Good morning, welcome to the conference call of Grupo Vamos to discuss the earnings regarding the second quarter, 2023. Today, with us, we have Mr. Gustavo Couto, CEO of Vamos, and Adriano Ortega, CFO and Investor Relations Officer for Vamos. Right now, all participants are in listen-only mode. Later on, we are going to start the Q&A session, when further instructions will be provided. Should any of you need assistance during the conference call, please reach the operator by pressing the star zero. We would like to inform you that this conference call is being recorded and simultaneously translated into English. Before moving on, we would like to let you know that any statements made during the conference call relative to the company's business, outlook, projections, operating, and financial goals are based on Vamos management's beliefs and assumptions, and rely 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 materially differ from those in the forward-looking statements. We'll now turn the call to Mr. Gustavo Couto. Please, Mr. Couto, you may go on.
Good morning, everyone. Thank you for joining us in the conference call to discuss the earnings of the second quarter, 2023. The second quarter was marked by major achievements in operations. We continue to grow consistently in a sustainable manner, improving the strengths of Vamos' ecosystem. A company that was created with several business gears that complement one another and generate value to our customers and shareholders.
A company that, in its DNA, contributes to development society and preservation of the environment in which we live. That's why, in a consistent manner along the years and in the years to come, we are going to expand our customer base, coverage areas, and continue to grow at high levels of profitability. Our outlook for the long term continues very positive. I'd like to thank the work of our teams, customers, OEMs, and service providers. Due to the commitment of the work of our people, the trust of our customers, and the long-term relationship with our suppliers, we continue to deliver consistent results and overcoming challenges. I also thank our shareholders, investors, and financial institutions to support our development. The certainty that we can still do a lot more moves us for greater achievements and results.
We are going to start with slide 4, where we show the main highlights for the quarter in all our business segments. Our consolidated net revenue grew 22.5% in the quarter, adding to almost BRL 1.5 billion, driven by the growth of 73% in the rental revenue compared to the 2Q 2022. Our consolidated EBITDA had strong growth in the 1Q, reaching BRL 665 million, a growth of almost 48% compared to the 2Q last year. Net income was BRL 106.6 million, with increasing financial expenses resulting from the high interest rates and higher leverage of the company, since we paid almost all the purchase of assets to build our inventory.
That reinforces the trust that the best is yet to come, because we'll certainly have a reduction in financial expenses as the interest curve goes down in Brazil, and also benefit from the rental revenues due to the investments made and assets that will be rented in the coming months. The return on invested capital is close to 19%, with an expansion of more than 4 percentage points compared to the second quarter last year. In the end of June, we had our third follow-on, with net primary funding of BRL 841 million, which will positively impact company cash as of the third quarter. The operation is in line with our organic growth plan, reinforcing our discipline in capital structure that makes us prepared for new market opportunities, particularly thinking of the cycle of growth of 2024.
With the drift close to 40%, our shares have an important improved liquidity, getting to BRL 70 million-BRL 80 million of daily transactions in the stock exchange, which allows us to participate in the Bovespa index for the next portfolio, as the preview announced by B3 itself. I'd like to also to call your attention to expressive results in rental, BRL 773 million in net revenues. EBITDA, even higher, growing 79%. We kept our EBITDA margin at 89%, way above last year and in line with the first quarter this year. Our backlog, that is future contracted revenue, had an increase of 50% in the quarter compared to the same period last year, adding up to BRL 16.2 billion in June 2023.
Considering some important measures implemented in this quarter, like the preventive retirement of leased assets that Adriano is going to talk about next. Deployed CapEx of more than BRL 1 billion in the quarter, adding 18% growth in the first half of the year compared to the first half of last year, totaling BRL 2,624 million. My main comments in rental, I'd like to highlight the performance of used assets, with gross margin on asset sales of 34.6%, with the revenue 95% higher this quarter compared to the second quarter 2022. The result reinforces the strong demand for our assets, our inventory that is integrated in used car stores and dealerships, with capillarity and the strengths of our digital channels. Dealerships.
Interest rates that are high to our customers, compared to the transition of more expensive trucks with Euro VI and the dropping price of farming commodities, made us to have a repression in the purchase of trucks and farm machinery. It was an expected effect, especially in the sales of new trucks. With that, we had BRL 642 million of net revenues in dealerships and EBITDA of almost BRL 35 million. We had gains in market share in almost all regions of operation, with evolution of stores that were open along last year. The return of demand, in our opinion, is repressed temporarily. We know that the fleet of trucks has to be renewed, and in agribusiness we had record crops in the country, with an expansion in planting areas.
With the announcement of the new Safra Plan and drop in fertilizer prices, farmers are not going to stop. We see a demand for machinery that is repressed and a good prospect for the next quarter. In the second quarter, we also announced the acquisition of Tietê Veículos. In June, we had CADE approval for the acquisition, and with this, Vamos consolidated as the largest network of Volkswagen buses and trucks in Brazil. Since July 2023, we're also appointed as Komatsu dealers in Rio Grande do Sul, an organic growth for the company with low capital allocation. It's important to say that we have been working in Rio Grande do Sul for many years. Four stores of Transrio , one used asset sales stores, and lots of rental clients. That is, with Komatsu, we'll have synergies and complementarity in between our heavy assets businesses.
Now I'm going to go on to slide 5, showing the evolution quarter on quarter of consolidated results. Here, I'd like to highlight how Vamos's diversification enabled us to have sustainable results with excellent prospects for the long term. Consolidated net revenue reached close to BRL 1.5 billion in the quarter, growth of 22% compared to the last quarter, the second quarter last year. Year to date, even higher than that, 47% above, with a good performance in rental and in the sale of used assets, with record numbers. Consolidated EBIT in the quarter also showed positive events, adding up to BRL 524 million, a growth of almost 38% compared to the second quarter 2022. Because of the organic growth in rental, gains in scale and productivity. Year to date, EBIT was 57.6% above the same period last year.
Our EBITDA consolidated had strong growth in the first quarter, reaching BRL 665 million. That is an increase of almost 48% compared to the second quarter last year, and 63.1% in the year-to-date comparison. Well, half-year on half-year. We're very happy with our evolution, showing that operating in different segments of the economy gives us resilient results in the long term, overcoming volatility and economic environment in Brazil. We have solid basis to grow and huge opportunities. On the right part of the chart, we show our net income of BRL 106.6 million, with an increase on financial expenses and our decision to advance the purchase of Euro V trucks has a temporary impact and is justified by the gains of these assets in the next five years when they are rented and then sold.
This inventory will go back to normal very soon. We are very happy with the investments made so far. In the first six months, the net income of the company grew by 4%, totaling BRL 276 million. Now I'm going to turn to Adriano, that will talk about our quarter performance in details. At the end of the conference call, I'll come back for the takeaway messages and join you in the Q&A session.
Thank you, Gustavo. Good morning, everyone, joining us in our conference call. I'm going to give a bit more color about our performance this quarter. On slide six, we show our ROIC and net income, showing how profitability grows for a long time. In this quarter, in the last 12 months, ROIC totaled 18.6%, 400 percentage points above the second quarter, 2022.
A unique level of profitability in our segment. Here we have the cost of debt after taxes. With the drop in interest rates that started last price, the spread tends to increase and improve our profitability. The dynamics of the truck market showed an increase, which will show a better results along time. Also we see net income in the bottom part of this slide. Even with an increase in financial expenses, we show consistency results and resilience of our business model with a positive long-term outlook. Going to slide, rental, and going into color of numbers, we show the strong organic growth, proving the resilience of our business model, with growth of net revenues of 73% in the quarter, reaching BRL 773 million.
Net revenue from services, BRL 649 million, an increase of 47% compared to the last quarter. When we compare 2023, 2022, we had an increase of 97.5% in net revenue. In here, you see net revenue from services with and without maintenance, with consistent growth. EBIT reached BRL 494.6 million, with an increase of 75.3% compared to the last quarter. We had, in the last half year, we reached 87.4%. EBITDA reached BRL 623 million, 79% above last year, and 87% above the first quarter, summer, half of 2022. The next slide, we show deployed CapEx.
We implemented about BRL 2.4 billion of record in the quarter, growth of about 18% over the 2Q 2022, showing our capacity of deployment. In the bottom part, we see our asset inventory from rental as of December 2022. We started at BRL 3.5 billion, we had a record deployment of BRL 2.4 billion, and we purchased assets of BRL 1.2 billion, getting to the end of June 2023, with BRL 2.3 billion inventory for rental. On the right, we talk about our fleet of 45,000 assets, growth of 33% compared to the previous year, with an important revolution in the use of our fleet, with occupancy rate of 95%, compared to 82% in the 2Q 2022. If you think of our historic fleet, occupancy is 95%.
We seek to normalize our inventories and to return to this level. On slide 10, we have our contracted CapEx in the quarter, more than BRL 1.4 billion. Year to date, more than BRL 3.1 billion contracted CapEx, the same pace of the previous quarter. We're waiting for the sustainability of the Brazilian scenario and showing consistency of our business. The average yield was 2.65%, 2.73 in the second quarter of 2022. A slight fluctuation because of a lower number of contracts with maintenance. 15% with maintenance, vis-a-vis 23% last year. Giving more visibility in the metrics that Vamos used to approve processes, the spread was 11%. The IRR and the cost of debt in the end of the second quarter, 2022. That reflects our pricing purchase efficiency in fleet sales and et cetera.
We also are very conservative with the depreciation of our assets. Considering the scenario, drop in interest rates and what we have in rental, we believe that we are going to have additional profitability for the future. As for the backlog, we had relevant growth of 50% compared to the same period last year, adding up to BRL 16.2 billion. Along the second quarter 2023, we had a reduction of BRL 767 million backlog because of the retirement of re-rented assets and termination of contracts not implemented. That was very important to keep the integrity of our assets. We had a record revenue of BRL 723 million and a backlog of BRL 2 billion. Of the assets that we had, 75% were destined for sales.
Of the total, all those contracts were resumed in the quarter, and we have adopted measures to go back to normal. Vamos is improving its processes, and we're having using technology to monitor our fleet. Now, the next slide, we talk about our strategic asset base for rental, generating long-term value. We closed the quarter with BRL 13 billion of fixed assets. If we consider our market value in inventory, we have a valuation close to what we see in the profitability of our contracts. The appreciation of assets, considering payment terms with providers, go past the information that we have. The on-demand assets are very important. The contract mix, with or without services, projects, with or without tires, contract terms in different segments of operation may cause different yields without reflecting the profitability of our contracts.
Still, we have an additional breakdown of our fixed assets for you to understand the implied yield, for you to understand what's available for rental, and also several assets that do not contribute to the revenue of the quarters, like the seasonality of the agribusiness, contracts to be matured in the quarter, and also retirement of assets. If you think of our base that just really actually generates revenue, we have a unique IR spread in the rental sector in Brazil. I'm going to go to slide set 13, with a strong demand in used assets, reaching to BRL 123.7 billion, with a margin 95.1% above the last quarter. If we consider gross margin of 30%, we would have about BRL 3.7 billion of added value by the appreciation of assets in the company's balance sheet.
In addition to 14 used asset stores, we have a strong potential of sale and expansion of our capillarity. We opened stores in Recife, São Leopoldo, and also we are planning openings for Sinop, Caçapava, and Chapecó. We sold BRL 500 million in asset sales, vis-a-vis BRL 354 million last year, with a growth of 44.4%. Inventory, we reached BRL 251 billion in the period. Going to slide 15, we see a temporary repression in the demand for trucks, agricultural machinery, and equipment. That's because absence of credit, high interest rates, and high prices in trucks, which led to a drop in registration of trucks. The drop in commodities and the delay of the Plano Safra also has a negative impact. We believe this repression is temporary.
Agribusiness will continue to expand in our regions of coverage, the renewal of the fleet is absolutely necessary. In our dealership, we reached BRL 642 billion in net revenue, a drop of 12.8% compared to the previous this quarter, due to what I mentioned before. Compared with the first half of 2023 against 2022, we have an increase of 9.3%, EBIT, BRL 27 million, -71% to the same period last year. Year to date, the drop was 33%. EBITDA, BRL 35 million in the second quarter of 2023, a drop of 65% compared to the first quarter of 2022. In line with what Gustavo mentioned in the beginning of the quarter, we started working with Komatsu in Rio Grande do Sul and completed the acquisition of Tietê, expanding our capillarity.
In addition, after the conditions precedent, we are going to add DHL Tratores, and we are also appointed as Fendt dealers, the second farming market in Brazil, the state of Paraná. Capital structure in the close of the 2Q 2023, Vamos's net debt was $9 billion, with leverage of 3.58 net debt, EBITDA ratio. Because of the payment of the strategic inventory that we had in 2022, the cash flow that will generate from this investment will decrease our leverage according to our financial discipline. As Gustavo mentioned, because of the primary follow one, we had $400 million net that are already in the company cash. Considering that, our net debt goes back to 3.5 net debt to EBITDA ratio.
On slide 18, we close the quarter with strong, solid cash position to cover the debt until 2025, BRL 1.4 billion or BRL 2.2 billion if we consider the follow-up. The average maturity is more than five years and cost debt after taxes, about 10.9%. Now that the Selic rate is going down, we have a positive outlook for our debt after taxes, giving us opportunities to improve our profitability, measured by the IRR spread. According to the hedge, we have BRL 323, with an average contracted cap of 8.99%, in addition to BRL 2 billion with prefixed rate operations. The current market operations give us opportunities to reduce the interest cap at just competitive prices. Thank you very much. I'm going to turn back to Gustavo for his final considerations. I'll be back for your questions.
Thanks, Adriano.
Going to the next slide, I would like to talk about the fleet renewal program based on Provisional Measure 1,175 of the Brazilian government. Our average fleet of trucks is 20 years old on average, upside, a lot more than the developed countries. A modern fleet reduces the use of fuel, has better air, and also the health of the population, increasing the income of independent drivers and really fosters the economy. We have to have newer vehicles on Brazilian roads. Independent drivers are really crucial for the operation of the country to supply our houses and for the comfort of our families. A year ago, with a project similar of those of the government, Vamos purchased old trucks that were written off in the Brazilian government and then recycled them with metal, glass, and other materials.
Of the 50 professionals, 20% kept the money, 14% invested in personal projects, and 20% kept the money. Twenty-eight truckers bought newer trucks that they could afford, and after monitoring, followed by independent agencies, 100% said that they had better conditions in health and safety and also a better economic condition. This enables people to improve the income of their families with newer trucks that are better and also improve the quality of air and reduce respiratory diseases. Environmental impact are basically, you know, to have the right disposal of metal, glass, and other materials and reduce particulate emissions. In the economy, increase of income, greater efficiency, reduction in fuel consumption, and even net discounts, according to the federal program, of 4%-5%.
It's true that the program has still limited financial resources, on a large scale could bring great social benefits. Vamos will support this and other initiatives to renew the Brazilian fleet of trucks. We can use our stores and dealerships to acquire trucks to be written off and disposed. We can help truckers to buy newer trucks. They can send our new trucks at the banks that they prefer, with installments that they can pay. The country needs a modern fleet, truckers are really important for the comfort of our families and for our supply. To close our presentation, I'd like to go to slide 20. We closed yet another quarter with strong earnings growth in the rental business and a very positive outlook for the long term.
Our assets, rented and to be rented, continue to be appreciated, that will lead to higher company profitability in the coming years. The appreciation of machinery and trucks is proven in our sales. We again proved our capacity to sell used assets in our own network and also dealerships that more and more are selling our used assets. 95% growth in revenue from used assets this quarter. Our third follow-on made the company even more prepared for the growth of 2024, with cash reinforcement, increased liquidity, and a possible entry into the IBOV, the next portfolio. The preview released in August confirmed the Vamos. We also talked about agility in recovering assets and appropriate addressing of assets within our ecosystem. We kept a high level of profitability that is unique in the sector, the bias is even more positive as interest rates decrease.
In dealerships, we expect a normalized demand for agriculture, machinery, and trucks in the second half of this year, reinforcing a positive outlook for all our sectors of operation. Finally, I'd like to once more thank the trust of all those we relate with and that supported us until here. We are leaders and pioneer in the rental of trucks, machinery, and equipment in Brazil, with a unique business model, and we are going to keep an accelerated pace of growth, preserving profitability and discipline in the allocation of capital. With that, I'm going to close my presentation, and we are going to open for your questions. Thank you very much.
Thank you. Ladies and gentlemen, we will now start the Q&A session. To ask a question, please press star one. If you have to remove your question from the list, just press star two.
Our first question comes from Daniel Gasparetto, from Itaú. Daniel, you may go on.
Thank you. Good morning, everyone, Couto and everyone on the call. I have two questions. First, I'd like to thank you for the KPIs you just closed in the quarter. With what you talked about the inventory, we got to a yield close to 2.5, 2.52, which is an evolution vis-a-vis the 2.7 last year. Very much in line with what you presented. I would like to understand, first, what you expect for the future. Do you still think you still have a potential to improve your inventory of Euro V? Again, thank you for the disclosure that you have this year. The second question is to understand the used assets dynamics.
We had for two quarters lower margin, and now we have an increase. Couto, I would like you to talk about this market for the long term. Thank you very much.
Thank you, Gasparetto, for your both questions. Okay, the yield, we get to the same as when we have the yield as the market monitors, and we believe that for the future, in terms of pricing, we have to consider that now the interest rate is going down, and that may naturally have the yield fall a bit. Gasparetto, we are always going to preserve the right spread, and with that, our pricing model. That will ensure competitiveness. Remember, the inventory has at least 40% appreciation when compared to the prices of trucks that are being sold in Brazil now.
We truly believe that we are going to continue to preserve profitability at this level that we showed you, at about 11%-12%, compared to the marginal cost of that. This is what we are going to focus on. Of course, the yield as an important instrument of pricing may vary, but we indeed have an expectation of at least keeping the yields we have right now. As for margins of used assets, if you take a look, we had 34%, almost 35% this quarter, and when you compare with the same base of the margin for the last quarter, it was 31%. Remember, again, that the number that showed a bit lower in the first quarter had the influence of that sale of new trucks to JSL as a related party.
A non-recurrent sale that was important to us at the time, also to avoid that we would have, you know, advance purchases and that we set the price of a truck that was not still normalized. It's still in the process. We continue to believe that margins are going to keep strong. You see that we almost doubled the sale compared to the last quarter of last year, the second quarter last year. Sales are still strong, even in a scenario that has still high interest rates and credit restrictions, but you see that we had a very strong volume. That reinforces, Gasparetto, our capillarity and capacity to sell our used assets. Then, as a reminder, today, if you-- we, we integrated the inventory. If you go to a dealership, you can see our used assets inventory integrated to our dealerships.
We have 14 stores, but we also have 21 dealerships that can also sell these assets. That increases our capacity of sale. We are preparing for the volume of used assets to grow in the coming years. We are confident margins are going to be preserved, because our asset base is a given, the BRL 3.7 billion, when compared to our total fixed assets, you're talking about a margin of 30%. We believe this is what is going to be shown in the coming quarters. Of course, this opens opportunity for more profitable contracts. We are very confident, and I think that things are going to stay at this level, okay?
Thank you, Couto. Very good.
Have a good day.
Our next question comes from Lucas Marquiori, from BTG Pactual. You may go on.
Hello, everyone. Good morning.
Thanks for the call. I have also two questions. Almost as a follow-up for the previous question. If you think of your inventory of assets, we understood the dynamics. You implemented almost BRL 2 billion, you bought assets, and we closed at BRL 2.3 billion. I'd like to understand your mindset in terms of timing. How and how fast you expect to decrease the inventory level, and what would be the normalized level inventory from now on, and what point of time, next quarter, next, half year, last, next year, the, for you to get to this, level? The second question, to try and understand, the scenario for dealerships. You had a drop in sales this quarter. Everybody is monitoring the volatility brought by Euro VI.
If you can give us a bit color in terms of sales for July, August, if sales are picking up? And if we should see dealerships performing better in the third quarter. These are my questions. Thank you.
Hi, Lucas. Thanks for your questions. Thanks for joining us. Well, inventory levels. We are happy with the volume implemented, BRL 2.4 billion in the quarter, as we mentioned, gives 18% growth compared to the last period last year. We are not in a hurry to deploy our inventory, because we obviously have to respect the time of the market. In the second quarter, Lucas, as we had already told the market, we decided to have discipline in the allocation and deployment of this equipment.
We had to retire some of this equipment because of the credit scenario, because we delayed the speed of deployment of assets, because we think this is our role. We have to act with responsibility, understanding what was going on in the quarter. Of course, we expect a change for the third quarter this year. We can only think that until the end of the third quarter, the end of September, or even a little beyond that, which is not a problem, things are going to get better. Remember, those assets have been appreciated by more than 40% in the market. Even if I have to carry a bit more financial expenses as I did this quarter, that wouldn't be a problem. What we want is to have good comfort. I don't want to rush it.
Obviously, we are going to respect what's going on in the macroeconomic scenario without failing to look at the financial health of the customers we work with. When we stop and think, I always say that, what is the main competitor of rental? It is purchase. As purchase like sensitive and people are delaying purchases, it's natural that people are doing the math, and they are waiting for the best timing to make a commitment. We are going to respect the market. We are not in a rush, but I think that we'll naturally do that along the next quarter without any difficulty. You see, we kept the level of deployment 18% above the second quarter, the first half of the year, last year.
I believe that the, the level of normalization, I would say 2.5 months of inventory or BRL 1.2 billion. That would be a normalized inventory and ensures that I can pay very well, even with accounts receivable, and relieving cash a bit, that is having lower inventory levels and financing most of the inventory at the supplier's account. That's about inventory. Dealerships. We all expected a weak second quarter for the demand of Euro VI trucks, because prices are still need to be normalized. This is happening. We see that OEM are already reconsidering that high increase that was first announced of 25%. The price did not really hold itself. The market cannot afford that, especially considering last years. So this happened. In farming machinery, there was a bit of a delay there.
What happened is that there was a drop in the main commodities. That changed the mood of farmers because they had already planted at a very high cost of inputs, fertilizers and others, and then they decided to, you know, hold back. That did not prevent the segment to continue growth. We had a harvest crop, and agribusiness continues to perform as we have been seeing in recent years, and that was going to be seen for the future. Machinery will be needed. It is a temporary repression. It is not that we lost sales. They were repressed, but demand will pick up. I cannot tell you when.
Lost the audio of the main conference. We are sorry to interrupt. This is the operator speaking. The line of the main conference has dropped. We are going to reconnect. Please wait while we reconnect the conference.
I'm sorry, this is Gustavo. The line dropped. I did not realize when. Lucas, I'm going to repeat.
You're talking about dealerships, Gustavo.
Okay. Thank you very much. I did not realize that the line had dropped. Okay, I'm going back to dealerships. Okay. Dealerships. Naturally, we already expected that we would have a reduction in the number of trucks sold, given that OEMs had announced a very high price, too much of a high price, considering the adjustments of last year, and also considering that inventory of Euro V that supported sales in the first quarter ended. We had the best drop, but we do expect the resumption to happen from now on, especially because those who need to renew their fleet are customers that have credit, but they decided not to do that because the prices were very high, interest rates were very high.
As the prices of Euro VI are normalized a bit below that we know will happen, and as interest rates go down, most probably those decisions are going to be recovered. If you take a look at trucks, the number of registrations, and I'm not talking about our numbers, I'm talking about market numbers. The market numbers show that sales in July 2023 were 5% higher, registrations, sorry, higher than June 2023. That shows early signs that the demand is picking up. As for farming and machinery, that was an important point, and I think that we were not expecting that. The price of commodities went down fast, soybeans, corn, despite the demand. The agribusiness continued to expand to the planting area, so it is a repression. We are planting more corn, more soybeans in Brazil, and machinery will be needed.
They were postponed. Why? Because the Safra Plan had not been released, and the farming sector is very sensitive to commodities. If price goes down and they had started planting with a high cost of fertilizers, they had to hold a bit, but they cannot hold forever. Now we have the Safra Plan, and we already see banks releasing more financing through the lines of incentive of the federal government. We see the recovery. It's going to be gradual, but it will happen naturally, and it has to happen along the next half year, but it has already started.
Very clear. Thank you very much, Couto. Thank you, and good day, everyone.
We now have a question from Pedro Bruno, from XP Investments. Pedro Bruno, you may go on.
Good morning, everyone. I just have a follow-up about your last answer.
Just to understand your negotiations of Euro VI for the future, you did say that, you know, the initial increase of 20%-2 5% did not pick up. I would like to know, what is your ex-expectation of prices, and what is the current scenario of the market vis-a-vis the OEMs, and also your position as customers? This is my first question. I will ask you the second one later on.
Pedro, thanks for your question. We are negotiating with OEMs, but we are not, again, in a hurry. We think that prices are still to be normalized for Euro VI. I joke around, it's just a joke, but I'm serious, that, you know, freights won't pay everything.
The price of the truck that we have accumulated along the years, and this combination of a very high price with high interest rates is terrible. Even for OEMs, they are selling very little in the last quarter, that naturally will have to be adjusted. Pedro, even for the new price to really consolidate, although the price is going down, the 20%-25% is not going to be that. I think it's going to be 10% at the most. I think even less than that, to tell you the truth. We are negotiating. We are not in a hurry because I have an inventory. I don't have to be in a hurry, but we are sitting down to discuss, and naturally, we think the price will have to be normalized.
On the other hand, the price needs to be adjusted now, but next year it will go up because inflation is going to come and OEM did have an increase in the inputs of their products. It is a matter of supply and demand now. Again, that 20+ % was too much. That is going to be adjusted. I think it's going to be closer to 5%. I don't know. This is just a personal opinion, but the matter of fact is that if it gets to this level, probably next year it will go up a little more at the turn of the year. Again, we are not in a hurry, but are negotiating and waiting for the best timing to buy.
Okay, great. The next question...
You did talk about the cancellations on rental, on used stores and dealerships, do you have any cancellations that may be relevant? Just for me to understand, you know, the difference between net and gross revenues, just to try and understand if there is any footnote about that, cancellations with dealerships and used stores.
Thanks, Pedro. Not really. Cancellations in rental, when we try to be very candid, were measures that were important to preserve, to preserve the financial health of our customers. This is something that we can do with a good agility. As for dealerships, there were also cancellation of orders, of course, in the second quarter. Sales were weaker for farming machinery. That happened. The dynamics that I understand, generally, the client, the customer posts the order.
It is just an administrative order, and then they ask for funds with the bank. If the interest rate is too high, they can cancel it. If they think their prices for soybeans, for instance, is not good, they can also cancel. That happened, and you saw the numbers for the 2nd quarter. That does not change what we expect for the future, because again, Brazil is going to be a powerhouse in agribusiness. It is not going to decelerate. That was a temporary movement of 1 quarter, and I think this next quarter is already showing signs of recovery. We believe that, that is going to be naturally resumed because we, we are already talking about the drought for next year in the United States, so they will need more Brazilian soybeans and corn.
Again, a positive outlook for, I don't know, a year period of time. In used assets, nothing of the kind. When we sell used assets, we have, you know, our own resources...
I'm sorry, we lost connection again.
We apologize that this is the operator. The line dropped again. Please wait until we reconnect. Thank you. Hear me?
Yes, yes, now we can hear you.
Well, we apologize. The main line dropped. The back line dropped. We are in the third line. We are having a problem with our phone lines. We really apologize. This time when the line dropped, I realized that in used asset sales, we don't have the problem. Sales are a lot more dynamic. The customer goes to the store, buys the product.
In one, two days, they have, you know, the okay for credit, so we don't have that many cancellations. In the agribusiness, yes, you saw the effect in the second quarter, because between the placement of the order and the okay of credit, you have that. It's more or less when you buy, you know, real estate. You sign with the contractor, then it takes 15, 30, 40 days for the credit to be okay, and then you close, the negotiation. In the agricultural, market, this is what you saw in the second quarter.
Okay, thank you very much.
We have Renata Cabral from Eleven. Renata Cabral, please, you may go on.
Hello, good morning. I'm Renata Cabral from Citibank, and I have two questions on my side.
The first is the appetite for growth in the midterm by 2025, given that the company is absolutely there in the segment, had strong growth until now. I'd like to understand your mindset in terms of growth for the future, CapEx, not only in numbers, but also real appetite for growth by 2025. Second question is, if you are considering changes with regards to depreciation, given the current scenario in terms of the price of used assets, specifically trucks, and the new pricing of Euro VI, that from what I understood, is still undetermined. My question about depreciation is also for the future, 2024. What you think it's going to be like vis-a-vis what you have today? Thank you very much.
Hi, Renata. Thanks for your questions. Well, appetite for growth. We continue confident that opportunities for growth are huge for the future.
Obviously, again, respecting the macroeconomic scenario, the credit scenario, and what's going on in the country as a whole. I would like to remind you that we've removed the guidance of getting to 100,000 assets. The objective, and even more than that, remains. Not necessarily we're going to pursue that for 2025, because we just reduced the pace of growth, given what I said, the macroeconomic scenario. We see opportunities to reach the 100,000 assets for the coming years and even go beyond that, because the opportunities are there. We have a unique business model, as you yourself said, and very little use in the country still. We believe, without a shadow of a doubt, that 100,000 assets in the coming years is completely feasible, not necessarily for 2025.
It can be in 26 or 25, we continue seeking this number and even past that. As for depreciation, I'd like to make two important comments. The first is that whenever we have a new project, and we are discussing a project with the customer, we start with the theoretical depreciation rate, taking into consideration our history in a normal situation. That is, you're talking about depreciation rates that will go from 7%-8% in trucks, 9% at some points in time. This is our basic plan, how we start depreciating. When we observe, and it has happened, that there is an appreciation of our asset base, as it's happening now, we can see the margin of the used assets, but we can also reduce depreciation along time. We do that in a very conservative manner, and that's what we have been doing.
If you take a look at our depreciation base today, it is smaller because the price of our trucks went up by more than 30%, as you know. Naturally, the depreciation dynamics, all that assets that are contracted, that were deployed 2, 3 years ago, was reduced. Now, the new contracts, they all start with a depreciation rate that is higher and will remain as such, as assets are priced as they are today. When we see a new appreciation, then we can adjust depreciation more or less, but that's what happens from now on, and we know that depreciation of assets will enable us to have a lower depreciation rate, thinking of these assets that have been already invested and rented.
Very clear, Couto. Thank you very much.
Our next question comes from Victor Mizusaki from Bradesco. You may go on.
Hi, good morning.
I have two questions. The first is thinking of our inventory for rental. We tried to have a conciliation, taking a look at the BRL 1.7 billion. If we remove the volume of the assets, you have also equipment acquired in the second quarter, you would be talking about an inventory of assets that's being carried out since last year to today of BRL 1.1 billion-BRL 1.2 billion. My first question: Is the calculation correct? Even considering that you had a bit of a deceleration in the third quarter, where you have the conciliation, do you think you're going to be able to rent all these assets in the third quarter? The second question, when you think of accounts receivable, suppliers, and working capital-...
Especially suppliers, do you have any relevant payment to be made in the coming quarter and in accounts receivable, giving this tougher scenario, but with more restricted credit, as you mentioned? Apparently, you make a provision of bad debt on about 4.7%, 4.9% of the gross revenue from services, from rental. Do you think you have to have a higher provision for the next quarter?
Hi, Gator. Thanks for joining us, your questions. I'm going to answer the first, and I'm going to let Adriano answer your second question. In inventory, not everything that we buy or rent was in our inventory.
Out of the BRL 1.2 billion, which was the CapEx for new acquisitions that we had in our slide, you have five machinery that was deployed at the turn of the crop from March to April. You have equipment, as you mentioned. Sometimes when you buy the truck tractor, for instance, it can have different applications and will need different equipment. You naturally have assets that are not necessarily trucks, so they are complementary. We continue with our Euro V inventory above what we had planned. As I talked to you, especially during the follow on, we had started and planned to get to the end of June with normalized inventory levels. Again, that's not much of a concern because the asset's very much appreciated. It has huge liquidity. What we want is to have good contracts.
It's not, you know, a precise match. The 1.2 part was implemented, part is inventory. We have a significant reduction in the inventory of Euro V, but not that strict correlation. There are things that still to be rented and will in the coming quarters, and I believe that by September, the numbers are going to be quite normal. I think it's natural, so I'm not very much concerned whether it's going to be September or October, but I want to have good clients, good conference. This is our main commitment. I'm going to let Adriano answer the second question about accounts receivable.
Hi, Gator, this is Adriano. Thanks for your question.
When you take a look at suppliers line, you had a significant drop of BRL 500 million, approximately. This is more of a continuity of our dealerships than rental. In rental, it is a low number. We expect it to be like this, for this quarter at least, when the inventory goes back to normal, when we resume purchases, the supplier line is going to go up again, improving our working capital, financial results. With regards to provisions, we are making provisions according to company rules and delinquency rates, because we already had some retirements, we have levels very close to what we see with the Central Bank of Brazil. We don't expect the provision for bad debt to increase much. I think it's going to be in line with what we have now.
Okay, thank you very much.
We have a question from Lucas Barbosa, from Santander. Lucas, you may go on.
Hello, good afternoon, Ruan, Couto, Adriano, Aline. Thanks for taking my question. I had some follow-ups on the dealerships. First, how do you see the approval of credit? Given that we had a bit of a credit recession as a whole, maybe just, just for this quarter. Perhaps in 2024, we are going to have better numbers. This is my first question: How you see credit approvals for now, if you think this is going to improve from now on? Second, in ag business, you already talked about the price of grains. You had also the delay of Plano Safra. It was made available only in June. My question is: Is it already helping with your demand?
Hi, Lucas. Thanks for your questions. Well, we did see...
We all did, I believe. Fortunately, some unfortunately, some large companies in Brazil did have problems with credit, some retailers, and that led to a series of issues related to credit in a cascade effect. All banks had a reduction of credit in the second quarter, and we saw that in the number of truck registrations, licensing. We do see an improvement already. We're already seeing a change. You already see that the 5-year curve had a downward trend, and that starts to get better even before the coupon announcement. It's a glad to start to show an improvement in numbers, and some volumes is still embryonic picking up. Talking about trucks. For farming machinery, the answer is yes. In the coming weeks, we are already seeing more credit with Safra plan and others.
They're already yielding results. Just after the announcement of the Safra Plan, remember, it was announced in the end of June, and the credit started on July 19th. The effect in July was still small, but we did see a change in trends, and we believe, as I mentioned, that in the coming months, it's going to pick up, because indeed, farmers will need machinery. There is no other alternative, because we'll continue growing planting, and they will need machinery. There was a bit of a displacement in the demand of 3, 4 months, but it's picking up.
Very clear, also. Thank you very much, and have a good afternoon.
Next question comes from Rogerio Araujo from Bank of America. You may go on.
Good morning, all and everyone. Thanks for the opportunity. I have 2 questions.
First, if you could give us a bit more color on contract cancellation, especially on the operations of it, how does it work? What kind of contract clauses do you have for termination? Do you settle everything on a friendly manner? Do you have to go to court? Moving forward, do you have any expectation of more cancellations or terminations or even retirement of assets? This is the first question. Second question, you talked about your the fleet modernization project, and you talked about a discount of 4% or 5% in new trucks. I suppose this is the discount that you have in taxes and the price you pay for the used truck. Is that it?
How long will the program last, and how many trucks do you intend to buy with this net discount of 4%-5%? That's it. Thank you.
Rogerio, thanks for joining us and questions. I'm going to start with your second question, the government program. We are not very much concerned with the number of trucks that we are going to buy. We have already bought about 100 trucks. It's a small number. What we really would like, Rogerio, is for the program to consolidate as something that is important. Public policy for us to indeed create opportunities to improve the income of our truckers, independent drivers, and have the benefits I mentioned in the presentation. The country needs that.
What we are doing, even if it were a break-even, you know, the price we paid for the used car or trucks, 25 years old, and the discounts offered by the government, we would do it, and we'll do it because for us, it's important. We have to create alternatives for fleet renewal and modernization in Brazil. It's good for the environment, for society, for the roads, for us as people, as human beings, as people that drive the roads, it's more safe. We believe this is essential for the country. It's important for carriers, because sometimes carriers have to have a lower freight cost because they have very old trucks that will accept any freight cost because they need to work. It's important for the country. Your math is perfect. 4% or 5% is the most I'm paying for the truck.
I sell the disposals, you know, for, you know, the government programs, and the delta is the 4% or 5%, depending on the model of the truck that we are buying. So your math is correct, but I just wanted to make clear that even if it were a break even, we would do it because we do want to support the initiative of really having a renewal, modernization of fleet and remove the old trucks from the roads to improve the lives of truckers themselves. As for contract cancellations, thank you for the question. I would like to talk about that. It was a measure that was necessary. The team was very agile. In two, three months, we're able to retire the assets.
When we saw that there was a payment delay, we sit down with the customer, we understand the situation, and we make a quick decision if we are going to renegotiate, if we are going to remove the assets. It is, you know, something that is resolved quickly. Most of these negotiations are settled, you know, on a friendly manner, because it's our truck, and the contracts say that in case of the delinquency, we can retire the trucks. Naturally, it is a friendly settlement. We have already been to court, which can be faster, because when you as a bank, finance an asset, remember that the asset is the propriety of the debtor, so justice is a bit slower.
When it is rented, it is our truck, and there's a very clear clause on that. Recovering the truck in court is even faster. Generally, when you have an agreement with customers, remember, not necessarily the customer returns everything. They have 30, and they give us back 10. In a commercial negotiation, we have to seek some kind of compensation. Sometimes we charge a penalty. It varies from case to case, but most times we are not going to settle in court. Just, you know, to answer the last part of your question, I don't think this is going to be recurrent for the future. We worked very well to try and identify those cases that offered us a bit more frailty.
Remember that we have the telematics in trucks, and we can even see if the trucks are in operation, because sometimes if they lost the service and the truck is not operating, we already have, you know, a red flag showing that the truck is not in operations. It is already an indicator that we may have a situation in the terms of a delay of payments and delinquency. We have all this monitoring to avoid problems. I think that we're able to clear our base. Of course, we can have something for the coming months, but not at the same level. I think much, much below what you saw in the second quarter.
Very clear. Thank you very much.
Our next question comes from Pedro Pimenta from EKI Research. Pedro, you may go on.
Good morning, everyone. Can you hear me?
Yes, loud and clear.
Okay. Congratulations on your results. I have 2 questions on our side. Talking about retirement and cancellations, I would like to understand the decision between the sale and rental of those assets. You said that 25% were redeployed, 75% were destined for sales. What was the average age of those assets? Were they close to the 5 years, or was this a window of opportunity that you decided to go for, to have better returns? What is the strategy for allocation of the follow-on capital? We see that the market's a bit more restricted. You've raised the bar with customers. Do you think that parts of this capital are going to be kept in your cash just to control leverage?
Pedro, thanks for your questions.
I'm going to answer the first one, and the second one, I'm going to turn to Adriano. As for the recovery or retirement of assets, we analyze asset by asset. What we do naturally is the following: You take a look at the equipment. If it has been implemented for a little period, like a year, you redeploy it in the best way. Redeployed assets are very new equipment, one year, one year and a bit old. Equipment or assets that are from 2.5 years onwards, we believe they are truly used assets. Then there is not a fixed rule for that. Each case is a case, but we are going to consider it for sale.
We could have a 2, 3-year-old asset, to be kept in inventory if I didn't have anything of the kind in inventory, but usually with that. Trucks 1 and 1.5 years are going to be rented, more than 3 years old are going to be sold. Exceptions will be analyzed on a case-by-case scenario. I'm going to turn to Adriano to answer about the follow-on.
Hi, Pedro. Thanks for your question. The follow-on funds are in our cash position. As we mentioned, it is enabling us to have a very strong balance sheet to negotiate with OEMs. That should take place in the coming months. We have already started, but we are going to carry on the negotiations. With the funds in cash, our power of urgency and our confidence in negotiations is a given.
As we also mentioned in the suppliers line, we are going to have to carry that until next year in the suppliers line, then next year, we're going to have a, an improved number.
Okay, thank you very much.
... We are now closing the Q&A session. I would like to turn the call back to Mr. Gustavo Couto for his final remarks. Please, Mr. Couto, you may go on.
Well, everyone, there were some questions on the webcast. We are going to answer them through our IR team that is also here, your investors and analysts. Takeaway messages: We are very excited about our long-term prospects. We have very strong foundations. Brazil can go through volatilities, but it is a country that has solid fundamentals in our business model that has proven resilient in the coming years. I think organic growth of the company, the, the main operating indicators show that. Well, artifacts are natural in any company, but we are very confident that everything we're doing consolidates a path of growth with strong profitability, with discipline in capital, very judicious in everything we do to continue growing and deserving the trust of our customers and shareholders. We are very pleased with the possibility of now joining the IBOV in the next portfolio.
Once again, we apologize, but we lost connection with the company. Wait while we reconnect. Thanks for your patience. We are with the third backup line.
Okay, we are very excited about IBOV, that will have strong liquidity in our shares with higher demand. We are very excited about that, and we see that the effects of the transformation in the value of our assets has impacted positively our margins in used assets, and also enabled us in rented assets to reduce the depreciation rate. That will continue in the next years. That gives us the encouragement of even improving profitability. We are excited, encouraged. The market is volatile, our business model is resilient, predictable, and we are sure of that. Once again, thank you very much for your trust, for your participation. Thanks for the BMB team and the work done. We're very pleased with the results we shared. Thank you, and we wish you a good afternoon.
BMB conference call is now closed. We thank you very much for joining us and wish you a good day. You may now disconnect your lines.