Good morning, ladies and gentlemen, and welcome to the video conference of Orizon Valorização de Resíduos to discuss the results relating to Q1 2025. This video conference is being recorded and may be replayed from the company's website at ri.orizonvr.com.br, where you may also download the presentation. We inform you that all participants will be connected in listen-only mode during the company's presentation, and later we will begin a Q&A session when further instructions will be given. Before proceeding, we would like to clarify that any forward-looking statements are based on the company's beliefs and premises and on information currently available to the company. These forward-looking statements may involve risks and uncertainties as they regard future events and depend on circumstances which may or may not occur.
Investors, analysts, and journalists should take into account that events relating to the macroeconomic environment to the company's industry, and other factors may lead to results which differ materially from those expressed in such forward-looking statements. Today with us are Mr. Milton Pilão, CEO, and Mr. Leonardo Santos, CFO and IRO. I now turn the floor over to Mr. Pilão, who will begin the presentation.
Good morning. Thank you all for attending our video conference. We are going to talk about the results of the first quarter of 2025. I will talk about the highlights and then turn the floor over to Leonardo, who is going to focus on the operational and financial results. In terms of the highlights, the first important thing is to say that once again, we have a very consistent result.
Our disposal assets continue to perform and yield very consistent results, which are in line of the expectations of the banks. Also, in terms of our results, we have seen prices climb up every quarter. We have been showing you that gate fee and final disposal of waste have increasing prices. In this quarter, the increase was 9.2%, which is the equivalent to IPCA plus 3.5%. As I say to our investors, this is something we focus on. There has been a real increase in prices. It happened in the last five quarters, and we are going to see this in the next two years. Prices are going up in line with the Brazilian market, and this has an impact on our margins and on the gate fee gains. The volume of waste has remained stable with Q1 2024.
In our 17 ecoparks, we can still see a growth by 1.5 million tons, which is going to happen in time. But this is a timeline that we don't focus so much on. We focus more on the prices. In this quarter, we didn't see a ramp-up of waste coming from the closure of dump sites, but some ramp-up is going to take place in Q2 and Q3 because of the closure of dump sites. But we see stable volumes in line with our forecasts. In terms of revenue and EBITDA, the growth was 13% relative to Q4, which attests to our constant growth. 13% relative to Q4 2024, and a revenue increase by 5%.
We also saw an increase in the generation of energy of the plants that we acquired from Ager and also gains in the circular economy segment, which we are seeing in the coprocessing plants in Magé and Sorocaba. In terms of the implementation of biomethane projects, both plants are on track and on budget. The Jaboatão plant will start up operations at the end of Q2 2025. In our results of Q3 2025, you will see the performance of Jaboatão showing up. The Paulínia plant also is an important driver of growth for the company. They account for the debt that we have, and this is now going to turn into EBITDA as of Q2 for Jaboatão and Q4 for Paulínia. You will be seeing a contribution from these plants to EBITDA and margin. The carbon credit agenda. We have news for you.
Carbon credits is always something we talk about. Investors ask us about the sales of carbon credits. Q1 was a very successful quarter in terms of quotes that we sent abroad. Today we will tell you that we sold 750,000 carbon credits to Google. We are going to be part of the account of Google in terms of lowering pollution. It is very symbolic for us to sell something to Google, but it is also the first carbon credit sale for the long term. We are going to deliver in 2027, 2028, and 2029. I have said that to some investors already. This year, we wanted to bring in contracts that would allow us to have greater visibility in the longer term, so that we could think of those contracts in terms of our business plan.
Here we have a guarantee that 250,000 tons of credits will be sold every year to Google up until 2029. In terms of the other highlights, we had the road show last week. I went to New York and had a conference with international investors. I think you are all aware of it. I just wanted to talk about the follow-on operation. The pricing was on May 9th, and it was completed on May 14th. We raised BRL 635 million. The lock-up is for two years, and the price per share was BRL 48.20. It was by Circular Holding, which belongs to EB Capital and the controlling shareholders. This has given us more power to enable inorganic growth. We had a plan to grow in terms of prices and volumes plus biomethane. This was all factored into our capital structure.
With the follow-on, we can now focus also on inorganic growth given the volume of acquisitions that we have in the pipeline, and these acquisitions should take place in the shorter term. This strengthens our balance sheet and may accelerate some other biomethane projects. I will now turn the floor over to Leonardo.
Good morning. Good morning. Thanks for attending our video conference. On this second section of the presentation, we are now on page 7. You will see the volume of waste received in our assets, 2,175,000 tons of waste, practically in line with Q4 2024 and very close to the amounts of Q1 2024. On the right-hand side, on the upper part, you see the volume of energy generated by our assets. There was a drop relative to Q4, but this reflects the startup of biomethane plant in Jaboatão dos Guararapes.
We are going to see in the second quarter the startup of the biomethane plant in Jaboatão dos Guararapes. Here, the biogas. The volumes are in line with Q4 2024 and Q1 2024. In terms of carbon credit, we saw a greater generation in Q1 2024 and in Q4 2024. In terms of financial highlights, net revenue grew by 15% relative to Q1 2024. The gross margin has increased as well relative to last year, and you see that this comes from other activities and not from the final disposal. In terms of final disposal, the margins are in line with Q4 and Q1 2024. You may ask, if you have gained in terms of price, why is the margin the same? In the first quarter, we had to transport and treat leachate.
There was a lot of rain, and this costs more. In terms of EBITDA, it was 5% above Q1 2024. On page 10, you see the CapEx of the company for Q1, a total of BRL 112 million. 12% went to the maintenance of the landfills and then expansion. Here you see where we allocated the CapEx. The biomethane plant in Jaboatão, BRL 47 million, to allow us to complete the plant in Jaboatão, which is in the commissioning phase now. In Barueri, of those BRL 36 million, BRL 33 million went to Barueri.
On page 11, you see the capital structure and the company's leverage. The current EBITDA does not reflect the maturity of the assets, the relevant monetization for Q2 2025 and the next few years, the Jaboatão biomethane, the Paulínia biomethane, or the Barueri projects. These are all impacting our leverage but are not generating profitability for the company.
Net debt over EBITDA was 3.07 in duration above six years. We have a pro forma here with the offer of Wednesday. The net debt over EBITDA will be 1.7, 1.69 times, which is a strong balance sheet that will enable us to grow. I turn the floor over to Pilão, who is going to speak about the outlook for the future, and then we will open for the Q&A session.
In terms of the outlook, I have spoken a little bit about it already, but I want to highlight some points. First, the advanced stage in terms of the acquisition of landfills. We talked about it during the follow-on road show. We have a very robust pipeline for 8, 9 million tons. A new Orizon. We don't want to acquire that in the short term.
We went for the follow-on to acquire 3 million tons in terms of new landfills to allow us to increase our volumes by 35% of volumes under management, which is very relevant. We want to complete those transactions. My best guess is that by Q3 this year, you would see the closing of these operations. Also, I have spoken about our current projects, which are maturing. You know what we expect in terms of the gain of gate fee in the next 24 months. We want to gain 25% in terms of real gains in prices in the next 24 months, and a gain of volumes in terms of 1.5 million tons in the next two years. This agenda will enable us to get the most out of our assets. We have been also executing our CapEx plan, and this is extremely important for us.
When we talk about the Jaboatão plant, Paulínia, and about the Barueri plant, once the three of them are operational, this will be the equivalent to our EBITDA of the whole company in 2024. So, these are huge figures. We will have twice as much EBITDA in the company once these three plants start to operate. If things are on track, Jaboatão should begin operating in Q2, Paulínia in Q1 2025, and Barueri in Q1 2027. So, I would like to leave it here. In the conference in the U.S., many didn't understand when these plants are going to start up operating, so I just wanted to clarify. Then the strengthening of the regulatory agenda. We had great news this week. You all know about the Fuel of the Future. There are new entrants, new demands. Petrobras is going to buy 700,000 cubic meters of biomethane.
But also on last Monday, the National Plan of Circular Economy has been approved, and this National Plan for Circular Economy has guidelines which will have to be implemented. But once they are implemented, they are in line with our expectations. So, there are provisions for a percentage of recycled material and other provisions which will drive revenue in the circular economy segment in the midterm. This is what we had to show you today. Thank you all so much for attending, and we will now open for the Q&A session.
We are going to start now the Q&A session for investors and analysts. To ask a question, press the button Reaction and raise your hand. You may leave the queue by lowering your hand. First question was asked on the website. "Congratulations for the results. They are very consistent.
I like that the company highlighted the sale of carbon credits. Are they going to be recurring?"
I don't know who asked the question, but thanks for the question anyway. Yes. Yes, is the answer. Six, nine months ago, we understood how the sale of carbon credits worked in the voluntary market. We then set up an area appropriately staffed and budgeted for, so that this staff could work around the world, travel to Europe, Asia, and the U.S., to look for clients able to buy in the voluntary market. In Q1, we had a very positive result. We have been sending out more quotes for the voluntary market. We quoted 3 million tons, a record in terms of volume quoted. So, this shows us that we have the right strategy in terms of sales.
And with this sale to Google, we understood that the conversion of these quotes into sales will happen. We have good expectations relative to the conversion of sales and that these sales become recurrent, be it for Google in terms of long-term sales or the sale of our carbon inventory, which is also being offered in the market now.
The next question is from Ms. Carolina Carneiro from Safra.
Good morning. Thanks for taking my question. I have two follow-up questions. Pilão, you talked about the intention to use the proceeds of the offering. Can you explain what is going to happen now in this new structure where you are also part of the holding, and you are also in EB Capital? There is a shareholders agreement which you have disclosed. There are some clauses there relating to leverage thresholds and major acquisitions.
Could you explain a little bit more how the company is going to operate now and maybe give us some highlights about the shareholders' agreement? Then going to the use of proceeds, you said that they would be used to acquire new landfills. What is your target? Is it 3 million tons in terms of volume? Is it one acquisition, more than one? Can you give us a little bit more color just for us to know how you're going to use the proceeds?
This is Leonardo speaking. In terms of the shareholders agreement, we have filed this at the CVM, the Brazilian SEC. It's been available there for investors. The agreement was done by the control bloc. EB Capital is part of this bloc, and it regulates the participation of EB Capital in the board. The appointees are going to be designated.
There are going to be nine members instead of seven. Things are proportional for those who have an important stake, a major stake, although not a controlling bloc. In terms of leverage, 3.5 up to 4.5, with the appropriate term. This is in line with our covenants with our creditors. Additionally, EB Capital is very aligned with the plan that we have designed for the company in terms of final disposal, energy transition, or circular economy, as long as it meets our requirement in terms of gate fee and new sorting plants. EB Capital is very aligned with the controllers, with a governance that is appropriate to the size. But the company is going to have flexibility enough to carry out the plans. In terms of the acquisitions, they're very relevant.
But before we discuss what is in the agreement, we would just like to highlight the alignment of EB Capital with the current controlling shareholders. I was there during the conversations. There are some mentions to specific expansions, but the alignment is the main point, and this is what we would like to make very clear here. In terms of the use of proceeds, if there is anything specific, we talked about this in the offer. When we talked about inorganic growth, we talked about buying landfills. It has to do with final disposal. The term of opportunity is another horizon in terms of volume. We are not focusing on a single asset. We have a large volume of assets and targets. For some targets, there is more than one asset.
This is what I can say, and we hope that in the months to come, in one or two quarters, we will be able to report on these acquisitions. This quarter and next quarter, if you have further questions, just feel free to ask.
This is Pilão speaking. Leo clarified everything, and in terms of the shareholders' agreement, the choice of EB Capital, and I talked about it in the roadshow, happened because we are very aligned in terms of the big dream for the company. We wouldn't bring in somebody into the control block. We wouldn't bring in a new member to the control block who was not aligned. We discussed it at length, and this is the beauty of it. EB Capital and we are completely aligned in terms of our big dream for Orizon in the next 5 to 10 years.
Thank you very much. That was very clear.
The next question comes from Mr. Cunha from Itaú BBA.
Good morning. Thank you for taking my question, and I have two. This week, as Pilão commented on, Petrobras presented on the results for the first public call for the acquisition of biomethane, which is now being negotiated. Has Orizon participated in this bid, and how is the negotiation going? Also, the Ministry of Mines and Energy has opened up a public consultation for the decree, which is going to regulate the Fuel of the Future. What is your opinion about the draft presented by the Ministry of Mines and Energy?
This is Leonardo speaking. The expectation was that we should participate and understand what Petrobras expected and what the result was. Yes, we did apply for the Petrobras bid, and as of May, the negotiations are going to take place.
There's going to be a consolidation of the contracts in the second semester. The signal we got from Petrobras is that the demand is for the beginning of 2026. Yes, we are looking at this opportunity within the timeframe that was announced. Relative to the public consultation, we have a new institutional director. We have hired Percy, a very experienced professional coming from the sanitation industry, and he has been advising us. We also rely on ABiogás and ABREMA, our trade associations. We do have a team that has listed all our comments. We are going to send this out to the Ministry next week. There is this public consultation on the decarbonization program, which is very important. It lists the main drivers relative to the mandatory targets for the use of biomethane as of 2026.
We, as a major producer of biomethane in Brazil, we have to make a contribution, and we will make a robust contribution in terms of comments to the Ministry of Mines and Energy next week.
Thank you very much.
The next question is from Mr. André de Mello Sampaio from Santander.
Good morning. I have actually two questions. First, could you talk about the growth of gate fee relative to the volumes? We were pleasantly surprised with the gate fees, but the volumes didn't grow as planned back then. Do you believe that there is a correlation between the two things, that is higher prices maybe hampering the growth of volumes? What happened in Jaboatão? There was a slight delay. We expected Jaboatão to start up in April. It's going to start up in Q3. Why did that delay happen?
First of all, relative to gate fee and volumes, as I have said, volumes and gate fee have different dynamics. Gate fees are aligned with the expiry of contracts, so we don't review prices without the expiry of contracts. This is a regular thing. In our portfolio, we have contracts that expire monthly. We have hundreds of contracts, and every month, some of them expire. There is a gain in prices, which is more regular because every quarter, some contracts expire, and our policy is to increase the gate fees above IPCA. That's why you see this transfer into our bottom line. There is less seasonality, therefore. In terms of volume, and I have reiterated that, the volumes are seasonal. This is what happens. We have a gain of 1.5 million tons above the 9 million that we have.
1.5 million is the expectation we have in the next 24 months in terms of an increase in volume. They have to do with the closure of dump sites. This is not regular, this is seasonal, but then it is a big impact. A dump site closing here, a dump site closing there. Six or seven of our assets can receive additional volumes because of the closure of a dump site. I will give you an example. Goiânia, for example. You will see that there are two dump sites in Goiânia and Aparecida de Goiânia, which are going to close at some point. Those assets receive 10 million tons per month, our assets. Once the dump sites close down, it is going to go to 50 million tons. That will be seasonal. In Juazeiro, we are waiting for a dump site to close down as well.
We have peaks and troughs, less predictability. We know that dump sites are going to close. Sometimes the thing drags on for a while, depending on the local situation. This is how it works in terms of volumes and gate fees. About Jaboatão. The plant is ready. There was no delay in getting the plant ready. It is ready for commissioning, 100% ready for injection. We are just waiting for the MP to give us the permit. We forgot to include the permit of ANP to authorize us to make the injection. This is the photo of the plant. It is 100% ready. We are just waiting for the ANP to give us the permit to start injection. Edu is on track. It is on budget, in line with the plan. We are just waiting now. We are expediting that at ANP.
There is a drag there of two or three months after the plant is ready. I am going to explain you how the process works. We have gone through three approval gates at ANP. They should come and visit the plant in the next few days. Then they are going to give us the permit to operate the plant. In the next 30 days or 40 days, we will generate biomethane, but instead of injecting it in the ducts, we will send the methane to ANP, to the lab, so they can verify the quality of the biomethane. In 30 days, they are going to give us the permit to inject. This is the final stretch where we need the permit by ANP.
That was very clear. Thank you.
Ladies and gentlemen, to ask a question, raise your hand. The Q&A session is now ended. I now turn the floor over to Mr. Pilão for his final remarks.
Once again, thank you all very much for attending en masse. It is always good to see that on a day so full of results, presentations, we have this big audience. Thank you so much for participating. If you have any questions, just reach out to our IR department. The Orizon video conference is now over. Thank you all for participating. Have a lovely day.