Good morning, ladies and gentlemen, and welcome to Vamos Conference Call to discuss the earnings regarding the 4th quarter 2023. Today with us we have Gustavo Couto, CEO, and Adriano Ortega, CFO and Investor Relations Officer for Vamos. This conference call is being recorded, and the replay can be hit on the company's website, ri.grupovamos.com.br. The presentation is also available for download in Portuguese and in English. We would like to inform you that all participants are going to be in listen-only mode during the presentation. We'll then start the Q&A session when further instructions will be provided. Before moving on, we would like to let you know that any statements made during this conference call relative to the company's business outlooks, projections, operating, and financial goals are based on the beliefs and assumptions of Vamos management and are based on information currently available to the company.
Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions since they refer 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 lead to results that will be materially different from the forward-looking statements. Now we are going to turn the call to Mr. Gustavo Couto to start the presentation. Please, Mr. Couto, you may go on.
Good morning, everyone. Thanks for joining us in our conference call for the 4th year and year-end 2023. Throughout the year we made progress in our strategy of growth, scale, solid foundations, and reach, expanding Vamos market leadership in rental and ensuring the company's continued sustainable development.
In dealerships we observed a typical dynamic in Brazilian agribusiness and were quick to adopt important measures for the new recovery of the sector's results. As a consequence, we can already see signs of improvement at the start of 2024. On slide 3, talking about highlights of the period in the year, we see that for yet another quarter the rental segment, our main business unit, showed strong performance with net revenues growing by 28% quarter-on-quarter, reaching BRL 8,181 million and more than 68% year-on-year, in a total of BRL 3.3 billion for the year. EBITDA for the quarter amounted to BRL 687 million, up 44% year-on-year. Allocation EBITDA grew by 66.5% to BRL 2.5 billion. We closed 2023 with an operating profit of BRL 2 billion, 64% higher than that of 2022.
Our allocated fleet, measured by a capacity rate, has already surpassed 91% of the total fleet and a strongly appreciated asset base, and yet another virtuous cycle of rental contracts. The inventory available for rental was gradually reduced until normalized. The acquisition value of these assets ensured high levels of profitability for new contracts, a reflection of the execution of our strategic plans, which ensure reach, leadership, and unique scale in the rental sector. By the end of 2023 we reached 41,700 rented assets in our operations. Adding to the volume of assets already deployed, plus the pipeline of new projects signed last year to be deployed at the beginning of 2024, we have a good outlook for healthy growth in another year of resilient results in the rental segment.
I'd like to draw attention to the company's good performance in some sectors, such as beverage, food, juice, energy, chemicals, and services. To close the rental highlights, we deployed BRL 4.7 billion in assets in the year, a volume in line with the pace achieved in 2022, which, by the way, was a record and most related to new contracts. Still, in 2023, as already anticipated, we began negotiations and strategic asset purchases of different truck models to cover 2024. We managed to gain good commercial conditions, a strategically relevant key differentiator of Vamos, given our scale and execution capacity. In asset sales we grew by almost 64%, reaching BRL 524 million in retail sales for the year, with gross margin of 30%, an increase of 3 percentage points for the year, and almost 9 percentage points for the quarter.
We'll show you the details later on, but would like to highlight the significant growth in gross profit of 82.5%, reinforcing the favorable market dynamics combined with the company's successful purchasing strategy. As for dealerships, we believe in our strategic positioning with a broad portfolio of recognized brands and excellence in services. Our heavy machinery truck and consumer machinery dealerships posted record sales volumes of parts and after-sales services, ensuring positive results as measured by the absorption rate, even in a scenario of lower sales volumes in the automotive, heavy agricultural, and construction machinery industries. In agribusiness, which was impacted by factors such as the fall in commodity prices, high interest rates, lower available credit, and climatic factors that affected the sector, we saw this effect, albeit occasionally, on dealerships as EBITDA margin closed the year at 3.5%.
When we take into account the internal measures to mitigate the effects observed in 2023, we believe the scenario should be more positive over the coming months, with signs already evident in our material fact yesterday, when dealerships' January and February sales volumes already show an important evolution in relation to the 3rd and 4th quarters of 2023. We reaffirm our confidence in the potential that agribusiness has in the country, and Vamos already has a solid base to extract the full potential of this market. After breaking down the highlights by segment, we get to our consolidated results. Consolidated net revenue grew 4.4% in the quarter to a total of BRL 1.5 billion and 24% in the year, more than BRL 6 billion altogether. Consolidated EBITDA grew by 16.6% in the quarter, amounting to BRL 661 million and almost 40% in the year, reaching BRL 2.7 billion.
Operating profit grew by 4% in the quarter and 30% in the year. Before net profit, we closed the year with a return on invested capital of 18.4% and ROIC spread of 9 percentage points measured by the spread between our ROIC and the marginal cost of debt at the end of the period. Net profit totaled BRL 587 million, about 12% compared to 2022 due to higher financial expenses and lower results on dealerships. Fourth quarter profit was 68% higher than the third quarter of 2023. Although there are non-operational and non-recurring factors, there is an extreme quality in the operational aspects of our results, which should determine the pace of 2024. I invite you to take a closer look at the net profit for 2023.
First, resilient growth in gross rental income, already indicated by the pace of developments carried out and new contracts signed, which will contribute to 2024 results. The downward trend in the Selic rate and natural impact on the cost of Vamos debt brings the prospect of lower financial expenses and increased profitability, as measured by various financial indicators. The gradual recovery of the dealership sector, with a reduction in inventories, expenses, and gradual recovery margins, should also contribute to our results when compared to 2023. The sum of these factors and other internal measures gives us confidence that we will spot 2024 prepared for yet another cycle of steady, sustainable results. Moving on to the next slide, we highlight the annual evolution of our consolidated results since 2021 as a result of the pioneering spirit, scale, and quality of our services that support and expand our market leadership.
I would like to once again highlight the importance of the rental segment as the main driver of Vamos results. In 2023 we exceeded BRL 6 billion in net revenue, with growth of 24% compared to 2022, driven by the strong performance of the rental segment, which was 68.5% higher than in 2022. We more than doubled the company's net revenue in two years. Rental revenue reached 54% of total revenue, with BRL 3.3 billion, and is already higher than the sum of all dealerships' net revenue. In two years operating profit grew almost 3 x compared to 2021 with 2023. EBITDA grew more than 2.5 x, also in two years.
Once again, the absolute highlight is the contribution of rental to this result, with 97.5% of operating profit and 95.5% of EBITDA referring to truck and machinery rental in 2023, in net profit down 12% on last year. As I already mentioned, we have a great impact from financial expenses and atypical volatility in dealerships. I would like to reinforce our confidence in a scenario of lower financial impact, better working capital management, and a gradual recovery in the dealership business. Now I'll hand the call to Adriano, that will give a bit more color on our performance. In the end I'll come back for the Q&A session and to give you further information. Adriano,
Thanks. Couto, good morning, everyone who are joining us in our earnings conference call. I'm going to give you more color on our performance for the fourth quarter and year of 2023.
On slide five we show our ROIC and EBIT since 2019, showing the consolidation of a high level of profitability. In 2023 our ROIC was 18.4%. It's likely lower than that of 2022, but still with a spread of 900 points in relation to after-tax cost of debt. An increase of 120 points reflects the falling interest rates in the chart below. In addition to robust growth of EBIT in recent years, multiplying the operating profit and realizing 2019 by seven, we also demonstrate the relevance of the rental segment to the growth of our results since 2019. That demonstrates our consistency in results and discipline in execution. On slide seven rental will give you a bit more details about the quarter. We posted strong organic growth, proving the resilience of our business model.
All indicators showed consistent evolution, especially EBITDA, 44% higher quarter-over-quarter, and also the EBITDA margin when we exclude the non-recurring items from previous periods. Net revenue grew 38% to BRL 881 million in the quarter. Net revenue from services amounted to BRL 759 million the quarter, almost 50% over the same period last year. At the bottom left we detail the evolution of our revenue in contracts with and without maintenance. In the chart at the bottom right we show consistent growth in rental EBIT, which reads BRL 533 million the quarter, up 38% the same quarter of 2022, with adjusted margin closer to 70%. Moving on we have the evolution of the rented fleet versus the total fleet. In the center we read 42,000 rented assets, confirming the consistent and effective capacity to deploy assets with agility to customers.
We can see that from December 2022 to December 2023 we had a significant increase of 14.7 percentage points in the percent of rented fleet, more than 90% over the course of the year. On the next slide on the left we show the quarterly evolution of deployed CapEx until reaching the total of 2023 of BRL 4.7 billion, in line with the record achieved in the previous year, demonstrating consistency in the pace of deployment and reinforcing the growth of the rental segment in the entrepreneurial market. With regard to backlog in the upper right graph, we will now show the amount referring to the volume of deployed CapEx no longer contracted in order to provide more correct information on the future generation of revenue for contracts already deployed and with assets delivered to customers.
As a result, in 2023 our backlog of future revenue from contracts already in place amounted to BRL 12.6 billion. The bottom right chart shows the evolution of our inventory available for rental, which at the end of the year was close to normal levels, equivalent to three months of deployment, considering that we bought new assets again on favorable terms during the fourth quarter. The next slide shows on the bottom upper left the CapEx contracted for the quarter, amounting to BRL 1.1 billion, almost 10% higher than that of the fourth quarter 2022, reinforcing the favorable dynamics in rental demand. The average yield of new contracts in the quarter was 2.5%, conserving the high profitability of new contracts.
The ideal spread of new contracts was 11 percentage points, and the ratio between the average IRR of the project and the cost of the debt after tax at the end of the fourth quarter 2023. Considering the credit environment observed in 2023 in the context of Brazilian economy, we were more restrictive in credit analysis and required more collateral to adapt to the reality. In the chart below we show the evolution of gross fixed assets rented, starting for BRL 88 billion in December 2022, taking into account implementation volumes, contract terminations, asset depreciation, and other effects to get to the final number of 2023 of BRL 12.6 billion. It's important to note that any assets recovered which were part of contracts and were present in receivables, the company may replace the contracts or prepay future flows, not generating, therefore, an impact on the financial result.
In the fourth quarter 2023 we prepaid BRL 190 million of future flows using our cash. In the bottom right we show once again the statement of a gross asset generating revenue. Now, on slide 12, talking about used vehicles, we had strong growth in asset sales. Gross profit on the sale of assets totaled BRL 36 million, up 35% in the quarter, and BRL 157 million, an increase of more than 80% in the year, reinforcing our strategic advantage in the used vehicle market. Revenue for the year was BRL 525 million, 63% higher than 2022. Gross margin in the fourth quarter of 2023 was 29.6%, an increase of more than 800 points compared to the same period last year. For the year gross margin was 30%, demonstrating the strong appreciation of assets over time. Our integrated venture between used vehicle stores and dealerships allowed for great agility in asset management.
The volume of assets sold in 2023 was more than 2,700 compared to 1,722, a growth of 60%, reflecting the retirement of assets throughout 2023. Inventory of used vehicles reached BRL 414 million at the end of the year. Our trucks and machinery have a book value of almost BRL 13 billion. Next exercise, considering the 30% asset sales margin of 2023, gives us a fixed asset value of BRL 16 billion, reinforcing the potential appreciation in the value of our model. On slide 14 I'll talk about dealerships. We had consistent evolution in the truck and heavy machinery segment throughout the year. However, 2023 results were negatively impacted by atypical factors related to the agricultural sector that affected the sales of our brands in the segment. It's worth noting that the company has already taken the necessary actions to adjust profitability standards in other dealerships.
In the chart shows the quarterly evolution of net revenue. We show the solid operating base already built in recent years, with a presence in the country's main region and large leadership in trucks. In the same chart we see the performance of dealerships affected by one-off effects related to agribusiness since the second quarter 2023. As Couto mentioned, we already see the first months of 2024 a more favorable dynamic, indicating a better trend for the coming months, both due to improvement in agribusiness and prospect of growth in truck sales, with the market growing 15% according to ANFAVEA. Looking at the dealerships' performance in the first two months of 2024, January and February together had net revenue of BRL 445 million. This monthly average of BRL 222 million is already 38% higher than the fourth quarter 2023.
We recorded net revenue in 2023 of BRL 2.5 billion and dealership EBITDA of BRL 87 million. On slide 16, our capital structure. At the end of 2023, Vamos net debt amounted to BRL 9 billion, with leverage of 3.3x net debt to EBITDA. The last debt with the EBITDA ratio to financial expenses as a covenant matured in February 2024. Before, the company will now use the interest coverage for its management, but will not have the obligation on the ratio. The continuous sale of dealerships' inventories will contribute to normalize working capital employed, reinforcing discipline in financial management. In addition, the predominantly CDI-linked debt will bring benefits to our financial results throughout 2024. On the next slide, we ended the quarter with a solid cash position sufficient to cover debt until mid-2026, adding up to about BRL 2.3 billion.
When you also consider available revolving credit lines of BRL 1.3 billion, we have a total of BRL 3.6 billion. The average term of net debt is five years, with average after-tax cost of 24%. The falling interest rates, together with greater efficiency in working capital, have had a positive impact on our financial results. I'll turn the call now back to Gustavo for his closing remarks, and we'll come back to you in the Q&A session.
Thank you. Thanks for the presentation, Adriano. Moving on to the final slide, I'd like to reaffirm some messages with you. We ended 2023 with a consistent pace of growth demonstrated by our capacity to implement and generate new contracts in all of the last quarters. Once again we expanded our leadership and scale in the heavy rental sector with solid competitive advantages.
Also in the rental segment we more than tripled our operating profit and had the company's EBITDA with a threefold growth, a consistent evolution of operating results which have shown a solid trajectory for more than five years. Every day we expand our capacity to sell used vehicles with new stores, digital tools, and a market in high demand for truly used assets in a very fragmented environment with great opportunities. We are dealerships, distributors of a portfolio of leading brands recognized worldwide in agribusiness. The potential of the sector in Brazil is undeniable, and naturally there'll be a gradual recovery for new machines over the next few quarters, which, added to internal measures already adopted, should show good recovery for 2024. These are initiatives to improve working capital, reduce inventory scuff expenses, improve margins, and improve sales arms. This will be pursued with discipline throughout the year.
Transrio and Tietê Veículos did the truck leaderships together. In addition to distributing Komatsu construction machineries, presented healthy results in 2023, and also have a positive bias for 2024. Finally, continue growth and already proving in rental together with the reduction in our cost of debt. Normalization of our working capital and inventories will bring an important additional contribution to the company's net profit and profitability in 2024. In closing our presentation, I'd like to thank our people, customers, and shareholders who repeatedly contribute to our development and give us the opportunity to continue working and developing in our unique business model. We reaffirm our confidence in 2024 and in our ability to deliver consistent results in yet another cycle of sustainable development. Now we are going to open the call for your questions. Thank you very much.
Thank you. We'll now start the Q&A session for investors and analysts. If you have a question, please raise your hand. If your question is answered, you may leave the queue by lowering your hand. If you want to ask a question in writing, please type your question on the Q&A field together with your name and company. Please wait while we collect the questions. Our first question comes from Lucas Marquiiori from BTG Pactual.
Thank you. Good morning, everyone. I have two questions that I would like to hear from you. The first is resumption of assets. We still saw a high level in the fourth quarter. I would like to hear a bit about the beginning of year, and if possible, signs from you of when you are going back to normal or to the level of BRL 50 million a month that you had already reached last year. So when we should get to this level.
And the second question, Couto, you briefly mentioned in your presentation about dealerships. So I would like to understand your view, especially for agribusiness. Trucks are doing slightly better. When do you think the demand for agricultural machinery and heavy equipment should go back to normal? Just for us to understand a bit more the dynamics. Thank you very much. These are my two questions.
Marchiori, good morning. Good morning, everyone. Thanks for your question. Okay. Assets. You had BRL 210-BRL 212 million worth of repossessed assets in the last quarter, and that, again, was necessary because we had some of our customer portfolio that we know the business of logistics, and we know when assets are not operating right and effectively should be repossessed, and the better to do it as fast as possible. So we did that. So altogether in the year, BRL 750 million.
In the beginning of year, we are at the same pace of the fourth quarter. We believe this number should be normalized a bit further ahead. We are monitoring the portfolio. Obviously, we believe the most important thing is to pay attention and be agile, because if this asset's not operating well in the hands of a company, it is extremely liquid. It can be resold as a used vehicle with a very good margin, bringing a very positive short-term result that already happened last year. You saw that. But it can also be re-rented. Approximately 25% that we repossessed last year was re-rented with very positive yields, which is a lot cheaper than using a new truck. Because, remember, repossessed assets, most of them are Euro 5, so they are at a different price level. So very liquid assets is not a problem to us.
Of course, revenue is not what we expected, but very liquid assets that can be sold as used vehicles or re-rented at interesting yields. Normalization. It's too early to say BRL 200 million. I think we can have in the first and second quarters. But this is a bit of a conservative view, because we are being agile. We are monitoring things from close to be able to reduce the number of repossession. But it is an attention, and we are paying attention to it. As for your second question, agricultural dealerships, as you mentioned, Marchiori, and I did mention that during my presentation, trucks and heavy machinery were a bit affected in 2023, but performed well. They didn't grow through the same situation as agribusiness.
Agribusiness had a series of very perverse effects: dropping commodity prices, high interest rates, tighter credit, and the drop of the end of the year that really locked the market and the volume of purchases in agribusiness. We are starting to see resumption, although light in the beginning of year. January and February are slightly better, not optimal yet. It will take time for it to improve further on. But I believe that in the first half of the year this is going to be better. We see trade shows going on. We see the harvest that is in the beginning of the quarter was signalizing a strong drop. It's showing better results. The drop is not going to be as cheap in the beginning of the year. Soybean prices are getting better. Interest rates going down are also going to be an incentive.
You know growers will always grow. The grown area will grow this year, and therefore more machinery will be needed. So those that could not renew their machinery last year will have to do so this year. So we believe it will happen, but gradually. We cannot say it's going to be in the next quarter, but it is happening, and I think the second half of the year is going to be a lot better. Now, what's important to say is that the result of dealership that was very affected last year happened because there was a huge turnaround in the market, a quick turnaround. We already suspended purchases. We've reviewed payment terms. We are adjusting our costs significantly.
With that, we'll see better margins compared to the second half of last year and the first quarter of this year, and therefore 2024 results tend to be better than what we showed last year. Okay. Thanks, Lucas, for your questions. I hope I could answer them all. Yes, very clear.
Thank you very much, Couto.
Our next question comes from Felipe Lenza from Citibank. You may go on.
Couto, Adriano, good morning. It's just one question with regards to the ICMS subsidy. You recognize BRL 88 million referring to previous quarters. Thus BRL 88 million represented 44% of the quarter. Without that, the bottom line should drop 60% quarter-on-quarter. So what will be the dynamics for 2024 when you no longer will have this benefit? Filipe, any more questions? No, that's it.
Okay, this is Gustavo Couto. Thanks for your question. It's true.
We do not have the subsidy benefit any longer. We had the effect accrued from previous years in the amount you mentioned. In the fourth quarter 2023, you should also take into account approximately BRL 30 million of one-off effects that hit our EBIT a bit and a bit down, also regarding or relative to previous quarters, and also non-recurring. So you're talking about claims and even collections that are from way back when, and in a way we adjusted and cleaned all that in the fourth quarter. So if you exclude everything, the EBIT, the margin goes back to 89%, which is, you know, historical data. So that would be another result from the fourth quarter, not the drop that you mentioned. But anyway, in 2024, I'm very confident about the market dynamics. First, because the pace of growth of operating profit in rental is showing quite positive.
As you saw in 2023, we're very consistent in deployment and grew agri and machinery by 64%, 68%, respectively, year-over-year. So that growth, I think very few companies have experienced year-over-year in 2023. The second aspect is that there is a favorable dynamic in reducing the cost of debt, which will also impact positively our financial bottom line and profitability indicators. Third, we started 2024 with a very strong pace of rental. We just released the material fact on Petrópolis. It is operating this quarter, and we are even ahead of our plans, considering deployed volumes and revenues in rental, a very positive effect, and again accounts for more than 90% of the company. And in dealerships, there is a natural clear improvement.
We see that and already gave you preliminary numbers for January and February, showing that dealerships will not have a wonderful year, but it will be better than 2023. So with that, we are very confident that 2024 is going to be a year for solid, resilient results in line with the growth that you saw in the rental segment, with healthy yields, return rates for signed contracts being very healthy, and very resilient in the results for 2024.
Thank you very much.
Our next question comes from Gabriel Rezende from Itaú BBA.
Good morning, Couto, Adriano. Two questions on my side. We see on your ITR a stable depreciation rate comparing 2023 and 2022 in company vehicles available for rental, about 3%. Your used vehicle margin continues high at 30%. How do you see the dynamics of this rate for 2024 and coming years?
Just for us to have a bit more color on our models and also inventory levels. You talked about the percentage of assets available for rental vis-à-vis the company fixed assets. And are you close to your run rate already?
Gabriel, this is Gustavo Couto. Thanks for your questions. Depreciation 2023, 2022 was stable because of the same profile of assets that we had performing rented in the period, a slight drop because of an appreciation of 2023, but very stable, as you mentioned. That gives us the comfort that the margin of used vehicle sales will continue quite positive, as you saw last year. Perhaps slowing down a long time, but still, especially in the beginning of the year, at the levels that you saw at the close of last year. So we still do not see a reduction in the margin of sales for these used assets.
Remember, these are assets with high demand. They had an additional market appreciation because of what happened with capital goods in the country, and that will be appreciated along the next 5 years when we'll actually be selling the assets that we accumulated throughout the history of Vamos. When we take a look at new assets of new contracts that are already starting with Euro 6 trucks, for instance, then you're talking about a higher depreciation until we can see the behavior of the price of assets a long time. But remember, historically, we always see something close to inflation. That is, truck prices in Brazil close at the level of inflation. We got, you know, some exercises with the FIPE table of 20, 30 years ago. On average, you're talking about 4%-5% in a 5-year period, 20%.
So we'll probably use lower depreciation rates in the future for Euro 6 trucks that have already been bought, and remember, bought at very advantageous conditions that ensure good yields for rental and a good IRR spread in the cost of debt. So we do believe that new contracts, new assets rented in Euro 6 will have interesting profitability. That's likely a higher depreciation rate, but always with the possibility of going down in the future. But we don't count on that right now. It's important to have in mind that rented assets are Euro 5 back. On the current base, we'll have lower depreciation, newer contracts, depreciation rates from 7%-8%. That's what we have in mind. As for inventory, we got to BRL 1.3 billion. But it's important to say that we already have new equipment and trucks last year to prepare for the cycle of 2024.
We already brought tractors, some brands that we saw inventories going down, and therefore we closed at 1.3 otherwise, and we showed that on slide nine. Inventory levels would be lower, but it's healthy to keep 2-3 months of inventory for deployment. We are exactly at this level, therefore already normalized when we think of the future of the company. Gabriel, I hope I have answered your questions, but if not, just let me know.
Very clear, Couto. Thank you, and have a good day.
Our next question comes from Victor Mizusaki from Bradesco BBI.
I have two questions. The first, a follow-up of Gabriel's question. Couto, when we take a look at the yield of the end of contracts, 2.5%. Can you give us a breakdown on the weight of Euro 6 trucks for us to try and understand where the yield should stabilize? Second question.
Still trying to understand the dynamics of debt, bad debt provision and assets we see a slight increase quarter-on-quarter. And we see that this has been increasing every quarter. So when do you think you should have that provision stabilized? And in terms of repossessions, what has been Vamos' policy about that? So if, I don't know, payment is late by X days, then you try and renegotiate. As of X days, you repossess the asset. How does it work?
Thanks for your questions, Victor. Victor, I haven't felt much difference in terms of yield of Euro 5 or Euro 6 trucks because we bought the trucks well, and the market already was repriced. Remember that most of Euro 6 trucks that we priced are already repriced in the market. So I am just in line with what the market is experiencing.
So the very few models that I have in Euro 5 have a higher yield, but that's not really substantial when we consider Euro 6 dynamics. I don't have the breakdown. I can take a look and get back to you, but we have not seen a huge variation that really draws attention or deserves highlight. What we see, Victor, is that, indeed, the IRR spread of our cost of debt has been maintaining at the level that you're used quite resiliently. We already had some conversations with you last year saying that it could go down, but it's not. We are keeping a level around 10% our marginal cost of debt, especially with the reduction of Selic rates that has even gone up a bit. And these are some of the points that we said that could happen and is.
So do not concern about yield variations from Euro 5 to 6. That is not substantial. And we are keeping a very healthy IRR spread, even with Euro 6 contracts. So much so that we see that in the contracts for the first years of this year, even with heavy machinery. As for provision of bad debt, Victor, remember that three quarters ago we already talked about assets repossession, and we did say that default rates were going to go up with a slight delay. Also, the provision for bad credit, because it is what it is. So if it is a tougher negotiation, we already launched the provision, but we can also wait for the time of when the contract should be delayed. I talked about that in the end, in the second quarter of last year. That could happen in the end of the year.
We expect this effect to carry on for the first and second quarters of this year, and then it kind of goes down. Remember that we are being very agile in each one of these processes. I have been taking an active part in the repossession of assets. Again, it's not something that we want to do. It is the best decision when you no longer believe that the customer is going to be able to pay. Why is that? Because the asset is liquid. It is valued in the market and can be re-rented or sold in our used vehicle stores. Again, this is not something that we like doing, but it has not caused a negative impact on our growth.
See that we grew 68% year-on-year, and we already started the year at an accelerated pace, even with repossessions this year compared to the last quarter last year. So I am positive. Yes, we are having repossessions. It's still in the level of the second quarter last year. But we are encouraged by net growth, and also considering what we can do with this asset as it is repossessed. Again, it can be either re-rented or sold. We are monitoring that. But I think company growth has been, in a way, offsetting the repossessions. I hope I have been able to answer your questions.
Thank you. Our next question comes from Pedro Bruno from XP.
Good morning. Thanks for taking my questions. I would like a follow-up on dealerships, especially revenue. If possible, margins.
In revenue, specifically, you broke down January and February for BRL 140 million net revenue for January and February, which gives a run rate for the quarter of the minimum growth that is quite substantial. Considering quarter-on-quarter, we saw that in recent quarters we had a mismatch between growth and net revenues because of returns and unperformed sales. I'd like to understand. How do you think this is going to evolve in terms of gross revenue? That is, could we see a gross revenue close to stable with an improvement in net revenues, and therefore a normalization of repossessions? Am I, is my understanding correct? Just to understand the dynamic and the improvement of net revenues. And if you could give us some color with regards to all the measures taken impacting margins in what you call short term. Saying that is still challenging vis-à-vis the midterm.
I understand that you are not giving guidance, but if you could give us a bit more granularity on what the normalized margin would be like for the future, and if this should happen in the end of the year of what?
Thank you. Pedro, thanks for your questions. I'm going to start talking about net and gross revenue. You said something very interesting. Atypically, in the second half of last year, we had a volume of sales that were repossessed because credit was denied. That happened with a large number of customers that had placed their orders. And when we had the invoices and the financing contracts with banks, banks denied credits, and they could stay with the machines. So that was then with positive margins in the first half of last year. So we had a double negative effect on the second half of 2023.
And why is that? Because not only do you repossess machines that had been sold under normal conditions and did not have their credit approved, and then you had the cooldown of demand, higher inventories, and therefore lower margins. So a double negative effect. When I say that 2024, even if agribusiness does not react. When I talk about market demand, even if it doesn't react, it would be better. Why? Because we no longer have the effect of repossessions. All repossessions based on credit were completed last year. So the ratio, net revenue growth ratio of the past is already normalized as of now, as of 2024. So you no longer see this effect, which shows already an improvement and my confidence for improved results in agricultural dealerships. And also remember that that has to do with decisions in suspending new purchases.
So we are not buying until inventory is normalized. Extended terms with OEMs for us not to continue paying for this machinery while having that inventory. So remember, most of our inventory is being funded by OEMs. Measures to reduce costs, and also with OEMs, we're able to have some bonus on the sales of this inventory in our stores for us to be able to sell at better margins than what we had in the second half of last year. All that gives us the confidence that the gradual improvement recovery is going to happen, even if demand takes a bit longer. I cannot tell you. I particularly believe that as of April, we are, because this is going to be the seasonal period, and agribusiness sales are going to start. You'll have trade shows, important events. So that's kind of expected.
So historically, as of April, you see an improvement in agribusiness. But I cannot say that because there is an accrued effect. But regardless of this happening as of April or further on, again, I cannot give you a specific date. The measures we took are already enough to improve results compared to the second half of last year. This is already happening. You saw that in January, February. We are also very confident about March. Actions are really taking effect. So we already see a result in this quarter. Far from the wonderful performance of 2022, but a significant improvement compared to the second half of last year. Thanks, Pedro.
Thank you. Our next question comes from Alberto Valerio from UBS.
Good morning, Couto, Adriano. Thanks for taking my question.
My question is more into the future in terms of growth for the year and the size of debt leverage. I was expecting when we got to a higher ratio of fleet utilization, we would be a bit more deleveraged to grow this year. Do you think that at this level of indebtedness you will be able to repeat the deployed CapEx for 2023? And the second question, going back to yield, the first quarter seasonally has lower yield, but this is a different quarter because you have Petrópolis now. So are you going to continue the seasonality, or is it going to be different in 2024?
Thank you. Alberto, thanks for your questions. Okay. Deleveraging. I think so. And perhaps the most concrete fact demonstrates that this level of leverage will enable us to continue making investments and keeping the strong pace of recent years.
We are now executing that operation with that beverage customer with an important disbursement in the quarter, and revenue is already showing in this quarter. I always joke around. I say it's immediate deployment. You have the fleet, and it's already rented in the customer operation itself. So that naturally will give with the strong improvement in revenues a deleverage. So we start with a higher leverage, and then lower, and then deleveraging. Remember that our inventory is a lot more normalized. As you saw, we are working to normalize working capital because, you know, that part of this inventory also in dealerships was already paid for. So better working capital, associated to a strong generation of new contracts.
I think I mentioned that in a previous question that we are already starting the year of 2024 with a volume of deployment that is even higher than historical volumes, and that will naturally deleverage the company, perhaps at a faster pace, keeping the consistent growth that you saw in the last two years. As I mentioned, we are even exceeding results expected given the large amount of contracts this year. As for the yields of the first quarter, Alberto, this is a question that you always address, and I thank you for that. You will write the yield for agribusiness because they have a characteristic of assets and longer-term contracts may be lower, but still with a good relationship with IRR spread to the cost of debt. So resilient, healthy contracts. Every now and then, they pull contracted yields in the first quarter.
You will see this effect happening. But on the other side, we had a good interesting volume accelerated by this beverage customer that has a higher yield, and that will pull our average up. So you could expect events that you already anticipated this quarter. On average, it's likely better because of the deal with Petrópolis, but by segment, something very similar with a slight sign of drop, but with a good IRR spread to cost of debt ratio. I hope I have answered your question.
Yes, very clear. Thank you very much.
Our next question comes from Rogério Araújo from Bank of America.
Hello. Good morning, Couto, Adriano. Aline. Two questions. First, if you could talk about contracted revenues in the quarter. Because you changed the methodology on deployed CapEx, we cannot see, on margin, what new contracts signed in the period were like.
And still a new contract. What is the yield that we should expect? Is it 2.5% that was delivered this quarter? Is it a reasonable level for us to continue seeing for the future? And if you could talk a bit about the competitive environment as we talk about yield with other rental players, OEMs, how you are feeling the environment. It's a large question. I'm sorry, but I still have a second one.
Rogério, thanks for your question. Okay. Contracted revenue, contracted CapEx in the fourth quarter. We did a breakdown. Just to be clear, on page 10, when you see BRL 1,105,000,000, that is the contracted CapEx that will be deployed in 2024. So that is the contracted CapEx, and that we also broke down 2.5% yield with IRR spread of 11 percentage points. So the information is there.
But I think your question was quite timely about the backlog that was contracted. It's important to give you that we are enhancing our numbers because it really translates a firmer number about what is under companies' management and control. That is assets that are already deployed, operating, and generating income. Also deducting all the repossessions along 2023. So you see what is indeed our backlog. That is yielding revenue for the remaining time of the contract. So the information is, much clearer, and we believe improves the quality of information to investors and analysts. And you, of course, you can see there in the trend of new contracts. The 1.1 that you see on page 10, and I think we are keeping transparency. We are not hiding anything. Quite the opposite. We are keeping the same transparency of average billing time, monthly billing, and added volumes.
Everything on page 10, you have the information there. Okay, Rogério. As for new contracts, I'm very excited, as I answered to Victor and Mizusaki . I see healthy yield, healthy IRR spread. Yield is going naturally to go down because of the reduction of interest rates, Selic, that will translate to the yield of contracts as well. And obviously, we are going to try and pursue the IRR spread that we have historically achieved. That has happened despite your question on the competitive environment. We do not see any competition, and we don't believe it's going to happen in terms of really predatory competition. Companies that are going to the market are companies that know their math, understand that this is a capital-intensive business, understand how to manage assets, and naturally will need scale that they don't have now.
And to compete with us, they should have a much larger scale and a much higher purchasing power, retail channels as we do, and that it seems to me that new entrants still don't have, in terms of structure and scale. We are not afraid of competition, but for now, it has not affected the good profitability of our contracts. And quite honestly, I believe there is room for everyone in the market. This is a market with huge opportunities. And I'm quite sure that when these companies are more structured with better scale, that will not necessarily hurt our profitability, at least not in the short, mid term. That's it, Rogério. You asked two in one, but I think we have room for another one.
Yes, very clear, Couto.
If you could talk about repossession of assets, I would like to understand the segments where the assets are coming from. Still, it I don't see a lot of color on that. What's going on? Is it the same segment that we have seen in four quarters in a row? Is it different segments? Is it one customer that returns all trucks? Is it part of trucks? Does it vary? Just for us to understand what to expect in the future. Understanding the past, I think, helps. Perhaps I am a bit misaligned with what you're saying, but to me, it's still hard to understand where this is coming from. And how you were addressing that. You did talk a bit about addressing the problem, but I would really have like to have a breakdown of where this asset's coming from.
Yes, Rogério, I agree with you.
I think that probably there was a bit of a distance. I think that last time we talked was five, six months when you visited our office. But anyhow, let me try and answer your questions because they're important for everyone. Yes, we do see a sector that was more affected, which happened in the agricultural dealerships. We had a fluctuation, and those that are close to the industry understand of, cargo that was going to be transported in Midwest Brazil. We had a volume of assets with a record average at the time, very good prices, interesting freight prices, and that ensured a very good margin for the whole of the sector, including, farmers, but also movers that were shipping the cargo. When freight rates started to go down, you did not have near linear movements for this freight. Lots of ports, having bottlenecks that gave difficulties to exporters.
diesel, at a high price and lower freight. What we did is that we anticipated ourselves. So we had two different sectors, but this is very much focused on the grain sector. We realized that we had to be quick, and that's what we have been doing. So companies are having a gradual return. It's rarely to have a total return, and total repossession of the fleet. There was this one customer, but generally, it's a friendly negotiation. Repossession is usually fast. At first, customers do not want to return the assets because they keep hoping the contract is going, the country is going to do better. They have corn and soy and everything. But, you know, as a matter of fact, we prefer to be agile, fast, and agree that they are going to return part of the fleet, and that is going on quite on a friendly dynamics.
I tried to give you some color for the future. The level of last quarter was 212, and I think this is what is going to happen for this quarter, and perhaps also for the second quarter of this year, given the dynamic that is still a bit negative for grain producers. The number can go down faster, but it is what I see for now. I hope I have answered your question. And if you want to sit down and talk to us, we are here for you.
Okay. Thanks, Couto. Just have a follow-up if possible. We have been following what's going on in agribusiness, but the relevance of repossession seemed to be a bit high compared to your position in agribusiness. That's why I was asking the question.
You are right when you talk about the value of these assets.
Remember that each set of assets costs more than BRL 1.3 million. So 100 sets, you were talking about BRL 300 million. So we have a higher volume in Midwest for customers in this region. So just for your context, these are assets that are different from mid or smaller assets that have a much lower average ticket. So you're talking about each set costing BRL 1.3 million. So these are assets that are basically operated in this sector. A sector that shows a high volatility, but it's also a lesson learned. Looking ahead, we are operating in a completely different way for the sectors. We are more restrictive in terms of credit. We are renting lower volumes. We are demanding collaterals, and this is what we started doing last year, as I mentioned to you.
So in time, things are going to happen, either because the market improved or because we will have addressed all portfolio at risk, but naturally, that should go to normal levels further on.
And what is the relevance of agribusiness for Vamos today? I'm sorry. It's my last question.
In rental, we know, but you also have sugar, ethanol, and grains. It's a bit more than 30%, but here, all sectors, grains are lower than sugar, ethanol. So you're talking about more recent contracts, and we have addressed already an important part of what we had. So relevance is lower today, but the disclaimer of agribusiness includes sugar, ethanol, and sugar, and ethanol accounts for most of the 30%.
Thank you very much. Very clear.
Our next question comes from Pedro Pimenta, from EQI Research.
Good morning. Can you hear me? Thanks for taking my question.
Congratulations on your results. It's still about profitability, talking about yield. We realized that in the quarter and the year, there was a reduction of contracts with maintenance. I'd like to understand the impact of that in the yield. And what is this prospect for these contracts in 2024 for the future? Second question. I'd like to understand the dynamics of the industrial portion. We see a slightly sharing revenues, but margins were very affected. So how do you see the segment from now on? Do you think you're going to get better? There is an impact of mix just to try and understand the results for 2023.
This is Gustavo Couto. Once again, profitability. I have mentioned before that the pace of growth of Vamos in rental has been higher in contracts without maintenance services, and that for a very organic reason.
Naturally, contracts without maintenance demand lower adaptation from customers and a quicker decision for the rental model. And this is something we learned in the last five years. In the beginning, we saw contracts with maintenance as an opportunity for customers to have better savings and for us to have a higher return. That continues to be true. We believe in our capacity to provide good maintenance services to customers, so much so that the contracts of this kind have good profitability, and customers are generally very loyal to them because they do see a benefit in outsourcing the whole rental with us with maintenance services. But the speed of growth, decision-making from customers is much faster when you're signing contracts without maintenance, and because they have to retire teams, they have to understand in details new costs, so that takes time.
So the speed is much more because of market characteristics than lack of direction. We do pay a better commission for sellers that sell contracts with maintenance because it's better for Vamos and the customer. But growth of the company continues, and good profitability. We see an IRR spread of 11 percentage points compared to our cost of that, and that mostly with contracts without maintenance. So, Pedro, given the opportunity of growth, it's naturally important to sign contracts with maintenance, but customers have to be mature and want the contract. Otherwise, we are going to continue growing with suitable profitability with non-maintenance contracts. Industrial area. Excellent question. Although with a low share in our results, as you can see, the main growth in revenue came from Truckvan. Truckvan had a share of about 1% in road equipment, and it's growing.
It grew a lot along 2023, working in an independent, autonomous manner, being led by the founder of the company that is a partner today at Truckvan, and that has been happening. New investments, production capacity increased, new products implemented. So that is part of Truckvan's plan for them to have higher market share, higher scale, and better profitability. Last year, we had a product that almost had no demand, last year, a mobile unit, an isolated mix effect that brought a loss in a bit the margin for Truckvan compared to previous quarter. That will naturally come back with more scale, more investments made, and more sales, and diluted fixed costs.
You probably see along this year improved consolidated results for the industrial manufacturing area, and Truckvan is certainly going to be the most contribution for this segment, but in the whole of Vamos is still not significant. I hope I have answered your questions.
Yes, very clear. Thank you.
Our next question comes in writing by Pedro Calixto from Clube de Investimento Lublin.
He says, "Good morning, gentlemen. Thanks for your results. During the follow-on roadshow, you mentioned that Euro 6 contracts are priced using a depreciation between 9%-10%. According to explanatory note 14 of your financial statements, the average rate of the vehicle depreciation for the years of 2019, 2020, 2021, 2022, and 2023 was 11%, 9%, 4%, 3%, and 3%, respectively.
Do you believe the current depreciation of 33% will converge to the range priced in contracts or any value between these numbers?"
Thanks, Pedro, for the questions. I'm going to refer to something I shared about depreciation in the past. The contracts that you saw with Euro 5 trucks rented until mid- to late last year were assets with depreciation of 7%-8%. Historically, that is the depreciation rate. But given the appreciation that we had, we saw that we could have lower depreciation rates, 3%-4%, as you mentioned, for several trucks and tractors. Now, when you consider Euro 6 trucks, and we are not talking about a different way to address that. Whenever you have a new equipment, you have a higher depreciation rate.
Because you're talking about a long contract site, because then a long time we understand the market value of the asset, and you can adjust depreciation up or down. Up, and I've been in the company for more than five years. Hardly happens, if ever. Generally, what we have is the opportunity to adjust it down. As you saw in the follow-on, we had a conservative simulation showing that we should price Euro 6 at perhaps 8%, but in a very adverse scenario, which was a concern of investors, what would happen to the IRR if depreciation rate went to 9%-10%? We made an exercise to show that contracts would still be positive, even with depreciation rates that we never had before for trucks and tractors. That was just a conservative exercise to show the resilience of our business model.
But for new Euro 6 contracts, you should start with an initial depreciation rate of 7%-8%. And a long time, if possible, we are going to go down. Otherwise, we are going to keep for these newer contracts that level. Not for Euro 5 trucks. I hope I have answered your question, Pedro.
Our next question comes from José Daronco from Suno Research.
Good morning, everyone. Thanks for your results. Congratulations. This year, we saw a lower margin in agriculture due to the drop in commodities. I'd like to understand if that had any impact in the cooling down of demand for rental in agribusiness, and also understand which sectors have demanded more rentals this year. Thank you.
Could you please repeat the beginning of the question? The sound was a bit cut off.
Certainly.
This year, we saw a lower margin to farmers due to a drop in commodities. But did this have an impact in the cooling down of demand from the agribusiness?
Yes, José, thanks for your question. As I mentioned, and I think was when Rogério mentioned, we had an impact that was much more related to credit criteria, because, again, these are growers that are having a higher pressure on costs. And it's not that the demand cooled down, but I think that we were a bit more strict in terms of credit demands to sign contracts. As I mentioned, we asked for collaterals and even initial volumes that were lower in terms of assets for us to start to operate gradually with customers. So that was the impact. But for the market as a whole, it's a giant opportunity.
The market as a whole, when you ask sectors that are doing well, I'm going to mention beverage, food, chemical, sugar, ethanol. These are sectors that are demanding a lot and that have an accelerated pace in the beginning of 2024. So despite one sector or another being a bit more affected because of natural market cycles, Brazil naturally is huge with huge opportunities, and the percentage of rented fleet is still low, with, remember, a truck fleet that has a very advanced age. So companies will have to renew, and several sectors are seeking for more efficiency with rentals. So we are very encouraged, and that's why we started 2024 strong.
I think that was our last question. I'm going to go back to the operator. Vamos Q&A is now closed.
All the other questions sent in writing are going to be answered by the company's IR team later on. Please, Mr. Couto. The floor is open for your final considerations.
Well, just to close, I'd like to thank our customers, our people, our shareholders, and finally, three takeaway messages that I believe are most important. First, the consistent pace of deployments with leadership and scale. We truly have an opportunity to continue growing, and that showed to be very believable in resilience. We went through periods where the business was not very well known. We had the pandemic. We had crises in some specific sectors. We had the high prices in trucks, and we continue to grow. In two years, 2021-2023, we doubled the operating profit of rental by 3.5 x, EBITDA by 3x . All that in three years.
If you consider the same pace of growth that we have achieved in the last two years, and you project it further on, you are going to understand the magnitude of resilient growth for the company, cash generation that will promote other cycles of development. So once again, I would like to draw your attention to the resilience of the rental model. Year after year, it is really no other sector in the economy can follow. As for dealerships, the effect is more isolated and concentrated in agribusiness. It is a one-off effect. No one believes that agribusiness is going to slow down in Brazil. You may have a harder year or another, as it happened last year, but agribusiness is one of the locomotives of the country and will continue to grow.
And naturally, internal measures have been taken for us to be prepared to go through this tougher period and naturally gradually improve results, as we have been showing the first two months of the year. And finally, to say that the combination of these two factors, rental, recovery of dealerships, down interest rates, and better working capital are very important for companies' numbers in 2024. We are going to continue growing strong. We are very confident in that. Our pace of growth is consistent, as you saw in the last two years, and you will see a transformation in profitability. And my 4th takeaway message. Our channels for asset sales have grown more than 60% year-on-year in sales volumes. We have integrated stores, digital tools. We are expanding our commercial reach and taking several actions in the markets that we don't even know how big it is.
It's a huge opportunity in the used vehicle market. So we are expanding our sales capabilities in a market that is eager for products of quality such as ours. So we are confident in 2024. Very much encouraged, and I would like to thank you very much for joining us. Thank you.
Vamos conference call is now closed. We thank you very much for joining us, and wish you a good afternoon.