Good afternoon, ladies and gentlemen. You're welcome to Portobello's video conference to discuss the results for the second quarter of 2023. This video conference is being recorded, and the replay can be accessed on the company's website, ri.portobello.com.br. The presentation is also available for download. To hear the audio in English, please click on Interpretation and select English. Please be advised that all participants will only be watching the video conference during the presentation, and then we'll start the Q&A session, when further instructions will be provided. The presentation will be held in Portuguese with simultaneous translation into English. Before proceeding, I would like to take this opportunity to reinforce that the forward-looking statements are based on the beliefs and assumptions of Portobello's Group and the current information available to the company.
These statements may involve risks and uncertainties in view of the fact that they relate to future events, and therefore, that they depend on circumstances that may or not occur. It's important to take into account that events related to the macroeconomic environment, the segment and other factors that may cause the results to be materially different from those expressed in the respective forward-looking statements. Before starting the presentation, the company will present a video on the quarter's results. Results to quarter 23. Resumption that reinforces a good perspective. Net revenue, a performance that is above than that of the market. Net revenue, the third largest net revenue. Indicators indicate the resumption of the sector, but also the resilience of our business model. EBITDA and margin. Evolution of the operational results. Strategic investments that strengthen our results. Adjusted EBITDA margin comparable to 17.1%.
We are an international highlight. Portobello is one of the global leaders in the production of ceramic tiles. We export to over 70 countries from all continents. Portobello America starts manufacturing in the United States and consolidates its presence in the market. Strong presence in the Coverings Expo in Orlando, Florida. Great opportunities are present in this important market, full of possibilities. Evolution curves or say, with significant growth. Portobello Shop Unit is a highlight. 146 stores, 22 own stores. Innovating retail of Portobello Shop invests in experience and design. Same-store sales growth higher than 11.2%, quarter-over-quarter. Resumption of resales channels, engineering +4.8%, export +11.3% on the 3rd quarter of 2023 versus the previous quarter. Net revenue, BRL 42.6 million. Gross margin, excluding other costs.
Advancing in ESG is very important. The publishing of the Annual Sustainability Report, the Portobello Shop, Jardim Social received a seal. Sustainability Week in 2023 potentiates this work. These results demonstrate the advancement of our strategy, paving our way to build the future quarters with success. Portobello Group. In this video conference, we have with us Mr. João Suzuki, CEO, Mrs. Rosangela Sutil, Vice President of Finance and Investor Relations, and Mr. Luiz Felipe Brito, CEO of the Portobello America unit. I now turn over to Mr. Suzuki, who will begin the presentation. Mr. John, please, you may proceed.
Good afternoon, everyone. Thank you for those who are here with us and who will later watch this recording.
This is a very interesting moment for us to talk about our results, in special, because of the evolution of our strategic projects, with highlights, of course, right now, to Portobello America. We've already given some visibility to it. We started the construction of our Tennessee plant at the end of July, in the second half of July. Right now, we have Luiz Felipe with us. He's going to help us with the dissemination of results. Luiz is going to talk a little bit more about this project, but I would like to start following our agenda first. We will talk a little bit about the market, about our second quarter of 2023 operational and financial performance. We will also talk about strategic projects and the outlook for the rest of the year, for the second half of 2023. In the end, we'll open for Q&A.
Very straight to the point, when talking about the Brazilian market in the next slide, this graph shows well the behavior of our segment, in special here in Brazil, but also similar behavior may be seen in the United States. I would say it's not as intense and, it's not as volatile in the United States, but it's very similar in terms of the performance curve. Here in Brazil, we highlight two periods. Number one, more recently, the fourth quarter of last year and the first quarter of this year. So in the slide, you can see it highlighted as December 2022. We had significant sales decrease in terms of ceramic coatings in Brazil, and we reached the same level of our worst moment in the pandemic, in April 2020.
After very positive times for the sector, we had a consumption boom at the end of 2020, 2021, 2022. The sector already had a normalization of consumption, but we did have a significant decrease towards the end of 2022. The good news is that we see a resumption of the levels getting close to pre-pandemic levels. We talked about this in previous calls, and it indicates a resumption, even if gradual, a resumption of ceramic tiles, and we believe that by the end of the year, we will reach pre-pandemic levels and last year levels. Please, the next slide. Here we have a comparison that helps us see how the Portobello Group performs throughout this period. We compared the pre-pandemic period to now, so that we could exclude the pandemic effect. In the beginning, we had a good availability of products.
We did really well, especially in the second and third quarters of 2020. We had strong demand, but we had a lot of restrictions to meet this demand, and we had some challenges with the availability of our offer. Since the boom was over, Portobello has had a performance that is superior to its competitors in the market. We have a 93 at the base when we compare everything, so we continue performing above than the market in general. In this context, we're talking a little bit about the result. Rosangela will make her presentation. You saw it in the video. We always like to reinstate the evolution of our strategy and the resilience of our business model, the resilience of our multi-business, multi-channel, which is very important in addition to our brand position.
In this context, I will like to turn over to Rosa ngela. Good afternoon, everyone. This resilience in our strategy, which has led to a superior performance than that of the market. This quarter, even though we had a lower performance than in the second quarter of last year, we had a very strong quarter. This quarter, the second quarter of 2023, we reached a very important revenue. We went above 500 million BRLs in the quarter, reaching the third largest historical sales of the group, 549 million BRLs, a 12.25% growth when compared to the first quarter of this year. We will talk a little bit about the composition of this revenue.
According to our sales channels, especially within the business units, we had a superior performance at the Portobello Shop, where we had the highest revenue in our history and consistent growth, including in the comparison with the previous year, indicating that we've delivered the growth strategy based on the investments we've made for this business segment. In the other unit, the Portobello unit also shows good results with growth in the domestic market, and we will talk more about this later. Portobello America, Luiz will talk about it in details later on, but we have a resumption in the revenue, reaching over 50 million US dollars with a strong backlog for the year. Based on this new phase of the unit. BRL 50 million, actually, not dollars. Yes, thank you, John.
Pointer maintained the revenue level, ending the declines of recent quarters with an expectation of positive development from now on. When we analyze the revenue and take into account domestic sales versus export, and here we share a different vision from prior periods. In the exports, we show how much of this revenue is exported to Portobello America, how much was exported to the other 70 countries we export to, and how much we had in our domestic market. In the domestic market, we had a very strong performance with BRL 432 million, the second-largest revenue in the company's history. This is very important.
The external market has resumed when compared to prior periods, but we still have an opportunity for a resumption when we compare it to last year, which was a much stronger year, as John commented, in the peak of the pandemic. In Portobello America, as we commented, we can see a positive development in terms of revenue based on the opening of the new plant, with sales leaving Brazil to be used in combination with the production in the United States. When we look at the rest of the group, take into account a more competitive market, we maintain some resilience in terms of price, mix, and cost, and therefore, from the point of view of gross margin, we have a similar level to the last quarter.
When we talk about absolute volume, we had a growth of 11.9% when we compare to the first quarter this year. We still have to recover our historical levels when we look at last year, when the results were much stronger. Then, when we analyze the gross margin per business model, the resilience of the business model with the multi-channel strategies enables us to offset some losses in challenging moments to some of them. For example, Pointer, as we know, when we look at the market it works with, is a market that has been more impacted by this macroeconomic model, and therefore, we have a higher idleness level. If we did not have any idleness, we would have been more resilient there.
On the other hand, we have an evolution at the Portobello unit, going from 37%- 35.6%, especially in terms of prices, but using a mix to partially offset the impacts of price reversion. Portobello Shop and Portobello America with a positive gross margin in this period. Portobello Shop has the second-largest margin in the history of the company. Portobello America also has an increasing gross margin level, and both of them respond according to the strategic areas of growth. When we look at operational expenses, the company has been working hard to improve operating expenses, and when we look at all of the units, we've had important reductions.
On the other hand, we kept the same level of investment in strategic projects, such as the expansion of Portobello Shops with our own stores, and also the expansion and preparation of Portobello America right now, with the start of our industrial plant in the United States, with sales, marketing, and industrial management included. In case the company had not made this investment decision way back then, we would have had lower expenses. We went from a level of BRL 163 million in operating expenses in 2022, representing 28.2% of our net revenue. Then now, if we had not made any strategic investments, we would have reached a level of BRL 155 million. We would also have maintained the level of 28% of expenses.
On the other hand, I'm sorry, we had 31.4 adjusted OpEx, and some of this revenue in the second quarter and some when we started 2024, to offset and bring our OpEx to a level of approximately 28%. Today, we have a BRL 187 million or 24.1% as a result of strategic projects that will generate future expenses. As mentioned before, we have achieved positive results. Well, Jose Angelo, I would like to add a comment here, because we had not made our presentations like this in the previous quarters, even though in all of the quarters, we had mentioned the projects, our discipline with expenses. When we take into account absolute figures, we were not able to share it with our stakeholders.
We, we were not able to share what we're doing. This slide indicates the company's choice. On one hand, in the business as usual, we have this discipline. We maintain an expense level that is according to the market we live in, but we are not deaccelerating strategic projects, which is adding future value. With that, we've been able to advance, but we naturally have expenses that have characteristics of investments. We were careful to analyze the expenses from inside, and only separated investments with characteristics which do not generate results yet. This is a very important overview to evaluate the results for this quarter. Well, immediately after that, taking into account the same view, we have the adjusted and recurring EBITDA. We reached BRL 11.4 million or BRL 62 million in EBITDA this quarter.
The EBITDA is superior to the one we had in the last quarter, and similar to the last quarter of last year. However, if we remove the volume of BRL 30 million of expenses, which were considered as, in quotes, investments or pre-operational, dedicated to growth, we would have been at a level of BRL 94 million of EBITDA, with a margin of 17%, which is aligned with our historical data. We want to understand once again, as John commented, so that we know these are strategic decisions of investments aiming at the company's growth and innovation curve. What we're trying to show you, if we remove the effect of the products or at least of the part that is not generating results yet, our EBITDA, be it according to the margin or absolute value, and would be much lower.
We would have reached a margin of 16% at our worst moment. Therefore, the EBITDA for the quarter would have been BRL 80 million. If we had a level of 110, which is what we were doing in the beginning of 2022. This is so we can try to clarify how we can separate what we have in terms of investments and why the performance is under the same business basis. When we analyze our net profit, we can see that because of the EBITDA versus the interest rates and debt expenses, we had a negative result. Losses of BRL 27 million actually BRL 17.6, non-recurring.
If we do the same exercise and compare it to prior moments before the strategic investment, we would have BRL 1.9 million in the second quarter of this year. Our working capital, we can see that we have high inventories according to the strategy that we defined in the past, with a level of services. On the other hand, with this man curve, our inventory level is above our expectation, but it's partially offset by optimizations in the portfolio of receivables, and therefore, we've had a more intensive results. Also something that we've not mentioned here, but is something that we're doing to try to have the best practices, including in the group, so that we can have better deadlines. Let's move on now, please. In terms of investments, we've maintained our investment plan.
It's aimed at strategic investments of Portobello America for the conclusion of the industrial plant and the different phases of the industrial plant, in addition to the purchase process of our own stores to expand our, the Portobello Shop revenues. All other results are marginal results, and they have been observed in previous years and are basically carry over, in addition to maintenance expenses. Just to complement, this in terms of investment, we are following the same guidelines. We maintained our investments in strategic projects, in, in terms of internationalization, among others. However, even in the case of CapEx, for everything that was related to our current businesses, we tried to rationalize from the point of view of implementation or rationalization in financial terms and, cash flow.
This, with a leverage level that Jose will talk about, and it has to do with expansive discipline, analyzing the cash generation of the company. Well, from the point of view of debt volume, it's according to plan, so that we can support our investment level. The leverage this quarter reached 3x our debt versus EBITDA. If we apply the same exercise here, we just talked about expenses with characteristics of pre-operational investments. Looking at expenses alone, we did not include CapEx. Here, just to remove the BRL 31 million of expenses, we would generate a better EBITDA and net debt, reaching-- going from 3x- 2.5x in the 2Q of 2023. However, this is something that we've worked hard to maintain, this leverage level.
Optimization of expenses, optimization of CapEx with a priority in strategic areas, and also strong actions in terms of the need of working capital, so that we can generate more cash for leverage. The mean cost of debt is at 2%. Our debt has about 3.8 years. The profile and composition of the debt is maintained in the same structure of last quarter from the point of view of local currency and foreign currency. Most of the debt is, as you can see here on the slide.
Now, looking at the aspects we'd shared with you in prior simulations, and also in terms of perspectives, our perspectives for the second quarter in terms of net revenue, we understand that we moved on as expected, reaching a new revenue level in the post-pandemic period, with a record of revenue in the Portobello Shop, the second-largest revenue in the domestic market, as we commented. In terms of costs and expenses, even with the maintenance of the gross margin and optimizations, as always, work with the best structure possible. As long as we maintain the same level of service, we had this level of 39% of gross margin, which is a little bit below what we expected.
When we talk about CapEx, we understand that we maintained our focus and strategies, and the CapEx is dedicated to these projects with expectations for expectation and revenue generation for the company. Also in terms of cash conversion, cycle optimization, and leverage, as we just mentioned, these are things that we will work with this next, the second half of the year so that we keep it as planned. I will now talk about our projects. Let's start talking about Portobello America. Yeah, let's do that. Let's start with our plant, please, and the video. Okay, let's update a little bit. We've just seen the video, and we're very happy to announce the start of our plant.
This is a project we've been studying and implementing for some years now, now it is the moment for us to start seeing the results of this investment. Anyway, if we look at the timeline, Portobello America is an old project of the company. Portobello has always had this international component, this vision of having the international market as part of the core strategy. In the 1990s, we had the beginning of Portobello America with a distribution operation in the United States, where we brought projects from Brazil and sold directly to smaller stores. Then in 2018, actually, this date is missing there, we made the decision to make more robust investments with a presence in the United States, depending less on Brazil.
We wanted to have a 100% Brazilian operation, but also another operation in the United States. In 2018, we made the decision to have a factory in the U.S. From 2018 until now, we always had to start, according to the market, which is more difficult. We had to develop our portfolio, evolution of portfolio, other outsourcing logistic models, and everything we did from 2018 until now, culminating with the plant startup. In 2022, we started our construction, and in the beginning of this year, we really started installing equipment with the start of our production now. Luiz, I would like to complement something here, just for the sake of clarification.
We did have a very important operation in the 90s, especially in the United States, and initially, the operation was very profitable and represented a very important part of the group's revenue in that period. Because of market issues and exchange rate issues, this operation stopped in the early 2000s. It was a period of important learnings, both in terms of the U.S. market, how to serve it, but also regarding the business model, which at the time, depended a lot on production here in Brazil. Therefore, we always depended on exchange rates. You can see the business model that we developed since 2018, in special, really has a different distribution, and now we have a plant starting its production in the U.S.
As another opportunity in the U.S., we have a strong market with the largest ceramic consumers in the world, but it still depends a lot on import. 70% of the market, more or less today, is covered by imported products, and over time, after COVID, we had productivity gains, be it according to the energy matrix. The market in the U.S. is very competitive, but it is especially because of the demand for services. I, I think that the international supply chain problems indicated the need of having a, a greater presence there, and now we're surfing this wave where we are delivering our plant. The value proposal is based on the production, and so having local production allows marketing to be faster. Also, this digital aspect.
When we started this new phase in 2018, we invested in digital platforms, including for the communication with our clients. We have the so-called Portobello America Concierge, with sample requests, information on the products. It's almost as if it were a 24-hour a day customer channel. Our investments thesis, advances in the company's internationalization, demand for local production, once again, leveraged by international supply issues we had after the pandemic. Differentiation based on the value proposition, price positioning and mix similar to European players. In other words, we are at the top of the U.S. chain. We can tell that by the type of clients who are buying our products now. We work as a multi-channel company, which is very similar to what we do in Brazil, with some risk sharing.
We work mainly with distributors and home centers. This is very similar to engineering here in Brazil, in large constructions. Therefore, we have a multi-channel characteristics and the supplies by production and outsourcing. Outsourcing will remain in the company. It will be very strong, actually, and synergies of the business model with PBG Brazil. If you allow me, I would like to add something, something very important for our project, which is having an American company. Naturally, Luiz, you can see that Luiz is a talent in the company. He had his career here in the company. He is Brazilian and is the liaison person for the group. He has been leading this project from the very beginning.
All of, all the rest of the company and all the leadership, the whole team below Luiz, is formed by U.S. citizens, and special, the area related to products, business areas. These are areas where we really wanted to design a company to meet the needs of the U.S. market with a U.S. product. The product is different from the one consumed here in Brazil or in Europe. This is something important. We didn't mention it before, but it is something very strong in this business unit. Can we move on, please? Well, we have a little bit more data on our plant. The plant is located in Baxter, Tennessee, and for our sector, because most plants most ceramic plants are in this state because this is where the raw material is located.
In terms of logistics, it covers about 70%-75% of the country in a very efficient manner. Therefore, Tennessee is very important for ceramic, also in logistic terms. We have land of 370,000 square meters. The construction area of the plant is 90,000 square meters, a total investment of approximately $180 million. One of the most modern ceramic coating plants. We work in cooperation with a Brazilian team. We already have a direct creation of more than 200 jobs. Another challenge, we hired these people to work in different areas of the company. We were very successful with that.
The company is ready to start operating with an installed capacity of 3.6 million sq m per year with the first kiln. Then a capacity to generate annual revenue of approximately $150 million. Another highlight, I would say, of our quarter, which had to do with our value proposal. In April, we had the largest flooring fair in Orlando. Clients could see the products we will be manufacturing in our plant. We served over 120 customers. We had eight products launched, focused on North American market stand, for example. Just for you to understand, we have this fair subdivided according to different countries. Portobello America is considered a U.S. company with a global strengthening of our brand that is very strong.
We are very happy with the results of the sales, which coincides well with the start of our operation in July. This is it, John. I don't know whether we have anything else on Portobello America. Well, let's talk a little bit about Portobello Shop. Then we're going to wait for the Q&A. We continue advancing with the Portobello Shop strategy. As you can see, and we've reinforced this in all of our calls, we have two strategies that are highlighted in the group: the internationalization and integrated retail. The business has performed really well. We cannot really feel the crisis, as mentioned before. We've just beaten another record on revenue for the second quarter, with BRL 233 million of revenue, representing 18% of growth when compared to the same quarter last year. Same-store sales, very important.
We grew 11% on same-store sales. In the second quarter, we did not have any changes in terms of the number of stores, but we will continue expanding, be it in franchises and also in own stores. Our own stores, which represent a very important part of our retail strategy, today represents 44% of the revenue for this business unit. We had a 34% growth, partially because of stores purchased in the beginning of last year from there from then on, but we also have same-store sale growth of 10%. Also, very importantly, is the NPS, the satisfaction level of our clients. It is very high, 87%. This is our focus.
We are always focused on clients and focused on the experience, not only on product sales, but the consumer experience from the time they start investigating the product to make the construction until the delivery. This is all measured by NPS, and the NPS is very high in retail. I also wanted to talk a little bit about sustainability. In this quarter, we had a very important event for the group as a whole. It was the Sustainability Week. All of the letters in the ESG, the environment associated to governance. Please, next slide. We have some highlights that I'd like to share with you. In our video, we talked about the publishing of our Sustainability Report. We've advanced the report. Is consolidated. We consolidate our initiatives and the measurement of the impact of all of these measurements. We also had improvement in our diversity ambassadors.
We've been working on female leaderships. It is now expanded to diversity as a whole. The group of ambassadors make us really proud. We also worked with governance. We had a specific governance day to talk about corporate governance, which is a challenge for the company as the company grows. We try to evaluate our businesses. Very relevant highlights also for the platinum certification of our store in Curitiba. It has received the highest certification for sustainable buildings. It is a reference project in our network. It works as a reference for us to move on working with sustainability in our retail network. We also have our volunteer program. This is really how we believe that we can move on with our social initiatives.
We have volunteer work that we did at a community center very close to our corporate office, and a large part of our team supports the work they do, especially with the children who live in that community. We have other initiatives as well, but the week was a very important one for us to reinforce how important this topic is for our group. I wanted to conclude talking a little bit about the outlook for the rest of 2023. We talked a lot about the results for the second quarter. The evolution of our results, which is very important for us in terms of the second quarter's results. We talked a little bit about the sector and our expectations. We see a gradual recovery of consumption and ceramic coverings all over the world.
The recovery of the economy is gradual. Of course, there are differences from one country to the other because of their own specificities. In retail, I'd like to highlight that Portobello Shop continues growing quarter after quarter, a very resilient performance, and also the engineering channel, which is going through a good moment because of the launches we've had for 21, 22. Highlight goes also to the market in the U.S., which is also impacted by high interest rates.... In terms of production and sales, there is no doubt that the main highlight is the start of production at the Portobello America factory. We've already talked about it.
We also advance in profitability changes, and the profitability is also very high and relevant for the business, and in the near future, we will no longer be talking about project expenses because it will have already proven more results. We also have the maturation of Portobello shops. The growth caused by these improvements, you can see that we've been growing in this area also. I've also talked about engineering, sales. We monitor the market, but we've witnessed a recovery and even gains in this segment of resales here in Brazil. Costs and expenses. We have maintained a strict management of operating costs and expenses, and now in the third quarter, we will go through an interesting moment, such as the cost of gas in Santa Catarina.
There was an increase of 12% in the cost of gas. Now in August, we had a decrease of 8% in gas that is received by the partner. We've started with the plant at a different level in terms of gas. The editor will continue the same trends. The way Jose Angelo introduced it was, it was very interesting in terms of investments being made. CapEx. We kept our guidance for previous quarters. Therefore, investments focusing on strategic projects. Finally, in terms of cash flow, we continue aiming at our guidelines, trying to have a 2.5x at the end of the year. Right now, we are still a little bit above of what we'd planned. We expect that at the end of the year, we'll reduce this leverage level.
Part of this as an economic result and part of it because of our discipline in financial management. Well, now we're going to open for Q&A. It's almost 3:00 already. Let's move on. Thank you very much. We're now going to start the Q&A session for investors and analysts. In case you wish to ask any question by audio, please press the Raise Hand button. If your question is answered, you can remove yourself from the queue by lowering your hand. Our first question comes from Mr. Cardoso. Good afternoon. Regarding the U.S. market, what is the gross margin expectation after the installation of all the kilns? Well, I will start answering here, Luiz.
We do not have any guidance for this level of specificity, but what I can anticipate to you in terms of Portobello America's impact, and Luiz commented in his presentation, that the revenue today, even with the plant already producing, it is part, partially with outsourcing and partially with production. We continue with similar margins to what we've been doing until now. When the factory comes in, the gross margin level will be totally different, and I can tell you that it will be superior to the gross margins we have here in Brazil. The US market works with superior gross margins than Brazil. This will happen gradually.
We will see part of this in the third quarter. When we think about the first kiln, this is something that we will see more significantly in the fourth quarter. Definitely in 2024, we will already have a total impact of the gains. This is very important. Portobello America had this characteristic of investment. We were investing in the infrastructure of the project. I wanted to remind you that, we wanted to do it in 2024. Yes, exactly. Our next question comes from Mr. Carlos Herrera from Condor Insider. Could you please confirm some information on the U.S. plant? When in the third quarter of 2023 has it started operating, and at what levels of capacity do you expect it to operate more or less in average during the quarter? Or what is your expectation regarding the ramp-up?
Well, the plant started operating in mid-June, July. It was a month for tests, low productivity, as we'd planned. Now, in August, we will have more or less of the plant's capacity, and now we are connecting more quickly at the end of August, trying to get as close as possible with our capacity of 80% to close the quarter, reaching 100% in the last quarter as planned.
Luiz, I'd like to add that we started operating in mid-July. Before the end of July, we started issuing invoices.
Yes, that was a very important landmark. We had record timings, basically in 15 days, a very strong operation to generate results as soon as possible. As John commented, we already have a good part of our revenue coming from the plant. It's going to be higher in August, in October, I'm sure it's going to be amazing, closing the year with a good percentage of our revenue coming from the plant. Well, our next question also comes from Mr. Carlos Herrera, from Condor Insider.
During the second quarter of 2023, shouldn't we have strong investments in the U.S., right? It would be too expected to have some cash burning there in the third quarter and fourth quarter.
How do you expect to evolve in terms of leverage, more or less, what would be the peak in terms of net EBITDA? Well, Carlos, in terms of investments, we have the continuation of cash used to pay for the equipment and also for the leasing. From the point of view of leverage, the investments are new when compared to the kiln that has already started operating. We've already made financial investments. In terms of leverage, our expectation is to have similar levels to what we had this quarter, based on the expectations of Portobello America and the EBITDA and the growth in the other businesses. As we commented, in terms of market evolution, the company is going to be a little bit above.
Also, in terms of the leverage level, I would like to make an important clarification so that we can have an idea of our company's cash. Today, we have investments of about $700 million in the plant. A little bit, half of this was done for the civil construction, and we've been paying the installments since April. So, it is gradually incorporated in our cash flow. The remainder, a large part, because of the investments in equipment, we started working with our equipment providers with a medium term of five years. In some cases, three years, but in the vast majority, five years. Jose Angelo has commented that we're already paying for this investment since the beginning of this year, and therefore, in terms of cash diversity, it will come in, in the next five years.
Then to complement in terms of leverage, the expectation is that throughout the year, we'll go back to the 2.5 level, but not necessarily this half of the year. Our next question comes from Mr. Tiago Souza. Good afternoon. Congratulations for the new plant. I would like to know a little bit more about the contract for the plant land. Do you have the option of buying it or a duty to buy it? Do you have a predefined deadline? If so, is it taken into account in the company's debt? Well, because we cannot buy the plot of land, in the end, it's really... something where we transfer the property of the asset to the investor without an option to buy at the end of the contract, therefore, it is not considered as a debt.
I don't remember what the deadline is, but I think it's 20years- 25 years. We can confirm that. It's part of our contract as well, but it's a long time, and the interest rates are much lower. We closed this in 2019, 2020. It was 2019. I don't remember everything by heart. We can share this information with you later. It was a beautiful funding model, this U.S. project, both in terms of construction and equipment.
Our next question also comes from Mr. Thiago Souza: In Portobello Shop, do you have a number of your own stores and franchises that you want to reach? With focus on specialized retail, does the company intend to buy or to have partnerships with premium companies in the areas of ceramic and metals?
Well, our current model is not a model where we can multiply the number of stores with the talent that we already have. We do believe in expansion once again, but we have to take into account our store models. We're not necessarily talking about revenue, because we have opportunities to have better revenue per store. From the point of view of the division of own stores and franchises, I will work more qualitatively. We believe in the franchise model. This is how we grew, this is how we conceived our business, and it works really well. Why have we moved on to our own stores?
That we can have an actual retail business experience, and also have an opportunity for us to test and apply all of the best business practices of the business, and then multiply it to the rest of the company. Even so, we've had a good performance. We've had many cases where some of our own stores are not necessarily profitable. In our case, we've become a profitability reference in the network. I don't know whether I've missed part of your question, but I think that was it. Well, please wait while we connect to more questions.
Our next question comes from Mr. Luiz Carneiro: When we analyze the debt, EBITDA, we see an exponential increase between the fourth quarter of 2022 and the second quarter of 2023, going beyond the first quarter of 2023 guidance.
In case this increase has the same magnitude in the next quarter, would we have a breach of confidence? How does the company see the debt and its respective growth? Could you comment about the methodologies? Well, first of all, Luiz, in terms of the debt versus EBITDA, the evolution happened especially because of two factors. Number one, we in fact had an increase in our debt as it was anticipated for the first and second quarter of the year, so that we could make all of the investments to be made throughout the year. In the beginning of the year, I think that it was commented in one of our calls, that the company made a decision to be more conservative, maintaining the level of debt, but also maintaining a cash, regardless of the evolution of the market.
On the other hand, the EBITDA for this year and the first quarter of this year is lower than the EBITDA volume for the second half of last year, and so we had a higher leverage level, mathematically speaking, of course. This, the fundamentals are presented in all of our presentation. When we look at the expectations, we expect that throughout the year, we will maintain the guidance 2.5x of our EBITDA. In this third quarter, we still have an expectation to have higher levels than the 2.5x. In terms of expectations, it's also within the covenants and all of the business actions treated internally from the point of view of expense optimization, and also of actions, cash generation, and need of capital, so that we are within the covenant.
Question number two, about the methodology used for our provisioning. We had an alignment according to the perspectives and probability, and follow our accounting rules. Whenever we have high probability, we provision. Whenever possible, then we just show it to our auditors with evidence, without provisioning. We have a comment by Mr. Carlos Herrera from Condor Insider: "Congratulations for having made this investment in the United States. I remember having questioned its feasibility in the annual meeting with investors back in 2019, and finally, I was wrong, and you made it." Well, thank you, Carlos. I think it is a comment that is good for us to really see the size of the challenge we faced. We started this project in 2017, 2018, with a few people, and we had the first warehouse rentals in Florida.
The project looked like it was grandiose. It was the largest one in the group's history. Really, when we look back in time, it was a long road. I can share with you that as a Brazilian company, we are very proud of the movement we've made. We are really starting a plant in the United States with expertise from Brazil. An initiative that started in Brazil and was very successful. The project is going well. We are very confident. It's a key piece for the evolution of our results in the second half of the year. We start the second half very confident.
To review one of the important variables of the project, which has to do with sales, the proposals, participation in the Coverings fair, which really confirmed our appeal with our clients, and the plant, which is now a reality and is producing with a high level of quality, and really doing better than what we usually see. We're doing well. We have a more positive half of the year ahead of us, and we're waiting to be able to deliver value to our clients. With this, we close our video conference.
Once again, we thank you for your participation. We're transmitting the reality of our project, and I would like to thank Rosangela, and also, I would like to thank all of you who participated here, and I hope to see you in the call for the third quarter.
Portobello video conference is now over. We thank you all for your participation. Wish you a good day.