Itausa SA
BOVESPA:ITSA4
Earnings Call Analysis
Q4-2023 Analysis
Itausa SA
The company has made intelligent capital allocation moves with strategic investments yielding exceptional returns far above benchmarks. The investment in NTS from 2017 has accrued a total shareholder return (TSR) of 378%. Another asset, Copa, has demonstrated strong performance with almost 200% TSR since its acquisition, surpassing other benchmarks like CDI. The IGA utility has experienced an impressive average EBITDA growth rate of 75% annually post-acquisition due to new concessions. Over a period of 10 years, one of the core main assets has delivered TSR of 333%, again, much higher than comparative benchmarks.
Financial outcomes across the investment portfolio have been diverse. Alpargatas is experiencing sectorial challenges, reflected in operational difficulties and accumulating warehouse inventory, resulting in a reduced EBITDA of BRL 250 million for the year and a decline in liabilities to BRL 48 million, marking a downtick from the previous year's performance. CCR, on the other hand, reported an adjusted EBITDA of BRL 7.8 billion and a net revenue of BRL 1.4 billion, indicating strong growth. An investment company within the utilities sector exhibited an EBITDA increase of 82% on account of new concessions, reaching BRL 4.5 billion in EBITDA and BRL 582 million in growth, marking healthy progress compared to last year.
Copa Energia, involved in natural gas distribution, has proven to be a robust investment. Margin recovery and cost synergy realization post Copagaz integration were significant, leading to an EBITDA of BRL 1.1 billion, marking 22% growth, and an almost 80% increase in net revenue, totaling BRL 562 million. The transportation company NTS is another potent cash generator, with BRL 6.8 billion in EBITDA highlighted.
The net revenue for the company soared to BRL 14.132 billion during the year, bolstered by BRL 1.7 billion in capital gains from the sale of XP shares in 2023. Despite tough market conditions, the performance of the investment companies contributed to a 6% growth in overall revenue for the year.
The revenue from investment companies amounted to BRL 13.5 billion, a 6% increase reflecting the overall portfolio's robustness. This growth offsets the company's internal negative result of BRL 683 million, driven by higher tax expenses and other administrative costs, which worsened compared to the previous year. However, the financial outcome improved by 8%, or BRL 46 million, despite the costs associated with leverage and capital structure. Higher cash mobility due to the sale of XP shares contributed positively, partially offset by increased interest expenses.
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Good morning, everyone. Welcome to the Itaúsa. I am Priscila Toledo, I'm the CFO of Itaúsa, and it's a great pleasure to be once again here with all of you to share the financial results of the holding for 2023, the perspectives for 2024 and of course, answering your questions. This session is going to be a bit different from the others because Alfredo Setubal, he is the CEO and Investor Relations Director of Itaúsa is not here physically with me at the studio, but he wants to depart remotely. Let's connect. Good Morning Alfredo, Welcome.
Good morning, Priscila. Good morning, everyone that is watching us. As Priscila said, I am here online. And it's a great pleasure to be with you to take part in the event and take hard on the Q&A session, which I think is the most interesting moment where we can discuss our strategies, and we can discuss the results of each of our companies that we're investing in.
Thank you, Alfredo. I'll come back in a short while. I'm going to give a few instructions for the start of the event. Before going to the agenda, I would like to remind you that we have simultaneous translation into English and Portuguese. If you'd like to access it, you just have to click on the American flag on the platform. You can also submit your own question, comment suggestions. Through the platform, there is a box for messages you can use that box or Twitter using the hashtag [indiscernible] and now I'm going to show the agenda for today. So we started with Alfredo. He's going to connect once again with us bringing a bit of the macro context and the business environment. Then we're going to go over the results of Itaúsa showing dependent [indiscernible] of the numbers of the invested companies. We're also going to talk about capital allocation and liquidity management, which are very important news on the advances. Well, we're going to talk about #4, which is the favorite moment of everyone and then the final consideration, so we can discuss the highlights of the year after the proceeds, and then we can clarify your doubts during the Q&A. Well, let's talk about the next topic. Again, let's bring Alfredo back to get his on look on the business environment. How do you see 2023? And what do you think about 2024, Alfredo? The floor is yours.
Thank you, Priscila, I think that 2023 started with low expectations of growth of the economy, a lot of uncertainties in regards to what would be the new government mainly due to many of the things that were discussed in the political campaign that brought a bit of insecurity to the investors, the companies and society as a whole. Now throughout the moment, the month the scenario has come down, the expectation for the GDP, which was about 1% for the growth of last year. We could see a GDP of almost 3% with the agri business being the main engine and industry still relatively weak throughout the year in Brazil. And we live in an environment of interest rates that are very high and very significant reduction of inflation. So it was a better [indiscernible] than what we expected, but some sectors that are more sensitive to the interest rates to specifically that affect us in our investments they suffered a bit more, which was Dexco, they work in the real estate construction market that had a performance somewhere worse due to this segment being calling down and Alpargatas, which we're going to discuss later, due to a drop in the income that happened in Brazil throughout. For 2024, we see a stable scenario. We still have low growth we imagine something about 2%, 2.5% of growth, not having the agri business as the main engine as 2023. But services, we can see that the activities in the service market are warming up in general. So this will be the sector that will pull up the growth of the economy this year. Due to the continuity of the dropping of the interest rates, we're going to see some sectors of the industry that are regaining some of their activities, the automobile once again, construction and real estate, we are expecting a better year. So we're going to expect a more pleasant situation from the standpoint of the economy itself. Central Bank should continue to decrease the interest rates. Tomorrow, we are going to have the meeting and our expectation is that it's going to be a 0.5% drop and then we have an expectation that at the end of the year, the interest rate is about 9.25 per month. This is a benign scenario that will bring an economy and an environment that is more healthy for growth. Inflation once again stable, dropping a bit more. It's within the range of the objective. The objective is 3, but they can vary 1.5% so we believe in an inflation of 3.5% to upper limit 4%. This is a very stable scenario. The exchange rate, we can see it very stable with a flow of the commercial plus financial. So we believe that there is going to be an exchange rate of BRL 5 to the dollar, that should be the reality. If there is a very strong influx of entry of resources, maybe it can drop below that. But the exchange rate is not going to be a factor double pressure inflation, neither the costs of the companies in 2024. So we see a scenario -- economic scenario that is okay, a growth with low inflation interest rates dropping and a scenario that is good benign in a general way without a great enthusiasm, but benign for all the companies that we have that we have a participation, specifically those that are more leveraged. CCR, for example, that interest rate will benefit these companies in terms of financial expenses. And there is a growth of interest rates that are lower and inflation is stable that should generate an environment that is good for the activities on the financial system, and we see the possibility of growth in the credit portfolio [indiscernible] a low delinquency and a scenario that we have the expectation. In general, therefore, this is a scenario that we are seeing as good not a great deal of enthusiasm, but it's good for our investments.
Thank you, Alfredo. Thank you for the introduction, very enriching. We will come back soon we're going to go over the numbers to the [indiscernible] . This context that Alfredo brought, how is it reflected in our numbers. I think that we had another year of results that a record -- the highest net income, which is recurring for the market was recorded BRL 14.1 billion, a 3% increase in regards to 2022, and ROE, profitability of our liquidity assets recurrent, 18.3%. This is in the historic threshold. We are very comfortable. It's been stable. Our net patrimony while we have the non -- the negative nonrecurring effects that are coming from the investments, some impairments from [indiscernible] and the Argentinian operation, BRL 13.5 billion, our net patrimony net asset, BRL 83 billion at the end of the year. And our market share, our portfolio value of the market of the invested companies the participation Itaúsa has of those assets reaching BRL 136 billion and have a very expressive growth of 34%. That really shows solidity and the quality of the portfolio. So let's talk about Itaúsa performed in the stock exchange, how is Itaúsa performing. We have the period of analysis to see how the shares of Itaúsa has valued in regards to both is [indiscernible] in the period of 10 years, we had a valuation of 311% in regards to the Main benchmark, which is [indiscernible] which is 134%. And in the short term, if we consider the last 12 months, February, that works 45% of valuation in regards to [indiscernible] facing [indiscernible] of 23%. So this is a performance that is very consistent with any of the periods analyzed, and it shows the resiliency capacity and the capacity for creating growth for and value for our shareholders. Let's talk about discount. Discount is still very high from what we consider that is fair. Here is the position of February, 22% of discounts. So we are talking about our pricing Itaúsa capital markets, BRL 106 billion. Which is lower than the stake that we have from Itaúsa de Banco, which would be valued at BRL 124 billion. The market has been giving a discount in regards to our participation in regards to Itaúsa Banco, without taking into consideration all of our investments, which are valued at least BRL 12 billion, and this is in the nonfinancial market, we have the consideration at the base level, and I'm going to comment that we have an important record for the creation of value for these recent investments. And certainly, we consider that this is a fair value for this investment. And we are going to get a discount that is implicit higher than that with which we have commented to the market. And the recent value creation of our assets that we had investments over the last few years. So we always talked about a case, which is very important for the value creation NTS, great capital allocation by [indiscernible] we did that investment in 2017. And when we consider that the TSR, that's an indicator of all the shareholder return, which measures the return the valuation of the assets plus the proceeds for a period in regard to the initial price of the investments in a certain period. So NTS, we invested in 2017, we reached a total shareholder return of 378%; much higher than any benchmark that we analyze [indiscernible]. Copa, which is another case that is very interesting in the allocation. Recent capital allocation, we reached almost 200% of TSR since the acquisition and it's much higher than CDI and any other indicator that we analyze [indiscernible] as well. IGA, this is for utilities, a great of EBITDA annual since our acquisition growth on average every year of 75%. And we've seen all the concessions that were achieved since our acquisition and also a very high record of value acquisition, value creation. If we consider the multiple of the EBITDA with an important growth that happened. [indiscernible] our core main asset and is very recurrently bringing a record of value creation here a period of 10 years, we consider 333%, much higher than benchmarks. And as I commented with a growth, a record of growth that is very consistent. We have space for that consistency and those recent records for value creation of our assets in regards to assets that are in our portfolio for some time, and they have to be priced in a more adequate way for the market in our shares. So now -- let's go over the numbers of 2023. Starting with the [indiscernible] of what happened with the numbers of our invested companies. All of our invested companies, they already did their reports to the market, earnings calls. And let's see the [indiscernible] of the main highlights, starting by [indiscernible], they reported BRL 34 billion, 0.7 a billion net revenue of recurrent ROI, very solid results. Alpargatas in a moment that is more challenged in sectorial as Alfredo commented but also with issues, difficulties, operational issues and all that reflects of increase of stocks of warehousing that the company saw in 2023. So they reached BRL 250 million of EBITDA recurring in the year, BRL 48 million of liabilities losses, a drop in regards to the results of last year. Dexco sector a moment that is more challenging because of the macroeconomic scenario that impacted our results that is reported by the company, BRL 1.4 billion of EBITDA that is recurrent reported and a net revenue of BRL 371 million. Infrastructure where we have the investments in CCR. CCR reporting an EBITDA that is adjusted for BRL 7.8 billion and BRL 1.4 billion of net revenue, so also a growth that is very important for all the models of the company. [indiscernible]
Our investment company in the utilities sector, a growth of EBITDA of 82% because of the new concessions said into the portfolio this year, BRL 4.5 billion of EBITDA this year for BRL 582 million of revenue of growth that is very healthy and relevant in regards to last year. Copa Energia, our invested in the distribution of natural gas very robust investment. The margins are reflecting the recovery of margins and the capture of synergies of costs and expenses with the integration of Copagaz that is reported BRL 1.1 billion for the growth of 22% and net revenue of almost -- growth of almost 80% getting to BRL 562 million. The transport NTS gas, this is a company that is generating cash, reporting BRL 6.8 billion of EBITDA and a net revenue of BRL 3.3 billion. Now let's talk about how these numbers of our investment companies are impacting the results of Itaúsa. So let's talk about the evolution our net revenue is getting to BRL 14.132 billion in the year that result is impacted BRL 1.7 billion of capital gains for the selling of the shares of XP in 2023, that result had an impact of the growth of the results that we captured from our investor companies as I reported in the previous page, we reported very solidly, and we have companies in a very challenging market times. But in general, our investment companies, they are contributing with a growth of 6% of the growth that we captured in year. Our own result is worsening in BRL 126 million. I'm going to comment what is within this, well, this is the cost of Itaúsa, the cost of the holding with a reflection that is very important of the increase of the tax expenses that I'm going to explain later, and our financial result that is improving in 46 in the year, mainly in the cash generation of the period. Here is the movement of IRS deferred and the movement of the movement of the assets, we have a reflection in this provision. And we're going to talk about the components of our results. Now our profits. Well, our -- let's start with the [indiscernible] or investor companies, which is the main component. As you can see, the result that we have from our invested companies of BRL 13.5 billion, so an increase of 6%, as I commented in the previous page, all of this is an equivalency of patrimony in regards to the net revenue that is reported from our investor companies. We have our own results of BRL 683 million, our own result is always negative as you have expenses, tax, administrative and other expenses with a worsening in regards to the previous year because of more tax expenses, the financial result, which is a positive effect, an improvement in regards to the previous year, but the financial result, which is the cost of our net debt the cash profitability, negative BRL 572 million. The effect of IRCs and the gains of capital by the sales of shares of XP, let's comment on every block, the variations -- let's start by the result, our own results of the company, composed by our administrative expenses, mainly and tax expenses and other small expenses, we had here a growth of BRL 126 million of 22%, explained essentially by larger tax expenses, which is our PIS COFINS taxes, which we pay over every value that we received from our invested companies. In the year -- we received more interest of our capital, which is the reflection of the dividends of our own capital. Well, the main is [indiscernible] and here, we have PIS COFINS. It's more news and good news because we receive more investments of Itaúsa by here is the fiscal inefficiency. And we are growing close to the inflation. Let's talk about the new component, which is the financial result, which is an improvement of 8% year-on-year of BRL 46 million. The result is on the negative because it's an effect of our cost of our leverage of our capital structure but we had more cash mobility effects contributing positively for this variation due to a higher cash in the year, and that has to do with the selling of the XP shares all throughout the year that reinforced our cash flow. And for that, we had a positive reflect of cash profitability. That is partially compensated with more expenses of the interest rates, which are the debentures that we had issued in the investment cycle that we did. Going over the last component, which is the main one, the main results of the capture results of the investment companies reaching BRL 13.5 billion, a growth of 6% so that is reflecting the robustness of our portfolio. We had a highlight that is very positive for the results where we captured it [indiscernible] , CCR, Copa Energia and [indiscernible] these are the companies that are better performing in the year negative reflections that we have of Dexco and Alparagatas and in challenging impacting the demand impacting the demand for the products of these companies. We have the negative reflection of XP of almost BRL 200 million. And here, is less patrimony equivalents that we capture from the results of XP due to the reducement of the participation in this investment. And NTS, even though the results are very positive. This is the only company that we account in a different way where we consider NTS a financial asset marked to the fair market value. In this case, we did the update of the fair market value of NTS, and we had that impact of the deflation of IGBM in the period. So this is a study of the localization of the model and the result of the negative fair value in comparison to the positive fair value of last year. This is the impact in this year. With that, I can give you the important overview of the results of our investor companies and how is the result of Itaúsa composed itself. And I would like to go over to the next topic, which we had a lot of advancement, which is the capital allocation and management of liquidity. Let's do a retrospect with the selling of the shares of XP. We closed completely the selling of XP. We left the participation, we 0 the participation in 2023 December. We still had a reflection in our results in 2023 of BRL 1.7 billion in gains of capital from the selling of the shares. Our cash, the interest cash by the selling BRL 3 billion or over BRL 3 billion last year, and all of that cash is utilized for the reinforcement of cash and the prepayment of debt that I'm going to comment thereafter. This is a retrospective from 2021 when we started to do the selling of this investment, we started to see the accumulated impact in our result of BRL 5.2 billion of capital gains and the selling that we had done and the cash of BRL 9.5 billion and if we update the price of selling of every lot that we did since 2021, until December, we were talking about a price per share of selling, well, selling price, BRL 132 this is a price that reflects very well the good execution of the strategy for selling of these shares. This is a price that is higher than the current quote of the share and remember that we always did the selling of the shares looking for the fiscal optimization and maximization of the value creation for our shareholders. So I commented that the main destination here was the cash reinforcement and the reduction of our debt. The deleveraging we are consistently commenting on our intention, given the scenario of the interest rates that is high in Brazil, our intention is to reduce our debt, reduce our financial expenses, and therefore, we are executing in a very consistent way. That here is a retrospect of the third quarter of 2022, when we reached the highest net debt of Itaúsa growth debt of Itaúsa, sorry, BRL 8.4 billion. And since then, we had a movement of the reduction of the gross debt, and you can see that from the selling of XP, we did the first moment movement in 2022. We closed '22 with a lower gross debt and in '23, the 2 movement for the reduction of the prepayment of that. And therefore, we closed the year with BRL 3.8 billion of gross debt with the cash that we did with the selling of XP and the reinforcement that we did, we also managed to do the reduction of the net debt. If we consider September 22, which is comparing with that BRL 8.4 billion of gross debt. We had BRL 5.8 billion in net debt. And now we are closing BRL 1.7 billion of net debt, so a reduction that is very important. Another movement that I think that is very interesting from last year is debt profile and there is the average debt line that is from 4.3 years in September of '22 to 6.5 years in average deadline. So that is a reflection that is very positive and the liquidity management of the company, mitigation of risk refinancing. And with that, all the movements of prepayment with the refinancing that we did, we zeroed each and every amortization of the main debt until 2027. So the next amortization only happens in 2028. We have the indicators for leveraging here very healthy. We have a lot of robustness in terms of interest rate coverage and level of leveraging of our spreadsheet. So now the issue that all of you have waited for anxiously. We have a lot of questions in regards to that in our social networks. And I'd like to remind you, if you'd like to submit your questions, you can do so in English as well, use the message box and the platform for through using the hash tag [indiscernible] .We are following up on your questions. ROCs, we had the positive news for our shareholders. We had an increase of 100% of our proceeds in 2023, reaching BRL 8 billion of the interest of our capital declared over the company. Well, it was BRL 4 billion to BRL 8 billion that reached a payout of 62%. So growth that is good when we compare over the last years at a threshold of 31%. The double of payout this year, 62% getting our dividend yield of positioning of 8.4%, which is a growth that is very robust, and it gets us in this position of the highest dividend yield of the listed companies at the B3 Stock Exchange here in Brazil. So there is an increase of the proceeds we had positive news, and we've done another type of remuneration for our shareholders, which is the payment of a bonus. We did the bonus on the shares we did it last year, payment of bonus of 5% capitalizing almost BRL 9 billion of reserves of Net income, we have the price on the share that highlights the fiscal benefit for our shareholders. And we have, over the last few years, the demonstration of trust of our the shareholders, which is the quality of capital with 100%. While we couldn't conclude the call to the market and we did the homologation of the capital at the end of the year last year. And for those shareholders that subscribed and that took part in our call to the capital, they also had the bonus of 5% in after the homologation of the [indiscernible] capital. This is positive news less -- well, yesterday, there is a new declaration of the interest over capital or on capital. We have the Board approving BRL 614 million, the value of $0.05 per share. So the shareholding position. For those of you that have shares of Itaúsa until March 21, you're going to have the payment until [indiscernible] the date is going to be paid until August of this year. So good news on the proceeds. And also, I'd like to before giving the floor to Alfredo I'd like to bring the highlights the highlights of what he saw in our portfolio, Itaúsa and giving the Panorama and also getting the unlock of Alfredo for 2024. And therefore, I'd like to remind all of you that Itaúsa publishes regularly the news and the information that is relevant for the holding and also the companies of our portfolio in the website and the newsletter and the social network. So follow Itaúsa in Instagram and also X, former Twitter and also in [indiscernible] on our YouTube, sign up on our newsletter, and you can get to know everything that happens through our portfolio. I would also like to ask you that at the end of transmission, please answer our satisfaction questionnaire, we're always trying to improve. So capture the QR code or click on the button and you can submit your questions, your comments. Now yes, we can connect with Alfredo. Here are the main numbers of Itaúsa, but wanting you to get your unlock. Since you are the Board of a great deal of our investor companies, what would you highlight from our portfolio and also Itaúsa in 2023.
Thank you, Priscila. Congratulations on the presentation. I think it was positive numbers that we announced to the market, they reflect a good performance of our companies. And I think that we had results that were positive I think that we did a great movement, financial movement reducing our shares on XP. And with that, we can do an increase of our debt or the decrease of our debt on the time frame, and that is very relevant. And all of that is reflected when you have the dividend yield and you have Itaúsa in regards to the results of Itaúsa [indiscernible] so I think it was a very positive year for Itaúsa. Internally without getting into the details, we had great investments in governance, control and all of our operation of the day-to-day that is more robust. So it was a positive year, and I think that we can continue to expect for 2024, an improvement. As I commented, of our operations. I think that the bank has continued in the gains of efficiency in the result in focusing on the clients, digital transformation. So I think that this is a long journey, but I think that the result has a lot of quality and low levels of delinquency. This year, we continue with this journey, possibly with the same scenario of the low cost of credit and in the area of an industry, Dexco and Alpargatas, we have better results and I think that the environment will be better for the companies all throughout 2024, the same with CCR. We've seen the numbers that are much higher in terms of the movement of the sports, all the area of mobility is well, reflecting that the service area will be pressuring the inflation, pulling up the GDP. And so we have the numbers of CCR and the indicators of the economy indicates that these are positive results of an economy that grows. We have the organic growth, and we have the cash generation the indebtneand this is going to be reduced with the amortization of the debt of Copa. And so we get into a moment that we have a virtuous cycle of Copa Energia, and we can eventually have new investments in the sector of energy. So we are not depending on so much on the macroeconomics. We have great opportunities for the next years in terms of privatization and concessions. Last year, was -- Well, we have [indiscernible] , and we have the portfolio, but we are going to have opportunities certainly so that IGE will continue with the journey of growth. We like that asset regardless of having an expansion, it has a social improvement of the quality of life of people. This company is working with the utilities, it's very good that we have the ESG strongly, not only in governance, but also the environment. With people and improvement of quality of life. So this is an asset that we really like. NTS is always -- well, looks like clockwork. It has a very rounded operation. No surprises really here. I would like to highlight also the selling of ESG, and we start to work with the Itaúsa foundation that we created last year. We followed on the first projects in 2023, BRL 7 million, this year, we have the budgeting of BRL 50 million already with some projects approved within what was proposed in the foundation and helping with the productivity of the Brazilian economy and the improvement of the environment. So I think that we start 2024 with ESG not only with our foundation, but also with an agenda that is very important and agreed with our invested companies. What are the points where each are going to act. So we can have a better follow-up of this, this agenda... We will continue with this agenda, and we will work together with our invested companies and the holding itself everything that has to do with the activities as well with a lot of quality. So I think that we can expect a good year for the company's I think that we can have a growth of results in all the companies of our portfolio, and we will have the interest rates that have a positive impact as construction and real estate and Daxco and also the more leveraged companies by the sectors which we work with, which is infrastructure that have debt on the long term, but they're doing the investments necessary with the concessions that were acquired. So I see that this is a positive year. We hope that this will continue to -- well, we don't have a recession and what in the economies-- we are growing in the world economy. And while geopolitics is not different from what we saw I think that the scenario for Brazil is positive. And for our companies is very well positioned. I think that we can benefit very well from this more easy scenario that we have in Brazil in comparison to abroad with the presentation, and then we'll see each other in the Q&A. Now actually, we're going to start with the Q&A, and let's answer your questions.
This is also the time that we're going to answer the Q&A session. And we have analysts market analysts that are going to take part. And they are going to answer your questions. The first 1 is Daniel Vasama.
My question is also aligned with the message of management. You demonstrate a need of -- well, the high interest rates, you have to be careful, the geopolitical issues in the world that we hear from Alfredo that there is more positive scenario in Brazil for 2024, when we see the inflation, which is a lowering of the cost cycle. So what are the possibilities for 2024 in terms of looking at this positive scenario in Brazil. Do you think that there is a possibility of you doing some acquisitions. You saw the leveraging strategy. So you are doing well with the services of that. What are the priorities? What is the sector that you want to invest? Do you simply want do the reduction of leveraging and maintenance in this case.
Thank you for the question. I think that we have a scenario a scenario that is reasonably positive in the Brazilian economy without a lot of enthusiasm [indiscernible] -- it's well -- not something that is going to make the economy and the qualities, I don't think that they're going to be minimized with a degree that is necessary. And this is a scenario that we see for the next years growth, low inflation and dropping of the interest rate. We see and analyze, Daniel, the set as a whole. We see in Brazil regardless of the interest rate dropping in a very strong way getting to 9%, 9.5% per year. The cost Brazil, the risk of Brazil is still high. So we see the MTNs that are longer index to the inflation with the interest rate of 100. Well, this is an interest rate of that is very high, if you add the premium to the interest rate on the risk, the additional risk of the new investment, then we were talking about something 1% or 3% more in the return of that. So the inflation of 4% with an interest rate of 6% but a premium of 3%, then we're talking about an investment that we need to be profitable with a return rate of 13% per year. So with that, we see a lot of difficulties in finding assets with this return with the quality that we would expect that Itaúsa will do an investment that is relevant. So I think it's difficult at this time that Itaúsa has a new investment and that we invested aspect of interest rates of high interest rate returns to compensate the risk of doing the additional investment. So we're going to continue to see we're always looking. We are signing a lot of NDAs, we're looking where the private equity companies are seeking us to analyze opportunities and we continue to see them I think that the gap that we have in our portfolio is always something connected to the ever business, which is very relevant in the Brazilian economy and that we do not have any assets that is directly connected to that sector. We haven't found anything that would justify the investment by the return or the opportunity that we had -- but we continue to see. I think that the strategy continues to be deleveraging -- we have the real interest rate will -- it will be very difficult it will drop below the 6%. So we have a debt that is still to be paid, that is very much reduced but still very high. Itaúsa is a holding from the segments of the dividends and the risks that we received. So we have to be careful analyzing the opportunities, but with a lot of trend quality -- and if possible, if we're not having any opportunity for growth, we are going to continue with our journey of reduction of the debt and expecting a new opportunity. Remember that Itaúsa did all of these investments through leveraging with the issuance of debentures in the Brazilian market 7,8 years. So if there is any other opportunity with the reduction of leveraging that we've done, we can think about indebtedness of the company if, in fact, there is an important special opportunity. Otherwise, we're going to continue with the process of deleveraging.
Thank you, Alfredo. Now I'd like to bring our new guest [indiscernible].
Well, I have a question about the flow of dividends '25, you talked about the perspective for 2024. But you talked about a good perspective for the flow of proceeds for the year. My question is, in your opinion, is it material the payment of dividends of the other companies that are not -- it throughout 2024 without the flow of the nonfinancial selling. Would it be growing up ahead, thinking that throughout 2024, Itaúsa will pay a great deal of dividends -- is there anything that is coming from the other companies -- and simply a quick follow-up. Itaúsa has something about -- the 90% of the assets of Itaúsa is that the perspective for the future? Or can we see diversification of your portfolio?
Thank you for the question. The dividends of the companies that are non-finance -- they're still not sufficient for us to pay the additional dividend for our shareholders. Some are still in a process -- a long process of investment, such as CCR idea that has a CapEx that is very high with leveraging that is very high. So the financial expenses have an investment that is equivalent of the EBITDA that is generated by these companies. But we see copper is going to pay a dividend that is much higher this year. We see tax which is a reasonable dividend rate regardless that the operation is not so good, but there is a space for that. So we see NTS will continue with the flow that is much more relevant of dividends, but these dividends are not enough for us to pay for the additional dividends. We have all the expenses of the holding and Priscila shown well, taking into consideration all of the expenses plus the donation of BRL 50 billion for the Itaúsa foundation. So BRL 200 million in expenses of the holding, but we have another BRL 500 million of expenses, the financial expenses payment of interest rates of our inventories, and we have also 500 million, 400 million, of inefficiencies, fiscal inefficiencies in regards -- regarding the interest of our capital, there is a holding and before we get to Itaúsa. So we are still not in a condition, well, we haven't got a low dividends that -- so we can 0 the expenses of the holding. But it's not enough to pay for the additional dividends. There is an expectation, and I commented in this year, in this event, we are in a trough in [indiscernible] . We are inverting -- there is a big elevated CapEx. So we haven't had a lot to work with for the payment of dividends. but we see that in a growing way for the next year, so we can distribute more dividends for our shareholders besides what we have in practice, which is passing on the dividends of the interest of the capital that is received by the company by the bank itself. So this is a part of your question. The second part, it's very difficult for us, Thiago, to do the diversification when we have 37.5% of Itau Unibanco, which is a giant, a very strong participation in the bank that gives you results, BRL 35 million, BRL 36 billion, just with the liquidity of this operation, and it shows the concentration of our results and our investments. So I think that it's -- we have to expect something about around 90%. What we see in the portfolio is a portfolio of companies that are good, they are relevant, and we see them with a unique portfolio. So they individually, they have a lower weight in the result of a Itausa. And I think it's very difficult that this will change in regards in the virtue of the size of the result of Itau Unibanco the next few years.
Now the next guest that will take part, Eric Ito from Bradesco BBI.
I have a question of interest [indiscernible] I know that in the last call results, well, the theme was about the extension of it, and in that sense, you commented, Alfredo, that for Itausa, had a benefit of the reduction of inefficiencies. But in the whole, it wouldn't be compensated for the negative impact of the subsidiary. So could you tell us what do you think about this theme? What would be the fair discount, therefore of Itausa in this scenario?
Thank you, Eric. Well, interest of our capital JCP, if it's over, we're going to have an expense -- tax expense of our fiscal inefficiency because we are holding of about BRL 500 million. So that would be a direct gain for the shareholders that we would release BRL 500 million for us to do the amortization of debt payment of dividends, we can do new investments. We will have some breathing space. But the effect on the subsidiaries, especially in Itau Unibanco would be much worse because the bank would be more taxed. So we wouldn't have the fiscal benefit of the interest of our capital and that would make the results of Itausa be reflected by the asset equivalents of Itau Unibanco being lower. So another one is, well, in the view of Itausa, division of the shareholder of the asset growth, the company is better than the JCP will continue. That will create more value for the shareholders. So once that is done, then we will have that direct gain immediate of BRL 500 million of keeping those expenses in the PIS and COFINS. And that discussion is still very open. And we have that discussion for the next year. The focus is to regulate the tax reform the complementary. So apparently, this discussion, we're going to have the part of 2025. 2024 will continue. 2025, we're still going to continue to be having the JCP and non-taxation of the dividend. So we have to see how Congress continues and the ministry -- how they continue to see what is proposed and what is approved by the National Congress itself.
I think that there is another question of Eric about the level of our share. What is the fair share?
Well, I think that those BRL 500 million, they shouldn't be discounted because the inefficiency -- one of the factors is that fiscal inefficiency that sometimes we see the results of Itausa and it's 4%, 5% of the result. So the fair share would be, in my opinion, about 15%, 18% of the entirety of the holding. We have the discounts in every market and every country. I think that here, the discount with Itausa is very high. So I think that the market still sees Itausa as discount worthy and we have the rest of the portfolio that has created value for the shareholders. We didn't realize that value because we sold the shares of XP and just the shares of XP that allowed for the reduction of debt, it generated value positive results. And as we continue over the next few years, the portfolio, we will continue to have gains with the realization that is very substantial because the rates of return in these investments are very high. So I think that this discount -- the expectation is that it's going to decrease in and on itself because the creation of value for the portfolio non-finance is very high. And Priscila also commented during the presentation -- her presentation of the closed companies, nonlisted [indiscernible], they have a value -- fair share value in our internal valuations that is enormous in regards to the accounting value that they are accounted for. So the discount that we see today as 22% is much higher than net real -- in terms of the real value in regards to our books. And I commented the -- how do we measure the TSR? The less investments were very robust for capital that we've done over the last few years. Which is now priced as you mentioned.
Now I'm going to call Tiago Binsfeld from Goldman Sachs and he is going to ask the question.
Well, what about the profitability over the last few years, we saw the capacity to generate revenue and tariffs. We have the interest rates. There is a lot of noise in regards to credit cards, for the company, the banks have done a lot of efforts. So in the balance of that, how is the sustainability of the bank thinking up ahead, we're going to get an ROE of 24% or...
This is a very interesting company. Well, question it, and it's very difficult transfer. I think that Itausa had a return of 20%. I believe that this will be kept over the last few years. We're still going to keep it over the last few years. We've worked strongly internally in the reduction of costs seeing the need of reducing cost, so we can be more competitive, specifically with the digital bank. This is our goal that we work strongly and we've, in fact, reduce the cost of the bank in -- at the same time that we reduced the business and we improve the investments in the perspective of the results. We did a great growth in technology, and we have 15,000 people working in technology. So we can remove those differences in the digital bank and the applications. So on the side of efficiency, it's fundamental that we have to continue to work revenue, we have expectations, which is natural that a great deal of the products that are traditional -- we are going to continue margins and prices and revenues that have to be compensated by other products, by the reduction of cost and by the growth. So [indiscernible] grows, the revenues also grow. We have a problem in the financial system that the revenues of the banks have not grown a lot regarding the low growth of the economy. So that brings risks of credit because these companies and physical companies, they have a certain level of leveraging. So for you to grow the revenue, you have to have a degree of additional risk that at this time. Itau Unibanco is also not wanting to take risks in regards to the uncertainties. So we have to work with all the reduction of costs, the gains of efficiency, reducing the number of branches personnel using artificial intelligence in our favor in terms of products, services for the clients and at the same time, to try and grow the revenues in an environment that we see in some products are decreasing, and there is a possibility of growing revenues, for example, for Itau Unibanco and insurance there is the management of assets. So we have to compensate the low growth of the credit portfolio, which there would be a great leveraging of leveraging of the financial system with the cost reduction. I think that the bank is well positioned. We managed to compete very well with the digital banks. We've done an effort with the technology that is very good with the cost and products and services that is very big, but the challenges are not small. So we have to -- we cannot think that Itau Unibanco has to rest on its [indiscernible]. No, we have to be humble. There is a lot of competition. And they are gaining the market and they are showing growth, and we have to adjust all the operation of Itau Unibanco befor this new reality of competition and a scenario that is possibly -- which is our basic scenario of low growth. So we have to adjust that to continue to be competitive in regards to the banks, mainly the digital banks that are gaining the markets in Brazil.
Now Yuri Fernandes, she is the analyst of JPMorgan to ask the last question.
My question is about Alpargatas. We -- the analysts are -- we hear the nonfinancial sector -- we hear the stories we know that Alpargatas has gone through a change in management and a few operational issues as well, regarding the management of stock, the international strategy, but I think that the worst is past us. So I wanted to ask you, how do you evaluate these recent changes, the positioning of Alpargatas today and a perspective for the recovery of the operational gains up ahead?
Thank you, Fernanda. Thank you for the question and the opportunity to talk about Alpargatas, which in fact has been our agreed duckling in our portfolio Well, over the last few years, a few years post dynamic, we've proved that through out the pandemic, we proved that the management and the Board of Directors, an expansion plan for Alpargatas. Based on Alpargatas and the sub products, the [indiscernible] an expansion that is more -- that is higher in the international area. That was approved, okay. But unfortunately, we didn't have an execution that was done in a way that we expected. We had a lot of difficulties. We ended up creating a portfolio of products of the flip flops that was much more complex and that brought a lot of complexity of the -- on the shop floors and that generated the problems with the selling and that generated a problem with logistics, that ended up hindering the results of the company. So I believe that poor execution of the plan approved by the Board of Directors took us to poor results with Alpargatas Havaianas. And with an enormous increase of stocks because the debt lines were not fulfilled, especially abroad, mistakes that were made, it's very difficult to get into the American market, which is very big and we still -- we have 3, 4 times the strategies, and we haven't fixed it yet. So we've had a lot of expenses and almost no revenue. In the Asian market, the same thing. China, Indonesia, it's not -- the difficulties of expansion are very big, and that is reflected in the results of the company. That were very much affected especially by the growth of stocks that ended up taking us to a working capital that is very high. And with that, we had financial issues and the entries we were making that to work with the company. Last year, we opted to -- with the substitution of the CEO of the time, and throughout last year, we did a process that was very cautious for the choosing of the new CEO. And with that period, Edmond, which is a former executive of AB InBev, which is from our Board, he is from our board. He is the Interim President of the company, and already started the strong process, structuring of operational improvement, reduction of SKUs, et cetera. As you've realized, the company has improved quarter-on-quarter. Last year, we did well. So that would -- it all indicates that this year will be better and it's seeking that trend of improvement. And the new CEO took on the company at the end of March -- of February, sorry. And [indiscernible] well. So we are in a different dynamic in a company of reduction of debt of stocks. The new collection that was presented and very much well received all throughout Brazil and abroad. As you said, the worst is past as it seems, today is a year of recovery of margins, recovery of image of our -- in facing our clients, we had cancellation of requests. It was a year that was very challenging, specifically for the international market. So we are recovering the company. And we think that we are going to reduce the working capital and we are recovering the market share. And we can see how that will work. And we are having good expectations for Alpargatas. Also, we commented that we did a great impairment for the last -- for last year in our acquisition of Rothy's, which is the shoe company in the United States, where Alpargatas has 49% of the company. It was purchased at a moment where the valuations were very high, then with the increase of the interest rate with the American market devaluations dropped a lot. And the similar company's Rothy's and all of that had significant drops in the American Stock Exchange. So we did the impairment, and that shows that the company doesn't have the value that we paid 2 years ago. So we did the impairment on the brand in such a way that we want to adjust accounting the numbers to the reality of the shoe sector that was very much affected -- as I'm shown with the international market that is very strong. But we are optimistic -- we're very optimistic in regards to [indiscernible] generated. It has opened new stores in a lower rhythm than what we expected in the business plan when we did the acquisition. The interest rate -- the American interest rate, but this is a company that we believe that has a good product that is very sustainable with good stores an ecologic sustainable work. Unfortunately, we bought at the wrong time, that's the reality. We did that impairment, but the company is growing. And I believe that this is seen as the investment that we're going to see the fruits in the case of the worst is past us and we're going to recover the market, the shares and everything in back on track in the operations of the company.
And now I would like to call our next guest, which is Eduardo Nishio from [indiscernible].
Well, I wanted to do a follow-up on the tax return. You talked about JCP but I think that the issue is more profound, and it's being discussed now, which is the impact of that on the banks, which is the bank's already paid for tax, which is very relevant. And we are discussing maybe a reduction of that percentage points and all the impact in Brazil as well. So we have the reevaluation of the fiscal credits and that has a relevant impact in the capital of the banks. So how do you see that issue of the taxes? And how do you think that we could do the exceptions for the banking sector? What is your opinion?
Thank you, Eduardo. Well, let me answer here. I think, Eduardo, I think you have important issues. The tax is very high. And when we exclude the interest of our capital, which is the scenario that was discussed up until now, we increased that effectively. So there is an impact that is extremely relevant for the financial sector that has to be balanced by a reduction of the corporate of higher SS. So we don't have an important reflection on the results for the operation itself of the bank, the concession of credit. Of course, that has a reflection on the company. So what we understand as being fair if, in fact, there is going to be an extension of the JCP, there has to be a compensation of the reduction of the corporate tax. So this is what is expected. Let's wait for the evolution of this issue. Today, we don't have a clear signaling of what is the path of the government. We've gone through several studies, but we don't have the surety of what is the path to trail. But the impact would be expressive and there should be a compensation of IRCS. So that impact is partially mitigated. Would you like to comment -- complement? Well Priscila -- thanks. The first thing that I read yesterday and today, the Ministry of Economy [indiscernible] saying that this is a subject matter for the future and that there should be a compensation of the reduction of shares in such a way that is as neutral as possible if the path is the extension of the interest of our capital, and we would have a reduction of the corporate costs. Another point, which is the discussion of interest over capital, which is very complex. It doesn't seem as simple as it is. we have the Ministry of Economy and the central bank, and they understand that the banks have a very big interest of our capital because we have regulatory that is kept by the banks is very high. So what ends up generating the interest of the capital nominally is very high because the banks have a high capital in regards to the regulatory rules of [indiscernible] that regulate the banks in a worldwide level. So there is an understanding that the banks do not have the high capital by their own will and because it's a regulatory issue. So that understanding is very important and that might take depending on how the things are going, depending on the financial system to have -- but we're going to have the need of the regulatory capital. But the decision will be for next year. Its very complex. It's not as simple as it seems. It's not simply eliminating the interest of our capital. There is countries in Europe that -- they have similar, thanks to interest of our capital, similar to Brazil. So we have to wait to see how these discussions will be replenished next year.
Alfredo, we still have a lot of questions. Over 200 questions that we received from our audience. So I think that the proceeds is what people ask the most. So [indiscernible] Silva, [indiscernible], Desio, Lucas Eduardo, they're asking what should we expect about the dividends of 2024, dividend yields expected and to see the future that will be kept in the same threshold that we had in 2023?
Well, that is a recurring question that we've had a base 900,000 shareholders that is focused on the growth of dividends and addressed on this issue. We have a common practice of passing on all the dividends that we receive from Itau Unibanco to our shareholders and the interest over the dividends that we receive over the nonfinancial sector to pay for the holding expenses, as I commented before. Our idea is that this is kept over the next few years. I don't see any reason why that shouldn't happen even though there is an additional investment if we find an opportunity that will compensate the risks, as I commented before, we can leverage at Itausa once again. We reduced very -- well -- the investment of the holding. So I think that what we can expect is passing on the dividends for -- that Itausa received through the shareholders of Itausa. And that is the practice that we expect for the next few years. How much? Well, the bank did the profit sharing in regards to an excess of capital that we had at Itau Unibanco. It was very relevant. So we've had the additional distribution of dividends of BRL 3 billion in our shareholders. Well, I think that the amount that is eventually distributed, it depends on what we are going to receive from Itausa, Itau Unibanco. This is going to be very substantial the bank distributed 60% of its income. Itausa as well, a bit over 60%, but we cannot affirm that this threshold will be kept because it depends on what we will receive all throughout this year and at the beginning of next year from Itau Unibanco regarding the net income of 2024. There are several favorables that fitted with that. If the economy grows, grows more and the credit portfolio grows more, you need more capital. So there is a series of topics that influence the decision-making process at the Board of Directors of Itau Unibanco, which is very difficult to predict, which something that we can expect is the continuity of the practice of passing on the dividends that we received from Itau Unibanco.
Alfredo, also questions regarding payment of bonus. Can we expect that [indiscernible] payment of those subsidies?
Well, we do the incorporation of reserve of capital for the capital of the company with a premium of shares, small premiums, single percentage points as we don't -- so we don't have any questions, fiscal questioning in regards to that profit sharing which is the distribution at the end of results that are accumulated of the company and not in the way of dividends, but in shares. And those shares, they have a cost. You can't realized that when we do the modification of 5% as we've done now, well, the cost that is attributed to each of the shares, if I'm not wrong, it was about BRL 17. So what happens? When you pay with a higher cost, your average cost of shares grows. So when you sell those shares, you will pay less interest rate because your cost will increase in regards to the proportion of the capital of Itausa. So it's important that now we are at the moment of of delivery of the interest rate -- interest tax. We have to have the natural persons. We have to incorporate that cost through bonafide cost because it's going to increase our cost. And therefore, we will have a lower interest rate in the moment that you do the selling of the shares. Well, let's see this year, we're going to see how things are ongoing, but we cannot guarantee if we're going to have or not new payment. We're going to see if there is any change of the rules. This is a decision that we usually take in November, actually November. Let's see if there is going to be an incorporation of reserves and consequently, there is going to be a payment.
Thank you, Alfredo, also alot of questions of repurchasing the shares. We talked about the share that is discounted. Is there any repurchasing of the shares in the future?
Well, there is an open program, which is simply to seeing the options for the administrators of the company. We have 10 million that is open. We talked about this in the beginning of the month, the purchasing of the lot -- facing a program next year. But there is no projects purchasing the -- so it would be a great investment, certainly for the shareholders of Itausa because you have -- you're purchasing the shares with the discount. So you would have a return rate that would be much more interesting. But the Board of Directors has opted for doing the distribution of the dividends of the interest of our capital.
Well, some questions. You commented a bit about that at the moment of the holding of the investment. So about the portfolio management, Paladino and [indiscernible] Santos, they want to know if Itausa [indiscernible] increase the position in the company is already present and holding. Do you see any specific sector or any possibility in increasing the investment in NTS and the electric sector as well?
Well, with the companies that we take part, we see our positions. So it's very unlikely. For example, at Alpargatas, at this moment, we wouldn't have our participation. So in the case of Dexco, the same thing. It limits how much each blocker of the shares of Dexco can have of its capital. So we are limited to that. Copa Energia, we have 49% of the company. So there is not a whole lot of space for us to increase in participation in the companies that we have in the portfolio, but having opportunities, we are going to have an increase of capital in those companies. and we have to keep our position or even increasing if there is anything in regards to other shareholders. So, yes, depending on the case, we can study an increase of participation in our portfolio.
Alfredo, some questions about the expectations for Itausa in the future. Now what should we expect of Itausa in the long term? What is the path predicted for the company? This is Rafael Bellinger, Marcos Araujo, and also, they talked [indiscernible], they talked about the future of Itausa?
I think that you can expect that we will continue to do a very cautious allocation with good interest rates for our investments. The bank will continue to be the big -- the crown jewel of investment of Itausa, that represents about 90% of our investments and our results. The bank is very big. Our participation is very important. But in the other companies of the portfolio, I would like to say that we can see all the movements we have participations and other companies or simply selling and waiting for the opportunity to do another investment, and this is the moment that we have a more active management of this portfolio. We sold Itau [indiscernible] recently. We sold [indiscernible], we sold all of our participation at XP. We purchased this portfolio that we have. So if tomorrow, we think that there is a certain investment that we got to a maturation and valuation that is adequate, then we can sell and we can find other alternatives. What we can expect is that the bank being a bank, going over the dividends of the Itausa and trying to maximize the investments the nonfinancial portfolio in such a way that we can create the value to the shareholders, and therefore, we can keep the profitability of Itausa in higher level.
Well, here is a question about the IPO of some invested companies, Eva [indiscernible], Marcos Stiger and Wesley Olivera, asking if Alpargatas are going to be listed and yes -- so where can we comment on the opening of capital of some of the companies that are in the portfolio?
So there is no discussion about this opening of capital. These companies are generating cash for the investment. So I don't see anything on the short term that is happening in IPOs of the companies that we have participation. Everything is possible, let's -- we're going to see the valuations of the stock exchange, the need of capital for investment that the company might have, but there is nothing on the radar [indiscernible] you say, on the short term, for the opening of the capital for any of the nonlisted companies that we take [indiscernible].
I think that with our transmission, there was some interruption for a few moments. I would just like to comment that all of this transmission, the live will be available at YouTube for those of you -- that -- later, if you lost a connection, you can watch it again. It will be later on YouTube. So I wanted to bring another question here that I think it's very interesting, and it talks about the moment. You talk about [indiscernible] Itausa, the sustainability, the strategy of ESG. And Eduardo [indiscernible] said considering the trends of the financial market. How is Itausa investing? How can we mitigate the risks? And how can we keep the commitment to sustainability and corporate sustainability?
Well, as I commented, Priscila, the management of the capital allocation is very cautious. We really look at the investments that we are doing, with whom we are partnering up. So we have the decision-making process for the capital allocation. So in that sense, we are very well positioned. On sustainability, this is very relevant. As I commented, this is a priority in the agenda, not only through the Itausa combination, but also through our influence that we might have along with the invested companies that we've taken part. We've taken this discussion -- we have to try to prioritize. We have especially environmental governance, they're very good in general. So we have in the sustainability agenda, we have an agenda that is prioritary regardless of the difficulties that this agenda brings. In terms of cost control, but we have a conviction that the companies that are nonadherent to this journey of sustainability of reduction of the consumption of energy of water. They're going to have a lot of difficulty in keeping our positions with their consumers in the future. So this is an agenda that we give a lot of priority. And we are going to continue to give to the holding and for the investment companies with what we can work with. In fact, and we hope that we can work with the sustainability agenda for the future.
Alfredo, [indiscernible] I mean we have a lot of questions, but we don't have enough time. And I would like to bring a question from Augusto Valentine. He represents the small investors. Remember that we have almost 1 million shareholders in our base, spread throughout Brazil. So he represents that public very well. Anyone [indiscernible] to know from you Alfredo, what are the main reasons for the small investors to have a conviction that investing in Itausa is a good investment in the long term? And how Itausa recognizes the importance of the small investors?
Well, it's interesting. I think that we give a lot of value for the small investors. We like to have the space. We like to have it [indiscernible]. Almost every single city in Brazil has shares of Itausa [indiscernible] pride and joy for us to be -- well, the company has one of the most spontaneous basis of shareholders. We try to work with the social networks. That -- this is a way that we can communicate with our shareholders, stakeholders in general. We have a strong working with LinkedIn, with Facebook, and with Twitter. We've grown our basis of followers on YouTube, our videos of results, our videos, they are more directive in regards to the proceeds in capital. We've seen a lot of people seeing our campaigns. They have a lot of repercussion. So we've done that effort, a very strong effort of keeping our shareholders informed. We have thousands that have registered to receive our information our reports every month. So we do a big investment. So we have a contact and we can be closer to the shareholders. Why investing in Itausa? I believe that, first of all, we historically it will be 50 years as a holding, nonfinancial. We have records to show very solid growth important growth for our shareholders. Of course, the life profitability is not a guarantee of the profitability of the future, but our records are very positive. And we've shown a profitability that is very good in terms of Itausa in 10 years when we compare with BOVESPA, it's almost double. So the performance of our companies that are led by our investment, which is Itau Unibanco has given us a lot of surety that we have the adequate portfolio with good profitability and a lower dividends are very good. And I personally don't think -- well, of course, I've seen the difficulties in competition and the financial system of the fintechs, the digital banks -- but I think that Itau Unibanco has a position on management that is very strong, very solid facing these challenges. Our biggest investment, which is 90% of our portfolio, it's an investment that we have a lot of trust and the bank will continue to be very profitable in Brazil. I think that the management, transparency, governance focus on sustainability. The dividend yield that is adequate payout that is good, I think that these are enough reasons so that Itausa consider a good investment by all the investors, the institutional investors, the natural persons. I think it enables us to be in this position of a big company Brazilian company committed with Brazil with the norms, with legality. I believe that we have -- we are very solid and we are very qualified to have this amount of shareholders and even an amount -- larger amount of natural persons, I believe, in our management.
Thank you, Alfredo. I think that we could work with our audience. We'd like to thank you for your time and give you the floor so you can give us your final ideas.
Thank you, Priscila. Thank you, everyone, that apart, thousands of people that saw our live, remembering that it will be available -- if you couldn't see it on YouTube, our networks. It's a pleasure to be here. Our responsibility as a big listed company, is a big company. Industrial, we have the accounts -- we have to -- we have the accountability and we believe that the results are very good, and we have the expectations that 2024 will be a [indiscernible] years, a very good year for the investments. And we hope that our investments will continue to grow in a very solid way, continuing to the development of Brazil because Itausa takes part in a lot of companies as our campaign has said. We are very much connected to the day-to-day of Brazilian people through Itau, Deca, Portinari, Copa Energia, it's a leader in the sector. So we have here investments that show our commitment with Brazil, and we will continue to do so, and we can hope to bring good returns on investment for our investors, not only financial but also reinforcing sustainability of the companies that we take part that are better for Brazil, more sustainable for Brazil, and we can grow and generate a bigger growth than what we've seen over the last year.
Thank you, Alfredo. I think that we managed to work with all of the questions of the audience. But should you not be able to clarify your doubts, you can get to the -- in contact with the Investor Relations area through our profiles and the social networks and also the e-mail. We are available. We want to hear your opinion. It's very important. Your opinion, your comment about our event, you can use a QR code that is appearing in the screen or click below to have access to our satisfaction questionnaire. [indiscernible] is staying here. You can see our live in our YouTube channel. Thank you very much for being with us, and we will see you in the next results for Itausa. [Statements in English on this transcript were
Spoken by an interpreter present on the live call.]