Good morning, ladies and gentlemen. Welcome to the video conference of Orizon Valorização de Resíduos, to discuss the results relating to the fourth quarter of 2025. This conference is being recorded, and the replay will be available on the company's website, ri.orizonvr.com.br. The presentation is also available for download in the results center of the company's investor relations website. Please note that all participants would only be watching the conference during the speakers' presentations. After that, we will begin the Q&A session when further instructions will be given. Before proceeding, I would like to emphasize that forward-looking statements are based on the beliefs and assumptions of Orizon VR, and on information currently available to the company. Such statements may involve risks and uncertainties as they refer to future events, and therefore, depend on circumstances that may or may not occur.
Investors, analysts, and journalists should take into account that events related to the macroeconomic environment, the industry, and other factors may cause results to differ materially from those expressed in such forward-looking statements. Present at this conference are Mr. Milton Pilão, CEO of Orizon, and Mr. Leonardo Santos, CFO and investor relations officer. I would now like to give the floor to Mr. Milton Pilão, who will begin the presentation. Mr. Pilão, go ahead.
Good morning, everyone. Thank you very much for attending the call to discuss the results of the fourth quarter 2025 and 2025. I'm here with Leonardo, the CFO. I always start talking about the highlights of the period. This first slide shows our figures at the end of 2025 in the fourth quarter.
An annual EBITDA of BRL 504 million, BRL 500.4 million, a growth of 15% year-on-year, basically driven by residue, because the biomethane plants contributed very little to the results of 2025. Now, this quarter, they will start to strongly contribute. This shows that the company remains as an avenue growth in waste, especially coming from increase in price volumes, increased margins due to the reduction of operational costs that drives a strong growth, even in the division of landfills that only works based on a margin gain. So, we have an EBITDA of BRL 134 million, which is almost 40% higher when compared to the same period of last year. But there is a growth of carbon credits here that was important. On the right side, I talk about the predictability in the final disposal.
There was a growth in IPCA of 3.9% of the average price, plus 8.9 million in volume. There is an average price curve. There's a lot to be delivered still, but we are in this curve constantly, and the recurrence in the sales of carbon credits is very important. That continued throughout the quarter. So, we went back to selling carbon credits continuously. So, BRL 35.5 million in carbon credits sold last year at around $6 of price. So, that shows that, again, we are entering a sales continuum that will be seen throughout 2026. In terms of capital structure, that is solid. We will discuss that further. We have a low leverage and an extended debt profile. We had a follow-on offering on May 2025, and we raised BRL 635 million.
There will be a new round at the beginning of next year. There is still room in the balance sheet for organic and inorganic growth, especially after the closing of the acquisition of Vital, which will improve the space for further organic and inorganic growth. The evolution of the biomethane. The results of the delay of the beginning of the operations of Jaboatão and Paulínia plants, there was a delay, of course. But the good news is they are now in operation, and we have a major event with the governor and major stakeholders of the region in Jaboatão. The plant is operating at its maximum level. It is now operating at 80,000 cubic meters per day, so it is very close to the 110
upper limit. It is CapEx online. OPEX operating slightly below what was predicted. So, we have the completion of the implementation stage of the biomethane plant, which was very successful in terms of OPEX and CapEx. The delay of the beginning of operations was a problem of adjustment of the pipelines to distribute the gas. So, we had to step by step, increasing the output of gas because they had to adjust the pipelines for their hundreds of customers that buy biomethane. So, there was a ramp-up that was driven by Copergás. The plant had capacity to be operating it since November. But the important news is that is in the past. To its full capacity. We should attain 100,000 cubic meters in the next two or three months, according to Copergás plans. So, that is a successful attainment that will have good results for 2026.
In addition, the plant of Paulínia is also in operation within the expected CapEx, with an operating OPEX slightly below what we projected, and Paulínia is already delivering 100,000 cubic meters per day. So, they have two plants in operation that will provide excellent results in 2026. Now we talk in the next slide about Vital. Vital, we all took part in December last year in the signing of the agreement. We had the incorporation of Vital and in the exchange ratio of 70% Orizon and 30% Vital payment in shares. With the corporate governance in which we will have the casting vote, and to appoint the chairman so that the management of the company can remain the same way that Orizon was being managed recently.
There are many synergies mapped will improve the projects of integrated management, reduce costs and increase volume, capturing of biogas and sales of carbon credits, efficiency and dilution in SG&A and optimization of the capital structure. Because once Vital is integrated and incorporated, we will deleverage the company even further and open more space in the balance sheet. So, this would be a transformational incorporation that will be major given the size of the company and with the prospects of multiple growth as it is incorporated in the platform of Orizon. In Slide 3, we talk about the capacity auction in 2026. The two plants, the Jaboatão and Paulínia, that became operational this first quarter, left two plants that were invested by the company that would be shut down when these two biomethane plants are at their full capacity. So, we had the capacity auction.
Orizon got ready to enroll in this auction to look for opportunities. We won the auction with the three plants that will bring for the assets that had been amortized already at an annual fixed income of more than BRL 100 million. We are talking about a VPL that was not in our net present value, that was not in our radar. The capacity of ours and to take part in this auction brought an additional value for shareholders with these three assets that are already amortized and will provide recurring revenue. Now finally, I have gone through these two plants. We have made opening ceremonies in Paulínia with the Governor Tarcísio three or four weeks ago. Tomorrow, we will have the Governor of Pernambuco in the opening Jaboatão. Of course, these are more of a celebration event. The plant is already in operation.
In addition to this celebration event, we have invited several investors, and we thank those who were able to attend. Several investors will attend our plant event tomorrow. We will have a Biomethane Jaboatão Day tomorrow so that investors can see on-site what I am talking about. Your CapEx, it is in line. OPEX operating below expected. What is the production line? You can visit the plant. It will be a very interesting opportunity because from a distance, you cannot see the size and the beauty of the operation and the project. We will have a live event tomorrow with investors taking part, attending in person. I will hand the floor to Leo, who will talk about the financial highlights of the fourth quarter in 2025.
Thank you, Pilão. Good morning, everyone. I will start with the operational highlights.
We start talking about the volume of waste and I think we had an important growth this year of 2025 and also comparing 4Q25 to the 3Q25. In energy generation and carbon credit, we had a decrease that was linked to the implementation of biomethane plants. The biogas was redirected to biomethane, so disconnected from thermal plants and moving to biomethane. There was a temporary adjustment in carbon generation and generation of energy in general, because the gas was generated to biomethane and the thermal plants will be contracted in the capacity auction that we won. In biogas capture, there was a drop when compared to last year, which is also linked to these adjustments given the biomethane implementation, but it is in line with the third quarter of 2025. In the next slide, we show the evolution of the net price for final disposal.
We made small adjustments since yesterday, adjustment in prices. The reported price, we see a drop when compared to the last quarter, and the growth when compared to last year. Nothing structural, so we do not see any yellow flag here in terms of growth above inflation. If we look at the fourth quarter of 2025, we had a recomposition of price of above approximately BRL 1. When comparing year-on-year, that would be a stronger growth. But we see prospects of real gains, actual gains in price, and we expect that for 2026 also. So, a good performance of IPCA + 4% per year-on-year. Regarding the financial highlights and net revenue, that is 15% higher comparing the 4Q25 to 4Q24, a gain in gross margin and EBITDA significantly bigger when comparing 4Q25 to 4Q24, and slightly bigger comparing 4Q25 to 3Q25. CapEx. No news here.
Basically, the investment level is maintained with the Barueri project and biomethane that start operating. Barueri started operating in 2027. We have the implementation of biogas plants and also treatment plants, and these two things will be reverted on the short run. On the next slide, we talk about capital structure. We had a follow-on offering in 2025 and the liability management transactions in which we had a reduction of capital cost and extended the debt maturity and the bridge loan for Paulínia was settled because we signed it, made the first disbursement in Paulínia at the end of the year. We made two important operate transactions to increase the maturity. So, we have a capital structure that is quite balanced and ready for 2026 and coming years.
I would like to remind you that with the incorporation of Vital, we create even more room in the balance sheet to capture further growth opportunities. We have the subscription bonus from the last follow-on offering that will be converted in the first half of 2027. I think I will turn back the floor to Pilão for prospects, and then we will open for the Q&A session.
Well, prospects for this year. First, given the importance, the incorporation of Vital, because that is very important, we expect to close the transaction in the same term between the second and third quarter. We are getting ready for this closing because given the transformation that is expected. Also, we expect to capture further synergies when the two companies are operating together. That will certainly be transformational for Orizon.
We will consolidate our position as market leader and also as a platform for valorization and treatment of waste. We will have an even greater amount of waste under management. The second point, we have been asked if after the consolidation of Vital, we would stop the M&A plan and what are we going to do with such an asset light balance sheet, because after the consolidation, we reduce leverage with a very asset light and capital structure light balance sheet. Well, the M&A structure will be enforced. We have not stopped that, and we do not intend to do so. We expect more inorganic growth for this year with further acquisition of landfills. So, this is not an agenda that will stop for now. Of course, the focus of the company is 100% on the integration of Vital, given the size of this transaction.
But the M&A area continues to work and during the year, we will probably have further acquisition of landfills to further boost the inorganic growth of the company. For biomethane, I have explained that we have two plants in operation and in ramp-up. For implemented, those who will visit Jaboatão will be able to see that in person. This year, we will have major results and achievements coming from these two biomethane plants, consolidating the results they can bring for the company. Obviously being able to multiply that to other plants that are under construction. We have four plants that are being implemented and then we will provide results for coming years. The waste management plant is also on track, and we expect to begin its operation in January of 2027 with good results for the company.
This is a plant that is being built for three years and will be a landmark in the waste transformation in Brazil. As for waste, in terms of expectations for this year, we will have very good results in terms of volume and price once more. We had price reviews already executed for the first quarter and further reviews contracted, and we expect to attain good volumes, especially coming from ecoparks ramp up. In carbon credits, you should expect recurring sales every quarter. I think that the carbon agenda is consolidated and will provide sales results in carbon credits, because there are several projects registered and we have a good inventory of credits, so that the commercial area could have a good time delivering such credits during the year. Okay, that is it. So, let us open for questions and thank you once more for attending the call.
Thank you. We will now start the Q&A session for investors and analysts. If you want to ask a question, please press the reaction or the raise hand button. If your question is answered, you can leave the queue by clicking on lower hand. Please hold while we collect the questions. The first question comes from Maria Carolina Carneiro from Safra.
Good morning, everyone. Thank you for the call. If you could, give us an update on the timeline for approval of the merger with Vital. What should we expect during this year? What is your expectation? Also, what is your strategy after this event? Because we are talking about a change in the company's portfolio. If you could tell us what the main drivers for growth are . I know that you are incorporating a new business segment, but what is your priority for this year?
Hello, Carol. I will start and then I will send the floor to Pilão. It is hard to talk about timeline to set on stone because it depends on CADE and the granting authorities and third parties. Based on what we see in the market and third parties, we believe that this should happen between the end of the second quarter and the beginning of the third quarters. That is not set on stone, but that is the best expectation we have. If things go faster than expected, maybe earlier. But this is a good scenario.
As for synergies, Carol, there are several. The incorporation of Vital, differently from other mergers and incorporations in other industries, brings a company that is very similar to Orizon in terms of consistent results.
Those who have looked at the results of Vital, disclosed yesterday, I guess, could see how similar they are to the type of performance that Orizon has delivered for some years now. So the first beauty of these situations that we expect to have assets that will be merged, that will create a platform with another size, and that will have much bigger synergies. What are these synergies? First, the synergies in landfills, because we have 18 and Vital has another 12 landfills. So, we have important synergies regarding operational flow. Since Orizon does not have other activities in the area, it is specialized in having an exceptional performance in cost per ton in the operation of landfills, as well as in transformation of waste per ton of biogas.
We see some significant opportunities in the 12 landfills of Vital that will provide gains for the new platform of operations of the company. On the other hand, Vital provides an expertise we do not have, which is of integrated management. The integrated management expertise will help us to multiply the value we can extract from each ton of waste. When you operate only in the valorization from the destination onwards, as we did, there is a major limitation in terms of what you can extract in terms of BRL per ton for each waste. With the integrated management, you add other services that can multiply it by up to three times the generation of BRL per ton for each ton of waste. Maintaining, likewise, the landfill as the barrier to entry.
If the landfill is the hub, integrated manager can come as a PPP or a concession and add value to waste, having the landfill to protect the margins and to have an important return for shareholders in the long term. This is an important drive, and Vital has expertise because they have a controlling interest in the largest concession of the country in integrated management. This will add a lot to our platform. In coming years, you will see the company implementing this type of contract in the 18 landfills that we have under our operation. In addition, there are traditional synergies, such reduction of SG&A, lower scale costs, capacity of gains in supplies, because you have a much greater scale for procurement of the materials we use to provide the services. There are several gains that will come as a consequence of the incorporation.
You will certainly see a platform that will be able to maximize joint gains.
Okay, wonderful. Thank you.
Our next question comes from Chihi Maki. "The company sees the opportunity to recover critical minerals and rare lands based on waste, such as electronic waste, RSU. Is this a front considered for the future or are you doing this in this operation?"
Thank you for the question, Chihi. Yes, this is Leonardo speaking. We do see the recycling of materials as an interesting avenue. But our main focus today is on things that we operate and we master. We see the returns coming in a shorter term. Integrated management, carbon credits. We are making partnerships with third parties also, but we do not have any material projects in those fronts for now. Thank you.
The next question is from João Pimentel from Citi.
Good morning. Just about the transactions.
After the closing, do you see any prospect of questions raised by CADE in terms of market concentration, since in some assets there is an overlap with the assets of Vital? Is there anything in that area in your radar?
Hello, João. This is Leo speaking. We are quite comfortable. There is a process that is public. You may have had access to that in terms of progress. We provided the material to CADE. But we are complementary companies, so we do not believe that this will trigger any issues at CADE. We cannot anticipate what the final decision of CADE will be, but we do not believe that there is nothing that will place the operation at risk. The process is according to ordinary procedure at CADE, and it is supposed to be a simple process. Here, we are talking about infrastructure projects, that logistics is the main barrier to waste management.
Thinking about the generator and destination, the disposal cost. You have to take into account the logistics costs. We do not see any significant aspect that should have this concentration at risk. Our lawyers believe that there will be no major problems.
Okay. Thank you, Leonardo.
The next question comes from Felipe Lima.
About Vital Engenharia Ambiental, I saw that you reported the figures of 2025. Could you comment if the results were in line with what was expected?
Thank you for the question. This is Leonardo Santos speaking. Yes. When we disclosed the incorporation, the revenue seemed a bit stronger, but it was more because of the macro vision. It is a bit lower, but the margins are stronger naturally, because the EBITDA is slightly bigger.
The way they reported it and also feeding their websites with audited numbers, that gives a comfort to Orizon Valorização de Resíduos because we were very comfortable at the due diligence phase, and we knew the company well, but also to investors. Investors can confirm the figures and the numbers that were disclosed at the time. They are pretty much in line, slightly above. The net income is much higher, and the company has a very asset-light, and is able to capture any opportunities for growth after the transaction is finished.
Please hold while we collect the questions. Next question comes from Carla Golovsky.
In the opening talk, Pilão commented Jaboatão have a limit of 100,000 cubic meters per day of methane. But in the material fact, the company said that this company could reach 130,000 or 150,000 cubic meters per day. Could you comment on that?
Hello. Yes. The first contract we signed with Copergás is 100,000 cubic meters in stage 1. There is two initial stages, 60,000, and then that was increased to 110,000 cubic meters. These 110,000 cubic meters , that is what I said about this first stage. When we said 130,000 in the past, it is because we have the option at Copergás agreement. Just to remind you, the invested plant is supposed to operate between 100,000 and 110,000 cubic meters. The contract gives me the possibility of communicating Copergás one year in advance that I will increase that to 130,000. Copergás is obliged to take that. That is why we can reach 130,000. The plant that is in operation has given us good news. It is operating at an operational cost slightly below what we imagined, and it is performing quite well.
In addition, in the last two to three months, we had the limitation of distribution from Copergás. Now we have agreed to timeline or schedule in which we are operating on with 30,000 now, and we reach 60,000 and 100,000 in the next 45 days. When we get there and we will make tests and but the plant is so robust that it will be able to produce even more than 110,000. If that happens, we can notify Copergás and say, "Next year, you can change to 130,000, and we will continue with this plant." But if we do not stay with that plant for 130,000, we have already waiting a CapEx to increase another plant to 130,000 because we have biogas to produce 130,000. Today, the limitation is the capacity of the acquired plant, which is 110,000 cubic meters.
But we'll test it to see if we can operate this plant above the technical limits. Not technical in terms of problems, but the limits that were contracted to see whether we need a new CapEx to go to 130, or if we'll remain with this plant and increase its production to 130.
The next question comes from Mateus Suarez. "The company had an important year in carbon credits. What are the prospects for the next year, and what's the management opinion for the regulated market in Brazil?"
This is Leonardo speaking, Mateus. Thank you for the question. Pilão mentioned in the opening remarks that the carbon credits was a very good year, three continuous quarters reporting revenue, and we expect to maintain this pace. It's always hard to state that this will be true every month or quarter because it's on a transaction basis.
The carbon credits market is part of our structure, should be seen as something recurring from investors and the market in general. The regulated market is important. We've seen sensitivity from the federal government to create and define the rules because this would unlock further value, and there is an agenda that along with society and other companies, we were trying to drive this agenda, but we depend on the government. But we see that the government has created the basis to define that in the short run, and we're optimistic about it. This would put prices at a higher level, creating demand from other customers. Currently, we have 15 different customers this year in the voluntary market. So, the agenda would be even better if we have the rules for the regulated market defined.
Just adding, that we should see, as Leo said, a less erratic sale, a more regular sale of carbon credits. This year, we don't envisage the regulated market, because that depends on the government. The regulated market will certainly unlock the possibility of selling all our inventory. We sold 2 million credits last year. We plan to sell even more than that this year. But this, still in the voluntary market. We sold credits last year to be delivered this year, next year, and so we envisage an increase in the sales of carbon credits this year. But even so, we won't be able to zero our inventory because that is higher than could be absorbed by sales in the voluntary market. So, the inventory remains. So as soon as the market is ready, we can sell it.
When the regulated market becomes operational, we'll be able to lower our inventory at better prices. This is our expectation.
The next question comes from Guilherme Tomé from Valor Investimentos.
"Could you comment on your view for the fuels law for the future and its impact for the company? To what extent is this law considered in the decision-making process? In addition, how do you evaluate risks regarding the change in the administration?"
This is Leo speaking, Guilherme. I think that the future fuels law only contributes to biomethane. All our contracts were built based on the non-mandatory market. So, customers want to have this molecule, and we provide them. But the law creates an extra demand.
It would only add to this market that already has a supply that is not so big, and the waste market is well-positioned because we have a capital cost that is lower than other options compared to biomethane. Orizon has not yet sold biomethane for urban mobility. That will create further demand. In the short term, we should see two major groups of customers. One is the fuel for the future, and the other one looking at biomethane in mobility. In terms of investment prospects, our vision does not change. The company believes that we should continue to invest in biomethane plants after closing the first long-term agreement. We only start to build a plant in this first CapEx after we sell a contract to sell biomethane. The biogas long-term agreement, it is similar to what we will do in biomethane.
That creates another demand and one more alternative for sale for long-term agreements, and then we can start investment. That is a very important factor, but the dynamics in terms of investment remains the same. We will only invest in biomethane after we have the long-term agreement.
The next question comes from Stephan Duran.
With regards to the collection activity, the company has always said that its focus was on final disposal, and now you announce the purchase of Vital Engenharia Ambiental. How about this activity after the acquisition?
That is true . We say that entering the collection activity will be through the integrated management contracts. Let me explain that once more.
The integrated management is a PPP, or a concession contracted for the long term with a return rate that is predetermined, and the company will be the stability of that agreement, and the collection that will be part of the landfill and the valorization of waste. It is different from a standalone collection contract in which we always said we did not intend to sign, and we continue with the same opinion. You will not see Orizon entering into one-time collection agreements because these provide low margins, little barriers to entry, low return to shareholders. When we talk about long-term agreements, that is the profile of Vital Engenharia Ambiental. If you saw the material disclosed yesterday by it, collection agreements within integrated management, it is collection with investment and guarantee of a perennial contract, long-term contract. This type of contract is going to be added to our current landfills.
This is why is the collection as part of the integrated management contracts. This is where Orizon will operate, and Vital Engenharia Ambiental has expertise in it because it has several contracts in that modality, in operating with high margins and important returns to shareholders.
Please hold while we collect the questions. The Q&A session has now ended. We would like to turn the floor to Mr. Milton Pilão for his final remarks.
Once again, thank you for attending the call and the high number of participants. We are very happy with the results. We expect a very successful year in 2026. For those who will be with us in Jaboatão plant, see you tomorrow. Have a good day. The conference call of Orizon has now ended. We thank you all for attending and have a good day.