Good afternoon, ladies and gentlemen. We would like to welcome everyone to Rumo's third quarter 2020 results conference call, which will be led by Mr. Ricardo Lewin, Chief Financial and Investor Relations Officer. We would like to inform you that this event is recorded, and all participants will be in a listen-only mode during the company's presentation. After Rumo's remarks, there will be a question- and- answer session for investors and industry analysts conducted by Mr. Ricardo Lewin, CFO, together with Mr. Gustavo da Rosa, Executive IR Manager. At the time, further instructions will be given. Should any participants need assistance during this call, please press star zero to reach the operator. The audio and the slideshow of this presentation are available through live webcast at ir.rumo.com., and the slides can also be downloaded from the same IR website.
Before proceeding, let me mention that forward-looking statements will be made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Rumo's management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Rumo and also cause results to differ materially from those expressed in such forward-looking statements. Now, I'll turn the conference over to Mr. Ricardo Lewin. Mr. Lewin, you may begin the conference.
Good afternoon, and thank you all for joining us in this earnings conference call for the third quarter 2020. I'd like to begin this presentation by commenting on ESG aspects. The COVID-19 scenario forced Rumo to restructure the way we operate to avoid contamination and protect the health of our employees. This was imperative to guarantee the continuity of our operations, putting Brazil into motion from the North to South. Since then, we carried out over 17,000 tests with roughly 2% of positive results, demonstrating the success of the actions we took. In our 2019 sustainability report, we announced our long-term commitment to a few targets for the 2020-2025 period. In the first nine months of 2020, we continue with a significant evolution in terms of safety, with a 44% decrease in personal injury rates.
In emissions, which are highly influenced by our FIOL use performance, we already achieved a 5.3% reduction in this year. This tells us we are on the right path to achieve our long-term goals. The next slide shows the main highlights in our results. In the third quarter, despite all the challenges, we delivered our best quarter in terms of volume, surpassing the third quarter 2019 record. We also maintained our cost discipline, delivering a 4% reduction from last year. EBITDA reached BRL 1.1 billion, down 7.9% from the same quarter of the last year, impacted by a 4.2% decrease in tariffs and a revenue mix with higher volumes of sugar, boosting port loading volumes and logistics solutions, both with lower margins than the railway transportation.
Net income in the third quarter stood at BRL 171 million, down 53.7% compared to the third quarter 2019, due to lower EBITDA and higher finance expenses, since for the most part of the third quarter 2020, we recognized interest on the renewal agreement for the Paulista and Central networks. We also point out the follow-on, which not only reduced leverage in the third quarter, but also allowed for the prepayment of concession fees for the Paulista and Central networks, which will further reduce financial expenses in upcoming quarters. The next slide shows more operating results. Some factors impacted the volume performance of each operation. The North operation had a 3.1% increase in volume, a new record for the operation. The fact that producers held back on corn exports limited cargo availability for the railway.
In this context, we used the capacity to transport more sugar, making total volume in tons grow 9%, although not generating that much RTKs and margins, since the product has lower profitability compared to grains. Coke and fertilizers continued to grow consistently. The south operation saw a decrease of 5.8% in volume. The industrial segment continues to be affected by COVID-19, decreasing 20% year-over-year. The agricultural segment had a marginally negative performance. Especially in Rio Grande do Sul, where volume was impacted by a shorter crop due to climate conditions. Container operation grew 5%, still below the usual growth level for this operation due to limited demand because of COVID-19. The next slide shows our results by operation.
North operation results were affected by a decrease in tariffs due to agreements negotiated in early 2020, as well as increase of competitiveness of truck in the north region after paving of the BR-163 highway was completed, still with no toll collection. Expenses with port loading and logistic solution grew much more than railway volume. This offsets net revenue, but also brings higher variable costs since these operations have much lower margins. The higher tariff in the South operation helped to offset part of the volume loss, bringing revenue close to the third quarter 2019 levels. EBITDA was impacted by non-recurring gains in all the revenues in the third quarter 2019. The container operation saw significant gains in non-recurring EBITDA due to the sale of the Cambé service unit, which is a non-core and unprofitable business unit. We will take a look at our financial results.
This quarter, we prepared BRL 5.1 billion in concession fees for the Paulista and Central networks. As a consequence, lease liabilities in the balance sheet dropped from BRL 7.9 billion to BRL 2.7 billion. Worth mentioning that there has been no change in accounting for the right-of-use, which will continue to be depreciated over the course of the useful life of the respective concession. With regards to interest expenses, since the prepayment was made in the second half of September, interest decreased only slightly in the month. Had the prepayment been made since September 1st, the interest line in the month would have been approximately BRL 26 million, suggesting potential gains for the fourth quarter. The next slide shows our net income and financial results. Financial results in the quarter grew 46%.
Cost of debt was affected by BRL 23 million by the lower mark-to-market gain, partially offset by the decrease in CDI. Other expenses increased, especially with the BRL 88 million growth in concession fees and operational leases due to early renewal of the Malha Paulista concession. Net income dropped by 54% due to the lower EBITDA and the higher financial expenses mentioned earlier. Note that with the capital increase and the consequent prepayment of the concession fee in the quarter, we will have a significantly lower financial expense starting in the fourth quarter 2020, resulting in better contribution to net income. On the next slide, we will take a look at our indebtedness. Our net debt dropped from BRL 7.9 billion to BRL 6.5 billion, mainly due to remaining funds from the capital increase in the amount of BRL 1.3 billion. Leverage was reduced to 1.7x EBITDA.
Rumo ended the quarter with cash flow approximately BRL 10 billion, leaving the company in a very comfortable position in terms of liquidity and amortization schedule. The next slides show information about the market scenario for corn and soybean. In the corn market, according to Agroconsult forecasts, Brazil is expected to export 35 million tons of the grain in 2020, a decrease of 4.3 million tons from 2019. Note that between February and September, exported volumes was six million tons lower than the same period of 2019, suggesting availability of this grain for the fourth quarter. Since Brazilian producers have been reducing the pace of trading activities, it is possible to guarantee that these volumes available will be exported in 2020. Second production is expected for 2021 to be 8% higher than the 2019, 2020 crop year, with projected inventories of eight to 10 million tons.
Sale of crop is well advanced, having reached 40% in the center south of Brazil and 63% in Mato Grosso, much higher than the historical average. The next slide will show information about soybean market. For 2021, Agroconsult's preliminary forecasts for soybean show a 6.4% growth in the Brazilian production and a 2.6% growth in the country exports, and an increase of 4.7% in exports for the state of Mato Grosso. Planting was delayed in the early stages due to unfavorable climate conditions, and is already recovering, reaching 62% in Mato Grosso in November 2020. Also, according to AgRural, sales of 2021 crop is advanced comparing to previous years, having already reached 56% in Brazil and 68% in Mato Grosso. The next slide shows information on Central network. Works are advancing for Central network that will become operational in 2021.
On this slide, you can see the railway works in certain stretches of our network. On the next slide, you can see other details on the terminals of this operation. For the beginning of operations in 2021, two terminals will be concluded between the first and third quarters of the next year. The first one will be in São Simão Terminal in Goiás, focusing on grains. It is being built through a partnership with a client of ours called Caramuru. This terminal will be finished by the first quarter of 2021 with capacity of 1.5 million tons. The second one is the Rio Verde Terminal, also in Goiás, which in its first stage will serve grains with capacity of 8 million tons. It should be ready to receive volumes by the third quarter 2021.
As shown in the table on slide 20, our clients have shown great interest in this operation, making themselves a series of investments. This points to significant growth of the Central network over the next years. Let's take a look at the next slide. On this slide, we illustrate works at São Simão and Rio Verde terminals, both in the state of Goiás. Terminal works keep their accelerated pace so that the schedule mentioned above is fulfilled. We are very excited for the start of this operation. We should continue to share more information as construction approaches workloads. This concludes my presentation for the third quarter 2020. I'm now available for the Q&A session. Thank you very much.
Thank you. We'll now begin the question-and-answer session for investors and analysts. If you have a question, please press star one on your telephone. We kindly ask you that in case you have more than one question, please announce it at the beginning and ask one by one to ensure conference flow. If you prefer to send your question over the internet, click on the Ask the Speaker button on your webcast platform. If your question is answered during the session, you may remove it from the line by pressing star two. The questions will be answered in order they are received. We ask you that you use your handset when asking the question in order to maintain excellent sound quality. Please stand by while we collect the questions. Our first question comes from Andre Hachem, Itaú.
Hello, guys. The first one is related to the North . If you could discuss a little bit about how you're seeing pricing pressure. We've seen yields this quarter falling quite a bit. If you could discuss what your expectations are for next year and how your negotiations for contracts for next year's volume have been evolving? that would be very helpful.
My second question is in regards to capital allocation. We saw yesterday the government approving that current owners of railway networks cannot participate in the FIOL auction. If you guys could discuss a little bit about how you see this auction. I'm sure you guys will not disclose whether or not you will participate, but how complementary this could be to the North-South Railway or how detrimental it could be. A bit of your take on this new project, which is expected to come downstream over the coming years. Thank you.
Hi, Andre. This is Ricardo. Thank you for your questions. The voice was not that good. I think that the first question was about pricing pressure. Well, actually, you asked about contracts, price, and things like this. A lot of items here. Let me start here by talking a bit about the competition. Yeah, about pricing pressure. It's not new for you guys that the pavement of 163 became cheaper to transport to the North part. This is the first item that brought pressure for us during the year. The second item that brought for us price pressure was the change or actually the decrease of fuel prices. When you decrease fuel prices, trucks get more competitive, and you know that in our part depends more on trucks than we depend. Yeah.
This brings more competitiveness to the North Arc. We know there's a short-run competitiveness is what I call, I always say in all my meetings, that this is completely asymmetric competition. There is no reason for the government paving 163 and not including toll plaza there. I call this a completely asymmetric competition, and you know that this asymmetric competition brought pressure on prices. This is the reality, and the company is dealing, and will continue to dealing with this. Okay, the company will not change its strategy because the short-term asymmetric competition. We will keep our strategy. We will keep in being a company that focus on scalability. Okay? We are focused on cost. I always repeat, we are focused on reducing our costs, diluting our fixed costs, reducing the variable costs by improving efficiency, reducing the dependence of fuels.
Once we do this, we will be every single time more competitive, and this is what we are doing. We have also our extension that we are working on it for Lucas do Rio Verde, that will make our solution more affordable. Okay? In what depend on us, we are dealing with this pricing pressure. On what does not depend on us, we are waiting for the auction of BR-163, was supposed to happen by the end of this year, it seems it will not happen. It will go to 2021. I don't know if it will beginning, at the end of the year. This lack of toll roads or it will end at one time, okay? The auction will happen, and the auction will take place, and this will bring another BRL 15-BRL 25 per ton, for the price of trucks going north.
This will make, again, asymmetric the competition between the two ways, going to the north or going to centers. Okay? This is the first part of your question, you asking about contracts for next year. You know that I never like to answer about this. This is very strategic information, I don't want to disclose too much information on that. What I can say is that, you have been following very closely, I know crops have been commercialized in advance this year, if you compare to the average of previous year or this year right now. It's really fair to say that the demand for take-or-pay has followed this anticipation, it's far better than previous year, at least when we refer to the first half of next year, that's soybean. That's what we have sold more volumes. Okay?
Related to prices, also what I can tell you is more related to the first half of the year. That is, it's likely better than this year right now. There, it's important that you take into consideration everything that I told you, like 163 is there with no toll roads. There is no miracle regarding yields for the next year. Okay. Which is slightly better. We have been doing a very good commercial and work. We have right now a new vice president, 100% focused on the commercial relation to be closer to the clients. We have been working a lot in bringing people to understand better the market. We have, right now, our market intelligence area, we have the pricing area working on technology to understand better. Things will come. However, you have this asymmetric competition that I told you.
Hope this part of the question was complete. You asked about capital allocation. I don't know if I get very well because your voice was not that good.
No. Could I ask it again? I'll ask again. The first part of the question was very clear. Thank you for your answer. I think everyone's aware of the short-term pressures regarding the BR-163. The second question was in regards to fuel. If you could comment, how complementary it could be to the North-South Railway, if it would help in originate new volumes or new grains from the Far East, or if you could see it as a potential risk should you not participate or should you not win, in removing cargoes from the North-South and bring it to other ports in Paranaguá.
Yeah. Here I will be really direct. We don't see a potential risk for Central network. Central network is going all the way through grains growth Great growth in Tocantins and Goiás, mainly south of Goiás. While Fiol, it's a railway based on minerals. There is nothing related to agriculture. Remember that FIOL goes only to Caetité, so it's not a risk for us, okay? You know that we have our fiduciary obligation. We will study FIOL, okay? You know that there is only few opportunities in railway to Brazil, it's really not 100% related to our business. Remember that I always say we are the spine of agricultural Brazil. We take agricultural products from the areas where we have the highest or the most important crops of Brazil.
Our focus is to take this in the north to Santos, in the south to Paranaguá, São Francisco do Sul, and Rio Grande. I can tell you that this is not 100% related to our business. As a fiduciary obligation, we will study it.
Thank you. Very clear.
Our next question comes from Bruno Amorim, Goldman Sachs.
Hi, good afternoon. I have two questions to begin with. The first one is a follow-up on your comments on the paving of the BR 163 and the effect of lower diesel prices. Has the company reacted somehow? Have you invested to some extent in your commercial efforts? What initiatives have been implemented, if any, in that sense? The second question is just to get your view on what should happen next year, given that the planting season for soybean was delayed. Does it mean that the strong volumes for soybean export should be delayed by maybe one month or two, and maybe the strong volumes will start and show up on March as opposed to February? If that's the case, should that imply that the corn cycle should also be delayed by one or two months? What's your view there? Thank you.
Hi, Bruno. Good to talk to you. I will answer the first part of the question. I will let Gustavo answer a bit here about the soybean crop. As I told you, what we have done during this year, that our initiatives on commercial side, okay? I think that what I have talked, it's very important, so I will reinforce that. From the beginning of the year, we have now a market intelligence area, 100% focused on understanding the market, where the grains are, where the grains are going, what are the competition, things like this. We have a pricing area, seeing how we can optimize our results. When I say optimize, Bruno, I'm not talking about 2020, about 2021, but always our long-term companies. When we talk about optimizing, we are talking about this year and the longer run.
That's connected to a new vice president that came. We are acting together with the clients and working on long-term partnerships with the clients, understanding their needs. A lot of things I have been doing here, okay? I really not enter in the details here. That's very strategic, but we have been working strategically, and thinking about the long run, to be dominant, mainly in Mato Grosso. Bruno, we always talk about this. We put in your mind and to our all investors, we are the most competitive logistic for Mato Grosso, okay? There is no other way that's more our logistic solution that are more competitive than us. Well, talking about the second part of the question, [Mario], would like to take this? For the market.
Yeah. I will take this one, Lewin. Bruno, you're right. We have a different dynamic for next year. Everybody knows so far that the crops of soybeans started late this year. The seeding and the planting of soybeans started late. The first crop of corn start a bit earlier. What we're going to have next year, it's a first crop of corn that typically provide cargos for the local market. We don't benefit much from this type of cargo. It's more to serve the consumption of corn in Brazil. The first corn crop will arrive in the regular window. We're going to have a late soybean crop. It's important to highlight that we are expecting to have this year's strong inventories carry over to next year.
One of the reasons why these inventories are being carried over is because there will be this gap between the first corn crop and the second corn crop. The second corn crop, which is the crop that we transport to export, it's going to start only after we finish with soybeans. Once soybeans started late, second crop of corn will also start a bit late. Inventories could be very profitable to farms, so they can fill up this gap between the first and the second crop of corn using inventories that they had this year.
One of the reasons why the producers are holding back some corn to next year is because they predict that, especially during this gap between the first and the second crop of corn, inventories of corn could be very profitable because it will be the only availability that we're going to have in the market. With that, it's too early to say, but according to the increase in the area used for corn, which is expected to grow 4% in Brazil and almost 6% in Mato Grosso, we are expecting our production to be growing around 8%. When we couple that with the inventories, it's likely that exports will be growing 12% year-over-year.
It could be a very good availability for corn, but it will be, especially in the beginning of the window, it will be much more based on inventories rather than in the second crop of corn, which will arrive a bit late as well as it happens with the soybean.
Thank you. Very clear.
Bruno, just complimenting one thing that Gustavo said and also getting back to [Andre's] question. It's important to say that, just to reinforce actually, that last year, we took longer to close our take-or-pay. Remember that this year, last year, no, we are assuming 2020. This year, it took longer for us to close the take-or-pay contracts. We got more exposed to spot markets. This was one strategy that we are following. Just to reinforce that with the growth, reinforce what I said to Andre is, you asked about commercial attitudes that we are taking here. The point here that once we have more commercialization, is what I said, it's really when I use the word far better in terms of take-or-pay, it's because we are following this anticipated commercialization. As Mario said, the commercialization is anticipated mainly for soybean.
We are also anticipating our contracts with the clients, what make us more optimistic related to certainty of volumes, at least when we are talking about soybean. You know we talk every single call about that. Corn is more difficult to understand because we need to wait a bit more during the year, okay? We will also work on that commercially talking.
That's a good call. Thank you.
Our next question comes from Victor Mizusaki, Bradesco BBI.
Hi. I have two questions. The first one, why don't we take a look on the CapEx execution this year. If you had the company already invest like BRL 1.2 billion in capacity expansion. In this number, we also have the conclusion of early renewal from Malha Paulista. I'd like to know if you can give any color on the capacity growth this year, and what can we expect for next year, specifically in the case of Malha Paulista. The second question, I think that recently there was a change in the state constitution for Mato Grosso that could allow the local government to approve new investments in railway. I'd like to know if there any plan to maybe try to apply for Lucas do Rio Verde using this new legislation. Thank you.
Hi, Victor. I will take the first question, maybe Ricardo can comment on the second one. Regarding the extension CapEx, we did our job this year. We expanded capacity. Unfortunately, we saw some changes in the assortment of cargos that we transport that are not producing as much RTKs that we could do if the mix was the same as last year. For instance, we saw higher volumes of sugar, that they generate a lot of tons transported, they don't produce the same amount of RTKs. Once the average distance, it's a bit lower. We are not maximizing our capacity when we transport as much sugar, it turns out that it was the only option. As I mentioned before, the farmers were holding back corn to export later on at higher prices.
Another thing that is important to highlight is that due to COVID-19, we didn't have much of our industrial volumes. We saw, especially in the south operation, the significant decline in the demand for industrials. That part of our capacity is kind of idle. Of course, as long as we recover this demand and hopefully, this will happen soon, we're going to be able to start transporting more volumes. I think our capacity will be more clear. You guys can look at the volumes and see how well we are doing in terms of volumes. With regards to next year, the plans, as Ricardo mentioned before, continues. We're going to have some, in the beginning of the year, the entrance of the longer trains. We have very important investments happening in Malha Paulista.
We're going to have the entrance of Central operation, which will request also more capacity in Malha Paulista. We are doing all the expansions, trying to follow our schedule, in a way that we can afford significantly more volumes next year. Especially because there will be this new trigger, which is the Central network requesting a lot more of capacity. I think, Ricardo can comment on the second question.
Yeah. Thank you, Gustavo and Victor. Thank you for the good question here. Just to align the knowledge of everybody, we call that, recently, Mato Grosso State has approved an amendment, in the local constitution, the state of Mato Grosso Constitution, what we call in Brazil, PEC. That allows the state to authorize any railway project within the state. It not can be outside the state, but in the state of Mato Grosso, okay? That already exists in the south of the country, in Paraná. Ferroeste is an example of that. How we see that is that this approval reinforced the importance of this project to the community of Mato Grosso, okay? Also that the government wants to speed up things. For us, it's very important because this is another option.
Now we have other options to start to build our extension to Lucas do Rio Verde. Remembering that Lucas do Rio Verde is an important project for the competitiveness of agriculture in Mato Grosso. Mato Grosso, that's the frontier of agriculture, not only in Brazil, but in the world. I think that I brought understanding importance of this project. Important to say that, although we have this optionality, we still believe that the federal government will be approving this project soon. This project is much more efficient than any other project that is being studied for Mato Grosso and will increase competitiveness. One thing that's not, maybe you people have not read in the newspaper, but it's important. Not many people talk about this, is that IBAMA formally approved that the environmental licensing for the extension was transferred from IBAMA to CONSEMA.
That's the environmental secretary from Mato Grosso, okay? That will speed up the environmental approval for the project. I think that besides the PEC, I think this change is also very important, and we continue to work on that, getting the approval, get evolving in our project. Once it's 100% approved, we are 100% ready to start to work on that.
Okay. Thank you.
Our next question comes from Rogério Araújo , UBS.
Hi, everyone. Thanks for the opportunity. I have a couple of questions here. One is a follow-up on yields. Is there a way of isolating the BR-163 pavement on the fares, on the freight prices in the north? Do you have an idea on how much freight prices came down in terms of reais per ton, isolating that? I'm asking this because I want to know if there is any kind of additional yield pressure in the short term, before the tolls start to be collected there. Any additional potential pressure in yields? Could you make this calculation? That's my first question. Thank you.
Hi, Rogério. I will try to answer this one. When we compare with last year, we saw freight prices going down by approximately BRL 35 per ton in the North Arc. I think it's fair to say that probably 12 to 15 BRL per ton is related to lower fuel prices. All the rest, we can put in the account of having the BR-163 paved without toll roads. We believe, when we look to the documents of this auction, that the price for going north after the privatization and consequently, the toll roads, could be between BRL 15 to BRL 25 per ton higher. The 25 is probably to take the assumption that the trucks will go up loaded and they will have to return empty, which is kind of the base case.
Of course, there might be a few trucks returning with other cargoes, but we believe that the majority of the trucks will be returning empty. This could make a huge impact in terms of competitiveness. Today, with the current fuel prices that we have, to get back to the previous level of competitiveness, we need to have the toll roads in place. As Ricardo mentioned, it's not clear yet when we're going to have this. It depends on the action from the government. That is probably the fast way to get our competitiveness back to the levels it was before the pavement of BR-163.
That's very clear. Thank you. My second question is regarding a couple of items related to your capacity. The first one is what you mentioned, the 120 rail cars train. If you could give us some color on when exactly it should start and the expected impact on the volume, on the cost due to that. In addition to that, also any kind of color you could provide us on the Port of Santos, the investments being done there with CODESP, with the port terminals, with Portofer. What and when to expect some kind of de bottlenecking events there. Thank you very much.
Thank you. Thank you, Rogério. I will start and then Ricardo will comment about the Port of Santos. We are planning to have the 120 rail cars train in the beginning of next year. It will not be 100% of the trains running with longer trains at the beginning, but we'll have, throughout the year, the option to increase the percentage of trains running with longer trains. When talking about cost, this is almost for granted, of course, when we shift to longer trains, that helps us to increase the average speed. It helps us to improve the fuel consumption. It makes our operation far more efficient, and it allows us to reduce our costs, and also to increase the scalability of this business.
When it comes to volumes, of course, it will be subject to the port capacity that Ricardo will comment, but also to certain market conditions. By having the longer trains, the company will have some degree of flexibility trying to increase capacity in the short run. In the past, when you depend on building infrastructure, it's much hard to provide more capacity in the short-term. I think the long trains are a quick response in terms of capacity that the company can speed up depending on how much volumes and how high could be the demand in the short-term. We have to put all those things together. It depends on how high is the demand, how willing the customers are to engage with more take-or-pay agreements, and also, of course, the capacity that we have in the Port of Santos. Ricardo, if you can comment on Santos.
Hi, Rogério. Well, Rogério, we have been investing in Santos for the last five years, okay? Maybe we never gave names to the projects for investors or sides, but we have basically invested in a series of projects that are de bottlenecking the Santos port and making it more efficient. Okay? You have been following all the investments that we have done in our T-16, T-19, and many projects that we have done in the entrance of the port. That's the most problematic part of the port. Currently, we have in our pipeline projects that are not transformational, but projects that de bottleneck, mainly the right side of the port. I will tell the name of two that probably you heard, but Macuco, the third line of Paquetá.
These are improvements that we are doing that are not that expensive projects, but that bring a good improvement of capacity for Santos port. There are other projects that we are working on. One that you probably read in the newspaper, talks about the loop that the government is studying to be built close to, actually, part of our terminals in the right side. This loop is very important to improve the capacity of the port. At the same time, you have a line that will, going outside the port and entering the port and doing all the unloading of the trains. This loop is important. There are other projects that are under study that are more focused on terminals. We can be part of this project in different ways. Okay?
For example, we can be part of improvement of terminals or building new terminals, by being equity partners or by being commercial partners, giving contracts that incentivize people to improve their terminals or build a new terminal. The point here, just summarizing what I'm saying, Rogério, is that we look very closely two things, capacity of the port and efficiency of the port. Okay. We never stopped working on that. With the time, these first ones that I told you that are improvement of efficiency as Macuco, Third Line of Paquetá, we are working on that.
You will hear from us other projects related to terminals, not only on the right side of the port, but on the left side of the port, that will allow us to invest in Paulista, increasing capacity, that will allow us to take more volume in Mato Grosso without having Santos as a bottleneck.
That's very clear, Lewin and Gustavo. Thanks so much. Have a great day.
Thank you, Rogério. Have a great day, too.
Our next question comes from Regis Cardoso, Credit Suisse.
Hi, guys. Gustavo, Ricardo, good afternoon. Thanks for taking the questions. A few follow-ups on my side. First one on yields. How can we explain the improvement in the third quarter over the second quarter? You saw already some sequential improvement there. Is this in any way related to mix because now you have more corn instead of soy? Is this really early signs of recovery in yields? You're talking third quarter and second quarter, but if you could also comment on how that impacts fourth quarter and 2021, as you explain. Second topic, still on the discussion around yields and volumes, more specifically on the expansion of the Rondonópolis transshipment terminal, whether you believe that could reduce truck lines, and if you believe that could also have any sort of impact for freight between Sorriso and Rondonópolis.
Then just finally, if you allow me a third one, it's about CapEx. If you can sort of describe what are the order of magnitude or the size of the investments you plan to make in Malha Paulista, Central, and in the first few years now 2021, 2022, 2023, given that you reduced leverage quite substantially after the recent follow-on. These three questions. Thank you.
Thank you, Regis. Gustavo speaking. I will address the first question, and then Ricardo maybe can comment on the last one. Starting with the yields. Yeah, you're right. We had some improvements in yields from the second quarter to the third quarter. Indeed, a lot of things changed. In the second quarter, we were transporting soybeans, which most of these soybeans were negotiated in the beginning of the year where we had low trucking prices, and we also had the effect of the low fuel prices in the market. Since then, we saw some improvements in fuel prices, which helps increase the price of trucks and therefore our competition. That definitely helped us to improve the yields compared to the third quarter. Another thing is that, in the third quarter, we shifted from soybeans to corn. It was a completely different dynamic.
We negotiate more of the volumes in the short term, therefore, we did better negotiations than the ones that we did earlier in the year. As a consequence of that, we had better yields in the third quarter. When it comes to the fourth quarter.
It's still unclear. Of course, we have already a big chunk of the volume negotiated, there is still some capacity left to be negotiated with the customers. That's why it's so important to see how much willing the producers will be to sell all the corn in the fourth quarter. Depending on how much we sell those additional volumes and how much more volumes we can transport, that could change our yields in the fourth quarter. I would say that the volumes that we already negotiated, they could be close to the pattern that we did in the third quarter. We are not 100% done, so there is still some volumes to be negotiated, and so far, it's too early to say how well can we negotiate those prices. I think when it comes to 2021, Ricardo already answered.
We have slightly better prices for soybean so far. We are well advanced in the negotiations for soybean. When it comes to corn, it's not the priority of the farmers and the trading companies right now. We should start to negotiate corn, maybe in December. This process can speed up. I think in a couple of months from now, maybe January, February, we can have a better view on pricing for corn. It's still too early to say, but when it comes to soybeans, it's fair to say that it's at least slightly better at this point. With regards to the expansion of capacity that we did in Rondonópolis, I will ask Ricardo to comment on that.
Yeah. Thank you, Gustavo. Regis, thanks for the questions. You know that, the extension from Rondonópolis, the extension to Lucas do Rio Verde, actually, we are not still releasing to the market any kind of yields or volumes, okay? It's important to you to understand the rationale, or what brings value to the extension, okay? You can do your calculations on that. Some people make confusion that the extension will bring more capacity. This is not true. What brings more capacity is the improvement of Malha Paulista, okay? That comes to your third question, actually. I will go through this, but are the investments that we'll be doing in the next years, that in Malha Paulista, that will double the capacity for Malha Paulista and allow us to bring more volumes from Mato Grosso.
Here is when you talk through volumes in long run, like we talk about doubling the capacity from Paulista, okay. That allow us to take more volumes here, and here, you can take market analysis from long run, for Mato Grosso. Okay. What brings value with the extension is the following, that currently, the transportation from Sorriso or from Lucas do Rio Verde to Rondonópolis is made by trucks, okay. We can do the same transportation, okay, maybe with a similar tariff, or obviously we can charge less than this, but with a much better margin than the truck does today, okay. Here you can start to make your assumptions. You can take the truck prices, much probably will be a bit cheaper than that. Our margins, in this stretch, that's much more efficient than Paulista, for example, even more efficient than Ferronorte.
We'll have good margins there. This will bring value for the CapEx that will be invested in this extension. Going to your third question, that CapEx for Malha Paulista. What we have released, and that's public by now, is that we have a commitment to invest BRL 6 billion. What are in the documents that this BRL 6 billion, 50% of that will be invested, to 2028. 50% of this 50%, or 25% of the total, will be invested until 2023, okay? This is what we can say from now. Once we next year, we'll much probably be releasing a new long-term guidance. You'll see this CapEx there in the long-term guidance. That good, Regis?
Ricardo, follow me. Just a follow-up on the second question. Maybe I wasn't completely clear. Thanks for the comment on the extension. It's very clear on that one. I also wanted to know about the expansion of the transshipment capacity with more truck loaders in Rondonópolis. Truck dumpers, sorry, in Rondonópolis, whether you believe that could benefit.
Yeah. Sorry, Reg, because every time you talk about expansion, I connect expansion to COVID-19. We are saying that we did an investment in Rondonópolis, double the static capacity there. This is done by now. We have finished. What's important for this, the turn of Rondonópolis, that's not only the most important terminal for Brazil, but the most important grain terminal, I think from Latin America. The turn was too high. It's more than one time a day. Okay? This stressed too much the terminal. With this increase of static capacity and unloading capacity also, loading and unloading capacity, unloading grains, unloading capacity for the train. With the increase of this capacity, you reduce a lot the stress of the terminal, increase capacity for transportation, okay? Reduce the risk of having any problem in the terminal. This is already done.
This is one thing that allow us to improve capacity for the next year. A third thing, another thing that is important here is that once you reduce also the turn time of trucks, as you get more efficient, as you have more static capacity, it gets more attractive for the trucks coming to Rondonópolis than sometimes going to the Northern Arc, for example. In the past, trucks needed to stay for a long time in the terminal, and that was drastically reduced with this project that we did. It gets cheaper for the truck drivers to come to Rondonópolis and get more attractive. You call more volumes for the terminal. Mario, I don't know if you want to complement anything here before about the expansion of capacity. Sorry, Regis, I misunderstood you.
I don't know, Regis. I think Ricardo just answered the question. If you have any other follow-ups, let us know.
Very clear, guys. Thanks so much. Have a great day.
Likewise.
Our next question comes from Stephen Trent, Citibank.
Yes. Good afternoon, gentlemen. Thanks for taking my questions. I just had two, just to make sure I understand. When you mentioned, in your release that logistics solutions created some EBITDA margin pressure, should we think of this as a temporary phenomenon related to high sugar volumes or extra measures you took during the COVID pandemic, or could this be something more structural? My second question, when you mentioned outside investors, is this something that we could still eventually see for the southern network? Thank you.
Hi, Stephen. Good to hear from you. I will answer the first question, and then Ricardo can comment on South network. You're right. Somehow, logistics solution is temporary, but not due to COVID. It's indeed a function of a strong volumes of sugar that we had this year. As long as the effect, it's helping the export of sugars. We are seeing a strong demand for sugar. As we mentioned before, we didn't see the market as strong for corn. There was a lot of capacity in the railways that we used to transport more sugar. If you look at our sugar volumes transported by railway, it grew like 80%, above 80%, it was a pretty high growth.
On top of that, as long as we own a terminal in the Port of Santos that has capacity for almost 10 million tons of sugar, we have to complement the amount of sugar that we transport with railways using third parties. Of course, when we have more capacity over time, the company will be able to shift from third parties to increase the percentage of volumes transported by railway. Right now, it was what was over the table. We did well in terms of railway volumes when it comes to sugar, but we also relied on third-party volumes to fill up all the capacity that we had in our port operation. Over time, as we add more capacity, this will be clearly shifting from third parties to the railway. That's the reason why we are doing this right now.
It's a way to keep the volume there. As long as we have the capacity, we could be able to serve the whole amount of volume.
Makes sense. Thank you.
Ricardo, if you want to comment.
Could you repeat your question about the South network, please?
Yeah, certainly. I think I heard you respond to an earlier call participant about other investments with potential equity partners joining you in other investments, if I heard correctly. I remember some time ago, there was potential discussion with potential equity partners in China, perhaps, in terms of looking at a long-term equity partner for the southern network. This is going back some time, and I was just wondering how you guys are thinking about that now.
Well, Stephen, in this call, what I talk about partnerships, things like this, is our partnership in the Santos port to incentive the improvement of capacity in terminals or efficiency in terminals in Santos. This is what I said in this call. You're right. In the past, we did have discussions on having partners in the South network. The discussions took too long. As we are close to the end of the term of the concession, we decide to stop this kind of conversation, and today we are 100% focused on the review of the South network. We started already the discussions with ANTT, with the government. We are evolving on discussions for review of the south.
Once we have the review done, we can think about as we have a portfolio of concessions, if for this specific concession, we will study, analyze, if you want, that we will be bring a partner. Today the focus is on the review of the concession.
Understood. Thanks very much, Ricardo and Gustavo.
Thank you, Stephen. Have a good day. I think that we have one more question from Rogér. Okay. Sorry, Stephen?
No, I said you two. Thank you very much.
Okay, great. Thank you. I think we have one more question from Rogério. Is that right?
Our next question comes from Rogério Araújo, UBS.
Yeah. Hey, guys. Thanks a lot for the follow-up. You mentioned in the report that there was some pressure on some components on the maintenance side due to the BRL depreciation. We have until now analyzed at BRL 1.1 billion maintenance CapEx. This includes the Malha Central as well. Can you provide us some kind of normalized maintenance CapEx figure, excluding Malha Central? How much can we think about it on an annual basis, and also how much of the components on maintenance is in terms of dollar? Thank you.
Hi, Rogério. I will take this one. Yeah, you're right. Due to the FX rate, we saw an increase in some costs, or the cost of some investments, especially rolling stock. We have some parts in the locomotives and the rail cars that are denominated in US dollars. At the same time, we have some agreements with the suppliers that sometimes avoid a major pass-through in the cost. It was not the full impact of the currency exchange, but definitely we had some kind of impact due to that. The amount of investments, the recurring investments in the Central network at this point is not that much significant. You can think about BRL 1 billion, BRL 1.1 billion in terms of recurring CapEx without Central network. Right now, it doesn't make much difference.
Of course, as we start to operate the Central network, these numbers, these recurring CapEx in Central network can be higher, but as of now, it's not that much relevant. Another thing that we have to take into account is the very fact that last year, the recurring CapEx was a bit low in the third quarter, so there is a phasing issue. If you think about BRL 1 billion, BRL 1.1 billion, you won't be wrong. That's the kind of recurring CapEx level that we should have going forward.
Very clear, Gustavo. Thanks a lot again.
Thank you, Rogério.
That concludes the question-and-answer session for investors and analysts. Now, I will turn the floor over to Mr. Ricardo Lewin for his considerations. Please, Mr. Lewin.
I was on mute, sorry. I just would like to thank you all for the good questions you had today. Any doubts or follow-up you'd like to do, please contact myself, Gustavo, or Mariana. Thank you very much. Have a good day.
That concludes Rumo's third quarter results conference call. Thank you very much and have a nice day.