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

Good day and welcome to Log-In Logistica Intermodal conference call to discuss fourth quarter and full year 2023 results. My name is Sandra Calcado. I'm Manager of Investor Relations, Strategy and ESG Manager, and I will be your hostess during this event. The presentation and comments about the results will be made by Log-In's CEO, Marcio Arany; Pascoal Gomes, Financial and Investor Relations Vice President; Marcus Voloch, Coastal Shipping Vice President; Gustavo Paixao, Terminals Officer; and Mauricio Alvarenga, Road Cargo Transportation Officer. They will comment on the company's performance and main highlights of the quarter and year 2023. Then they will be available to answer questions that you might have. The slides presentation and earnings release in both Portuguese and English are available in the results center of 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 will also provide 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 Arany, Log-In's CEO, to start with his initial remarks.

Thank you, Sandra. Good day, everyone. This is Marcio Arany speaking, the company's CEO. I would like to thank you all for attending Log-In Logistica Intermodal's fourth quarter and full year 2023 earnings video conference call. We will start our presentation on Slide 3, by reviewing the main achievements of our strategic plan in 4 blocks: Coastal Shipping, TVV and Terminals, Road Cargo Transportation, and ESG/capital structure, which -- and the last one, which permeates all the company's business lines. And next, we will present our results in greater detail. In our Coastal Shipping business, despite being affected by the drought on Negro River and the rain in the South of the country, we highlight record revenue and feeder volumes of BRL 81.1 million and 82,900 TEUs transported, a 14% increase in Cabotage revenues, due to a better cargo mix and our pricing strategy. And lastly, the receipt of our vessel, Log-In Evolution, the newest in our fleet. In TVV and intermodal terminals, we highlight historical records for container handling at TVV with 60,400 boxes. TVV's all-time high NOR totaling BRL 93.8 million and the highest adjusted EBITDA for a fourth quarter, BRL 44.4 million. Regarding Road Cargo Transportation, we highlight 1,086 TEUs handled in a joint operation of Tecmar and Log-In in Q4, '23, the best level of service in Tecmar's history and the kickoff of the 66 million expansion project. Also, the ABRALOG Award for best operator in the multimodal category. The fourth and final point relates to our ESG agenda in capital structure, where we had the second issuance of commercial papers in the amount of BRL 275 million. The recertification by Great Place to Work has, of course, a Great Place to Work. CDP score, carbon disclosure project upgraded to B, higher than the global average for the sector. Next our team will present the results of the quarter starting with our financial and Investor Relations Vice President, Pascoal Gomes.

Thank you, Marcio. Good day, everyone and thank you once again for being with us today. Very well. It is with great satisfaction that, we share our consolidated results for the fourth quarter, and for the year 2023. I'd like to start saying that we showed a significant increase in net operating revenue, NOR, which grew 10%, compared to the same period last year, reaching BRL 601.5 million. Still, in relation to the consolidated NOR quarter-on-quarter, we can highlight a 14% increase in Cabotage revenue compared to Q4 2022. Driven by a better cargo mix and an effective pricing strategy, this is going to be detailed by Marcus Voloch in a minute. We also achieved historical records in some trades, for instance, feeder, which posted record revenues of more than 80 million, up 22% over the same period last year. And despite the crisis in Argentina, which is well known to all, Mercosur revenue maintained its share of the trade, despite a drop in volume in the total market. As for the annual variation, I would highlight Coastal Shipping NOR, growing 13% in the period totaling BRL 1.38 billion in Coastal Shipping. This is a record mark for this indicator. And noteworthy was the Road Cargo Transportation, which added BRL 553 million in 2023, compared to the BRL 407 million added in 2022. This result was leveraged by the inclusion of Oliva Pinto in 2023 and the start of Tecmar consolidation after the acquisition in March of 2022. In addition, we recorded an all-time record total NOR Vila Velha terminal, demonstrating our ability to expand and diversify our operations. Gustavo Paixao will be talking about the terminal. And as Marcio said earlier, we faced climate challenges both in the Northern and Southern regions of Brazil. In the former, it did not rain at all in the South. It rained too much and that impacted Coastal Shipping business. I just said EBITDA in Q4 '23 was BRL 101 million, down 39% in relation to the comparative period. On the next slide, I'd like to use the slide to make the impact clear, business-by-business. I'm showing a graph with the variations in annual adjusted EBITDA by line of business. The numbers I showed before in 2023, BRL 583.9 million that, was the result. So a decrease of 2.2%, compared to the previous year for this indicator, EBITDA. And although the fourth quarter was directly affected by this context of the climate change, this result reflects a robust growth in Coastal Shipping operations, in particular in terms of operating income, which was quite strong in the first 3 quarters of the year. As regards to the cost of services provided, in fourth quarter '23, we saw an increase in CSP, cost of services provided, mainly in Coastal Shipping. And why? Because we had 2 more vessels, compared to the same period last year. And we had context-related factors, climate problems, which lowered our volume and NOR. When we were ramping up and in our fixed costs, we had in Q4 this whole weather-related context. TVV posted another excellent year, a strong result, and Gustavo Paixao will be exploring this later. Road Cargo Transportation, now Tecmar + Oliva Pinto, contributed with BRL 49.5 million in EBITDA in 2023, compared to BRL 28 million in 2022. In operating expenses, we recorded an increase of BRL 32 million in Q4 and BRL 52 million in the full year, mainly due to reversals and statute of limitation on operating contingencies in EBITDA in Q4 '22. The effect of the acquisition of Tecmar, and we've been reversing contingencies that were provided for in the scope of this acquisition. I now turn the floor over to Marcus Voloch, Coastal Shipping VP. Marcus?

Thank you, Pascoal. Good morning, everyone. This is Marcus Voloch speaking, Coastal Shipping VP. I recently joined the company. As Pascoal pointed out, we had excellent full year 2023, but the fourth quarter was more challenging, given the impact of more severe weather conditions. I'll start on Slide 6, by highlighting our 6.8% growth in volume handled in yet another record year, and the significant 15.8%, almost 16% growth in Cabotage. During this period, according to data from ABAC, the Brazilian Association of Cabotage Shipowners, the volume of containers transported by Cabotage in Brazil fell slightly by 0.5%, reinforcing Log-In's increased market share in this type of transport, mainly due to the launch in the second quarter of 2023 of the new service to Manaus, the Amazonas Express service offered after the addition of 2 more vessels to the company's fleet. In the fourth quarter, Log-In's total volume grew by 17.8% year-on-year, versus a 9.5% drop in the market as a whole, and Cabotage volume grew by 1%, compared to a contraction of 24% in the market, according to ABAC data. The low growth was due to weather conditions, specifically the drought on the rivers that, make up the Amazon River basin, where the traffic of vessels, was completely interrupted for approximately 6 weeks. Log-In remained active in the market through an innovative multi-model solution with the combined use of ships, trucks, and barges, but this did not prove sufficient, to fully serve the market. This solution led, to an increase in transshipment costs, the purchase of space on the barges and storage, while the transshipment port itself, was unable to maintain an operation in line with market needs. Although the increase in variable costs that was passed on to the market, despite the cost of idle vessels, was not covered, and they were idle, because of the drought. In turn, in the South of Brazil, excessive rainfall interrupted the smooth running of operations, especially in the state of Santa Catarina, causing missed calls and delays in operations, generating extra expenses related to line transportation, storage, and transshipment, with a significant impact on our margins. It is important to mention, as highlighted by Pascoal, the significant 36% increase in the volume handled in the feeder trade in the fourth quarter, with part of the growth resulting from the impact of the inclement weather, which caused some missed calls of vessels from international ship owners, leading to more demand for the transshipment solutions that Log-In operates on the coast. Mercosur continued to see falling volumes, down 19.5% quarter-on-quarter, as a result of the economic crisis Argentina is facing, which has reduced cargo handling, between the main countries in the block. Despite the drop in volume, transported Log-In's market share remained stable, with a small increase, about 3% in the fourth quarter, when compared to the same period in 2022. Moving on to net revenue from Coastal Shipping, this grew by 7.1%, over Q4, 2022. In the full year, net revenue grew by 6.6%, posting a record mark of BRL 1.375 billion. Adjusted EBITDA for Coastal Shipping totals BRL 61.8 million, down 47.2% year-on-year, compared to the fourth quarter of 2022. And in the full year, BRL 424.2 million, 4.9% below the previous year. This reduced result is a consequence of the weather factors, as explained before, as well as of the increase in our fleet, with 2 new vessels joining our operation in the second quarter of last year. Lastly, EBITDA margin dropped by 3.8 percentage points a year-on-year, pulled down by the fourth quarter, when we suffered with idle vessels, on account of the severe weather conditions mentioned. Moving on to the next slide, please. We are super proud, to welcome two new ships during the first half of 2024. Log-In Evolution, which is already in Brazilian waters, being prepared, to start operations in March. And Log-In Experience, Evolution's younger sibling, is scheduled for delivery in June, and will join our fleet in Brazil shortly afterwards. Both vessels bring a significant increase in capacity and, above all, an improvement in terms of consumption per TEU transported, reinforcing our commitment to the sustainable development of Cabotage and society as a whole. And I'll hand over to Gustavo Paixao, who will present the results for terminals. Thank you.

Thank you, Voloch, and good day to all. This is Gustavo Paixao, Log-In's Terminals Officer. It is a pleasure to be here to share with you TVV's results for the fourth quarter and full year 2023, a period in which we had many positive highlights. Talking about volumes and our main business, which is container handling, we had a significant growth compared to our result in the same period last year. In Q4, '23, we grew by 48%, handling 60,400 containers, achieving the terminal's best ever result in container handling. Year-on-year, 2023 also stands out, having grown by 15.4%, handling 188,400 containers. And I would highlight the strong recovery in coffee exports in both the fourth quarter and full year, as well as excellent handling of vehicles imported in containers. Turning now to general cargo handling, this last quarter of 2023 was a big highlight, consolidating, the recovery already seen in the previous quarter. So when we compare Q4, '22 with Q4, '23, we grew by 18.7%, handling close to 217,000 tonnes, with the highlight being the handling of steel products, with the operation of rails and pipes for the offshore industry, granite exports and bulk operations. The consolidated figure for the full year was down 8.9% compared to 2022, but we still handled approximately 874,000 tonnes in 2023, which is a noteworthy volume, but which ended up being affected by the low handling of steel products and spot operations, especially in the first half of the year. Moving on now to our financial results, I would like to highlight the record marks in net revenue, both in Q4 and in the full year, as well as our record adjusted EBITDA for 2023, which reinforces the terminal's good commercial operating and financial performance. In terms of net revenue in Q4, '23, we posted net revenue of BRL 93.8 million, up 19.9%, compared to the same period in 2022. In the full year, we reached BRL 350.7 million, a result 9.9% higher than last year. And as mentioned earlier, both results for the last quarter and for 2023, are historical record marks. These net revenue figures, are underpinned by record marks in container handling in the last quarter, a better mix of cargo and full and empty containers and operations, with high value added. Turning now to our adjusted EBITDA, in Q4, '23, we totaled BRL 44.4 million, increasing 21.2% over the fourth quarter of 2022, which brings us the best result ever for a fourth quarter, and brings us to an adjusted EBITDA of BRL 169 million in the full year, up 12.9% over 2022. This is a historical EBITDA mark for a full year. All these are the results for the fourth quarter and the full year 2023. Our final quarter and year, with many highlights and records achieved, which are the result of all the work done, to improve TVV's performance, supported by investment in the modernization of the terminal. And this is getting to the final stage in 2024, and all the commercial work that has been going on at the terminal for quite some time now. This has placed us in a prominent position as a multi-purpose terminal and the logistics seen in Brazil and has attracted new business to TVV in the state of Espirito Santo. This concludes the presentation of the terminal's results for the fourth quarter in 2023. I now hand over to Mauricio Alvarenga, Officer in-charge of Tecmar Transportes and Oliva Pinto to continue the presentation of the results. Thank you all.

We will continue with Alvarenga's comments. This is Pascoal. Because Alvarenga crashed, but he is back.

Oh, hello. Good morning, everyone. This is Mauricio Alvarenga speaking, Executive Officer in-charge of Log-Ins Road Cargo Transportation business unit, the newest of the Group. Our fourth quarter was marked by 2 different realities when we consider the Group's road business. Firstly, Tecmar's parceled cargo performed well and we managed to improve our customer level of service. And when I speak about level of service, I mean OTD, on-time delivery. And we continued to grow in multimodal transportation, where we began to offer a new product on the market last year, which is parceled cargo transported via road Cabotage. In this case, using the warehouses and smaller vehicles for collection and delivery by Tecmar, as well as the whole Cabotage and shipping structure of Log-In. We also made good progress in door-to-door container transportation for Log-In, with a new business unit implemented last year. I spoke about this in previous calls. Where in Q4, we carried out more than 2,000 operations, these door-to-door operations from the port to the customer, and vice versa. And I'm speaking specifically about the state of Sao Paulo. On the other hand, our most recent business, and here speak a little about Oliva Pinto in Manaus. Well, this most recent business suffered the full impact of the Amazon River Basin drought, with very low volume of operations for much of the quarter. This has already been mentioned by Voloch. So the same impact felt by Coastal Shipping impacted Log-In's volume in Manaus, impacting Oliva directly, but also the volume of other customers operated by Oliva. Those imports vessels never got to Manaus. So the impact of the non-arrival of these vessels in Manaus, greatly affecting the specific results of this business unit. As a consequence, we had our results affected in Q4, as shown on Slide 9, where our adjusted EBITDA reached BRL 10 million, down 20% compared to the same period last year. When we look at the consolidated full year 2023, we had a very good year, still structuring the road business unit. We continued to transform this road business, but we posted a good level of growth and improvement in various indicators. In level of service, for example, we posted good improvement, we improved our safety indicators, and we gained a lot of new customers. So we continue to evolve and grow. Please note that our NOR exceeded BRL 550 million and our EBITDA was close to BRL 50 million with an improvement in EBITDA margin. When we look at the full year 2023, well, 2023 marked Tecmar's transformation from a road carrier, to a multimodal operator. As I mentioned in the last earnings calls, the company whose main product, was the transportation of parceled cargo, and full container load by road. Now the company also offers the market other services, such as the transport of parceled cargo via road and Cabotage. Joining Tecmar and Log-In's services, we are strongly focusing on warehousing services, and also the transportation of containers, carrying containers from the port, to the customers and vice versa. This was not done by Tecmar until then, whether for Cabotage or for imports and exports. It is in this new business of container transport in which Oliva Pinto in Manaus already specializes when we acquired it. And we started operating more strongly in Santos in 2023. Now in 2024, we will also expand the container transport operation to the states of Pernambuco and Santa Catarina. On Slide 10, please note that we are investing in the acquisition of container trucks and semi-trailers -- container semi-trailers for this specific type of transportation. We are bringing in modern equipment to that, in addition to emitting less CO2 and reducing fuel consumption, will also provide more reliability for Log-In's own intermodal, as we call it, the door-to-door Cabotage operation that we do for Log-In. But also for this service, door-to-door service that we provide for other imports and exports customers that we serve. In short, we made a lot of progress in 2023 in Road Cargo Transportation and we have already started 2024 in full swing with the expansion of container transport operations and investments. We should also remember that in 2023, in particular, in the second half of 2023, we began to expand the distribution of parceled cargo in the Northern region in Manaus, the state of Amazonas and Roraima. In other words, there are many challenges ahead, but we also have a lot of opportunities ahead of us. And we're very confident that we have a competitive product on the market, an efficient product. We are confident that we have an experienced and engaged team that is very motivated by the transformation we're promoting in the company. So I'd like to thank everyone who's attending this conference call and I'll hand the floor back to Pascoal.

Thank you, Alvarenga. So to continue, talking about the company's indebtedness. The highlight is always on leverage level. In Q4, '23, net debt over EBITDA ratio stood at 1.7x. The slight increase over the previous quarter stems from a retraction of EBITDA in the last 12 months, specifically, because of the fourth quarter as everyone has explained. As you can see in previous quarters, we were expanding this indicator quite a lot. In addition to the last 12-month EBITDA, this variation takes into account a higher net debt, basically due to the replenishment of part of the cash used to acquire the new vessels, Log-In Evolution and Experience as mentioned by Marcus Voloch. Well, as for the rest, our debt is very well balanced. Amortization schedule, 88%, is in the long-term. There's some concentration in 2025, which is a challenge for us. Just like we did now in 2023, we want to lengthen our debt, have a more interest in debt regarding the average cost of debt. It is important to highlight that this leverage indicator has plenty of room or makes plenty of room for us to make new investments. On the next slide, this is just to show the last quarter. In the historical series of our bottom line, Log-In came off a run of 10 consecutive quarters of net profit. Just to recap, in fourth quarter 2022, we had a positive event. Net income was positively impacted, due to the recognition of deferred tax assets. We note that these deferred tax assets, will turn into cash, when we deduct the payment of income tax. And in 2023 in Q4, firstly, the operating result of Coastal Shipping was very much impacted, by the whole context. With a reduction of approximately BRL 68 million in operating result. This was combined with a lower financial result in Q4, mainly, due to the currency depreciation, the super currency depreciation in Argentina in December, with the new administration that took office. And this affected our result in the Mercosur operation, the results of our subsidiary in Mercosur. Even so, net of these adjustments of deferred tax assets, we had a net income of BRL 3.6 million. However, in the last quarter, BRL 33.3 million were recognized related to temporary differences, mainly, as I explained before, due to operating and administrative provisions. And we also used to offset income tax. We had the revision of deferred tax assets resulting from the estimation of long-term tax credits, BRL 6.2 million in tax losses were offset in the last quarter of the year alone. And here, as we approach at the end of the presentation, we would like to highlight the importance of our ESG agenda, how important it is for the company. We take it very seriously. So when we speak about innovation and sustainable growth, our goal is to seek opportunities for innovation that, will drive Log-In's growth in a sustainable way. This includes investments in clean technologies, efficient processes and a balanced capital structure that will allow us to make investments. Some important examples: The innovations in the new vessels, which are capable of maintaining the same level of performance, but with much lower fuel consumption, compared to the average of the fleet. We also reported that we had -- the docking operations for the vessels that comprise our fleet. As Alvarenga mentioned, we have an important innovation in the sector. We are using Cabotage for long haul transportation of parceled cargo, and we're starting to increase the scale of that. And Fitch upgraded Log-In's rating to A+ with stable outlook. In the environmental pillar, we are committed to minimizing our environmental impact, seeking sustainable practices in all our operations. This includes reducing carbon emissions, using natural resources responsibly, and promoting energy efficiency in our activities. Some good examples were the stratification of the third greenhouse gas inventory. We improved our CDP score to grade B. CDP is very important in this sector, an important reference. So grade B is higher than the global average for the sector, and that made us very proud. Moving to the social pillar, our goal here is to value the well-being and safety of our employees, customers and the communities, where we operate. Here, we invest in some community development programs, a strong diversity and inclusion program, as well as occupational health and safety initiatives, to ensure a safe and welcoming working environment for all. Some highlights, again, the recertification by Great Place to Work, we ranked 14th place in Rio de Janeiro. The continuation of our diversity and inclusion plus program, the first ESG week that, was held to raise awareness, and to engage our internal public. And the third phase of our Comunidade a Bordo, our onboard community, which involves a close relationship with the community as well as volunteering. In Governance, we maintain the highest standards of corporate governance in all our operations. And this includes transparency, business ethics, regulatory compliance and a robust governance structure. Some good examples are the third sustainability report, which is assured by a third-party, and it follows the main international standards. We have now a new dual materialidade matrix. We did a broad survey with our stakeholders to understand what, is truly material for Log-In and we have applied the new GRI rules. We implemented the ESG committee, to conduct the strategy of this agenda. At Log-In, we launched a new manual of ethic conduct. We launched Log-In's new whistleblowing channel. In the Log-In Group we worked strongly with the Road Cargo Transportation. And through this agenda and these strategies, we remain very committed, to creating long-term value for our shareholders, employees and society in general. And we're committed to contributing, to a more sustainable and inclusive future. We thank you for your continued support in this agenda, and are always willing to collaborate with our customers, investors and society on this long ESG journey. I'll now turn the floor back to Marcio Arany, our CEO.

Thank you, Pascoal, Voloch, Gustavo and Alvarenga. We will now move to the question-and-answer session. We are here for you. Thank you.

[Operator Instructions] We have the first question from [ Pedro Lima. ]

Regarding the drought in Manaus, what is the current situation? What can we expect for Q1, 2024? What about the company's relationship with customers? And how prepared are you for a similar event in the future?

Thank you, Pedro, for the question. I'll ask Marcus Voloch to answer your question.

Thank you, Pedro, Marcio and Sandra. Well, this is a good question. I think I'll start talking about relationship with customers. Relationship was not affected at all, given the level of transparency that we had with them since the beginning. When we started suspecting that a drought was coming, we held meetings with industries of the State of Amazonas and with several individual customers making it clear that there was a very strong risk of an unprecedented drought, which ended up happening. In Q1, '24, while the drought is over, we started January with basically no operating restrictions. Therefore, the vessels can already go up the river. The river has a limitation of 11.5 meters of draft. Most of the ships have a higher draft than that, but 11.5 meters is normal for the Amazon river. Regarding the future, well, that's a more strategic discussion. What I can tell you at the moment is that we're evaluating some options available in the north of the country to minimize future or possible future disruptions. This is a project that is very much a priority for the company. And for 2024, the plan is to minimize or even eliminate the plan -- if the plans we are evaluating work. Thank you. Sandra, over to you.

I have a question by Joao Frizo with Goldman Sachs.

I have just one question regarding Log-In Evolution. In the release, you mentioned that it's going to be replacing Discovery, the docking operations, and then she will go to Cabotage. At the same time, we have a chartered vessel, MSC Belmonte. So will Evolution be replacing the charted vessel or will it be bringing additional capacity?

I'll turn the floor back to Marcus. Marcus' microphone is off.

Sorry. My microphone was muted. Thank you for the question. We have a chartered vessel, MSC Belmonte as you mentioned. We have some plans for this vessel. Still too early to speak about what we're going to do. It is possible we'll return it. We'll return her. It's possible we'll keep the vessel here, depending on some discussions we're having at the moment as we speak. It's a little earlier, but very soon we'll have more clarity, more visibility regarding what we are going to do with our current fleet.

I have a question in the Q&A by [ Lane ].

What measures is the company considering to cope with a good portion of the debt mature in 2025? Are you considering the issuance of new shares?

I'll turn the floor to Pascoal to answer your question.

All right. I think that this portion of the debt maturing 2025, it is important to remember that this comes from our fourth issuance that we had in the past with a much better structure than, the situation we had in the past in a more difficult period that Log-In faced. But this debt, became expensive for Log-In. It is expensive. As I showed, we have room to leverage the company, and to do what the market calls liability management. In other words, moving from a bad debt for the context or shortened debt to a better, more lengthened, cheaper debt. The credit market, with Log-In's risk perception that improved greatly in recent years, made room for us to take on a much better debt. As regards to issuance of shares, no, this is not in our plans, but we do proactive management of our debt level at Log-In to find the best moments, the best timing to start our project. So that at the end of the day we'll have a result and a capital structure which is more balanced, that can work with the competitiveness that we need.

Thank you, Pascoal. I have a question in the Q&A, a question from [ Renata Diaz ].

What about the process of construction of the new vessel and what is the expectation regarding where she will be allocated?

I'll answer that myself. Well, everything is going really well. Construction is unfolding well. This is the second vessel that we have in this shipyard. It is kind of a copy of Log-In Evolution. Today, what we're thinking is bringing the vessel, to having the Buenos Aires [ Fuerte ] trade, which is South Atlantic service. But as mentioned, a lot is being considered, a lot is being evaluated. It's possible, she will go to another trade, but the initial design, was to use this vessel in the South Atlantic service.

Thank you, Marcio. As there are no more questions, I would like to thank you all for participating. And I turn the floor back to our CEO, Marcio Arany for his final statements.

Well, I think that we were able to present a victorious 2023, especially considering all our business lines and Coastal Shipping, with a very complicated fourth quarter, something we had never seen before. We had never faced such severe climate problems, always had a problem of drought in the North or too much rain somewhere else. But a month and a half without being able to berth the ships in Manaus, it was something unprecedented and the team is to be congratulated. Now we have the consolidation of our services. We launched a new service that was performing quite well, above our expectations, until the arrival of the unprecedented drought. And now with the drought over, the service is running really well, and it is already consolidated in. And this was surprisingly fast. I believe it is because this service has a great competitive edge, which is uniting Santos and Manaus directly. Log-In faced this period with a lot of resilience. The rainfall in the South, which was not so talked about in the media as the drought in Manaus, also brought along a lot of missed calls, because it was impossible for the ships to moor. But we were able to face that critical period, and we are now recovering the whole volume that we were not able to transport in Q4. Lastly, I would really like to thank everyone for attending our conference call. Thank you very much, and a great afternoon to everyone.

Thank you. The conference call of Log-In Logistica Intermodal to review fourth quarter and full year 2023 earnings is ended. You may disconnect and have an excellent day.