Log-In Logística Intermodal S.A. ($LOGN3)

Good day, everyone. Welcome to Log-In Logistica Integrada conference call to discuss first quarter 2026 earnings results. I am Sandra Calcado, 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 Marcus Voloch, CEO; Pascoal Gomes, Log-In's Finance and Investor Relations VP; Gustavo Paixao, Terminals Officer; and Felipe Gurgel, Global Shipping 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 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. And as a reminder, that all participants will be on listen-only mode during the company's presentation. Later there will be a question-and-answer session when further instructions to participate will be provided. Be advised that this webinar is being recorded and will be available on the company's website. Before proceeding, as usual, we 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. 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 Marcus Voloch, Log-In's CEO, to start with the initial remarks.

Good morning, everyone. I'm Marcus Voloch, CEO of Log-In. I'd like to thank everyone for joining Log-In Logistica Intermodal's Q1 2026 Earnings Conference Call. Let us begin our presentation on Slide 3. We ended the quarter with net operating revenue of BRL 680 million, which was essentially flat compared to Q1 '25. We saw revenue growth at TVV and Tecmar, but a decline in Coastal Shipping driven mainly by a reduction in the Feeder trade. In Q1 2025, the Navegantes Shuttle Service was still in full operation, having significant volume and revenue, and that service was discontinued in April 2025. Despite this decline in total NOR, we posted significant growth in Cabotage and Mercosur volumes, the details of which Gurgel will address. At the same time, we continue to face a sharp increase in operating costs, terminals, pilot services, fuel, of course, and maritime costs. And the effects have been mitigated through efficiency gains. Rising costs are partly to blame for our EBITDA decline, though the bulk of it, in fact, is due to a drop in freight rates in Coastal Shipping. For several months now, the sales team has been working to restore our margins through freight rate increases, even if this occasionally comes at the expense of market share. And that said, our adjusted EBITDA stood at BRL 106.6 million, down 30.4% year-on-year, again, driven mainly by Coastal Shipping. EBITDA margin in the quarter decreased by 6.7 percentage points, standing at 15.7%. It is important to mention the significant growth at TVV and Gustavo will discuss this in detail as well as Tecmar's recovery, which while still having a long way to go, it seems that the worst is behind us. Lastly, we find ourselves in a challenging scenario, high interest rates, strong inflation, and soaring fuel prices. While economic activity has not been growing, cost management is becoming even more important. However, improving our bottom line will inevitably require repricing our products, mainly in Coastal Shipping and Road Cargo Transportation. Thank you. I will now turn the floor to Felipe Gurgel, Coastal Shipping Officer.

Good morning, everyone. Thank you, Voloch. I'm going to speak a little about the results of Coastal Shipping. And now we are integrating the integrated solutions business, which used to be a separate business. As Voloch mentioned, we had a very challenging first quarter. But before we get into the numbers, I'd like to speak a little about the operational side. In this first quarter, we successfully completed the mandatory docking of Log-In Resiliente. And it all went well with no operational impacts and all on schedule. The Vessel has been reintegrated to the fleet and is operating at full capacity. In this regard, we can also highlight that we had an excellent quarter in terms of complying with our schedule, both for Vessels and Road Transport, again, reinforcing our commitment to offer excellent levels of service to our customers. With regard to Cabotage and Mercosur market, Log-In grew well above the market, growing more than 30% year-over-year and growing above the market, which grew by around 9%. And we gained market share in a robust way. And we are at the same order of magnitude we had at the end of last year. In the Feeder trade, however, we experienced a sharp drop in volume, driven by the discontinuation of the Navegantes Shuttle Service in April 2025 and the decline in the Vitoria trade. We currently have 2 services dedicated to that trade. And because of the tariff policy imposed by the United States, we had a significant contraction in this trade. And we start seeing some improvement in Q2. As for the Cabotage market, we are currently experiencing significant pressure on freight rates due to the supply-demand balance. And at the same time, a cost environment under considerable strain caused by high port terminal utilization and recent fluctuations in fuel costs with diesel prices having fluctuated by more than 20% and bunker fuel by more than 100% following the conflict in the Middle East. However, these 2 costs have been and are being mitigated through the adoption of an additional surcharge on freight rates. Now talking about the numbers of the quarter. We had a retraction in volume of about 4.8%, a 5.9% drop in NOR and consequently, an EBITDA that was down about 40%. And this is driven primarily by the reduction in Feeder operations, as I mentioned before, as the additional volume from Cabotage and Mercosur has already offset the margin decline due to increased prices and margin reduction. In the second quarter, we faced a challenging environment with another docking operation that is already underway. We have an aggressive plan to recover our margins with a strong focus on price pass-through, development of new logistics projects and solutions that hopefully will bring us some financial gain and increase our margin in addition to a strong focus on variable and fixed costs. We chose not to replenish a vessel that went into docking. We would normally charter another vessel, but we decided not to and bought the necessary space from market partners. Well, these are the main highlights for Coastal Shipping. Thank you very much for your attention. I now turn the floor over to Gustavo Paixao, who will talk about the results for Terminals.

Thank you, Gurgel. Good morning, everyone. This is Gustavo Paixao speaking, Terminals Officer. And I will now present TVV's operating and financial results for Q1 2026. Starting with Container throughput, we recorded a volume of 43,000 boxes in Q1. This number represents a 15% decline compared to the same period in 2025. This trend is primarily explained by the normalization of the flow of empty containers and by an export volume that still reflects the challenges of the global macroeconomic landscape as pointed out by Gurgel. On the other hand, the General Cargo segment delivered an exceptional performance with a milestone of 241,500 tonnes handled, a significant increase of 135% compared to Q1 '25. I highlight the robust recovery in vehicles, in railroad operations, machinery, equipment, and steel products, cargo types that give us much better margins. And this result confirms the strength of our strategy to operate as a multipurpose terminal capable of handling highly complex cargo with excellence and supplying eventual gaps and variations in the market. Reflecting this efficiency, our net operating revenue grew 21% year-over-year, totaling BRL 106.6 million. This performance was driven by a more favorable operational mix in the Container segment, more containers handled and primarily by the profitability of General Cargo and the strong revenue generation from warehousing and ancillary services. As a result, EBITDA totaled BRL 47.6 million, up almost 30% year-over-year, supported by margin optimization and cargo portfolio diversification activity. Moving on to the next slide. We celebrated a crucial milestone, the completion of customs clearance for the expansion of our terminal. Our expansion affectionately named the Penedo Area in honor of a natural landmark in our state is the cornerstone of Log-In's robust investment plan with an investment of BRL 35 million in this project, which adds to another BRL 170 million already invested in the TVV modernization plan. With operations set to begin this May, we have expanded our container storage capacity by 40% and our coverage warehousing capacity by 90%. This investment not only reinforces TVV as a logistics hub of innovation and efficiency, but also strengthens our infrastructure to support our customers' growth and to continue to create value for our shareholders and create opportunities for our employees. With that good news, I conclude the presentation for the Terminals division and turn the floor over to Pascoal Gomes, who will detail the results for our Road Cargo Transportation BU. Thank you all.

Thank you, Gustavo. Good morning, everyone. To continue talking about Road Cargo Transportation, the first quarter of 2026 confirms the still gradual progress of Tecmar's turnaround process. Although we're dealing with a challenging landscape in the sector, we already see consistent improvement in our key operational and financial indicators. Our net operating revenue, NOR, grew close to 5% to BRL 128 million. This progress was driven mainly by Tecmar Norte with significant expansion in our warehousing operations in the North region, particularly related to import cargo. And this performance helps partially offset an even weaker volume in the less-than-truckload business, which remains in the process of restructuring. Talking about costs. Cost of services provided remained virtually stable, rising only 1.6%, even while we are posting revenue growth. This reflects progress in the turnaround plan that we've been executing with great operational control and efficiency gains. Of course, there was temporary pressure on fuel costs due to the international geopolitical situation mentioned by Gurgel, but without significant distortions and impacts during the quarter. Other operating expenses decreased, which also contributed to improved operating income. And this is a movement that reflects a more streamlined operation with lower volatility in non-recurring items compared to the same period last year. All with that result adjusted EBITDA was positive at BRL 2.7 million, reversing a negative adjusted EBITDA in the same period of the previous year. This improvement, again, stems mainly from Tecmar Norte's performance. A little bit came from improved cargo mix of the cargo we've been transporting with the cargo profile we've been handling, progress in Intermodal operations of containers. And this is, as I always mention, a great commercial and operational integration with Coastal Shipping. In summary, Road Cargo Transportation still operates at modest profitability levels. We dream with a lot more with going way beyond this. But the BU remains on a consistent recovery trajectory with gradual improvement in the margins, which brings greater operational predictability and reduced risks. And all of this is in line with the turnaround plan currently being implemented. And still on the turnaround effort, I'd like to share with you, we had a management change at Tecmar, appointing a new executive, Clovis Severino in April, following the departure of Mauricio Alvarenga to whom we would like to thank for all his contributions at Log-In. Clovis has career spanning more than 25 years in the sector. He has a track record in expansion initiatives, operational integration, and business development, always focusing on sustainable growth and aiming to strengthen the strategies of all organizations he worked for. All right. Moving on to the next slide. Talking about our level of debt. We ended March with net debt of BRL 1.27 billion and a net debt over EBITDA ratio of 1.7x in the last 12 months. This capital structure remains balanced. Our debt portfolio is mostly long-term with an average cost of debt very much aligned with its indexation profile. Our debt structure remains healthy, rather comfortable, and we are well positioned relative to our top financial covenants. In the pie chart, we can see that 90% of the debt is long-term, more than a year maturity. And this aligns with the bar chart below showing our repayment schedule. It becomes clear that the main maturities will start happening only in 2029. So even facing a quarter with more pressure on results, as we have seen so far, we maintained financial discipline and adequate liquidity. Now moving to the next slide. And to conclude, I'd like to make a brief comment on our ESG agenda. In the environmental pillar, we completed the 2025 Greenhouse Gas Inventory, strengthening our climate governance, our climate agenda and helps us build a technical foundation for future decisions. And we continued to participate in the University of Hamburg's D GREES project, which focuses on global decarbonization strategies. Here we sit side-by-side with large Brazilian companies and international companies alike. We also renewed the ISO 9001 and ISO 14001 certifications at TVV and Tecmar Norte and continue to enhance Tecmar's waste management initiatives. In the social pillar, we received the Empresa Amiga da Crianca awarded ABRINQ Foundation as a Child-Friendly Company in recognition of TVV's CAB actions that supports the surrounding community. And in governance, Log-In was selected as one of the finalists for the Finance and Law Summit and Awards 2026, which clearly highlights the evolution of our internal processes and controls. These advances reinforce an objective and pragmatic and integrated ESG agenda focused on risk management, compliance, and the creation of sustainable long-term value. Very well. I now turn the floor back to Marcus Voloch.

Wonderful. Thank you, Pascoal, Gurgel, Gustavo. We will now move on to the question-and-answer session. Sandra, over to you, and I'm available.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have one question here from [ Lucas Pereira ]. How are the fuel and diesel cost pass-through mechanisms working? And what was the actual impact of these costs on Q1 2026 earnings?

Lucas, thank you for the question. Felipe Gurgel will answer your question.

Thank you, Lucas, for the question. Well, the impact on bunker price started kind of at the end of February. If we get the price reference in February, it was about $500. And in the end of March, beginning of April, it increased, and this immediately raised an alert, not only for us, but for all companies in our industry. And this led us to implement what we call a fuel price adjustment surcharge, basically geared to rebuild this additional freight prices through this surcharge. And with price increase as we saw in the journal media in the ANTT price list was reviewed and the whole mechanism of the regulatory agency was started finding companies that were operating outside the minimum price list. On one hand, diesel impacts us because we have our Road Cargo Transportation. We have Tecmar as part of the group and Tecmar uses diesel as its main in part to serve its customers. But also diesel prices create an opportunity with the reinforcement of inspection by ANTT, particularly return cargo from the Northeast, et cetera, is positively impacting Cabotage because we end up working with freight rates, which are more advantageous for customers in Cabotage than on highways when we compare the price list. So on one hand, we pass through the whole bunker price increases in diesel when it impacts our business. And on the other hand, we expect to capture volume growth opportunities given this adjustment in the ANTT price list. We expect a positive result for us. In a nutshell, this is it.

Thank you, Gurgel. We have a question from [ Fernando Ramos ]. I'd like to know about the Pantanal vessel sale and why the vessel was sold?

Thank you for the question, Fernando. Pascoal, over to you.

Thank you, Marcus. Thank you, Fernando. Well, going straight to the point, this operation is completed. It's part of a cash management strategy and a fleet management strategy for that matter. We took advantage of a good moment in terms of price of vessels like ours in the international market. So we got a high price. And in terms of cash, I think it's clear for everyone that in Brazil today, taking on debt to fund the company is costing a lot. The credit market is going through a credit crunch, and it is expensive. So the decision was made by our management together with the Board of Directors, considering both the financial landscape, like I said, focusing on the company's cash, and also looking at the opportunity related to the price of the asset in the international market. And what is very good about this operation is that we have flexibility of returning the vessel when it is interesting to us, looking at our asset renewal plan in fleet of vessels in the future. So that made a lot of sense to us. There was no commercial or operational change or motivation in the change. The operational plan of the company remains totally unchanged. No changes whatsoever. Now of course, we will recognize the chartering expense associated with this vessel, but there is no impact whatsoever on business continuity, on service to customers, and our operational routines. The operation was totally approved by our governance. This was performed at market value based on an independent reference. It was approved by the Board, by the financial, and auditing committees. So this was totally transparent.

Thank you, Pascoal. We have a question from Max Bueno from Mapfre Investimentos. Hello, guys. Thank you for the opportunity. We have followed the evolution of logistics bottlenecks resulting from the war in the Middle East, monthly reduction in the availability of containers and increased freight rates. How will these variables impact Coastal Shipping operations throughout the year, mainly in terms of margins?

Thank you, Max, for your question. I will answer this myself. What happens is that one of the most immediate and obvious consequence is higher fuel prices. As Gurgel has explained, we pass this through the emergency fuel adjustment. We created this surcharge specifically to cover moments of high volatility and this surcharge varies. And it varies very quickly, reflecting international prices. So in a way, we end up creating a hedge. Now as regards to the lack of containers, we have our own fleet. Our fleet is not mixed with anyone. Although the fleet does have MSC containers, we largely have MSC fleet. The fleets do not mix. It's 100% belonging to Log-In. So regardless of what happens in Asia or the Middle East, these prices will not affect Log-In Brazil because our containers remain in South America, in a closed loop, but they tend to go abroad. So our fleet is dedicated, and this is an advantage. And finally, with the price of the vessels, these are our own vessels. So this should not have a variation with the except of Pantanal. As Pascoal explained, we sold the asset, but continue to operate with it with a fixed price. So it's a fixed cost for us regardless of what happens in the international market. So we're reasonably okay. Now if there is a recession globally, this recession inevitably will impact Brazil, and it is possible that Cabotage will be impacted, that exports will be impacted, that Feeder railroad operations might drop and import volumes might drop. But we are not seeing this happen. I think that fuel prices need to be high for a very, very long time for us to face a global recession, which would eventually affect cargo handling around the world. This is not happening. We're following up close what's happening in volume around the world. And for now, there have been no retractions. On the contrary, it's been growing. So other than bunker fuel prices, which are passed through in diesel, this impacts our operation in Brazil and in South America, very little. Sandra, back to you.

Thank you, Marcus. We have another question from Max Bueno about TVV. With the integration of the new Penedo Area at TVV, what is the expected increase in the terminal's operations along with several lines.

I'll let Gustavo answer this.

Thank you, Max, for the question. Well, it's initially a physical increase. We increased our physical space by close to 70%. When we segregate this into operations that we can handle at the warehousing, we're growing by 90% and container cargo handling growing another 40%. So this meets a great demand of TVV. We have been working with occupancies at around 94%, 95% every year, sometimes even compromising the quality of our service. So this expansion will correct this. We will also increase our levels of service and mainly our capacity to capture new cargo and new business because we had a simple limitation, we could do it. So this will crown a short-term investment plan in the terminal and in the modernization plan. Like I mentioned, we invested BRL 170 million in the modernization plan, and we need more room to grow physically. And now we have almost 70% increase in capacity, improving our levels of service and with opportunities for new business at TVV and with this new area. Back to you, Sandra.

Thank you, Gustavo. We have another question by Fernando Ramos with [ Investor Master ]. Do you intend to increase the action of Tecmar Norte in the North region?

Always, but I will let Pascoal answer this question.

Thank you, Marcus. Well, actually, we are already doing this. Not so long ago, we communicated to the market the acquisition of an area just next to our terminal at Tecmar Norte, which represents 60% of the existing area, and this will be used for container handling. Also a warehouse, even better than the one we have in the original plot of land. It is currently occupied, but with the possibility of future business. Tecmar Norte has been expanding its share in the main services we provide, i.e., warehousing, container handling, transportation, and we have been doing different things, new things. We have a very interesting operation with some of our major customers to have match-back of containers. And at the same time, we are developing the less-than-truckload business, which was not an expertise of Tecmar Norte, but which is an expertise of Tecmar. So we're transferring this. And we have started this for a while, and we are ramping up the volume of LTL with Tecmar Norte. Although the results of Tecmar Norte are very positive in Q1, it's still low season there. We will still serve a wave with this new plot of land with this expansion, and we'll set this wave more strongly at the moment that the market starts entering a stronger seasonality during the year. Thank you.

A question by Fernando Ramos with [ Investment Master ] about last year about TVV. Is there any expectation of new container services at the terminal?

Gustavo?

Thank you, Fernando, for this question. Well, considering our plan to start operating in the Back Area in 2026, we have expanded and added another service at TVV. Initially, a monthly call of our SEA, a Log-In service coming from Manaus. There's an expectation that the service will start operating every fortnight in the second half of the year. Of course, new windows for container or any other type of service is a looking possibility at the terminal given the increased capacity. But of course, this is all confidential. But in a nutshell, we have increased our windows for 2026, considering this expansion.

Thank you very much, Gustavo. Well, as there are no more questions, I would like to thank everyone for participating, and I'll turn the floor to our CEO, Marcus Voloch, for his final statements.

Very well. We closed out Q1 2026 with results that reflect disciplined execution in a still competitive environment, due to increased volumes, progress in integrated solutions, and a consistent focus on levels of service, and operating efficiency. We remain attentive to cost pressures and market conditions, prioritizing commercial adjustments, expense control, and margin preservation until recovery, while preparing the company for a more balanced operational dynamic throughout the year. The team remains super motivated, and this driving vigorous growth of our operations and improvement in all levels of service across all segments. I'd like to thank everyone for your attention during this conference call, and I'll see you next time. All the best. Sandra?

Thank you, everyone. The conference call of Log-In Logistica Intermodal to review first quarter 2026 earnings is now finished. You may disconnect, and have a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]