Vamos Locação de Caminhões, Máquinas e Equipamentos S.A. (VAMO3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, welcome to VAMOS Conference Call to discuss the earnings regarding the First Quarter of 2024. Today, with us in this conference call, we have Mr. Gustavo Couto, CEO; and Adriano Carvalho, CFO and Investor Relations Officer of the company. This conference call is being recorded, and the replay can be reached at the company's website, ri.grupovamos.com.br. The presentation is already available for download in Portuguese and English. We would like to inform that all participants will be just watching the conference call during the company's presentation. We will then start the Q&A session when further instructions will be provided. Before moving on, we would like to let you know that any statements made during this conference call relative to the company's business outlooks, projections and operating and financial goals are based on Vamos management beliefs and assumptions and are based on information currently available to the company. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions since they refer to future events and therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the company's future results and lead to results that will be materially different from those in the forward-looking statements. We'll now turn the call to Mr. Gustavo Couto that will start the presentation. Mr. Couto, you may go on.

Good morning. Thank you for joining us for the first quarter 2024 results conference call. We started our year on a consistent footing, marking our first quarter with solid consolidated results that reinforce the evolution and potential of our business segments. Throughout the presentation, you can see that the first quarter results show a strong operational performance in rental and consequently of our consolidated results. Going to Slide 3, we talk about our highlights. The Rental segment showed net revenue growth of 42%, reaching BRL 829 million. The sale of used assets grew by 56% compared to the first quarter of '23, when we exclude the sale of nonrecurring new assets that we carried out a year ago. Gross margin for trucks was 25.7%, in line with our projections and reinforcing depreciation of our trucks. Consolidated margin was 23.4% for used vehicles due to the mix of machinery and equipment. EBITDA in this quarter amounted to BRL 793 million, with growth of more than 40%. Operating profit of BRL 635 million, 34.5% higher than the first quarter '23, following the sequence of solid operational growth of the company. Our stranded fleet reached around 45,000 assets, 90% of our total fleet approximately when we deployed a record volume of BRL 8.8 billion in assets, 36% higher than the first quarter '23. The record was written by an operation of unprecedented scale in the sector. When we acquired practically the entire fleet of an important client in the beverage segment and subsequently rented back to the customer. This is called a sales leaseback operation, although there is no option for the client to buy at the end of the contract. The operation was almost 100% completed over the months of January, February, March. And as we have acquired assets, the rental revenue started to immediately come and now there are few assets left to be transferred and paid for. Dealerships net revenue was BRL 607 million, up 38% in the fourth quarter '23 and down 15% compared to the same period last year. EBITDA was BRL 17.8 million, reversing last quarter's negative results with an improvement of more than BRL 50 million and EBITDA margin of 2.6%. We already see a slight improvement in our group business stores and construction equipment and dealerships continue to show positive results. Consolidated results, net revenue totaled BRL 1.7 billion, up 2.6%. Consolidated EBITDA grew 24% in the quarter, totaling BRL 820 million. We ended the first quarter with an operating profit of BRL 640 million, up 18% compared to last year. Net profit totaled BRL 183 million, 8% higher than the first quarter of '23. If we look more closely at this result, the growth in net profit was even greater, almost 20% compared to a year ago. If we exclude the impact of nonrecurring tax credit appreciated last year, the profit for the first quarter of the last 12 months was 16.8%, a spread up 8.1% compared to our marginal cost of debt at the end of the period. On the next slide, we show the evolution of our consolidated results since '22, highlighting the contribution of the Rental segment, driving our consolidated results. We reached BRL 1.7 billion in consolidated net revenue, a growth of 3% and double that recorded in the first quarter '22. The Rental segment accounted for more than half of total revenue, with BRL 979 million, a bit more than doubled in 2 years and Rental accounted for BRL 635 million of the company's gross profit. EBITDA grew 2.3x also in 2 years. Again, the highlight is the significant contribution of Rental to this result, accounting for 97% of our EBITDA. Net profit was 8% higher than the first quarter of '23 and 50% higher than 2 years ago. The highlight here is the bottom line result free from nonrecurring effects and with our confidence that we'll continue to improve. We are confident that 2024 will be a year of better results for Vamos and reinforce our commitment to the sustainable development, profitability, diligence and above all, offering the best services to our customers. Now I will turn the call to Adriano that will comment on our performance, and then I'll come back for the final messages and the Q&A session. Adriano?

Thank you, Couto. Good morning, everyone, that are taking part in our earnings conference call. I'm going to present to you in more details our performance in the first quarter '24. On Slide 5, at the top left, we present our return on invested capital at the end of the first quarter '24 considering the last 12 months of 16.8% below that reported in '23 with consistency in the spread in relation to the cost of debt at a unique level of profitability in the sector. The most recent evolution of return on invested capital reflects the stability of the Rental business and the current momentum of agricultural dealerships. On the right, we see bit by segment, showing the company's different segments with consistency in profitability in Rental and gradual improvement of dealerships. In the bottom left, we show the annual development of EBIT with an increase of 9x the EBIT of '19, showing the potential of the Rental market and the company's profitability. On Slide 7, Rental segment, we show yet another quarter of growth, reinforcing the sustainability of our results with continuous improvement in the main financial indicators and consistent results and solid margins. Net revenue grew by almost 22% to BRL 975 million in the quarter, an important contribution from the breadth of revenue, which totaled BRL 829 million in the quarter, up 42% from the same period last year. Then EBITDA, which totaled BRL 793 million in the quarter, an increase of more than 40% compared to the first quarter '23 with a margin of more than 91%. The bottom left, we detail the evolution of our revenue breaking down contracts with and without maintenance services. Right-hand corner, we show the consistent growth in Rental EBIT, reaching BRL 635 million in the quarter, an increase of 38% compared to the same quarter '23 and a margin of over 72%. Next slide, on the left, we show the quarterly comparison of our CapEx deployed of record in the first quarter of '24 of BRL 1.8 billion, 36% higher the previous year, confirming our capacity to execute and drive results. With the amount deployed, we have BRL 55 million of used assets that have been returned and redeployed, just over BRL 1.2 billion of new assets deployed and BRL 525 million from the innovative sales leaseback transaction. And the chart below, we show the evolution of the deployed backlog considered the bottom of revenue related to deployment of the first quarter '24, minus the contract termination amounts and the gross revenue in the quarter. We get to approximately BRL 14 billion in future revenue from contracts in force and already deployed. In addition to the consistent pace of implementation, the sales and leaseback transaction with recent [indiscernible] has made an important contribution to generation of future revenue, confirming our ability to execute. On Slide 9, on the left, we show the rented fleet versus total feet. In March this year, we reached almost 50,000 assets total fleet, 45,000 of which are rented, reflecting the positive dynamics of the rental business. From March '23 to March '24, we had an important expansion of 10 percentage points in the rented fleet at the level of 90% since '23. On the right, we show the evolution of our inventory available for rental, which on March 24 was approximately BRL 1.4 million, reflecting the purchase of new assets since the end of last year. Next slide, top left chart, we show our contracted CapEx more than BRL 2 billion, a quarterly record, 17% higher than that contracted in the first quarter '23, conforming a healthy pace of rental with good profitability. The average yield of our contracts in this quarter was 2.5%, maintaining consistency in the profitability of our contracts. The spread IRR, which is the bridge between average IRR and the cost of debt after tax in the first quarter '24 was 20 percentage points. The lower left chart shows the evolution of gross fixed assets rented starting from BRL 12.6 billion in December '23, taking into account implementation volumes, contract terminations and asset returns, which amounted to BRL 270 million in [indiscernible] this quarter at this faster path than expected for the period, also reflecting the credit market. By the end of March '24, we had to retire close with assets of BRL 14 billion. The chart shows the breakdown of this amount. On Slide 12, we talked about used assets. We had a strong performance in asset sales, showing consistent market with great potential for asset appreciation. Recurring net revenue was 56% higher in the first quarter '23 and gross profit up 18%. Gross margin for the first quarter was 23.4%, impacted by the mix of assets showed. However, if we consider only trucks and tractors, we reached a margin of 25.7%. Bottom left, we saw a strong appreciation of 36% of assets in our truck fleet. We had the analysis with a sample of 4 representative models for our fleet, around 13% of our net fixed assets, appreciation of assets indicates opportunities to sell with attractive margins or even a new rental cycle for this asset. To be clear, the appreciation reflects price variation and not sales margin of these assets compared to the FIPE table, not Vamos selling price. Reflecting the retirement of assets in '23, the inventory of used vehicles reached BRL 400 million at the end of the first quarter '24. On Slide 14, we'll talk on the results of our dealerships. Trucks and construction equipment continued to make positive contribution to our results. Agricultural dealerships on the other hand show a gradual improvement and already reflect a series of internal measures to improve results. Despite the movement theory, cyclical movement of the sector, the country's agriculture potential is undeniable. We had significant increase in net revenues for the first quarter '24, reaching BRL 671 million, almost 40% higher than the fourth quarter '23 and still below the first quarter of '23. We can observe the dynamics of contribution of agriculture dealerships in revenue in recent quarters, reflecting the atypical scenario of '23. The segment's EBITDA was BRL 17.8 million in the quarter, reversing last year's negative result for more than BRL 50 million. First quarter '24 already shows a gradual improvement with a growing outlook for the contribution of the segments to company's results in '24. On Slide 16, we have our capital structure. In the first quarter '24, Vamos net debt amounted to BRL 9.8 billion with leverage of 3.4x on net debt-to-EBITDA ratio, mainly reflecting the payment of the sales leaseback transaction of the quarter. If we consider the potential EBITDA of 1 year generated through this transaction, our leverage would be 3.27x. On the right, we have a comparison of the evolution of working capital since the third quarter '23, which should decrease by approximately BRL 1 billion in the period following our plans. Below, we show the variation of the bank lines compared to the third quarter '23 used as a references in Part A. We had a reduction of more than BRL 100 million in inventory and receivables on dealerships and still have an important opportunity coming from inventories in the segment, considering extended payment terms at a time that we are buying assets for rental again, the supplier line increased more than BRL 700 million. We continue to normalize our working capital in a trend towards deleveraging towards the first half of this year, reinforcing our commitment to the company's financial management. Next slide, we ended the quarter with solid cash position sufficient to cover up debt up to the middle of 2026 with almost BRL 2.5 billion. If we add BRL 1 billion in available revolving credit lines, we have a total of approximately BRL 36 billion. Average term of the net debt is 5 years with average cost after tax of 8.7%. The downward trend in the average cost of debt contributes to the improvement in financial results over the coming periods. Now I'll turn the call back to Gustavo to make his final remarks, and we'll be back for the Q&A session. Thank you very much.

Thank you, Adriano. Let's now go to the takeaway messages. We entered another quarter of consistent growth for the company, with the main driver being the Rental segment, which reached important milestones, record deployment of BRL 1.8 billion, with a good diversification of segments, especially in the battery sector. energy, alcohol, logistics in different sectors and intralogistics as well as a record of new orders signed by our customers and new contracts signed. The performance confirms the resilient dynamics of the rental market, the business model that is just starting with differentiated profitability in the market. The growth in net revenue from asset sales achieved a truck margin of 25% and 23.4% when we include the other assets. This reaffirms the quality of our assets, the appreciation of our fixed assets and the company's successful strategy of purchasing. At dealerships, the positive dynamics of trucks and heavy equipment indicates a fair growth scenario for the year. In addition, Agricultural segment is showing gradual improvement, although figures are still below what we expect. We prefer to be conservative with regard to the speed of a weighted recovery in demand, but we believe the potential of agribusiness and the market is very strong. For now, we have taken several measures to reduce inventories, costs and ensure improvement in short-term results. We hope to have a positive impact on the coming financial years. Lastly, we continue to normalize our working capital added to the growth of this Rental sector will lead to the deleveraging of the company in the second half of the year. Also, the positive outlook for business performance reinforces our confidence in the results for '24. There's much to do and improve over the course of the year. I'd like to close by thanking our people that are committed to doing more and better and are essential to beating the best experience to our customers. We also thank for their trust in our solutions and services. Before opening for your questions, I'd like to welcome Jose Cezario. As announced a few weeks ago, Adriano will be stepping down as CFO and Investor Relations Officer at Vamos at the end of the month, and we'll take on new duties at SIMPAR. Along May, Adriano will continue with business as usual. But Cezario is already with us. He will take up his position on June 1. The transition has already begun and is going up. Adriano, thank you very much for your work and your time even. Cezario, we are very happy to have you. We wish you both success in your new roles. Now we are going to open for your questions. Thank you very much.

[Operator Instructions] Our first question comes from Luiz Capistrano from Itau BBA.

I have 2 questions. First, the pace of new contracts that we saw this quarter a record number and a strong number even when adjusted with the new contract with Petropolis. Do you think it's fair to assume the same level for the remainder of the year? Are you expecting the same pace of development? Again, I'm talking about ex Petropolis. Do you see the evolution of demand, not considering this contract, stable? Second is about profitability. How this contract impacted the average IRI of the batch of contracts signed this quarter if it was higher than the other contracts or not? And also what drew our attention is that this number continues to grow. The cost of debt went down by 1 point and IRR went up by 1 point. Is this a trend that we should expect for the remainder of the year, although interest rates are going down, you're being able to keep on prices or you see pressure from customers, and you think you will have to reduce the IRR over the course of the next quarters.

This is Gustavo Couto. I'm going to start by talking about new contracts. We started with a volume record of deployment and new orders and contracts signed. That gives us the guarantee that the demand continues strong, and that our business model is quite resilient. Ex the beverage transaction, we have BRL 400 million of CapEx deployed. I'm going to invite you all to understand what the company can be in 1, 2 years time. If we keep the BRL 400 million of deployment from now on. We can grow, deleverage and really transform in size, as you saw what happened in the last 5 years. So we do have the opportunity of showing consistent results at the pace of deployment that we have already been showing in recent years. And by doing so, we can grow and naturally deleverage the company to levels that are below what we see today. So that's the trend, and we are working towards that. The fact that we are starting the year with a record volume of deployment shows also that we have a commitment with the year's plan. And this is what you should expect from the company. As for profitability, every time the company grows and to develop, we get better conditions to be able to provide services to our customers. And this is also true with competitive commercial conditions and the maintenance of an IRR spread, which is what we want. We want a better gap between the average cost of debt and the IRR of new contracts. And with already new assets after the implementation of new truck Euro VI, we are having a unique level of IRR spread in the sector that has been sustainable long time. And we do believe this is our reality for the future to come. If the IRR does go down a bit, it's going to be because of the interest rates, but the spread we want to get the same.

This is Adriano. Just to add to that, when you're talking about the cost of debt after tax, that depends a lot on the short-term interest rates established by the Central Bank of Brazil. When you're talking about prices, you're talking about the curve of 3 to 5 years. There was a downward turn trend in the first quarter, but there were also picks up. So when you think of IRR, you think of a longer-term curve. And now it is even at a higher level than what we had in the first quarter.

Next question comes from Lucas Marquiori from BTG Pactual.

I have 2 questions. First about the return of assets, I would like to understand how are things going? The second question, we see better terms...

We're very sorry. We are having a bit of background noise and as soon as the situation is reestablished, we are going to resume interpretation.

We are very sorry, but it was very hard to hear you. I think it was for everyone that was too much of a background noise. When you open your mic, Marquiori, we hear a very high background noise. So if you please later on, can fix that just for us to be sure we understood your question. I'll try to answer what I understood. But the first question, if I'm not mistaken, is about the pace of the return of assets. We to not have these assets return, we wanted contracts to last. But market conditions change, the company grew, and this is a reality that we are facing. But more important than that, we are being prompt in making decisions and putting these assets to sale, and why is that? Because these assets are appreciated. As you saw in the presentation, we got 5, 6 different models and showed the appreciation compared to the FIPE table. So those assets today are much cheaper than new assets, they are 1, 2 years old, and they can be sold at good margins or re-rented in new contracts. So this is a good business. So obviously, this is not what we meant, but in a scenario that happened in the sector that was momentarily impacted in recent months. It was just natural then instead of waiting for a bigger problem, we had these assets returned in common agreement with our customers sometimes and sometimes in lawsuit, to be able to enjoy new contracts, new sales, as you have seen in the sale of used vehicles. Obviously, I still expect a level of return higher than we estimated in the beginning of the year. It may happen in 1 or 2 quarters. This is not guidance, but we know there is still some things to be done in specific sectors of the economy, and that can bring returns at levels similar to what you saw in previous quarter. But anyway, this has become an opportunity for the short term. It was not planned or expected. Those assets were very much appreciated and are very valuable in our heads. As for suppliers, I don't know if I understood your question that from what I understood, you would like to know the trade-off between payment terms and commercial conditions that we see in this new cycle of acquisitions. Marquiori, we always have extended payment terms. We have a very good relationship with almost all OEMs historically speaking. And that gives us payment terms that are also good for the OEMs because we have planned sales at high volumes, and that also enables them to plan for production and manage costs better. So naturally, we always have a good negotiation and come to terms in terms of an extended payment term, cost of capital. These are negotiations case by case. But we always want to extend the terms. OEMs know that they are going to get paid for what they sell to us. And so we don't have many difficulties to negotiate. But anyway, commercial terms and extended payment terms are things that we always seek. And I apologize, if I couldn't understand your question in full. If you want to ask any follow-on questions, just let me know.

No, very clear.

Our next question comes from Victor Mizusaki from Bradesco BBI.

Congratulations on your results. I have 2 questions. The first is about assets available for rentals. If you do a quick math when you'll see the BRL 1.3 billion that you listed, and still what was bought vis-a-vis what was deployed. I have a question. What can we expect from that onwards? The fact that you have these assets available to your customers, is it still very important, given the fact that OEMs are taking about 3 months to deliver assets? Or do you see room to decrease this percentage and therefore unlock some more capital and deleverage to the company? My second question is about deleveraging. We are trying to make a simulation to try and understand the most leverage rate, considering a more normal scenario for the dealerships. If you think of the excess inventory and dealerships going to the level of BRL 4 billion. We should have leverage of a net debt to EBITDA ratio of 3x. Do you think the rationale makes sense?

Hi Victor, this is Gustavo Couto. Let's talk first about assets available for rental. As we said before, we are moving towards normalizing our available inventory. You saw that we already resumed a volume of purchases, which was important to meet the demand and purchases have been planned until the end of the year. But it's possible to work at inventory levels lower than what we see today, particularly because we want to work more and more financed by the supplier line to keep the ready-to-deliver infantry and this is done when we analyze each vehicle model. There are some that are more restricted with longer delivery times. So there is a whole analysis for us to work with assets -- with these assets in a specific manner. Other that are more liquid assets, we don't have to have such volume of inventory. Remember that we simulated on SIMPAR Day number. And I think that we should keep our inventory level at 2x, 3x considering our deployment volume. Therefore, I think the volume of inventory is going to go down without us losing any competitive advantage in terms of ready-to-deliver assets. As for leverage, it is just natural that we do the same math that you did. It makes sense to answer your question. Of course, that will depend on how fast agricultural dealerships will go back to normal. These are the dealerships that have been going through tougher times. But we believe that they are going to come back to normal. We don't want to give you a guidance of when, but we are taking important measures to lower inventories, lower costs and also use the supplier line to keep inventory with extended terms that we already negotiated with OEMs, without hurting financial results. So we believe that naturally, we are coming back to normal and certainly then leverage will convert to the level you mentioned. This is what we expect and we are working for. Just for you to have an idea in terms of working capital, we have registered important improvements. We wanted even to recover what was said in SIMPAR Day we still believe there is room to improve working capital, not only in dealerships but also in rental. So I believe it will naturally happen. And it is an important focus of the company for the coming months.

Our next question comes from Felipe Lenza from Citi.

First, I'd like to congratulate Adriano on your work success, and welcome Cezario. Two questions. First, a follow-up of the previous question. This is May already. So could you talk about the performance of dealerships in April? Second question, perhaps a more sensitive issue at the climate disasters in Rio Grande do Sul. We saw an expansion of Komatsu brand in the state and we would like to know about your exposure in the region and how the disaster could affect your results?

I still cannot say much about the month of April. But as we have shown and tried to give you a bit of color of the first quarter, we do see a gradual improvement. We saw the Agrishow in April, seasonally, the second and third quarters are stronger. People look for agricultural equipment, farmers are being more active in purchases. So we do accept back to the second and third quarters as they are traditionally stronger to have better sense. Talking about agriculture, because you know, truck and construction equipment dealerships are at normal levels with normal margins, and we are doing very well in this line. So it's just natural that we expect a gradual recovery, as you saw in the first quarter in the coming quarters, undoubtedly. As for Rio Grande do Sul, thank you very much for the question. Well, first, I would like to sympathize with all the families affected. The whole of the states, we have about 185 employees and some stores, 2 of them were affected. We had the store of Eldorado and [indiscernible] affected by the rains. The Komatsu store is in Caxias do Sul. It was not affected. And our inventory lies in the store. So we had no impact in the Komatsu operation. And the other stores, Caxias [indiscernible] were not affected. But the more metropolitan region, we have 2 stores, as I mentioned. The 2 stores were partially flooded. So we do expect some loss of inventory days. I already know what we have there. Looking at our inventory of new used trucks and parts, it is not as representative for Vamos as a whole, but it is an important amount, perhaps losses between BRL 20 million to BRL 40 million. But that's too early to say. It depends on us waiting for the water to come down, and then we will know what kind of damage we had. I particularly have hoped the numbers are not that high. When I see the images and our teams there the trucks flooded until the level of the tires. But I would say from BRL 20 million to BRL 40 million. This is not an amount projected, but just for you to try and understand, just to have some color what would be the maximum limits in relation to our inventory. As for the rented fleet, we have telemetrics. Remember the trucks that are rented to companies in Rio Grande do Sul, they also operate nationwide. So I know what trucks are in risk areas. But remember, our contracts in case of losses, the responsibility lies with the customer. This is not what we are concerned now. We are concerned about the people, with the lives that are there with the safety of our people and 100 of our people are sick. And those that had some impact, like houses flooded or anything are being helped by the company and supported in real time. The Simpar Group as a whole is working to support our people there. Now in terms of material financial losses, which is a second priority, we believe that it is a controlled situation. The risk is known and it is an important amount, but not too material for the company. In the branded fleet, you're talking about a bit more than 200 trucks in the flooded areas, a percentage that is much lower than 1% of our fixed assets or recurring revenue. So again, not material in terms of volumes, and we do not expect a greater impact there. I hope I have answered your questions. But again, our priority is the safety of our people at this point in time.

Our next question comes from Guilherme Mendes from JPMorgan.

Good luck Adriano, on your new endowments. I have 2 questions. The first question, if you could talk about the competitive environment, especially those smaller players that are showing up in recent quarters. And second, we talked about the Petropolis transaction, the sales leaseback. Does the company have in its pipeline, other transactions of this magnitude? I know that you've had already smaller operations of buying customer fees. But in terms of larger scale, should we expect anything like that in the coming quarters?

Well, the competitive environment, I always say the competitive environment as it gets more competitive, we have to work more. This is what I say. Competition is good for the development of the business for fleet renewal, which is an extremely important and new things for the country and there is huge potential. So it's just natural that new players will appear and we have to work more and more to have more competitive advantages because we have a unique positioning. Remember, Vamos was a lot started in '16, '17. It were several assets put together, but assets that have a whole history with SIMPAR. And with that, we have competitive advantages that are truly unique. And I would like to connect your first question to the second question, Guilherme. In the operation, for instance, that you mentioned that the purchase of the assets of beverage customers, the operation was public and competitors could present their proposals to try to compete with the banking proposal that we had. And we knew that the combination of used assets -- receiving use assets, sell them in several stores in Brazil, renew parts of the fleet with items bought at competitive conditions. And obviously, the whole structure for the operation, which is not simple, was second to none. My team says that the Petropolis transaction seem simple because we are buying an asset that continues in the operation. But in terms of supervision, inspection, and licensing, it's even more complex than the deployment of new assets. So truly, the capacity of execution was put to test. And we showed our unique positioning indeed. As you said, this operation of buying assets from customers and renting the assets and renewing part of the asset is something that we had done before. The Petropolis transaction was unique because of its magnitude. It's hard to find others in the sites, there aren't so many opportunities. But after the visibility of the operation, many customers have come to us with smaller offers and we are going to continue looking to that. Perhaps not transactions, the size of Petropolis, but certainly, we are going to look into other opportunities. And we are very encouraged because it generates value to shareholders, to customers and to the company.

Our next question comes from Alberto Valerio from UBS.

Also, I'd like to wish a new cycle of success for Adriano. Thanks for working with us, and welcome Cezario and good luck on your new undertaking. I would like to talk about CapEx deployed a record in the quarter. Anything in terms of breakdown for January, February and March. Anything that stood up? Was it stable throughout the quarter and also some color on the average show -- trade show, do you think that there were more deals closed, were the people buying more?

Alberto, this is Gustavo Couto. Alberto, I would say that the months were quite uniform. Although there was a higher volume in the beverage operation, the sales leaseback in January and February, there was also something to happen in the second quarter, more licensing and this kind of thing, but still some work in terms of transferring, et cetera. Remember, this is a fleet throughout Brazil. That's why I said it is a very complex deployment. But most of it was conducted in the beginning of the quarter. But just in terms of models, the quarter was quite evenly distributed and more 90% of the operation was completed in the quarter, which shows that as of April, you're going to see the full revenue almost not full because it's 90%, but the remainder of the operations are more or less stable. You have sugar and alcohol with a stronger seasonal quarter in the first quarter and then the other sectors more or less offsetting that peak of sugar ethanol. Agrishow we had a stand, we had our rental teams, but also teams from the other businesses, dealerships. And people were very encouraged by the trade show. It seems that the situation is clearer to farmers today and they are starting to get more encouraged to invest because those that did not buy last year, they cannot push purchases forever. Their machines are aging. If they had a piece of equipment that is 5, 6 years old, they start to see a drop in productivity, machinery renews. So they can kind of postpone things for a year. But more than that, it really affects their productivity. And year after year, we know that Midwest is breaking records of productivity because of investments. So I would say Agrishow was encouraging, but we have to be careful. It's not what it was in 2023, which was a wonderful year. But I don't think it will be as difficult as '23. I think this encouragement is going to be more felt as of now.

Our next question comes from Rogerio Araujo from Bank of America.

First of all, congratulations on your strong results from rental. Adriano, Cezario good luck. And Cezario is there from what I understood from what Couto mentioned. I know it is just the beginning. But if you could share an initial view of the sector, any potential changing years, even if it's a life change for the company under the new management. So this is my first question. Second question is about the return of assets. Just to understand if it is mostly from the agribusiness sector and if you expect that to continue. And if the company will have to accelerate the sales of assets for the coming quarters. We still see timid asset sales and this asset returns were just at BRL 55 million. Do you think we are going to have more sales of [indiscernible] because of the returns? So any color you could give us in terms of where this come from? And how long do you think it will last?

Cezario has been with us for 4 business days. So I'm going to keep him as a listener only in this conference call. He already started the transition with Adriano, but any impression of his perhaps this is going to be too early. But you certainly have opportunities to hear from him, and he will be able to share his perceptions as soon as he has a deeper dive in the numbers and sector. But anyway, to answer about the return of assets, yes, the sector that concentrated most of the returns was agribusiness. This is something that we already knew and we have to be very careful with regards to that, even looking into the future because when we grow records after record in the harvesting of the Midwest, many companies search for new assets. But then you have restrictions in terms of ports, infrastructures that pose challenges for the fleet to be as productive as needed. So when freight costs go down, when ports are congested, companies may have difficulties. And that's why we decided not to let problems deteriorate and really have these assets back because we are a certain of their liquidity, and I'm going to go back to a point I mentioned. The appreciation of these assets compared to price of new vehicles, it's impressive because they appreciate it, and they're still much cheaper than a new truck, a new equipment. So it is really a unique opportunity for those that want to bend this asset. So the volumes are still at BRL 55 million for branded assets in this quarter. And why is that? Because the company was built to get the assets after the countries are closed and then sell them at used stores. We have the possibility of getting the assets and redeploy them, we have to prepare those assets. So the company has already distracted for that, and it's just natural that this second cycle of deployment will reach higher volumes for those customers that are seeing an opportunity of a used vehicle trucks or new trucks are too expensive, and these are very new and are at excellent status. This is what we see. On the other hand, it is no news that we want to expand our capacity to sell at the used vehicle stores. When we started the company, we inherited from SIMPAR from JSL, 10, 11 stores, used vehicle stores. Now we have more than 40 considering dedicated used vehicle stores plus dealerships that have used assets to sell. So today, our customers can find our assets with a unique geographic coverage in the sector. Now we have second to none. And this crucial for the company to grow at a volume of sold used assets to our customers. Again, this is an extremely unique asset given the age of the Brazilian fleet. And one more thing. We reinforced digital channels. And we already see a very interesting volume of commercial leads on digital, basically due to our marketing and sales teams, obviously, used vehicles customers want to see the trucks before they buy them, but mainly are using digital tools to start the process. And we have a whole automated system and can show the goods to our customers, and then they go directly to where Vamos has the assets available today. So we are very encouraged. The market is still very much fragmented. We are less than 1% of the secondary market. And it is like despite resilient prices are appreciating, which gives us the certainty that even if the assets are returned before time, they are liquid assets that are going to show good profitability.

Our next question comes in writing by [ Gabriel GB ] from Alpha Research. Congratulations on your results. I see a concern with a possible follow-on on current prices. Is there any possibility of this to happen?

Gabriel, I'm going to talk about, so this is always a good question to ask the controller -- the parent company. But the company does not need it, does not have plans for a follow-on operation right now. Naturally, you always have to talk to the holding company, then it's in part can answer the question. But on the part of them, we do not have any plans for such an operation.

Vamos Q&A session is now closed. We are going to turn the call to Gustavo Couto for his final remarks.

Well, once again, and I've been telling you that I'm quite confident with the developments of the company and consistent deliveries, leverage by rental and a gradual recovery of our dealerships. I'd like to reinforce some messages. First, the quality of our used assets that can be redeployed or sold with profitability. So although we did not plan for the return of assets, we clearly see that they are extremely liquid, well accepted in the market and will certainly be put to good use, either in rental or sale. Working capital, we are also very much encouraged. We've done part of the work, but there is still much to be done. We can work better with dealerships inventory. They are still much higher than what they should be, especially in agriculture. We already made some measures to extend payment terms and also reduce costs to normalize the results of agricultural dealerships, regardless of what happens in the market. We expect a recovery. But even if it doesn't come, you're going to see better results from the company. As for the future of rental, I'll say it again. Please just simulate the numbers you believe in terms of the pace of deployment ahead of us, use the numbers from previous quarters, use projections that you used before and try and see how much the company is going to value in 2, 3 years' time. We are doubling the size of the company every 2 years. And there is no reason for us not to continue this sustainable growth. So your models are very important for you to understand where we are going, given the market opportunity that we have ahead of us. And finally, I'd like to tell you the following. I'm going to close the call by saying we've really emphasized with the families in the South of Brazil, Simpar Group and all our companies and especially Vamos are here to support authorities, the local population and ensure safety and health to our people. This is the priority. In terms of material losses, as I mentioned, I do not expect anything higher than what I mentioned, but it's just natural that we have some losses. So it is not really a guidance in terms of losses. But just for you to understand the cap in terms of exposure to the situation. Once again, thank you very much for joining us today. Thank you very much, and let's work because the year is just starting. Thank you very much. And before, I'm sorry, I had mentioned that before, Adriano, Cezario just for Rogerio, not to have an answer. Adriano, if you have any remarks that if you want to introduce yourself.

Well, this is Adriano. I'd like to thank all analysts and investors that with me in the period, we had very good interactions, thank the Board of Directors, the work with Couto and the transition that we are going through. And Vamos team that has always supported my work and has a unique business model. It was a period of accomplishments on my side. And I think that Vamos still has a lot to do. It is still a very underpenetrated market. So I wish all just to continue the extraordinary work you have been doing. Cezario, best of luck, I think that you have a good experience, and I'm certain that you're going to have a successful experience with the team.

Thank you, Adriano, Couto. It's a pleasure for me to be here. As Couto mentioned for month of May, I'm going to really take a deep dive into the business, getting to know processes and people. And in June, I'm going to be able to talk to the market better, addressing the points that you're going to have. So in June, I will formally take over. And I'm very excited for this challenge, had a very warm welcoming from Vamos and the transition process has been very smooth, I'd known Adriano for many years, and I really appreciate his work. So thanks, Adriano, and thank you very much.

And just to close, I'm not going to say anything, but I would like to congratulate Adriano and Cezario on their birthdays, which is today. So it is the birthday of Adriano and Cezario, quite a co-incidence. So happy birthday, and thank you, everyone.

Vamos video conference call is now closed. We thank you very much for joining us and wish you a good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]