Thank you.
Thank you, everyone. Welcome. As we begin our earnings call for the third quarter of 2025, we'll begin with a quick presentation of our results in this quarter, and then after, we'll open up to Q&A, and this can be done by the chat or even by mic open. We also have translation into English, and this will be provided on the company's IR, and so this will start off with our presentation. We had a net revenue of BRL 433,463,000, with an Adjusted EBITDA of BRL 446 million, and a margin of 33.7%, and a net income of BRL 4,260. And the ROIC in the last 12 months ended with 12.9%, and the cost of debt also in the last 12 months for income tax and social contributions of 8.8% a year, then the adjusted net debt to EBITDA ratio of 2.06, an important drop, which had dropped from 2.3.
And then when we look at the total, we have an elevation of 4.7% in regards to the third quarter of 2024. Then we have 10.5%, which was the representation of the exports in the third quarter, 10.7% in 2025, and 7.4% in this quarter. And the EBITDA, we had an elevation of 15.9% compared to the third quarter of 2024, and 14.6% in regards to the second quarter of 2025. So this was very significant results this month, and a margin of 33.7%. When we look at our net income, we had an increment. Just to give you an idea, the dark green is the recurring profit without biological assets. The light green are the biological gains, and they have a tax credit of IPI that are not recurring, as we had a lawsuit in the second quarter of 2025 that we won. And we were registered, right?
We had a recurring profit of 72.3% compared to the second quarter, and 32.8% in regards to the third quarter of 2024. Biologicals had significant increase in value, which was lower than in the previous quarter, where we recognized also the acquisition of a forest asset that we have in Rio Grande do Sul with the Rosslins. The third quarter ended with a total of BRL 42,076,000 of net income. When we get into the second round for packages, the paper packaging and corrugated cardboard, the market as a whole had a major evolution in regards to the third quarter of 2024 of 0.9%, and in regards to the second quarter, 7.5%, which is mainly due to the seasonality in the period. In square meters, the evolution was significantly similar, and we had 7.5% in regards to the second quarter of 2024. 2025, sorry.
When we look at H&E specifically, we had a drop in volumes in regards to last year, and an evolution of 2.5% in regards to the second quarter of 2025. This drop is mainly due to our policy to value profitability to the detriment of volumes. We had a drop in volumes because we were very firm in price transfers over the last year, as we'll see up ahead. This was an evolution that was very significant, and the recovery of the volumes that takes place naturally as the market becomes more heated in the second semester. When we look at this in square meters, we had an evolution of 3% and a drop of 8.3% in regards to the third quarter of 2024. That represents about 83 million.
Our prices, as I mentioned, we had an evolution, and we closed with BRL 6,192 per ton, and 2.1% above the second quarter. And we had an elevation in the pricing, which is the residual of the price increase we had. And then in regards to the second quarter of 2024, we had an evolution of 14.1%. So this is very significant, quite higher, a bit higher than the inflation in the period, and also due to the increase in the scraps, which elevated our costs, and that made our price transfer become a little more intense. And this is the average price. And that's 1.6% above the second quarter and 14.6% above the third quarter of 2024. So, however, this price transfer was really important for our profitability in the company over the period.
Now, when we get into the paper for packaging, which is what we sell to the market, we had an evolution in our total sales of 0.8% in regards to the third quarter of 2024 with 33,165.27 tons, sorry, from the flexible packaging and 6,145 tons of rigid cardboard. Most of this is transferred. There's still volume that we sold, and so it was a little bit better than in the second quarter because we transferred a bit more paper. We had substantial evolution also in the sale of paper for flexible packaging, 7%, and a bit above what we did in the third quarter of last semester. We see the paper for flexible packaging, and we had a drop of 1.6% in regards to the second quarter in 2025, and an evolution of 0.3% in regards to the third quarter of 2024.
This drop in regards to the second quarter is mainly due to the depreciation of the dollar, so that influences revenue from exports due to the drop that the dollar had during this period, and the average prices of the rigid packaging had an evolution of 15.6% in regards to the third quarter of 2024, and that's mainly due to the increase in the scraps, and so the scraps were a lot higher than inflation in the period, and in regards to the second quarter, we had an evolution of 1.4%, reaching 3,839 BRL per ton. The price of the scraps was a significant evolution of 17.1% in one year, as we ended the third quarter with 1,199 BRL, and that's the overall market.
IBGE is the statistical agency that works with the numbers of the scraps in the market, and a drop of 5.6% in regards to the second quarter of 2025. That was very significant. This drop is going to remain in the next months due to a bigger offer of scraps in the market. When we look at H&E, we had an evolution of 17.4% in the year and a drop of 7% compared to the previous quarter, ending at BRL 1,093 per ton FOB. When we look at the leverage, we had a drop that was very significant, 2.6206. This drop in leverage was already foreseen in our projections, our financial projections for the cycle of investments.
Here you can see in the Gaia Platform, this was done after the re-IPO in 2020, and they're at the final stretch with some projects that are still being conducted within the Gaia Platform. But most of the investments already happened, and now we'll enter in the phase of deleveraging before we begin any new cycle for investments. So we have a gross debt of BRL 1,752,000, a cash position of BRL 181 million, and a net debt of BRL 1,071,516. And most of this is in national currency. Only 1% is foreign currency, and 89% is long-term, and only 11% is short-term. So our financial situation is very stable and very well controlled within parameters we've established in our financial policy management policy. Our ROI starts evolving when it comes to the worst moment, let's say, when we were still performing investments in 2024.
So there was a substantial drop, but now they start off with a peak trend. And this quarter, they ended at 12.9%, and the cost of debt was at 8.1% after income tax and social contributions. So we had 1.1 percentage points in regards to the second quarter and 2.1 percentage points in regards to 2024. So this evolution is also expected to happen and should take place throughout the next quarter. Then when it comes to dividends, we distributed in the third quarter 26,318, reaching 0.3%. And in the last 12 months, which were completed in the third quarter, we distributed 169 dividends and 0.79, a dividend yield of 9.85%. And that's considering the price of the shares on the closing date of the 30th of September 2024. Then we completed the buyback program, and we were able to wrap up with this in.
We canceled 9,328,000 ordinary or common shares, and the average price was BRL 7.63 per share. The share capital was, after the cancellation of the share, 280,501. This is a measure that we've been implementing over the last few years, as we understand that the value of the shares in the market does not reflect the intrinsic value of the company, and that ends up being the capital allocation that's very efficient at this moment. We relaunched a buyback program in 2025, which began on the same day in the cancellation of the prior program with a period of 18 months and a limit for acquisition with a total amount of ordinary shares. We also had an addition of debentures to be able to handle the Gaia 5 project with our small hydropower plant.
This is what was already expected among the Gaia platforms. We also had the license to begin with this and started just longer than what we expected. We were able to get the license and this issuance of BRL 120 million with investments over 15 years from the date of emission. We were able to have an IPCA plus 6.76% a year, and that's considering CDI minus 1.13% per year, which is a very significant cost. It's very competitive, and that really improves our debt level, as this cost of debt is lower than the average cost we have for debt as a whole. This was important fundraising for us here and really helped us handle this investment.
So when we look at the Gaia Platform projects, we have our main initiatives complete, but we're also beginning with the repotentialization of Santa Luzia Gaia 5, and we're wrapping up on the last phase of Gaia 4. And that's why we started to begin this. And so we had 125,831. And we still have two projects that are at the final phase, the new printer folder gluer, which is a final or cutting-edge version from Mitsubishi with 87% advanced. It's already in the performance phase. And the Gaia 11, where we already have 65% advancing, the machine has a planned shutdown for January 2026. And that's how we're going to be completing this, our main machine, which is going to increase paper for corrugated cardboard and very competitive machine. And so with this, we were able to complete the 11 projects expected in Gaia Platform.
We had two investment tranches, and we're completing the second round. In the third quarter, we had some important highlights. For the third consecutive year, we were able to conquer acknowledgment from the Época Negócios magazine on diversity, along with Ethos. And that's on diversity, equity, and inclusion. We're the best company in the paper and pulp segment. For the fifth consecutive year, we were recognized and acknowledged at the Transparency Trophy of ANEFAC in the liquid category of up to 5 billion BRL. And this year, we were among the 10 companies, and we were the highlighted company for the year, five years winning the prize. And this year, we were the highlight. That means we were the company that had, let's say, the best performance among those that had revenue below 5 billion BRL.
We're the third company that's most innovative in the paper and pulp sector for Brazil 2025. We were able to keep up with this position. We were finalists also in an ANEFAC award for best practices in ESG. This recognizes ESG practices that are very innovative in different companies in the sector. Our team here also for IR and investor relations and accounting and financial company, which is always available to our investors. Odivan is our CFO, and Andriéi is our investor relations manager. Mayra is our investor relations analyst, as well as the new Eni and Israel, and Giovana, an investor relations and new business. We have Evandro, our accounting manager, and Alex. In the financial area, we have Marcos, our financial manager, and Emmanuel, who's a specialist as well, that's working on behalf of our investors.
Great, guys. When it comes to presentations, that's pretty much it. Now we'll open up to have a period for Q&A to answer any questions our team might have. Thank you, Sérgio. Good afternoon, everyone. It's a pleasure to be with you guys once again in another webinar. You could send me the questions here in the Q&A, in the chat, or raise hand, and we'll open up your mic. The first question comes from Guilherme at XP, and he's saying, "Look, on the demand for corrugated cardboard," and he wanted to hear a little bit of the dynamic on this and the prices and which sectors have been really pushing demand and what's the expectation for volumes and prices throughout the fourth quarter of this year. Also, if you could talk about the expectation for 2026.
And then you have, first, we can talk about demand, and then we'll get into the second one on costs. That's okay. Yeah, the demand for the second quarter, as expected, has come in line with expectations. The month of October was really good when it comes to closing for the market as a whole. And so the numbers disclosed by Empapel were in line with expectations. And so they're all in line with the seasonality expected for the second semester. And our expectation is that this will be kept till the end of the year, so no big surprises. But for next year, the projections that Empapel has disclosed, they have a projection that's normally supported by the Getulio Vargas Foundation. And the projection for this is about 2% growth in 2026.
Sectors that have really been leveraging demand, one of them is one where we have pretty good exposure to, which is the fisheries and animal protein sector. Even with the American tariffs, there's been redirection to other markets. We've really had excellent demand, besides, of course, the food sector, which has had significant performance as well. That's mainly due to the salary levels that have been kept at a peak. Numbers were disclosed yesterday. Unemployment continues at historical minimum rates. This, of course, helps a lot with the segment for the food sector. Of course, there's still a debt level among families, which is concerning. We don't see, we haven't been feeling any kind of stress for demand in the food sector, which is responsible for almost 70% of our specific demand and another 50%, I'd say, of the market as a whole.
So, Lindomar, he's also asking about the prices. Sure, we'll already cover that. Yeah, so I think you were very clear on the evolution of this segment for corrugated cardboard. I would just add on that in regards to prices, we've been able to keep up with our prices and adjustments and have been implementing at the beginning of the year. We don't see any perspectives on a drop when it comes to pricing, but we'll consider the maintenance of the prices till the end of the year. So I don't think we're going to have any major pressure, considering that the demand in the second semester is basically occupying the capacity in the market as a whole. And if there's still some capacity, it's very small, right? But our concern is always, as you can see in the beginning of the year, lower seasonality.
Even the drop in scraps also generates a bit of pressure. We do have a policy of not reducing the prices. We believe this is something that's conquered, and it's going to be very difficult for to recover conquered prices, right? We are really firm with managing our prices, and we should keep these stabilized during the next quarters. Perfect. The second part of this question from Guilherme is about costs. A few quarters ago, we were talking about the reduction of the price scraps. We were starting to cover the numbers that you didn't need in margin performance in the company. We can imagine part of this is remaining due to the reduction in volumes. You can see some players stopped their production.
I wanted to understand with you all what you guys think, what's the balance point on the price of scraps that would not encourage the recovery and the production of recycled goods, considering the price of cardboard at different levels, right? Consider the level of the price of scraps that will maybe motivate or restart the machines and recycled goods. That's one point. Another point is what you've been seeing when it comes to the price of the scraps. And if we should expect more reductions up ahead, the scraps got into a rupture cycle, let's say. The trend is that there should be a reduction in the fourth quarter, and probably in the beginning of 2026. Normally, the drops between the point of dropping cycles and increasing cycles.
We imagine this will remain since we haven't seen much pressure in this market, even at this moment with higher demand. We do expect scraps to continue to drop at a pace that's very similar to what has gone on in the last few months. This is the expectation. Of course, this will help us when it comes to profitability in the next quarter. What else did you put? The balance point. The average price of the scraps historically is BRL 900 per ton. Today, we're above BRL 1,000. The expectation is that this should be close to the average price. Of course, we can remember that this is a market that has a bit of volatility. It's around some peak moments, right, downwards and upwards. It's also related to the kraftliner dynamic.
Consider while you have space for the kraftliner here in the packaging, this can lead to the closure of recycled goods. It's not just a proxy of the scraps prices, but also related to the kraftliner prices. As the market and exporters of kraftliners have had relevant exports in the last few months, if they redirect paper to the internal market because externally, the market's a little weaker, this would end up making scraps prices go down. But we've seen some closings in recycled operations and we've also been adding more virgin fiber paper into the market. That helps also with the scraps market to intensify the drops. Thank you. Here we have Edgar. How's it going, Edgar? Can you open up your mic? Great. Thank you all so much for the questions.
Congrats on the results and sharing a bit of your deleveraging track journey of returns to shareholders and the buyback strategy. And so let's get back to questions. The first question is if you could explore a bit of the value over volume strategy. And it becomes very clear in the company's results that you guys have been able to retain pricing. There's an increase in the average price of corrugated cardboard. But on the other hand, and so I want to understand up until what point you guys would accept losing market share to the detriment of pricing. So is there some optimal calculation of what would be the volume you should be operating with when it comes to this and operational capacity versus installed capacity that really makes sense maybe to give up on market share to the detriment of price?
I wanted to hear you guys talk about this a bit and how you consider the strategy and how the decision-making takes place in this sense and even how this should be in 2026. Then I also wanted to get into a little more details about the scraps, right? Obviously, we have this balance point, maybe the historical price of 900 BRL per ton, but also a point that ends up being a driver for the market dynamic, which is the spread between the price for cardboard boxes and scraps. And I think maybe there's a sweet spot. Maybe there's a delta that makes sense. And then from one point in time, you would start having more pressure, right? But of course, the other factors of demand and all of this. But if we consider this level, is there already some pressure maybe on reduction of prices in the industry?
And that kind of meets the first question with the strategy of value over volume, right? So what's the scrap price that would be a sweet spot for you guys that wouldn't pressure price and would still maybe bring in an increase in profitability, let's say? And last, if possible, I would just like to know if there's an update on the NEOS platform. We see you guys are getting close to the completion of major Gaia projects. And of course, you still have two ECHs. We're close to completing most of the projects. And I think for NEOS, we did expect some news this year. But these uncertainties in the market maybe have led to a decision up ahead. And so is there like a day where you would expect to make a decision?
Or if you have any new updates in regards to this, that would help a lot. Thank you so much. Okay, thanks, Edgar. Thanks for the questions. That really clarifies a lot of our strategy in value and profitability to the detriment of volumes. And this has been a strategy that we've been implementing historically. And so we have a lot of experience when it comes to this corrugated cardboard market. And whenever there's an opportunity to have an increase in prices, we'll always give up on volumes momentarily to not generate any losses due to price increase processes. So it can be implemented vigorously. And as soon as the price cycle is complete, we start the recovery of the volumes in a very careful manner. And so we start dealing with volumes that have smaller profitability in the portfolio, trying to readjust prices and search for more volume.
And we're going to work on prospecting as well. So we're very careful with new prospecting, right? Especially when it comes to seasonality periods that are lower to avoid a market price reduction that could be retrofitting a systemic value destruction process. So we try to do this in a very cautious manner after the price increase cycle. So we have a price maintenance strategy. We try to not perform price reductions, especially in the box market. Then the sheets are maybe a little more related to the scraps or closer ratio. But when it comes to prices of boxes, we don't want to perform any adjustments with this variation of the scraps prices. And with this, we recover volumes and take advantage of the seasonality moments that are a little better.
So it could be that we'll go through the next quarter with a little less volume than what we had last year or this year, maybe in the first quarter. But focusing from the second semester next year with a bit more of a recovery in volumes if the seasonality helps, of course, right? So this strategy of coexisting with capacity and keeping up with the prices unmodified, really helping you to have a bigger control on the cost variables and performing some adjustments here and there, working with less extra hours. And that all makes your process more efficient. So bringing in volumes with profitability that's lower maybe and would lead to a destruction of value. So that we're very careful in this process when it comes to implementing prices so that we could really get the most out of the price increase cycle.
Also in the volume reduction process, we're very careful because we know the market has seasonality in the second semester and volumes are recovering. Part of the volumes you're seeing that are lower in the third quarter, they're going to be recovered in the fourth quarter due to seasonality and part of them throughout next year. When it comes to the price of scraps that you referred to, typically this relationship between the price of corrugated cardboard and the scraps price are about six times of the historical average. We had some important variation in a few months, right? So that went to about 12 times where the scraps dropped a lot. Corrugated cardboard prices also went up a lot. This is atypical, right?
If you look at this long-term horizon, you'll see the average of six times seems to be more consistent than the variations that took place in the short term. So we're very close to this balance point between the price of scraps and corrugated cardboard prices. But considering the market dynamic, we believe there's going to be a drop in scrap prices, and it should be closer to stability in the next quarter, and so the last question, well, about NEOS, this is really what we were talking about. We have the engineering work done, all the projects are planning, and this is all part of this initial planning process in the NEOS platform. But we're just going to start disclosing projects at the moment when we understand this is adequate. And the current moment is really bad due to the high interest rates.
And also a lot of uncertainty in the horizon. So we plan to be more conscious as we launch new cycles and make the deleveraging happen a little stronger throughout the next year. And with this, we're prepared, and we have the ready engineering to launch the NEOS platform as soon as we see a more intense drop in the interest rates. And of course, the uncertainties we're all experiencing. Okay, perfect. Thanks, guys. Not sure if I answered everything, but I think so. The next is Stefan from Citi. Hi, there, Stefan. Good morning. Thanks for taking my question. And so first, I wanted to explore about the flexible segment. And Sarah, you talked about the price in the quarter that was impacted by the value of the dollar.
But we wanted to look at what you guys are seeing in the fourth quarter of 2026 and on costs as well. I think that was already pretty well explored with the drop in scraps and possible continuation of this movement trend. But correct me if I'm wrong, this movement in the third quarter seemed to be a little more accelerated in the end of the last quarter. So that we'll consider that affected all of the drop in the quarter? Or is there still something that was kind of impacted by the fourth quarter? So once again, the drop in costs in the third quarter already reflected the lower scrap prices. Or is there still a little more to come? Those are my two questions. Thanks. By what we discussed, there's the average price, right? So naturally, you would have for the fourth quarter a new level of prices.
You have this dropping curve. You also have in the fourth quarter more of a drop in scraps that we're expecting to happen due to the market dynamics. You start off with a lower average price. You also have an expected drop in the next month. In regards to flexible packaging, we have to split this market. We sell paper for flexible packaging and also print and sew bags. We have papers in machine two, which are the papers for bags. We have papers for machine four, which are the thinner papers. That's where we have the price transfers that are above inflation. This is a market where we have leadership. Those are the papers that’s for bakeries and other businesses that use this kind of thinner paper.
We've been able to transfer prices for inflation, actually, then we have the bags market, machine two, that we refurbished in the Gaia Platform, and then we have excellent performance, and the market has had really good dynamics, so we've been able to transfer prices, and there's also this other ingredient of scraps in the composition of the papers, but most is virgin fiber. We're able to transfer prices and pass along prices. Paper for machines one have been a little more challenging, and that's because companies that have the bag conversion, they have a market that is maybe a little worse than what they expected, and they've been placing spot papers in the market, which has been leading to a bit more of a difficulty to pass along prices in this specific segment, which is that of industrial bags. This is important for us.
We have a premium price in regards to the average in the market, considering our leadership in this segment. But also because we are the only company that provides paper in a safe manner to small and medium-sized converters, because the companies that produce this type of paper typically have a conversion operation, especially for cement bags. And they come in and out as the market becomes better or worse. So at this moment, there's been a bigger offering of this type of paper in the market. With this, we've had a bigger challenge to transfer prices in the market where we have leadership and premium prices. So exactly. Well, yeah, I think it's just to add on. The fourth quarter is maybe very similar to the third. But maybe as a slight variation, we have the Christmas period, October, November. Has really been strong.
In the other segment, as mentioned, if you have this variation from the third to the fourth, it's going to be very small. And then the biggest influence in this issue is the dollar, of course, which had a significant drop. And so, sorry, I got up too quick here. But we have still other questions here to answer. Then we have Angelo here. He also has a question. Good afternoon. Thanks. Congratulations on the results. I want to see what this means for profitability in the end of this year, considering the increase recently in prices and the scenario with a drop in scrap prices. Well, the answer is in the questions.
Since we have a drop in scrap prices taking place and the average prices also starting off with the lower price than the average in the previous quarter, then it's natural we'll have an evolution in profitability because volumes do not have too much of a modification. The number of December is shorter when it comes to volumes for packaging and the operation of cartons and the smaller operations for the converters will be working till the 20th, and then people get into vacation. And that affects the orders in the month of December. But that is our typical seasonality rate. So the fourth quarter could have a little less volume in the third quarter due to the month of December. But when it comes to profitability, our profitability is growing since prices are stable and the cost of scraps have been dropping as well. Right.
So then we have done good here. And there are a bunch of questions here. So anyways, what would be the average fair price in the market in the long term? Well, this is ultimately we can foresee, right? Because fair pricing depends on so many different conditions there. But what we can say is that the average history of the price of scraps in Brazil is about BRL 900 per ton. And the prices vary around this much. Then the other part of the question is that the company ended the third quarter with about BRL 525 million of profit reserves and another BRL 180 million in accumulated profits, BRL 700 million in total. And since the last earnings call for 2025, and if there is an approval of the exemption of income tax, what would be the challenges of having the company distribute additional dividends?
Could these dividends reach BRL 700 million, considering the possibility for the payment of these dividends? I think I can answer this one, Sarah, actually. Well, we have a distribution dividend policy. We've already distributed 50% of our profits ever since leverage in the company, as long as it's below that 2.5 times. So the objective here is to optimize capital structure to leverage returns for shareholders over time. The exemption of dividends, and we understand this is important, but this is only valid for individuals, right? And for companies, an additional distribution of dividends will not interact with our strategy for optimization of all of this capital structure.
As we already distribute 50% of our profits every year, and as a company that wants to grow, the other 50% that are retained are directed to expansion projects because we have a lot of expansion projects with return rates that are way above the cost of capital. So we don't have anything to mention in regards to this with dividend distribution. But we've been keeping up with this. And this hasn't even been approved definitely by Congress, right? We think it's going to be approved unanimously. But it is a topic we've been keeping up with. We haven't really seen opportunities in regards to it so far. So Sarah, do you want to talk about anything? No, we have no decision in this regard, really. And we should fulfill our dividend policy as established, right? There's no decision yet. And if there is, of course, we'll communicate about it.
But there's no discussion underway at this moment. Great. So then we have Marina. She's asking about greater pressure on the prices of recycled paper due to scraps. Have you guys seen a drop in the prices of paper in this quarter? Well, it could be if the scraps continue to drop at this pace. There is a strong correlation. But of course, since demand is still pretty good in this period, and we have customers that are very faithful, we'll be controlling this all very well. But he can add on and explain how the market's doing. Well, that's exactly it. But of course, it depends on the supply and demand. When you have a drop in the scraps, sometimes there's a drop in something related to paper. But it's dropping at a rate that's lower.
So probably in the fourth quarter, we'll have a slight drop in the price of recycled paper. But very little, in my view. And we're not so exposed to this market, right? Only 6,000 tons per year. And most of the recycled paper is produced by the company or transferred to the packaging unit. Well, here he has another question. And he says, well, do scraps have a significant participation or share in the cost of paper and the corrugated cardboard? What's your analysis for prices for the fourth quarter? Well, we've already talked about this when it comes to this dropping cycle in the next quarter. So that's pretty much the same question. Then for 2026, that's the trend. So at a peak or a drop in prices, and still the supply of this raw material.
And so here you can also see that she manages the paper and cardboard unit. And that's from the Northeast, right? But anyways, we're expecting this continuity in the South. 2026 is a big question mark, right? It's going to depend on internal demand, external market for kraftliner paper, and the amount of operations. So there's still so many variables that could influence this. But up until where we can see, all these variables which demonstrate this drop, the international market has had more of a difficulty. And the exports are still very resilient for kraft liners. And so if there is a drop in the international market, of course, the products would be redirected to the internal market. And with that, you have more of a supply for papers and virgin fiber in the market. So that influences supply a lot. Great. So our next question.
Henrique, did you want to say something? No? Oh, okay. Our next one here, but it's from Oziel Soares. What are the reasons for an increase in production costs in the third quarter? Well, an increase in production costs, that would be, I think, in the third quarter. Well, maybe I can help with this one here, right? Maybe it's the paper mix. No, the greater level of depreciation we had in the quarter, well, there was not any issue really. That was more structural, let's say. Well, it's about cost of production. We're pretty much stable. Some inputs that have a dollar influence still have not led to direct influence on the prices. But they should drop. If the dollar keeps up at this pace, then scraps, which would be one of our main production costs when it comes to variable costs, have been dropping.
And so then first about the ROIC and could we expect this behavior for 2026? And the second one is about the announced platform. Well, about the Gaia platform, they were already expecting a drop in the ROIC at the level of about 10%. And then they said this peak or growing trend, getting back to historical levels of a half. But all of this depends on this dynamic for results the next year. And if everything keeps up as it is and we evolve in profitability with a drop in scraps and volumes continue to keep up with the projections, we don't expect a shift in this trajectory when it comes to deleveraging or increase of the ROIC that should keep up. Perfect.
Then our projections for EBITDA margins are really in line with what's going on this quarter and should evolve a little more in regards to the next quarter in line with what we've been expecting for the Gaia Platform. So this Gaia Platform recovery starts configuring in a stronger manner as they get back to normality levels. All right, perfect. And the next part was about the Nellis platform, but that was already answered. And if you have any questions, I think that's already been answered. Last question we have for today is from someone Magalhães. And he's asking about the latest buyback program and if there's like a ceiling for this acquisition. We assess this together with the board, and we define this as things take place month by month.
We don't have like a specific target, but we assess the market, we assess stock behavior, and other variables to define where we're headed to when it comes to the buyback process, right? And also when we consider this so we can buy back as well. That's sometimes below with what is internal. All right. No other questions. All right, guys. Thank you so much for your presence. I think it was a really good quarter, and our expectation is that results should continue to get better with the drop in scraps, which have significant influence when there is a peak as occurred in the last few months. But the expectation is that results should be more resilient and better, and of course, capturing the total returns for the Gaia Platform. We still have a few points of returns to be captured, especially machine one.
But that's going to happen over time, right? So with these investments that were made from the re-IPO, the company changed its size, and this has been captured in an ongoing manner and more consistently over the quarters. And the launch of new projects, of course, depends on these macroeconomic variables and also the drops in interest rates and uncertainties also around the world. So I think that's pretty much it on our side. And do the directors have any other points? No? Okay. So I want to thank you all for your presence. And we're always available with our teams to meet you in the best way possible. Thank you.