Itaúsa S.A. (ITSA4) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to another edition of [ Resultados Em Foco ]. I am Priscila Grecco, I'm the CFO of Itausa and it's a pleasure to be with all of you. So we can present the results of the first -- of the first semester of 2025, speaking of the expectations for the second semester. And this is a very special one. It's the first one that we talked from the headquarters of Itausa and with a new brand that is launched as the celebration of our 50 years. And we are modern, more modern, more digital. And this future reflects upon our evolution and reinforces the values that we place every day. To comment this live, we have Alfredo Setubal, CEO of the Investor Relations of Itausa. Alfredo, welcome to another edition of [ resultados em foco ]. Now directly from Itausa.

Yes, very exciting to see our multiuse space and we can publish our results and our events. So let's continue.

Before talking about the agenda of the event, we'd like to tell you that we have the simultaneous translation into English. If you need it, click on the English button, so you can access the translation. You can take part of our event, submitting your questions, comments clicking in the message box of the platform in YouTube. We're also on YouTube in the comments. Using the #ResultadosItausa. Of course, we want to answer all of your questions. We talk about the end of the event Well, we're going to talk about the business environment, bringing some own look from Alfredo on how he saw the first semester. The results of our invested companies and Itausa. Let's talk about liquidity management, which is an issue that we've been working since 2022. We're going to talk about the results, important profit sharing -- and then we are going to close with the Q&A session. To warm up our event, I want to bring Alfredo, so we can talk about the business environment. I think that we had a first semester that was challenging. A lot of volatility in the capital markets, global markets. I wanted to get your own look. How do you see this first semester and how it impacted our invested companies and to have your perspective for the second semester.

Thank you Priscila. It was a challenging semester. We're seeing an interest rate that is very high. It has gone up. And of course, that brings challenges to all the companies, and this is not different. And we had an international scenario that is very difficult with awards that continue and mainly with the new commercial policy of the United States. And we have the tariffs and regardless of this environment, we are working with an inflation that is controlled. Even though it's higher than the targeted goal, 15% is a bit high. We have an economy growing less than '24, but showing a few signs of more deceleration. So it's an environment that is challenging, for the companies and for Itau Unibanco, which would be our biggest invested company. And the results of the first quarter are very positive. We see them above the budget that were done at the end of last year for this year. The companies, in general, in the industry and services and infrastructure in Itau Unibanco with growing results, solid results with good provisioning levels. And we continue to perform an important role, and we're adapting to the new environment, the new competition of the fintechs, the digital world, and an efficiency level that is very high. We have the revenue costs and Itau Unibanco is our biggest highlight here. In the second semester, we don't see a different scenario. We see the interest rates still high. I do not foresee how this can be reduced any more in a significant way for the companies. But as I told you, we have good companies, good brands, good provisioning and companies that are leaders in their sectors. And we are trusting. Now we're going to have a second semester that is very positive for Itausa.

Very good. Now I want to go over our results in the first semester. Even with this challenging scenario that Alfredo has discussed, we have a record result. Considering all the historical records, we closed the recurrent net revenue of BRL 7.9 billion growth of 2 digits in regards to the first semester of 2024, 10% growth, which lead us to an ROE recurrent of 17.9% year-on-year. Important growth in regards to the previous year. The net and the ROE of the partnership, we haven't had any big hiccups. Our net patrimony has gotten to almost BRL 90 billion a growth of 7% and the market value of our portfolio getting to practically BRL 160 billion in this period, 24% in regards to the growth of the previous period, even if we consider the volatile capital markets, our portfolio valuing in 24%, the market value is 12%. So it shows the resilience of our portfolio, the quality of it shown that we invest in leader and companies that are leaders in their market shares. And these strong results show our consistency and our value creation possibilities. So let's see the share, the performance considering ITAS4 performing in all the periods that we have for analysis, short term, 5 years, 10 years, much higher than any benchmark here. we have for reference Ibovespa, IBrX 100, S&P 500 and the shares of Itausa 28% valuation, while Ibovespa once again, 12% and the S&P growing 13.6%. It shows our capacity of Itausa of creating value in a consistent and recurrent way throughout the years. So let's talk about the share, the discounted share and we are talking to the market about this. Our discount closing in July, still with the threshold very high, which is 25%. Our market value of Itausa getting to BRL 113 billion in this period, and the sum of all of our assets in the portfolio getting to BRL 152 billion. Once again, we negotiated our shares with discounts even in regards to our stake of Itau Unibanco, our participation at Itau Unibanco. The market still hasn't priced. The end of the fiscal inefficiency is for 2027, where the PIS/COFINS, which is incident over the distributed profits is no longer being considered.

So the discount is still very expressive, very high and I think it doesn't make sense, specifically when we look at the quality of the portfolio, a discount where our market value is less than our participation at Itau Unibanco. In fact, there is an excessive discount in our opinion. And as you commented fiscal inefficiencies represent BRL 500 million, BRL 600 million per year, which we are not going to have these expenses, taxed in our portfolios, in our balance sheets. It's very relevant. And also the fact that some companies are not listed in the stock exchange, NTS, Aegea, Copa Energia. If we get them on the fair value, that would consume about 2%, 3% in our opinion. Very high discount, therefore, we have good news at the end of the fiscal inefficiency, which we will adjust through time.

Well, I wanted to talk about doing a deep dive in our results on the first quarter looking at the overview of our invested companies. Most of them did the report to the market, so Itau Unibanco continues with a trajectory that is sustainable for the results, very solid. We got to a net revenue in IFRS of BRL 21.6 billion, an important growth in regards to previous year. It got recurrent ROI of 21%. Dexco, very good, very favorable and in it's an operation of LD Celulose still challenging in the finishing sector. It's a challenging moment, but on EBITDA and recurrent adjusted of BRL 1 billion. and the net recurring revenue of BRL 94 million, a drop of 6% affected by financial expenses, increase of the Selic rates such as Alfredo has commented, but less impact for the biologic assets, which happen in a very expressive way last year. Alpargatas, a report of results that is very positive, very favorable. And here, we are getting to an EBITDA with a growth of -- over 100% BRL 400 million in the first semester. Net revenue, BRL 221 million, here reflecting more revenues and a better mix of products, channels, less costs and a lot of efficiency gains. Motiva, an important growth EBITDA in net revenue, 100%, an impact of the growth of volumes where they operate a growth in revenue due to the tariffs and also a reflection of all the movement of efficiencies, improvement of operational efficiencies even with the increase of financial expenses, reporting an expressive growth. Aegea, an operational impact, a very important growth of its revenues the concessions, new acquired concessions by the company, but also a reflection of higher volumes and higher adjustments in the tariffs. Net revenue drop in regards to the previous years, which is a reflection of the higher financial expense. The result of the controller with an increase in -- by the partnership reorganization involving Corsan, but the company started to capture more results. of this concession of Corsan, an important movement for the company. Copa Energia with double-digit results, EBITDA and net revenue, EBITDA guiding to BRL 570 in period very impacted by the best spreads of the operations and gains of efficiency. And by a positive result by the deleveraging of the company. The recurrent net revenue, BRL 295 million, very expressive. EBITDA NTS guiding to a growth of 13%, a reflection of the IGPM and the correction of the contracts. Net revenue, BRL 1.8 billion, very positive. As Alfredo commented, our investment companies, even in a challenging scenario have reported robust results.

Important growth of results of EBITDA. Of course, the interest rate eats away, let's just say. A great deal of this EBITDA for the more leveraged companies, such as the infrastructure sector and naturally the more leveraged, highly invested in the concessions utilities strains, but these highlights are what we have Itau Unibanco with solid results, facing these issues and positioning very well. in a very competitive digital world. And I think that Alpargatas that has been displaying results that are weaker and the cash generation has restarted with a normal rhythm of growth of EBITDA and results. And we are continuing to grow and the perspectives of Alpargatas in the next quarters is very positive. So we have a capital reduction. The company has a positive cash then the debt. So it's positive. And now last week, the Board of Directors has approved the shareholding meeting, the reduction of capital of BRL 850 million, which is a dividend for the shareholders. It's a proceed that will be paid in the second semester. Given the legal issues that you have to go through for the profit sharing.

Let's talk about how these results impacted our net revenue. We got to almost BRL 8 billion. We got BRL 67 million positive of nonrecurring effects of our investment companies, Motiva mainly. And out of the BRL 7.913 billion of the net recurring revenue, BRL 8.5 billion come from our investment companies. The main one being Itau Unibanco, contributing with BRL 8 billion, a growth of 10% in regards to what we recognized last year as the financial results for the FI. The nonfinancial already contributing with BRL 500 million of this result. And you have to highlight a growth that is very expressive of 23%. And more than double the growth of the financial sector in the same period. So it shows the quality of our assets and the capacity of growth of these assets. Mainly the infrastructure with new concessions that are to come in these times. Our own result is negative because of our administrative expenses, tax expenses we saw an increase of these expenses, tax in regards to the previous year. I will talk about this and the financial result that is stable in the period. Even with the impact of the Selic rate, we could keep a stable result. Very -- such as a reflection of the liability management initiatives that we've been implementing over the years. Now the details of our invested companies. As I commented, the nonfinancial sector has grown BRL 503 million, the 23% growth in the combined, and these are the main invested companies that has broad contribution to our results. We're talking about d Copa Energia, NTS, Alpargatas generating results that are more positive for the holding. But let's talk about the result of our own results and tax results that are worsening year-on-year was due to a higher expense of the PIS and COFINS over the profit sharing. We have the PIS/COFINS on Itau Unibanco and some invested companies, where we have a reflection on Itausa that at the end leads us to a scenario that is even positive of higher receivables and results of our invested companies because of this financial fiscal benefit of the investor companies of the interest over capital. The worsening of the result comes from the invested companies, and let's talk about the financial result. It was BRL 120 million negative in the period with this composition. We got a higher profitability of cash in this period that was compensated by the higher expenses and interest rates that would be even higher if we haven't done all the movements of prepayment refinancing of the expenses that allowed us to have the result in the period. And now let's talk about the next session. Liquidity management as to retrospective of the movement since 2022. You followed Itausa, we've done a lot of initiatives of reduction of debt, the reduction of the prepayment and I'm going to do a retrospect. This movement started in 2022, where we got the biggest gross debt of BRL 8.4 billion after our last cycle of investments, and then we did the first movement using the resources of the sales of shares of XP with a prepayment of debt of BRL 1.8 billion, which had a reduction of our net debt in -- as you've seen. We did another prepayment of the debt while so using the resources of XP, we did a refinance with the objective of reducing our net debt, but also improving the profile of our debt. In 2024, we did another movement of refinancing. Seeking the -- well, I think that this is an important movement. We delayed our debt in 1 year, and still, we reduced in 52 bps, the cost of our debt. Last but not least, you should have seen in July, that we used the resource that comes from the increase in capital that we've done in BRL 1 billion. And also we build our own cash in BRL 250 million to do another prepayment of BRL 1.25 billion, and here, we reduced our gross debt in another 28%. We had a reflection that was positive for the reduction of the average cost. We did a prepayment of the debt, which in terms of spread is more expensive, a reduction of 17 bps in the cost of our debt. So considering all of these movements since 2022. These are the main results, very expressive, 57% drop reduction in our gross debt. Our net debt reducing 90% the service of the debt, an important drop, with a delay of the debt profile in 2.2 years, very positive scenario of the reflection of these strategies, and it is what brings us a lot of comfort. We zeroed any amortization of the debt until 2028. And all of these movements were recognized by the three agencies of rating that follow us and evaluate our credit risk and classified Itausa as a AAA rating. So let's see the schedule of amortization. We zeroed our debts, the payment of the main one until 2028 with a prepayment that we did in July. We reduced the concentration of amortization in 2020 and '31, we have an amortization flow that is very comfortable. Our net debt of getting to BRL 587 million. The average cost of the debt was getting to 1.37%, 61 bps below what we reported in June of '24. Our average deadline, an increase to 6.5 years. When we see all the indicators of the deleveraging very comfortable in terms of interest rate coverage, and it shows a lot of solidity in our balance sheet and the capacity to leverage our company if we have another cycle of investment, when the scenario allows.

The last investment that we've done was at the end of '22 when we purchased our participation at CCR current Motiva changed the name and with the interest rate increase and the international uncertainties political, national uncertainties, economic uncertainties, our strategy has been of reducing the interest rate, our debt, and we've reduced in BRL 5 billion throughout these years using the resources of the selling of the XP shares, the small calls of capital to complement the reduction of debt. So our strategy has been adequate because our scenario of the interest rates Selic could have some reduction over the next 12 months. but it will continue and it generates resources and dividends, interest over capital received of our invested companies, and we have the company and we have to understand the best policy for the interest rate reduction. It doesn't mean that we don't continue to see new alternatives for investments. We have a team dedicated for this. We continue to analyze the opportunities, but with an interest rate of 15% plus another spread of Brazil risk we would be talking today that we need to have an investment to generate share -- value for the shareholders around 20% per year. In this context and with the deceleration of the interest rates very high, it's very difficult to find such opportunities at this time. At this moment, the strategy is increasing the debt and increasing the -- decreasing the debt over the year. This is important for the investors. We reduced the financial expenses. We will keep our practice of paying out the dividends received by Itau Unibanco for our shareholders. And we will have, as I commented -- and we are going to have a reduction of the fiscal inefficiency, which is BRL 500 million, BRL 600 million. And it's about what we have in the financial flow to amortize this debt. So from the structural standpoint we're very good, very at least in a financial standpoint. If the scenario changes, the cycle changes, we will take a look at this in new investments. We're going to have the company very deleveraged, and we can leverage it again. It's a scenario that we still are very cautious.

Let's talk about the payouts, the proceeds. It's a theme that is expected by our audience. We have had good news. We talked to the Board the payment of BRL 2.3 billion in interest of our capital on August 25, net out of which BRL 553 million net were delivered in June 16, and we deliberated at yesterday's meeting of the Board, another BRL 1.7 billion interest in proceeds. They're going to be paid on August 29. It was discussed in the previous meeting. Well, with that, we closed the semester with a payment of BRL 2.3 billion in proceeds for our shareholders, a growth that is very expressive in regards to the previous quarter, 37% of growth -- and this gets us to a payout of 36% in regards to the reported result for the first quarter -- first semester, and the dividend yield getting to 10%, which gets us in a recurrent way amongst the biggest dividend yields among these shares negotiated at B3. Very attractive negotiation for our shareholders.

Very attractive, and we see the flows of proceeds received by our nonfinancial invested companies growing. And this makes us -- well, we can pay the amortization fee, the interest of debt for the next months and quarters. And we have the practice of going fully the dividends from Itau Unibanco. So this is a yield that is very high regards the Ibovespa and this is one of the biggest payments of dividends in regards to the quote and the investors that invest in Itausa have as their objectives besides investing in a company that has a solid portfolio. We have to have a flow of dividend that is predictable, that is solid, so we can keep the investments. I think that this is a positive update.

Before giving the floor to Alfredo so we can close the event, let's remember that Itausa publishes all the information that is relevant about the holding and the companies in our portfolio and their website. our newsletter and also the social networks. Please follow Itausa at Instagram and X and enroll yourself at the YouTube channel and sign the Itausa newsletter. So at the end of this transmission, please answer the satisfaction questionnaire. So we can improve our event. So capture this QR code that is appearing in your screen or click the button that is below. Well, Alfredo, you already talked a few -- about a few ideas, but to close the presentation, what are the main points that you would highlight in this quarter and talking about the second semester, what can we expect?

We've had solid results strategy for the reduction of the debt very well organized, not only reduction, but the increasing delaying the debt, increasing the time for the delay of the debt. So there is no concentration over the next few years. We've kept a level of payments that is very high due to the proceeds from Itau Unibanco and an increase of the proceeds from the other nonfinancial companies. So in general, Itausa continues with a clear strategy. As I told you, reducing debt,delaying the debt is the main motto of our strategy, and we will continue as such. We analyze new opportunities, but in a challenging scenario, this is more difficult. But in general, the investors, I imagine that they are satisfied. The share has valued itself, the dividends and proceeds have been paid, and our portfolio has been very resilient, very strong. Not only Itau Unibanco by the financial market, but because of the investor companies, which are relevant in its sectors. And they've shown a financial performance, a growth that is very important. So we are well positioned to face this event, and we're going to continue with this strategy.

Well, I wanted to tell you that now we get into the next session. We have to answer the questions of our analysts, invitees and guests, everybody that is following us.

Now we're going to start the second part of results which is the Q&A session. Let's start with the analyst that we invited, they can ask a question live. [Operator Instructions] We are going to start with our first guest Thiago Batista from UBS.

I have two questions. The first one is regards to the cash flow, your cash flow. When we look at the nonfinance company, you get the first semester, you had a positive gains of BRL 340 million and such. Well, last year of BRL 700 million in non-finance That flow generates what was higher than the operational expenses, financial expenses, I have to exclude the fiscal inefficiency. Of course, my point is, can you imagine that 2027 up ahead, when you don't have that fiscal inefficiency Part of this cash flow that comes from the nonfinance will be distributed to the shareholders or can Itausa pay more than they receive from Itau via proceeds? And the second point, Petrobras showed an interest in investing the gas and you have a participation at Copa. Can you say that Copa is grown too? Or can you think about this investment of Copagaz.

Thank you, Thiago. Thank you for your participation. I'm going to start answering about the cash flow. I think you're right. The cash flow of the non-finance sector is growing through the years. We have perspectives that are very positive for the next years. and Alfredo has disclosed the end of the PIS/COFIN stack will change a lot our scenario of cash flow for the next years. So I think that, yes, we can affirm that on the mid deadline, we should go over what we receive from the financial sector as long as this flow can pay for the cost of the holding which will be reduced with the end of the fiscal inefficiency. We're talking about our administrative expenses and finance expenses has reduced a lot because of the prepayment of debts that we are doing. Now the strategy of refinancing. Scenario is positive in the midterm and we're going to pay this flow that is from the finance sector. I don't know if you want to comment Alfredo about Copa Energia.

Yes. Thank you, Thiago. Well, it's an interesting question. And in fact, Petrobras, the Board of Directors last year, approved the comeback, the potential comeback of Petrobras for the distribution of fuels, not only of the gas -- cooking gas, but also fuels, gas, diesel, lubricants, let's see how this is unfolding. It might have an impact in the profitability of the companies. And there is going to be an important player such as Petrobras in this market might have a point from the structure and the way that the market is operating in the distribution of GLP. It's not in our scenario even with the drop of profitability of GLP of disinvesting in Copa Energia. We see Copa Energia as a platform to get into other ways of distributing energy as it's happening. Copa Energia has done two investments, one in biomethane energy and we have -- the company has a positive cash generation. We've paid the proceeds in a recurring way. So we see Copa Energia with an investment that is very important.

Continuing with our portfolio Well, now Eric Ito from Bradesco BBI.

I wanted to focus on the capital. You've reduced the strategy of the debt and today's strategy is delaying and increasing the debt because of the difficult scenario. So what is the level of leverage that is adequate for the next 12 months? And do we see Itau paying an extraordinary dividend at the end of the year, can Itausa use that to pay more debt? Or it will be paid off to the shareholders? And continuing the previous question, you commented at the beginning that eventually, you can look at your investments, Selic rate is lower. So what would be the sectors that would make sense to increase the participation.

Thank you, Eric. Well, let's answer about the threshold of debt. We've done great movements of prepayment of refinancing. We're looking at opportunities. It's a continuous analysis that we do of opportunities of improving the profile of the debt reduction of cost, and we can follow up on the opportunities that we think that makes sense. We can refinance. But the prepayment of debt, we are at a very acceptable threshold less than BRL 600 million of net debt today. So we don't see big movements of prepayment, specifically using dividends of the financial sector, there is no plan of changing the practice, which is a practice that is very recurrent, paying fully the dividends from the finance sector. So we don't see that movement of holding the flows of the financial sector to pay debt. And we are at a threshold that is comfortable. So we don't see this scenario over the next 12 months. About the other question of new sectors, Alfredo, would you like to talk about the appetite.

Let's complement. We showed that there is a flow that is very at ease of amortization. No need to increase capital, keeping a scenario that is challenging, but not to rupture, that's the premise. So from the standpoint of debt, what we see are opportunities to increase the time line of the debt. We discussed the Board increasing the deadline and in decreasing the concentration of payment over the last years and increasing the time for 2030. And we can do a movement. But as Priscila said, we do not see amortization or need of amortization of debt because as it is the end of the payment of the PIS/COFINS in 2027, that leaves the company at a level of liquidity that is very at ease to do the amortizations. In regards to new investments, we are -- have the opportunities through the next years of two ways. One is increasing the participation of the companies where we already invest. That can be a path. We are very satisfied with the investments with the companies that we take part. I think that increase in the participation in one of them would -- can make sense. As long as there is that opportunity. Another one is to continue to see new sectors, new alternatives, we continue discussing a specific sector, which is agribusiness, which represents 25% of the Brazilian GDP, a sector that we don't have any exposure. And we continue to find alternatives. It's difficult. The value chain and logistics of agribusiness is very large. We're talking about the production of seeds until the production and logistics, the production of equipment, so on and so forth. We've tried and we looked at this sector as a whole. But we're trying to find alternatives that would bring us an investment that makes sense. And it doesn't bring a lot of volatility of the price of the commodities for our results. It's difficult, but we continue to mention, for example, the agribusiness sector is one of the sectors that we would have an interest in doing some sort of investment.

The next guest is Tiago Binsfeld from Goldman Sachs.

I wanted to hear about the efficiencies at Itau. How do you see this issue for the bank has a positive result and if we look at the last 5 years, there is a lot of gains of efficiency. So we need to hear from you of Alfredo, how do you see the efficiency evolving You have some cycles of adopting technologies in the banks, but how are you monitoring the use of AI? Is it unlocking the way that you service the client or even increasing the cross-sell or decreasing the nominal expenses throughout the year.

Thank you, Tiago. The strategy of Itau Unibanco, 90% of the business of the holding -- well, the efficiency at Itau Unibanco is a word that is key of our strategy. The bank has displayed gains of efficiency all throughout the last years. If we look 10 years back the level of efficiency of Itau Unibanco, is about 48%, 49%. Now we see that level of efficiency, 38%, 39%. So there is a reduction of 10 points. And that, in our opinion, is not enough. That level of efficiency is the average. And our wholesale Itau BBA bank, asset management has efficiency levels below 30%. But our retail individuals operation still has an efficiency level of 45%, 50%. There is a space for the reduction of an improvement of the efficiency levels and the activities, this is due to artificial intelligence and not only to -- well, we have the internal efficiency, but the efficiency of serving the client. It's going to get more weight throughout time, the AI. Today, we have a technology area with 18,000 people working. So we are transferring all of our technology, all of our software to the cloud. We're going to close 2026 very high, and this increases the ease of Itau Unibanco of launching new apps and new products with more speed so we can serve the client better. So I think that efficiency is a topic that is very relevant for the cost reduction, mainly as I commented, in the area of individuals. So the branches, Itau Personnalite, Uniclass, private banking. All of that goes and will have a lot of transformation throughout the years. We're going to continue to see this level of efficiency, improving a lot at Itau Unibanco over the next years.

We have another guest, Yuri Fernandes from JPMorgan.

Alfredo, I wanted to follow up on Batista's question. The disinvestment is generic. And he talked about the expense. And we have questions about how to invest and is there any unit that you see an option for this investment by IPO or because it's now aligned with the portfolio? And the second question I have a doubt. We see your portfolio for a long time. I see that you have a convertible debenture to 10 years and the purchase of the stake of Petrobras while your stake was lower, it got higher. I don't know if that debenture is still existing? Is there something that you could increase. I know it's a small operation in your portfolio, but it's a good operation. So can you convert it to shares? And is there any options to execute it.

Yuri, thank you for your question. The debenture of the NTS doesn't exist a long time -- for some time. So we wouldn't have that option. We've done that substitution of that debenture at NTS for some time.

In regards to disinvestment, we follow our portfolio. We have problems of valuation of the investments that we have, as I commented. We are very satisfied with the portfolio that we built. We hope to do some of this investment in a business that is more mature, so we can leave them and we can get into other investments. But at this moment, we see more possibilities of increasing our investments in one of the businesses that we already have, that we already take part, then disinvest because it wouldn't be necessarily the best time to disinvest. Of course, the best moment to disinvest will be the moment that we will have less profitability. But we will also have more surety of scenarios in this opportunity. So it's not within our plans, any big disinvestment in the next quarters.

Next guest, Daniel Vaz from Safra Bank.

Well, we've heard a lot in this potential deceleration macroeconomic in the second semester in consumption that still seems very vibrant by the comment of a lot of senior management, it's more evident that part of deceleration. So I wanted to get your opinion since you have a few investor companies in different sectors, what would you think that is more evident in representativeness in acceleration in the sector? if you can quantify? And where do you see the deceleration signals so we can support ourselves and trends and data that you observed and what are the sectors where this is directed. That deceleration is a focus at a point Alfredo is talking about agro, but you have roadways I mean these are details that very few companies have such granularity.

Thank you, Daniel. We've seen an economy that is decelerating in regards to the previous year. But on the other hand, we I think that the biggest factor of this deceleration is an inflation of food, which removes the income of the individuals for utilization, for rebuilding your home and purchasing goods. We've seen a slight deceleration, but still with growth when we compare with the year of '24, so it's a deceleration where we have an economy last year growing 13.5%, and we're going to have an economy that is growing 2% to 2.5% this year. So it's not that we are seeing a drop in the -- in here or a drop of movements in the roadways or utilities. No, we are seeing less growth. Same thing we observed at Itau Unibanco. Itau Unibanco has grown in a more -- in a slower way, the credit portfolio, but it's growing it. So it's a deceleration with growth in regards to previous years. Of course, in the case of Itau Unibanco, due to the context, there is a bit of a squeeze of the credit concession, taking less risks and many more guarantees, but anyway, we've seen growth, slower growth, but growth nonetheless, in other companies that we have a participation. It's not that we are seeing a drop of profitability in the companies.

And we have a participation in the infrastructure sector that has a more stable flow.

We see the numbers of Motiva, roadways, airports, they grow slow, but grow nonetheless. These are positive growth. Growth in utilities. We connect more houses to the sector, the tubing to the sewage, so to speak. That grows Alpargatas, we see stability. There are some regions the growth and the utilization. So it's a growth that is less when we talk about deceleration.

Alfredo, we managed to talk to our analysts and now I'm going to get a few questions from the audience. I group them, as you know, we get a lot of questions from the proceeds, profit sharing. People want to understand our remuneration practices, the return to the shareholders and our perspectives. They also want to know if there's going to be new payouts, which is something that we've been doing -- any change in the practice, [ Sean Francisco, Martin Muza, Ivan pesquiro, Marek, Daniel netto, Mattia Hunziker ] participation from a lot of people wanting to explore the dividends.

Our practice of paying the dividend received from Itau Unibanco from our shareholders. I don't see any change over the next years because as we've seen the flow of amortization of debt is very space, very easy through time. We see the potential in the payment of dividends and above what Itau Unibanco pays as we have a gain fiscal inefficiency, BRL 560 million. We've seen the company's nonfinancial, improving their payment flows also for the investors. So it's possible. through the next years that we see an increase of Itausa paying more dividends, interest -- profit sharing, interest of our capital than what we receive from Itau Unibanco. It's a possible scenario. Now we can see from 2027 on with the higher stability of our flow of dividends of interest of our capital and less tax expenses with the end of the PIS/COFINS in our segments. It's a scenario that is more positive for the investors.

Alfredo also on payouts?

Well, this is something that we're going to discuss in the Board. We've seen these bonuses incorporating the accumulated profits in our capital, and we offer these bonuses. But this is an issue that we're going to see for the end of the year. We have the reforms of the Congress that will be voted in the second semester. Let's see what are the impacts that this can cause in our policy of reserving corporation. So it's very premature that we talk about this.

Also questions about investments, portfolio management, [ Alissa Barbosa, Giselle Bayona, Igor Barbosa ] a lot of people taking part and asking when -- what will be the focus of Itausa increasing the participation in the companies that we had in the portfolio or distributing dividends in a more favorable scenario. What are the sectors? That we already are present that will generate more interest in Itausa. And we have a prediction of new investments.

We've discussed a bit about this through our presentation and the more possible scenario is that we increased the participation in the companies that we take part that we know that we have had positive performances opportunities of growth, infrastructure in utilities. I think it's possible. It's important -- it's possible that we can increase if we have the chance in the companies that we take part. That would be the first strategic. And looking for new alternatives with the interest rates of the 15% and the involved risk, while we would have to find returns of 20% on year, which at this moment is very difficult to find. So we're going to -- we're going to try and find a type of angle that makes sense to invest and would generate value for Itausa. In the agribusiness is broad, but we haven't found anything that makes sense.

Alfredo, Carlos Rodriguez and Mario Junior talk about the perspective of IPO at Aegea.

Possibly, there might be an IPO at this moment, the window of IPO in the capital market is closed. There has been 2, 3 years. We don't have an IPO at the B3, but the company announced that if we have the opportunity, they're going to do a listing for capitalizing more Aegea that works in the utility sector that demands a lot of investment, they have an indebtedness level that is comfortable, but that limits their growth for other concessions and other investments and bids that might come up through the next months, so yes, Aegea is a candidate for an IPO in the future. And it's preparing itself from the standpoint of governance, controls, audit, risk control. It's preparing itself in an accelerated way so at the moment that we have an opportunity, we can do an IPO, of course, as long as the value -- the valuation offered by the banks and the investment is adequate for the expectation of the company.

We also received a question from William, about the interest of Itausa of exercising its preference right on Motiva?

Well, this is an issue that we're going to see. There is no clarity on when this is going to happen. At which price level, but not only Itausa has said preference, the other shareholders in the controlling group. At the moment, we are going to discuss if there's interest, if there is no interest, which shareholders they have interest in what they do not have, I mean, everyone has their own strategy. Still a bit premature the discussion. It will happen through the semester, but still, there is no schedule for this.

Well, [ Will Jader and Silvio Fossa ] want to understand how Itausa sees the role of Alpargatas within the portfolio and how we see the performance of the company.

Alpargatas is the second investment that we've done in 2017. It performed very well until the pandemic and afterwards, as I commented in events such as this, we made a few strategic operational mistakes the company went through a difficult moment, internal and external. The results of the last 12 months show a company that is restarting its operation, growing and had an indebtedness level. It has a positive cash flow in terms of liquidity, and we will do a reduction -- proposal of reduction of capital of BRL 850 million for the Board in September. So I think that the company is doing well. It's growing the investment of Rothy's that we've done in the United States has been better, we've done a write-off of part of this investment of 1.5 years, 2.5 years, the company has been growing cash generation, opening new stores. So Rothy's has shown as a good investment in this moment, I think the company is within our portfolio that had more difficult moments. We're very satisfied with the new workings that they have over the last 12 months.

Alfredo, questions on the macroeconomic scenario. About the import tariffs of United States. [ Savado, Antonio and Larisa Kazakhi ] I wanted to know what is the impact on the tariffs of the United States, with the result of Itausa, do we see any relevant impact and how do we position ourselves facing these challenges.

Well, the tariffs imposed by the American government do not affect our companies. Dexco, less than 1% of its invoicing is imports for the United States. Of course, that is not going to happen. Alpargatas through Havaianas also 1 million or 2 million pairs, 1% of the invoicing. So there won't be in our company's relevant impacts. They're going to be very small, within the results. So I think that from the standpoint of our portfolio, we don't see any problems for any of the companies that we take part from the impacts of the tariffs imposed by the American government.

Alfredo, to close, our last question that was from [ Carlos Vila ], I wanted to understand the investments at R&D and Itausa Institute, what is the focus of work and does it encompass primary education as well.

Thank you, Carlos. For us, it's a very important theme. ESG is a theme that left the agenda of many companies and a lot of investors in the last years, but for us is a theme that continues very strong in our Board. We created the Itausa Institute in 2023 with an annual budget of BRL 50 million. Our objective in this institute is to focus mainly in two aspects, sustainability and productivity connected to sustainability. These are themes that we've chose because they are relevant themes and productivity and Institute of Itausa works in association. We work with projects along with other foundations and other institutes connected to our focus of sustainability and productivity, whereas basic education, primary education, well, we have through the Foundation Itau, which is a norm of the social arm of Banco Itau, we work at basic education and education work professional education, and we've placed Itau Cultural with an agenda that is very important, connected to culture and education. So this area of education is serviced through Itau Foundation. It has a budget, BRL 320 million, focus of 2/3, 3/4 in education. And because of this, Itausa Foundation opted for not being a competitor of Itau Foundation, there are several entities in the education sector and our option is to complement the sustainability and productivity. We're doing well, study is doing well. We're going to be present at COP, at COP we got a lot of companies. So we've reached our objectives. In our agenda of sustainability, with the other companies, we've worked with the Board of Directors not letting the ESG losing relevance in the invested because for Itau, this is part of the strategy where we have companies that we take part in the ESG sector.

Well, I think that we service very well in the audience. But if we haven't answered your question, get in contact with the IR team, through the profiles of the social networks and also the e-mail. We also want to hear your opinion on our [ resultados em foco ] capture the QR code on the screen or click on the button below the transmission window to have access. Now I'd like to remind you and invite you that on September 30, we're going to have our Panorama Itausa which is the annual event to strengthen the relationship with the investors and stakeholders. It's a great opportunity to hear about the strategy of Itausa, about the perspective. Well, pay attention to the communication and you are all invited. Alfredo, I think it was a great and it was very good to share this new scenario of Itausa with you.

I think it was great. We answered in a reasonable time with a lot of debt, all the themes and questions and the more frequent curiosities of our investors I reaffirm Itausa has a solid portfolio. We're very optimistic with the results for the next quarters and we have challenges, evidently the country and the world go through big challenges, but we place ourselves with a position, very well positioned in the portfolio with strong brands reducing our debt. So we can -- at the adequate moment, we can think about new investments, growing our portfolio. And increase our participation in the companies that we already invest. Itausa goes through a very good time and this is reflected upon the valuation of our shares, the proceeds that we distributed the solidity of our balance sheet and our results, so we count with the support of our investors, capital markets that we use the debentures, the capital halls for investments and debt. So this is a good moment, and we count on your support for our strategy. Thank you for taking part and following up our event.

Thank you, Alfredo, closing this session. Thank you for being with us. [Statements in English on this transcript were spoken by an interpreter present on the live call.]