Good morning and welcome to Simpar's conference call to discuss the results for 3Q24 today. With us are Mr. Fernando Simões, CEO, and Denys Ferrez, Executive Vice President of Corporate Finance and Investor Relations Officer. This event is being webcast on Zoom and can be accessed at ri.simpar.com.br. We would like to inform you that all participants are going to be in listen-only mode during the company's presentations. We'll then begin the Q&A when participants can send their questions on the platform during the conference call or by Simpar's IR team after the end of the conference. Remember that the content presented is going to be in Portuguese with simultaneous translation into English. For those that want to follow the audio in English, you can go to the Interpretation button at the bottom of your screen and choose English again.
For those who do not speak Portuguese and want to listen to the interpretation in English, just click on the Interpretation button at the bottom of your screen. From now on, participants can already send their questions on the Zoom platform. All you have to do is click on the Q and A button at the bottom of the screen and type in your question. Before we proceed, we would like to emphasize that any forward-looking statements made during this conference call are based on the beliefs and assumptions of Simpar management and rely on information currently available to the company. Forward-looking statements are not a guarantee of performance. They involve risks and uncertainties since they relate to future events and therefore depend on circumstances that may or may not occur.
General economic conditions, industry conditions and other operating factors may affect the company's future results and cause results to differ materially from those in the forward-looking statements. The results discussed in this presentation are adjusted by non-recurring effects and the reconciliations are during the earnings release and on the company's IR website. Now I'm going to turn over to Mr. Simões to start the conference. Mr. Simões.
Good morning everyone. We are starting announcing our third quarter 2024 results. I would like to thank our more than 56,000 direct employees for their hard work and dedication. They are all crucial to serving our customers on their behalf. We thank all our customers who have given us opportunity to work and fulfill our sales process building and transforming our business over the years. Thank you very much.
I'll start on page three when we talk about some of the main highlights of the sustainable development of our companies which ensures the continued transformation of our results. We had total gross revenue of BRL 11.9 billion which means growth of 29%. Over the same period, net revenue grew more than 26% for a total of BRL 8.4 billion in net revenue from services alone. This growth is basically organic, which is the result of the business foundations built in recent years.
Our total EBITDA margin increased by 0.9 percentage points with an EBITDA margin of 32.1%. When we talk about total revenue, which shows our focus, efficiency and productivity is even more so in efficiency and productivity. When we exclude the growth of the dealerships and asset sales, then our EBITDA is 46.5%, 4.2 percentage points higher. This shows our productivity, our gains and our focus on operational efficiency.
We had net income in the third quarter 2024 of 125 million reais and record asset sales of revenue of BRL 2.3 billion, 44% over the same period last year, which shows the capacity of our people and our ecosystem prepared for the sale of our assets which have high liquidity and great operational utility for those who buy them as used assets. Leverage at 3.7 at the end of the third quarter 2024, whereas in the second quarter it was 3.8. Although it looks like a small decrease in leverage when you look at 3Q24 and annualize it going forward, we have leverage of 3.4. I'd like to point out that even though the future leverage is 3.4, it still does not include in the third quarter 2024 all the revenue and the results of the CapEX that has been done in recent quarters.
What you're going to see last year later on and in addition the efficiency, focus on productivity and focus on extracting more value from other foundations built in recent years will lead to better indicators and reduction in leverage in the coming quarters. I would also like to highlight our proposal for corporate reorganization strategy from Vamos Locação which we strongly believe for the creation of value in the short, medium and long term. Page 4 we talk about the strategic reorganization of Vamos Locação which if approved will result in a NewCo a company focused on dealerships. This is a proposed transaction that we very much believe will create value if approved in line with our strategic planning. Both when the business unit or the company is involved, when the business grow in size, develop as it happened in the case of Vamos Locação dealerships.
There was a major transformation in size and scale, and with this we are proposing to create a company, and Vamos, focus solely on machinery, trucks and equipment rental, mostly trucks. As a result, managers will have exclusive dedicated resources for rental. We see it as an opportunity for Vamos Locação to expand its commercial alliances with large dealer networks of other brands. We also believe this is the market's desire for a pure exclusive rental company. As a result, if approved, our proposal is to have Automob, a new company where you put together Automob, which is one of the largest car dealership networks, the most consistent areas trucks and agriculture machinery, and thence becoming the largest network of car trucks and machines that is diversified into cars, trucks and machines.
In line with our strategic planning of always depending on everyone, but not depending on a single segment and creating scale and potential growth both organic and inorganic. We strongly believe that the dealership business is a business that has a lot of opportunity for transportation insights and services. And we are making this proposal in line with our governance principles. First, we made the proposal in line with the best practices. We created an independent committee that made its own appraisals and proposed some adjustments. You can see below what the adjustments resulted in, which is with 25.4% Automob 14.49% and Simpar and the NewCo with 60.11%. And on the right hand side, still on page four, the timetable that we believe will bring this operation to a close. When we start negotiations and then we end in December, 2024. On page five we talk about JSL.
I'm going to briefly talk about the companies. Most of them have already released those results. JSL had sustainable growth. Evolution of margins and deleveraging. I'd like to draw your attention to more than JSL's transformational growth. It had growth of more than 17% in revenue, 18.7% Adjusted EBITDA with margin of 20.4% of its EBITDA margin and profit of 73 million BRL in 3Q24, which means growth of more than 25%. It has been growing sustainably, improving its margins and the results of its net income. In a segment that has great growth potential. The company is prepared and has the capacity for acquisitions, independent management. With these companies growing, transforming and developing, which contributes to its scale and size. Remember that this is an extremely scattered segment. Customers increasingly need to hire companies that have governance, compliance, sustainability and management capacity.
And that's what JSL offers to the main industry and is in a highly resilient segment with a wide range of customers. This makes us believe that there is great opportunity for organic and inorganic growth in a new cycle for JSL. Improving results and deleveraging. On page six we talk about Movida. Movida quarter after quarter has shown its operational improvement in line with financial discipline and value creation. It has also released its results. I'll go briefly through them, but it's quite impressive. The growth in revenue EBITDA with more than 43% compared to the same period, 6.6 percentage point improvement EBITDA margin and net income of BRL 91 million with net revenue growing by more than 34% with a much smaller growth in fleet size. This shows operational efficiency, scale and how efficient the company has been with focus on improving productivity.
I'd like to invite you to reflect on Movida. Movida has had several cycles of transportation in size. We are entering a new time in which the company has scale size, does not need to grow to improve productivity and has the opportunity to negotiate with OEMs on the mix of products. They offer price terms as it did before the pandemic. This is the first time that Movida has scale and positioning with this opportunity. This leads us to believe that these operational indicators, such as improvement of prices in the Rent-a-Car, GTF will still have an opportunity to further improve prices, operational efficiency and cost reductions. As a result, deleveraging and better indicators. On page seven we talk about Vamos. Vamos released its results yesterday.
So again I'm going to go through it quickly, but it has been resilient in machinery, truck and equipment rental, which shows the opportunity for deployment. When we look at the whole of the year, the last 12 months, nine months of 2024 in the third quarter we had revenue growth of 33%, 46% EBITDA margin. When we talk about the whole of Vamos Locação with dealerships, net income of BRL 175 million. Remember that these results, practically all of them come from leasing and thus also show its capacity for implementation and generation of new businesses, which is new future revenue that is being deployed and business that are being closed, which will be deployed. Extremely incipient market, great opportunity for growth. And Vamos has a fantastic scale and asset purchasing capacity, really second to none in the market.
It has demonstrated its ability, which is very important, to sell its assets, which are highly liquid. That proves again the high liquidity and its ability to sell assets. If the reorganization is approved, Vamos will focus exclusively on rental and will be able to create possibilities for commercial alliances with large dealer groups of various truck brands. I believe this will enable to grow even more and improve results. On page eight we have Automob, which is the company that is consolidating car dealerships. If we look at the last 12 months, we had net revenues of BRL 9.4 billion. I'm sorry, 34% increase in the same period, EBITDA of BRL 464 million and net income of BRL 44 million.
It's important to point out that although this growth, the main figure you can see in the sale of new used vehicles, F&I , this is a company that is consolidating. So the results and the improvements in productivity have been happening per store. We are having a higher number of sales per store, the best F&I . But this consolidation of improved results and cost reductions will show much more significantly in the coming quarters. But we already have 121 stores, 23 cities, five states, representing 28 brands. And in line with our strategy, a diversification of more economy, branded, premium, luxury brands. Again, our strategy is to have diversified mix depending on all the brands, but not on one of them. An independence strategy will become even greater and more prevalent.
As you can see on page nine, if the merger of Vamos Locação with Automob is approved, we have a new Automob, the largest group of dealerships in Brazil. With the sophistication because then we'll have light vehicles that Automob already has, but also truck, machinery and equipment. And it's important that truck, machinery and equipment business is already separated. It consolidates at Vamos, but it has independent people management companies. And the merger would mean that we would have 34 brands, 192 stores, three states and 176,000 units sold a year with a mix of various equipment. Agribusiness would have a lower share in this company. Trucks as well, automotive as well. So a great defensive position and a new company with R$ 12 billion revenue, R$ 439 million in EBITDA.
With a strong geographical presence and leadership in several markets, a fragmented market, a diversified portfolio, organic growth, but also the potential for M& A and consolidations and with great synergies to be extracted with F&I , administrative and financial efficiencies. We are very confident about this move. Dealership business in Brazil has a lot of opportunity to be developed and providing much better services with customer loyalty and bringing a new business cycle to the current operations. Whether it's new cars, used, F&I , financial relationship with customers. We are sure that our service-based DNA can make a difference in the segment as well and contribute to its development. On page 10, we talk about CS Infra, which has a portfolio of assets, practically all of them still pre-operational with a great opportunity for results as we can see ahead.
Whether the two ports in Bahia, the Transcerrados Highway, the CS Mobi in Cuiabá or the BRT in Sorocaba, we are focusing on concession opportunities, PPPs with the DNA of services that does not hurt the capital structure or the development of other businesses and that brings value to our ecosystem and our shareholders. CS Infra is focused on this objective, also in line with our strategic planning. On page 11 we have a business that has grown in size significantly, which is Ciclus Ambiental, that has been improving operations in Rio. In the new operation in Amazonas, as in Belém. This is a new company compared to the same period last year, with great efficiency in operations, improving the quality of life of citizens, but also bring results to the company with the highest level of governance.
Page 12, we have CS Brasil, which is a service, mobility and fleet outsourcing company with driver services for state-owned and mixed-ownership companies. It has also seen growth in line with our strategic planning and improvements in results. On page 13, we have BBC, our bank that operates within our ecosystem, but is already starting to have around credit origination of 30% outside our ecosystem, but within the business of financing new and used cars, used trucks. A business that we know as a means of payment for our truck drivers and also creates loyalty within our ecosystem. With businesses on average with a 30%-40% down payment and a significant spread. What we really believe is that it can create value in the medium and long term, not only for our ecosystem, but also for its bottom line.
As you can see, credit origination has been transformational quarter on quarter. On page 14 we talk about our main financial highlights. I'll hand over to Denys who is going to talk a bit about our consolidated numbers and financial indicators. Thank you. Denys, go ahead.
Thanks, Fernando. Good morning everyone. On slide 14 we have our financial highlights. Consolidated basis starting at top left, net revenue reached BRL 10.9 billion compared to the third quarter of the previous year, which is equivalent to an increase of 31%.
When we look only at the evolution of net revenue from services, which is a subset of the total I mentioned, it reached BRL 8.4 billion, which represents growth of 26% compared to the same period last year. EBITDA grew by 30% in the same comparison, reaching BRL 2.7 billion, which is material increase and result of the investments made during the period.
With an EBITDA margin of 25.3% in line with the same period last year. Operating profit also showed strong growth, up 28% year-on-year to BRL 1.7 billion and EBIT margin of 16.4%. Net income was BRL 125 million, reversing the negative result of the previous year. Just a brief comment here, given that the group has shown growth in businesses with a different operating margin profile. Here on the right we have a table where we try to exclude not only recurring effects but also the mix of services, given that retail operations in dealerships have grown. Just to tell you that the EBITDA margin without the effect of the dealerships stood at 46.5%, which compares to 42% in the same period last year. Excluding the dealership activity, that is an increase of approximately 44 percentage points, demonstrating increasing efficiency.
On this next slide, Slide 15, we'll talk a little about our cash position and debt profile, both consolidated and for Simpar as a holding company. Separately consolidated net debt BRL 38.7 billion with an average maturity of 4.8 years. The group's cash position stood at BRL 16 billion, which is quite comfortable in relation to our short term commitments. That covers more than two times short term debt or in other words its equivalent to amortizations basically until the year 2026. And speaking of Simpar as a holding company, separately we ended the quarter with a total net debt of BRL 3.5 billion, which has an average maturity period of 6.6 years and cash position of BRL 3.1 billion, which also gives us a lot of comfort, just as we shown on the consolidated basis.
Moving on the next slide, we bring our net CapEX vis-à-vis cash generation measured by EBITDA. So in the third quarter on an annualized basis, we continue to demonstrate the reversal of a trend. This is, we were until 2022 investing more than our cash generation. It was a period where we understood we were building the scale and foundations of our businesses and that is now no longer necessary, and then as you can see in the highlighted box, our EBITDA is around one and a half times greater than the volume invested in the period, continuing the trend that has been reversed since 2023. On the right we have the consolidated snapshot where net investments for the quarter amounted to BRL 1.8 billion and year to date for the nine months BRL 6.9 million.
The main volume of investments was for Vamos, followed by Movida and then the others at much lower levels. Now I'd like to move on to the next slide where we talk a bit about leverage ratio and here again we point out that that leverage that we consider to be the business leverage which is shown here on the left hand chart, remains stable at around 2.2x . This is 12 months. Base annualized should be 2.1, which is very similar to the leverage ratio of local debts which entered the third quarter at 2.3x , last 12 months or 2x . When we take the annualized third quarter, you see that these two, the one on the left, business leverage and the right of local debts are very similar.
In the middle we have the traditional view of net debt EBITDA ratio, where we have basically followed the data defined by foreign market bonds and we have leverage of 3.7x 12 months and annualized current quarter. Given that we invest a lot and do not fully benefit from the investments made in the last 12 months, when we look back, when we annualize the quarter, we have a proxy that is more real of the size of the group and then we have a lower index, that is 3.4x. Now this is going to be my last slide before turning it back to Fernando.
Here we show the concept we have been using recurrently of what we call production ROIC. That is separating those investments that haven't yet contribute so that we can see the essence of return in a more mature way. We show a return of 12.8% in what we call Production ROIC. This is around 4.4x points above the company's cost of debt, also after tax. With that I'd like to hand over to Fernando. Fernando.
Thank you, Denys. On page 19, we are prepared to extract even more value from the foundations built. And doing so further strengthening our ecosystem which is irreplicable. We have a unique management model, an irreplicable ecosystem. And this model generated leading companies or companies that stand out in their markets. When we talk about managed models, we are talking about independence, being part of an ecosystem, strong focus within the managed model, which are defined by clear values and cultures practiced by differentiated people. The greatest value in our companies is our people.
This has led to expansion and presence in segments with high growth potential, in essential sectors of the economy and within the main industries and sectors in which we operate in Brazil. Because our people, our team, our management model provide confidence for those that use our services and that resulted in great diversification. 80% of economic sectors, several customers contracts and different types of services. Our DNA of services means that 74% of our EBITDA comes from long term contracts. We have highly liquid assets and we have scale and potential to buy in differentiated conditions, all in line with the strategic planning that we as Simpar contribute to the boards of Directors in a way that ensures execution. The construction of these foundations have left us prepared with solid pillars and will contribute to improvements in margin and return.
We are prepared for growth with much lower need of investment with improved cash generation, enjoying from everything that has been built. In addition to growth, we are focused on operational efficiency, continuing with fleet optimization, accelerating our asset turnover, reducing inventories, working the cost of our business and therefore improving margins. This is only possible because of the diversification and the way we manage the business, anticipating customer needs in diversified services that contribute to the margins and resilience in all lines of revenue. All this at a fair price and just as important as fair prices is have the ability to always adjust prices whenever necessary to meet our investments and the quality of efficiency of services the clients want with the best value for money, but at a fair price and with good results. And the result of this growth, operational efficiency, diversification.
Fair prices we certainly believe will contribute to deleveraging the company due to cash generation, less investment and better operational efficiency. This is what I'd like to share with you once again. On behalf of all of us from the Simpar Group, thanks for joining us. And now we are going to open for your questions so that we clarify any of your questions. Thank you very much.
Thank you. The conference call is now open to questions of investors and analysts only. So if you have a question, please click on Raise hand at the bottom of your screen now or at any point during the Q& A. If your question is answered, you can leave lower hand. You can leave the queue by clicking lower hand. When you ask questions, please click close the mic so that everyone can hear you clearly.
You can also send questions in writing on the platform by clicking on the Q&A button at the bottom of the screen. Wait while we collect the questions of investors and analysts. Our first question comes from Gabriel Rezende from Itaú BBA.
Hi, Fernando, Denys, good morning. Thanks for taking my questions. I would like to talk about Automob if you could give us some color in terms of price dynamics. We did see a more pressured trend both for used and new cars on a year-on-year and quarter-on-quarter. On what quarter-on-quarter comparison. I understand there is an influence of mix, but if you could talk about price dynamics because I believe no one better in listed companies than you because of the reach that you have with all the dealerships.
So if you could talk about what happened this quarter, expectations of prices for both new used cars and also what drew our attention was a major advance in the sale of used cars compared to new cars. I understand this was one of your objective and seems that you advanced well in this area. If you can remind us what kind of ratio you would like to have in maturity, that is, what is the used new car ratio and when do you think you should reach that optimal number? Thank you.
Good morning, Gabriel. This is Fernando. How are you? Gabriel, Thanks for asking your questions. Automob prices. When we talk about prices, it depends a lot on the mix. So you have luxury cars that are quite important in terms of share in average tickets. Then you have economic cars that have less share, but you also sometimes have more demand in a region. So when it seems that prices are pressured and there is a drop in prices, it's not only that, it's the type of sales that you had.
This last quarter we had a luxury brand that had some difficulty with a car in some parts, and that took us some time to sell the cars, and that somehow can hurt the average ticket, so this is what happens, but we do not see pressure on prices so that margins are decreased in sales. Quite the opposite is quite heated. Credit continues to be granted, because that depends on credit. Retail is moving on, and our company Automob is organizing itself to be more and more prepared, so no prices, no pressure on prices.
And there are some areas in which sales, compared to last year, did have growth, both for new and used cars. And we believe this is a market to stay and the trend is just to increase. And why is that? I think 20 years ago, 18 years ago, the Brazilian market had much lower cars. Now we have 2.2 million, but we haven't grown much in sales because industries have installed capacity of more than 54 million cars. So we do not see pressure on prices. I think that what is going to increase is that OEM is going to increase their supply. So in Automob, we want to extract more value per point of sale, thus offering different services. We like everything that we do in the dealership business.
But we understand that this is a business that has an opportunity to transform the number of sales per store. That is huge. I'll give you a number without giving you guidance. Historically we sell 0.8 used for each one new. The companies we acquired, the ratio was 0.321. That difference alone shows the capacity of more sales per store. And in the future we can have even more used cars than new. Because, you know, cars, you know, if you think of car sales, used car sales are increasing by fourfold compared to new cars. So I'm not saying this is going to happen, but why can't we have a ratio of 2:1 ? But this is in line with our plan, which is again, to optimize stores, gain volume, scale and growth with the same cost and the same infrastructure. Gabriel, that's it.
I don't know if I answered your question. And just to add, the used car market, you know, it's not, you know, really euphoric, but it is moving well in all areas. More economic, premium, luxury, no problems with demand. It continues happening and it's not a peak, but within plans, the market is doing very well. Thank you, Gabriel.
Our next question comes from Guilherme Mendes from J.P. Morgan.
Hello, Denys. Fernando, thanks for taking my question. I also have two. The first, about reorganization of Vamos and Automob. Next week you'll have the general meeting of Vamos. Any definition on Simpar, whether it's going to take parts of the voting or not. And the second point, Denys, you showed a bit on net CapEX. Very interesting evolution a long time. So how would you see this ratio from now on? That would be very helpful, thank you.
Hi, Guilherme. Good morning. Okay, Denys is going to talk about the better cash generation. But let me talk about Vamos' reorganization and the voting. Our vote has not been decided yet whether we are going to vote or not. But I would like to make some comments about this. I'll talk about step by step and governance, our governance. In all the movements we had with related parties, we always followed the voting of the other shareholders. In this case we have a slightly different positioning, not as a shareholder, but as a company. Because you are involving two listed companies, a third company that is not listed but also has shareholders. And in our view, all shareholders deserve the same respect. It's our obligation. And so this move puts together a fourth operating listed company, our fifth. This is the result of the movement.
So under this concern we are following all initiatives to have the highest level of governance. So we created an independent committee with an independent board member from Vamos. Another independent member that was from Simpar, today is Movida, but knows the rental business. The independent committee sought a third person that is also part of the committee. And for the proposal we appointed a bank. The bank Vamos appointed another bank. The independent committee hired a third bank. So we are following all procedures that we believe are our obligations at the highest level. As for the voting, I would like to give you some thoughts. As shareholders, we are listening to all related parties: independent members, board members, investors. We have been talking to several of them. This is our obligation and it is our track record to have respect to everyone that is involved.
The reflection is being developed. We haven't made the decision yet. We have been trying to understand the interests of the current shareholders, the interests and risks of these transactions being contaminated by some shareholders that invest against the company that are not long term investments, that do not consider the company in the long term. So we want to make sure that trading is not going to contaminate the sustainable development of our companies and put our shareholders that, you know, have an interest in the long term of the company affected. So we are going to hear everyone to make a decision because we do not want one time investors or the trading to affect our business. Foundations of growth. We understand that this is a good move.
We have been talking to shareholders for more than a year and we believe this is going to benefit all our companies. This has just been validated by two companies that made the appraisal and recommended the transaction and said that it is fair. So that gives us the comfort. And just to close, Guilherme, we want to treat our shareholders as we do our customers with long term relations. Our first listed company was 14 years ago and we are going to continue having the highest level of governance and I think this transaction has been an example of that. Thank you for your question, Denys. Now if you could answer the financial question.
Hi, Guilherme. Just to add to what Fernando said, what I would like to highlight is that the two consultancies that approved ISS and Glass Lewis also took into consideration how the process was following the right steps, and the independent committee, after intense negotiation, did get a material improvement in terms of the interests of the other shareholders of Vamos in terms of percentage of the new potential company by almost 20%. I think it's very important to talk about the result of the process, but a bit on CapEX, as you asked Guilherme, looking into our budget process, I'm going to start from the end saying that differently from previous years and as we have already said in the beginning of the call, where we were in a process of gaining scale with our business, building foundations.
This year is a year that we sought to be better companies in all aspects with more profitability and that may make the group not have any access to financial capital next year. Today we have on the table a volume of credit offers of BRL 6 billion. We don't need it all thinking of the budget process. So it might be that next year differently from all previous years. We don't even access the market and raise capital.
So with this backdrop, I think it's clear that if we look into what has been invested so far and what we can expect in terms of benefits, better EBITDA based on what has been done before, the EBITDA of the following year and the investment of the current year ratio is going to be better than what we see today. So I think that this is going to be a trend for the future, at least in the summer cycle of income that we see now. Very clear.
Thank you very much, Fernando and Denys,
thank you. Our next question comes from André Ferreira from Bradesco BBA.
Hi everyone, thanks for taking my question. I have one on BBC the bank. The volume of new transactions in the last 12 months is close to the amount mentioned for 2026 on Simpar Day. Specifically in the third quarter, the volume of new transactions accelerated a lot, doubled quarter on quarter. So I would like to understand what is driving such a strong growth and what do you expect for the future?
André, this is Fernando. This is in line with our strategic plan when we were on the Simpar Day 2023. I don't remember, but remember our focus is not giving guidance or creating expectations. You can see that JSL went public when it was a company of BRL three billion revenues and we said there was a potential of growth and opportunity. It's closing this year at BRL 10 billion revenues, so we don't create expectations, but we work very hard to deliver results consistently. It's a completely different company. BBC is a company that we have been working very consistently. We created first the payment means for truckers, then a leasing company to try and understand the financial leasing of trucks and the resale of used trucks.
Now we are having movements that are very structured to focus on the financing of new and used vehicles with a down payment of 30%-40%, a spread of 9%. That's what the company is doing. Completely digitalized light. The company has been working with responsibility and focus. Again, it's not guidance, but we have a window of opportunity to continue as such with a focus on vehicles. A small bank, but I think no one is so prepared, not in terms of size and scale, but in the area of used cars and trucks it's second to none. Again apart comes already from the outside, outside the ecosystem. It's not only for Simpar, but it does sell 20% of the volume of our used cars and trucks. So we see that this is an operation that can continue growing.
This is our focus with huge opportunity, very similar to rent-a-car if you think of it. The only thing is that, you know, with the rental car, the GTF you don't have a down payment. With the bank you do. But it's a very similar business if you think of it.
And a brief comment on my side, then speaking as for the increasing origination volumes, the financing business that Fernando mentioned from 24 to 48 months continues very solid. And BBC as any other bank has had transactions in a very short time and that brings peaks of origination. But the essence of the business, the more steady business continues to show a very good pace of growth as it evolves.
Very good. Thank you.
Please wait while we collect the questions. Our next question comes from Mizusaki. Victor?
hi, good morning. Fernando. Denys, two questions on my side. First, looking at CS Infra operations, your port, you're getting to the final lap of your initial CapEX and we have seen lots of M&A transactions in the port sector. My question is if it makes sense to wait for a process of M&A and asset sales and also infrastructure. We see PPPs of highways with an EBITDA margin of 54%. If you can comment what you see this sector like. On the one hand, we see a good execution of the project and we see a large pipeline from the government. So are you looking into other opportunities in the sector?
Hi Victor, thanks for your question. I understood that this was a question on ports and CapEX, but I could not hear your question in full. Your audio was breaking a bit, so if you can repeat, we'll try. Okay. Otherwise we'll try to answer. But if you could ask it again. No, no problems. My connection is not good and I apologize.
It's okay. On ports, as we see your investment plan almost in the end, theoretically, this implies that the project risk is going down. And then we saw several transactions in M&A in ports involving several areas of Brazil. Do you think that opens an opportunity for CS Infra to sell the asset? And on highways we are seeing a very good execution in terms of EBITDA margin of 54%. And you have a huge pipeline of the federal government and the government of the state of São Paulo. Is the group looking into other opportunities for highways?
Okay, Victor, now I could hear your question loud and clear. Ports. What is important to say is that our team from CS Infra has had a capacity of execution and the timeline, both physical and financial, is completely in line with plans even ahead of scale. We are going probably to deliver March or April no CapEX deviations. Remember a huge port modernization. Part of the pier was built, but reinforcement was built.
So what we call wet construction which is very hard but timeline completely complied with physically and financially. So we knew what we're doing, we knew the region. But I have to admit that we are having a lot more demand than we expected and these demands, many of them are becoming take-or-pay contracts part of it even more because you know, when people see that the port is about to be ready they start to trust the operation more.
So we are very confident in terms of revenues, returns CapEX are for the long term. But all that said, we have had demand of users that want to be partners. There is always demand and we at Simpar have an open mind to assess possibilities, new shareholders or anything that contributes to create value for the business and for the group. This is what we do and this is what we are going to continue to do with all our assets. And we do believe that the port has even higher value than what we expected because of demand, supply and the amount of people that have been coming to us highways. We are very happy with our highway. We have a big operation, a small CapEX when we look into new infrastructure businesses Victor. Remember that I would like to reinforce that we are very cautious about investment.
We are very responsible about returns. We don't want anything that will hurt the development of other businesses or our capital structure. Otherwise we are not going to do that. Our focus is to deleverage Simpar and the capital structure as a whole. So we are only going to look into infrastructure opportunities that are happening in the area of services low CapEX and that we are sure that we can extract value to shareholders and the company. This is what we do. Highways is not our main focus but we are always looking into opportunities and quite modestly, with all the requirements we have the CS Infra has developed excellent work. I hope I have answered your question.
Yes, very clear. Thank you.
Now we are going to turn to the Simpar team to read the questions in writing.
Okay, this is Denys. I'm going to start with the questions that we collected on the Q&A. The first came from email. Ivo Barreto is asking the following. We are already seeing a resumption of profitability in the bottom line of 2024 and as debt leverage goes down what is the expectation of dividends for 2025? If this is Denys answering your question, I would say that looking at Simpar as we mentioned, since the turn of the year that started in January we want to focus on reducing net debt. Starting with Simpar, Fernando here. This is a decision of the firm as part of the board, the whole of the board. But I would say it would be the mandatory minimum of 25% because the priority is to reduce Simpar's net debt. Fernando, if you want to add to that.
No, that's it.
Our focus is to decrease net debt at Simpar level, so the focus is not dividend. That is, I expect the minimum mandatory dividend, but of course this is always a decision of the board. Thank you. Second question comes from Alexandre Mendes and he asks the following. Wouldn't it be better divesting businesses that seem small and without synergy, such as BRT of Sorocaba and CS Mobi in Cuiabá?
Hi, Alexandre, this is Fernando speaking. Just to share with you. All our businesses transformed in size, but they started small. We don't have anything that started big, and all of them were in our business, and I can tell you about several assets. We started with customers, then we went, you know, into CS Frotas, then Movida. Movida, when it was bought it had 2,300 cars, and today the company is.
It is part of our business to be long-term investors and generate value through education and a lot of work. These assets or any others, if it makes sense, as I told to Victor, we can have partners, shareholders and at some point we can divest them because this is part of the recycling of our assets. But our business is to manage long-term businesses. You can see some moves, but not because they are small or they are big. All our businesses were developed from scratch with a lot of work, dedication. And yes, Infra is just part of that.
Thank you, Fernando. Carrying on. Our next question comes from Daniel Schafer. And the question is there was a news about a meeting called by Movida for a possible spin-off of the used car business. Would that be a path to have this business inside Automob? Thanks, Daniel, for the question. No, the news that was of Movida is just a simplification of its corporate structure. When it is completed in full, that will be the combination of two of the main taxpayer numbers the company operates. So it is a spin-off, but it is a merger into another taxpayer number. And in the latter the merger of two taxpayer numbers nothing to do with what Automob is just a simplification of Movida's corporate structure.
And this is Fernando, just to add to that, we understand Movida car. You know, cars you buy, you rent and you sell. And within our governance the focus is to have the whole cycle in a company and not share, you know, cycles with related parties and the business ends there. So.
So that you can compare this company to other listed companies. And when we wanted to have this movement, you would have the comparison. And we have been simplifying our structure. This is a case that Denys mentioned. But this movement of Vamos is an example of that. Vamos, if approved, is going to be only for the rental. But the sale of used cars is coming with it. Tomorrow it can have a relationship with our dealerships and to have Automob, we call consignment sales. Yes, but this is a one-time business. We are going to close the cycle with Vamos because then you can have clear comparables. In the case of Movida, you can see the better indicators, better management, better asset turnover because it is a dedicated company.
Thank you, Fernando. Let's move on. The next question comes from Daniel Villarino. The question is the biogas amendment of Ciclus. What is the additional revenue given the new volumes and prices in the amendment? To answer this is about BRL 60 million gross. And remember, there is no other cost connected to this revenue. So basically it is an increase in revenues purely right now. Right. Because if gas has a higher offer, we can also have a take-or-pay. I'm concerned about, not to give you any guidance, but it can be a take-or-pay. So in addition to adjustment of prices as a whole, we can have take-or-pay because we have this commercial alliance, we have the plant and they are going to buy everything that is generated. So probably we are going to have more than that without creating expectations.
Second ATU 12, what is the expectation for the timeline of operational ramp-up after completion of work in the fourth quarter? 24. Well, Daniel, here it's a bit hard to give you this piece of information because that would be guidance. What we have that is public information. It's the guidance of the two ports. And the first year that it refers to is 2026, where we estimate net revenues of BRL 390 million and EBITDA of BRL 250 million. Yeah, BRL 330 million to BRL 390 million. BRL 200 million to BRL 250 million. This is public information. But we cannot break down the numbers for your better visibility. Moving on. Is asking when the company's economy of scale will translate into profits to compensate shareholders. Well, this is a group that, thank God all the businesses in which we are involved have opportunities to grow.
But indeed we went through recent years with a much higher investment rate creating the scale and foundations that we want to enjoy from now on. So I believe without stating that with this budget that we have for 2025, the strategy to reduce the leverage ratio of the holding company, the whole available cash flow available for an additional compensation to shareholders is going to go up. So what is going to be paid out? Again, this is a decision of the board of directors and based on our plans to grow. But the strategy is already set and it certainly release more money available to shareholders and to the company itself to start a new cycle of growth. But I think we are on the right path.
Philippe, as a shareholder, what I can say to that is that we work to create value in the long term. When you generate a contract, a business, a long term deal backlog, a portfolio for the future, that you want to create value through dividends or the transformation of value of the companies. And we understand this corporate organization and the creation of value, if you do the math from 2010 to here, it's crazy, but you don't even have to go back, the last five years. The transformation in size of our assets is amazing.
So when I say that we are going to a new cycle, it is because we have the basis to generate more value. And if you decrease leverage, you have a valuation of assets and the business. So this is how we see the company in the long term. We have another question from what is the interest rate that makes Simpar Group no longer have profit?
I like this question because the group was founded in 1956 and it has gone through more years of very high interest rate than what we have had more recently. You know, the young people generation have not experienced hyperinflation. And why I'm saying that because, you know, we know that interest rates are going to go up. This is the projection. When I ask people, you know, why interest rates are going to go and how this is more a nominal increase than a real expansion because the levels are already one of the highest historically. So it is very difficult for the whole of the Brazilian economy.
But all that said, I would like to remind you that our long term contracts have this memory of inflation and therefore they have protections that allow you to pass through these effects, and in the end of the day, our asset base, if you are in a more inflationary scenario, also responds to that in their residual value. So that's almost a natural hedge that we have, so what I'm trying to say is that if interest rates increase too intensely, we take a little time to adjust for pass through because you have year schedules, but they will happen, and you also have a natural recycling of your assets, because as you have the turnover of the portfolio, you start to absorb new economic foundations. This is what the group has done until today, and it's not going to be different for the future.
Of course, we have to do our homework. We have to be more and more efficient. We have to work cost to improve returns. And we have to have discipline in the origination of new contracts, given the macroeconomic scenario. But I would say it is almost as simple as that. You might have. You may lag behind a bit, depending on the speed of the increasing inflation, but very soon you pick up in the business and when it is short term, again giving the liquidity of assets. If the market is not profitable, you know, you don't have to be there. We are not a plant. We don't have, you know, to keep on producing. This is a modular business. We have a sum of contracts that make sense, but we only originate more if it makes sense. I don't know if another would like to add
now, just to say that I never experienced a market in Brazil that was not volatile in terms of interest rates. And for instance, if you take a look of the last three or four years and the transformation of asset prices, you see that Vamos continues to do so. Well, Movida in the segment is the company that is increasing prices in the market, just to be fair. And that has to do with interest rates and the transformation of assets. When you see the interest curve for the future, generally assets also transforming value, together with the increase in interest rates come the increase in assets. This is what we have been doing. And once again we have the capacity of our people of managing the business and being very agile and simple in execution. And that's why you are able to see the extraction of value we have had, no matter the volatility, whether we are up or down.
Thank you very much. Our next question comes from Rafael Barreto. The question is what's your mindset for a possible higher speed to reduce the consolidated debt? If you have a higher interest for longer time, can you deliver net income? Well, I'll start to answer and Fernando can add to that. What we mentioned for 2025 is that it is going to be more accelerated in reducing leverage, as we have mentioned, without giving you numbers. But we do have an expectation of enjoying the foundations built and, you know, being selective in terms of origination. This will happen. So I think that we are going to make the deliveries we propose as time goes by.
Rafael, as an executive of Simpar and as a board member, we are aligning our work with the mission that is given to us by the board of directors. Those that have been following us for a little time perhaps don't have this view, but everything that we do is in line with strategic plans. If we hadn't contracted that, we wouldn't have built everything that we did. Now the mission is to extract value from everything that has been built. What you're going to see for the future is growth based on the foundations already built, with less investment and lower leverage. This is the movement now. This is the mission that we have and obligation before the board of directors.
We have to deliver goals aligned with the board of directors for the whole of the companies and for Simpar as a holding as well for the cycle starting 2025. Well, our last question for today comes from Eduardo Barreiros. Because this is a more mature business. Is there any conversation for strategic moves at Ciclus? Well, we have lots of mature businesses, Eduardo, but all of them have a huge potential to grow. JSL I just mentioned had BRL 3 billion in 2020 and is going to close to BRL 10 billion with growth in market share, the market in which Ciclus is inserted. I think in Brazil only 50% of waste is treated. 50% is not. We just won a huge concession in Pará.
So if you look at Ciclus, it seems it is mature, but take a look at CS, you know, the amount of additional revenue it is generating. So this is an asset that is a reference. It's very modern, one of the largest in the world, certainly the largest in Brazil. So we've been enjoying results now and we are very happy with the asset, the strategic moves, you know, our responsibilities to look into everything. We want things that are good, sustainable and that add value to the company. But, you know, no rumors. We continue to run our business as if we were to stay with them for life. At some point, you know, we can have something, but you know, that's not a priority. Thank you very much. Thanks, Fernando. With that we close our questions. So if you want to provide your final remarks.
Well, before we go to the final remarks, once again I'd like to reinforce our governance. You asked question about that, about the reorganization. But whether this is the movement or any other, we always work at the highest level of governance, in line with our board of directors, following all B3 regulations and relating with respect with everyone that is connected to us, our shareholders. And we are going to continue to follow our obligation in doing everything that is at the highest level of governance.
Final remarks. I'd like once again to share with you our point in time. We have been saying that we have developed our businesses. It's now time to enjoy that less investments and more results. And when we take a look at our ecosystem as a whole. Movida, for the first time, is going to cycle with volume scale, people store systems, and with OEMs selling vehicles at pre-pandemic conditions. This is something that it has never experienced before because it did not have the scale. Vamos has the scale.
Higher interest rates give the opportunity for the company for more businesses inventory. It can work with less inventory procurement with OEMs. So the company, if approved, the organization focused on rental. That will open new avenues of business with OEM. JSL, the opportunities we talked about that size. So this new cycle, our strategy aligned and again given by the board of directors is to improve operational efficiency, prices, reinforce partnership with customers, and that will reflect in our results.
I draw your attention that one of the points of our release is EBITDA margin that increase 4.2 percentage point when you get net revenues from services ex dealerships because you have a lower margin and excluding asset sales, which is the consequence of our business. 4.2 percentage points increase in the service margin is significant. It shows a new cycle and the focus of our management and how we expected that to show in the results for the future. On behalf of our more than 56 employees, our board of directors, our team, we thank the more than 280 participants that we had in our conference today. Thank you very much. Again, our commitment is to work hard to keep up with your confidence. Thanks very much for your attention. That's it. See you next time.
Simpar's conference call is now closed. We thank you very much for joining us and wish you a good day.