Good morning, everyone, welcome to Hidrovias do Brasil earnings conference call for the fourth quarter 2025. Joining us today are Décio Amaral, the Chief Executive Officer, and André Saleme Hachem, Chief Financial Officer and Investor Relations Officer. This event is being recorded and will be available on the company's investor relations website. Ensuing the comments of Hidrovias management, there will be a Q&A session when further instructions will be provided. We highlight that the simultaneous translation tool is available on the platform. To access it, simply click on the interpretation button and choose your preferred language. Before proceeding, we would like to emphasize that forward-looking statements are based on the company's assumptions and information currently available to the company. These statements involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur.
Investors and analysts should take into account that events related to the macroeconomic environment of segment may cause results to differ materially from those expressed in the respective forward statements. I will now turn the floor over to Mr. Amaral.
Good morning, everyone. Thank you for joining our earnings call for the fourth quarter 2025. Before going into the numbers, I would like to start by putting 2025 into context as a year of structural changes for Hidrovias do Brasil. It was a period of profound transformation that redefined our governance foundations. We concluded the capital increase and saw the consolidation of Ultrapar as our controlling shareholder, a decisive step to ensure corporate longevity. This move was accompanied by an important renewal of executive leadership, reinforcing our execution capabilities and focusing on our core business.
Within this context of governance and strategic discipline, we completed the sale of our coaster shipping operation. This was a relevant step in optimizing our portfolio, allowing us to redirect capital and gear efforts on businesses with stronger alignment with our long-term strategy. We are entering a new cycle for the company, simpler, more disciplined, and focused on sustained profitability. From the operational standpoint, for the first time, we surpassed BRL 1,000,000,025 for the year, 95% growth vis-à-vis 2024. We transported nearly 18 million tons, 22% above the previous year, reflecting hydrological normalization, operational improvements, and structural enhancements across our operations. The implementation of an integrated operational management system and 56% reduction in our Lost Time Injury Frequency Rate demonstrate that productivity and profitability begin at the foundation, safe and well-structured operations. We carried on a robust balance sheet repositioning.
We reduced leverage from 7x at the end of 2024 to 2.3% at the end of 2025, followed by the elimination of foreign exchange exposure, the capital increase and operational recovery. This reinforces our entry into a new profitability cycle for the company. Let's start with our strengthened foundation on slide 5. We closed the quarter with recurring adjusted EBITDA of BRL 160 million, with a 31% margin, reversing the negative results recorded in Q4 2024. I will now hand it over to our CFO, André Hachem, to comment on the performance of each operation.
Thank you, Décio, and good morning to everyone.
Before we begin, I would like to highlight that the earnings release is being presented on a pro forma basis, including the results of the coastal shipping operation through October, since the sale was concluded on November 1st. Let's start with the North Corridor on slide 7. In the fourth quarter, we transported 1.8 million tons with recurring EBITDA of BRL 123 million and 54% margin, reversing the negative result for the same period last year. For the full year, we reached a record volume of 8 million tons with a higher share of grains. Recurring EBITDA was BRL 662 million in 2025, 43% higher than in 2024 with a 60% margin. Despite favorable navigation conditions and positive crop outlooks, we are facing relevant challenges at the ETC intake.
The high volume of trucks at the transshipment terminal, combined with heavy rainfall, have impacted the intake cycle and operational fluidity. As a result, we are observing performance below that seen in the same period last year. Moving to slide 8, regarding the Southern Corridor, we operated the quarter with improved navigation conditions in the Paraguay-Paraná Waterway. We focused mainly on iron ore. We transported 893,000 tons in line with seasonal patterns, with recurring EBITDA of BRL 36 million and an 18% margin due to higher volumes and a better mix. For the full year, the Southern Corridor worked with 5 million tons, 78% higher than in 2024. Recurring EBITDA totaled BRL 422 million, with a 43% EBITDA margin, the highest in the historical series, and a cost dilution from higher asset utilization.
If we look at the South Corridor, we have been operating under navigation conditions closer to normal levels. We have had some limitations, considering the stronger comparison base of the first quarter of 25, we expect lower results in the first quarter 29. Moving on to slide 9, we present the results of the Santos operation. We handled 647,000 tons, 27% above the previous year, with fertilizers as the main highlight. Recurring EBITDA was BRL 23 million, with 45% margin, 10 percentage points higher than last year, driven by higher volumes and a better mix as fertilizers carry higher tariffs, accounting for 83% of volume in the fourth quarter.
For the full year, Santos handled 2 million tons, 17% above 2024, with recurring EBITDA of BRL 58 million, with only 4% growth year-over-year, reflecting the consolidation of the salt operation, which contributed to higher volumes. We continue with a good outlook for Santos for 2026, thanks to our enhancement and a more competitive environment for fertilizers. Let's speak about the coastal navigation and go on to slide 10. As Décio mentioned, we concluded the sale in November. We include the results only through October. In the quarter, we transported 224,000 tons. For the year, 2.7 million tons. Recurring adjusted EBITDA totaled BRL 13 million in the quarter and BRL 88 million for the full year. Reflecting the effects on dry docking, lower operational capacity, and non-recurring items associated to the sale process. Please turn to slide 12.
In the quarter, we transported 3.6 million tons, a growth of 65% vis-à-vis the same period last year, driven by higher volumes in the North and South Corridors. Net operating revenue was BRL 509 million compared to BRL 265 million in the fourth quarter 2024, reflecting higher volumes transported, a better mix in the North and South Corridors, and a higher volume from Santos, which offset the effect of divestment of the Cabotage operation. Recurring adjusted EBITDA reached BRL 160 million. For the full year, net operating revenue totaled BRL 2.5 billion, representing 41% growth, recurring adjusted EBITDA reached a record BRL 1.1 billion, up 95% year-on-year, reflecting the recovery of navigation conditions and operational improvements implemented through the year.
On slide 13, in the fourth quarter 2025, we recorded a net loss of BRL 361 million, impacted by non-recurring items during the period, primarily accounting write-offs related to coastal shipping and client indemnities and compensation. This is simply an accounting effect and does not have a cash impact. For the full year, the net loss totaled BRL 141 million, a 75% improvement compared to 2024, reflecting operational recovery and normalization of navigability conditions. Cash generation reached BRL 1.1 billion in 2025, the highest level ever recorded in the company because of improved results and corporate reorganization. Finally, on slide 14, we present the financial results with leverage standing at 2.3x Net Debt to EBITDA, a reduction of 4.7x compared to 2024.
This deleveraging reflects the completion of the capital increase in May, improved operating results, and the sale of the coastal shipping operation. We remain committed to reducing foreign exchange exposure and extending the debt maturity. This reinforces the consolidation of Hidrovias' new capital structure. With this, I conclude the presentation and remain available along with Décio for the question and answer session.
We will now go on to the question and answer session. Should you wish to pose a question, please click on the Q&A icon at the bottom of the screen and type in your question. To pose questions using the microphone, please click on Raise Hand. Please wait while we poll for questions. Our first question comes from João Ramiro from XP. Your microphone has been activated. You may proceed.
Good morning, Décio. Good morning, Hachem. Thank you for taking my question, first of all.
We have two points at our end. First, referring to the North Corridor, Hachem mentioned the indemnities of BRL 83 million for clients in the quarter. If you give us, could give us more color on what this represents and what we could expect going forward for 2026 and for the future, there has been significant pressure in railroad freight for that route, especially in Imbituba. How does this impact the company's competitive positioning for 2026 in terms of volume? The last question refers to dredging. We heard recent news from the government suspending an auction for the Tapajós River. Does this represent structural uncertainty, something relevant for you going forward? What is it that we can expect for coming years? My third question refers to capital allocation.
The company is in a sound trajectory of delevering, going from 7.4 times in 2024 to 2.3 times now in the fourth quarter 2025. What is happening with your modular projects, especially those beginning now, the Tumbador flu 20, the floating barge, and if this flexibility and the balance will enable you to work with more structural projects or pay more dividends going forward? Thank you.
Good morning, João. This is Décio. I will answer part of them and the rest will be answered by Hashim. Let's speak a bit about the dredging and the Transportadia. As we mentioned last year, the definite solution, which is the construction of a new highway that will be well-planned, will be concluded by the end of the year. This is a year of transition. We hope to have a somewhat better solution vis-à-vis the past.
We're paving two of the main uphills so that we can have a better flow. Simultaneously, we have begun an operation of jointly working with the main operators of the region. This is something that began a fortnight ago. Unfortunately, those works of paving have a slight delay. We're at the beginning of the harvest with these works underway, which means there are interruptions on the highway and a slowdown in the beginning of the operation. We should have a more complicated beginning of the year due to these causes. Through the months, there will be a solution, and we will have a definite solution at the end of the year and before the next harvest. Without a doubt, this will cause pressure on the tariffs in the North Corridor.
We have to be aware of that. We are attempting to work with the customers to maintain the competitiveness of our corridor. We have that structural work underway that will be a definite solution. Regarding dredging, I was personally in Brasília last week visiting some ministries and the Senate, all of us quite disappointed with the attitude adopted by the government, canceling the decree as well as the dredging. Let's try to translate this somewhat. To issue a decree does not represent a risk for the short-term project of the concession. All the work will continue to be done, and this was mentioned by the ministry per se. It's a moment of a great deal of pressure, occupation of Cargill, and this measure was adopted. Regarding the dredging, there was a misunderstanding, perhaps, a statement of the government.
This dredging that was listed is simply a maintenance dredging carried out recurrently in the rivers. In the Madeira River, they say that it was not canceled. I was in Brasília, therefore, we are monitoring the level of the rivers in a systematic fashion with ANA from the government. If we perceive the need of dredging, which was not necessary in 2025, should this need arise, the government will resume that process with significant speed. For the structural long term, nothing will happen. The studies for concession will continue to be carried out, and the dredging, there will be a monitoring of the water with the help of the government, and if necessary, it will be resumed. No great problems for the short term. Let's speak about the indemnity to clients and capital allocation.
Good morning, João.
Regarding non-recurrent effects throughout the year 2025. We identified problems in the operation of a specific client, and throughout the year, we were forced to pay off that client because of that problem. This problem relates to the problem that was part of our system during the year, a more wet harvest. It is a highly located problem restricted to the client. In the long term, we took the decision to make an agreement with the client. We do have some items here that refer to insurance and much more. Part of that amount will have to be reopened going forward. That's the first part referring to non-recurring impacts. Regarding capital allocation, you'll see an enhancement of results that have contributed a great deal, the improvement in capital as well. We stand at 2.3 times Net Debt to EBITDA.
Going forward, this is a more comfortable level. We still have uncertainties in terms of the draft level for the future. Perhaps it will be below the present-day level. Because of the resiliency of the dredging, we may go back to levels of 2.3, 2.5 times. We have the commissioning of Cabria in the fourth quarter. Cabria began to operate at the very end of December, and we're now working with a part of commissioning. We're carrying out tests, and until the end of the first quarter, they should enter full-steam operations. We have an investment plan, and the share represents all of the expansion or most of the expansion connected to that project.
Throughout the second half of the year, we should have the commissioning in the third quarter. In the fourth quarter, this should enter full-steam operation with a TUP working full-fledged.
Okay. Thank you. That was very clear. Thank you very much.
Our next question is in writing from Mr. Pedro Bruno from Itaú BBA. He says, "Good morning, everybody. The first question, could you remark in greater detail the main drivers for your strong volume performance in the fourth quarter 2025? Will this be the new normal without considering Cabria so far? Secondly, how the barriers at IPC can impact your work during 2026? Another question, could you give us more details on this non-recurrent effect in the Northern Corridor?"
Pedro, thank you for your question.
The fourth quarter, where we understood the difficulties of the new dynamic of corn because of the reference prices that have been set, helped us to carry out good negotiations with our clients, gave us some value in exchange of a differentiated value for operations. We had favorable conditions in the last quarter in Transport Guaya. We were able to test some new operational configurations that we believe would lead to a better productivity. This was a successful move. So far, we can't say that this is the new normal for the short term. There are issues in Transport Guaya that still hamper this. We're quite confident that the thesis of productivity that we have developed will materialize.
As we eliminate some bottlenecks that we still have in the operation and outside of the operation with Transportadia, we will have new normal levels going forward. To speak about ITC, I mentioned this in the previous question. Some of the measures we took, the pavement of the 2 upward hills, working jointly with all of the companies to better coordinate the movement of trucks. All of this should bring about good effects. We're leasing some capacity from third parties. There will be a slight increase in price. This will offer greater flexibility to the clients. Because of this, we're leasing third-party trucks to avoid the problems in Transportadia. The definite solution, as I mentioned, will only be about for the next harvest, where we will have more consistent flow and productivity during the year.
In terms of non-recurring effects, I have nothing to add. We answered this in the previous question.
Our next question comes from Gabriel Frazão from Bank of America. Your microphone has been activated.
Good morning. This is Hashan. Thank you for taking my question. If you could speak about the negotiations for tariff this year and share with us if the dynamic of previous years, 100% contracted in tariffs will be repeated, and if it would be feasible to still deliver a real increase in price with the capacity that you will deliver this year, especially with Cabria. Allow me a minute in terms of indemnities. Were part of these indemnities allocated in the revenues of the North Corridor? This will explain the drop in tariff that you had in that line item just by your better mix and higher volume. These are my questions. Thank you.
Thank you for the questions. Now, regarding the rescission, there is no revenue problem. This is a strategy that we had to capture greater flexibility for corn. This explains the revenue changes in the fourth quarter. Now, regarding our commercial dynamic, as we have mentioned in previous calls, we don't speak about individual indemnities with clients. The company is working with that 100% contracting. We are revising these models and Well, we can't expect to be fully sold out as we were last year. Now, when it comes to the price, I believe, changes in pricing. In pricing, we have been mentioning that our main focus is the management of costs. We won't be able to fully manage prices. They are outside factors, and the best defense for an industry like ours is to become ever more efficient.
We're seeking enormous discipline for the turnaround of our assets to, of course, make the best of the capital invested, and we want to be less impacted, or we will be less impacted by prices. The situation will be less favorable.
Thank you, Hachem. That was very clear. Thank you very much.
The question and answer session ends here. We would like to return the floor to Mr. Décio Amaral for the closing remarks. You may proceed, sir.
I would like to thank all of you for your attendance at the call. Thank you for the questions, and we will be together again in a few months to speak about the results for the first quarter of 2026. I wish you a very good day.
The conference call ends here. We would like to thank all of you for your attendance. Have a very good day.