My name is Marcelo Milliet. I'm the CEO of Oi. We are going to have Rodrigo Aguilar, our CFO, and some members of our executive board with us, as well as our investor relations team. I'm going to be using this first chapter of the presentation to recap some important steps the company took in 2024, and also to clarify what the new Oi is going to be like in the future. In the second chapter, we'll go through the fourth quarter's figures, and then we'll open up to your questions. I'll show you the slides as we go through the presentation. Now, this is going to be slide number four. We'll look at how the reorganization plan has been performing or performed in 2024. The new Oi has made progress in the central pillars that are absolutely pivotal for the company to be sustainable financially in the long term.
After intense and lengthy negotiations, the approval of the new plan for the court-supervised reorganization allowed the company to restructure its financial debt, reducing the net debt, and also with a strong reduction of the credits with the take-or-pay suppliers. That was also possible in spite of the new financing plan. It's also a very important pillar in the plan and allowed the company to have enough liquidity to go through the cash consumption period that was still impacted by the legacy operation. In the fourth quarter of 2024, we concluded the capital increase, where the credit supporters of the company and the court-supervised reorganization plan capitalized out of their credits, becoming holders of just under 80% of the company's stockholders' share. We elected a new board of directors, thus implementing the new governance provided in the reorganization plan.
In the regulatory pillar, we have made progress as well. We signed an authorization term that allowed for the migration from the concession regime into the authorization regime. With this migration, we accelerate the capture of efficiencies in the services of the legacy infrastructure, with a number of subjects associated with landline telephone. We made progress in the asset sales pillar as well. We concluded the processes of the UPI Client Code, real estate and properties, and towers, and the UPI TV. The UPI Client Co specifically was sold to V.tal in an operation that was BRL 5.7 billion, without a cash component, but with the credits pertaining to the contract of the FTTH and the debentures of the 13th issuing, in addition to the delivery of new shares of V.tal to the company.
After the completion of this transaction, Oi now holds a 27.5% stake in the subsidiary. Moving on to slide five. Here we have the main components of the services that remain with new Oi. They continue to make progress, focusing on the company becoming an increasingly lean and efficient company. Each one of these components has different profiles and unique value generation capabilities. The first component is Oi Solutions, a digital solutions orchestrator integrating telecom and ICT services for the corporate client market, B2B. The second component groups together Oi's wholly owned subsidiaries, Serede, Tahto, and Oi Services. The first operates in field services, the second in call center operations, and the third was recently created as part of the sale of the UPI Client Code to provide BPO services to both Client Code and the company in HR, finance, information systems, and technology operations and logistics.
These subsidiaries have great potential for growth and value generation. Oi also holds a significant stake in Brazil's largest neutral fiber company, V.tal, which represents a great value for the company in the future, as V.tal consolidates itself as the operator of the largest pure fiber infrastructure in the country. Finally, the third component is the legacy services. In that subject, the approval of the authorization term, making it possible for the migration of the concession to the authorization regime, will allow the resolution of the legacy and various issues associated with the concession of the landline telephones and reversible assets, reducing regulatory costs. In addition, the company is seeking to compensate for the economic financial imbalance and the unsustainability of the concession through an arbitration process that is still ongoing. Slide six. We have a little more detail on the Oi Solutions business.
That is the main service component of new Oi and the main focus for revenue growth. It is a core business for Oi, and it has been delivering significant results through its conversion into an ICT player, leveraging its existing customer base, which already covers more than 80% of the largest companies in Brazil in its portfolio. By combining connectivity services with information technology offers, Oi Solutions has shown a transformation in its revenue mix, driven by strong sales of ICT solutions, together with long-term agreements and lower CapEx.
Connectivity, combined with comprehensive solutions in the Oi Solutions portfolio, brings a substantial impact on the customer's value chain, taking advantage of its major market differentials, combining the experience of those who already dominate the telecom and the IT markets in partnership with strategic partners, focusing on customer service and proximity, and offering customized solutions, becoming the basis for sustaining the growth of the segment. Let's now look at the fourth quarter highlights. In the fourth quarter of this year, revenue performance was once again impacted by the accelerated dynamics of reduction in legacy services. In addition to a more selective approach in the bidding processes for new contracts with the companies and government at Oi Solutions, with the aim of improving business profitability, new Oi reported a revenue of BRL 625 million, down 33% yea- on- year, mainly due to the impact on the reduction of non-core revenue.
Oi Solutions' revenue totaled BRL 409 million, amounting to 65% of our total revenue. Oi Solutions maintains a commercial strategy of prioritizing margins and focusing on segments with higher value added. As a result, approximately 34% of its revenues already come from information technology services, which are more important to customers and have a high growth potential. The UPI Client Code and the UPI TV. With that, the company began to record the results of these businesses as discontinued operations or held for sale. Revenue from the discontinued operation totaled BRL 1.3 billion, with the fiber business accounting for BRL 1.1 billion of this total amount. In order to at least partially offset the impact of the legacy, the company is continuing to seek operating efficiency and capital allocation. The implementation of new initiatives in this regard resulted in a 38% reduction in operating expense and investments this quarter.
The reduction in capital allocation stresses a more selective stance geared towards maximizing profitability, optimizing the resources used in operations.
Now let's move on to slide nine, where we can see the evolution and details of our revenue. Consolidated net revenue fell by 17.4% year- on- year. Now, on the right-hand side of the slide, you can see the evolution of our revenue, showing the services that will remain in the new Oi after the conclusion of the sales of the fiber and TV businesses. Once again, this result was impacted by the dynamic of the non-core services, which now account for only 35% of new Oi's total revenue. Oi Solutions' revenues, which already account for 65% of the total revenue, fell by 24.3% year- on- year.
As I said earlier, this result reflects the continued reduction in demand for legacy services, in addition to the more selective sales strategy focusing on profitability and higher quality in the new sales, aiming at healthier margins for the company. Now let's take a look at slide 10. Here I highlight the performance of Oi Solutions, which has been showing growth in higher value-added services, despite the impact of lower demand for legacy services and a more selective sales approach. Contributing to the year-on-year reduction in Oi Solutions' revenues are the telecom revenues, which include more commoditized connectivity services, as well as other revenues, which concentrate copper-based services. On the right-hand side of the slide, you can see some of the information and communication technologies verticals, or ICT, which are our main growth drivers.
Based services revenue posted a solid year-on-year increase of 11%, while the unified and collaborative communications revenues grew by 20%. The ICT revenues accounted for roughly 34% of Oi Solutions' total revenue in 4Q 2024. Oi Solutions begins 2025 by strengthening its presence in the cloud computing segment. In the last months of 2024, the company won bids and signed contracts that should have a positive impact on the company's results from 2Q 2025 onwards. Now let's move on to slide 11. Here I would like to highlight that in 4Q 2024, efficiency-centered initiatives generated considerable year-on-year savings, with reductions in virtually all manageable cost lines. Routine operating expenses came to BRL 2 billion, a 16% reduction year-on-year. Excluding rental and insurance costs, which reflect the dynamic of the fiber operating model, routine costs and expenses showed an annual reduction of 37.7%.
On the right-hand side of the slide, you can see that this reduction was supported by specific actions that the company adopted on three main fronts. In sales, we decided to adopt a strategy focused on higher quality and preserving profitability, rationalizing selling expenses through policy changes and also channel restructuring, promoting greater efficiency in customer acquisition and intensifying the use of digital media. This strategy generated reductions in expenses with billing, sales, customer relations, advertising, and also an improvement in delinquency levels. On the legacy front, we were able to capture efficiencies through new management initiatives, while at the same time respecting the limits set by regulatory requirements in force at that time. This resulted in a 30% year-on-year reduction in network maintenance expenses. We continue to make intense efforts to renegotiate content acquisition contracts with a special focus on those related to legacy technologies.
These initiatives have already generated annual reductions of 25%-30% in this expense line over all quarters of 2024. We're also committed to achieving a leaner, simpler, and more agile organizational structure, which is in line with the ongoing transformations. We posted an annual reduction of roughly 14% in the total number of employees. Personnel costs increased by 9.7% year-on-year due to the one-off effect caused by the contract terminations of employees who migrated to client code. Excluding this effect, this item would have decreased by 6.3% year-on-year. Finally, we continue to implement strict cost control, focusing on eliminating non-core expenses that led to significant reductions, as we can see in the G&A line. Now, on slide 12, we can see more details about the routine EBITDA and CapEx.
Routine EBITDA continued to be negatively impacted by the losses from the legacy services, as I mentioned earlier, but there was an improvement quarter- on- quarter. Looking forward, we can see significant opportunities for improving profitability through additional cost reduction initiatives, especially in relation to legacy services, and especially after the migration to the authorization model at the end of November, in addition to resizing the operation after the sale of Oi Fiber, with the consequent reduction in associated costs. Now, on the right-hand side of the slide, we can see that the fourth quarter CapEx came to BRL 108 million, a 41.8% year-on-year reduction, and accounting for just under 6% of our revenue. This reduction was driven by the gradual implementation of efficiency initiatives and optimization of investment allocation, aligned with a more selective stance and focusing on maximizing profitability. Now, let's take a look at slide 13.
Here we can see the cash balance of BRL 1.8 billion at the end of the period, a 35% increase in the quarter. The cash is made up by three elements. The first is freely available to the company. The second is for the purpose of fulfilling specific contractual obligations. The third element is to be released upon the fulfillment of certain conditions precedent. The operational cash burn was more than offset by the net redemption of a deposit in court as part of the agreement to reduce the debt with ANATEL. Also, in non-core operations, the company continues to work on funding alternatives that can offset the cash burn in the quarter, such as the advance of credit rights, such as the surpluses from Sistel's PBS-A plan.
The positive result in working capital came basically from expenses that were recovered during the quarter, partially offset by payments to Class I creditors, as provided for in the approved reorganization plan. Payments of interest-bearing liabilities were reduced by 78% year-on-year due to the application of the new take-or-pay conditions that we negotiated under the reorganization plan with satellite suppliers. Now, finally, on slide 14, we can see that the progress made by the company in 2024 was not insignificant. We made substantial progress on critical fronts in the operation and the execution of the court-supervised reorganization plan, achieving great results towards Oi's operational and financial sustainability. Looking forward, new challenges will for sure come, but we will take action to minimize the impact of the legacy business on our cash flow after the migration to authorization.
We'll focus on the recovery of B2B revenues and profitability, the acceleration in sales of real estate assets, and optimization actions and search for additional liquidity for the company, such as the recovery of credit rights. As we have always emphasized to all of our stakeholders, this entire transformation process has been conducted with transparency and is part of our commitment to building an operationally viable company focused on operating in digital services and technology solutions for the Brazilian corporate market. Thank you very much. Now we're ready to take your questions.
Agora, iniciaremos a sessão de perguntas e respostas. Para entrar na fila, para fazer perguntas.
We'll now start the Q&A moment. To ask a question, please click the Q&A icon at the bottom of the screen. Please write your name and your company's name.
Once your name is called out, a pop-up will ask you to unmute your microphone so that it can ask you a question. You can also send your questions in writing.
A nossa primeira pergunta é do Guilherme Borges. Guilherme, iremos abrir o seu áudio para que você...
Guilherme Borges will ask the first question. Guilherme, pode prosseguir, por favor. You may unmute your microphone now.
Olá, me escutam?
Can you hear me? Yes.
Olá, Marcelo, tudo bom? Muito prazer.
Hello, Marcelo. It's great to talk to you, sir.
Na verdade, eu fiz conjunto de perguntas aqui.
I actually asked a set of questions in writing.
Vou começar pelo seguinte.
My first question is the following.
Em bases absolutas ou percentuais,
can we measure what the saving is going to be with the sales of Oi Fiber, with the landline, telephones, and with the Oi TV?
What would the estimates be? When do we expect, and this is my second question, to have a ruling from the arbitration? If the company can give some details on the property sales, and also if you can share information on that front and what the plan is. Thank you.
Just a second, please.
Também fiz as perguntas aqui pela plataforma escrita, tá?
I asked the questions using the platform, so I send them in writing too.
Sobre as operações que foram descontinuadas, né?
About the discontinued operations. Fiber and TV. There is a specific note, note 28, in the P&L that can answer your questions. The arbitration is a process that we don't know exactly when it's going to end. We can't know that.
We would hope that this year, before this year is out, at least for a first initial decision, but the final decision may take years. The term or the deadline is rather indefinite.
Marcelo, te agradeço. Se eu ainda puder, só complementar pouco.
Thank you, Marcelo. If I may ask one more question. How about copper? Has everything been sold to V.tal or what is the plan regarding the remaining copper? And is there any chance that a company might publish any guidance in the coming months, or for the coming months at least?
Não sei se o Marcelo recebeu minhas últimas perguntas.
I'm not sure if Marcelo heard my questions.
I did hear them, yes.
Nós temos hoje compromisso de venda da totalidade do próprio subterrâneo.
We have committed to selling all of the underground copper to V.tal. This is still ongoing.
The underground copper is still being extracted. It is a difficult process. The air copper that will continue with Oi, as it is extracted, will be negotiated as scrap in the national and international markets.
A respeito do guidance?
How about the guidance?
Com relação à pergunta que foi feita sobre o valor do cobre. About the copper still, about the value. I'd just like to clarify that I used to be the CEO of Paranapanema before I joined Oi. It is a company that works with copper. The London Metal Exchange will set the price of copper. This is a value that fluctuates. I have the cost of extractions, and we need to deduct that from the potential revenue.
Marcelo, de antemão, já agradeço as respostas, tá?
Thank you very much for your answers, Marcelo.
Vamos à nossa próxima pergunta.
É do Carlos Eduardo Gabriel.
Carlos Eduardo Gabriel will ask the next question.
Quem quer realizar a sua pergunta?
Y ou may unmute now, Carlos, and ask your question.
Dando seguimento, as perguntas enviadas através do Carlos são três perguntas.
Carlos asked three questions in writing. The first question is: the arbitration decision, a partial at least decision, when is it expected by? What is it that Oi needs to do to leave the court-supervised reorganization plan? E a terceira pergunta? The next question has to do with the copper that is still to be sold, how much copper there is left. The third question is tributary credits that are to be sold and what price they would have.
As for the court-supervised reorganization, even though the law sets a period, what normally happens is after a number of steps have been taken, only then can the company leave the court-supervised reorganization. I also spoke about copper already, and so it's a variable amount depending on the London Metal Exchange. In the last 12 months, they have varied from $8,000-$12,000 per ton. This is a market that is impacted by the international market, including China. It is very difficult to say exactly what that asset would be worth at this point. I'd like to remind you that the extraction cost is high. Much of what is left in copper is still to be extracted from more remote regions, and that increases the cost of the extraction. We have already extracted what is in more or in closer region.
The revenue arising from the copper sale as scrap is impacted by the maintenance costs of the posts and also the extraction costs. These are part of the obligations we need to comply with that were part of the reorganization plan already.
Vamos à nossa próxima pergunta.
Next question. Nuno Fonseca.
Parece que você possa realizar a sua pergunta.
Y ou may unmute yourself, sir.
Pode prosseguir, por gentileza.
Nuno, please.
Dando seguimento à pergunta do senhor Nuno.
Good morning. He sent this question in writing, so we're going to read it. Good morning. I am a creditor type Option 1 , and I have been a shareholder since 2014. First and foremost, I'd like to congratulate you on the new management board, and I'd like to wish Mr. Marcelo Milliet a whole lot of success in taking the helm of Oi.
As for the sales of ClientCo , can we expect a positive routine EBITDA in the second quarter 2025? As for the reorganization plan, could Oi have an additional credit of up to BRL 1.5 billion, and what is the expectation regarding that matter? The reorganization plan sets forth that in up to 12 months after the approval, there should be the property sales. What is the status of the property sales and the revenue? The financial debt is clear, but it would be also important to understand what the status is and what the debt, the creditor's debt, TOP, without collateral for 2024 and 2025, reinstated Option 1 would be. What is the current situation for that and for the suppliers? How much has been amortized already with the property transfer? ClientCo had a negative EBITDA that can be seen in the P&L.
When ClientCo left Oi Operations, we can't just assume that it's going to become positive in the second quarter, also due to the operations focusing on the legacy. As we're a publicly traded company, we can't yet say or publish any forward-looking statements around this matter. Around the additional BRL 1.5 billion credit, even though that's in the reorganization plan, it's not that easy to make it happen, as most of the company's guarantees or collaterals have already been taken up by other debts, by other credits. We will present the balance of the property sales at the right moment in the reorganization plan so that every stakeholder can be privy to the information at the same time. We have companies such as Deloitte monitoring the progress, auditing them to make sure that the sales are carried out transparently and as they should.
As for the non-financial debt, this information is available in the P&L.
Temos uma última pergunta.
It is from Michael Maffra. We have one last question from Michael Maffra. In percentage terms, how much do you believe that Oi will get from the disposal of the real estate assets?
This is a very difficult question. It is so difficult because the properties that are up for sale are very different in terms of location, in terms of the state they are in. I really can't say. I don't even have a ballpark number to give you. We have rural assets. We have small properties. We have properties located in safety risk zones. We have larger properties as well.
Although it is a high number of properties, I do not think I can give you a ballpark number considering the group of assets that are still up for sale.
Thank you very much. This concludes the Q&A session. I would like to turn it over now to Mr. Marcelo Milliet, the CEO of the company, for his closing remarks.
Thank you very much for your time for attending our earnings call. Of course, we are at your disposal in case you need more information. Please make sure to access our investor relations website. In case you need more information, in case you have questions, you can access www.oi.com.br/ri and also through our email. Feel free to contact us with further questions. It will be a pleasure to address all of your questions. Thank you very much. Have a good day. Obrigada. A conferência de resultados.
Thank you.
This concludes Oi's 4Q24 E arnings Call. For more information, please access the company's investor relations website at www.oi.com.br/ri. Thank you very much. Have a good day.