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

Good day, everyone. Welcome to the conference call of Log-In LogÃstica Integrada to discuss third quarter 2025 results. I am Sandra Calcado. I am Log-In's Investor Relations, Strategy and ESG Manager, and I will be your host during this event. The presentation and comments about the results will be made by Log-In's CEO, Marcio Arany; Pascoal Gomes, Finance and Investor Relations Vice President; Marcus Voloch Coastal Shipping Vice President; Roberto Pandolfo, Logistics Solutions Officer; 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. 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, I would like to 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 that may 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 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 Third Quarter 2025 Earnings Conference Call. We will start our presentation on Slide 3 by reviewing the main Q3 '25 achievements of our strategic plan and 4 blocks: Coastal Shipping and Integrated Solutions, TVV, Road Cargo Transportation and ESG/Capital Structure, which permeates all the company's business units. In our Coastal Shipping business, we highlight historical record of cabotage volume with 71,600 TEUs, a historical record NOR for Coastal Shipping, BRL 533 million; an all-time high cabotage NOR, BRL 308 million and the second consecutive quarter with a record number of intermodal operations of 43,200 operations. At TVV, of note, our terminal productivity increased by 33.5% over Q3 2024 after the completion of the retrofit, the first operation of a ship carrying 4,500 tonnes of bitumen and the operation of the largest ship ever operated by TVV, carrying 83,000 tonnes. This operation was carried out at the public berth. With regard to Road Cargo Transportation, we highlight an 8 percentage point increase in the service level year-on-year, a 6.6% increase in the customer portfolio and the Panasonic Supply Chain Excellence Award 2024 in the category of speed and least effort. The fourth and final point concerns our ESG agenda and capital structure, where we highlight the Programa+, second place in the category Best Employer Branding Strategy. Unilog-In internationally recognized as Best Corporation Learning University by the Brandon H. Group. Our legal department, which received the AB2L Certificate for the fourth consecutive year; and finally, the approval of our internal human rights policy. Next, our team will present the results for the quarter, starting with Pascoal Gomes, Finance and Investor Relations VP.

Thank you, Marcio. Thank you all for joining Log-In Logistica Intermodal's Third Quarter '25 Earnings Conference Call. We ended Q3 with a net operating revenue of almost BRL 800 million, up 12.3% compared to the same period last year. This growth is a result of historical record marks, [indiscernible] particularly in Coastal Shipping, which was positively impacted by all 3 trades, Cabotage, Feeder and [indiscernible] Marcus Voloch is going to give us more detail on that in a minute. It was also a quarter with growing costs. Our cost of services provided increased to 14.4%, totaling approximately BRL 620 million with a greater share naturally from Coastal Shipping. We saw an increment in variable costs in line with container handling volume, which was a record mark in the quarter, including expenses with handling, increased volume of intermodal operations and greater repositioning of empty containers and also an increase in fixed costs, mainly due to port tariff adjustments, increased costs with seafarers and normalization of the schedule of port calls, which is good news this year. But when we compare with the scenario of Q3 2024, back then, the market had a lot of port congestion and port call emissions. Operating expenses increased by BRL 9 million, a good part of that reflecting the reclassification of the purchase of ICMS credits. In addition, Q3 '24 benefited by the revision of expected credit losses, ECL, of customers that pulled down our expense base. And in the comparison, we see this delta. Our AFRMM totaled BRL 23.8 million in the quarter, an increase of 8.2% over the same period last year, mainly due to greater generation of AFRMM in eligible cabotage routes. As a result of these movements in cost and revenue, adjusted EBITDA was BRL 155 million approximately, a 5.6% reduction with EBITDA margin of 19.5%, representing a decline of 3.7 percentage points. In summary, the third quarter of 2025 was marked by solid performance in operational terms. We had volume growth and consequently, revenue growth despite related to costs and greater market competition, and this will be more detailed by our officers from the different divisions. We remain focused on strengthening our position in the logistics sector to continue to capture growth opportunities that are out there. Thank you. And I now give the floor to Marcus Voloch, our Coastal Shipping Vice President.

Thank you, Pascoal. Good morning, everyone. This is Marcus Voloch, Coastal Shipping VP. Starting on Slide 5. I would like to highlight, as Marcio mentioned, the solid growth in net operating revenue. We recorded a 19.1% increase in Q3 year-on-year and 18.7% in the first 9 months of the year, reaching a historic milestone of almost BRL 1.5 billion in Coastal Shipping. Volume handled also continues to grow, reaching just over 201,000 TEUs in the quarter, a record for this period of the year, even after the discontinuation of the Navegantes Shuttle Service. Year-to-date growth was 3.1%, totaling 576,800 TEUs, another historic record for Log-In. [indiscernible] volume growth is important to mention the performance of the domestic market. We handled 71,600 TEUs, significant growth of 37% year-on-year and 25% growth quarter-on-quarter. This gives us a historical market share of just over 24%. In the same period, market volumes grew 12.1%. According to [indiscernible] practically double that. Volumes in Mercosur grew slightly 4.4%, in line with the market. In Feeder, in this quarter, we recorded a 12.7% decline in total volume compared to Q3 '24, which is a direct result of the end of Navegantes Shuttle Service. However, we grew marginally 3.5% over the second quarter of '25 when we were no longer operating the service. The high point here is that despite the decrease in volume, Feeder revenue was a record for third quarter. This is the result of a successful strategy of exchanging a short route with lower shipping costs for longer routes with higher revenue, bringing superior results. Moving on to the operating results. We recorded a 19.1% decline in Q3 with EBITDA of BRL 105 million. This result is mainly explained by the imbalance between supply and demand in the domestic market. This scenario led to great difficulties in passing on cost increases to shipping rates. Even with the good results from Feeder and Mercosur trades, the drop in cabotage margins was the main factor in the deterioration of the operating results. In view of this, we're working hard to reduce costs, both fixed and variable, in order to achieve better operating balance. Moreover, several commercial initiatives are underway to improve contribution margins, initiatives -- commercial initiatives and rationalization initiatives. It is important to note that year-to-date, our EBITDA remains at BRL 344.2 million, a slight increase of almost 3% over the same period of 2024. Operationally, our reliability level declined slightly in Q3 with punctuality falling to just under 80%. This is a factor regularly observed when cold fronts [indiscernible] southern ports. And we also experienced an operational [indiscernible] at the Port of [indiscernible]. Another important point is our record volume of intermodal operations large land segments of collection and delivery of goods. We achieved the best quarter in history with more than 43,000 operations. To conclude, as we mentioned in the previous quarter, we continue to feel a sudden pulling domestic demand, which is reflected in freight levels. Despite this and with the continuous improvement of our service indicators, we maintained our growth rate in both volume and number of active customers. I'll now give the floor to Pandolfo, who will present the results for Logistics Solutions. Thank you.

Thank you, Val. It's good to see growth in the market that makes us very proud. Good day to all. I'm Roberto Pandolfo, Integrated Logistics Officer. I'd like to thank you all for your attention. So let us present our results for Q3 2025, a period that strengthened the implementation of our business plan to create the Logistics Solutions -- Integrated Logistics Solutions division, a plan approved last year. Looking at the figures for the quarter, we performed above expectations. We achieved a net revenue of BRL 17.3 million, a robust growth of 39.6% year-on-year. EBITDA of 6.4 million, 16% up over Q3 '24. As regards to volume of containers, we have a 32% increase compared to the same period of 2024 in our logistics projects. In addition to having 100% of customers remaining long-term contracts, we had the arrival of new strategic projects driven by strong increase in internal synergies and engagement of all business units is responsible for 50% increase of EBITDA for the quarter. As regards to EBITDA margin, we saw a reduction. It stood at 36.8% because our division is focused on the business plan and on ensuring a contribution margin, which is adequate, which guarantees not only our sustainability, but also competitiveness and full alignment with the Log-In Group's objectives. This strategy may indeed lead to a reduction in the margin of individual projects. However, it prioritizes what is most important, i.e., scalability of volumes and the maximization of consolidated results for the group. The trade-off is a lower percentage margin offset by a much higher volume and absolute results. This is our goal. In addition, we signed extensions of long-term contracts, which shows the trust and reliability of the services we are providing. In a nutshell, third quarter '25 was a quarter of strong revenue growth and growth driven by the success of our projects and the synergies captured within the group. On the next slide, very quickly, we want to present a real case that perfectly exemplifies our value proposition. This is a sustainable multimodal operation that we developed for a leading customer in the automotive industry. What matters to us is to listen to the client's pain. And this client's pain was very clear. They were looking for a logistics solution that was sustainable and that would also optimize and reduce their operating costs. To serve them, we designed a customized solution with integrated management of the entire logistics chain. We took on door-to-door visibility covering full multimodality. Highway at the origin, rail, storage rail, coastal shaping and highway at the destination in addition to including our warehousing and cross-docking services, both at the origin and destination. The results of this project speak for themselves. We delivered what was expected. In terms of sustainability, this is a multinational company. They have a focus on ESG. We delivered a reduction of more than 60% in CO2 emissions by converting from road to rail and cabotage. This used to be long haul, long distance transportation by road and it became cabotage. To give an idea of the scale, this is equivalent to planting more than 1,000 trees per year just with the beginning of the project. In terms of cost efficiency, we generated an 18% reduction in total logistics costs for the customer. Reliability and quality. This is the most critical item for the automotive industry. We achieved 0% of full because we didn't have to be loading and unloading all the time. In terms of logistics integration, our unique and direct rail access to the port terminal allowed for a connection without bottlenecks ensuring a smooth operation. So this stresses what was said in the previous slide about a strategy that focuses on volume scalability and maximizing results for the group. This project, which began in the second half of this year, has already had 96 operations to date. It is not just about good financial return, but rather it is proof of our ability to deliver sustainable and high added value logistics solutions that set us apart from the competition and build customer loyalty. This is only possible because Log-In in addition to cabotage has the port area and of course, [indiscernible], our road cargo transportation in addition to terminals. So once again, I'd like to thank you for your time. It's been great to be able to share our experience, and we are available to develop projects that might add value to your company. Now I'll give the floor to Gustavo Paixao, who will present the results for terminals.

Thank you, Pandolfo. Good day. By the way, congratulations on the results presented. Good day to all. This is Gustavo Paixao speaking, Terminals Officer. Now I'll present TVV's results for Q3 2025. Starting the presentation with volume of containers handled in Q3 2025, we see a drop of around 6.8% with about 54,000 boxes handled in the quarter, a reduction compared to the previous year. Here, in addition to a sharp decline in coffee exports, which in 2024 accounted for a large share of container handling at TVV, enjoying a unique moment in the international market. Exports also began to be impacted by a roughly 30% reduction in granite shipments to the U.S. following the announcement of tariffs imposed on Brazilian products destined for the U.S. market. In terms of imports, we also see a slight reduction with lower volume of electric vehicles on flat racks from China. That had pushed the results of TVV last year. Looking at the year-to-date figures so far in percentage terms, we follow the same downward trend with around 6.5% fewer containers handled compared to 2024, around 165,000 boxes with export flows once again being the biggest effect. However, when we look at our general cargo volume, we see the opposite of the perceived reduction in container handling as we grew more than 88% in the quarter in the yearly comparison with 24,800 tonnes handled, a fantastic volume. We also posted a 25% increase in handling for the year-to-date period with more than 0.5 million tons of general cargo handled. And here, we clearly see the resumption of the terminal operating capacity, which last year was compromised either by the terminal's expansion works or by the fantastic results we had in container handling, reinforcing the importance and strategy of having a multipurpose terminal and being able to operate on several commercial and operational fronts, minimizing the impact of lower volume in any specific service line. Translating this into results, we have both for the quarter and year-to-date, net operating revenue practically in line with the previous year with BRL 95 million in the quarter and BRL 282.2 million for the 9 months. Showing that despite the incredible recovery in general cargo, it was still not enough to recover from the decline in container handling, our main product since the contribution margin of some general cargo is much lower than the margin obtained from containers. Looking now at EBITDA result, it follows the reduction in container handling volume, our main cargo with EBITDA of BRL 39 million in the quarter, 6.1% below the result recorded in the same period last year. When we look at the year-to-date results, we've recorded EBITDA of almost BRL 117 million, down 7.9% from last year's results. Well, I'll take this opportunity to update you on our TVV expansion plan that was announced in the beginning of the year. As a reminder, this expansion was signed in February of this year with the Port Authority, and it gives us the right to explore an additional area of roughly 66,000 square meters for the next 5 years, where an investment of BRL 35 million has been made. We are in the final stages of construction with high expectations that the area will be delivered in terms of construction later this month. However, we still need to overcome one last important hurdle, which is customs clearance for the area, which is currently underway with the Federal Revenue Service. We had a strike of the Federal Revenue Service which impacted the customs clearance, but we are working hard for this hurdle to be overcome very well, these are the results and material facts of the Terminals division in Q3. On the one hand, the Q3 expense reduction in volumes, specifically for containers and lower financial results when compared to the same quarter of last year. On the other hand, Q3 also reflects a scenario of recovery in the general cargo compared to what was executed in the same period 2024. And again, this shows the importance of our strategy of having a multipurpose terminal so that we can be dynamic and have alternatives to make our business more and more feasible. This concludes the presentation of the results of the Terminals division. I'll hand over to Mauricio de Alvarenga, Officer responsible for Tecmar Transportes, who will continue the presentation. Thank you.

Thank you, Gustavo and good day. This is Mauricio de Alvarenga, Tecmar's Executive Officer. I will speak a little about our results for Q3. We continue with our plan to restructure Tecmar. We are focusing at this point on improving customers' experience overall and in particular, of Less than Truckload segment, which is the main business that we acquired 3 years ago. While we try to provide a better customer experience and better level of service, we are seeking to improve our customer base with the profile of customers that is more suited to our structure. Today, Tecmar is not just a road carrier, but it is positioned as a more complete logistics operator. In this third quarter, as we see on the slide, we still had a negative result of BRL 2.4 million of adjusted EBITDA. Less-Than-Truckload cargo volume was very similar to the previous year, still even facing cost pressures in the market. And here, our EBITDA is affected by the cost pressures we faced in the quarter and the difficulty of passing on price adjustments given that we had lower volume. We made excellent progress in capturing synergies for the Log-In Group with the highest volume of Less than container load transported on Log-In vessels, about 1,600 TEUs transported, a new record mark for this product that we launched on the market about 2 years ago. And Pandolfo also mentioned ESG. And this is a product which is extremely geared to ESG fronts with a reduction of CO2 emissions of up to 80% in the transportation of Less than Truckload. In compared to the previous quarter, we had a 16% growth quarter-on-quarter. So this is a product that is gaining space in our business. In other words, Tecmar continues very strong in the Less than Truckload transport on road, but we're also offering the market this migration, this transmission to a multimodality road cabotage transportation using Tecmar structure as well as our shipping network. Still on the topic of synergies with the other businesses of the group, in this quarter, Tecmar is the largest intermodal carrier of Log-In. Voloch mentioned Log-In's growth in the store-to-door transportation, and this has been gaining space in shipping. And as a strategy of the group, Tecmar has been contributing for coastal shipping to be growing even more this door-to-door service. Tecmar is currently Log-In's largest intermodal carrier, providing road-to-road services. We are already operating approximately 5,000 trips per month from the port to the customer, from the customer to the port in Brazil, operating from the South to the Northeast and North. So it's very interesting growth in this segment where we have log in as a customer, but we're also positioned as a white flag offering services to other customers. In the next slide, we can see a considerable improvement in our level of service. Please note that we have achieved the best OTD on-time delivery as we took over Tecmar, and we are talking about on-time delivery geared to the Less than Truckload business. It's a continuous pursuit to offer a better level of service than Tecmar had in the past. And we're beginning to receive recognition from our customers, both in campaigns that customers run with their suppliers or in a direct feedback from customers to us. Still talking about the quality of services provided. Tecmar has been recently recognized as one of the best OSH companies, occupational safety and health at a national level. This is a very important recognition for us because it signals that our efforts are being recognized by the market and that we are on the right track. In the chart on the right, please note that we have been experiencing a steady decline in volumes since we started the restructuring and to position ourselves as a logistics operator with a different positioning and also purging our customer portfolio. But this is now the second consecutive quarter with growth in LTL volume. However, our main focus is not really to pursue this growth, but rather to continue to improve our levels of service, adjusting our customer portfolio and adjusting the customer portfolio to our cargo profile in the coming months. This will be the work we will continue to do to improve the profile of LTL and also to reduce costs. And more and more, we are seeking to achieve synergies with the Log-In group. That was the group strategy to acquire Tecmar. So Tecmar would be a strong part to ensure that the company's businesses would run smoothly. With that, I'll close, and I'll give the floor back to Pascoal.

Thank you, Alvarenga. Moving on to Slide 10. Speaking about our debt, I think that the good news is that our net debt continues stable. On the top right, we see net debt over EBITDA ratio of the last 12 months for 3 quarters now, our leverage has stood at 1.8x. And this is the result of a stable cash position with little variation. EBITDA for the last 12 months showing a marginal increase. As a reminder, in the second quarter of the year, we carried out our fifth issuance of debentures in the amount of BRL 280 million with a 7-year term, reinforcing our strategy of lengthening our debt liabilities and strengthening liquidity for the company. We rolled over part of the debt service and with a very positive approach compared to the average of the market. This helps maintain our average cost of debt at a good level. Considering the scenario in Brazil of very high interest rates, about 11.5% approximately in our debt portfolio, always very well distributed in terms of the indicators they are connected to the business. And a little share of short-term debt. We're talking about 9% short term against 91% of long-term debt. Well, that's basically it. I give the floor now back to our CEO, Marcio Arany.

Thank you, Pascoal, Voloch, Pandolfo, Gustavo and Alvarenga. We now move on to the question-and-answer session. We're all here for you. Thank you.

[Operator Instructions] We have a question in the Q&A asked by João Pedro. Congratulations on the excellent results in the quarter. As regards to coastal shipping and price pressure, given the increase of capacity in the market, total revenue growth with volume but unit prices have been under pressure. Does Log-In expect prices to continue to reduce? Or do you think we have achieved a normal plateau?

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

Thank you, João Pedro. Thank you, Marcio. Prices in cabotage have two factors happening at the same time. First, we increased our capacity considerably. And with that, we needed to focus on less profitable cargo. We used to focus more at the top of the market when our capacity was smaller, but now to fill our vessels, we have to focus on all quadrants of the cargo. We classify the cargo quadrant. And we're focusing on the lower quadrant so that our unit revenue does suffer a little bit of pressure, naturally given the mix of cargo, coupled with the market, which is more competitive. Our opinion is that we are close to the rock bottom because as I mentioned during my part of the presentation, the levels of costs are increasing consistently and profitability is being compressed. So on our end, I cannot speak about other players, but on our end, I believe that we are at a limit our expectation, our commercial behavior looking forward is to resume margins no matter what. I tend to believe that other market players are probably facing numbers very similar to ours so that their margins are probably narrower now as well. I am fully convinced that Log-In has more competitive unit costs than the competition. I have been constantly analyzing this based on the track record in my own experience in understanding our costs, I see that Log-In is super competitive in terms of unit cost, which leads me to think that if our margins are narrow, the competitors are probably facing a worse condition. You put all the pieces together, I believe that the market is very close to the rock bottom and it should only increase. I hope I have answered your question. Thank you. Sandra, back to you.

Marcus we have another question in the Q&A. It's an anonymous question. Congratulations on the results of Q3. The continuous increase of domestic cargo, does Log-In focused on converting cargo from road to coastal shipping, considering that the minimum ANTT shipping table tends to have more figure?

Thank you for the question. Again, I'll ask Voloch to answer that.

All right. It's interesting, this question about the minimum shipping price list for cabotage, we had this feeling in 2018, 2019 when the minimum price list was implemented. The more cargo, the highest the road freight, particularly return freight, the more attractive multimodal by cabotage transport becomes -- because our exposure to the road modality is lower. Our focus has always been to convert cargo with or without a price list, and we will continue to convert. As Alvarenga mentioned, a good part of our operation is handled by Tecmar, which is a group company. So we end up having some internal advantages. The truck for us is a cost. So the way in which we deal this in-house brings competitiveness for the whole Log-In Group, and we expect to attract more and more cargo. Our focus is to convert -- and with the minimum price list, this is even a greater focus. And customers come to us. They approach us when they start suffering with cost increases. The natural alternative is to look for cabotage. So this is great for us.

Thank you, Marcus. Another question in the Q&A written question. Asked by [ YSU7 ]. Has there been or may there be any impact on the operations in the North region if we have a possible drought in the Amazon River Basin has happened last year?

Thank you, Voloch, over to you again. Questions all to Voloch.

Yes, coastal shipping is in the spotlight. Yes, there is an impact. We have already felt an impact. Obviously, lower impact than last year. Last year and the year before last, we had a full interruption of coastal shipping for several weeks. 2024, it was 12 or 13 weeks of total interruption of coastal shipping. This year, although there is no interruption, the vessels are limited. There are some limitations happening. First, the restriction of nocturnal shipping. Vessels cannot navigate at night in the stretches where there is some kind of limitation so that the vessels have to be halted until 6:00 a.m., 7:00 a.m., 8:00 a.m. when they can resume navigation and then they have to accelerate to catch up, have an impact on bunker. And there are also piloting costs increasing the moment that we enter the Amazon River. But with that, the vessels normally go the Amazon regions with 11 meters of draft and the restriction is below 10.5 meters. I think it's 10.2%. Every day, it's a different number to be honest. I haven't got the number for today. But there are already restrictions, like I said, not as severe as in the previous years. However, there are some restrictions, and we're suffering that every week. Sandra, back to you.

Thank you, Marcus. Another question in the Q&A asked by Guilherme Agusto. He says congratulations on the results. And then he asks a question. What is the expected impact of the acquisition of [indiscernible] real estate in Manaus on the debt and cash generation of Tecmar?

Pascoal, can you answer the question?

I want to speak a little about the project. And in the end of my answer, I will ask Alvarenga to talk about it. Regarding debt and cash generation of Tecmar, we -- as Log-In group will fund this acquisition. You saw that our cash position is very solid. Naturally, this is a project of growth, which is almost a plug-and-play project. This is an area next to our current terminal in Manaus, the terminal of Tecmar Norte. So it does not really require great work to start operating, and it will generate cash very quickly. And again, our cash position at Log-In will allow us to pay for this investment quite easily. And to speak a little about the project, taking this opportunity as not everyone knows about it, I will invite Alvarenga to complement my answer.

Thank you, Pascoal. Now this is a very interesting project for us, as Pascoal mentioned. Not specifically because it is an area in Amazonas, the city of Manaus, but because of the opportunity, this area is located exactly next to the terminal that we already operate. It allows us to operate this area growth with marginal operating costs compared to what we have today. In other words, we don't need great investments. And today, the terminal is very well located. We're district 1 of the Manaus free trade zone as a reference. We are just across from the biggest motorcycle factory in the America's, Honda. We are close to many major companies in the trade hub. So with this investment, we can grow a lot our offering of products in the region, which is cargo storage. We store full containers at the terminal. And right now, many customers have this expectation of a severe drought as we have last year. And given this possibility, many customers brought forward the purchase of inputs for their production. And Tecmar has been offering a solution for these customers to store their cargo in our yard. And we, as a group strategy, where Log-In has been growing the most, is coastal shipping. In the North region, we added a lot of capacity compared to a year ago or so. We -- more than -- we increased more than fourfold our capacity in the region and this terminal is a lever so that the coastal shipping structure will work well. So we are thinking here in an integrated way, integrating coastal shipping with the terminal structure and with the offering of products on road to complement sea. It's no use investing in one part of the business and not looking at the other part because we can face bottlenecks if we did so. So it's a very interesting project looking at the future and the outlook that is a region that we believe a lot in. That's it as well. Sandra, over to you.

I have another question from the same Guilherme Agusto. This time he asks, the current average cost is 11.55% per annum. Are there plans to reduce this cost via longer issuances debenture rollover or international funding through MSC?

Thank you, Guilherme. Pascoal, this is for you.

Guilherme, there are always plans to improve our average cost of debt and our schedule of financial obligations. Our treasury team thus the very active management of this team here at Log-In. Log-In has a relevant debt position. We have been strongly deleveraging the company in recent years. We improved a lot our credit rating over the last few years, exactly because of the fact that we are very austere that we are very strict in terms of managing our debt. And we also lowered our average cost of debt compared to previous years, because we have a credit risk in the market, which is much better now compared to previous years. However, the moment is not very positive right now. The credit market is a little bit dry, index risk for long-term debt in Brazil. If we look at the curves, long-term interest rate curves, the spreads are very high. Companies with a credit rating that are very good AAA issuing the current cost that is higher than their average historical cost. So we think that this is not the right moment to do anything. When does this happen? When we have a better market window, and we keep monitoring that. We keep monitoring these opportunities. Sometimes we proactively swap one index for another to try to reduce the average cost of debt. But the market is the one setting this or when we present a long-term project. For example, our renewal of fleet of vessels or when we increase the capacity of our business at the terminal in road cargo transportation or integrated logistics, this might entail long-term investments and linked to that, and this is always our strategy, we will seek long-term funding with a very competitive cost. This is how we manage our debt here at Log-In.

Thank you Pascoal. We have another question, an anonymous question. What is the forecast of growth for the cabotage market next year in Log-In's opinion?

Thank you for the question. Voloch, over to you.

Well, we work with something around 5% to 6%. This year, we were also working for 5% to 6%. We were surprised to post a growth above 10%, which was super positive. But I believe that the strong growth was because last year, growth was weaker. So we prefer to be a little more conservative. 5% to 6% growth for 2026 is a number that we consider feasible given the indebtedness of the families a slowdown of domestic -- the domestic economy. If on one hand, the economy is weaker. On the other hand, the companies think that they have to have savings. And logistics is an area to quickly -- to quickly cut costs and cabotage is the natural answer to savings. Even if the economy is doing poorly, we expect this growth. Thank you.

Another anonymous question about Argentina. As regards to river routes, we see growing volumes of Argentina ports. Does Log-In intend to expand its coverage of ports in Argentina?

Thank you for the question. Voloch, again, back to you.

This is a good question that unfortunately, I'll abstain from answering because it has to do with our strategic plans. What I can tell you those that our presence there will not be reduced.

As there are no more questions, I would like to thank all of you for participating. I'll turn the floor back to Marcio Arany, for his final statements.

Well, once again, we ended a challenging quarter with a strong growth in coastal shipping. Thanks to investments in the launch of our Amazon Express service. The market, as we said before, it's highly competitive. We reduced our margins a bit, but our service differentials have been fundamental for us to continue to grow -- to grow in new cargo, converting road cargo to sea, as Voloch mentioned, so this is fundamental for our business. We also achieved several milestones in ESG, which demonstrate our dedication to building an excellent work environment. Our team remains motivated and continues to drive vigorous growth of our operations in all our business lines. Lastly, I would like to thank all of you for your attention during this conference call. Thank you very much, and good afternoon, everyone.

Thank you. The conference call of Log-In Logistica Integrada to Review Third Quarter 2025 Earnings is ended. You may disconnect, and have a good day. Goodbye, everyone. [Statements in English on this transcript were spoken by an interpreter present on the live call.]