Rumo S.A. (RAIL3) Earnings Call Transcript & Summary

Good afternoon. Thank you for waiting. Welcome to Rumo's Fourth Quarter 2024 Earnings Presentation. [Operator Instructions] This presentation is being recorded and simultaneous translation is available by clicking on the Interpretation button. If you are listening to the video conference in English, you have the option to mute the original audio in Portuguese by clicking on Mute Original Audio. Before proceeding, we would like to reiterate that forward-looking statements are based on Rumo's Executive Board's beliefs and assumptions and information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and depend on circumstances that may or may not materialize. We recommend that you refer to the disclaimer on the second page of the presentation. Now I will turn the conference over to Mr. Felipe Saraiva, Rumo's Head of Investor Relations. Mr. Saraiva, you may begin the presentation.

Good afternoon, and thank you for joining Rumo's Q4 2024 Earnings Conference Call. Let's begin with the highlights on Page 3 of the presentation. 2024 was a very positive year for Rumo. We delivered growth, achieved solid results, and further consolidated our railway as the leading logistics corridor in our major markets. In the grain business, we increased transported volumes despite the decline in Brazilian exports, expanding our market share in Mato Grosso, Goiás, and in the ports of Santos, Paranaguá, and São Francisco do Sul. We also saw volume growth in other segments with an important increase in industrial product transportation, driven by the startup of Suzano's new hardwood pulp mill in Mato Grosso do Sul. Higher transported volumes combined with a 25% increase in average tariff boosted our quarterly results. Adjusted net EBITDA reached BRL 1.7 billion, up 38% year-over-year. Adjusted net income was BRL 206 million, more than double from the previous year. For the full year, we delivered adjusted EBITDA of BRL 7.7 billion and adjusted net income of BRL 2.1 billion. Financial leverage ended the year at 1.4x, lower than the same figure at the end of 2023 and flat compared to the previous quarter. It reinforces our financial discipline. I would like to highlight the progress of the construction of our railway in Mato Grosso. The project is at peak execution with more than 5,000 workers and 1,000 heavy equipment units mobilized. On Page 4, we present our market share gains in the quarter. We increased market share in all 4 highlighted operations, both in the quarter and for the full year. The growth emphasizes the key role of the railway in transporting agriculture commodities produced in the Midwest of the country. Moving to Page 5, let's review our operational indicators. We improved our main efficiency metrics even with a higher transported volume. This progress reflects our investments in infrastructure, technology, and process optimization. On Page 6, we present our operational and volume performance. Transported volume grew 2% in the quarter, reaching 19.9 billion RTK. The Northern operation was the main driver of this growth with higher volumes in industrial projects, sugar and fertilizers. The Southern operation was impacted by extreme weather events in May and lower grain exports in the last quarter. For the full year, which was part of the all-time high level of 79.8 billion RTK, up 2.6 billion RTK from 2023. On Page 7, we highlight revenue and yields. Pricing was the main driver of our performance throughout 2024. We posted year-over-year increases in Q4 despite the usual seasonality of lower prices at the year-end. The railway remains the major long-haul logistics solution, essential for moving the Midwest agricultural commodities exports. In addition to providing competitiveness and resilience, the railway aligns with the decarbonization agenda of the industry's reserve. On Page 8, I will present the quarterly EBITDA. Higher contribution margin was the main driver of EBITDA growth during the period. Fixed costs and operating expenses increased at a slower pace than the contribution margin and reflects the structure needed to support our growth strategy, efficiency gains and risk management. In 2024, we completed several structure and operational adjustments. From now on, we expect our fixed costs and expenses to remain stable. On Page 9, let's discuss financial results and net income. Net financial result for the quarter was BRL 735 million. The cost of debt was lower in the quarter, given the lower interest rates compared to the same quarter last year. Other expenses increased due to the addition of the Malha Paulista agreement and the leasing of equipment for track maintenance. It's worth mentioning that our debt is materially indexed to CDI, either directly or through derivatives. On Page 10, I will present our leverage and debt profile. Net debt at the end of the quarter was BRL 11 billion, and the financial leverage was at 1.4x, flat versus the previous quarter and lower than compared to the end of 2023. In 2024, we were very active in the local capital markets, raising BRL 3 billion through new issuances at competitive costs close to the Brazilian sovereign rates. It highlights our strong credit profile and Rumo's broad access to capital markets, ensuring a well-balanced debt structure. Our liquidity position remains solid with BRL 8 billion in cash and well distributed maturities over the next coming years. On Page 11, let's review our investments in the quarter. We have invested BRL 1.9 billion allocated as follows: BRL 513 million in recurring maintenance, BRL 848 million in the Mato Grosso Railway Project, and BRL 551 million in other expansion projects. On the Mato Grosso Railway, we are very pleased with the progress of the construction. The infrastructure works, which forms the foundation of the railway is advancing rapidly, and we have already completed more than half of its execution. For this superstructure, which is the visible part of the railway, we have made progress in material logistics. All of the imported rails have been received. A significant portion of the rocks is already on site, and the sleeper factory will begin deliveries in the second half of the year. Another key milestone is the construction of the Rio Vermelho bridge, the main special structure in this first phase of the project. The bridge infrastructure has now reached the opposite bank of the river. Additionally, the construction sites for the BR-070 terminal is fully mobilized and work continues to advance. Moving on to grain update, start with soybeans on Page 12. We are very optimistic about the 2024-2025 crop. Soybean production in Mato Grosso is expected to grow by roughly 7 million tonnes, driven by the expansion of planted area and the all-time high productivity level in the state. As expected, we are seeing a highly concentrated harvest with increased logistic demand across all of the corridors and ports. Now on Page 13, let's discuss the current outlook. We have a positive view for the 2025 second crop. We expect healthy production levels in 2025, supported by stronger farmer margins, which provides the right incentives for the expansion of planted area. A strong dynamic in the raw material supply chain, including seeds, fertilizers and crop defensives further strengthens this outlook. We are closely monitoring planting progress and weather forecast for the coming months, key factors in confirming this crop potential. So far, all the indicators point to a production level similar to the previous year. On Page 14, I will present our 2025 guidance. We are very excited about the opportunities that 2025 presents, supported by a solid supply and demand fundamentals in the logistics sector. We expect another year of growth. The transported volume will be driven mostly by new segments, including the ramping up of transportation of hardwood pulp, mining commodities, and fuel. In the grain segment, we expect some modest growth supported by more capacity for the circulation of trains even though there is still no major expansion at the Port of Santos at this point in time. Our EBITDA guidance reflects the positive impact of higher transported volumes. Regarding prices, we remain committed to our value-driven strategy. After 3 consecutive years of strong price hikes, we anticipate a stabilization in margins on a year-over-year basis. Our '25 investment plan aligns the execution pace of our key projects, including the greenfield railway in Mato Grosso, the capacity and safety enhancements in Malha Paulista and the improvements in the port access in Santos. It concludes my presentation. We are now available for the Q&A session. Thank you.

We will now begin the Q&A session. Joining us today are Mr. Pedro Palma, Mr. Guilherme Machado, and Mr. Felipe Saraiva. [Operator Instructions] Questions in writing via the Q&A will be answered after the conference by Rumo's Investor Relations team. The first question is from Mr. Lucas Marquiori from BTG Pactual.

I have a question about your volume execution. If you could provide us more information on how you built your guidance with the RTK. We know that Q1 tends to be a bit weaker. So Q2 and Q3, will they be a bit more overburdened? And would you have to consider a second semester based on your projections, where the -- I mean, there is an increase in corn exports but it might not be that clear yet? So can you help us think about how the volume is going to be executed over the year? That would be fantastic.

Lucas, this is Guilherme. Thank you for your question. Well, when we were working on the budget and building our guidance, we included different improvements and efficiencies that we are applying to our operations, our assets. As Felipe has shown, our non-grain portfolio should be expanding considerably and mobilizing significant volumes, with our new pulp operation with Suzano, also bauxite volumes with CBA, and many other initiatives that we have going on. So looking at our main portfolio, which is grains, our growth should be in line with the investments we've been making in our operation. And obviously, the fundamentals for the next crop are very, very solid. So we're very constructive, very optimistic when it comes to this coming crop. What I can illustrate when it comes to our volume guidance that will have an impact on the finance is the improvements that we're making in the 135 car train tests that we have been doing. It points to the fact that we can continue to increase capacity, the implementation of technology, implementation like PTC, which will allow for greater flow in the transit and dwell time of our assets, and we still have some rolling stock coming in to strengthen our operation as a whole. So we will be focusing on execution this year. You're right. When it comes to our strong operation months, I mean, that is our prospect. Last year, there were consecutive months where we were operating at the limit of our capacity, so record capacity levels, which is a testament that we have been building operating efficiency. And that is our objective, to provide a return on the investments that we're making. So we feel very confident it's going to be a very solid crop. And you're right about corn. We are monitoring that, but we're very positive when it comes to the next 6 months.

The next question is from Mr. Guilherme Mendes from JPMorgan.

I have a follow-up question to the question that was just asked. It's very clear where your volumes are coming for next year, but it's clear that it will be a more challenging year when it comes to contracting prices. How is contracting coming in terms of soybean and corn in the first half of the year with regards to take-or-pay? That would be great to hear about that.

This is Guilherme. Thanks for your question, and you're giving me the opportunity to clarify a point that we have been sharing with the market in the last few months. We have made progress in our pricing. Every year and every campaign have its own specificities. You saw that farm selling was delayed last year, and we have been complying with our trading strategy. In practical terms, in our grains portfolio, we have already sold all of our mill for next year, and that is a vocation of the railway because the crushers are connected to our terminal. So to us, this will be a natural cargo and all of that has been practically fixed. Now soybeans, in the first half of the year, we're well advanced when it comes to soybeans. At the end of last year and beginning of this year, we realized that there was a delay. So we have -- fixing some prices and we've made progress in the last 2 weeks. In terms of percentage, I mean, a percentage of the soybean will happen on spot prices. We have been faced with similar scenarios in previous crops, and it's a natural market dynamic. So we'll be fixing those prices over the months, the percentage that hasn't been fixed yet. But the percentage that has is quite robust and it will give us great operating dynamics. Now second half of the year, corn, we have made progress in fixing prices as well. As per our strategy, there is a percentage that we will be trading in the first half of the year, then we'll be more contracted. We're also monitoring planting and harvest, but we're confident that we have the right commercial strategy and it will comply with the strategy that we have been designing over the last few years and will also be providing us with great operating dynamics. We're confident that it will be a strong year, strong fundamentals, concentrated crops. And so naturally, that will favor the most efficient logistics solution, and we have been making the right investments to provide precisely that to our clients. So we remain confident and continue to follow our operational strategy.

Great. That was very clear.

The next question is from Mr. Alberto Valerio from UBS.

I'd like to hear about future projects. The government has been quite vocal when it comes to rail projects. More recently, we heard that there may be a new bidding process for the stretch between [indiscernible] and Macarena. There's the FICO coming out as well in the West and South networks. Could you give us an update on how Rumo is seeing these new projects the government is launching? And what will happen to the West and South networks? That would be great.

Alberto, this is Pedro. Thanks for the question. It's quite a broad question so I will take the opportunity to comment on our whole portfolio. First point is that we are highly focused on executing our projects, our ongoing projects. And I'm very happy with the progress we've been making at the Mato Grosso rail using the Paulista network capacity and the new projects in the Santos Port, including the seeds project in the terminal with CHS. So just to make it very clear right off the bat, this is our priority. Now obviously, considering the system, and I'll comment on the West and South Networks, first, the South Network is a very relevant asset to us. As you know, the South Network concession will be due in the first half of '27. So we have reorganized internally so we can focus more on that operation and so that we can be ready to have the best negotiation possible for that asset together with the granting authority. Because not only do we want to manage that asset the best we can right now but also to have the best future possible for the concession of the South Network. What happened at the end of last year is we -- the Ministry of Transportation created a working group with [ ONT ] and Infra S.A. to discuss how that network will be designed so that it can be sustainable over time and so that it can keep up with the growth of agribusiness, especially in Paraná and also so that it can be attractive to any operator in the system. So obviously, we're working very closely with the government on that. We will be making contributions. We are making contributions, and discussions will take a while before we have a material fact to disclose. But what I can say right now is that the working group has been set up and we're making our contributions. And obviously in 2025, discussions will make progress. As for the West Network, I think the news is that at the end of last year, I think it was in December, the government sent the discussion of remodeling that network to the court of accounts, and the working group that was set up for that process is now at the TCU. It has just been received by the court so now they're going to open the process and discuss potential designs and come to a conclusion on the exit for that network. Rumo has not committed any capital to that process, I just want to make that clear. Rumo has not made any commitments to the future design of that network, but we are working actively with the government so that we can come to a feasible design that can be the best design for the country. But again, Rumo has not made any commitments to invest anything in that asset. As for the other projects, Alberto, you mentioned the government's projects. To be honest with you, we are monitoring and looking into all the different rail projects in Brazil. But I think they're all too incipient. It's too soon to have any position about those projects. Again, I'll reiterate, our team is focusing on executing our projects, our investments. We have a very solid competitive position right now. And as we move forward with the Central Network, as we move forward with the Mato Grosso Railway, the more competitive we will become. All the other projects and all other potential avenues will be taken into consideration in a timely fashion. But right now, for the time being, we're just discussing ideas and not actual concrete projects. So when the time is right, we will look into these projects but always continue to focus on what we're doing right now and the investments that we have committed to.

The next question is from Mr. Gabriel Rezende from Itaú BBA.

Our question is about your CapEx guidance. Could you talk about the range? What might be the opportunities and risks to remain at the top of the range or the bottom of the range? And what kind of FX are you considering for your investments expectations for the year? And how will that variable affect your CapEx prospects?

This is Guilherme. Well, the guidance includes all these projects that Pedro just mentioned. We continue to be highly mobilized and focusing on the extension of the first stage of the Mato Grosso rail coming to BR-070, building the terminal and all the other initiatives that Saraiva mentioned during the presentation. These are ongoing initiatives. We have ongoing projects and will continue at a higher level as we did in 2024, which were -- was at the execution peak of that phase. And in addition to that, we also have the Paulista Network duties. These are considerable investments to make sure that, that network has the right flow because it's key to us. Also investments in the Ports of Santos to improve traffic in the region. Also the work in the port through the partnership with CHS. So the first stages of work, probing both onshore and offshore, those are ongoing as well in addition to the recurring CapEx. So that range includes potential variations, but I just want to point out that the CapEx is an increment to that of 2024. We'll continue to invest and to execute on those projects without any interruptions across the board. We're completely confident that they will be leading to higher efficiency and additional capacity that will lead to even better results in the future. So there may be variations, but the message we want you to leave here with is that we will continue to increase investments, and that's the dynamic we'll be pursuing in 2025.

The next question is from Mr. Victor Mizusaki from Bradesco BBI.

Just a follow-up question to Gabriel's question about CapEx. Could you confirm the investments that will be made in Lucas this year, considering Saraiva's presentation? And what about 2026? How much will you be investing to conclude the project?

Victor, this is Guilherme. So this year, to continue Phase 1 of the Mato Grosso rail, we're talking about BRL 2 billion. That's the amount we should be executing. And next year will be around that as well. We're still finalizing the assessment but we'll disclose that when we disclose the guidance at the end of the year, depending on some fine-tuning, and by then, we'll have a better outlook on the execution in 2025, and we'll be able to know what the final figures will be for 2026.

The next question is from Mr. Bruno Amorim from Goldman Sachs.

Could you comment on the dynamics of volume looking forward? There are some bottlenecks in the Port of Santos, as you mentioned, which will limit the growth in grains for the time being. There are major investments that are maturing, so port capacity will increase this year, next year. And there's also a potential trigger to accelerate volume, which is the implementation of the expansion in Mato Grosso. So could you help us understand when might we be able to see an increase in capacity coming from these investments? That will be very helpful, be it through the entry of the new terminals or other initiatives at the Port of Santos, or if you could give us an idea when the Mato Grosso extension will begin to contribute with the volume. Will it be first, second half next year or maybe 2027? That would be great.

This is Felipe. Our system in the Santos corridor is probably operating roughly 35 million tonnes. In 2024, it was 32 million tonnes of grains transported, and that number should go up a bit more this year. That is implicit in our guidance. As of 2026, that system will go through a new stage with the block of investments both in the Port of Santos and circulation works in the system, and obviously, Mato Grosso with the new terminal. So in 2026 at the Port of Santos, we'll be concluding the Outeirinhos loop line, which is key to move cargo on the right side of the port, and STS11 will be ramping up because COFCO should be concluding the works at the end of this year, beginning of next year. So we're talking about 10 million tonnes -- additional tonnes to Rumo, which we can pursue as of 2026. Then there will be the BR-070 new terminal, the first terminal of the extension with 10 million tonnes of capacity, and it will go into operation this year. It's hard to say exactly when it will go into operation this year, but we are working with a scenario that will be -- have cargo at that terminal in 2026. And we'll provide more details in the guidance at the end of the year about how that's going to be executed. And there are also lots of initiatives in the Paulista Network, which are maturing now. So the update of the stretches, the extension of the train to 135 cars, better technology to coordinate and license trains -- that will be bringing in an additional circulation capacity to be able to transport the additional 10 million tonnes. That's it. As of 2026, we won't be capturing 10 million tonnes from 1 year to the next. So then we're going to have to consider the market in terms of what kind of an increase we'll have year-on-year, but that's the volume we'll be pursuing. The new terminal in partnership with CHS will bring in another 9 million tonnes of capacity to move grains and another 1 million in the system. That is not the single project at the Port of Santos. We also have some work at T-39 and we're talking about T-39 plus the partnership with CHS probably towards the end of the decade, '28, '29, depending on when the work starts. And let's not forget, we're licensing that new infrastructure now. And that's happening at the same time as everything else that's happened. So we will increase capacity at the Port of Santos and also we have the new -- the second stage of the Mato Grosso rail. So to summarize what I said, we'll have a first capacity increase as of 2026 and then another increase as of 2028, '29, towards the end of the decade.

The next question is from Mr. Filipe Nielsen from Citi.

Most of my questions have been answered, but I'd like to hear from you in terms of potential divestments as well as agreements with operators in your terminals. You just mentioned the BR-070 terminal. I remember that was one of the things Rumo was pursuing, new partners to have terminals in land in Lucas do Rio Verde. So what have you been seeing and discussing when it comes to selling assets as well as potential partnerships with other players?

Thank you for the question. We always look into potential opportunities in our portfolio. And we have been executing on some of them with partners that may or may not be our clients to recycle our portfolio. That's been happening over the last 2 years in different ways. You saw the divestment we made part we had in T-16 and T-19 and similar initiatives. So as part of our process to look into the portfolio, we've also made some joint investments that are client investments in our operations. For instance, an operation that we consider to be very constructive like the acquisition of rolling stock that we did at the end of last year in partnership with COFCO and which to us was beneficial in many different ways. So COFCO is a key client. It helps us diversify our base, bringing in new rolling stock. It's a long-term partnership. So that's a recurring exercise for us. It's part of the company's internal dynamics. Right now, there's nothing that we can comment on that is relevant, but should anything arise, we will be sharing it with you.

[Operator Instructions] The next question is from Ms. Julia Rizzo from Morgan Stanley.

Could you clarify a point, please? On the CapEx guidance, you mentioned BRL 2 billion going into Lucas this year and perhaps the same amount next year. It wasn't very clear to me. Would it imply an increase in the CapEx expected for the first stage? Could you provide us some more color on that, please?

Thanks for giving me the opportunity to clarify that point. The Mato Grosso project is -- it's important to say that the guidance we disclosed last year remains valid. We have spent last year, 2024, roughly '23-'24, BRL 2 billion, and we have another BRL 3 billion to be invested in that project so that adds up to BRL 5 billion. Considering '23-'24, we spent BRL 2 billion. We have BRL 3 billion left to spend. So this year in '25, we should spend most of that just to reiterate what I said in the previous question, close to BRL 2 billion and the remainder should be invested in 2026. If it wasn't clear, thank you for giving me the opportunity to clarify that. I want to be completely transparent with you.

Great, okay. So may I ask a question about what Felipe said during the presentation about expanding the infrastructure and that would justify the increase in costs and expenses last year? What was -- what were the main drivers for that increase? And what are you expecting for next year? Will it be growing less, considering the infrastructure has probably been adjusted?

Julia, this is Felipe. In the last few years, there have been many changes in our portfolio. In 2019, the Central Network came into the portfolio, many new terminals. We had Iturama, Sao Simao, Rio Verde, Alvorada that we started last year. We also expanded new pulp operations, new liquid operations. And in 2019-2021, there was also an expansion in the capacity of the Rondonópolis terminal. So the company has grown and its operating structure has also grown to keep up with the company. Now in terms of portfolio and growth, we have also been implementing new initiatives, new ongoing projects. And obviously, our personnel and infrastructure has kept up with that. So that company restructuring was mainly concentrated in 2024. So the current structure should settle now, and the fixed cost should continue to grow at the same rate as the inflation. We're not expecting the same kind of increases that we saw in the previous years.

The next question is from Mr. Lucas Marquiori from BTG Pactual.

Still on the volume execution, could you update us on the shipping process in Mato Grosso? We've seen quite a lot of rain in Mato Grosso. Should we be worried about how the crop is going to be shipped and considering the delays in the corn crop, does that imply a risk to logistics considering the ramp-up in Q2?

Lucas, this is Felipe again. I'll start answering your question by what you asked about the crop. There has been considerable progress in the soybean harvest so we have harvested over 70% of the soybean crop and 70% of the corn has been planted. So in terms of the crop, the risk for the planting window in the double crop corn has been overcome. A large part of the double crop corn in Mato Grosso will have been planted by February. In terms of operations and the weather, in the last few weeks, we have been operating according to our plan for the beginning of the year. The cargo arrival at our terminals, especially terminal in the North Network in Rio Verde and the Central Network, has increased as of the middle of February. We're hoping that we'll gain traction because now the harvested crops will begin to be exported.

Our next question is from Mr. Bruno Amorim from Goldman Sachs.

My second question, it's a follow-up question on your comment about a more stable guidance and a more stable pricing, which makes sense because a while back, road transportation prices went up, you caught up. So considering the structural big picture, prices should become stable. On the other hand, we're going into a year now where the company has contracted less than it did in previous years. Please correct me if I'm wrong, but you have contracted less this year until the end of last year, which meant that you were more exposed at the beginning of this year to -- it's not spot dynamics but closer to the spot market. So in a strong crop scenario, that suggests a higher pricing power. So if you're less contracted with a strong crop, there may be a pricing upside that hasn't been included in the guidance. So could you comment on that, please?

Thanks for the question. This is Guilherme. As I said, I think when I was answering Guilherme's first question about our trading dynamics, we're highly contracted for the first half of the year in soybeans, given everything we've seen in terms of harvesting, as Saraiva just mentioned. So that's in line with our strategy for the year. So this is happening gradually, and we believe our commercial strategy makes complete sense, considering what we set off to do and catching up with a historical gap and charging a fair price for our services. So considering the current dynamics, we're fixing prices as the crop unfolds. What we have included in our guidance is a considerable EBITDA increase, considering the combination of price and volume. And that's what we should be seeing during the year. As I said, part of those volumes will be sold on the spot market. We'll be doing that gradually when we conclude the sales for the first -- second half, and then we'll see what the corn dynamics will be. So we're very confident that this will be happening in the next couple of months, and we'll adjust our operation based on the volumes dynamics. So there will be a smaller share of that, that will be fixed on the spot market.

The next question is from Mr. Pedro Bruno from XP.

My question, which is about what Pedro said, and it's in your release about safety, which is a nonnegotiable value to you. I know that there are many sides to safety, but in a year where you're less exposed to long-term contracts, considering the rail operation, safety becomes even more relevant in the next couple of months, a higher concentration in the first half of the year and potentially for the second half as well. So I'd like to hear from you what that means in your everyday life. And I mentioned a couple of areas where the company is not happy with performance, and the peak capacity has led to an increase in the number of accidents. And I'm sure that's part of business as usual, but if you could provide us a little bit more information about that because it's a very important topic, especially considering the risk of the beginning of the year but also structurally speaking.

That's a great question, Pedro. Thank you for giving me the opportunity to talk about that topic. It was very well put. As I said in my letter, safety and security is a nonnegotiable value to us. And at the same time, we know that we're not doing the best that we can, and that's precisely why I mentioned that in my letter. We are not satisfied with the safety culture that we have at the company right now. Let me just qualify why I said that. In 2024 -- and let me just split that into 2 things: personal safety and rail safety. On the personal safety side, there weren't any serious incidents but there has been an increase in frequency rate, which happened mainly due to new people coming into the operation, third-party contracts working in the projects. So we saw in our execution indicators that frequency has increased. And the fact that we have new people coming into the operation isn't and shouldn't be an excuse for the rate to increase. That just shows to me that our safety culture is not solid enough. It's not as solid as it should be. New people coming in should be adopting the standards that are already part of the organization. So that's a very relevant point to us. And we're going over structure, personnel, and the work that is done to make sure that the culture of safety can be completely solid and fully permeates the organization. And that's something I'm doing and all company leaders are doing. We have full visibility of the process, and it's very clear to us that, that's something that we need to work on. So that's key to the organization. Nothing that we do in terms of value creation or financial results makes sense if we cannot make absolute certain that everyone who works with us can go home safely and come back to work the next day safely. So we know we have some work to do on that front and we are working on it. As for the rail safety component, there is work to be done as well. But here, we're talking about the frequency of rail incidents. Even though there was an increase in volume, it was lower than that of last year. So we are on a very relevant and solid journey to reduce rail incidents, and I'm happy with how we've been progressing. But we need to do more. In 2024, there were 3 accidents that were a bit more serious because of the number of cars and the cargo that was involved in some of those operations. But it's not the same as it is when it comes to personal safety, it's not a cultural matter. But we have to carry on working on it and doing the best of our efforts to minimize the number of incidents. So safety goes hand-in-hand not only with company growth but the quality of our operations. So at the end of the day, the better you manage your operation, the better it is and the safer it is, and the safer the operation is, the better the production process.

The next question is from Mr. Rogério Araújo from Bank of America.

I have a follow-up question about the guidance range. It was BRL 600 million. Last year, you mentioned BRL 500 million for the range. But I think last year, you were more certain that you were going to deliver more because I think more had been signed already. So how sure are you of that range based on the crop volume expectations? How much demand can you anticipate for the guidance price? What are the risks that are not in your control and that might push you off the range, both downwards or upwards? And in terms of volume growth, we're talking about 4.5% to 10% growth implicit compared from December to February. In 2021, I remember that you were working more in the spot market and you talked a lot about operating predictability. So that volume growth, how much of that and signing the spot market, how much of that can be a problem, considering a lack of operating predictability? And your CapEx guidance, how much of that CapEx range is coming from investments in the new port terminal?

This is Guilherme. Thanks for the questions. Well, let's start with the EBITDA. Obviously, as you can imagine, that number is part of our internal budgeting process and that's how we see prospects for the year. We're very confident that we will be delivering this year, as I have reiterated in my previous answers, based on the fundamentals for the crop or our competitive environment or our pricing strategy. As for the range, if you'll allow me, that's a marginal variation compared to last year. It's a 3.5% variation upwards or downwards in the EBITDA. But the main message is that there's solid growth, which is capturing efficiencies of the investments we've been making. And our commercial strategy focusing on costs, expenses and return on our investments, so that includes EBITDA, includes a metric that measures the company growth and how solidly we have been running our operation. In terms of CapEx, we've been making investments. And for the port project this year, it's still a timid amount. We are looking into onshore and offshore, and that will require some investment as well as preparing the area, but it's still a timid amount when compared to the whole. I think I missed one of your questions, right, or have I answered all of them?

It's about operational predictability. In 2021, you mentioned that, and that kind of got in the way of your operation. And it was because you were working a lot in the spot market so you couldn't organize the order of the trains. So I was wondering how you've progressed since then and the risk of lack of operating predictability since you're operating more in the spot market.

Okay, got it. Well, what I can say is that in the last few years, we have been making considerable investments to make the system more fluid, and that has been captured year-on-year. So that means we have become more resilient when it comes to operations to deal with the market that we're faced with, how it grows and its challenges. During this call, we've talked about different investments that we've been making. Saraiva talked about investments that are being made in the port, in technology with PTC, which is an onboard control so that we can make our operation more fluid and a more efficient dwell time. We're also updating some major stretches in the Paulista Network. So all of that will make us more resilient and help us adapt our operation to whatever market dynamics might take place, and that will be translated into results, obviously. So as I said, every year is different and our commitment is to focus on efficiency, safety, as Pedro mentioned earlier, and to capture consistent results for the company.

Great, that's very clear. It was very helpful.

The Q&A session is now concluded. We would like to hand the floor back to Mr. Guilherme Machado for his closing remarks.

Thanks, everyone, for joining us on this call. We're very happy with everything we've delivered in 2024. And I'd like to thank everyone who was part of this process, our employees who contributed to these results. I'd like to thank our shareholders for their trust, and to say that 2025 has very solid fundamentals. We're very excited about the work we're doing on all fronts, and it will be a year of execution in all of our operations. We want to make sure that we have enough fluidity and execution to meet our client needs, and we'll also be executing on projects that will pave the road to the company's future. Thank you for joining us, and we'll see you on the next conference call.

Rumo's Fourth Quarter 2024 conference call is now concluded. Thank you for joining us. Have a great day. Questions in writing will be answered by the IR team by e-mail. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]