Good afternoon. Thank you for holding. Welcome to Mills' live to discuss the earnings of the second quarter of 2023. If you need simultaneous translation, this tool is available on the platform. Simply click the Interpretation button at the globe icon on the bottom of the screen and select the language you prefer, Portuguese or English. For those who are listening to the conference in English, there is the option to click on Mute Original Audio. We inform that this video conference is being recorded and will be made available at the company's IR website, where you may find all materials of this earnings release. During the company's presentation, the microphones of all participants will remain on mute, and afterwards, we will begin the questions and answer session.
Note that the information contained in this presentation and the forward-looking statements that may be made during this conference call relating to the company's business prospects and projections, are based on the management's expectations regarding the future of Mills. Forward-looking statements are not a guarantee of performance. They involve macroeconomic risks or macroeconomic conditions, market risks and other factors. I will now turn the floor to Sérgio Kariya , Mills' CEO.
Good afternoon. It's a great pleasure to meet again to comment on Mills' second quarter of 2023's results. We're proud of what we've done so far and excited with what we're seeing ahead for the second half of 2023. On slide three, we show the period's highlights. This quarter, we had earnings expansion across all business units, demonstrating our resilience and consistency with our growth strategy.
Consolidated gross revenue reached BRL 385 million in the second quarter of 2023, up 30.7% compared to the second quarter of 2022. Growth was significant in all business units, with an increase of 27% in rental and 79% in formwork and shoring compared to the second quarter of 2022. Regarding the rental fleet, there was a net addition of 200 machines, with an increase of nearly 21% when compared to the second quarter of 2022. We ended the quarter with a total of 11,500 pieces of equipment in the fleet, maintaining our leadership in the elevating platform rental market and with the largest electric fleet in Latin America.
In addition to having more than tripled Triengel's fleet in less than a year after its acquisition, becoming already a relevant player in this broad, heavy equipment market. We remain confident that our technical excellence, customer-focused culture, capillarity, and scale are Mills' strengths and set us apart in the conduction of our business. We posted record adjusted EBITDA of BRL 168 million, a margin almost 50% of this quarter. Net income was BRL 64 million, with a margin of almost 20%. We continue to have room on our balance sheet for growth, with leverage at 0.7x net debt over adjusted EBITDA. We are certain that the low leverage enhances our use of opportunities in the short and medium term.
Investments totaled BRL 81 million in the second quarter this year. In this quarter, we received the last large batch of orders for 2021 and 2022 for the elevating platforms. Our focus in the second half will be to raise productivity, given the increase in the fleet in recent months. We also made acquisitions of Yellow Line equipment and continued to make investments along with the signing of new contract, and actively seeking M&A opportunities to bring both knowledge and accelerate growth. The adjusted ROIC recorded in Q2 was 22.1%, reinforcing our commitment with the return for investors in every deal made. Also on this front, we announced IoE for the fiscal year of 2023 in the amount of BRL 18 million in the quarter, totaling already BRL 37 million in the year.
The advances on the ESG front have included the start of the fourth cycle of the TransFORMAR program, with the opening of 220 positions in 15 different cities. This is a Mills initiative that grants scholarships for technical courses, focusing on families in social vulnerability, aiming to support the communities where we're present. We also celebrated the rise of four positions in the gender diversity ranking of the Teva index, reaching the 5th position. Another important event that brings us great pride was the release of the GPTW ranking early August, placing us in the 15th position among the best companies to work for in Rio de Janeiro. By building a strong and inspiring organizational culture, Mills positions itself as a company that recognizes the importance of human capital to its success.
To conclude this slide, I think it's important to mention that the recently announced cut of 50 BPS in the interest rate announced by the central bank is the beginning of what seems to be a cycle of lower interest rates and consequent boost to the Brazilian economy. This is great news that added to the investment pipeline, including the fact that's being announced today. The company's great appetite to reach new heights, the expertise of our team and the competitive advantages of the company, motivates us to be very excited for the period to come. Moving on to the next slide, we can illustrate a proof of the thesis of entering the heavy equipment sector in less than a year after the start of operation. Our heavy unit involves Yellow Line equipment, its implements and trucks.
The Yellow Line market is broad and scattered, with plenty of opportunity for consolidation and a very robust pipeline ahead. We replicated Triengel's business model quickly, tripled the fleet in less than a year. Even without having the scale of major players, we were able to form partnerships with OEMs, and we were able to acquire at good discount due to our intention to grow and seek a long-term relationship. We increased the diversification of our revenue to resilient sectors of the economy, such as agribusiness and mining support. In the second quarter of this year, agribusiness revenue accounted for 10% of the rentals unit. We are seeing many opportunities and signing contracts through cross-selling between our business unit. We have already formed contracts involving our three business units, formwork and shoring, Yellow Line equipment and platforms with the same client.
We increased our revenue predictability by closing long-term contracts, and we have an average duration today of nearly three years. This is another important step in Mills' growth and consolidation of our strategy to be a one-stop shop equipment rental company. Carol, I turn the floor to you to comment on the financial aspects of the quarter.
Good afternoon, everyone. Kariya, thank you very much for the introduction. On slide six, we begin by commenting on the results of the combined rental business unit, which accounted for 83% of our revenue in the second quarter of 2023, and includes light and heavy equipment. We have grown our fleet in this business unit by 21% over the last 12 months, and the current replacement value is BRL 4 billion.
Mills is already a reference in the rental sector, being a benchmark for elevating platforms and an absolute leader in the rental of this type of equipment. We started less than a year ago, our operations in the heavy rental segment, adding the experience of Triengel, tripling its size and hiring relevant professionals in the sector, so that Mills continues to emphasize its vocation for leadership, and consolidates itself as the largest Brazilian rental company, one-stop shop with complete solutions for customers. We are not intimidated by the competition, because we know that our hard and consistent work is what has led us here. We believe that rental is a service that adds value. We have primary maintenance, experienced and trained technicians, focused on the needs of each customer in order to always offer the best solution.
Our value proposition stands out for its focus on ensuring service quality, safety and productivity, reinforcing our culture of cultivating trusting, long-term relationships with both our customers and suppliers. On slide seven, we show the evolution of our diversification strategy, seeking greater resilience to Brazilian economic cycles. The rental business unit serves customers from a variety of industries, as we demonstrate in the chart on the left of the slide. The distribution between the sectors is more dispersed, and it is worth noting the greater penetration in the agribusiness segment, a resilient sector of the economy, which today totals 10% of our rental in- revenue, with an increase of 4 percentage points compared to the first quarter of 2023. We are diligent with the distribution of our portfolio at a healthy level also in the second quarter.
We have more than 8,400 clients, and approximately 80% of our revenue is pulverized, which reduces the risk of a portfolio concentrated in a few customers. We have the constant concern to increase our client portfolio and the share of wallet in each of them, because we are confident that partnerships are key to success. Yellow Line market is deep, and we believe in the consolidation and growth potential of this market. We believe in the buy-to-rent conversion, and guarantee our customers the best solution with the best equipment, working for the longest possible time, and with the necessary safety for the operators. Let's go to the financial highlights of the rental business unit on slide eight. Compared to the second quarter of 2022, our net revenue grew 30%, mainly due to the increase in rented volume and rental prices.
Sales of new and semi-new equipment accounted for 8% of the business unit's net revenue in the quarter, versus 6% in the same period last year. The renewal of our fleet is part of our commitment to optimize this life cycle and with the mix of our fleet. In light equipment, being close to our customers is important, and we also offer solutions that optimize this contracting and mobilization through our logistics project, bringing even more quality to the service provided. There are 56 branches ready to serve customers throughout Brazil. Speaking of the Yellow Line, our solution is complete, and we have learned a lot so far. Contracts are analyzed individually as project finance. We price each of them according to the use, wear, and residual value of the equipment.
We have signed long-term contract with an average duration of three years and brought greater revenue and cash predictability to the company. We improved our EBITDA margin compared to the first quarter of 2023 by 2 percentage points. It is important to mention that we had expenses with the adjustment of the company's structure in the amount of BRL 1.1 million. If we exclude these one-off expenses, we would be left with a margin in line with the second quarter of 2022, a period in which there was not yet the Yellow Line structure at Mills. We understand that we have more opportunities for cost and expense dilution as the Yellow Line business becomes more relevant and as the number of the branches increases.
These structural adjustments, carried out in the second quarter of 2023, do not affect our ability to grow, and we reaffirm our commitment to continue increasing our efficiency. Moving on to the results of formwork and shoring, as we had predicted in our last communications with the market, we have observed a good momentum and relevant growth in the performance of this business unit, mainly due to the pipeline of infrastructure works and the resumption of the civil construction industry. Net revenue increased 79% compared to the second quarter of 2022, mainly due to the better prices in place. When we look at adjusted EBITDA, we see a value 175% higher than in the second quarter of 2022, with growth of 21 percentage points in the EBITDA margin in the year-on-year comparison.
In comparison with the previous quarter, it is necessary to compare the results by excluding the strategic one-off sale of semi-new assets of BRL 10 million in the first quarter of 2023, and removing as well the expenses with the structure adaptation in the second quarter of 2023 of BRL 700,000. With this, we see an improvement in pro forma adjusted EBITDA from 58.6% in the first quarter to 60.5% in the second quarter. On slide 12, we show Mills' consolidated results. The comparison with the second quarter of last year, we can see growth in all business units, which generated a 36.5% increase in net revenue. Compared to the previous quarter, growth was 7.4%, excluding the strategic one-off sale in the formwork and shoring unit in the first quarter.
Adjusted EBITDA was 42.4% higher compared to the previous year, and the margin was higher by 2 percentage points, totaling 49.7%. I'd like to draw your attention to our pro forma Adjusted EBITDA margin, where in the first quarter of 2023, we had an extraordinary revenue from a strategic one-off sale in formwork and shoring, and on the second quarter, we had an expense related to the adaptation of structure, which will bring annual savings of 10.5 million BRL. If we exclude these two one-off events, we would have gone from a margin of 48.7% in the first quarter of 2023 to 50.2% in the second quarter of 2023. We remain confident that our pillars and our strategy form a solid foundation for Mills' growth.
On slide 13, the chart on the left shows that our net income reached BRL 64 million in the second quarter of 2023, 1.4% higher than the second quarter of 2022. The BRL 900,000 variation in the period is the result of the increase in EBITDA in the second quarter of 2023, being impacted also by a higher financial expense as a consequence of higher growth, growth debt, the refund of the deferred income tax by SK Rental, that was an acquisition in the second quarter of 2022, in the amount of BRL 14.2 million, and the increase in depreciation expenses as a result of the fleet increase.
Net margin went from 25.5% in the second quarter of 2022 to 19% in the second quarter of 2023, mainly due to the increase in financial expenses in the second quarter of 2023, and that refund of the deferred income tax at SK Rental in the second quarter of 2022. Excluding the effect of SK's chargeback, the net margin in the second quarter of 2022 would have been 19.7%, at the same level as registered in the second quarter of 2023. The effective rate of income tax and social contribution in the period was 28%.
Cash flow, on the other hand, demonstrates that the company continues to generate operating cash, and the reduction in flows is mainly explained by the disbursement related to the acquisitions of rental assets made in previous periods, and the payment of profit sharing to employees in the 2022's results that occurred in the second quarter of 2023. I'd like to emphasize that we are attentive to adjust our pace of investment according to the movement of the economy, and optimize the allocation of capital at Mills, seeking the best return for our shareholders. In light rentals, we received in the second quarter of 2023, the last large, large batch of orders from 2021 and 2022. In the second half of the year, our focus will be on raising productivity, given the increase in machines in recent months.
With that, we postpone most of the purchase orders related to new machines to 2024. In heavy equipment, we continue to invest, along with the signing of new contracts, and evaluate strategic opportunities for equipment acquisitions and M&As to accelerate growth. To conclude, on slide 14, I present our capital structure, highlighting our solid balance sheet and low indebtedness, which allows us to capture growth opportunities. We closed the first quarter with gross debt of BRL 953 million, BRL 523 million in cash, and BRL 430 million in net debt. Our gross debt is composed almost entirely of the venture, and has 89% of its payment expected for the long term. We maintained our average cost at CDI + 2.24% in the second quarter of 2023, compared to the first quarter of 2023.
I would also like to mention the fundraising in foreign currency, amounting to BRL 100 million, with swap for rate hedge and exchange variation at a cost of CDI + 2%, below the average cost of the company, reinforcing our continuous search to improve the capital structure and optimize Mills' cost of debt. This funding was made through two banking institutions. One of the issues was completed without covenant. In the second issuance, we were able to improve our covenants, confirming the increasing robustness of our balance sheet. The indicators were more flexible than previous issues. The net debt over EBITDA ratio went from 2.5x to 3 x. Short-term net debt over EBITDA went from 0.75x to 1 x. Leverage reached 0.7 times net debt over adjusted EBITDA ratio in the last 12 months.
This guarantees us another quarter of fulfilled covenant. We have room to leverage the company, and appetite to do so, to continue to grow in our light and heavy segments. Given everything we've said, I can only thank again, Mills' employees for their tireless efforts and constant dedication. We invite our shareholders, investors, and stakeholders to continue following our journey, because you are an important part of what we're building. Kariya, thank you, and the floor is yours.
Thank you, Carol. To close our presentation, I want to highlight some points that demonstrate our strategy to leverage the company's growth in all businesses. We believe that the recovery of the macroeconomic scenario, driven by the reduction in the interest rates and the strong pipeline of infrastructure investments that we will have in the coming years in Brazil, will be very positive for the company.
Going to the light equipment segment, we must continue our work of disseminating the concept of the elevating platforms, showing that it is the safest equipment and the most productive for our customers. In the coming months, we'll have an increase in the utilization rates due to the maturing of the strong investment we made in platforms in the fourth quarter of last year, and in the first quarter this year, due to the increased demand in the second half. We continue with an appetite to grow the number of branches, and should open around five branches this year. In addition, our ramp up at the branches we opened last year continues. We have several directed commercial actions by region, that with a focus on increasing penetration in new and current customers.
In heavy equipment, this segment is an important avenue for growth, and it will be increasingly relevant to the company's results. With a large and pulverized addressable market, still with low penetration of the concept of equipment rentals, we've seen many opportunities for consolidation via organic and inorganic growth. The concept of buy versus rent is still little disseminated in Brazil, and we've been able to help spread this concept by showing the benefits that rentals offer to our customers. We are seeing significant cross-selling opportunities between the businesses. We have already signed, as I said, contracts involving Formwork and Shoring platforms and Yellow Line. We continue to increase our cash generation predictability with long-term contracts. In formwork and shoring, we prepared this business unit to be a strong cash generator in the coming years, and we have a positive scenario for the coming years.
The infrastructure sector continues to heat up, especially with this exposure to the new PAC. The construction market also continues with the strong demand, will benefit from this next cycle of interest rate reduction. We focus on the profitability of the business, which will have strong cash generation, given the low need for investment in coming years. Finally, I'd like to mention that we have a balance sheet with room for leverage and to seize opportunities. We combine a robust load debt capital structure, with a cash-generating operation, financial strength, so that we can advance our growth plans and consolidate the expanding market.
The growth we experience is planned and executed with discipline, driven by our M&A experience over the past two years, without losing pace, to ensure that our margins and returns are affected....Our operation is very well structured to offer the best service as a rental provider of light and heavy equipment, which support the ambition of being a one-stop shop rental company. We have many levers in our favor, such as our capillarity and robust balance, always offering our customers operational excellence, reliability, and differentiated service. We thank you for joining us and are available to take your questions. Thank you.
We will now begin the questions and answer session. In order to ask a question, click on the Q&A icon at the bottom of your screen, write down your name, company, and when we announce you, there will be a request to activate your microphone. Then you should switch your microphone on and ask your question. If you prefer, you can type your question and indicate it for the operator to read. First question, Luiz Capistrano, sell-side analyst, Itaú BBA. Luiz, you may go ahead.
Kariya, Carol, thank you for this opportunity. Congratulations on the results. I'd like to discuss two things, and first, you mentioned briefly, but it'd be nice to hear more about exposure in the government's program, that PAC that Kariya mentioned at the end of his speech. It would be interesting to understand, now that we have more details about the recent announcement made by the president, what do you think in terms of the size of the program? It attracts our attention initially, compared to recent programs. Should we be really this excited or any expectation on the timeline from when this should start reflecting on your results?
I think it's going to be overlapping with the effect on that, if the structure pipeline that was already bid in recent years. If you can give us more details, this PAC program, it would be excellent. The second point that I'd like to hear more, you've been mentioning on releases and today on your speech, about the better utilization rate, especially on elevating platforms for the second half. What can we expect in terms of margin improvement? Do you have numbers that can help us and guide us in terms of utilization, thinking of EBITDA, EBITDA margin of the rental segment?
Thank you. Luis, the first point on your question about the new PAC, P-A-C. I think the main point there is that there's strong investment in the Minha Casa, Minha Vida housing program, both for financing and construction.
It's important to say we have little penetration there. Everything else, the resumption of works, of highways or ports, airports, that may potentially be resumed during this project, we have exposure there for all of our three business units. For formwork and shoring, with the works on the previous PAC program to be concluded, for elevating platforms as well, and now with our entry in the Yellow Line equipment. As for the elevating platform for the second half, since last month, we've been seeing strong traction in terms of demand. We were stable, relatively, between the Q1 and Q2 quarters, and we started to see a relevant inflection since last month. This month, the first 10 days of the month were not no different, and we're very optimistic. As for margins, our pricing is stable. We're maintaining it stable. We're not yet seeking...
Considering that in our viewpoints, there's no room yet for us to raise prices at this time, maybe during the second half of the year. In terms of margin, through prices, it should not increase. What should increase is a little bit of what Carol was saying. You saw that in the second quarter, we had some adjustments in G&A. We had a one-off impact in terms of expenses that had almost $2 million, BRL 2 million in impact, and in the next 12 months, annualizing these, the savings should be of around BRL 10 million. That should help the margin as well as that dilution, as we will continue to grow in Yellow Line. Light equipment will probably benefit from the G&A dilution and the reduction we did, but not as much in terms of price, as I said.
That's very clear. Thank you.
Note that to ask a question, please click on the Q&A icon at the bottom of your screen. Write down your name, company, and language, when announced, there will be a request for you to open your microphone, then you may activate your microphone and ask your question. Next question, Felipe, investor, it is the following: In this adverse macroeconomic scenario, did the company see an increase on delinquency from its customers?
Good afternoon, Felipe. Thank you for your question. Actually, we had better results in terms of delinquency, this, in this period, even better results when we compare it to the previous year. We're watchful of this topic, we're keeping track of it very closely, but until the second quarter, we do not feel that on Mills results.
Thank you. Once again, in order to ask a question, click on the Q&A icon at the bottom of your screen and write down your question to join the queue. Next question, Carlos, Buy-side analyst, and Carlos' question is: "Can you explain a little bit more of the cash flow to us? I highlight the strong disbursement in suppliers and -BRL 81 million. How should this line evolve? The profit share of BRL 26 million, how should this evolve, and what metrics are considered here?"
Carlos, good afternoon. For your first question, cash flow is a reflection of the equipment at purchase that we made in the fourth quarter. In the first quarter, we had an increase, a net increase of 1,000 pieces of equipment to our fleet.
These equipments came very strongly in the fourth quarter, in the first quarter, and that's why we see a higher disbursement in the first half. When you look at the second half, we'll go back to the historical levels of Mills cash conversion between 80%-85%. What happens in this first half of the year, we have a lower conversion, but if we look at the second half of last year, conversion was more than 95%. On average, we can expect to maintain our cash conversion from EBITDA to cash between 80%-85%. It's a one-off effect in the first half of the year because of that strong arrival of equipment. As for your second question, We have a target of BRL 26 million. We had a payment now, referring to the targets met in 2022.
The year 2022 was very positive, where we exceeded our targets. Our targets are a combination of corporate and individual targets. In terms of corporate targets, we have targets linked to the organizational, organization's financial results, performance. We have targets related to sustainability and to our operations, so it's a set of corporate targets. Then we have a second set of targets which are individual or relating to a specific group, which are specific targets for each one of the departments, but that's how we break it down, the main indicators of our profit-sharing program. Carlos, just to add, in the long term, the company's executives are always aligning through the delta ad hoc, the EVA generation, and that's based on that, that we do the payment of executives.
Thank you for the answers. Next question, Carlos Alberto, investor. Good afternoon. Congratulations for the result. We spent the last year talking about the Phoenix project. With this CapEx already, how is this already used CapEx impacting the company's OpEx now with the machine ready?
Carlos, Phoenix still has very few machines for this year, 2023. We did almost all of it last year, and a lot of these equipments are already on rent, so they're already generating revenue to the company. Both CapEx and OpEx, depending on the classification that we had in the maintenance of those assets, have already been allocated, were already allocated last year. As I said, very few for this year of 2023, and the equipments are already rental ready, either already rented or waiting for the right time to be rented. Just adding, until now, we have 732 machines that went through maintenance through the Phoenix projects, and they're already released, cleared.
Thank you. Once again, we'd like to remind you that to ask your question, click on the Q&A icon at the bottom of your screen to join the queue. When your name is announced, you'll receive a request to open your microphone and ask your question. If you want our operator to read the question, simply write it down on the box. Next question. Again, Carlos Alberto, investor. His question is: "Have you already analyzed the debt issuance via CRI or CRA with a lower cost?"
We're always looking at alternatives and financial instruments for, for the debt in the market. The issue that we had at the end of the year, we looked at the detail of CRA, but we were able to get a better cost through the ventures. The entry in agribusiness, we know, allows us to be exposed to new financial instruments. We're constantly looking into this and analyzing them to choose the best option. CRA and CRI are two instruments that are always in our pipeline. We're always looking at them.
Thank you for your answers. Once again, to ask a question, please click on the Q&A icon at the bottom of your screen to join the queue. Next question, Matheus Soares, Buy-side Analyst Market Makers.
Good afternoon. Congratulations on the results. Can you give us more details about the process to acquire new clients in Yellow Line, and how is idleness?
Matheus, thank you for your question. I think it's interesting to talk about this. We talked a lot about this during our speech. We tripled the size of the fleet acquired with Triengel via organic growth.
We already have 80% of utilization rate of these equipments. We're very optimistic considering what we see in terms of pipeline. This strongly proves the thesis that the market is deep. Just to remind you again, we've been declining on all short-term contracts. We're focusing the company's efforts, the strategy that we're seeking to increase predictability of cash flow, focusing on long-term contracts. This pipeline is very strong. We're very optimistic for the second half.
Thank you. Next question, Caio Lacerda, Buy-side Analyst, Ventor. The question is: How do you see the Yellow Line market vis-a-vis the competition and contract level?
Caio, adding to the answer that I was giving earlier, the market is quite deep, so of course, we meet different players depending on the type of market we're looking at, but it's rare for us to take always the same players on.
It shows, again, the dispersion of the market versus how extensive this market is. That's why, this kind of proves our thesis in terms of the size and, and expansion of the market, and we are very optimistic looking forward with this business unit of heavy equipment and so on.
Thank you. Next question, Marcelo Arazi, Sell-side Analyst, BTG Pactual.
We saw an increase of exposure to the agribusiness industry, which has been proving very resilient. How do you see this exposure from here on out? Do you think of any M&A in order to grow faster in this industry?
Thank you, Marcelo. Yes, we're still focused on the Yellow Line market acquisitions, not only in the agribusiness industry, but also in view of other industries.
I think it's important for the company, as we did with Tree and Shell, to add knowledge for us to be able to accelerate growth after acquisition. We've been growing in other areas in our other main pillars in the Yellow Line market organically. In agribusiness, I think there's always the crop season and the off-season. The off-season, that's usually the phase when the companies end up contracting, has already gone. It's come and gone. From the second quarter on, the quarter volume starts to reduce. It doesn't end, but it goes down, and we work to increase this exposure. If you looked at one year ago, we had 1% of agribusiness share in Mills results, and with the acquisition of Tree and Shell, we went to 6, and today we're at 10%.
We've been working hard and focused on growing in more perennial industries, more resilient sectors of the Brazilian economy.
Thank you. Next question, Marcelo from Everest. There are two questions. As for the investments in shipyards announced that this PAC program, would that be a potential line of business for growth for the company? The second question is the % of exposure of the revenue to agribusiness the company expects to reach in the long term.
Well, Marcelo, about shipyards, yes. In the past, we had relevance there when there were a number of shipyards being built. We do participate today in the shipyards, and so in the south, Rio de Janeiro, the northeast of the country, and without a doubt, an increase of investment in this industry will bring more opportunities for us to increase our exposure. We're optimistic with that.
Agribusiness is a little bit of what, what I will say, and we don't have a specific target. We're focused on increasing our share, our positive exposure in this, in the most resilient sectors of Brazil's GDP.
Thank you. Next question, Felipe Zubeti, investor. Without giving us a guidance, what's the perspective of increase of indebtedness to increase market share in Yellow Line?
On the long term, of course, this is not a guidance, but on the long term, we want a better balance. If you remember, when we gave the presentation introducing Yellow Line, on Mills Day two years ago, we wanted to bring a product that would increase the company's participation in longer term contracts, that could also join the company into more perennial sectors, where there's less application for elevating platforms, for example.
That's why it strengthened our thesis for entering Yellow Line and heavy equipment. As a result, over time, the company wants to balance this in order to bring, again, revenue predictability. We want this business unit to gain important relevance. Regardless, I was still looking at all adjacent products that are related to the products we have, so that we can add. As we mentioned in our presentation, what we're seeking for the long term is to be a one-stop-shop company. That's the central goal, and we're seeking that and moving towards that end.
Thank you. Our next question, Carlos Alberto, investor at L4 Capital . Oil and gas scenario for Mills, have you ever thought about this industry?
Yes, we already participate in the oil and gas industry. Not only refineries, we're present with generators, compressors, and elevating platforms. I think there was a question about shipyards earlier. Shipyards and their participation in the oil and gas industry, we also have equipment there. Of course, the investments that will be made in this area, also open a path for us to continue to grow. We participate of renovations when there's FPSOs or tips renovations. That's very constant in our application, so we do participate. As I said today, especially in elevating platforms, generators, and compressors.
Thank you. Next question, Alexandre Assaf. Congratulations for the results. Does the company consider making any international M&A?
Well, Alexandre, we have a lot of room in Brazil with everything we're looking at, everything we want to offer our clients and the products. There's a lot of space in the country to diversify the portfolio, to get a better market coverage, co- market coverage. Our focus at this time is 100% on the domestic territory.
Thank you. In order to ask a question, please click on the Q&A icon at the bottom of your screen. Write down your name and the company to join the queue. If you wish the operator to read your question, simply type it down and we will read it. Next question. From Hugo, about the oil and gas scenario for Mills. That question was already answered, Hugo Queiroz's question. Moving to the next one, Mauricio, buy-side analyst. Congratulations for the results. Is there a lot of platforms entering Brazil? How does this affect the competitive environment?
Mauricio, what happened, actually, considering the stress on the supply chain, was a concentration of equipment entry in the fourth quarter of last year and the first quarter of this year, which led to a slight imbalance between supply and demand, but it was a one-off event. We are already seeing this balance restored. Demand continued to grow, so we were able to balance this off, and we're seeing growth for the second half of the year. Then it goes back to its natural course, considering that the global supply market is already regaining balance in terms of lead time, and so on. We see a normal pace of business, a normal course of business from here on out. We're optimistic with the second half, as we said, and we're seeing a traction of demand.
Our closings as well, started to grow in June, very strongly, so we're very optimistic for the second half of the year.
Thank you for the answers. We now close the question and answer session. I would like to turn the floor to Mr. Sergio Kariya for his final remarks. Please, Kariya, you may go ahead.
Thank you everyone for your interest and participation at our earnings conference call for the second quarter of 2023. Our investor relations team is at your disposal, if you have any doubts. Thank you very much. Have a good afternoon and a great weekend.