Good afternoon everyone and welcome to Empresas Copec First Quarter 2024 Results Conference Call. Today's presentation and the First Quarter 2024 Earnings Release are available on the company's investor relations website at investors.empresascopec.cl. Before we begin, I would like to remind you that this presentation may include market outlooks and forward-looking statements, which are based on the beliefs and assumptions of Empresas Copec management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they are related to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Empresas Copec and could cause results to differ materially from those expressed in such forward-looking statements.
This presentation contains certain performance measures that have been adjusted with respect to IFRS definitions such as EBITDA. In this opportunity, questions will be received in written form. If you have a question, please write it down on the Q&A section. Please beware that your company name should be visible for your question to be taken. I will now turn the call over to Mr. Rodrigo Huidobro, Chief Financial Officer of Empresas Copec. Please go ahead, sir.
Okay, thank you very much. Welcome everyone, and thanks for joining us today in this presentation where we will be taking a look at the results for the first quarter 2024 for Empresas Copec. We have new image for the company, we have launched a new purpose, and we have a new setting as well, so we hope you like it. I will start on my own going through the presentation, and in 20 minutes or so I will be joined by Mr. Cristián Palacios, our Director of Finance and Investor Relations, and also by Mr. Charles Kimber, who is VP of Human Resources and Sustainability at Arauco, and they will be helping us out with any questions you might have at the end of the presentation.
You might start posing your questions right away through the chat that we have on the Zoom platform, so you are more than welcome to start sending your questions right away. Having said all that, let us start with the most important highlights of the quarter. As usual, we will start with the most important developments of the quarter, an executive summary of what the quarter was, then we will go deeper into each business sector, and we will also have a look at the most important milestones that we had during the first quarter 2024, and then we will end our presentation with the answers to the questions that you are going to send through the platform. Okay, so let us start by looking at the highlights for this quarter.
We had quite an interesting EBITDA increasing significantly year-over-year and Q-over-Q, which is explained basically by improved performances in our two main divisions, both Forestry and Energy, showing improved results with respect to their comparable quarters. In the case of Forestry, we had year-over-year, we had increased volumes and lower costs in pulp, essentially, very good performance at our pulp division. In terms of Q-over-Q, we had better prices in pulp as well, increased volumes, and also lower costs. Once again, essentially, our pulp division is what explained most of the increase in our Forestry sector. In Energy, we also showed increased EBITDA. In terms of year-over-year, we had favorable inventory effects at Copec and also at Terpel, and also an increased industrial margin together with better performance at Abastible, our liquid gas division.
In terms of Q on Q, we had an improved operational efficiency Q on Q and also better margins at Abastible. Regarding projects and other developments during the quarter, we had our shareholders' meeting where we announced our purpose, we launched our new corporate image, and also we took a look at our investment plan for 2024. Our leverage went down from 3.9 at the end of the last year to 3.3 during this quarter. And in terms of ESG, we also had some significant developments basically related to our issuance of the integrated report. There's a lot of information in our 2023 integrated report. We continue to make progress through Copec in energy transition and business model transformation through companies such as Turntide and Optibus, and also we made an investment in Granja Solar, which is a solar generation project in the north of Chile.
In terms of goals, we had Arauco announcing its greenhouse gas emissions goals for 2030. We'll take a look in more detail at all of those milestones in some minutes. Now we can see the most important figures for the quarter on screen. We had sales going down slightly, EBITDA, however, ending up at $846 million and going up significantly with respect to the last quarter and also to the comparable quarter last year. We had leverage going down to 3.3, as we said before, from a beginning level of 3.9. CapEx was announced for 2024 and established at $1.7 billion. We had pulp EBITDA going up to $360 million, quite a significant increase with respect to one year ago and also to the immediately preceding quarter. EBITDA coming from wood products going down slightly, $115 million. We will go into that in some minutes.
The EBITDA at Copec at CLP 294 billion also up, interestingly, with respect to the comparable quarters. Same thing for Abastible with CLP 41 billion. And lastly, but not least, Mina Justa's EBITDA going down to $144 million. On the back of a reduced production because of the reduced grade at the part of the mine that we are operating right now. Some more details to come, of course. Now, if we look at the results from a historical perspective, you can see EBITDA $846 million, up 33% Q on Q and 37% year on year. We had gone through five quarters of EBITDAs in the range or in the vicinity of $600 million, and now we are up to $850 million approximately. So it's a major increase in EBITDA to $846 million for the reasons that we are going to explain in a while.
In terms of net income, it's up to 228, also an increase with respect to one year ago and also to the immediately preceding quarter. Our financial situation is on the screen there, our balance sheet situation. We have debt maturities for $1.5 billion this year, a lot of it coming from the Arauco level. Also, half of that is bond debt, half of that is also bank debt. A large portion of that has been refinanced already. We have cash for more than $2 billion, so everything there under control, as well as our leverage, which has been going down gradually from a peak of 4.0 that we reached at the end of the third quarter last year. We have been gradually going down to the current 3.3, and we expect this to continue going down, of course.
In terms of returns and margins, we have seen margins going up, of course, an increased EBITDA for this quarter, and a return on capital employed that is gradually also beginning to go up. Those are the most important numbers for the quarter. Now, if we look into each business division, let's take a look into Forestry, our most important subsidiary, Arauco, ended up the quarter with an EBITDA of $471 million, compared to $298 million in the first quarter 2023. So a significant increase here. This has to do essentially with improved margins in pulp, which is associated to higher volumes, essentially, and also to lower costs.
Together with that, at the net income level, we also had an improvement in non-operating income, which has to do with the fact that last year we recorded non-recurrent expenses related to the forest fires that affected our forests at the beginning of last year, and together with that, some non-recurrent expenses related to mill stoppages, mainly also as a result of forest fires last year. So $471 million EBITDA for Arauco and net income going up to $100 million for this quarter. This particular quarter. This is up significantly from the last quarter at $272 million, and especially with one year ago where we recorded $78 million, so $360 million for the pulp division. This, of course, was driven to some extent by costs going down.
We had costs going down all across the board for different fibers year-over-year and quarter-over-quarter, and also especially volumes going up. You can see in the table here that volumes went up significantly, 67.9% with respect to one year ago. So that was a major driver of increased EBITDA for this quarter compared to one year ago. We also show the maintenance schedule down here, and we are going to go through two maintenances this quarter, one at Constitución, 21 days, and also Arauco's line three, which is MAPA, for 16 days. This is a stoppage in which we are going to do the last adjustments related to MAPA and restart operations after that and continuing at full capacity. So in general, good news in pulp.
The behavior of the markets, you have probably seen this, the behavior of the markets in the first quarter was quite favorable. We have seen inventories that stand below historical levels. So inventories are at levels which are neutral to positive. In general, you can see them here with levels that are below historical averages. We have seen, in general, stability in China, a stable demand in China, picking up a bit after the new year with higher operating rates of paper mills. Europe, especially, has been a major driver of the situation in pulp. We have seen a strong situation in Europe with quite a stable demand and strong demand picking up.
Some supply disruptions both at the paper level and at the pulp level, so shipments from Asia together with some interruptions in production related to stoppages in Scandinavia have driven pulp prices up quite significantly in Europe during the quarter. As a result of that, the world in general has seen prices going up during the quarter. dissolving pulp as well has shown an improved market with prices increasing during the quarter. You can see the global production and global demand of pulp in the table on the right-hand upper corner standing at 7.8% year-on-year, which is quite a healthy level of growth. The outlook for the next quarter, for the time being, appears positive. Demand in China is expected to remain stable despite some noise coming from paper overcapacity in the market, which could potentially add some pressure to the operating rates at the mill.
Europe has continued to show strength in demand, a stable end paper demand and tissue market demand as well. We have seen some customers placing additional orders, which could pose some additional pricing pressure, upward pricing pressure on pulp. In terms of supply, we have seen some disruptions coming from strikes, as we said before, in Scandinavia, particularly in Finland. Added to that, we have seen some strikes in Chile at Puerto Coronel, also affecting shipments during this quarter. We have also seen bad weather conditions, floods affecting parts of Brazil and Uruguay, which would also mean disruptions in shipments and also upward pressure in prices. The outlook for the time being for pulp is of prices stable and potentially increasing a little bit.
You can see here the levels of prices in China for Arauco, $740; in May for hardwood, $820 for softwood, and $940 for dissolving pulp. Let us switch to wood products, our other division within the forestry sector. We have reported an EBITDA of $115 million. $115, this is slightly down with respect to the levels of $130 or $140 that we were seeing during the last year, essentially. And this has to do with decreased prices, basically. You can see in the tables that we are showing there that prices have gone down in some products quite significantly, however, offset to a great extent by volumes going up, in some cases, quite significantly. But in general, the EBITDA generation for panels has gone down a bit, staying, however, still within historic leverage levels, so still healthy levels for wood and panels, however, going down a little bit.
What we have seen is housing starts remaining quite stable in the North American market, which is our most important market with 52% of our sales. In general, in North America, we see stability across the board for the different products. We see MDF with some potential increases in demand, stable prices in general. In particle board, the same thing, also stable demand and eventually some support for prices going up. In remanufactured products, we were entering part of a season in which we could see improving demand, potentially to some extent offset by a slight overcapacity as well. And finally, in plywood, we see a balanced market, so stability in general with some eventual support for price increases. Second most important geographies or geographical area for wood segment is South and Central America, where our most important market is Brazil. In Brazil, we have seen some positive signs.
We have seen domestic markets showing some signs of improvement with a potential increase in the construction sector driven by lower interest rates. Our second most important market within this area is Chile, where we have seen a lot of uncertainty in these markets, essentially, having to do with some of the industries that drive this market with a slowdown. For example, construction and retail have seen some slowdown. So as a consequence of that, we are seeing a slow demand. This could eventually be offset to some extent by supply disruptions, however, so prices are not necessarily going down. In Argentina, we were able to keep prices and margins up for a while, but now there's a lot of uncertainty in what is happening in Argentina with volumes decreasing a bit. So nothing very clear still in Argentina.
In terms of Europe and Middle East and also Asia and Australia, which represent a smaller part of our shipments, in general, we see a good situation, quite stable, with some space for demand recovery and also some potential price increases driven by supply shortages. So once again, supply shortages could drive prices up a little bit in these geographies. That's it for the forestry sector. We can now move on, move into the energy division. We had a good quarter for energy as well. You can see on the screen there, our fuels division, Copec, recorded a consolidated EBITDA of CLP 294 billion, 294, which is up quite considerably from the CLP 207 billion that we recorded in the first quarter 2023. This has been driven by increased volumes in our gas station tunnel in Chile together with a good inventory revaluation effect.
So those are the two main drivers in Chile, also an effect of industrial margins for the increased EBITDA in Chile. So CLP 294 EBITDA for Copec consolidated, which is an interesting figure. In operational terms, we saw the gas station volumes going up by 1.4%, offset to some extent by industrial volumes going down, as you can see in the graph there. All of this meant markets here staying quite stable at the levels that have been held for a long time, around 58% market share. But in general, gas station volumes going up and also industrial margins going up and offsetting the effect of volumes going down in the industrial tunnel. We had our international fuel subsidiary, Terpel, also performing very well during this quarter. Terpel is showing an EBITDA of COP 461 billion. That compares with COP 333 billion recorded in the first quarter 2023.
So quite an interesting increase in EBITDA there. What we had there is a positive inventory revaluation effect as well and also an improved performance in lubricants. The lubricant division here has been performing quite interestingly. Let me remind you that some years ago, we bought the assets for lubricants from ExxonMobil in Colombia, Peru, and Ecuador. And we have been gradually seeing an operational maturity in that segment, in the lubricant segment, in those three countries. And we are progressively generating more interesting levels of EBITDA in lubricants. So this increase in lubricants helped increase performance, the improved performance at Terpel for this quarter. You can see there that volumes went down at the aggregate level by 3.8%. And this has to do with different behaviors across different geographies, but essentially going down in Colombia because of some industrial clients and also some aviation clients in Colombia.
Abastible performed well also during the quarter with an EBITDA of CLP 41 billion compared to CLP 28 billion last quarter. This has to do with an improved performance, operationally speaking, basically across the board. We saw increased EBITDAs in all geographies, better volumes in Chile, Peru, and Ecuador, offset to a certain extent by a drop in volumes in Colombia, and in general, improved margins in some segments in the different geographies. A better operational performance at Abastible offset to some extent by a tax effect. Now, this is quite usual at Abastible. We have volatile tax effects here because we have some effects coming from foreign exchange, from the currency levels. The foreign exchange levels affect the valuation of the international subsidiaries of Abastible, which is carried on accounting terms and tax terms in dollars.
In this particular quarter, we had a negative effect for taxes at the Abastible level . In operational terms, a very good quarter for Abastible. You can see some more detail for the different countries there. In general, we are seeing, as I said before, increased volumes coming from an improved commercial performance, very successful commercial strategies across the board, and some particular segments that have increased quite significantly. For example, in Chile, the industrial segment has shown a very good performance. Together with this, we are seeing, in general, improved margins. Let me remind you that we come from a couple of years of reduced margins in Abastible, which were driven by the very high international prices of propane that affected all of our countries. And now we have gradually begun to trend towards more historical levels of margins in Abastible.
So this is beginning to make itself noted in the improved operational performance. Regarding our other investments, let me just focus on two particular effects here or two particular things. One of them is Metrogas, which shows quite a decreased result, more negative result with respect to the last quarter. And that has to do with a foreign exchange effect that has affected a provision that Metrogas recorded in dollars. Metrogas has accounting in Chilean pesos. But this provision, which is related to a judicial contingency in Argentina, and it's a major provision, this provision is carried in US dollars. So this appreciation of the US dollar against the Chilean pesos that we saw during the quarter has given way to this quite significant foreign exchange effect that has affected the results of Metrogas. Together with that, let me comment the effect at Mina Justa.
Justa is showing an EBITDA that is still quite interesting, $144 million, but that is well below the $225 million that we recorded in the first quarter 2023. As we anticipated last year, we would be going through an area of reduced grades in the mining operation at Mina Justa. So during the whole of this year, we will be producing at an area in the mine that has reduced grade, which in turn affects production, which is going to be lower than last year, and also cash costs, which are going to be higher than last year. So you can see here that sales go down because of production going down. We should aim to produce between 120,000 and 130,000 tons this year compared to almost 150,000 tons that we had last year.
In addition to that, because of the same reduced grade, we are going to see costs going up from the levels that we saw during most of last year, which were around $1.3 or $1.4. We're going to go up during this year to levels of $1.6 or $1.7, as we can see during this quarter. A reduced performance at Mina Justa because of what we had anticipated. This will be offset to some extent, however, and going forward by the very good pricing scenario that we are currently seeing in international markets. That's it for the most important figures of the quarter. Let me tell you about the most important developments that we saw during the quarter in our different divisions. We had our shareholders' meeting during this quarter, an event in which, among other things, we launched our corporate purpose, Empresas Copec's purpose.
So this is the purpose for the parent company at Empresas Copec, which is we have phrased as to shape the world for future generations. This has to do with the areas in which we do business, which are essentially energy and natural resources, which are two areas that are critical in terms of the effect they have on the country, on the environment, on the planet, and in terms of the effects that they will have in the future of our environment. Together with that, we think we have a way of doing business, which is very traditional, very characteristic of our company, and which has to do with looking at business in a long-term fashion, thinking in decades, looking at the effects that all of our businesses have on the environment, on the communities nearby, and on all of our stakeholders, all of that with a long-term view.
So on one hand, the areas in which we do business. On the other hand, the way in which we do business, all of that places us in a good position to be able to influence on the world that we are leaving behind for the future generations. So to shape the world for future generations is our purpose. Through the parent company, we issued a bond during the quarter in the Chilean local markets, approximately $60 million, with an inflation-adjusted rate of 3.86, so UF, which is the local inflation-adjusted currency, plus 3.86, which represents the lowest corporate spread in the whole year. So a good corporate issue at the parent company level. And thank you once again to the investors that participated in that operation. We gave up some more detail on the CapEx level for 2024 during the same shareholders' meeting.
Total investment base plan for investment is around $1.7 billion for this year. This is comprised of 70% going to the forestry sector and 25% going to the energy sector. So basically, the whole of the investment going to our key areas. It is comprised as well of around $800 million-$900 million having to do with the maintenance of our asset base. Together with that, we have some additional acquisitions, some projects going on. One of them is the Citácuaro, the Zitácuaro Mill in Mexico, which is a project that is around $230 million and that is going to double our panel capacity in Mexico. That project has been delayed a bit, so the bulk of the investment is going in this particular year. In addition to that, we have an interesting investment in lands and plantations during this year.
An important part of that is going to Brazil in preparation for our potential project at Sucuriú. So part of the investment that is contemplated here also has to do with plantations potentially related to the Sucuriú project. And also, we have between $50 million and $100 million contemplated for these investments that Copec has been doing for energy transition and business model transformation, which is in line with what we have been investing what we have been investing over the last few years in those two concepts. So between $50 million and $100 million for Copec's transition and business model transformation. And finally, a lot of different smaller projects having to do with optimizing the commercial positioning of our companies and improving our efficiency, industrial operations, all across the board. That's our investment plan for year 2024.
Both Abastible and Copec stood out in one of the important customer experience rankings that are issued yearly in Chile. This is a very important dimension for Copec and Abastible. This position in the ranking is very welcome for both companies. We had good news over the last few days for the Sucuriú project, which saw its installation license already granted by the Environmental Institute of the State of Mato Grosso do Sul. This is an important step forward in our Sucuriú project. Let me remind you that the Sucuriú project is up for discussion by the Board of Directors at Arauco. It's going to be up for discussion by the end of this year or beginning of the next year.
The Board of Directors at Arauco is going to look at all of the important elements of the Sucuriú project, including, of course, environmental permits, but also including evaluation, engineering, economic feasibility, financial evaluation, financing, and so on and so forth in order to be able to make a final investment decision at that point. But this is, however, an important step forward in the development of this project in Brazil. Let us switch to our ESG highlights for the quarter. As usual, we had a lot of developments in ESG. ESG is basically undistinguishable from our business activity. We do a lot of ESG through our business activity by absorbing carbon at the plantations in Arauco, by replacing materials and products that are less environmentally friendly, by pushing energy transition, and so on and so forth.
But in addition to that, we have achieved several milestones in ESG during this quarter. Among them and things that are worth highlighting are the publishing of the annual report by Empresas Copec. This is an integrated annual report, which includes a sustainable management model, which is shown there and includes the pillars of sustainability and innovation, governance and integrity, climate action and management of natural resources, and also creation of social value. This is an integrated report that has a lot of information in it with metrics, goals, and a lot of variables that show our progress in many different dimensions. A lot of dimensions have been validated by external auditors, so it's worth taking a look at. This integrated report is published on our website, and you are more than welcome to have a look at it.
Together with that, we received a very important position in the ESG ranking published by Merco, and we were recognized as the leading holding company in terms of ESG responsibility. So once again, a very welcome award, and thank you for recognizing all of our efforts in these dimensions. Copec continues to make progress in electromobility. Copec has the largest or one of the largest networks of charging stations in South America, already around 1,800 kilometers covered in the Chilean territory. This contributes to expand our network further. So what we did here is a very symbolic inauguration of the southernmost fast charger for electric vehicles in the world. This has been inaugurated in the city of Punta Arenas, very far to the south in Chile.
So we continue to make progress in positioning ourselves as leaders in electromobility and contributing to drive this energy transformation in the countries in which we operate. We also made progress in business development, business model transformation through two of the companies in which we have invested through our venture capital. Let me remind you that we have a venture capital arm that invests in different companies and technologies that are related to energy, convenience, and mobility, which we have defined as the three areas in which we have business know-how: energy, convenience, and mobility. And in this particular quarter, we made two interesting progress or degrees of progress in two of these companies. One of them is Turntide Technologies, which provides a technology of efficient motors, and this is gradually gaining commercial traction. And as a matter of fact, we entered into an agreement with Walmart Chile.
Walmart Chile is going to roll out the installation of these efficient motors in a large part of its network of stores in Chile. So this motor efficiency operation is already gaining commercial traction. Together with that, we invested in a platform for optimizing the operation of city buses. It's called Optibus, and it complements very well the positioning that we have been gaining in the area of supplying services for city buses. Another interesting development is Arauco announcing the goal of reducing its CO2 emissions by 1.5 million tons of CO2 as of 2030. Let me remind you that Arauco is already carbon neutral and actually it absorbs carbon, and this has been validated and certified by external companies. So Arauco continues to make progress in this area and commits itself to go ahead with a further reduction of 1.5 million tons of CO2 by year 2030.
So once again, an interesting development there in terms of carbon absorption. And finally, an investment that we announced towards the end of the quarter or actually after the end of the quarter and a couple of weeks ago, we announced the investment from our fuels division, Copec, into a solar generation pool of assets held by or called Granja Solar, which is located in the north of Chile, a total investment of $91 million for these assets that have a total generating capacity of 123 megawatts. So we continue to make progress in solar generation. This comes to complement very well what we had in terms of distributed generation and also in terms of energy trading activity by our different divisions, Flux Solar and EMOAC. So we continue to make progress in sustainable energy generation.
So that is what we had prepared for you in terms of information to convey to you. We are now going to open up the floor for any questions that you might have. Please go ahead and continue posting your questions through the platform that is available in the Zoom platform, in the chat that is available in the Zoom platform. And I will be joined in a couple of minutes by Mr. Cristián Palacios, Director of Finance and Investment Relations at Empresas Copec, and also by Mr. Charles Kimber, VP of Human Resources and Sustainability at Arauco. So we will all be looking at the questions that you might have. Thank you very much, and I will hand it over to the host.
Thank you. We'll now start the Q&A. If you have a question, please write it down on the Q&A session. Please remember that your company name should be visible for a question to be taken. Now, I'll hand the floor back to Mr. Cristián Palacios, who will conduct the Q&A. Please go ahead, sir.
Okay. Thank you, everyone, for joining this webcast. I'm going to start with the questions. The first comes from Camilla Barder at Bradesco BBI. This is on forestry. Could you comment on the strikes in Chilean ports if they have affected your operations?
I'll take that one. It's basically the Port of Coronel that has not operated for the last 49 days. There is a strike going on there. This is between temporary workers and the management of the port. It relates to policies on drugs and alcohol testing that temporary workers do not want to abide by. Unfortunately, that has meant that the port has not operated. This is one of the three ports present in the eight region. So we are using the other two ports as well as moving material, moving our cargo to the ports that are further north in the area of San Antonio and Valparaíso.
Thank you, Charles. On POP, if you can comment on how our negotiations for May orders. Also, there are some information that there might be another hike for June. Do you believe that the market can absorb this?
Okay. So May has been concluded. We've closed all of our orders for May with price increases in both bleached eucalyptus and bleached softwood pulp. We expect a strong market still for June. We're in the process of closing those orders. We see a firm market in the European market, and there's a firm response also from the Asian market.
Okay. Finally, from Camilla, if you can comment on your cost expectations along the next quarters, please?
Okay. I think we have two interesting points to make here. One is that our mills have been operating very well, so we should see a cost structure that is an improvement to what we saw last year in second quarter. We do have, however, the maintenance of line three or MAPA. It's going to be 16 days now starting in May. And as of that, once that is concluded, we expect a very good ramp-up and operating at design capacity. So that is going to have a real effect on our cash costs as of June onwards.
Thank you, Charles. Rodrigo, you mentioned in previous calls that CapEx for 2024 was going to be $1 billion. Right now, you're announcing $1.7 billion. If you can clarify or give some color on what has changed.
Yes. Thank you, Cristián. No, I guess that $1 billion corresponded to just the forestry portion of our CapEx. As I said in the presentation, we are expecting a $1.7 billion CapEx for this year. 70% of that approximately goes to our forestry sector, so that fits in well with the $1 billion that you had in mind. The breakup of that $1.7 billion I mentioned is approximately $800 million-$900 million in maintenance, as I said. Together with that, we have some particular projects going on in the forestry division, such as the Zitácuaro Project in Mexico, some acquisitions of plantations in different geographies, some of them related to the potential Sucuriú project, some CapEx related to the energy transition initiatives that Copec is going ahead with. And the remainder is basically a myriad of different small projects related to operational efficiency and also to competitive positioning for different subsidies.
That's the $1.7 billion, and the $1 billion is just for the forestry division.
Thank you, Rodrigo. I have Henrique Marques from Goldman Sachs. First, if you can provide a follow-up on MAPA. We understand that ramp-up is going well and in the final step. So if you think that volumes could be higher in second quarter versus first quarter?
Yeah. Ramp-up has been very good. We expect now that after the maintenance we have in a few days, to have a very good startup for the rest of the year. So yes, volumes should be going up from a production point of view. What we could see, however, is a slight delay in shipments because of the problem I mentioned before on a strike at Puerto Coronel. So we're working with our logistics team to move cargo to other ports in order not to have to postpone those shipments much further than the end of the second quarter.
Thank you, Charles. The second question is about bulk market, so it was already answered. Rodrigo, if you can comment on Mina Justa. We saw an improvement in cash cost quarter-on-quarter despite lower volumes. Should we expect a sequential decline going forward, maybe back to 1Q2023 levels?
Not necessarily. As we have anticipated, Mina Justa is going to have a phase in the mine that is a lower grade phase, and that will bring about two things. One is decreased volumes, and the second one is increased cash costs. So we have anticipated that during the year, we will be operating at cash costs of around $1.6-$1.7 per pound, which compares to the $1.3-$1.4 that we achieved last year during most of the year last year. This will be transitory, and then on 2025, we are going back to grades that are similar to the ones we introduced where we operated last year. So during 2024, we will have high cash costs, and then going forward, we should revert to the $1.4 approximately that we had announced as a long-term vision.
Thank you, Rodrigo. I have María Teresa Ruiz at Itaú. She's asking about the situation of Metrogas and the material fact that was issued on May 8th related to the situation with the court in Argentina. If you can give some color on that.
Yes. This is not provision that Metrogas announced that it would be reporting last year. I think it relates to a judicial process going on in Argentina that has to do with some differences with a provider of natural gas transportation that were generated back in 2009 approximately. This is a long story. So there was a first instance ruling last year that condemned Metrogas to pay for these services, and therefore, the provision was booked last year. This is a provision in US dollars. Now, we have been informed through an essential fact that there is a second ruling by the Court of Appeals in Argentina that has reverted that initial ruling.
This is already in favor of Metrogas, and we expect Metrogas to analyze the potential accounting effects that this will have and to inform them to us as a parent company, and that we will be informing the market. But so far, nothing to inform on that matter.
Okay. Charles, regarding the Coronel Railway operation, Colorado Sawmill, how many days the market should expect the operation to be stopped, or is it a final decision?
Colorado Sawmill was operating in one shift as of two months ago, and we decided last Friday to discontinue the operation. So there's a suspension. It's an indefinite suspension. Any pickups in demand, we expect to absorb with our other five sawmills operating either on a third shift or extending the other two shifts. So Colorado Sawmill, for the time being, is not coming back into production.
Thank you, Charles. Rodrigo Clemente Swett is asking about leverage. Since net debt to EBITDA is going down, do you have any new acquisition in mind for the short to middle term?
We're always looking at potential acquisition and potential projects along the lines that we have informed the market. So in forestry, we'll look for countries where trees grow well and countries that have potential comparative advantages in the forestry sector. In energy, we are looking at assets that complement our existing operations and also assets that facilitate the transition towards a new energy environment. At the same time, we have to look for financial prudence and financial health. So we have a financial policy in place that we have to follow. Net Debt to EBITDA effectively is going down because we are increasing our EBITDA and bringing down our debt. So as opportunities come along, we will look at them, and we will inform the market duly if we decide to pursue any of them.
Thank you, Rodrigo. We don't have more questions at this point, so I'll turn it back to you and the operator.
Thank you. This concludes the question-and-answer section. At this time, I'll like to turn the floor back to Mr. Rodrigo Huidobro for any closing remarks. Please go ahead, sir.
Well, thank you all very much for joining this presentation. We hope you like the new format, and we expect to see you again sometime in August to take a look at the mid-year results. Thank you very much.