Good afternoon, and thank you for waiting. We would like to welcome you to the conference call of Tegma Gestão Logística S.A. To discuss the earnings in 2018, we have with us Mr. Gennaro Oddone, Chief Executive Officer and Investor Relations Officer, and Mr. Ramón Pérez, CFO. Be informed that this event is being recorded, and all the participants will be in the listen mode only during the company's presentation. Next, we will begin the Q&A session when more instructions will be supplied. If you need any assistance during the conference, please request the help of an operator by dialing after zero. The replay will be available right after the closure for seven days.
Before proceeding, we would like to clarify that any declarations that may be made during this conference call concerning the business perspectives of Tegma, projections, operational, financial goals are based on beliefs and assumptions of the company's board and also based on information currently in formation. Considerations about the future are not guarantees of performance. They involve risks, uncertainties, and depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other factors may affect the performance of Tegma in the future and lead to results that differ materially from those expressed. Now I would like to pass the floor to Mr. Gennaro Oddone, Chief Executive Officer and Investor Relations Officer of Tegma. Sir, you have the floor.
Thank you. Good afternoon. We would like to begin another conference call for the earnings of Tegma, and I would like to thank you all for your interest in our company. I would like to begin with slide number two with an agenda of our presentation. We will begin with the highlights of the quarter, then market performance, and some operational indicators of Tegma. Next, we will focus on the earnings of the period, also cash flow, investment, debt at the end of Q3 2018. Finally, we will talk about the capital market and expectations. On slide number three, we present the highlights of the quarter. We would like to begin talking about the new contract for yard management for GM Brazil that we began in Q3 in Araquari, Santa Catarina.
In this contract, we will be responsible for managing a yard of 200,000 sq m, has capacity for up to 8,000 vehicles to be imported by the Port of Itajaí, which is 65 km away. In the chemical sector, we highlight the anticipated renewal of the most important clients of Logística Integrada for another two years with a new end date for December 2021. In this negotiation, we will acquire more productive and profitable equipment for the operations, representing BRL 4 million. Third, we would like to highlight the notice we received in 2018 involving the payment of back taxes, ICMS, in the chemicals operations, which resulted in additional BRL 5.3 million in taxes concerning the last five years and BRL 2 million in fines and monetary corrections.
Fourth, it was approved the distribution of 50% of the profit of 2018, corresponding to BRL 0.24 per share, and payment on November 26th. Finally, we have the pleasure to inform you that in this quarter, we won two awards from two important magazines from the financial and investor relations sector, showing that our investor relations team and our investor relations program is one of the best in Brazil and Latin America. On slide number four, we show the performance of the automotive market and Tegma indicators. Beginning with the graph on the left, it's possible to see that domestic sales were 12% higher in Q3 2018, a growth that is consistent with the rest of the year and reinforces ANFAVEA's estimate that in 2018 we should have 13% growth versus 2017. This has been influenced due to the improvement in the Brazilian economy and recovery of consumer trust.
The exports in blue had a drop of 23% reflecting the crisis in Argentina. Looking at the graph in the middle, we can see that the lower growth of production due to the drop in exports and also higher inventory. The growth of exports, on the other hand, reflects the end of the benefit for vehicles produced locally by Inovar-Auto, which had finished in 2017, making the export more competitive and increasing the consumer. More consumption of premium vehicles in Brazil. In transport, at 207,000 tons, 6% more than in 2017, resulting in a growth of 11% of deliveries in domestic duties and a drop of 18% in exports. This brought a gain of 0.7 percentage points in market share compared with the sales in wholesale, partially due to the improvement of the market in our clients.
In Q3, we had the average distance of 1,040 km continue to grow, and this influenced mainly by the continuous growth of the distance of domestic trips and the reduction in the participation of exports, all which have a smaller distance. On slide five, we show the evolution of the results of the divisions. We see revenue on the left, profitability, EBITDA and EBIT in the graph in the middle, and net profit, consolidated net profit on the right. We remind you that the numbers here shown do not include the warehousing operation in Cariacica in 2017 and in January 2018, and without the impact of the notice for back taxes owed in the chemicals operation.
We can see that the revenues for automotive logistics in Q3 had a growth of 20% due to the number of vehicles transported, the average distance, and the price readjustment made in 2018, and the revenue from other services. The net revenue from Integrated Logistics grew 14%, reflecting an increase in the volume and also the entry of new clients in the warehousing operation and the increase in Q3 2018 of the revenue from chemicals operations. Now talking about EBITDA per operation in the graph in the middle to the left, the growth of automotive EBIT in blue of 41%, representing a margin of 17% and a gain of 2.4 percentage points versus Q3 2017, reflects the cost control and expense control together with the growth in revenue. The EBITDA from Integrated Logistics in orange grew 6% with a margin of 21%.
The graph in the middle to the right, we can see the evolution of the EBIT margin of the division. The EBIT margin in vehicle logistics had a positive evolution in the period. The evolution of the EBIT margin of Integrated Logistics versus Q3 2017 is significant. But if we do not consider BRL 5.7 million of negative non-recurring events in the quarter of 2017 related to a discontinued operation, we can see that the level of EBITDA margin was already equivalent to automotive logistics. The net profit in Q3 2018 on the graph on the right of BRL 36 million, if compared to BRL 15 million in Q3 2017, was 2.4% greater in relation to the operational improvements explained previously, and additionally, with lower balances of net debt and lower interest rate in the issue of the spread of our debt.
With this, I'd like to pass the floor to Ramón, our CFO, who will talk about return, cash flow, and debt.
Thank you, Gennaro. On slide number six, we show the graph on the left, the evolution of our return on equity and on invested capital in orange. The growth of ROIC and ROE in Q3 2018 versus Q2 2018 reflects, apart from the improvement of the operational and net result, the discipline in relation to the capital control in our operations. In the graph in the middle, we can see that the operational cash generation in Q3 2018 was practically equal to that of Q3 2017. In spite of the better operational results. This happened due to the increase in the cash cycle of the company and due to the back taxes paid, already explained.
The CapEx in Q3 2018 was, in orange, BRL 15 million, made up of the acquisition of a property line in Sorocaba for the Toyota operation. This event shows the drop that we see in the free cash flow. Continuing financial leverage, we see on the graph on the right the increase in the gross debt due to the lengthening of part of our debt that would become mature in 2019 to 2020. During this operation, we decided to increase the operation by BRL 10 million, aiming at a cash reinforcement. The net debt, due to the increase in cash, did not present a significant variation, maintaining our level of Net debt divided by EBITDA adjusted in 0.3x . On slide number seven, where we see issues in capital markets, we share the evolution of the price of our shares.
We'd like to say that our shares had high volatility in Q3. We believe that amongst other reasons, this is due to the political-economic uncertainty that affected the market. Sectorially, the lack of definition due to the implementation of a minimum price to its freight. After the first round of elections, we see a recovery of the stock market as a whole, but Tegma shares recovered even more, closing at around BRL 23. In terms of liquidity of our shares, the average daily liquidity over the last 12 months has been around BRL 7 million, an increase in relation to the average of 2017. In October, we reached BRL 10 million negotiated. In the center, we have the comparison of the multiples of Tegma calculated in 2017 based on the estimates of 2018 and 2018 at the estimate for 2019.
You can see that in 2018, we had discounted multiples in comparison with 2017, probably due to the resurgence of political uncertainties in spite of the better results. On the right, we show that our ratings continue to be one for Moody's without any update to reflect the improvement in the market or the fundamentals of the company. Also, we show the relationship for the analyst with their average price for the end of 2018 and 2019. With this, I would like to pass the floor back to Mr. Gennaro Oddone.
Thank you, Ramón. Now, we'd like to begin the Q&A session.
Ladies and gentlemen, we'd like to begin the Q&A session. To ask a question, please dial asterisk one. To remove the question, please dial asterisk two. Mr. Gennaro Oddone will read the questions from the webcast . Our first question comes from Mr. Lucas Marquiori, Safra Bank.
Congratulations for the results.
Two points, Mr. Gennaro Oddone. After a quarter with a lot of discussion, it seems that the freight price list set by the government is being accepted. What is the impact of freight in Tegma's business? The second point, please give us your perception about the clients' OEMs. How do you see the market evolving next year? What is the growth these OEMs are using, and whether there is a lot of regional difference between Southeast and the rest of the country.
Good afternoon. Thank you for the questions. Well, first, concerning the freight crisis, this topic is in the Supreme Court to discuss whether it's constitutional or not. The lawyers understand that it is not constitutional. The Supreme Court should give their opinion. It will be decided by all the members. I don't know if it will be done before 2019 or after.
We're waiting for positioning from the Supreme Court. Also, there's some class associations are working in case the law is approved to correct some imperfections in the table. There are many. So it is still very premature. We cannot have a good visibility of what will happen in relation to this item. Obviously, we're doing a follow-up. We were making an effort to react as soon as the decision is made. Concerning the second question, in terms of volume is good. As I mentioned here in the speech, some projects are projecting a growth of 13%. It can even be higher than that at the end of the year. Normally, the volumes go up through even year-to-date, 13%. For next year, our main clients are still preparing their plans, but we have heard that there is a consensus that next year, the growth should be double-digit growth.
Concerning the differences per region, should we see more recovery in the North and Northeast?
It's difficult to foresee right now. This will depend on the policy of each OEM. I wouldn't be able to estimate that.
Thank you.
Ladies and gentlemen, reminding you to ask questions, please dial asterisk one. Once again, if there are any questions, please dial asterisk one. We have another question from the website.
Ramón, speaking, the ROIC, consolidated ROIC, had another significant increase in Q3. What can we expect for the future? Well, the ROIC arrived at this level due to our effort to manage our capital, the metric for evaluation of each project in the new business. We hope that it has reached a level where it will not suffer any fluctuations.
It will have a small negative impact due to the acquisition of the plot of land in Sorocaba, which is a plot of land for an operation we already have. This will increase the capital used, but with a marginal effect. We don't expect any significant impact concerning our projection for ROIC.
First question, please dial asterisk one. Star one. It's Lucas Marquiori, Safra Bank.
I have two quick follow-ups. Ramon, could you give us a view of what to expect in terms of CapEx next year, including this new contract, chemicals, and the new project with GM for the yard in Araquari? What kind of CapEx will you have? Another point, in Q1, Q2, you had clients that stopped. In Q3, you don't have any stops, right?
Now, are you talking about the plant stopping operations at the end of the year?
Yes.
This is normal.
In December, OEMs stop at the end of the year. In the middle of December, they stop. Some come back in the beginning of January, some on January 15th.
In Q2, your market share stopped because the two plants stopped in the middle of the truck drivers strike. In Q3, you had no stops, right?
Oh, no. I understood.
We didn't. In Q3, we did not have. In Q2, we had because of the launch of new products.
Now, concerning CapEx, first, it's difficult to give you guidance, but I can comment that of the investments we had foreseen for this year. We mentioned there are BRL 20 million for the acquisition of the plot of land. Recently, we announced BRL 4 million for the acquisition of new trailer trucks. Part of this will go to 2019.
It's an issue of time, making the investment a carryover for 2019, which should be added to the amount we have had in the last few years, a CapEx around BRL 15 million, BRL 20 million. This is what I can tell you. Part of this investment will be made next year, yes.
Thank you.
If there are any questions, please dial asterisk one. We'd like to conclude the Q&A session. I'd like to pass the floor to Mr. Gennaro for his final comments.
Once again, I'd like to thank you all for participating, and we will be available to bring clarifications. Thank you. Good afternoon.
This conference call is concluded. We would say thank you. Thank you for using Chorus Call.