closing, even these big companies. To dispute the market with the Chinese competitors is complicated. It is difficult because you have to spend a lot of money during a lot of years.
It is nice to see Fábio's perception. I think also that we made the right decision. We put all the provision of BRL 17 million, but we had already provisioned BRL 9 million before. It is the equipment that we have bought that we are not sure whether we are going to be able to sell them. If we sell them, we are going to decrease this value. We are being very conservative regarding the provision. Do we have any other questions?
Yes, from Luís Parduch. Regarding the trial in the Supreme Federal Court of Brazil regarding chrysotile, if there is a prohibition, what is the impact for the perennity of the company?
Very good point, Luís. This is a concern. The mine really creates cash flow to the company. What is happening, we are having the voting inside the Supreme Federal Court in Brazil. We have judges that are voting for two years of continuity of the mine. Some judges are voting for five years. The final result is forecast to be released on Friday. We believe that they are going to follow the Goiás State Law , that says that the termination of the mine operation is going to be after five years. This can be done with responsibility. We can then recover job positions, because we have more than 400 employees in the mine, in the plant.
This is why we are telling the Supreme Federal Court that it is very important to have these five years. We are fighting for these five years. We are going to have enough time to recover everything. During this time, we are going to bring new revenues, new segments to the company, so that the company can continue with the same type of governance, okay? Because we are very responsible. We do a lot in the ESG area. We are going to do some adjustments regarding costs. The idea is also to put some type of business to substitute, to replace this, okay? That is it.
Paulo, Max Reno is asking, what is the size of the market of construction systems inside the company?
Good question, Max Reno. We have forecast that it can reach a lot. The growth is 20% per year in the last three years. For this year, we believe that it is going to be even higher. We have several orders from construction firms that are building several houses all over. They want to be kind of an assembling firm, like the automotive plants. Today, they have to do the floors, the walls, the roofs. I believe that we really can enter in this game, because we are very efficient. The size of the market is huge depending on the substitution of these construction systems. Nowadays, we sell 3,000-3,500 tons per month. It still is small, the amount of the volume of sales inside the company. The revenues are better, because the added value is better.
We are talking about 5%-6% of the volume, but the revenues are more. We believe that in the future, more than half of the revenues of the company can come from this. Because today we have a capacity of 100,000 tons, and I am selling 65,000-70,000 tons. This machinery can be converted to build cement panels. I can use my assets that I have today to produce these products for the market, okay? We do not have some other products regarding to gist and metal panels, metal frameworks. But regarding the cement, we have a lot of capacity. This depends on the economy of the country. If you really have a good economy boom, you are going to have this strengthening in the segment. Any other question?
Thank you, Paulo Andrade. Lincoln Oliveira is asking, as a shareholder, as an investor, the results were beyond what we expected. How can we see the 2025 year?
Hi, Lincoln Oliveira. The result was beyond expected, due to the sales, but I can tell you that we expect a recovery in the volume of sales in this year. January, February, already signalize very positively. Also, we had difficulties in 2024 regarding the pricing. The updating of prices in the market. But we do not think that we are going to have this type of difficulties in 2025. This is going to be good for us. Of course, we are expecting also on the economy of the country. Regarding chrysotile, we had this problem in the operation, but we are back to our 180,000 tons per year with the exchange rate positive. This favors the business. So we have good expectations for 2025.
I think, Carisa, you mentioned everything. We see that the beginning of 2025 is better than the finishing of 2024.
The segment is better. We have this theory, because our segment, it does not have audits, but in 2021, 2020, during the pandemic, we have already idle capacity there. Because at that time, nobody was traveling, nobody was going to restaurants. The money was applied in electrical appliances and the renovation of the houses. Everybody doing renovation, extensions, expanding the homes. There was this boom. Since we had idle capacity, we sold a lot of fiber cement roofing tiles. The monthly market is around 200 tons per month, today. But during the pandemic, we sold more than, in the market as a whole, more than 350,000 tons per month. When you do this, then you do a renovation in your home, you do not really spend money again on this. It takes some years. This is why 2023 and 2024 were bad years.
But now in 2025, it is going to be better because, also we had the heavy rains and winds, so people need to replace maybe the roofing. In 2025, we believe that we are going to have an increase in volumes, and we are going to follow this up in our market share. Expectations for 2025 are good. Our thesis is that in 2023 and 2024, we had bad results because during the pandemic, the results were really too high.
Thank you, Paulo. Thank you, Carisa. If you wanted to make questions, please put them, write them on the chat. We have another question from Lisa from the BV Bank. She asks, "What is the capacity of production of building systems today?"
Well, in the company, in our specific products, we have around 30,000 tons for roofing tiles. Okay?
The machinery, when it is converted to do walls or to do floors, then you do not have the same yield. Maybe you have a reduction in the performance of the equipment. But I would say that with additional equipment that we can buy in the market and with increase the labor also because we need labor, maybe we are going to be able to do 15,000 tons with equipment that we have today. Sometimes when the tiles are not really occupying the production line too much, we can convert the line to make cement panels. Today, without big investments, I believe that we could reach 15,000 tons with some additional equipment only. But if you put more investment, then the sky is the limit. We have to pay attention to the interest rate as well. So far, everything that we have invested, it was okay.
Our products are in the blue. We can think about doing new investments to increase production in this segment very easily.
Thank you, Paulo. Giuseppe asks, "Which are the main competitors that could change the perspectives of Eternit?"
The competitors are the same. We try to be better than them. You know the competitors, Grupo Saint-Gobain, that has a market share that is similar to ours. We have regional competitors. I think really the national players are us and the Saint-Gobain group. I think that we have much more competence to do this. We are fast. We are the player that understands better fiber cement roofing tiles. We are very well distributed, very pulverized. We have a list of customers that we sell to them regularly. I think that in the market, we are really the ones who are closer to the dealers.
We can really surf the wave that is going to come now with the recovery in the economy. I do not think that the competitors are going to threaten us, okay?
Thank you for the question. We do not have any more questions. Oh, no, we have another question from Lincoln Oliveira again. He is asking about the short-term debt. Is it bigger than the long-term debt? Do you have any intentions of changing the profile of this debt?
Hi, Lincoln. I think it is important to comment that the debt of the company decreased 12.5%. I would say that we have 55% of the debt is in the short term, the rest in the long term. The debt is balanced. We have 1/3 of it is BASA, is a debt with a fixed cost of 7% per year.
The other is a FINAME, linked to the Selic of 4.9% per year, the cost. The other 1/3 is a CCE, is a CDI, 5% cost on average. This is a very balanced debt with different indexators. One of our concerns really is to look at the opportunities to elongate the debt. Trying to search for debts with a lower cost, of course, is a big challenge. The Selic rate, interest rate, is growing up. The inflation is rising up. Even so, we are trying to maximize the debt of the company.
Carisa, let me add something. Our debt, historically, is short-term because we have the ACCs usually. We sell in dollars, so we can do this. Historically, if you look to our reports, you will see that the short term is bigger. It is easy to do, it is cheaper.
We are trying also to redefine our debt. We are talking to Banco do Nordeste do Brasil, partner of ours. We had these investments in the Northeast done with own capital, so we are talking to them. We are trying to reprofile the debt if we get this value. We have commented already about these conversations in other releases. The idea is if we have this operation with the Banco do Nordeste do Brasil, everybody knows that is always challenging. Banco do Nordeste do Brasil, they have a lot of people wanting from them.
We are doing this, and this debt would be linked to the Caucaia plant to help with the development of the Northeast region. This is why we are going to have this loan with the Banco do Nordeste do Brasil, and then we are going to be able to change a lot of our debt that is indexed by the Selic rate.
Then we would improve the profile, better the profile of our debt. Because when we talk about the Banco do Nordeste do Brasil, we are talking about 10- year term.
Now we have a question by Kevali. With the conclusion of the judicial recovery, do you have the perspective of debentures or other issuances in the market?
Hi, Kev. I think that this is something that the company really does not do. We do not have a historical of strong debentures. But after the judicial recovery, we are going to study this, yes. If we have an equity store, a strong future forecast. Yeah, it makes sense to think about this type of operation.
Ok. If we don't have any more questions.
Now I'd like to invite again Paulo to make his final comments of the day. Paulo, please.
Thank you, Saulo. Well, I would like to thank everybody that is here with us in this webinar, this teleconference. It is very nice to talk with our shareholders. We know that 2024 was not a good year. Of course, in the past, we were under the judicial recovery, we had not profits. Now we are having profits. Of course, it is not at the level that the shareholders expect, but we are trying to be spartans, controlling the expenses. We are not spending any cent, if it is not aimed to create profit for the company. We are really working hard. We think about our debt, we think about our cash flow all the time. We are working closely on it. This is very critical for us on our daily lives. We are prepared.
In the past, we had these old plants, equipment that were not updated, but now we have everything that we need to meet the demands of the market. We are ready for it. We have the challenges of the margins. Of course, our suppliers, they are putting some increases in the prices. Last year, we were not able to pass these increases to our products and to our customers as well, but we are going to recover the margins. With the mine working well, we have this perspective of doing 180,000 tons per year. Trust on us, we are taking care of your company the best way we can do. We do not even sleep, because we keep on thinking about what we can do to really achieve the best results for you. Well, that is it. Saulo, would you like to say something?
No. Thank you, Paulo.
Now I invite our operator that is going to make the final remarks.
Thank you, the video conference of Eternit is finished. We thank you for your participation. Have a nice rest of the day.