Time in the ISE portfolio, B3's Corporate Sustainability Index, which comprises companies recognized for their commitment to the three ESG pillars. This result demonstrates our commitment to sustainable growth, investing in concrete strategies that increase efficiency while reducing environmental impact, alongside building increasingly robust governance and promoting an inclusive and diverse workplace environment.
Moving to slide 4, let's look at the main indicators for the automotive market. In the first quarter 2026, such as domestic sales, which posted robust growth of around 16%, as shown in the top graph. This performance is the result of promotional conditions offered by automakers and dealerships, increased auto loans, unemployment, which remains low, and increasing consumer confidence. Sales in March 2026 were the highest for the month of March since 2013. Below, on the left, we see that local production grew 7%, reaching 601,000 units produced.
This number mainly reflects a higher number of vehicles licensed and registered. We also see the 18% drop in exports next to the production chart, which was due to a decline in purchases from Argentina. Slide 5 addresses the operating indicators for the Automotive Logistics division. We see that the number of vehicles transported, both domestically and exported, increased by 6.9% in the quarter, reflecting a market share of 22.3%, down half a percentage point year-over-year.
This performance is a result of key customers growing at a slower rate than the market. It is worth noting that Toyota, a major customer of ours, has not yet regained its position in the national sales ranking following the extreme weather event that affected its engine plant. On the other hand, average distance was up 11%, reflecting longer domestic trips. After these highlights, I now turn the floor to our CFO, Ramón Pérez , who will talk about our results, cash flow, and other indicators. Ramón, please.
Good afternoon, everyone. As can be seen in the top chart, net revenue in the first quarter 2026 was BRL 480 million, with a 22% increase over the same quarter last year on the back of a higher number of vehicles transported, a longer average distance traveled, as well as a 59% growth in the Fastline operations. The bottom chart, the division's EBITDA margin in Q1 was 13.7%, down 1.6 percentage point year-on-year. This result reflects a decline in yard management services, which last year benefited from additional demand from clients due to excess inventory.
In addition, we experienced the idle capacity at yards dedicated to storing imported vehicles, which we estimate will begin arriving in the second quarter of 2026. Other relevant factors included the impact of changes to ICMS tax credits, which have been in effect since Q3 2025 and will have a permanent effect, as well as peaks in vehicle handling in the northern region, which led to additional river transportation costs.
Lastly, the significant and sudden increase in diesel prices in March, on account of the conflict in the Middle East, caused a mismatch in price pass-through between suppliers and certain clients who had not yet formalized price adjustments by March 31st. This had a temporary negative impact on Q1 2026 results, and we provide further details on this matter in the earnings release.
The Integrated Logistics division posted net revenue of BRL 41 million, down 10% year-on-year due to the partial loss of a major chemicals transportation contract, as announced in Q2 2025. This has been partially mitigated by new contracts and the expansion of services provided to existing customers. As shown in the bottom graph, EBITDA margin increased to 2.8 percentage points year-over-year, a reflection of lower expenses, as well as non-recurring revenue. With regard to GDL, net revenue for the quarter was BRL 53 million, 21% lower than in Q1 2025, driven by a decline in the volume of parts and components stored, a reduction in the number of vehicles stored and handled, as well as currency appreciation, which reduced the revenue from bonded warehousing activities.
This factor, combined with the idle capacity of yards leased since 2025 to handle the high volume of vehicles imported and expected through the end of June 2026, the date of the last increase in import taxes on electrified vehicles in Brazil, explains the 77% drop in net income and the decline in net margin to 5.8% in Q1, as shown in the chart on the left. It is important to emphasize that we expect full utilization of GDL's facilities during a likely peak of imports in the second and third quarters 2026. The decision to maintain these leased facilities is in line with the strategic vision for the market where Tegma operates. Now talking about Tegma's consolidated results.
We recorded net revenue of BRL 521 million, up 18% year-on-year, mainly explained by the performance of the Automotive Logistics division and growth of its operating indicators. Our EBITDA grew 8% in Q1 2026, although EBITDA margin declined in the quarter due to weaker operating results in the automotive division, offset by a 13% reduction in expenses. Taking into account the reduction in equity income and increase in financial expenses, given the high distribution of earnings in the previous quarter, net income declined by 11%, closing at BRL 39 million. Moving on to slide 10. The chart on the left shows the cash to cash cycle at the end of Q1, which was 43 days, with no significant delays in collections identified. CapEx for the quarter was BRL 12 million due to land improvements in the partial payment for the purchase of a plot of land in Camaçari totaling BRL 5.8 million.
Also, the revitalization and improvement of the company's own fleet totaling BRL 1 million, and the purchase of software licenses, including for the ERP system amounting to BRL 2.8 million. The company's free cash flow was positive, BRL 71 million, a lower level than that generated in the same period last year, resulting from lower working capital releases, higher capital expenditures invested, CapEx, and the company's lower net income for the period. On slide 11, we present a detailed view of Tegma's capital structure. In the chart on the left, we can see that the company's cash now stands at BRL 184 million, which exceeds gross debt repayments for the coming years, resulting in a net cash of BRL 59 million. The company's gross debt reached BRL 125 million at an average cost of CDI + 1.34%, with 60% of the debt maturing by 2027.
As for profitability indicators, due to all the effects mentioned before, both the company's ROIC and ROE were lower in the first quarter, with return on invested capital at 30.4% and return on equity of 25.3%. On the right, we show the history of dividends and interest on equity paid. No announcements were made regarding dividend payment this year, as an extraordinary distribution took place in December 2025.
On the next slide 13, as shown in the top chart, we see our share performance compared to the IBOVESPA index and the Small Caps index. Taking last year's closing price as base zero, we believe this underperformance can be attributed to the uncertainties arising from the international geopolitical context and its impact on global supply chains. As shown in the top chart, Tegma continues to trade at multiples slightly below its historical average. With that, I would like to thank everyone once again for your participation and interest in the company. Now I'd like to start the question-and-answer session.
Thank you, Ramón. We 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 want also to ask a question in writing, please type your question in the Q&A field at the bottom of the screen. Please hold as we wait for questions and collect the questions. Apparently, this is unprecedented. We did not receive any questions. That's perhaps a sign that the earnings release was very well explained. Now I will turn the floor back to Nivaldo for his final statements. Nivaldo?
All right. Yeah. Very well. I'd like to thank everyone for joining us in this conference call and to discuss the results of Q1 2026, and rest assured that we're starting Q2 2026 with a lot of enthusiasm and a lot of confidence in the automotive market, always working to achieve better and better results for all of us. I wish you all the best. Thank you very much.