Hello, ladies and gentlemen. Good morning. Welcome to the earnings pre-lease calls of LOG Commercial Properties. They are referring to the results of the fourth quarter 2024. We have here with us today Sérgio Fischer, CEO; André Vitória, CFO and IRO; and we also have Henrique Schaffner, Finance and IR Officer. We would like to let you know that the presentation is being recorded and translated simultaneously. Translation is available by clicking "Interpretation." For those who are listening to the video conference in English, there is the option to mute original audio in Portuguese by clicking "mute original audio." During the company presentation, everyone will be in listen-only mode. Next, we are going to start with our Q&A session. To ask a question, please select Q&A and type in your name and company. Once you are called, you are going to get a note to unmute your microphone.
Just click and ask your question. We would like to clarify that forward-looking statements that may be made during this conference call with respect to business prospects, forecasts, financial and operational goals of LOG are all based on assumptions of the executive board of the company, which may or may not occur. Investors should understand that political, macroeconomic conditions and other operational factors may affect the future performance of the company and lead to results which may differ materially from those expressed in these forward-looking statements. To start our call today for the fourth quarter 2024, I would like to hand it over to Sérgio Fischer.
[Foreign language]
Good morning, everyone, and thank you for being with us on LOG's fourth quarter 2024 earnings call. 2024 is an exceptional year for LOG. We sold 413,000 square meters of GLA, generating BRL 1.5 billion in revenue, a gross margin of 38%, and performance above our NAV. These sales went beyond funding our growth. They have created real value for our shareholders and strengthened our balance sheet. Throughout the year, we distributed BRL 220 million in dividends and repurchased BRL 313 million in shares. In addition, we have reduced our leverage, which enables more solid growth. Operationally, LOG continues to evolve. We increased our average ticket by 11% this year, reaching BRL 21.76. It means our assets have value, our customers recognize our quality, and that we have been able to pass through prices above inflation for the 10th consecutive quarter.
In the last quarter, we delivered LOG Ribeirão Preto, Recife II, and São Bernardo do Campo. The latter sold at the beginning of its development. In the quarter, we had record deliveries of 189,000 square meters of GLA with 90% release and an average ticket of BRL 28.83 and yield on cost of 13.1%. It shows that we are meeting a real growing demand for quality assets. In the year, we reached the highest volume of deliveries ever recorded, 443,000 square meters of GLA, maintaining vacancy rate at minimum levels of 0.65%. A great indicator that we continue to invest in the right place. It's estimated that 2.5 million square meters of GLA were delivered in Brazil in 2024. Deliveries made by LOG accounted for about 18% of this new stock in the country.
In the end of 2024, we completed our plan, All for 1.5, and we started a new growth cycle with LOG 2 Million. We are going to deliver 2 million square meters of GLA between 2025 and 2028. The expansion of our production capacity reflected our operational strength and preparedness to meet the growing demand for high-end logistics and infrastructure in Brazil. In this quarter, the company also had a record production of 126,000 square meters of GLA. In December, we reached a production of 50,000 square meters of GLA, equivalent to 600,000 square meters when annualized. Now, two indicators demonstrate the result of the company's strong operating performance. LOG recorded a significant increase of 106% in earnings per share in 2024, reaching 3.95 per share. As a result of efficient capital allocation, we presented 23% growth in NAV per share in the year.
In the fourth quarter, rental net revenue reached BRL 55.9 million, an increase of 18% compared to the same period of the previous year. In the year, LOG reached revenues of BRL 220 million. Revenue has been driven by one important aspect: positive lease spread for 10 consecutive quarters. In the last quarter, 1.2%, demonstrating that our contracts are not only staying strong, they have also been appreciating. Accumulated net delinquency in the last 12 months was only 0.57% of accounts receivables, reflecting the quality of the customer portfolio and our management of receivables. LOG manages and administers not only its own logistics condominium, but also a large part of the assets sold. We believe that this line of business has enormous room for growth in the coming years. Regarding asset management, there was 50% growth in revenue registering BRL 4 million in the quarter, with a margin of 66%.
EBITDA for the quarter reflected the high performance of LOG's leasing and development, reaching BRL 143 million, an increase of 125% compared to the same quarter of the previous year. Rental EBITDA reached BRL 42 million, an increase of 30% over the fourth quarter 2023, with a margin of 74%. In the year, consolidated EBITDA reached BRL 494 million, showing growth of 86%. Rental EBITDA was BRL 122 million. Operating expenses decreased by 7% compared to the same period of the previous year, driven by a drop in general administrative expenses carried out throughout 2024. Our net profit showed the high performance of the quarter, reaching BRL 100 million, with a growth of 37% over the fourth quarter 2023. Net income for the year registered BRL 344 million, an increase of 77% over 2023.
For 2025, we forecast net income between BRL 350 million and BRL 450 million, with dividends being distributed quarterly, income responding to 50% of annual net income. In 2024, LOG once again proved its capacity to generate cash in a consistent, disciplined manner. Last year, we generated BRL 1.3 billion in cash through the sales of assets. We highlighted that of the total, BRL 533 million were directly returned to our shareholders in the form of dividends and share buybacks. In 2024, we made significant progress in our debt management. We reduced adjusted net debt by 19%, ending the year with BRL 400 million, and reported significant reduction in adjusted leverage, which went from 1.87 times to just 0.81 times. It means that we are funding our growth with intelligence and control without compromising the strength of our balance sheet.
In addition, we reduced the effective cost of debt from CDI plus 1.9% to CDI plus 1.5%. As a result, our adjusted LTV fell to 9%, a decrease of 240 basis points for the year. For 2025, we are ready to continue growing, creating opportunities and delivering real value. Our strategy is clear: to balance expansion, financial strength, and returns for our investors. We are now starting the Q&A session. Thank you all very much.
Thank you. We are going to start now the Q&A session. I would like to remind you that to ask a question, please click Q&A and type in your name and company name. Once your name is called, you are going to get a message to unmute your microphone. Do it and ask your question. Please hold while we collect the questions. Our first question comes from Ygor Altero, XP. Please unmute your microphone.
Hello, good morning. I have two points. First, understand about recycling in terms of volume and CapEx for 2025. Consider higher interest rates. Understand what would be the potential buyers. Would it still be real estate funds? Do you think that they can really raise more funds to keep on investing? And if we consider a scenario of less recycling, what would you consider for CapEx? Thank you.
Hi, Ygor. Thank you for the questions. Sergio speaking. It's a more complex situation. We have to say that recycling scenarios are somewhat more bumpy. We believe it's going to improve throughout the year. There have been a change in regulatory aspects of real estate funds. There is less attraction, especially for the real estate funds. But as you can see, we just have access to different pockets.
In our last transaction in October last year was with an institutional investor who is not really focused on increasing interest rates, but rather thinking about the long term, so we are comfortable that we are going to have a very positive volume this year. Our idea is to keep on recycling our assets similar to what we've done in 2023 and 2024, and we have ongoing negotiations. People are still at the negotiating tables. Of course, we have to have some more level of flexibility or creativity in our transactions. This is something that we've been experiencing, but we are very confident that we are going to maintain our level of sales. Another thing that really makes us comfortable in going into the second point is the fact that we have an amount of receivables, which is very relevant: almost 1 billion BRL of previous sales to be received.
Part of the volume is going to be paid throughout the year. If necessary, we can anticipate part of these resources. We've done that in the past. There is some level of liquidity really in that. So this is what we are going to work with. Compare quarter over quarter, try to understand the situation, how receivables are being paid, and really make the necessary investments. But that's the same situation. We are maintaining our investment plan for the year, and we are just going to keep on observing closely. Thank you.
The next question comes from Pedro Lobato, Bradesco BBI. Pedro, please unmute your mic.
Good morning. Thank you for the presentation. I would like to hear more about recycling of assets, really, and focusing on your main pillars. So net debt, LOG 2 Million in guidance of dividends, 50% payout.
If you get a more stressed situation for sales of assets, what would be your priority of those three drivers? My second question is, we've just seen reported lease and new developments. Do you think that this is going to change your yield on costs from now on, or do you expect it to be of about 2.7, which was exactly what you had in this quarter?
Thank you, Pedro. Sérgio speaking. Let me start from the second question. This is a different, really, situation for the industry and for us. It's a positive situation, though. We've been making pre-lease with average tickets that we didn't use to consider 18 or 24 months ago, and the gap is being closed. In 2024, we increased our average ticket by 11%, much above inflation rate, and that's how we started 2025.
We've opened the average ticket of the fourth quarter just for you to realize how strong the industry is. We had rentals of about BRL 30 on average. It's a very good number. There is some pressure over the cost of construction, but nothing major, really, in terms of investment. So we expect to have some marginal increase of yield on cost. We've already reported the strong volume of the fourth quarter of 189,000 square meters of GLA, where yield of 3.2, which was better than the average yield of the year. In 2025, we are maintaining exactly the same pace. Yields above 13, very strong number. This is not going to change. There's new projects that we have for 2025, very positive. The best projects ever, I would say. Very high levels of pre-lease and very positive tickets.
I don't think that we are going to have anything unexpected in terms of yield on cost. In terms of recycling, our debt cap is maintained. We maintain it with discipline. We are not going to exceed it. We have a significant part of receivables, which makes us more comfortable. Our LOG 2 Million is a four-year plan up to 2028. We want to deliver 500,000 square meters per year, but it may change. We want to get 2 million by the end of four years. The guidance of dividend yield is not different from what we've performed in 2024. We distributed 44% of our dividends, and what we are proposing for 2025 is close to that, reaching 50%. But how can we do that?
We really believe in our LOG developer, the company that builds assets of quality, of good projects, and then we can sell these assets and generate cash from that. Last year, it was BRL 1.3 billion of cash from these operations, very relevant. So that's how we could return the capital to our investors with buyback. So that's exactly what we are following this year, and we are very confident. So trying to answer your first question.
Thank you, Sérgio. Very clear. Thank you. Have a great day.
[Foreign language]
The next question comes from André Mazini, Citi. André, please unmute your mic.
Good morning, Sérgio, André, and Enrique. I have two questions as well. First, the follow-up about sales of assets.
Sérgio was in an interview recently after the press release, saying that you expect the same level of sales in 2025 over 2024, despite the interest rate and everything you've just said. So would you be willing to accept other payment terms, such as, let's say, shares of real estate funds that are accepted by other companies when they sell assets? So that's why I ask. Now, the discussion of average ticket, and it's been growing continuously. That's great. 21.7 million, then in 2024, I thought it was 24 million. And Sérgio has just talked about 30. So 30 million BRL. Is it in some specific region, some specific states? And speaking of regions and previous discussions with you, I recall, for example, Salvador, where they have high average ticket near 30 million BRL.
Interesting, because real estate in general does not cost that much compared to the Southeast, but the average ticket is high. Would that be a good indicator of where you're going to grow from the margins? Because if you have high average ticket and the piece of land is cheaper, are these the regions where you are going to grow, or are there other metrics, maybe where customers expect you to be, or maybe those two factors together, if possible? So do you consider more yield on cost, or do you consider customer demands and see where they are going to move to, and there you just focus on that exponentially? Thank you.
Thank you, Mazini. Sergio speaking. Let me start with the second question. I think things go hand in hand, you see, where customers want to go and the average ticket of that specific region.
Of course, that the average ticket of 30 in the fourth quarter has got to do with the product mix, of course. So São Paulo, some other strong regions. It's not the reality of our full portfolio. BRL 24 with a 10% upside is the reality of our portfolio. And this is something that has been changing quarter over quarter because we've been really passing through prices continuously. There's going to be a gap, but we are always trying to increase prices. You see, we analyze return, return on investment, and how much we can pre-lease during the construction. Investments in 2025 focus on cities such as Salvador. Yes, there are new projects there, lots of projects in the Northwest where we can see very positive performance and good average ticket.
It's the same customer that is leasing a shed in the Southeast of Brazil or São Paulo, and they are willing to pay the same price in other regions because of quality. In these regions, they have a scarcity of good offers. When we offer them our products with our own customers, it's really easy to offer quality, and they are willing to pay for it. As I told you, in these regions, there is an improvement, and we expect to provide better yield on cost. Now, concerning sales of assets, yes, it's more challenging. We are going to have to offer flexibility, even work on cap, but we still haven't been affected by that. There are ongoing discussions, very positive discussions of selling our assets at NAV, even above NAV. Some discussions are more mature than others, but still working.
We are open to listen to all offers, maybe get paid in some quotas or shares. That's fine. We can consider it, but we've been having very fruitful discussions with potential clients, and we are not in a hurry, you see. We want to produce a volume close to what we've done in the past two years. We can do it at our own pace, probably concentrating most of these sales on the second part of the year. Probably the situation will be better then with a more clear definition of how interest rates are going to go down, when will it start coming down, so we are confident. Maybe it's going to be harder, but we are definitely going to deliver results.
Great. Thank you.
The next question comes from Marcelo Motta, JP Morgan. Marcelo, please unmute your mic.
Hello, good morning. Thank you. I have two questions.
First, I would like to understand whether there is room for liability management. You are talking about selling, cap rate, cost of debt. So how do you think about spread? Is there anything else that can be done once we have that bad situation of interest rate? Second question. When we think about your hurdle rate or the minimum return on investment, you have a yield on cost of 13%-14%. And when we see the interest rate of about close to 15%, maybe the spread is too tight. You cannot generate value. So I would like to understand the macroeconomic perspective and how this is going to impact your LOG 2 Million plan. Maybe you're going to postpone it for 2026, 2027 when interest rates are coming down, trying to understand about marginal return and your average EBITDA.
Thank you, Motta.
I'm going to start and then hand it over to André. You see, Motta, considering the scenario, yes, there is going to be an increase in interest rate. It may get to 15, 15, 25, I don't know. But inevitably, it will start coming down in a moment. So we are not forgetting our long-term projects because of temporary increase in interest rate. Even though it's bad, it's okay. We are going to keep on focusing. We want to provide real service to our customers. If we don't, others will. 13% of yield on cost being delivered is quite comfortable. This 13%, Motta, is 13% plus inflation. So that leads to real gains, which is what we've been obtaining recently. We deliver projects. We can bring prices above inflation immediately after when we have renewals or when we replace customers. So that's the power of our real business capability.
So we are not going to shut down projects because of the current situation.
André speaking. Concerning the debt, something that we've been considering with our financial planning is liability management. It's a constant concern, which has tried to identify opportunities to extend our debt at lower cost. We did that in the end of last year. The company before all rating agencies and financial organizations, we are seen as good, low credit risk. We had CDI plus 03. So the cost of our debt is really going down. It went from 1.3 to now 1.4. So we are going to keep on really focusing that, so paying our higher debts with lower credit rates so that we can really benefit from all the windows of opportunities throughout the year of 2025. We are going to keep on executing, but we are going to maintain always our debt maximum cap.
Thank you. Great. [Foreign language] . Next question from Rafael from Safra. Please go ahead. Senhor Rafael, [Foreign language] . Rafael, please unmute your microphone and ask your question.
[Foreign language]
Good. Can you all hear me?
Yes, we can hear you. Please go ahead.
[Foreign language] . A chart that always attracts our attention is the inflation of civil construction, consistently below the rates. What do you expect for the mix? What about the construction mix of a regular shed in terms of raw material and personnel or labor? And how it differs in the different regions? Is it a similar cost per built square meters, or are there differences in the Northeast and Southeast? Tell us a bit more about that. Thank you.
Rafael, Sérgio speaking. Thank you for the questions.
About the cost of construction, our construction basket is less exposed to labor than the basket offered by INCC, the Index of Civil Construction, and this is why we've been performing well. We have less exposure to labor, which is what's applying more pressure over the cost of construction. So we do not expect anything to change very relevantly the cost of construction throughout 2025. The cost of construction is linear. There is no difference among regions. It's very similar throughout Brazil, so we don't expect to be under any pressure, and we don't expect the situation to change. I think that was the question, right? Yeah, exactly. Thank you.
Well, our Q&A session is closed now. Let me now hand it over to Sérgio Fischer for his closing remarks.
Thank you all very much for being here with us.
We've had a very good year in 2024 at LOG. We've presented good results through our developer arm, the company that is building, developing, and selling the assets, generating high levels of cash and returning a lot of dividends to our shareholders. We are going into 2025 with a dichotomy, so to speak. Operationally speaking, we are delivering very great projects with positive yields, very well positioned, located, very great sequence of projects. Now, in the first quarter of 2025, we are delivering 100,000 square meters of GLA pre-leased with very positive yield on cost. Now, on the other side, yes, the macro situation is hard, bumpy. We will have to work harder to sell more. We are working on it and paying attention to maintain really our plans for the year. But we are going to keep on selling.
We've been selling over BRL 3 billion of our assets over the three years. Conversations are ongoing, negotiations. We are very confident with our ability to deliver results throughout the year to, once again, break a record of returns to shareholders. Thank you all very much and see you in the next quarter. A videoconferência. Our earnings call for LOG is now closed. If you have any questions, please submit your questions to the investment relations team using the email ri@logcp.com.br. Thank you for your participation. Have a great day.