Quarter of 2023. This video conference is being recorded, and the replay can be accessed on the company's website, www.orizonvr.com.br/ir. The presentation is also available for download at the result center of the company's IR website. We would like to inform that the participants attending the video conference will be in listen-only mode during the presentation. We will then open the Q&A session when further instructions will be provided. Before proceeding, we would like to clarify that any forward-looking statements are based on the beliefs and assumptions of Orizon Valorização de Resíduos management and on current information currently available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists must understand that events related to the macroeconomic environment, industry, and other factors could cause results to differ materially from those expressed in such forward-looking statements. Here with us at this video conference are Mr. Milton Pilão, CEO of Orizon, and Mr. Leonardo Santos, CFO and Investor Relations Officer. I would now like to turn the call over to Mr. Pilão, who will start the presentation. You may proceed, sir.
Good morning, everyone. Thank you for attending our call. We're going to start discussing the results for the first quarter of 2023. We always use the same script. We divide the presentation into three pillars. First, the highlights of the period, and then the financial and operational highlights. At the end, we'll talk about our growth strategy. On the next slide. We like to show our business platform.
This is the business strategy for our company. This is how we organize with different divisions. This is for the investors to remember that the company today is organized like this, in terms of divisions and the results that we see at this time come from OMA Ecoparks. We have the three other divisions of gas, renewable, green fertilizers, and waste to energy, which are divisions which are underway, being developed at the company. These are divisions that along the years will multiply the values of our assets, all comprising our base. Moving on to the highlights now. We have three highlights, and these are the most relevant so that the presentation will not be too long. First is the acquisition of Ecopark Santa Luzia in Minas Gerais State. It's the 15th Ecopark that has been acquired.
It involved BRL 25 million , and BRL 16 million have already been invested up to the end of the first quarter of 2023. This is an amount that has already been disbursed by the company that would account for 50% of this asset. You can see its picture to the right, and you can see that the BRL 16 million were used in the CapEx of this asset that you see on the right. It's an asset whose operation has already started in the first half of 2023, and it has the prospect and the capacity to receive up to 1,500 tons of waste per day. The target public is the Metropolitan region of Belo Horizonte, and there are some agreements that we have already executed. This is the reason why we have already started its operation, and its useful life is very significant.
The receiving capacity is about 1,000 tons a day, and 1,500 would be the full capacity, and the useful life of 33 years. This type of asset has a very good return to the company. With 1,000 tons, we can have a revenue of BRL 25 million or BRL 30 million per year, only considering the waste and not to consider the other associated benefits. This is for you to understand the EBITDA that was invested and that was purchased at BRL 25 million. As I said, along the year, we are going to continue going after this type of acquisition in order to add value to the company and to the shareholders. Next slide, we talk about this biomethane sales agreement. On this slide, we will discuss the sales agreement of biomethane to Copergás for the Ecopark Jaboatão dos Guararapes.
This is very significant because one of the questions that we receive from our investors and also from our stakeholders is how much the price of biomethane would be. We made a sale of biomethane, a significant amount of 60,000 [inaudible] . This will be valid for 10 years. We started the investment last month. We are going to start the facilities for the transformation of biomethane. We wanted to show this to you because how significant it is to show the market the capacity that we have to sell biomethane for an agreement of 10 years and adjusted by IPCA and at a very attractive prices. The last highlight would be the follow-on and those who are monitoring the activities of the company, this was one of the operations that was priced at the market.
In a very challenging market, we had an operation of 1.5% of a discount in relation to the other negotiation and 6% compared to the launch. It was a primary offering of BRL 91 million to the company, a secondary offering of BRL 278 million. It is a shareholder that joined in, and he also had a time to leave. We eliminated this overhang, and it was a very successful move. We had a follow-on with a discount at a challenging moment for the market. We brought in new shareholders to the company, international shareholders, which are going to be important for our base of shareholders. In addition to that, we have the controllers. We have the controlling shareholders maintaining 45% of the shares. This is a little bit about the highlights for the first quarter. Now let's move on to the operational and financial highlights.
We have the first slide about the waste volume, energy generation, biogas generation, and carbon credits. I am going now to go a little bit more slowly with the details, focusing on those who require more detail. First, let's talk about waste volume that had a drop of 3% in relation to the first quarter of 2022. We always receive a question related to this because we always talk about the resilience required for generation of waste of our assets. Why did we have this drop? Because when we see the breakdown of our assets, specifically in three or four landfills, there was a decrease of waste from civil construction. Which are those? They are the waste that come from specific works with a discretionary specification, such as sludge, whenever they do a canal cleaning.
That would depend on the rainfall, and there is an additional generation of waste. We did not have in a period of this waste and had an impact because we had a high volume. Now the sludge started to come because the government started cleaning the canal. Maceió had a loss of the waste volume because a portion of what we received in the first quarter of last year came from the demobilization. For example, Braskem has the liabilities that they have in Alagoas, and they had to demolish a number of households in the first quarter of last year. We have this liability-related waste, and we did not have this kind of activity this year. We may have that in the future or not, but what I mean to say is that the resilience of our volumes, and we can open up this for you.
This happens in RSU. Why is that? Because this is where the price with more value. If we look at the same assets that lost in revenue. For example, I am going to give the example of Maceió and Jaboatão. They lost in volume, but they gained in revenue. Obviously, the average price was gained. That is the reason why you improve the prices. Not only because of that. The reason was is because you improve the mix, because some of the waste is domestic, had a higher volume. This is why you improve the mix and you improve the average price, and therefore we have better revenue for those assets. Any impact of the decreased volume is eliminated. This kind of waste, I mean, the ones that go over fluctuations, not seasonal.
I would not say seasonal because otherwise it would refer to the same months. They have some fluctuation because they depend on the civil construction works, and it has no impact on the biogas generated. This is something important to mention here. There is a variation of volume that has no impact on the generation of the other dimensions. This is important to make it clear, and this is why I wanted to talk more about the volume so that this number of less 3% is explained by this. In relation to energy generation and capture of biogas, we can see significant growth, and we are likely to see this trend in the next quarters because these are divisions which have a lot to profit. Many of the new landfills are in the process of ramp up for the generation of biogas.
Many quarters will reflect this growth in the capture of the generation of the energy and generation of biogas, and also carbon credit, because they go along with the generation of biogas and the energy generation. These are our highlights. As for carbon credit, since we are talking about it relates to revenue, which is waiting for it to be accounted for at the end of the migration. As I said in the previous call, we had some headway. We also had the final audits in the three main assets. We have the same expectation of nothing has changed. We are going to account for the carbon credits in the third and fourth quarters of this year. In relation to carbon credit sales, our strategy is, we sold 5,000 tons, have currently sold.
We are waiting for the regulated market rules in order to sell the remaining amounts of carbon. There is a bid, by the way, at the same price level, at a lower volume. We might sell in a strategic way because we are talking about a strategic client. Part of the carbon may be sold at the same price basis, which is $7. Going to the financial highlights. As to net revenue, it is difficult to make this comparison because the company grew exponentially. The growth of net revenue was very high. What we see on the right is very important because it shows the comparison of net revenue only of the Ecoparks. This is a pro forma. As if the pro formas were already operating in company.
We see this increase related only to Ecoparks, and that confirms what I have just said based on the previous slide. We lost 3% in volume, but we gained 12% in revenue. That means that we improved the mix and we also improved the price. This is called Gate Fee. What you see on the right explains what I said and what I started explaining in the previous slide. On the next slide, we discuss the pro forma EBITDA. Those who took part in the follow-on heard me say of our prediction for this year, which was to be in line with the same of the last quarter of 2022. We are already in line in this first quarter. The EBITDA is a little bit. 102 for the first quarter of EBITDA.
I would say that this is the next ceiling for the EBITDA for the company, considering the new assets. Based on this is we are going to make the calculations of the future gains. This, because we are talking about immature assets. Jaboatão that in the first quarter had some improvement in relation to the previous quarter. If you consider the gain of Cuiabá, which was so relevant, and even more so for the second quarter, and the UTM Paulínia and Jaboatão, they start the second quarter, no more bringing in negative results. The ramp-up, which is a phase that is not going to push down the results, the results are going to go back to the base. Porto Velho, Aparecida de Goiânia, Minas Gerais assets that did not Aparecida de Goiânia started to have a ramp-up in the second quarter.
We are going to have some good news as of the second quarter. Minas Gerais and Porto Velho that in spite of the fact that they had all the cash disbursement made in the first quarter, have not contributed the result yet, because their operations are going to start in the second quarter, and then we will start seeing the results. What I mean to say is that all those immature assets are the ones that are going to start to bring in new amounts to the EBITDA of BRL 102 million along the year. The average EBITDA call on a quarterly basis will be higher than the BRL 102 million that we see in this first quarter. This is something I have already told in the follow-on. Now let us talk about the next slides in terms of margin and depreciation.
Hello. Good afternoon, everyone. On slide 12, we bring information of the gross profit ex depreciation and gain in gross margin. As Pilão mentioned in the beginning of the presentation about revenues, the gross profit comes together with the acquisition that we made and the new project that have been implemented along 2022, and they will help us in this comparison of the BRL 93 million that were posted in the first quarter of 2023.
In relation to gross margin, we can see an increase of 1.2 percentage point, especially due to the higher average price in comparison to last year and lower costs. On slide 13, we see some information about the CapEx of the company. We understood what is CapEx maintenance and CapEx for maintenance. For expansion, we would focus on two assets, Maceió and Jaboatão dos Guararapes, which we have recently acquired. It is related to UPI Aterros.
We use the relevant CapEx to expand that landfill that will allow us to optimize that in the next 10 years. In relation to net income, even though the company reported an improvement in the accounting EBITDA and also for the EBITDA of the company ex carbon, we see the bottom line was adversely affected by financial expenses.
Specifically on depreciation, when we compare this line of BRL 60.2 million in the first quarter of 2023 with the results of the first quarter of 2022, we see the difference very clearly of the base that we incorporated in 2022. There was a growth in the number of assets and also in the volume of waste, a little bit less than the double. It is true it is a non-cash effect, but that impacted the last line. It is important to mention that this would include other items such as the amortization.
For those who are used to this kind of calculation, they understand that this is a very important component when we allocate the assets. It is important to say that the assets that received from the other company, even though they have a long useful life, because there are many years to go, but the depreciation are based on the assets that are being used in the company. We are considering whether or not we would need to revisit this line, so that we will consider useful life. As for the financial highlights, again, we have some impact for the interest and the net debt interest and the greenfield Paulínia, where we do not capture the whole result. We would capture only the results of the last 12 months.
This would impact this result because there are some assets which have not yet been consolidated in our base. During this chapter related to financial highlights, we talk about the debt profile of the company. The running rate is very close to what we reported last year. There was a little difference, a little variation impacted by the capital cost, of course, but there was a significant drop reported, 2.17 At the end of the year and 3.47 for the EBITDA. We are going to look at that, and we are going to see that there is going to be a lower level of net debt over EBITDA, more aligned with the running rate up to the end of the year. Now we are going to move on to growth and other highlights.
To complete, let us talk about growth. The agenda is the same. As I said before, we continue in a big window of growth driven by those additional items in each of the landfills that we have, especially the ones that we have acquired. As I said before, this is where we have the most mature revenues, the gate fee, which is the top of the pyramid. The gate fee, because it is still the most mature.
We have Cuiabá, Minas Gerais, Porto Velho are the ones that have not reached the maturity level, and the other ones have maturity. The gain that we expect is related to price, and this is what we have been seeing. As for biogas, this is a big growth front because in the new assets we are not getting revenue from biogas. As for carbon credit, it would be the same because it is consistent with the generation of biogas.
Now talking about biomethane, I am going to talk a little bit about the specific agenda for biomethane. The agenda of UTMs, as I said before, we are going to see the results as of the second quarter, a new scenario for the UTMs. Therefore, we can pave the way so that up to the end of the year, next year, beginning of next year, we can talk about replicating the assets across our base. The agenda of fertilizers, in which we have executed a joint venture with a company called Terra, and we have already got the permit. We have already invested the CapEx for the construction. We will start operating as of July or August. This will be the first plant for the transformation of sludge for fertilizers, and this is something that is going to bring good results for the company in the future.
It is also important to point out all the growth pathways that we have at the organic level. This can multiply by 3x or 4x the current size of the company. It does not come from inorganic growth, but rather from organic growth. Now a highlight for biomethane, as I mentioned. We talked about biomethane a lot on the follow-on, and we continue with the same perspective. Up to the end of June, we are going to do the launch of the two main projects of biomethane for the company, Jaboatão and Paulínia, with a capacity of 300,000 cu m/d of capacity. They will bring an EBITDA growth when in operation of BRL 300 million year after year.
These projects are likely to be launched up to the end of June, both as for launch of the acquisition and purchase agreement, and also the launch of the funding and launch of the sale of the remaining items of Jaboatão and Paulínia. They are the same conditions, similar or even better than the conditions that we applied when we sold to Copergás 40% of the gas. I complete here the presentation, and I would like to open the Q&A session.
We are now going to start the Q&A session for investors and analysts. If you wish to ask a question, please press raise hand on the bottom of your screen so that your microphone can be open. If you wish to send your question in writing, you can use the Q&A button also at the bottom of your screen. Written questions will also be answered live. Please wait while collecting questions. Our first question comes from Mr. Rafael Nagano with Credit Suisse. Your line is open, sir. You may proceed.
Hello. Good afternoon, everyone. I have two questions on my side. One is in relation to the volume. You gave already some information. I would like to know if the volume can be considered something that would be, let's say, the recurrent volume, since you had this extraordinary volume from construction work waste. Of course, disregarding Jaboatão when you said about the cleaning of the canals. The other question would be related to Jaboatão biomethane plant. There was a question whether this would be constructed only with Copergás and with a limited percentage of the capacity. As far as I understood, you would use 100% of the quality, and this is also aligned with the energy plant. I would like to know what is the mechanism that you are going to use, and who would be the partner.
Thank you for the question, Rafael. In relation to the volume of waste, I think you are right when you said that we have to consider this level. We have to remember that we have four assets which are under maturity stage, and they would cause zero impact or very negligent impact. That maybe would be felt up to 2024. We also have some discretionary actions. As you said, the cleaning of the canals. We might have three or four initiatives such as these specific works that are likely to cause impact this year. But I think it is too early to test any volumes, but we are likely to have good surprises along the year.
In relation to the biomethane facility of Jaboatão, in addition to the front of suppliers in terms of CapEx, we are likely to purchase the surplus of biomethane from Copergás. We are in advanced level of negotiation with the suppliers. So we are likely to start as early as the first half of the year, and the sale of biomethane simultaneously is going to be completed with the CapEx use.
If you allow me another question, still in relation to biomethane. How do you see the negotiations, both in Jaboatão and Paulínia? Are you looking for clients in other facilities or only for those two?
We are looking in a broad way. We are looking in a proactive way. We are looking at those two plants whose CapEx is already organized and planned for the next 60 or 90 days for the start of construction. But we have received a lot of demands for other Ecoparks we are present. Obviously, we are discussing this with the clients, and we see good opportunities coming up in terms of prices, similar commercial conditions, similar to those of Copergás.
Thank you.
Our next question comes from Andre Sampaio with Santander. Mr. Andre, your line is open.
Good afternoon, everyone. I have two questions on my side. My first question is something similar to what Nagano asked, but in relation to the gate fee. I would like you to tell us what would be a normalized number. So we had a gate fee which was higher year-on-year, but we can see two quarters when there was a drop. So looking down the road, what can we expect in terms of a structural gate fee? This is my first question. My second question, now looking at the ramp-up of the agreement of the new asset. What is the progress, and when to expect that those new assets will be able to, or let's say, reach their potential? Now I am talking about waste.
Hi, Andre Sampaio. This is Milton Pilão speaking now. Okay, here we go. Beginning with gate fee. There is a point to be clarified in relation to the gate fee that was posted in the third and fourth quarters of 2022. We mentioned this during the follow-on process, and in those gate fees, we had some revenues that came from the purchase from other assets, and they were capped. I would say that they make the price dirt. I know this is not the right word. Because the price is according to the tonnage.
When the revenue of 2023 that should have accounted for in April and September, and it was only accounted for in the third quarter last year, there is a component of the revenue that when divided by the volume, that would be the volume of only that quarter, makes us record a price which is not real. Let me try to explain. In the first quarter of last year, if we looked at that period without those dirt, of course, I am not being negative when I say that, the average price would be BRL 60.63. The average price of this quarter is BRL 65.44. Now we are comparing apples to apples, and then we show that this is where the revenue gain happens, more than 10% in the average price when you compare the same pro forma assets, 2022 and 2023. The company has been gaining in price.
What was the loss in price in relation to the fourth quarter of 2022?
The price we see there is BRL 71.22 per ton. There are two adjustments that need to be made in order to make a comparisons of apples to apples. The first adjustment that we have to make is Maceió. In the fourth quarter, there was no Maceió revenue coming. The average price of Maceió is lower. It pushes down the average price of the company. Why is that? Because it is lower than the average of the other assets. This impact, when calculated, is at BRL 2. Without Maceió, you would be comparing an average price. With Maceió in the fourth quarter, you would be comparing average price of instead of BRL 71.22, BRL 69.22.
In the BRL 69.22, there are revenues that do not belong to that quarter, and they had not been accounted for before, and then we accounted them in the fourth quarter, and they represented BRL 4 per ton. That means that our normalized average price for the fourth quarter is BRL 65 against the BRL 65.44. The truth is that there was an increase when we compared apple to apple in the average price of the company between the fourth quarter and the first quarter of 2023. In addition to this, now looking into the future, in the first quarter of 2023, we have some increases. Specifically related to four or five clients, I do not know for sure. But considering all our client base, there are four or five clients who are having financial problems, and this is the reason why we have this carryover between quarters.
They are in administrative process of making adjustments, and it will bring an impact of BRL 1.5 in the average price that you are going to see in the second quarter when those administrative adjustments will be accounted for. That will require the approval of the audit. This is the drive that I can give you in relation to price. Moving on to the second question, but still talking about prices. How immature assets are those assets which are undergoing ramp-up, Cuiabá, Porto Velho, Aparecida de Goiânia, and Minas Gerais? Let us talk about each one individually. Cuiabá. Cuiabá had a negative impact in the average price of the company. If you look at Cuiabá alone for the third and fourth quarters of last year and the first quarter of this year, it was an expected impact because Cuiabá would receive only private waste, whose price is different.
When we started receiving public waste, the average price was much lower. There was an explosion in volume in Cuiabá with a decrease of average price that we saw in the fourth quarter of last year and the first quarter of this year. In terms of volume, Cuiabá still has an expected ramp-up in relation to the first quarter of 2023. In relation to timelines, you asked me, I would say that May and June will be months that I would say that Cuiabá reached the maturity. In May and June, we are going to reach the volumes that I refer to as mature volumes of Cuiabá. For Minas Gerais, we purchased the asset, we started the receiving of waste, and the ramp-up for the 1,000 tons would take about nine months.
We are going to see Minas Gerais with the 1,000 tons per day in the first quarter of 2024. This is when this is going to be reached. But you are going to see along the quarters of this year a very significant ramp-up in terms of volume. Of course, we are going to start from zero. We are going to see a long way until we reach the 1,000 tons per day. Porto Velho. Porto Velho is an active with an expected ramp-up, different from Minas Gerais, because Minas Gerais has many cities around, so you do the ramp-up according to the city. City by city, so the ramp-up is increasing. On the other hand, Porto Velho, we have a specific moment for the capital city, which is in the expectations of those trash areas being closed.
We are going to see a very strong ramp-up as of July and August this year. Lastly, Aparecida de Goiânia. This is an asset which is growing. You can see its growth. It is difficult to say when it is going to reach its top productivity. We expect that in June, we are going to have a jump of about 40% of the current volume received today. You are going to bring the asset to a very interesting level, but still far from what we consider to be the maximum capacity of the region, Goiânia, Aparecida de Goiânia, which are big cities. Those capitals have results that are going to come next year. But in June and July, we are likely to see a ramp-up in the volumes considering the smaller cities around this asset.
Okay, perfect. Thank you for the very detailed answer.
Our next two questions come from Luis Lima with Genial, and these are as follows. Good afternoon. What can we expect in the renewal concession of Jaboatão and the M&As of Ecoparks? What can we expect in relation to the average gate fee for the next quarters?
First, renewal of the contract of Jaboatão. We have a judicial agreement. I think everybody knows that the renewal process is through the transformation of a historical debt of that asset that has a specific deadline. This was decided by the court together with the prosecutor's office and with the agency of the city council. There was a lawsuit that was entered. From the legal viewpoint, it is already approved, the expansion agreement.
We still do not have the additional agreement because there is a mechanized sorting facility in Jaboatão. It is a big project and it is included in this process. The purpose is to bring renewable fuel to the cement companies in the region. This is likely to happen in two or three weeks' time. There was a bit delay because it is going to be done together with an event. We prepared a special video of the UTM and also the city. There is also a dimension for the public communication to the company. All those advertising materials were being prepared. This is why we had this delay. This is like an extension of the concession for another 20 years as of this year, 2023. In addition to this, what was the second question? I got lost a bit.
In relation to the gate fee.
Oh, yes, the gate fee. There was another one in the middle, wasn't it?
Oh, new M&As. Yes.
I think I have already answered the question about the gate fee. If you have any additional question, please let me know. Okay. About M&A, it is a little bit about what I have already said in the follow on. I just mentioned some in relation to the strategy of the company. We are likely to continue with the strategy of M&A. I would say opportunistic opportunities, but rather we are talking about M&As whose assets or landfills are still in the process of licensing. They all offer a good potential for ramp-up. What do we see in those assets? Opportunities. The entrepreneur needs some cash to finish the CapEx. We say the CapEx of expansion, but it is the CapEx for the base of the landfill.
You go to the landfill when the other side has the need for capital, and we can provide that. On the other hand, we can have a return account, which is very attractive. Usually when we consider those M&As are close to areas where we are already operating. In other words, in the space where we are already operating. The idea is to go into the interior of those areas, considering that our assets are located in 10 different states. We are likely to grow with the M&As in the interior of the states where we already operate.
Our next question comes from Marcela [Suarez], and that is the question: Congratulations on the results. The carbon credit volumes were very high. Can we expect the same level up to the end of the year, or can we expect fluctuations quarter on quarter?
Marcela, thank you for the question. We are really consolidated the newly acquired assets. Therefore, the level of 750,000 carbon credits for the half of the year. Up to the year, we want to reach a volume which is higher than the one mentioned, and the volume would be high, about three million a year. For 2023, we expect volume higher than three million. We expect a stronger volume for the next quarter, consolidating the year at a much higher level than that of last year.
We would like to remind you that if you wish to ask a question, click Raise Hand at the bottom of your screen, or you can send your question in writing using the Q&A button. Please wait while we collect your questions. Our next question comes from Pedro Vilela as follows: in relation to biomethane, I have three questions. In addition to Jaboatão and Paulínia expansion, what else can we expect for the year? Do you have sale long-term agreement for the Ecopark? And three, are those projects eligible to be CBIOs?
I think I wrote down all the three questions. First of all, yes, we are going to launch the expansion of Paulínia and Jaboatão, as Pilão mentioned, and we would like to have another project which will start the construction in 2023. So we have three or four Ecoparks we are discussing with the clients, and we have a sales long agreement with clients, and new projects are likely to be built still or up to the end of this year. In relation to long-term agreements, we are negotiating, we are discussing with the different clients, and the facilities are going to be launched together with the agreements for sure. In relation to CBIOs, yes, they are eligible to CBIOs, and we can expect revenue from those projects.
We would like to remind you that if you wish to ask a question, click on raise hand at the bottom of your screen, or you can send your question in writing using the Q&A button. Please wait while we collect your questions. Our next question comes from Mr. [inaudible] as follows: Good afternoon, everyone. Could you say the certification of the carbon credit and how extent the decision not to sell in 2023 was related to price? Was it voluntary, or was it because the transition has not taken place yet?
In relation to the registration of a project in Gold Standard, those voluntary programs, we are likely to have good surprises as of the third quarter of this year in relation to the previous registrations, and we expect good results up to 2023. In relation of not having sold carbon credit, it was not a decision related to price, but rather it was, on the one hand, the registration would help us in the breadth of our discussion as mentioned before. The second half of the year is based on the tail of the agreement. But we are planning something in the short run for the second half of the year, something very specific up to the end of 2023.
The Q&A session has come to an end. I would like to turn the call over to Mr. Pilão for his final remarks.
Once again, thank you very much for the attendance, for the questions asked. I would like to say that our area is always open to a one-on-one service. Thank you very much. Have a good day.
Orizon's conference call has come to an end. We would like to thank everyone's participation, and have a good afternoon