Good morning, everyone. Welcome to the disclosure of results of the first quarter of 2023 of the Ourof ino Saúde Animal. I'm Mariana Anselmo , I'm part of the communication team. This transmission is being recorded and will be available on our website with our ri.ourofino.com and on YouTube. At the end of the presentations, we'll have our round of Q&A. You can be part, you can write in our Q&A area. We have a legal disclosure to start with. This presentation brings declarations of future events that are subject to uncertainties and risks, and there are presuppositions and calculations and provisions. Future events include information about our intentions, beliefs, and current beliefs. Those are from our board of directors. Information and declarations include information about operational results or presumed, as well as declarations that are preceded, that are followed, or will continue waiting, pretending, intending, in other words.
Declarations and statements about the future are not assurance of results. We have predictions because we are talking about future events. They may occur or not. Future results and the generation of value for shareholders may vary from those suggested herein. Many of the factors that will determine those results and values are beyond our control and capacity for forecasting. Our legal disclosure ends here. We start with the group that will be part of the presentation today. Kleber Gomes, CEO, Marcelo Silva, IR and Financial, and Angelo Melo, Strategic Development and New Businesses. Welcome all. I would like to pass the floor to our CEO, Mr. Kleber Gomes. Floor is yours.
Thank you for the great introduction. A history, if you will. It is a great happiness to have closed 2022 with official numbers of SINDAN, the official trade union of our area, the greatest actually institution of the vet animal area in Brazil. We had great movementation. We have had a sector that in a short term, was able to bring us back to the top, showing a lot of the work that we have done in the last three years that have brought a lot of learning.
We have been certified by GPTW, a good classification in the awards by GPTW. 2023, nevertheless, we still have to keep up with those performances, levels of performance. That hopefully will keep us as an outstanding industry company in Brazil. We had two launches in Brazil this semester. Companion animals, we have divested a lot. We had a lot of silviculture last year.
Angelo Melo, Mr. Angelo Melo will comment on that. Commenting on that, furthermore, we are working hard on ESG. Our sustainability report has been released along with our financial report, with a review of the material themes that we are solidly working not only this year, but in the future. The quarter didn't have a net revenue lesser than last year. I would like to start talking about the relevance of the last years. A sequence of quarters that were very positive, growingly with sustainability, accompanied by great financial indicators, our point of management. We are trusting our drivers of growth and the management that is being worked on. The quarter, per se, is a set of points that is affecting the world and Brazil.
We had some additional points in our area. The economy, agriculturally speaking, a lot of uncertainty, not only in Brazil, but worldwide with inflation, high-interest rates. We are not exempted from that. We are in a situation with capital costs very costly and that impacts, we have to adapt, and that has to be done in our management, planning for that. In the retail, you have seen declarations, statements from companies that are struggling more or others less, and retail per se, but our segments that work with tighter margins, and that kind of puts us under a burden. We have less stockage and more margins. It is very objective once that the inventory reaches a certain level. The dynamics must take us to less procurements and more management in other areas. Other points that have to do with the trade union as well.
These discussions were actually clarifying in terms of the effect of things that are happening in other segments in Brazil and worldwide. We know of other companies in the pet retail that had better results on account of inventory management. It is healthy if you think in terms of sustainability of business per se, the distribution, especially at this point when we have interest rates very high. Furthermore, we had a problem with exports of beef to China due to the mad cow disease. The results among the countries were all affected because there was an embargo, and that affects investments and the husbandry and agriculture directly. Factors that I believe brought a diminishing of the rhythm of the activity in our sector and in other companies as well. We are aware of what we have to do.
We are following our strategies play by play with our purposes and our values, knowing that we want to be the top-of-mind company, the company that sells the best product that is strong and consistent. Even when it comes to accountancy and other points, as I mentioned myself, we had quarters that were quite good, but this one was a little more burdening in terms of traction. We will regain our higher tiers. We will do what we have always done, checking our expenses, our structure. We tighten the belts, we know that. I apologize. The transmission was cut off for a while. Please bear with us. We will be back in a moment.
[Non-English content ]
[Non-English content]. Mariana. [Non-English content].
[Non-English content]
[Non-English content]
Canines, a continuation of our line of supplements that we started last year. We are talking about a segment that grows in a greater number than any other. This concept is good for myself, for my son, for my pets. It grows even in human medicine and animal medicine as well. What is the importance of Longil Paste? It shows the capacity that placing the clients mainly as the center of our purpose. There are animals that adapt better, other animals adapt better to the paste. More animals are more debilitated, so they need the formulation in the shape of a paste. We will continue in that pathway. We are paving a way. We are just starting. We are very trusting, and we are sure that we will grow. That's what I have for now. I'm available for questions. I would like to ask you, Mariana, please, take the floor.
Thank you, Angelo. We'll keep with Marcelo Silva, our Director of IR and Finances. Floor is yours.
Good morning, Mariana. Good morning, all. It's a pleasure to be here. I am very grateful for those who are keeping up with us. We know we had a technical problem, but it's over. We have a combination of factors that were unfavorable. Not exactly what we were expecting in 2023 with macro, we were expecting a more complex due to the macroeconomic scenario, with interest rates more higher, OpEx, and mainly the mega stores in retail. Taking that into consideration, we had bad news. I think that somehow brought some pessimism to the business. We can talk about the mad cow disease that held back. That was on hold for clear reasons, the embargo.
We had drought in Rio Grande do Sul, a very important state for us, a leader state in a series of leader products, especially for parasites, influenza. That brings actually concerns. Costs of grains are more expensive. We have an exchange with the Agriculture. Some were more comfortable, some others less, but that was important to remind you that we have the arroba, which is a measure, is currently in BRL 270. There wasn't a drop. The cost and the proportion was actually eye to eye. Some cooperatives were actually giving up on the leverage. We had some situations that were very developed, Rio Grande, especially some of them, Languiru, for instance, from Rio Grande. A scenario that was more complex in other words, potentialized by political problems and the political scenario in Brazil. We are expecting a regaining of the growth in the second semester.
We had a great harvest of grains, outputs, inputs. We are actually expecting to overcome the diminishing in sales in other areas with this growth. The first quarter of the second semester might be better, but the second will certainly be better. Some other important points is that the company is very solid. Capital structure that is very comforting in a scenario that is unfavorable economically speaking. We had cash flow generated in a very good level. We have healthy levels of financial leverage below the select rates that allows us to keep on growing and investing in our business. We are going to the evolution of the revenue and the gross margin, a drop of 17.4% in the first three trimesters of 2022 compared to 2023, but we expect growth. A drop from 44.9% down to 44.3%.
We have less gross margin for products, a fixed cost less diluted, avoiding the void for the production floor, manufacturing floor. We have more production. We have a lot of what is happening here, our forecast for the semester. Besides the macro perspective, we have lines that were growing a lot in the last years, IATF, IVF, artificial fertilization. Now we have a husbandry in low levels, diminishing reproduction protocols, dropping in numbers, semen market diminishing with a drop of -8% in 2022, and is slightly higher now in 2023. That affected by the embargo and the need to bring relief for OpEx, especially for retail. Nevertheless, there was a growth and a better profit. The gross margin down to 36.7%, down from 44%. We are looking at those products with less cuts. Companion animals. We started talking about those in retail.
We have cash flow with better performance that can be healthy for the health of the whole chain. Nevertheless we have to look at certain points specifically. Purchases will be probably more, n evertheless less volume that leads us on to looking at OpEx from a different perspective, because it is a sector that is impacted by the macroeconomics. Since last year, since the first and fourth trimesters, we have pre- and post-pandemics. We have habits that are coming back. The consumption of services and goods that actually starts giving more traction to the markets. The humanization of the pets, and the care of those pets, such pets, will bring more needs for healthcare, animal welfare. We see ahead a robust line of product supplements. Cells, animals that need to live more, and that has to do with the company developing sub-segments with this greater need for welfare. International operations.
We had a mix less favorable in the semester with a drop in the gross margin in Colombia. Colombia is going through months that are changing politically and economically that affected the valuation, appreciation of the local currency, the American dollar as well. That is a unit that brings promises growth with Mexico, Colombia, and other countries launching new products with the filing and registration of products that will increase our portfolio. SG&A of the trimester didn't suffer any drop, 87.20%, 87.8%. The company is working with consumption with the quality of our councils and the index of profitability. We are looking our EBITDA rates, always looking for continuous development and excellence in our operations. Even with the unfavorable scenario, we had R&D that kept on developing new products. We have two new products that have been announced.
We have been maintaining a tier of 7%, 7.5% of revenue, 7.8% down to 7.4%. That was due to less sales. Nominally face value, we have the idea of decelerating our agenda products. The combination of less sales flow, less floor plan costs, brought costs of BRL 3 million against BRL 30 million of last year. That was a major drop. The company is working hard to take EBITDA back to its previous values. We are maintaining the sustainability in terms of cash flow, more favorable capital generation compared to the first tri of 2022. We had a growth of 30%, BRL 70 million, a generation of cash flow of BRL 30 million. We ended the semester with BRL 34 million. We are growing. That shows a growth, and we aim to keep on growing in this sense. We have OpEx, we have the average receipts levels.
We commented on previous semesters during the pandemic. We had additional investments, especially when it came to considering India and China. We are working with a scenario that is more favorable. We didn't have problems with resources or any other problem. There is a more favorable period. It promises growth during the first and second trimesters of the second semester. There was a generation of cash flow, very robust, that contributed to the net revenue. EBITDA growing very comfortably, 0.94% in the second semester with capital costs higher than last year, still below CDI, that is below 295 bps. That gives us a comfortable position. It doesn't concern us financially. Our investment is in innovation, in new products. We have the resources to invest in new products and new launches.
Capital structure still on that, 73% in the long run, and a major part of that actually planned for over a period of five years. To the end of my presentation, we had results that caught me by surprise. We expected initially an opening of the market of a greater order, it didn't happen. We were looking at our clients, the trade union, other companies of the sector. We are working solidly to regain the growing numbers, looking at the strategies, maintaining our sales force engaged.
We are very successful, 4,000 clients in Fortaleza monthly. A line of products with a coverage that is very comprehensive. A portfolio of products with an access to the market that is very differentiated. We've got two major properties. Companion animals. Just on a final note, we had accommodation of inventory. We expect more in the second semester. Mexico, Colombia, the increase in the coverage in terms of products in the market. Financially, we are well-structured. Structure of capital and endowment in the long run, which is very positive. Mariana, floor is yours.
We are open for Q&A now. Thank you, Marcelo. I reinforce the invitation for you to send your questions in the Q&A room. Mr. Kleber Gomes, if you would please lead this moment.
Can you all hear me now? Yes, we can hear you loud and clear. I apologize. There was a problem with the translation that was locally. It was here. We had to come back anyway. I will go back to what was happening. As the CEO of the company, our solid commitment that even during adjustments as now, we are to deliver excellent results. We are working strongly on that.
We depend on the market, undoubtedly, the market is very complex. It's happening worldwide. Adjustment of cash flow on new capital costs, it's no different for us. Our opinion is that it is passing. It's not here to stay. Things will change. Questions. We had some questions that came from Mr. Matheus Plínio saying that they are doing a solid work on Ourof ino. Thank you for paying attention to Ourof ino. I'll try to summarize because some of the questions we cannot respond openly. Guidance and gross margin, we prioritize the good work, delivering results as we have done. We do not have the habit of working differently than that. Let me see what else we have here. Investments in capital goods, CapEx, as we know that will be a guidance.
In general terms, the company had a lot of investments in the past, we are now having the results of what we sold in the past. We had capital growth very representative. Another question. Would you comment on global market share and the strategy of the company and the main players? We have 9.5% in Brazil. In Mexico and Colombia, less than that in terms of market share. In the last few years, we are the company that has been on-growing more than any other. We do not have this perspective of market share globally. These strategies are competitive. The strategy of our company is very clear. We communicated that very clear. We have the Ourofino Day with investors. We aim at production animals and productivity in the fields. The bovine culture we can improve. It requires investments. points brought by Marcelo, our market.
We have more or less half the population of the U.S. and one-tenth of the market. There is a major potential there. Prioritization-wise, we are focusing on Latin America. This is because Latin America is 16.5% of the production of protein to the world, and we are keeping on growing. We have plans up to 2050. We have incremental plans for the tropical climate areas. Certainly, we try to be ahead of our competition. They think of more temperate climates. We intend on maintaining our growth. We have Mitsui, 16% of the company is their share, and we are looking at Asia, Middle East. We understand that we will have opportunities there, but we are studying these pathways to grow in a structured way. We are also looking at more innovative technology from Japan and traditional countries in terms of important technologies.
These are our strategies based upon our purposes, value, and the desire to be the most admired company in Latin America. We intend on being the company that keeps on growing. How we see the scenario of debtors, the provision, there was default in the order of 34 points. As we talk about scenarios that are complete in the macroeconomic scenario with costs very high, I do not know if you did get that in the beginning. Our profits rates are different.
We have a commercial model that is different, very pulverized in production animals, bovine culture. We sell to husbandry and agriculture retail, and the average ticket is lower. That may actually have a difference in terms of the risk. In general terms, we have been having three years that are very productive. We did not even were required to have a revision of any point of our strategic plan.
Along with the economic conditions, we have the regional points, such as the droughts in the state of Rio Grande do Sul, the culture of rice and other cereals. We have to pay attention to that. We have seen other relevant products in other areas. We have our credit and debt collecting very robust. It is a diminishing in the risk that is very relevant, and we are very attentive to the changes that the market is suffering. We are not anticipating any problem that is of concern. André Prates, an updating of Mitsui and synergy with Mitsui. I think we are at a very early stage to have any opinion or a statement in that sense. I told you I went to Japan. I traveled around Asia. We were with Mitsui, the fourth greatest conglomerate in Brazil, invested in 500 companies around the world. Nevertheless, we keep on planning.
We have more of a forecast for the future, especially when it comes to Japanese companies in terms of partnership in products. It takes time. The filing in Brazil, the time for filing and the file registration and the final documentation. On another note, by the end of the year, we want to have a plan for entering other markets in Asia. A lot happening in terms of gains and synergies. At this point, it is difficult to talk because the term is very short for us to have an opinion based upon that. Another question? It is an anonymous question. The person is asking if we could explore further the leverage loss, the consortium of the Ourof ino, and net revenue. Those are good points. In general terms, we are a company focused on growth.
The pharma and vet companies, those two different industries work on a different basis than us. Even commercial expenses, they have a very important component. Our employees are based upon a labor contract based upon the labor framework of Brazil that represents a fixed cost that is relevant. Therefore, when they have losses, it affects directly the contracts of our employees and their lives. We still are convicted that it all will suffer adjustments, and will de-leverage the company at certain points. We keep on planning for leverage with fixed costs significant. From what I see, there is an end of Q&A.
If you want to go to the closing of the session, I would like to, on that note, thank all for keeping up with us on a daily basis, and for the trustworthiness that you have invested in us and the belief in our potential, our profits. Our board has a vision of long-term, very positive market perspectives, and a question that was very specific that brought together factors that we weren't expecting. I trust our board of directors, our managers, our sales team that makes the whole of the difference in the field, our external team, and our capacity of adaptation. Thank you all for being here with us on this call for results.
Thanks, Kleber, the participation of Angelo, Mr. Angelo and Marcelo, and I thank all that kept up with us on this day. Our relations IR team is always available to clarify doubts that you may have throughout the next upcoming months. You have the recording of this session. We have that available on ri.ourofino.com and Ourof ino on YouTube, youtube.com/ourofino. Maintaining our commitment to our purposes and our values. Thank you all, and see you next time.