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Good afternoon to all. This is Ian Nunes speaking, your manager of Tegma. Welcome to the Conference Call to discuss the Earnings Concerning the Fourth Quarter of 2025. This conference call is being recorded and the replay may be accessed on the company's website. We inform you that all participants will be in listen-only mode during the presentation. After which, we will have the Q&A session when further instructions to participate will be provided. For those listening to the call in English, we have in the chat the link to the presentation in English. Here on Zoom, we will be showing only the version in Portuguese. I'd like now to give the floor to Nivaldo Tuba, CEO of Tegma, who will begin the presentation. Nivaldo, you may proceed.
Let's start. Good afternoon, everyone. This is Nivaldo Tuba speaking, CEO of Tegma. On behalf of the entire company, I thank you once again for participating in our earnings conference call. With me here are Ramon Perez, our CFO, and Ian Nunes, our investor relations executive manager. As usual, we'll start our presentation on slide two, where you, ladies and gentlemen, can find our disclaimers regarding our forward-looking statements. Moving on to slide three, here we have the market outlook. Firstly, domestic vehicle sales, which after two years of double-digit growth in 2023 and 2024, slowed down at the end of 2025, ending the year with growth of 2.6%.
Although the outlook remains cautious, with the main associations forecasting growth of around 3% for 2026, daily sales in the first two months of the year were encouraging, growing by around 9%. It is worth noting that by 2026 the market will have around 70 new models. In other words, another important stimulus for fleet renewal. Another important issue at the end of 2025 was the incident at Toyota's engine factory, which caused the automaker's sales to fall 40% in the fourth quarter of 2025 vis-a-vis the previous year. The automaker has adapted its production in various ways, and its sales in the first two months of 2026 are already showing a rebound. They're regaining sixth place in the sales ranking.
I would also like to point out that there are already 14 Chinese automakers operating in the country, whose sales growth has been exponential in just a few months, rising 45% between July and December. Chinese brands already account for 13% of licensing of vehicles in Brazil, and some of them have already started local production. All this movement has required many adjustments to our operation, as well as investments to deal with unusual complexities in this business. Now, on slide four, let's look at the main indicators for the automotive market in Q4 2025, such as domestic sales, which, as I mentioned, were affected by high interest rates and slowed growth to just 1%. Below, on the left, the local production remained fairly stable at 662,000 units, down 1% year-on-year.
As for exports, our exports are still very dependent on purchases from Argentina, so they suffered from reduced demand from that country and declined by 17%. Slide 5 addresses the operating indicators for the Automotive Logistics division. It is worth noting that the number of vehicles transported, both domestically and exported, fell by 6.6% in the quarter, reflecting a market share of 22.7%, i.e., 1.3 percentage points lower. This performance is a consequence of the sharp drop in Toyota sales and the decline of other key customers. Fortunately, average distance traveled was 1,154 kilometers, 6% higher due to sales growth in regions outside the South and Southeast regions. After these highlights, I will now give the floor to our CFO, Ramón Pérez , who will talk about our results, cash flow, and other indicators. Ramon?
Good afternoon, everyone. As can be seen in the top chart, net revenue for the fourth quarter of 2025 was BRL 572 million. A 2% decrease compared to the same quarter of the previous year due to the reduction in number of vehicles transported, reduction in vehicle transport services between yards, and less logistics services. The bottom chart, the division's EBITDA margin in Q4 was 13.6%, down seven percentage points. It was atypically affected by a number of factors which we attempted to detail in our earnings release, including a drop in Toyota sales, an increase in ICMS tax collection, and one month long hold in transportation at two branches which led to idleness in one month and extra costs in the following month.
The Integrated Logistics division posted net revenue of BRL 38 million, down 6% year-on-year due to the partial loss of a major chemical transportation contract, as announced in Q2 2025. This has been partially offset by new contracts signed and the extension of services to existing customers. Similarly, due to the reduction in revenue and a lower dilution of fixed costs, EBITDA margin declined 5.2 percentage points to 8.8%. The division is collecting more ICMS, which is the state value added tax, due to a change in the collection framework, and there were additional maintenance costs at the division's main chemicals warehouse. With regard to GDL, net revenue for the quarter was BRL 61 million, lower than in Q4 2024 on account of the decline in the volume of bonded warehousing services.
This reason, coupled with higher rental costs for new leased areas, explains the 30% drop in net income and net margin, which was reduced to 14.3% in the quarter, as shown in the bottom left chart. GDL maintained its dividend payout history, distributing almost 75% of its net income for 2025, or BRL 49 million. Now talking about Tegma's consolidated results, we recorded net revenue of BRL 610 million in the fourth quarter 2025, down 2% year-on-year. Despite this, in 2025, this indicator closed at BRL 2.2 billion, up 6% compared to 2024, by virtue of a positive dynamics observed in the first half of the year.
Regarding consolidated EBITDA, Tegma showed a decline both in nominal terms and in terms of margin in the quarter and in the full year due to the worse operating result that I previously described. Considering also the reduction in equity income, we posted a 39% decline in net income, which closed at BRL 52 million. Net income for the full year reached BRL 243 million, and despite the reduction compared to 2024, still represented a double-digit net margin of 11%. Moving on to slide 10, the chart on the left shows the cash to cash cycle at the end of Q4, which was 41 days, remaining flat with Q4 2024. CapEx for the quarter was BRL 73 million. The amount of BRL 40 million.
Improvements to land totaling BRL 7 million, and the acquisition of semi-trucks for the logistics operation of newly registered vehicles in the amount of BRL 7 million. CapEx for full year 2025 totaled BRL 112 million, mainly due to the acquisition of a plot of land and improvements to yards to handle the increase in imports of vehicles from China. Due to the reduction in the company's operating income and the significant CapEx mentioned just now, free cash flow for the fourth quarter of 2025 was a negative BRL 21 million. In the full year 2025, however, free cash flow was positive of BRL 128 million, down from BRL 170 million in 2024. With regard to capital structure, Tegma distributed a record amount of dividends and interest on equity in 2025, totaling BRL 292 million.
As a reminder, this was an atypical distribution and we cannot promise the same level of distribution in the coming years. Even after dividends paid and the significant CapEx invested, the company continues to have a virtually levered capital structure with net debt standing at only BRL 12 million in December 2025. As for gross debt, the company's gross debt reached BRL 126 million at an average cost of CDI plus 1.34%. 70% of the debt will be maturing by 2027. As for profitability indicators, on the back of all the effects mentioned before, both the company's ROIC and ROE were lower in the fourth quarter of 2025, with return on invested capital for Q4 at 31.2% and return on equity of 25.5%. On the right, we show the history of dividends and interest on equity paid.
As we mentioned, 2025 was a record year resulting in a payout of 110% on an accrual basis. The dividend yield on distributions for the last 12 months was 12.5%. On the last slide, as shown in the top chart, we see our share performance compared to the Ibovespa index and to the Small Caps index, taking last year's closing price as day zero. We believe that we can explain this underperformance because these two indexes include stocks linked to sectors and industries that are more attractive to foreign investors and these have recorded above average performance at the beginning of this year. With this, I would like to thank everyone once again for your participation and interest in the company, and I will now begin the Q&A session.
Thank you, Ramon. I will now start the Q&A session for investors and analysts.
If you would like to ask a question, please press the Raise Hand button. If your question has been answered, you can leave the queue by clicking Lower Hand. If you would like to ask a question in writing, please type your question in the Q&A field at the bottom of the screen. We have a question from Victor Blasques with Prumo Capital. I think that Victor sent a written question, which I will read. Good afternoon, Nivaldo, Ramon, Ian, and the whole team. If you can comment on how you assess the performance of vehicle sales in the first two months of 2026. Nivaldo, please.
Thank you, Victor. Let me try to explain. Speaking about the first two months of 2026, sales performed better. Up 9% in daily sales, which is the expectation we had for 2026, which was a 3%, so higher than what we expected for 2026. This is an expectation by all regulatory bodies of the automotive industry. We can say that the biggest losers of market share in the yearly comparison were GM, Nissan, and Toyota. To explain Toyota, well, it was because that problem that they had in their engine factory due to a storm, and the groups that gained more market share were BYD, both BYD and Great Wall. BYD and Great Wall, two Chinese automakers, the two biggest operating in Brazil. Another highlight would be other Chinese entrants, Geely, Omoda, Leapmotor, and GAC, and they account for 2%-2.3% market share.
One important point is that exports posted a decline in this period. They dropped 28%, a substantial number, primarily because of Argentina. With this reduction in exports, consolidated production in the first two months also posted a drop of approximately 8%.
Thank you, Nivaldo. There's a second written question from Victor Demier with Vinci Compass. Good afternoon, gentlemen. Congratulations on the results. The company acquired another plot of land in Camaçari, Bahia in this quarter. Can we expect more CapEx for this operation? In addition, could you give us more color on the impact of these yards on the results?
Pass this question through Ramon. Ramon? [Foreign Language] Oi, uma boa tarde aí. Obrigado pela pergunta.
Good afternoon. Thank you for the question.
[Foreign Language] De fato, a gente fez essa aquisição aí de BRL 40 million no ano passado, né? E teve um novo terreno também de aproximadamente BRL 4 million. A gente, enfim, fez esse investimento, isso aí acompanhando a demanda desse cliente importante, né, importante porque a gente tá posicionado aí ao longo da nova planta, né? Nós não esperamos mais nenhum CapEx dessa magnitude aí no curto a médio prazo. Pelo menos caso não apareça nenhuma oportunidade que se some aí às aquisições recentes, né? O racional dessa aquisição é justamente estar próximo da montadora, como eu mencionei, que vem ganhando muita relevância aí nas vendas nacionais.
[Foreign Language] Eles informaram que pretendem produzir 150 mil veículos esse ano e que querem produzir até 600 mil veículos até 2030. Sobre a questão do impacto, né, da desses gastos no resultado. Assim, é o que eu posso dizer, tá? A gente não fala exatamente aí a rentabilidade de cada projeto, de cada cliente, né? Mas tá dentro das regras da companhia, né? É garantindo aí um retorno, né, do capital que a gente tá empregando, né. E retornos saudáveis, né, como são todos os projetos que a gente aprova, tá?
Thank you, Ramon. Next question from Guilherme Ávila Gutaco. Good afternoon, Nivaldo, Ramon and Ian. What is the size of the factors that led to an increase in expenses in LA? I think Ramon is going to speak a little about the consolidated expenses of the company, which would be non-recurring and impacting EBITDA. Ramon, over to you.
[Foreign Language] Bom, sobre as despesas, acho que a gente tá se referindo aqui às despesas administrativas, né? Consolidadas. Eu posso comentar sobre elas. Elas são rateadas aí pra cada uma das divisões, mas basicamente reflete na logística automotiva, o que eu vou explicar no consolidado. A gente tentou, a gente deu informações no nosso relatório de resultados, né? Mas se puder assim me aprofundar um pouquinho mais em relação ao que a gente já mencionou lá. A gente teve um aumento nas despesas consolidadas de cerca de 22%, né? Foram BRL 6.5 million, aproximadamente, no trimestre, tá? O que a gente teve aí que dá pra gente destacar de importante, né?
[Foreign Language] A gente teve maiores gastos com honorários advocatícios, ligados a processos anticoncorrenciais, que foram de aproximadamente BRL 1.6 million quando comparado trimestre contra trimestre. Interessante é que, na verdade, no ano a gente ficou dentro do nosso padrão, mas nesse trimestre especificamente houve isso explica parte dessa diferença. A gente também teve o que eu vou falar agora do trimestre também se repetiu o resto todo ano, né? Gastos maiores com ERP. A gente teve a implantação do ERP. Esses gastos, eles vêm praticamente a maior parte deles da amortização desse investimento, que cai aí também dentro das despesas administrativas.
[Foreign Language] Também ajustes de estrutura, que foram necessárias em função da readequação dos processos, pra que eles estivessem em linha com a implantação do ERP. Isso se somou a aproximadamente BRL 1.5 million. Como eu disse, o principal foi a amortização. Os gastos advocatícios, BRL 1.6 million, BRL 1.5 million do ERP. A gente também teve nesse trimestre maiores contingências trabalhistas e gastos com rescisão. Isso somou aproximadamente BRL 1.4 million, BRL 1 million, BRL 1.5 million. Deixa eu ver assim, digno de nota também de valores iguais, que começa a entrar agora em uns valores mais picados. A gente também teve gasto com a parte de tecnologia, na parte de TI.
[Foreign Language] A gente teve um aumento aí da ordem de BRL 700,000 ligados a investimentos no data center, né, em termos de segurança de informação, tá. Pra que a gente tivesse em compliance aí com as nossas necessidades. Por último, também dessa ordem, eu acho que o último que vale a pena aqui mencionar, isso daqui aproximadamente, acho que a gente deve explicar 80%-90% desses BRL 6.5 million. A gente teve aumento de despesas administrativas propriamente ditas, mas que vem do fato que a gente adquiriu aquela empresa, a Buskar.Me, né, que tá atrelada às atividades da Fastline, né, transporte de veículos usados, motocicletas, que é uma estrutura que a gente não tinha.
[Foreign Language] No quarto trimestre de 2023 a gente não tinha ela, agora ela tem, são BRL 500,000, BRL 600,000 aproximadamente que aumenta as nossas despesas administrativas. Isso aí explica aproximadamente aí 90% dessa variação, como eu disse. Esse é o detalhe aí que eu consigo abrir. Acho que desses pensando um pouco aqui no que é recorrente, não é recorrente. Essas contingências trabalhistas, esses gastos com rescisão não são recorrentes, mas obviamente no dia a dia de uma empresa você sempre vai ter isso em algum momento. É isso que eu poderia detalhar.
[Foreign Language] Obrigado, Ramon. A gente vai tentar coletar mais alguma pergunta aqui. Please hold as we collect more questions. Pessoal, acho que encerramos por aqui, não temos mais nenhuma pergunta. We will end the Q&A session. I'll turn the floor to Nivaldo for his final statements.
[Foreign Language] Antes de finalizarmos, eu gostaria só de destacar que apesar dos baixos índices indicativos de crescimento da indústria automobilística para 2026, índices que são esperados pelos órgãos setoriais, o mercado do primeiro trimestre os números de vendas são públicos mostraram-se bastante positivos, com uma efetiva recuperação das vendas diárias. Como foi dito, houve um crescimento de 9% versus 3% do previsto. O que sem dúvida alguma cria um ligeiro otimismo ao mercado. Por isso eu gostaria muito de agradecer a quem nos escutou, a quem nos assistiu, a quem esteve presente aí na nossa apresentação, tá? Tenho a certeza aí que estamos trabalhando forte para termos um primeiro trimestre em 2026 bastante feliz. Muito obrigado a todos.
Thank you very much.