Q2 2026 Log-in Logistica Intermodal SA Earnings Call
Speaker #1: Contados e o.
Speaker #2: O 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 here the presentation in Portuguese, here on Zoom.
Speaker #2: In addition to the rooms available in Portuguese and English, we will also provide Brazilian sign language interpreting during the whole event. I'd like to remind you that all participants will be in listen-only mode during the company's presentation.
Speaker #2: Later, there will be a question-and-answer session when further instructions to participate will be provided. We advise that this webinar is being recorded and will be available on the company's website.
Speaker #2: Before proceeding, as usual, we would like to clarify that forward-looking statements that might be made during this conference call relative to log-ins, business perspectives, projections, and operating and financial goals are based on the beliefs and assumptions of log-in management, and on information currently available to the company.
Speaker #2: Forward-looking statements are not a guarantee of performance; they involve risks, uncertainties, and assumptions, and they depend on circumstances that may or may not occur.
Speaker #2: Investors should understand that general economic conditions and industry conditions and other operating factors can affect the future results of log-in and could cause results to differ materially from those expressed in such forward-looking statements.
Speaker #2: Now, with the legal disclaimers made, I'd like to turn the floor to Marcus Voloch, CEO of Login. To start with the initial remarks. Thank you, Sandra.
Speaker #2: Good morning, everyone. And Marcus Voloch, CEO of Login. I'd like to thank everyone for joining Login Logistica Intermodal's Q2, 2026 earnings conference call. Let's begin the presentation on slide 3.
Speaker #2: We ended the quarter with net operating revenue of $777 million BRL, up 5.1% year-on-year, and almost $1.46 billion BRL in the first half of the year, adjusted EBITDA for the quarter was $113.4 million, with EBITDA margin of 14.6.7%.
Speaker #2: For the half, the first half, $220 million, with EBITDA margin of 15.1, down 8.4 percentage points. This is not the result we want, but I'll explain where it comes from and what we're doing.
Speaker #1: What log-in statement? There might be later during this conference call relative to log-ins, business perspectives, projections, and operating and financial goals, or based on leads and assumptions.
Speaker #1: We still have a lot of capacity for other growth, which come in the next quarters. Container shipping was the resumption of exports, particularly coffee and granite, along with the red mark of 26,900 containers.
Speaker #2: I'll start with PDB, which recorded the very best quarter in its history. EBITDA was $70 million, up 70% from last year, with a margin of 52.1%.
Speaker #2: In May, we began operations at the Pinedo Baca area, which added $65,000 square meters, and expanded the terminal's total area by 60%. In a high-demand market like Speedy to Santo, this has already been reflected in revenue from warehousing and ancillary services.
Speaker #1: Available to the company. What log-in statements are not a guarantee of performance; they involve risks, uncertainties, and assumptions, and they are general. Operating factors can affect the future results of log-in and could cause results to differ materially from sales expressed in such fraudulent statements.
Speaker #2: This quarter, but we still have a lot of capacity for further growth, which should come in the next quarters. In container handling, the highlight was the resumption of exports, particularly coffee and granite, along with a record mark of 26,900 containers handled and imports driven by electric vehicles.
Speaker #1: Now, with the legal disclaimers made, I'd like to turn the floor to Marcus Volek, CEO of Login. To start with the initial remarks, thank you, Sandra.
Speaker #2: Coastal shipping posted a 6.6% volume growth, and the quarter's 193,000, 400 TUs. We recorded the highest cabotage volume for a second quarter, growing faster than the market, which rose 4.2% according to a back, and retrieved this with a fleet that was that had lesser capacity as we're currently in the process of dry docking several vessels.
Speaker #1: Good morning, everyone. I'm Marcus Volek, CEO of Login. I thank everyone for joining Login Logistica Intermodals Q2, 26 earnings conference call. It's logged in revenue from warehousing.
Speaker #2: Our commercial efforts are paying off. Cabotage posted its highest revenue for a second quarter, with an improvement in unit revenue. In the domestic trade, nevertheless, coastal shipping EBITDA declined for three reasons.
Speaker #2: Firstly, feeder trade, which includes a higher share of operations with lower contribution margins, and the effect of the US dollar depreciation on revenue packed to the US dollar.
Speaker #2: Secondly, variable costs associated with higher volume. Thirdly, and the biggest impact, fuel costs, which are under pressure due to the conflict in the Middle East, the situation we have partially mitigated through the implementation of the emergency fuel adjustment, EFA.
Speaker #2: Regarding margins, costs continue to rise faster than revenue. We are addressing what's under our control, reliability, fuel consumption, and operating efficiency, and we will continue to do so.
Speaker #2: But no single efficiency gain on its own can close the gap we face today. Cabotage margin remains substantially below the level necessary for the Middle East economic equilibrium, and below what it was two years ago, without even factoring in inflation over that period.
Speaker #1: We recorded the highest cabotage volume for a second quarter, growing faster than the market, which rose 4.2% according to a back and retrieve to this is a fleet that was, that had lesser capacity as we're currently in the process of dry docking several vessels.
Speaker #2: Freight rate recovery began to take hold this quarter and is our number-one priority in cabotage. At Tecma, revenue grew 4.3%, driven by the lasting truckload business with a more profitable mix, but earnings fell short of last year's levels.
Speaker #1: Our commercial efforts are paying off: cabotage posted its highest, the revenue for a second quarter, with an improvement in unit revenue. In the domestic trade.
Speaker #1: Nevertheless, coastal shipping EBITDA declined for three reasons. Firstly, feeder trade: we which includes a higher share of operations with lower contribution margins. And the effect of the U.S.
Speaker #2: Unit costs rose, particularly fuel and freight, and price adjustments offset only part of this increase. Tecma's turnaround is still underway. We replaced the senior leadership and brought in executives with experience in the lasting truckload market, which is where our greatest challenge lies.
Speaker #2: Obrigado, Gurgel. Obrigado.
Speaker #1: Dollar depreciation on revenue pegged to the U.S. dollar. Secondly, variable costs associated with higher volume. Thirdly—and the biggest impact—fuel costs, which are under pressure due to the conflict in the Middle East, a situation we have partially mitigated through the implementation of the Emergency Fuel Adjustment (EFA).
Speaker #2: The recovery is gradual, and we will report on progress quarter by quarter, and we will recover. Two observations regarding our balance sheet. Net income of $133 million for the quarter includes a gain of $155 million, from the divestiture of Login Pimentel and Login Resilient.
Speaker #1: Regarding margins, costs continue to rise faster than revenue. We are addressing what's under our control, reliability, fuel consumption, and operating efficiency, and we will continue to do so.
Speaker #2: This is a non-recurring event, and we do not treat it as operating income. On the other hand, we have reduced net debt, while maintaining capital discipline, in a high-interest rate environment, thereby preserving capacity and flexibility.
Speaker #1: But no single efficiency gain on its own can close the gap we face today. Cabotage margin remains substantially below the level necessary for the mill's economic 2 years ago.
Speaker #1: Without even factoring in inflation over that period. Freight rate recovery began to take hold this quarter. Logistica Intermodal Q4. With cargo transportation. Thank you very much.
Speaker #2: For the next generation of the fleet, which might eventually come. Regarding the current environment, the facts are well known: high-interest rates, rising fuel costs, and weak demand.
Speaker #2: The supply to the entire sector, and that is precisely why cost discipline is critical. Our number-one priority. But it is not the environment that defines our plan.
Speaker #2: We have gained volume, increased our market share, and began to restore freight rates. Improving our bottom line requires setting the price of our services, at a level that provides a return on the capital invested in cabotage, and that is what the company is focused on.
Speaker #2: With that, I'll turn the floor over to Felipe Gurgel, Coastal Shipping Officer. Thank you, Voloch. Well, again, this is Felipe Gurgel speaking, Coastal Shipping Officer.
Speaker #2: And I think that Voloch mentioned a number of things related to coastal shipping, and I'll get into more detail now. As I had mentioned in our last call, the year of 2026 is a very challenging year, not just because of price issues, but also on the operational front.
Speaker #2: So, on the operational front, we have a very complex dry docking schedule this year, and in this second quarter, I would like to highlight the completion of the dry docking of Login Endurance, which followed Login Resilient's dry docking, which took place in the first quarter.
Speaker #2: Both without any operational impact, it was done perfectly. Currently, Login Polaris is undergoing its mandatory docking operation. I would also like to highlight the progress we made in our NPS, our level of service improved.
Speaker #2: Our NPS, once again, reached the quality zone. Thanks to the ongoing efforts, various departments across the company led by the customer service team. This has been our focus.
Speaker #2: For some years now. On the commercial side, the challenge is also significant. Cabotage market grew 6% in the first half of the year, according to a back data.
Speaker #2: And we managed to grow well above that level. However, freight rates remain under pressure, even though in the second quarter we were able to partially offset the loss in margins, through not only pricing measures, but also initiatives focused on cost optimization.
Speaker #2: For example, we chose to operate with one less vessel, practically throughout the year, because of the dry docking process, and we didn't bring in an additional vessel.
Speaker #2: To replenish capacity, we are still hitting record marks. And the feeder trade, we experienced a sharp drop in volume, particularly on the Santos Rio and Vitoria feeder route.
Speaker #2: Due to a decline in imports and exports. In exports, we can see some recovery. And we had some impact from weather events that contributed to this downturn, and this has been a big offender.
Speaker #2: In 2026, now getting to the quarter's figures, we saw 6.6% increase in total volume, ending the half-year practically in line with last year's volume.
Speaker #2: So, with a different mix. This time, driven by substantial increase in cabotage, and less feeder services. NOR closed the quarter in line with Q2 25.
Speaker #2: However, 3.2% below in the half-year comparison. Consequently, we saw about 38% decline in EBITDA for the quarter, and a 36% decline in EBITDA for the half-year, driven primarily by the reduction in feeder services.
Speaker #2: Since the additional volume from cabotage and merchants grew partially offset the margin decline. Lastly, I would like to underscore that in this third quarter, we continue to face a challenging environment, as we have already begun to notice some impacts resulting from more frequent weather-related issues, while we are already in peak season for cabotage, particularly on the route to and from Manaus.
Speaker #2: And there is some uncertainty regarding this year's drought conditions on the river, which, according to current projections, indicate a greater degree of restriction than in 2025.
Speaker #2: While these are the main highlights regarding coastal shipping, and I now turn the floor to Glovis Severino, who will present the results for Road Cargo Transportation.
Speaker #2: Thank you very much. Thank you, Gurgel. Well, I am Glovis, Road Cargo Transportation Officer. Take Mara's officer. So let's speak a little bit about the second quarter.
Speaker #2: In Q2, as Voloch mentioned, Tecmar reported a 4.3% increase in net revenue, reaching almost $143 million BRLs. Driven primarily by LTO, which is our main product.
Speaker #2: In Tecmar's transportation ecosystem, but with an improved cargo mix, which helped us a lot. In addition to growth in road cabotage, road cabotage, continues to grow quarter on quarter and year on year.
Speaker #2: On the other hand, we're still faced significant pressure on profitability. Mainly on account of diesel price, that continues to impact our business. Diesel, if we look at our whole middle mile, last mile transfer model in first mile, this has an impact of 50 to 55% of our income statement.
Speaker #2: So it brings a big impact and we are working on recovering the rates. But we continue to advance with Tecmar's turnaround, and now with a very clear focus on restoring profitability.
Speaker #2: We are currently reviewing our portfolio and contracts, improving vehicle utilization, because that variable is super important. Improving operational productivity, headcount, and having much stronger cost discipline.
Speaker #2: Our goal is not simply to increase revenue, but to translate that growth into margins and profits. Because at the end of the day, that is what matters.
Speaker #2: And there is a very important strategic component to this process. We know that Tecmar is a key part of the intermodal strategy of the Login group.
in Q2 as well, mentioned, take my reported
Speaker #2: And with that, we continue to build a large integrated logistics platform, connecting road transport to cabotage. We're housing is a product in our DU and the last mile delivery.
a 4.3% increase in net revenue, reaching almost, 143 million brls, driven, primarily by lto, which is our main product.
Intake, Mars transportation ecosystem, but with an improved Kygo mix, which helps us a lot.
Speaker #2: Always offering our customers an increasingly comprehensive end-to-end solution. The improvement of the progress made in road cabotage this quarter reinforces this strategy and Tecmar's role in the group.
In addition to growth in road, habitat growth and cabotage continue to grow quarter on quarter and year on year. On the other hand, we’re still faced with significant pressure on profitability.
Mainly on account of diesel prices.
Speaker #2: Looking at our ecosystem. Bringing competitive differentials for us as transportation is part of the Login MSC group. Therefore, our path is very clear. To restore Tecmar's profitability and at the same time accelerate its integration with the group's other assets, capturing new growth opportunities and synergies through an intermodal approach.
That continues to impact our business.
Where diesel?
If we look at our whole middle mile, last mile transfer model, and first to MI.
This has an impact of 50% to 55%.
...of our income statement. So, it brings a big impact, and we are working on recovering the rates.
Speaker #2: This is it. We expect to bring you even better results, throughout 2026. This is what I had about the Road Cargo Transportation, and I now turn the floor over to Pascoal, our VP.
But we continue to advance with technos turn around. And now with a very clear focus on restoring restoring profitability, we are currently reviewing our portfolio and contracts.
Improving the vehicle utilization.
Speaker #2: Thank you. Hi, everyone. Good morning. This is Pascoal Gomes speaking, Finance and Investor Relations. Vice President. And I'm speaking on behalf of Gustavo Paixão, Terminals Officer, who is on vacation.
Because that variable is super important. Improving operational productivity. Headcount and having much stronger cost discipline and we're going with not simply to increase Revenue, but to translate that growth into margins and profits.
Speaker #2: I will now present TVV's operating and financial results for Q2 26. Starting with container handling. Container handling reached a 65,500 boxes. The highest volume in TVV's history for a second quarter.
Because at the end of the day, that is what matters and there is a very important strategic component to this process. We know that take more is a key part.
Speaker #2: This performance was driven primarily by the recovery in exports. Following a weaker comparison base in Q2 25, the highlights being coffee and granite. As well as growth in imports, especially of vehicles.
Of the Intermodal strategy of the log in group. And with that, we continue to build a large integrated Logistics platform, connecting Road Transport to cabotage.
Speaker #2: Transported or EVs, electric vehicles transported in flat rack containers. On the other hand, we observed a decline in general cargo volume. This decline is not associated with a structural deterioration in demand at the terminal, but is primarily due to fewer vessels, specialized in general cargo, calling at the terminal, and a greater operational concentration of container ships throughout the quarter.
Warehousing is a product in our BU, and last mile delivery is always offering our customers an increasingly comprehensive end-to-end solution. The improvement of the progress made in world cabotage this quarter reinforces the strategy and Tech Mars' role in the group. Looking at our ecosystem, bringing compet—
Speaker #2: It is worth noting that the strong demand for electric vehicles boosted row-row vessel traffic, partially offsetting the decline observed in the more traditional general cargo.
Age of differentials for us as transportation is part of the login, MSC group. Therefore, our path is very clear to restore take Mouse profitability and at the same time accelerate its integration with the groups of other assets, capturing new growth opportunities and synergies through an intermodal approach.
Speaker #2: From a financial standpoint, TVV recorded the highest net operating revenue ever reported in a second quarter. This result was driven mainly by growth in container throughput.
This is it. We expect to bring you even better results throughout 2026. This is what I heard about the road cawker, transportation, and I now turn the floor over to Pascal. Our VP.
Thank you.
Speaker #2: The terminal's high utilization rate, this quarter, and increased revenue from warehousing and ancillary services. Driven by the start of operations at the Penedo back area.
Hi everyone, good morning. This is Pasco G, speaking, finance and investor relations vice president. I'm speaking on behalf of Gustavo question. Terminals officer, who is
Uh, on vacation.
I will now present TVs operating and financial results for Q2 to 226.
Speaker #2: Our expansion project. Even while absorbing the initial costs of the new operation and the expansion of the terminal's operational infrastructure, still, we were able to maintain discipline in cost management and capture operational leverage gains.
Starting with container handling, container handling reached 65,500 boxes, the highest volume in the company's history for a second quarter. This performance was driven primarily by the recovery in exports.
Speaker #2: As a result, TVV delivered a record adjusted EBITDA of $70 million BRLs over the quarter. But more important than the record itself, we believe this result reflects the recovery of TVV's operating capacity in recent quarters, the maturation of investments made and an increasingly diversified revenue mix across handling, warehousing, logistics services, etc.
Following a weaker comparison base in Q2 25.
The highlights being coffee and granite as well as growth and inputs specially of vehicles.
Transported more EVS, electric vehicles transported in Flat Rate containers.
Speaker #2: We continue to view TVV as a key driver of cash generation and value creation for our company, our group. Combining growth potential with operational discipline which is quite significant and additional opportunities.
Speaker #2: Now, with the expansion of Penedo Retro area to monetize our recently expanded infrastructure. Now moving to the next slide. Logging into the quarter with net data of $1.16 billion gross debt of $1.48 billion, maintaining a debt profile as Marcus mentioned.
From a financial standpoint TVB recorded the highest net operating Revenue ever reported in a second quarter.
This results was driven mainly by growth in container throughput.
Speaker #2: That is predominantly long-term and consistent with the nature of Login's business. With regards to leverage, we observed a decrease in the net debt over EBITDA ratio for the last 12 months, quarter on quarter.
The terminals. High utilization rate this quarter and increased revenue from warehousing and ancillary services.
Driven by the start of operations at the penedo back area. Our Expansion Project.
Speaker #2: Now, obviously, it is important to note that this improvement was benefited by the effects of the sale of our vessels Login Pantanal and Login Resiliente during Q2.
Speaker #2: Both through the inflow of funds in our cash and the accounting impacts associated with the deal. Although the diversity of the vessels accelerated the reduction in leverage this quarter, we at the company continue to work to ensure that the future trajectory is increasingly supported by the operational performance of the business.
Even while absorbing the initial costs of the new operation and the expansion of the terminals, operational infrastructure. Still, we were able to maintain the discipline and cost Management in capture operational, leverage gains.
As a result.
Speaker #2: Particularly by the performance of TVV, Coastal Shipping, and Tecmar stand around and by the profit improvement initiatives currently underway in our operations. And now we turn the floor to CEO Marcus Volok.
TVD delivered a record adjusted epita of 17 million brls for the quarter, but more important than the record itself. We believe this result reflects the recovery of TVs in recent quarters, the maturation of Investments made and an increasingly Diversified Revenue, mix across handling warehousing, Logistics Services Etc.
Speaker #2: Thank you. Thank you. Pascoal Gurgel. And Clovis. I think that the main message is that despite the challenges in the micro and mainly macroeconomic level, the company is totally focused in inverting the trajectory of our results, focusing on cost operating efficiency and the quality perceived by our customers.
we continue to view to view the key tribe of cast, generation and value creation for our company, our group,
Combining growth potential with operational discipline, which is quite significant, and additional opportunities. Now, with the expansion of the Penedo retro area to monetize our recently expanded infrastructure,
Now, moving to the next slide.
Speaker #2: Internal initiatives are in full swing and the results will start to be reaped soon. With this, I'll move to the question and answer session and we are here for you.
Speaker #2: Sandra, over to you. Thank you. Thank you a lot. Now we will begin the Q&A session. If you want to ask a question, you can use the raise hand feature.
Log-in ended the quarter with net debt of $1.6 billion, gross debt of $1.48 billion, maintaining a debt profile, as Marcus mentioned, that is predominantly long-term and consistent with the nature of Log-in's business. With regards to leverage, we observed a decrease in the net debt over EBITDA ratio for the last 12 months, quarter-on-quarter.
Speaker #2: Located at the bottom part of your screen, so that your microphone can be enabled. Those of you who prefer to send your questions in writing, you may do so using the Q&A button.
Speaker #2: Also located on the bottom of your screen. Questions received in writing will also be answered live. I have here a question from Pedro Barros.
Now obviously it is important to note that this Improvement was benefited by the facts of the sale of our vessels, login panel, and login resilient during Q2, both through the inflow of funds in our cash and the accounting impacts associated with the deal.
Speaker #2: Coastal Shipping's EBITDA and EBITDA margin declined in the first two quarters of 2026. What factors had the highest impact here? And what initiatives already implemented by the company are likely to contribute to a recovery in profitability?
Although the diversity of the vessels accelerated, the reduction in leverage this quarter, we at the company continued to work to ensure that the future trajectory is increasingly supported by the operational. Performance of the business particularly by the performance of TVV, Coastal shaping and
Techmaster, around and by the Profit Improvement initiatives currently underway in our operations. I now return the floor to Toshio, Michael's Wallock.
Thank you.
Speaker #2: All right, Pedro, thank you for the question. I'll turn the floor to Felipe to speak about the initiatives you are adopting in Coastal Shipping.
Speaker #2: Thank you, Pedro. Well, the situation in Coastal Shipping involves a number of things happening at the same time. One, the supply and demand relationship.
Speaker #2: Today we have a supply of capacity of the market, particularly in some specific routes. Which leads to a retraction, particularly in freight rates, because of the supply and demand relationship.
Thank you. I think that the main message is that despite the challenges in the micro and mainly macroeconomic level, the company is totally focused in inverting, the trajectory of our results focusing on cost operating efficiency in the quality perceived by our customers. Internal initiatives are in full swing and the results will start to be raped. Soon with this, I'll move to the question and answer session and we are here for you Sandra over to you.
Speaker #2: On the other hand, we see port terminals and diesel bunkers fuel prices very much under pressure. So port terminals lack capacity. And of course, the supply and demand ratio plays against those.
Thank you. Thank you very much. Now, we will begin the Q&A session. If you would like to ask a question, please use the raise hand feature.
Speaker #2: There's a possibility of increased revenue, but this means costs to us. And this has been compressing our margins. Since the second quarter of last year, we've seen a significant margin reduction in our operations.
Located at the bottom part of your screen so that your microphone can be enabled. Those of you who prefer to send your questions in writing, you may do. So, using the Q&A button, also located on the bottom of your screen questions received in writing will also be answered live.
I have here a question from Pedro Barros.
Speaker #2: So what have we been doing to try to recover part of the margin? This year, since we had this dry docking schedule, there was quite significant with three vessels, which is not to charter any other vessel, because this would bring an additional cost to the system.
Koso shipping's epita and epid margin declined. In the first 2 quarters of 2026, what factors had the highest impact here and what initiatives already implemented, by the company are likely to contribute to a recovery in profitability.
All right, please. Thank you for the question.
Speaker #2: And we're able to replenish capacity by buying slots from partners. And this has been supporting our growth without us incurring the cost of having an additional chartered vessel.
To speak about the initiatives we are adopting in coastal shipping.
Thank you, Pedro.
Speaker #2: This has been one of the primary initiatives. The second one particularly related to the cost of fuel. We applied EFA as Volok mentioned. EFA, the emergency fuel adjustment policy.
Well, the situation in coastal shipping, in both the number of things happening at the same time—one is a supply and demand relationship.
Today we have a supply of capacity in the market, particularly on some specific routes.
Speaker #2: To recover partially not just bunker fuel, but also the increase in diesel prices. And since the end of Q1, we've had a more aggressive plan to recover our prices.
which leads to a retraction particularly in Freight rates because of the supply and demand relationship on the other hand, we see Port terminals.
Speaker #2: With all of our customers. And of course, this is very well backed up by this whole market situation. There we see happening in Cabo Taj.
The road transportation and the diesel bunker fuel prices, very much Under Pressure. So Port terminals, like capacity and of course the supply and demand ratio plays against those.
Speaker #2: So these have been the main initiatives adopted by the company. We continue to explore a number of initiatives involving mainly cost reduction. And this has been our drive and will continue to do so now that we get into the budget plan and will start defining the assumptions for next year.
There's a possibility of increased revenue, but this also means higher costs for us, and this has been compressing our margins. Since the second quarter of last year, we've seen a significant reduction in our operating margins.
So, what have we been doing to try to recover part of the margin this year?
Speaker #2: So that we can have sustainable levels as Volok mentioned. Thank you. Thank you, Gurgel. There's an anonymous question, which is divided into three questions.
since we have this dry docking schedule,
that was quite significant with 3 vessels, which is not to Charter, any other vessel because this would bring an additional cost to the system.
Speaker #2: I will ask one at a time, because these are different topics. First question. I'd like to better understand the decline in results for Coastal Shipping.
And we're able to replenish capacity by buying slots from partners.
Speaker #2: Could you provide a little more detail regarding the deterioration of either mix and the competitive environment in both feeder and coastal shipping? Does this appear to be a one-time event or is it a structural change?
And this has been supporting our growth without us in covering the cost of having an additional Charter. The Vessel
This has been 1 of the primary initiatives. The second 1,
Particularly related to the cost of fuel.
Speaker #2: I will answer this myself. Well, part of the question has been answered by Gurgel. Structurally, there is an oversupply of capacity on the other hand.
we applied EFA, as Volk mentioned, EFA the emergency, if you will adjustment policy,
Speaker #2: There is an undersupply of port capacity. It is exactly what Gurgel explained. And we understand that this is a one-time event. It's structural. But this will be quickly offset especially by demand.
To recover partially, not just bunker fuel, but also the increasing diesel prices.
and,
Since the end of Q1, we've had a more aggressive plan to recover our prices with all of our customers.
Speaker #2: After many years, our team has in Cabo Taj, we see that we're never new capacity comes in, it takes 18 to 24 months to be occupied.
Speaker #2: So we are in the time frame for the additional capacity that was added in 2024, 2025. The capacity starts being occupied. We start seeing some stabilization in that regard.
And of course, this is very well backed up by this whole Market situation that we see happening in Kabota. So these have been the main initiatives adopted, by the company. We continue to explore a number of initiatives involving mainly cost. Reductions
And this has been our drive and will continue to be so,
Speaker #2: Freight rates were so low that everyone is suffering. We know our cost base. And the cost base for the sector is not so different from ours.
now that we get into the budget plan and we'll start defining the assumptions for next year, so that
We can have sustainable levels as well ignition. Thank you.
Speaker #2: You know, vessels are vessels. Ports are ports. Containers are containers. Trucks are trucks. It's the same for the whole industry. So if we are suffering, other players are suffering just as much.
Thank you. This is an anonymous question, which is divided into three parts. I will ask one at a time because these are different topics.
First question, I'd like to better understand the decline in results for Coastal shipping.
Speaker #2: In the levels got to a situation which is no longer bearable. Everyone is burning cash to maintain the operation. And this is not sustainable.
Speaker #2: So we adopted a super strong initiative to recover freight rates. Our levels are below two years ago, not factoring in the equation. So we have a long road ahead of us.
Could you provide a little more detail regarding the deterioration of either mix and the competitive environment in both feeder and coastal shipping? Does this appear to be a one-time event, or is it a structural change?
I will answer this myself. Well, part of the question has been answered by Gonzalo.
Structurally.
Speaker #2: But it is inexorable. It's inevitable. It will happen. It's just a matter of time for freight rates to recover. But like I said, the supply and demand equilibrium in Cabo Taj Strait will stabilize with growth.
On the other hand, there is an oversupply of capacity.
There is an under Supply.
Speaker #2: The market has been growing. So like I said, it's 24 months that we need for the market to occupy the extra capacity. As for feeder, it's a matter of cargo mix.
Of Port capacity. It is exactly what gel explained and we understand that this is a 1 time event.
It's structural, but this will be quick.
Speaker #2: Feeder we don't have exactly control over the cargo that is coming into Brazil, leaving Brazil. We're just a service provider. And there are some routes that are more or less profitable.
Offset specially by demand after many years. That our team has inhabited. We see that. Whenever new capacity comes in, it takes 18 to 24 months to be occupied.
Speaker #2: And our feeder customers' demand from us and the cargo mix and the impacting our revenue base. So this is not structural. This is a one-time of base.
So we are in the time frame for the additional capacity. That was added in 2024, 2025 the capacity starts being occupied with stretching, some stabilization in that regard.
but,
Speaker #2: But it's not totally under control. But we can do is open or close the forfeits for other cargo or even for feeder. Trying to look for more profitable cargo.
Great, rates were so low that everyone is suffering. We know our costs are based.
Speaker #2: This is super dynamic. It's something we do week by week. Ship by ship. Our team is piloting, monitoring this thermometer with always looking to have more profitability.
Vessels of vessels ports are ports. Uh, containers are containers. Trucks are trucks. It's the same for the whole industry. So if we are suffering, other players are suffering just as much.
In the levels.
Speaker #2: Thank you, Marcus. Second question from the same person. Regarding the strong results in TVV, do you believe this could be the new normal or was it a one-time occurrence?
We've gotten to a situation which is no longer bearable; everyone is burning cash to maintain the operation, and this is not sustainable.
Speaker #2: A little bit of everything. TVV is going through a great moment. The official opening of Penedo retro area our terminal was operating at 95%, sometimes above 100% capacity.
Speaker #2: I mean, how can we do that? We would shut down some streets. But the trucks would that the trucks would use and we would put containers there.
So we adopted a super strong initiative to recover freight rates. Our levels are below two years ago, not factoring in the equation. So we have a long road ahead of us, but it is inexorable, it's inevitable—it will happen, it's just a matter of time for freight rates to recover. But like I said, the supply and demand equilibrium in the Kabota Strait will stabilize with growth. The market has been growing. So like I said, it's 24 months that we need for the market to occupy the extra capacity.
As for feeder.
It's a matter of cargo mix.
Either.
Speaker #2: And now we're breathing the operation has much more satisfactory occupancy levels. Another 65,000 square meters. A lot of area to be explored and to bring in new revenue.
Speaker #2: So the increase in profitability in revenue and margins of TVV will continue to increase. What was a one-time off effect was the import of cars.
We don't have exact control over the cargo that is coming into Brazil or leaving Brazil. We're just the service provider, and there are some routes that are more or less profitable, depending on what the customers demand from us and the cargo mix.
Speaker #2: We know that the government whenever the government increases the level of taxes, imports take advantage of the last days until the end of June.
Ends up impacting our Revenue base. So this is not structural, this is a 1 time off space but it's not totally under control, but we can do is open or closed the faucets or other cargo or even for feeder.
Speaker #2: They enjoy the lower tax rate. And it's an absurd volume of vehicles unloading in May and June. But this has normalized. It's never zero.
We're trying to look for more profitable cargo. This is super dynamic—it's something we do week by week, ship by ship. Our team is piloting this "thermometer," but always...
Speaker #2: But it stabilized. So this June and May peak should not continue. But the EBITDA level that TVV starts generating is higher because of the Penedo retro area, which was officially opened and started operating.
Looking.
To have more profitability.
Thank you. Marcus second question from the same person.
Regarding the strong results in TVV, do you believe?
Speaker #2: Thank you, Marcus. Now the third question from this very same person. Regarding the sale of logging Pantanal and Resiliente, was this a sales and lease back transaction, correct?
Could this be the new normal, or was it a one-time occurrence?
Speaker #2: What was the sales price if you can disclose it? And the lease cost going forward, how is the lease amount adjusted? Yeah, this was a sales and lease back transaction, yes.
A little bit of everything. The TVV is going through a great moment with the official opening of the Penedo Retro area. Our terminal was operating at 95%, sometimes above 100% capacity. I mean, how can we do that?
Speaker #2: The amount was disclosed in the material fact. I must admit I don't know it by heart. But it is in our material facts sheet.
We would shut down some streets.
Speaker #2: And the lease back operation has a predetermined amount. According to the duration of the contract, it will not change. It will not be adjusted.
Speaker #2: And the ships are here for us in operation. And like I said, this brings us flexibility. Plus there's a financial point, the economic point of improving our debt profile.
Where, where the trucks would that the trucks would use. And we would put containers there, and now, we breathing the operation has much more satisfactory occupancy levels, another 65,000 square meters, a lot of area to be explored and to bring in new Revenue.
so,
Speaker #2: We can take advantage of very high interest rates and particularly good vessel prices. The market has high demand. For vessels, this was a super interesting opportunity for us.
The increase in profitability in revenue and margins of TV. So we will continue to increase what was a 1 time off effect?
Speaker #2: It's a deal that was really worth our while. But if an opportunity arises, press to get more modern vessels, which is something they're looking for, more efficient vessels, not necessarily bigger, but more efficient.
Regarding the imports of cars, we know that whenever the government increases the level of taxes, importers take advantage of the last days until the end of June.
Speaker #2: Both Pantanal and Resiliente are somewhat older vessels. So we are looking for ships with more adequate consumption and this might happen. Sooner or later.
They enjoy the lower uh, tax rate and so an absurd volume of vehicles on loading in May and June, but this has normalized, it's number zero but it's stabilized.
So, this June and may Peak should not continue.
Speaker #2: But we it's important that we have flexibility. We don't intend to increase our fleet. We understand that the economy doesn't come with a number of vessels, but rather with more efficient vessels.
But the upper level of the TV view starts generating is higher because of the been retro area, which was officially opened and started operating.
Speaker #2: So this opens up some room for us to think about that. Thank you, Sandra. Thank you, Marcus. Now we have another question. From Guilherme Augusto de Santos.
Thank you, Marcus. Now the third question from this very same person. Regarding the sale of logging pantanal and resiliente.
Speaker #2: Despite the significant net income for the quarter, we note that the substantial portion of the earnings and the reduction in net debt was driven by the divestiture of the vessels while cumulative operating cash flow for the first half of the year was below the previous year's level.
What's this? A sales and lease back transaction. Correct. What was the sales price? If you can disclose it and the lease cost going forward? How is the lease amount adjusted?
Yes, this was a sale and leaseback transaction. Yes.
Speaker #2: Looking ahead, what does Logan's recurring free cash flow generation capacity, excluding our asset sales, and one-time working capital and excluding one-time working capital effects, and what are the main drivers for increasing this generation in the coming quarters?
Speaker #2: I'll let Pascoal answer this question. Thank you, Sandra. And thank you, Guilherme, for the questions. Right. It's true. And I think that Marcus Voloch mentioned this.
Speaker #2: The divestiture of the vessels did impact the cash generation. For the company. And we took advantage of a very positive moment of the value of the assets.
File. But
If an opportunity arises for us to get more, more than vessels, which is something—we're looking for more efficient vessels, not necessarily bigger, but more efficient.
Speaker #2: And we intended to replace these vessels in the future anyway. And the trade-off was the chartering. According to market conditions. So this was an efficient way for us to balance the cost of capital of the company in a environment of high interest rates and expensive interest.
Both points are now resilient here, some more order vessels.
Speaker #2: Regarding the company's ability to generate cash, excluding asset sales, well, this brings challenges as Marcus mentioned. And it's a challenge for all of our officers.
So we are looking for ships with more adequate consumption, and this might happen sooner or later. But it's important that we have flexibility. We don't intend to increase our fleet. We understand that the economy still doesn't come with a number of vessels, but rather with more efficient vessels. So this opens up some room for us to think about that.
Thank you, Sandra.
Thank you, Marcus. Now, we have another question.
From gillio me. August to the
Speaker #2: But everything is based on an improvement plan for the company's margins. So our main business unit, Coastal Shipping, Marcus spoke at length about this.
Speaker #2: Gurgel as well. So the company has this focus of improving cash generation based on the primary view of the company, Coastal Shipping. TVV is already a cash cow.
Despite the significant net income for the quarter, we note that a substantial portion of the earnings and the reduction in net debt was driven by the diversity of the portfolio. While Log-in Dev operating cash flow for the first half of the year was below the previous year's level, looking ahead, what does Log-in's recovering free cash flow generation capacity, excluding our asset sales and one-time working capital, look like?
Speaker #2: TVV has a positive influence on the company's cash generation bringing in strong results as we presented in Marcus Voloch complemented in the answer. The previous answer and take more still in its turnaround phase in order to advance take more will require some investment, some capital to continue its business plan.
And excluding 1 time, working capital effects. And what are the main drivers for increasing this generation in the coming quarters?
All that. Pascal answered this question.
Thank you, Sandra.
And thank you, Guilherme, for the questions.
Right. It's true. And I think that Marcus Wok mentioned this, the diversity of the of the vessels did impact the cash generation for the company.
Speaker #2: And the financial team is always looking at our debt portfolio. To suggest during the right windows to do some liability management. Active liability management.
And we took advantage of a very positive moment for the value of the assets.
And we intend to replace this Ruffles in the future. Anyway,
and,
Speaker #2: So that we can improve cash consumption, debt the principal and interest rates. According to Logan's amortization calendar, which is mostly long term. In terms of drivers to improve the main drivers always the operational one.
And the trade-off was a chartering according to market conditions. So, this was an efficient way for us to balance the cost of capital of the company in an environment of high interest rates and expensive interests.
Regarding the company's ability to generate cash, excluding asset sales.
While the Spring's challenges, as Marcus mentioned.
Speaker #2: Of business units results. And then working capital. We are always active at Logan to improve the linquency, accounts receivable, accounts payable, and the financial conversion cycle.
And and it's a challenge for all of our officers, but everything is based on an improvement plan.
For the company's margins.
Speaker #2: Of Logan. Logan does not have relevant inventories and inventories by inventories I mean bank accumulable parts and components. At the moment, the bunker fuel price has inflated this number a bit, but we started a campaign to recover.
To our main business unit Coastal shipping Market spoke at length about this as well. So the company has this focus of improving cash generation based on the primary view of the company coal. Shipping
TVV already a cash cow.
CVD has a positive influence on the company's cash generation.
Speaker #2: This extraordinary fuel price increase resulting from the middle list prices and more. I have a question that I think was partially answered by Pascoal.
Speaker #2: From Claudia Matos. Regarding take more's turnaround process. Well, I'll let Pascoal answer this. Claudius, I think you're the best person to answer this. Thank you, Claudia, for the question.
Bringing in strong results, as represented and as Marcus Vola complimented in the answer—the previous answer—and Techno is still in its turnaround phase. In order to advance, Techno will require some investments, some capital, to continue its business plan.
And the financial team is always looking at our debt portfolio.
To suggest.
Speaker #2: Actually, the process is underway. I think that the first phase was an adjustment of infrastructure. We worked on the org charge of the company.
During the right windows, to do some liability management, active liability management, so that we can improve.
Cash consumption.
Debt. The principal and interest rates.
Speaker #2: We needed to restructure the whole org chart. The current phase, we have a strong focus on operating efficiency. And in recovering our profitability, this is one of the main drivers.
Speaker #2: And that includes vehicle occupancy productivity cost and contract profitability. IE recovering the rates. That's fundamental for us to get the results. As a strategic front, we accelerate the integration of take more with cab otage and the other assets of the group.
According to Log-in, for motivation calendar, which is mostly long term in terms of drivers to improve—the main drivers are always the operational, one of the business unit results, and then working capital.
We are always active at Log-In to improve the link between accounts received, accounts payable, and the financial conversion cycle at Log-In.
Speaker #2: This is extremely important. And relevant. And obviously, converting the turnaround actions into margin and earnings. No use adopting a lot of actions and no bringing the effective results for the business.
Log-In does not have relevant inventories.
In inventories, by inventories, I mean Bank of fuel parts and and and components.
At the moment, the bunker fuel price has inflated this number a bit, but we started a campaign.
Speaker #2: This is how we've been working and we will continue to do so. Thank you very much for the question. Now we have another two questions from the Nilo Oliveira.
To recover.
Speaker #2: From magazine Portos e Navios. First question. Following the results of the sale of ships with Logan chartering, is the company considering repeating this strategy with other vessels of its fleet?
Uh, this extraordinary fuel pricing, increase resulting from the Middle East crisis and the war.
Answered by Pascal from Cloud, Jamat.
Regarding pekar's turnaround process.
I'll answer this.
Speaker #2: Well, we're looking into opportunities. I would say yes or no. But if an opportunity knocks on our door, as was the case of Logan Resilient and Logan Pentano with good prices and interestingly back strategy, I wouldn't disregard the possibility.
Well.
Claus, I think you're the best person to answer this.
Thank you, Claudia for the question.
Actually the process is underway. I think that the first phase was an adjustment.
Speaker #2: But it is not in the radar in the short term. If the opportunity arises, we'll look into it. If somebody wants to make a good offer, or any of our vessels.
Speaker #2: Okay, we'll look into that. Second question from the Nilo Oliveira. Toward extent does the lack of definition regarding the rules for sustainable ships hinder the planning and analysis involved in the search for more efficient ships mentioned by Voloch?
We worked on the org chart of the company. We needed to restructure the whole org chart in the current phase. We have a strong focus on operating efficiency and on recovering our profitability; this is one of the main drivers.
Speaker #2: Well, the Nilo, that is a good point. We are looking at good efficient vessels. Regardless of the rules for sustainable ships. There are some things that worry us a lot.
And that includes vehicle occupancy, productivity costs, and contract profitability—i.e., covering the rates. That is fundamental for us to get the results as a strategic front. We accelerate the integration of taking more with cabotage and the other assets of the group. This is extremely important and relevant for others.
and obviously,
Speaker #2: Now there are some weird points about national content. We know that the Brazilian shipbuilding industry does not have a successful track record. So the more people invent leaves or drivers, the more people come up with schemes to drive an industry which notably does not work in Brazil.
We are converting the turnaround actions into margin and earnings now. We're adopting a lot of actions, and all of them are bringing effective results for the business. This is how we've been working, and we will continue to do so. So, thank you very much for the question.
Now, we have another 2 questions from the nilu Oliva from magazine fours interviews. First question, following the result of the sale of ships with logging chartering them,
Speaker #2: The more complicated things can get. But independent of that, we believe that good common sense will win and that sustainable ships will continue regardless of whether the content is Brazilian or foreign, what matters is that the ships are effective, contributing to Brazilian economy, helping reduce pollution and helping decarbonization.
Is the company considering repeating this strategy with other vessels of its Fleet.
Mobile looking into opportunities. I would say yes or no for different opportunity. Knocks on our door. As was the case of login, resilient and login pentano with a good prices and an interesting lease back strategy.
Speaker #2: And the fact that we get cargo from road to sea transport, that's already an initiative to decarbonize the economy. The pending point is deliberations that don't make sense from the operational sustainability and the environment standpoint.
I wouldn't disregard the possibility, but it is not on the radar in the short term. If the opportunity arises, we'll look into it.
if somebody here wants to make a good offer,
For any of our vessels, okay? We'll look into that.
Second question from the Nylo Iva.
Speaker #2: It's all good, but anything other than this does not make sense to be included. In the decree and ordinance dictating whether the ship should have more or less national content.
To the extent that the lack of definition regarding the rules for sustainable ships, Hendrick, the planning and analysis involved in the search for more efficient ships was mentioned by Volo.
Speaker #2: And I'll stress, when we know that the Brazilian shipbuilding industry is not competitive, Logan has quite a substantial liability resulting from the non-competitiveness and failure of the Brazilian shipbuilding industry.
Well, Vanilla, that is a good point.
We are looking at good, efficient vessels, regardless of the rules for sustainable ships.
There are some things that worries a lot.
Speaker #2: So our lawmakers should understand that it's no use investing in dead dogs. I apologize for the strong expression, but we have to put the elephant here.
Now, there are some other weird points about national content. We know that the Brazilian shipbuilding industry does not have a successful track record. So the more people invent, leave us or drivers...
The more people come up with schemes to drive an industry, which notably does not work in Brazil.
Speaker #2: We have to acknowledge the elephant in the room. We cannot bet on something that Brazil cannot do successfully. Brazil could do it until the 1980s.
The more complicated things can get.
But independent of that, we believe that...
Speaker #2: After that, no longer. This will create distortions for a whole sector, which can basically kill cabotage. Ultimately, this plays against the cabotage. And if cabotage is no longer sustainable and non-existent, cargoes will go back to the trucks and normally that's the last straw.
Good. Common sense will win, and sustainable ships will continue regardless of whether the content is Brazilian or foreign. What matters is that the ships are effective in contributing to the Brazilian economy, helping reduce pollution, and supporting decarbonization. The fact that we are moving cargo from road to sea transport is what really matters.
Speaker #2: It is the complete definition of incompetence. Believing that we can foster a cleaner mode by supporting a dirtier mode. But the Nilo, when we meet face to face, we can debate more on that topic.
That's already an initiative to decarbonize the economy.
The pending point.
Speaker #2: Thank you, Sandra. Very well. There are no more questions. I would like to thank all of you for participating and I'll turn the floor to Marcus Voloch for his final statements.
These are deliberations that don't make sense from the operational sustainability and environmental standpoint.
Speaker #2: Very well. Thank you very much for your questions, for joining us. I think we caught good questions. And I stress, but we are dealing with a challenging environment.
It's all good, but anything other than this does not make sense to be included in the decree and ordinance. Dictating whether the ship should have more or less national content adds to our stress, especially when we know that the Brazilian shipbuilding industry is not competitive.
Speaker #2: But our team is focused. The company is super focused on improving our earnings. Everything which is under our control is being done. Particularly in terms of operating efficiency, cost efficiency, improving levels of service, better perception of service level, by our customers.
Log in.
Has quite a substantial liability resulting from the non-competitiveness and failure of the Brazilian shipbuilding industry.
Speaker #2: We fully believe that the improvement in results will come as we improve our levels of service. Customers want to be well served. And this is a top priority for Logan.
Understand that it's no use investing in the dogs.
Speaker #2: It has been so for a while. This is seen by the market. And now we are in a second wave to recover freight rates.
Speaker #2: Now, having said that, again, thank you very much for joining us. And I'll see you in the next conference call. Thank you very much.
I'm I apologize for the strong expression but we, we have to put the elephant. We have to acknowledge the elephant in the room. We cannot bet on something. The Brazil cannot do successfully, because it could do it until the 1980s. After that no longer this will create distortions for a whole sector which can basically kill capitis.
Ultimately, this plays against the capital, and if capital is no longer sustainable and non-existent, cargo will go back to the trucks, and normally that's the last straw.
It is the complete definition of incompetence, believing that we can.
Foster.
Uh, a cleaner mode.
by supporting a dirtier mode. But Danilo, when we meet face to face, we can debate more on that topic. Thank you, Sandra, and—
Very well. As there are no more questions, I would like to thank all of you for participating. I now turn the floor to Marcus Volo for his final statements.
Very well. Thank you very much for your questions and for joining us. I think we got good questions, and I stress that we are dealing with a challenging environment, but our team is focused. The company is super focused on improving our earnings. Everything that is under our control is being done, particularly in terms of operating efficiency.
Efficiency, cost-efficiency, improving levels of service, and better perception of service level by our customers—we fully believe that the improvement in results will come as we improve our levels of service. Customers want to be well served, and this is a top priority for Log-in. It has been so for a while. This is seen by the market, and now we are in a second wave to recover freight rates. Now, having said that, again, thank you very much for joining us, and I'll see you in the next conference call. Thank you very much. The conference call of Log-in to review second quarter 2026 earnings is now finished. You may disconnect and have a good day.
