Good afternoon, ladies and gentlemen. Welcome to the MAHLE Metal Leve video conference call to discuss the results for the first quarter of 2023. This video conference is being recorded, and the replay will be available on the company's investors website section. The presentation is also available for download. Please be advised that all participants will be only watching this presentation. After that, we will begin the Q&A session when further instructions will be provided. Before proceeding, let me take this opportunity to point out that forward-looking statements are based on the beliefs and assumptions of the management team of MAHLE Metal Leve and current information available to the company. These statements may involve risks and uncertainties because they relate to future events. Therefore, they depend on circumstances that may or may not occur.
Investors, analysts, and the public in general must take into account macroeconomic, industry, and other factors that may cause actual results to differ materially from those expressed in such forward-looking statements. Joining us today are Mr. Nathan John Quye, CFO, Mr. Daniel Brasil Alves, Marketing and Corporate Communications Director, and Mr. Fábio Lopes Peres, Finance Executive Director. Now I'd like to turn it over to Mr. Quye, who will begin the presentation. Mr. Quye, you can proceed.
Well, thank you very much, Caroline. Good afternoon, everyone. Welcome to our video conference call to discuss our results regarding the first quarter of 2023. Before we begin, we hope you are all safe and healthy. At the end of today's presentation, we will be available to answer your questions. Now let's start our presentation. Next slide, so that we can go over the agenda.
Today's agenda, we'll start with the highlights, then we will present a market overview with Daniel, then the net revenue performances by Fábio, financial management, CapEx and depreciation, followed by the Q&A session. Next slide, please. I'd like to start giving you an overview. First quarter of 2023 was a very strong quarter. Actually, we achieved a record this quarter with sales going over BRL 1 billion. In general, what we see is a different breakdown of sales. I'm not going to go into depth about that because Daniel's going to address that. But heavy vehicles suffered strong impact because of the Euro 6 legislation. That certainly affected the entire production of such vehicles. Also, with regards to aftermarket, it's still very strong, just as last year, particularly in Brazil and in Argentina.
Aftermarket exportation was also affected by political and economic factors related to South America, Chile, Peru, and Colombia, just as we mentioned in the previous quarter. Later, Daniel will talk more about such events. At the bottom, you can see the major indicators. I'm also not going to details, but we achieved a very positive result in this first quarter. We are all extremely happy with an EBITDA above BRL 260 million and 45.7% above the same period last year. You can see also that the numbers are much better than the last quarter. All the other major indicators also just show very good results. Now I'd like to turn it over to Daniel. He will talk about sales, and he will also share details about our Investor Day. Daniel.
Thank you very much, Nathan, and good afternoon, everyone. It's really great to welcome all of you to discuss this first quarter results. Before we talk about the market, I'd like to highlight the last event we held on April 3, 2023. We hosted MAHLE Investor Day and the APIMEC meeting, the Brazilian Association of Investment Analysts. We were able then to discuss the trends and innovative solutions to shape a more sustainable future for this industry. You can find the entire presentation available at our RI website. You can also use the link below or the QR code so that you can download everything related to this event. It's a very good content. If you have any questions, you can certainly get in touch with our RI department. Next slide, please. Let's talk about sales and production for Brazil and Argentina. Then we will discuss production in North America and Europe.
We are comparing this year's first quarter against the first quarter of 2022. You can see sales and production for heavy vehicles and light vehicles for Brazil, Argentina, and Brazil plus Argentina. I'm going to focus on the last column, Brazil and Argentina. We always address these two markets together. Many engines produced in Brazil are exported to Argentina, as well as cars and SUVs that are manufactured in Argentina and exported to Brazil. You can see an increase of light vehicles of 15.9%. This is based on low numbers. At the beginning of 2022, we were still suffering from the pandemic. We also had some floodings, which affected sales. That's why the comparison baseline is lower. As for heavy vehicles, we see an increase, 13.4%. First quarter year-over-year.
As for production light vehicles, we can see a 14.4% growth, and as for heavy vehicles, the impact of Euro 6. January and February presented a low production because we still had Euro 5 in inventory. By March, we still sold Euro 5 products. That's why we have this mismatch. For 2023, our forecast considers the entire 2023, considering also numbers from ANFAVEA. It's expected that Brazil presents a 4.2% increase in its production. Our numbers are slightly below ANFAVEA's numbers. Our forecast is 1% growth in the production of light vehicles, combining Brazil and Argentina. Very similar to what we saw in 2022. With regard to heavy vehicles, the forecast presented by ANFAVEA is a drop of 15.4%. We expect -21% decrease. Now let's talk about Europe and North America, the major destinations of our exportations.
Light vehicles, we see a growth of 11.3% in Europe, and heavy vehicles 1.5%. North America, light vehicles increase of 6.8%, heavy vehicles 12%. By combining the two markets, 9.2% growth regarding light vehicles and 6.5 regarding heavy vehicles. Next slide, please. Here we can see our net revenue performance by market. Starting with original equipment. For domestic original equipment, you can see 9.2% increase above the market rates. If we were to consider expectation of a decrease in heavy vehicles and that accounts for important part of our revenue, you can see that this number, especially because of increased market share and mix of clients, we also see the participation of exportations. We sell locally, but our clients then export their products. That also improved our numbers. All these factors that I mentioned.
As for OE export, we can see revenue increase by 12.1%, pretty much aligned to what we see in the market. Here we have some new projects in the ramp-up phase, and that certainly also supports this growth. So for total OE, 10.7%. Aftermarket. Domestic aftermarket, 34.3% increase. Here with the market share increases. Just as mentioned by Nathan, we see a very strong demand. Despite that low baseline, we still see levels that are similar to what we had during the pandemic. We did not resume the levels seen in 2019. That also supports us in the Aftermarket segment. M arket share increase and also the Argentinian market. We do have some competitors facing some restrictions.
MAHLE has a plant in Argentina which supports our trade balance between exportation and importation, allowing us to benefit in the export aftermarket, thus generating this very important number also in our total revenue. Export, you can see a drop of 20.7% and Nathan already mentioned some political and economic issues, particularly Peru and Colombia, which led to this decrease. The total increase in the aftermarket of 21.5%. When we combine OE plus aftermarket, we see that it is up by 14.9%. Now I would like to turn it over to Nathan, and I will be available during the Q&A session.
Thank you very much, Daniel. Now, I would like to talk to you about the gross margin and expenses, especially when we talk about sales cost. So in the first quarter, last year we saw a lower number with 68.9% of cost of sales. With that, our gross revenue increased by 31.1% when we compare the two quarters year- over- year. But mainly because of the aftermarket sales, they are more than 30% above the regular and also the mix of our clients and products.
On the other hand side, actually, we can see our plants that keep on improving our efficiency. So when we combine all that, we can see that the gross profit was very positive this first quarter. When we go over selling and distribution expenses, absolute number also went up as well as its percentage. The major reasons that explain that are related to freight, regarding aftermarket sales, also exportation to Europe and the U.S. We also increased advertisement regarding aftermarket and also to support our sales. You can see that as a consequence, we increased our selling expenses and also inflation rates.
Last year and this first quarter, we also saw inflation increases and with that, selling expenses going up. As for SG&A, when we examine the percentage is 2.9% compared to 2.6% year- over- year, but there are many factors related to that. Personnel and also inflation in Argentina and in Brazil. We also had some additional costs related to some projects that are being conducted right now. These two main factors led to this slight increase in our SG&A expenses. As for development and product development expenses, same percentage. In absolute numbers, it increased only a little, and there are not many different factors to explain that. Finally, other operating income, you can see it is positive in 2023 compared to 2022. Two important factors here. Sales gain coming from a fixed asset and second, we also had income coming from contracts that were settled in 2022.
Now I'd like to turn it over to Fábio. He will talk to us about net financial results.
Good afternoon, everyone. Thank you for joining us. Let me talk to you about our net financial results, and here we are comparing Q1 2023 against the first quarter of 2022. We see a substantial improve regarding or coming from net interest income coming from investment and also loans and borrowings. As we know, interest rate is very high in Argentina. When we combine the revenues from Brazil and Argentina, you can see that total net interest income is BRL 23.5. As for this net for exchange rate, also and hedging. Very successfully, we managed these two aspects. Last year we had -BRL 10.7, this year it's BRL 3. You can see that last year, the exchange rate fluctuation was 10%-12% negative.
We started the year at a higher rate and ending it at a lower rate. This year, the scenario is different. Exchange rate was flat. With regard to exchange rate effects, we also see this improvement of BRL 7.2 million. As for liquid monetary variation, it's also aligned to what we had last year. The bottom line, we see an improvement by 18.8%, closing this quarter with BRL 14.8. Going to the next slide, talking about our indebtedness. Both net cash as well as loans and borrowings, they are also aligned to what we saw at the end of 2022. March, we closed with BRL 530 million in cash and also loans and borrowings, BRL 410 million. Short term, BRL 213 million, accounting for 52% of our indebtedness and long term, 48% of our indebtedness. In the long term, BRL 197 million.
Our net cash position, BRL 119.7 million. Positive number. Improving from what we had at the end of last year, as you can see on the slide. Now we will open for the Q&A session. Nathan, Daniel, and I are available to answer any questions you may have. Thank you very much for your participation so far.
Now we will open for the Q&A session for investors and analysts. Should you want to ask any question, please raise your hand. If your question has been answered, you can lower your hand. Our first question from Pedro Fontana, Bradesco BBI.
Good morning, Nathan, Daniel, and Fábio. Thank you very much for taking my question. In regards to the first quarter and the 25% margin, which is a very strong number, is that related to a different sales mix or is it a decrease in the price of raw material that has not been then added to your products? How do you see the competitive scenario, particularly in the Aftermarket segment in Brazil? What about the price levels? How sustainable is this margin you achieved in the first quarter?
Thank you very much for your question. I can start and then Daniel and Fábio can jump in. Very good question. Just as you mentioned, this was a very positive number in this quarter and the three aspects that you mentioned are certainly aligned and it's very hard for us to go in depth. Obviously, price of raw materials is very different this year compared to 2022. Our domestic aftermarket in Brazil is very strong, but there is still room for improvement regarding our market share. Also the mixed conditions, just as Daniel mentioned, with aftermarket heavy vehicles and exportation. It is very difficult to separate each of these factors. They are all aligned and combined when we talk about the gross margin for this first quarter.
Thank you very much. Do you believe that we will see this trend for the rest of 2023?
Another very good question. It is very hard for me to say anything. Obviously, in the first quarter, Euro 5 was still being sold, but not anymore. So it is difficult to see how the market will react to that. The price of these products are higher. The new products that meet Euro 6. As for materials, raw materials, it is hard. We do not know what is going to happen.
Thank you very much.
Just to remind you, if you want to ask a question, just click on the Raise Hand icon. Our next question from Jonathan Koutras with JP Morgan.
Good afternoon, Nathan, Fábio, and Daniel. My first question is related to the decrease in revenues of aftermarket export market. Does that have the impact of FX, the dollar variation year to date? The second question is about your CapEx. I saw the investment and depreciation numbers. So do you find that this growth will be sustained? If you can just add more color to those numbers, please.
Jonathan, good morning, and thank you for the question. Jonathan, this is Daniel. Let me start regarding OEM. We need to consider instabilities. Especially in Latin America countries, mainly Peru and Colombia. That is also related to seasonality, but mostly that is explained because of those instabilities.
Great. Thank you.
Jonathan, can you please repeat your second question? Jonathan, can you please repeat your second question?
It is about your strategy regarding investments. If I just compare CapEx and depreciation.
Thank you. Usually, the first quarter of every single year, you see lower CapEx levels because we are just starting projects. Our budget for 2023 is above the one we had for 2022, and in the following quarters, we will carry out the plan that has been set up for 2023. We are now aligned to what we had planned.
Perfect. Thank you very much.
Once again, if you want to ask a question, just click on the Raise Hand icon at the bottom of your Zoom bar. The Q&A session has come to an end. Let me turn it over to Mr. Nathan Quye for his final remarks.
Thank you again, Caroline Chiarini. Thank you everyone for joining us this afternoon. As I mentioned, this quarter we achieved the record in sales for the first quarter. We do face some challenges, just as always in this market, but our team is very well prepared to face all the challenges ahead of us. We keep on working on a daily basis in order to improve our positions. Thank you very much for your questions, and Luis is also available later on to answer any questions you may have. Thank you once again. We will meet again to discuss the second quarter's results soon.
With that, we close the MAHLE Metal Leve's video conference. We would like to thank you all for joining, and have a great afternoon.