Log-In Logística Intermodal S.A. (LOGN3) Earnings Call Transcript & Summary

Good day, everyone. Welcome to Log-In Logistica Intermodal conference call to discuss first quarter 2023 results. My name is Sandra Calcado. I'm Log-In's Investor Relations, Strategy and ESG Manager, and I will be your host during this event. The presentation and comments about the company's results will be made by Log-In's CEO, Marcio Aran; Felipe Gurgel, Chief Commercial Officer; and Gustavo Paixao, Terminals Officer; Mauricio Alvarenga, Tecmar Transportes Officer; and Andrea Simoes, People, Culture and Digital Transformation Officer. They will comment on the company's performance and main highlights of the quarter, then they will be available to answer questions that you might have. The slide presentation and earnings release in both Portuguese and English are available in the Results Center at the company's IR website, and we will be showing the presentation in Portuguese here on Zoom. In addition to the rooms available in Portuguese and English, we also provide a Brazilian sign language interpreting during the whole event. [Operator Instructions] Be advised that this webinar is being recorded and will be available on the company's website. Before proceeding, as usual, let me clarify that forward-looking statements that might be made during this conference call relative to Log-In's business perspectives, projections and operating and financial goals are based on the beliefs and assumptions of Log-In's management and on information currently available to the company. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Log-In and could cause results to differ materially from those expressed in such forward-looking statements. Now with the legal disclaimers made, I'd like to turn the floor to Marcio Aran, Log-In's CEO. Please go ahead.

Thank you, Sandra. Good day to all. This is Marcio Aran speaking, CEO of the company. I would like to thank everyone for joining us on this conference call to review first quarter 2023 results of Log-In Logistica Intermodal. We will start the presentation on Slide 3. Going over the main achievements of our strategic plans structured around 4 blocks: Coastal Shipping, TVV and Terminals, Road Cargo Transportation, and ESG/Capital Structure, which permeates all of the company's business lines. Next, we will move on to the presentation of our results. In our Coastal Shipping business, we highlight historical record adjusted EBITDA, highest NOR for a first quarter, [indiscernible] of our vessel Log-In evolution, 0 accidents on the road transport operation and the launch of our new Amazonas Express service that was communicated to the market. In TVV and Logistics Solutions, we highlight all-time high total NOR and warehousing and other services and the highest adjusted EBITDA for the first quarter. With regards to Tecmar, we continue to emphasize the company's structuring process and integration with Oliva Pinto. We highlight more integration with coastal shipping, 530 TEUs handled in Q1 and the best level of service in the history of Tecmar. The fourth and last point talks about our ESG agenda and capital structure. Here, we have the stratification of our third greenhouse gas inventory according to international standards. We also had an internal inclusive attitude week. We implemented a new ERP system and launched Unilog-In, our corporate university. Now our team will present the company's Q1 '23 results, starting with Felipe Gurgel, our Chief Commercial Officer.

Thank you, Marcio. Good day, everyone. As highlighted by Marcio, we had another excellent start of the year, once again, achieving some important records in our results. Our 3% growth in volume handled is noteworthy with Cabotage growing 19% and markets were growing 6%, offsetting a slight reduction in feeder cargo transported. In the first quarter, according to ABAC's data, the Brazilian Association of Cabotage ship owners, container cabotage in Brazil grew by about 9%, reinforcing Log-in's increased sharing this type of transport as a result of constant work to convert cargo from road transport to Cabotage and improved levels of service. Coastal Shipping revenue grew about 10% over first quarter 2022, posting the highest revenue ever in the first quarter, totaling about BRL 330 million, driven by a better cargo mix transported as well as by feeder cargo from non-recurring opportunities that arose during this period. Adjusted EBITDA of the Coastal Shipping business totaled BRL 128 million, up 22.4% over the same period last year, representing an all-time quarterly record for the company. This excellent result is due not only to the revenue recorded in Q1, but also to important cost reduction initiatives, especially the increased efficiency in bunker consumption of our vessels obtained after the docking operations carried out. Finally, I would like to highlight the growth of our EBITDA margin up 3.9 percentage points, reaching 39.9%. Moving on to the next slide. We would like to inform that in April, we announced to the market and our customers, the launch of our new Coastal Shipping service, the Amazonas Express service. This service was designed by actively listening to our customers and aims to increase Log-In's presence in the entire national market, especially in the market to and from Manaus. To do this, we will have a self-bound express solution with shorter transit time for routes from [ Anau ] to the Southeast and South of Brazil, thus increasing the competitiveness of Cabotage compared to road transport for that route. Northbound will be no different. We have added calls in ports such as Navegantes and Salvador, which in addition to being able to serve a new market, brings competitiveness with shorter transit times for Tecmar's own cargo. And Tecmar has been increasingly using Cabotage to serve its customers of parcel cargo. This service will count at first with 2 Log-In vessels, Log-In Discovery acquired by Log-In in 2020, which was chartered in the international market system. But at the end of last month, she returned to Brazil and is currently in the process of changing flag and crew so that it can be used in this new service still this quarter. Additionally, we have chartered this month, one more vessel, which is already in Brazil and is in the process of changing flag and crew and is awaiting clearance by the competent authorities. Thus, as of this second quarter, Log-In will not only take another important step in its expansion plan and the continuous search to better serve its customers, but the company will also begin a new phase focused on prospecting and converting new customers to Cabotage given the significant increase in capacity that we will have. Now give the floor to Gustavo Paixao, who will present the results of terminals. Thank you.

Thank you, Gurgel. Good day, everyone. And this is Gustavo Paixao speaking, Log-In's Terminals Officer, and I will now take over to present the terminals results Well, ladies and gentlemen, Q1 '23 was another quarter where the results of net revenue and EBITDA reached great levels. And this happened in a scenario where the terminals volumes impacted by different reasons were lower compared to the same period last year. In fact, that brings even more value to the financial results that I will present ahead. As I said, I'll begin representing the volumes transported in this first quarter by cargo profile and the impact that resulted in a lower cargo handling compared to the first quarter of 2022. When we look specifically at containers, we still see the impact on our main export lines, which are granted in [ coffee ], which, respectively, continue to be impacted by stagnation in our main consumer market and freight. We also see a decline in number of empty containers imported, which is also impacted by low demand for exports. And these issues combined resulted in a 13.7% drop in handling year-on-year. As for general cargo, we have a 20.9% drop when compared to the same period last year. And this is basically due to a non-recurring volume handled specifically in the line of steel products in Q1 2022, a cargo of opportunity captured at the time due to the expertise in multipurpose operations of our terminal. Turning now to the financial results of Q1. I would like to highlight our net revenue, which hit a historical record in the period, posting BRL 85.5 million, up 10.9% compared to the results recorded in the first quarter of 2022 with a highlight going to pipe operations, a type of cargo for which our terminal has great expertise and know-how and one that has been gaining even more prominence and has been attracting new projects. Another highlight was the operations of tracks and large-sized machinery and equipment. Our EBITDA was also highlighted this quarter, posting a record mark very first quarter. Our EBITDA grew 29.5% over the first quarter of 2022, totaling in Q1, BRL 41.4 million given the continuity of our warehousing operations, which have better margins. As mentioned before, the financial results gained even more relevance considering the scenario of volumes in this first quarter. And this stems from the work of our commercial team in capturing new opportunities to bring higher margins, coupled, of course, to an efficient cost management as well as to an operation and asset management that were also efficient, which gives us a differential level of service and puts us in a prominent position in a market as competitive as net of port operations, not only in Espirito Santo but in Brazil. And I would like to briefly mention that our modernization project for the terminal is on schedule. And at the end of this month, May, we will start to face interventions of our STSs and the delivery of the project is still scheduled for the end of the last quarter of 2023. I'll now turn the floor to Mauricio Alvarenga, officer in charge of Tecmar Transportes and Oliva Pinto. Thank you.

Thank you, Gustavo. Good day to all. As Gustavo mentioned, I am Mauricio Alvarenga, the officer in charge of Tecmar Transporters and Oliva Pinto. In this first quarter of 2023, we already have included the balance sheet of Oliva Pinto, a company recently acquired by Tecmar at the end of 2022. Please note on Slide 7 that we achieved an EBITDA margin of 8% and posted adjusted EBITDA of BRL 10 million in this Q1. It's important to highlight that Q1 of any given year is usually a more difficult quarter, more challenging quarter in general for road carriers in Brazil because it is a period of low demand, what we call a low season period. It is worth pointing out that besides having a much more effective cost control at Tecmar, it's been a year since we took over Tecmar. A major focus in this Q1 was the search for synergies with Log-In. As already mentioned, we transported a record number of containers in parceled cargo and Coastal Shipping. We took advantage of the interim model trade show event that took place in late February and early March to officially launch 2 new products on the market. One was the transport of parceled cargo to the whole of Northeast. It is a region where Tecmar has great capillarity. And we also launched a new route of operation for Tecmar in the North region. Tecmar was not operating in the North, but we now started offering distribution services of parceled cargo to the North region, specifically to the States of Amazonas and Roraima already taking advantage of Oliva's structure. Moving on to Slide 8. We recall the phases of the integration process. We are still in Phase 2, looking for synergies with Log-In, as I mentioned. This is for the transport of parceled cargo but in other types as well. As an example, we have 35 vehicles dedicated to container transportation for Log-In incentives. This is a new business with Tecmar. Tecmar had never operated with this kind of transport. I also want to highlight the creation of the compliance department at Tecmar. That is already operating in Tecmar and also in the recently acquired Oliva Pinto. On Slide 9, we focus on Oliva Pinto. As a reminder, Oliva Pinto is an operator with over 30 years of experience in container transport in the region of Manaus. The company also has a route to Boa Vista State of Roraima. It has more than 330 vehicles per 70,000 square meter yard in the 12,000 square meter warehouse. In the yard is for containers for trucks. And this warehouse of 12,000 square meters is very well located in the industrial hub of Manaus. We are neighbors to very well-known companies in that region. The purchase of Oliva Pinto was strategic for the group. Log-In, as mentioned by [indiscernible] not in service for the North region, where it will need capacity for multi-mobile transportation of containers. Tecmar in turn, has a lot to learn from Oliva Pinto in container transportation and also to expand this business, this operation nationally over time, with Oliva Pinto becoming Tecmar's parceled cargo distribution arm in the North region. So as shown on the map, our logistics network now connects the more than 2,600 municipalities in which Tecmar already has its distribution network, connecting all of that to the Northern region. And here, we are talking about these regions, South and Southeast to the north and Tecmar will become an excellent option to distribute all the electronic products manufactured in the industrial hub of Manaus in this region, with Tecmar's capillarity. As I had already anticipated in the last earnings release call, we stated our management at Oliva Pinto in this first quarter with the implementation of what we call the 100-day plan, which will help us with short-term actions of the [ C&ACT ] type but also with a robust diagnosis of structural actions that we'll need to implement in order to grow and integrate the business in the coming months. Well, then, I would like to thank everyone for joining this conference and turn the floor to Pascoal, the company's CFO, who will present the consolidated results of the quarter.

Thank you, Alvarenga. Good morning, one and all, and thank you for being with us today. It cannot be different. We saw record marks in Coastal Shipping with higher market share, significant volumes in capitals and workers [indiscernible] trades, paper efficient cost management facility related to bunker fuel, all done by our team at TVV, a record NOR for warehousing services and other added value services. That meant a significant increase in our result compared to the results of the same quarter last year. In the addition of our new tower bringing an important NOR and EBITDA that is still being constructed, but with the margin already expanding compared to the margins of the companies that we acquired. So that meant to our consolidated results and NOR of almost BRL 600 million, up 44%, quite significant. When we exclude the revenue of Tecmar for the period, still the growth is very strong, almost 12%. EBITDA was BRL 165.8 million, up 45.3%., very strong growth. And this also has to do with cost management by the company. We all try to gain efficiency and leverage our vessels. The result of the road operation is still contributing a little, but we still have a long route to expand and have a greater share in that number. With an EBITDA margin aligned with what we observed in Q1 of 2022. Now of course, we have a lot of challenges ahead of us. As you could see, it's a challenging start of the year, particularly in Coastal Shipping in the feeder trade. In the terminal, general cargo-ing continues posting significant volume declines. The market is feeling that. As Gustavo mentioned, the flagships of the terminal were particularly affected by the economic dynamic of the country and abroad. And the road cargo transportation as Alvarenga mentioned, we always have a low season at the start of the year. We normally have a strong end of year and that's seasonal. That's normal for this type of business, but still have a lot of things to celebrate because this EBITDA that we posted in Q1 was the highest EBITDA ever in the history of Log-In and the NOR was the very best for the first quarter. So very cool things to be celebrated. Moving to the next slide. Here, we also have good news of debt. It's very well managed, starting with net debt over EBITDA ratio. This is a super important indicator that we monitor. It posted the lowest level ever recorded by Log-In, 1.4x. And this is a combination of stable cash, with a last 12-month EBITDA that is expanding. So December '22, BRL 576 million to BRL 65 million now in Q1 '23. So this is the deleveraging effect of the company. Please observe in the amortization schedule on the bottom, BRL 156 million to be amortized in the next 3 quarters of this year. Just the EBITDA that we had in Q1 of BRL 165 million, that's already more than what we need to amortize. This gives some comfort to the company in a moment of a bad window for the issuance of new debt. In other words, we can continue to invest. We can execute our investment plan to acquire new vessels, to modernize the terminal, and to invest in road cargo transportation with peace of mind just by using our cash, while we wait for good window of opportunity in the market to, for instance, fund the new vessels that are being constructed on board that have not been financed. We have been using our own cash to make the necessary payments for those. So let us continue on the next slide. Here, we have our ESG agenda, the 4 pillars: economic, governance, social and the environment. Starting with the economic dimension, we have the lowest level of leverage in the history of the company. And that gives us comfort to go through the more difficult and challenging times and to invest in new projects in the near future. We are increasing our capacity in [indiscernible] introduced our new service with a significant capacity increase in the northern access to and from analysts, is going to make a lot of difference for the extension of Cabotage in the short to midterm, not to mention synergies with the road operation that Alvarenga spoke about when he spoke about Tecmar. So this gives us a certain hedge, a certain protection when we face difficult times that might come. And the governance pillar, there are things to be highlighted, as Marcio mentioned. We had to go live of the new ERP system, a very stable migration -- the best migration project I have ever witnessed. We also extended the ethical compliance program to Tecmar and now in parallel to Oliva Pinto. And we launched the Log-In University that we call Unilog-In, and we have included ethics and compliance training there, among many others that are available -- many training courts that are available to our employees. We also had the [ Parceiro-Log-In ] campaign that was reformulated. It is relevant recognition of our suppliers and vendors that have a long track record of relationship with us and a good level of service. So we award them in this project. In the social pillar, the big highlight, goes to project cap or community on board. This is a beautiful project that takes place in the vicinity of the [ Villa Valley ] terminal in [ Elia Floris ] community. It impacted more than 750 people with 2,000 hours of workshops and activities. We measured satisfaction of the FDs and participants of the project and satisfaction is very high, reaching an NPS of 97 points and this was excellent, almost 100 points. And also we had the Diversity and Inclusion Week, a theme, which is in our agenda. We brought people from the market to speak about this, and we had our own employees giving their own examples. We wanted to demystify that and bring diversity and inclusion to our agenda as a value, our day-to-day value, how we put this into practice and want to continue putting this into practice. In relation to the environment, the main highlights are the reduction in greenhouse gas emissions. We have this in our third GHD inventory that was published. We were able to reduce the intensity of emissions for TEU transported by 26% compared to 2020 and by 10% compared to 2022. So big step forward for Log-In. And this is due to the investments that we made to increase efficiency in bunker consumption by our vessels, and that consequently reduces greenhouse gas emissions. I'd like to remind you that we docked 5 vessels in the last 2.5 years, and we're eating the fruits of those investments now. Very well. Now I would like to turn the floor to Andrea Simoes, our People, Culture and Digital Transformation Officer. She'll speak about our digital transformation agenda.

Thank you, Pascoal. Good day, everyone. This is Andrea Simoes, is the Log-In's People, Culture and Digital Transformation Officer. My goal today is to present to you Log-In's digital transformation journey. In 2020, the technology department became part of the people department, given the understanding that the digital transformation journey is a cultural transformation and that it would happen through our people. Based on our framework, we understood the technology, processes, and especially our people, would be the drivers for this transformation to happen. In that in order to be efficient, we needed to list the problems we were going to solve. We then close 4 work pillars: customer experience, employee experience, governance improvement and infrastructure. We are in the fourth year of this journey that began in 2020 with a focus on the customer. We conducted workshops for listening to the team, to our internal and external clients, understanding their pains, prioritizing actions and the termination of the concept of digital transformation. We have the IT and management teams working together. This whole journey is based on the IT infrastructure on process digitalization and team skill building after the process review. Some of our relevant deliveries were in customer experience, LogIE platform, 93% of customers joining the digital platform, CRM, with optimization of the customer service and communication process, LogApp, digitalized trip control in the palm of our drivers' hands with more than 16,000 trips monitored. When we talk about employee experience, our focus is the development of a centralized platform for our employees with a single point of access and experience in the palm of their hand and a unified database to monitor the lifetime value of the employees. Secondly, dissemination of the Agile methodology, a lever to change the mental model, increased employee productivities Item 3. We have more than 1,400 main hours focused on process automation and digitalization and alignment of the culture with our innovation and digital transformation journey, culminating with a review of competencies to align the team to the new phase, the future is now. And we have the NPS. We had an NPS increase to 76 in 2022, plus 33% over 2021, and this is provided by GPTW. In governance, the improvement of back-office processes, as mentioned by Marcio and Pascoal, with the deployment of SAP ERP. In cybersecurity master plan, shutting our operation with a robust action plan based on assessment, Gartner missed in CIS control and strengthening of technological security barriers, investment in specialized consulting. And to support this pillar, the development of an information security culture for all employees with drills for correction and implementation of the incident response plan. In the infrastructure pillar, we have a cloud migration journey, improved infrastructure for greater resilience to our operations, modernization of the vessel's network and communication and TVV modernization, as Gustavo mentioned, with a direct impact on customer service and employee experience. As a take home message, I have to say that we have on the path aligned with our culture and our Log-In way. And we understand that digital transformation is not just about technology, it's about strategy in new ways of thinking and that our key product is value creation for our customers, either internal or external clients. Now back to Marcio Aran, our CEO.

Thank you, Andréa, Pascoal, Gustavo and Alvarenga. We will now start the Q&A session. We are all available. Thank you.

[Operator Instructions] We have 3 questions by João Frizo with Goldman Sachs.

I will read the first one, and then I'll read the other 2. We have seen other container terminal operators disclosing still weak volumes in Q2, and we plan to understand your expected volumes for the rest of the year, both for TVV and for Cabotage.

Thank you, João, for the question. I will break down the question to 2, for 2 people. Gustavo will answer about terminals and then Gurgel will answer about Cabotage.

Marcio, thanks so much for the question. Talking about container volumes from the standpoint of TPD, we are living uncertainties given market uncertainties, as Pascoal mentioned. We have a scenario of inflation in the United States. And they are one of the main consumer of our cargos such as granite. On the other hand, we have an improved outlook considering domestic and foreign market for coffee, which is another great product that we export. So we are monitoring this thoroughly and up close so that we can adjust our routes, so as to minimize any impact caused by economic issues, which are not under our control.

Speaking a little about Cabotage. We envision volumes very much in line with what we've been doing much. Due to conversion of cargo, Log-In is betting a lot on converting cargo from road to Cabotage. And as for the market, we see some stagnation in some markets. And in other markets, still have a strong demand. And I believe that this should remain in the future. No great alterations. And we have offsetting mechanisms. So if Feeder trade drops, we can offset with Cabotage, if Cabotage declines a little, we can offset this with Feeder. And as for [indiscernible], there's a point of a change and particularly because of the situation of Argentina regarding imports and exports. But overall, this is it.

Second question by João.

I would like to understand the company's view regarding the price of bunker looking forward. Do we expect this to be a factor to maintain high margins for Coastal Shipping in the short-term? How long does it take for the company to pass through the cost of fuel to customers?

Well, so our expectation regarding bunker fuel price is some stability as we have seen during the year. Here at Log-In, we have a bunker rate, and it is self-adjusted. If bunker price increases a lot, we increase that rate and we pass it through to customers. If bunker price drops, we reduce the rate and also pass through that reduction to customers. So we are relatively hedged against the very abrupt rises or reductions in the price of bunker.

There is a last question by João.

Lastly, how does the company assess the arrival of MSC at the company? Anything you can share with us?

Well, we've been together with MSC for almost a year now. And what we can say is that it's been a good experience. Our goal during this period was to absorb knowledge and work on reducing Log-In costs. This is what we've been doing with them. Our autonomy at the management level continues to be 100% as we have always had the same autonomy from our shareholders and we continue with our independent business plan following our multiyear plan as we have always done.

Now we have another 3 questions posted by [indiscernible].

First question, what explains a reduction -- a big reduction in feeder volumes? I'll ask Gurgel to answer that [indiscernible].

Our theater is mostly concentrated on the Victoria axis to support the whole TVV structure. We have 2 -- practically just 2 cabotage ship owners running the part. And as Gustavo explained, the granite and coffee market have been suffering. They have been showing some stagnation and that drove down the feeder volume. Other feeder operations in other regions? Will they continue normally because they are part of a structure to support these ship owners, they need to complement this last leg in Brazil. But the impact comes mostly from granite and coffee cargo.

Second question by [indiscernible].

What is the expected ramp-up period for the new service in the North area? Is there any expectation to increase the service to weekly? It was mentioned that the new service meets the request of clients. How does the decision making process work to initiate a new service in terms of volume requested by clients. In other words, how much -- what percentage -- minimum percentage has to be guaranteed for you to start a new service?

I would love to answer it, but I'll turn the floor to Gurgel. I think he can do a better job.

Well, as in regards increase in the frequency to weekly service? Yes, there is a structured plan for that. We believe that in the second half of the year, the new service will be offered quickly. We need to address some internal topics for this to happen. But yes, we are working towards it. As you said, this was a request by our customers, and this is in the pipeline. As in regards to the decision-making process, in recent years, we have been restricting a lot of cargo, particularly in the Manaus axis. And as we map these restrictions, based on that, we come to a percentage that we believe is a minimum reasonable percentage to make a new service viable. It doesn't mean that the new service will come on board full steam. But there is this cargo conversion process that I mentioned, we have to consider a level of service as well. And Alvarenga also talked a little about this because we always want to create added value for our customers. Now with Oliva Pinto operating in the region of Manaus, we can offer a differentiated service. And we believe that this will help in the ramp-up of this new service. Marcio, do you want to add anything?

So third question from [indiscernible].

What is the amount percentage of NOR and CapEx expected for the next 2 years? Do you intend to work with what level of leverage in that?

Well, last question will be answered by Pascoal.

Thank you for the questions. Well, we don't work with a percentage of NOR to convert into investment. So what are the investments of Log-In? When there are expansion investments, such as the acquisition of the 2 new vessels that we are building or modernization of the [ Villa Valley ] terminal, so that we get prepared in terms of cash projections to be able to serve the payments in the financial schedule. So these are the most relevant projects that we have in terms of capacity expansion, and that we are prepared to pay in the near future. Other than that, we have a second line of CapEx, which is replenishment CapEx. Perhaps we can call it maintenance CapEx to increase the lifespan of our assets, a beautiful case of that is the docking operations of our vessels. We got some ships and some vessels in recent years. Other than the that, there is a current support CapEx to maintain assets operating adequately, but that is less relevant, both for Coastal Shipping, terminals and road transportation. Cash generation itself by the company can pay for these investments, as I mentioned. Now docking, as I mentioned before. Now doing operations are somewhat heavier investments because of vessel docks. According to her birth date, most vessels are 5 years old, the older vessels are 7, 7.5 years old, and that's the moment when we spend more on them. But that more relevant phase of docking is behind us. As regards a target for debt, what I can tell you about this, [indiscernible] is that we have room to increase the leverage of the company. Our tighter covenants from our main creditors, they are very far from the 1.4x net debt over EBITDA ratio. And that gives us a lot of peace of mind, not only to use part of our cash when the credit market is going through a bad spell. But also in terms of opportunities for acquisitions and new projects. So we do have momentum for that. We do have room for that. Thank you.

We have one more question by [ Jose Fraga ].

What about the integration process with Tecmar? What do we expect from Tecmar results in 2023? And what about integration of Oliva Pinto in Tecmar?

Okay. We have like 3 questions in one. So regarding the integration process, I think I spoke a little bit about this. The integration is unfolding. The first thing we did was to map the whole structure of Tecmar and particularly align the leadership team. And this has been done. This is happening. At this point, we have a very focused leadership. So this first phase is behind us. We are now in Phase 2. We're searching for synergies with Log-In. We're trying to understand where synergies will work for both companies. So we are working together, offering the market a new product that only Tecmar can offer as a road carrier, which is having Cabotage coupled with road cargo transportation because Tecmar is a more specialized. Its volume was much more in long-haul trips, which is very much aligned with Cabotage, particularly cargo from the South and Southeast of Brazil to the Northeast and vice versa. So there we have a lot of synergies. And we're working strongly on those. For the next steps, we'll look for cost synergies. Now we are starting to work with procurement in a joint fashion. So synergies not only with Log-In, but looking for global contracts with a more effective cost control. Now integration with Oliva, we're doing similar work to what we did initially at Tecmar. So we are mapping everything. And we're already trying to have integration with Tecmar. To give you an idea, we have structured a road distribution for parceled cargo from Manaus looking for this integration with the Coastal Shipping services that get there. And now even more with the new service that [indiscernible], that we are launching the Express Service. So this integration has everything to gain momentum looking forward, to gain more muscle looking forward. And as for the 2023 results, well, like we always say, we don't give any guidance, but we believe we'll continue to work strongly as we have so far. And we believe that this is an ongoing process. We can't expect great leap. What we want is sustainable improvement. And I think that this is what we expect when we talk about integration. Thank you.

Well, as there are no more questions, I would like to thank you all for participating. I'll hand the floor over to our CEO, Marcio Aran for his final statements.

Thank you, Sandra. Well, we ended the first quarter of the year, as you could see with a number of records and spectacular results in all of our business lines. These records have been successive quarter after quarter, we have been posting record marks and improving our operations, only good news. I would like to especially thank Log-In and take more teams for a sensational Q1, the result of a lot of hard work. This was not a trivial quarter for us. A lot of things happened that made us reinvent ourselves along these first 3 months. But that is it. I'd like to thank you all for your attention in this video conference call. Thank you very much, and have a good day, everyone.

The video conference call of Log-In Logistica Intermodal to review first quarter 2023 earnings is ended. You may disconnect and have an excellent day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]