Vibra Energia SA
BOVESPA:VBBR3
Earnings Call Analysis
Q4-2023 Analysis
Vibra Energia SA
The company concluded 2023 with record results, reflecting sustained operational improvements. These improvements have consistently bolstered the company's new profitability level, boasting an adjusted EBITDA of BRL 2,328 million for the fourth quarter, a 54.5% growth, and an adjusted margin of BRL 254 per cubic meter. An important benchmark for the company is the BRL 1.3 billion in operational cash and a remarkable 4.1 percentage point increase in the Return on Invested Capital (ROIC) compared to the previous year's quarter.
The company experienced a 7.8% reduction in volume, a strategic readjustment considered necessary for long-term profitability. Focus in 2024 will be on recovering the per-share volume to align with the overall size of the company while maintaining profitability.
Cost control remains a priority despite an increase in expenses due to provisions for variable compensation and the impact of reduced volume on unit expenses. The company successfully reduced its leverage from the previous year's 2.7x to 1.1x, reflecting a strong commitment to balancing revenue generation with debt management. Moreover, they invested over BRL 3 billion in reducing both principal and interest rates.
The company showed growth in market share for additive-enhanced and premium fuels, increasing from 41.9% in 2022 to 44.6% in 2023. This strategic focus on relationship-building and product quality underpins an 11.6% quarter-on-quarter EBITDA growth in the gas station segment.
A continued expansion in retail involves the addition of 117 new BR Mania stores, ranking 6th in the Brazilian Franchising Association. The company also highlights a concentrated effort on strengthening relationships with service stations and focusing on branded network growth along with B2B customer relations, which are considered key growth avenues.
Vibra's acquisition of Comerc has been exceptionally positive, contributing BRL 125 million to the quarter and anticipated to represent BRL 1 billion of EBITDA for the year. Comerc's operational capacity of 2000 megawatts and a 17% market share demonstrate the company's leading position in the energy market.
The company has continued to excel in its ESG commitments, notably achieving 0 occurrences with environmental impact and surpassing diversity targets with 16% black leaders and 23% women in senior management positions.
Supplementary Law 192, which began last year, is expected to allow 100% credit use by 2025. The company is strategically realigning to recover market share and maintain healthy margins, having ended the year with an impressive BRL 169 per cubic meter. Despite challenges, including the influence of Russian diesel, the company is restructuring to enhance competitiveness and grow shares without compromising margin quality.
Vibra maintains a straightforward capital allocation strategy aiming to maximize returns for investors. They will continue to allocate 40% of their equity for dividend payments, with the possibility of adjusting this based on net income results and company leverage as they navigate through 2024.
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Good morning, ladies and gentlemen, and welcome to Vibra's video conference to discuss the fourth quarter 2023 results. This video conference is being recorded and the replay can be accessed on the company's website at www.ri.vibraenergia.com.br. The presentation is also available for download. [Operator Instructions]Please be advised that the forward-looking statements are based on the beliefs and assumptions of Vibra's management and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts and journalists should bear in mind that events related to the macroeconomic environment, the segment and other factors could lead results to differ materially from those expressed in the forward-looking statements.At this video conference, we have Mr. Ernesto Pousada, CEO and Mr. Augusto Ribeiro, CFO, as well as some company executives. I would now like to turn the floor over to Mr. Pousada, who will begin the presentation. You may proceed, sir.
Good morning, everybody. It is a pleasure to be with you sharing our results for 2023 and the fourth quarter 2023. I'm going to share this presentation with Augusto. Before giving the floor to him, I would like to share with you the pride that we have concluding the year 2023 with record results. We have changed levels when it comes to management. We have a structured management and the Vibra operating margins have truly changed. Our team and I would like to highlight the talent that we have in-house, talent with a great deal of technical capacity, and they are transforming everything in the company, a more agile company focused on result.I'm convinced that the combination of the Vibra talent and the technical capacity, a legacy of BR along with its cultural transformation, will be able to deliver very relevant results in coming years. And the year 2023 has taken the company to another level through the change in management. We worked with several projects beginning with operations and logistics, with inventory optimization and reducing inefficiencies. We have reduced the inventory days and have increased our cash by BRL 800 million and there you will see the result with a focus of the company on return on invested capital, something we will pursue ever more.We have also worked in sales, direct sales, pricing, focusing on our customer B2B, Vibra Prime, additive products and, of course, lubricants, the top of mind product. We enhanced our EBITDA by BRL 500 million. Finally, the customer experience seeking excellence in our attendants and we have truly significant figures to share with you Premmia gaining traction. We have added more than 700,000 engaged customers on our app who are also working with forecourt attendants.We have 40,000 attendants engaged in training to better service our customer satisfaction, of course, of 4.7 for customer service, and an internal project that we call Vibra Prime. We have increased the interest of PIS by 30%, all geared to better service our customer. Now this office for experimentation called the Clients in our DNA has a very active management and through this, we have been able to change the EBITDA margin for a new level. This is what I wanted to share with you.I will now give the floor to Augusto, who will share with you the details of the fourth quarter and full year '23.
Thank you, Ernesto. Before I begin to speak about the record results in 2023 and the fourth quarter, with the exception of net income and leverage, all the indicators present in this presentation exclude the extraordinary result that we had because of the Supplementary Law 192 why we thought it would give you a better view of the results of the company without the occurrence of Supplementary Law 192. It's very satisfying to share these results with you.As Ernesto mentioned, we had another record results at Vibra. We reached BRL 6,259 million for adjusted EBITDA, a growth of 22.5% vis-a-vis 2022 with an adjusted EBITDA margin of 169 per cubic meter. It's BRL 6.2 billion in operational cash generation related to the management program implemented in the company. Ernesto refer to the reduction in inventory, BRL 800 million in value, 1.2, 1.3 days in inventory and our leverage, as mentioned, reached 1.1x without the Supplementary Law 192, ending the year at 1.5x.We reached a net income 210% above 2022, BRL 4.766 billion and the proposal for dividend is BRL 1.6 billion between what was announced in equity for shareholders and payout. That BRL 1.6 billion was calculated as following: 40% of the 2023 with or without Law 192 and 40% of the cash expected during 2022, thanks to the Supplementary Law 192.Next slide, please, #3. The fourth quarter '23 once again summarizes the operational improvements that we have attained consistently and that sustains our new profitability level. BRL 2,328 million for adjusted EBITDA, growth of 54.5% and an adjusted margin of BRL 254 per cubic meter. Our recurring EBITDA, the one that we look out taking away taxes, the sale of assets and the sale of inventory around the fourth quarter of '23 was BRL 181 per cubic meter. This is an important benchmark. BRL 1.3 billion for operational cash and the ROIC of 15.7% for the quarter with a growth of 4.1 percentage points compared to the fourth quarter '22.In volume, we had a reduction of 7.8%, reaching [ 8.136 million ] cubic meter. What is important to mention here is that the strategy to readjust while we believe is important for profitability for Vibra did have an impact on Vibra. 2024 means Vibra has to continue on with its profitability and deliver its projects and it will allow us to recover or reach per share for the size of Vibra. We believe this is not the level we wanted to reach at the end of the year. In 2024, we'll focus on volume in that per share goal of returning to levels above what we deliver without losing sight of the profitability or our ambitions for profitability. That was on slide #4.Now Vibra's track record is impressive. Since 2019, we have systematically year after year delivered profitability that is reflected on adjusted EBITDA, one that is growing. In 2023, we reached a new record, which was only possible, thanks to the people, human capital working in the company. I haven't been in the company for a whole year. I have been here more than 6 months but I can ensure you that the technical quality of our technical corps is above that of the market and has generated efficiency and will generate that strategy to deliver our projects.Some indicators, the average age of the company, 41, 42 years time of service, 6 to 7 years. This is a group that has been delivering consistently. From the viewpoint of expenses, yes, we did have an increase in the third quarter of '23. There are specific reasons for this, for example, an increase in provision for variable compensation aligned with the strategy of the company and, of course, a reduction in volume that impacts the unit expenses, but the price management continues to be one of the strongest pillars at Vibra. Cost management is our focus, but allied with our mission for profitability, we have delivered the best profitability, controlling the expenses in the company.In the next slide, #5, I speak about capital allocation. It's extremely satisfying to see the reduction of leverage when we look at the figure for quarter '22, 2.7x to 1.1x at the end of the fourth quarter '23. We have not delivered more return in revenue, costs and expenses, but we allocated capital to reduce our debt. We had more than BRL 3 billion expenses between the principal and interest rates, and we have reduced our gross debt from -- to BRL 17.1 billion at the end of '23.Our ROIC increased 4 percentage points to 16.7% (sic) [15.7 1218], and the CapEx for the year had a slight growth, but basically remain at the same level of '21, '22, '23 between anticipated bonuses for new customers and CapEx for our operations. Regarding dividends, the proposal is BRL 1.6 billion, and net income after legal result is equivalent to a payout of 36%. Once again, the dividend is 8.1% based on the average cost of '26 -- vis-a-vis 2026, BRL 1.6 million. You can see this in the graph, it's double of what we distributed or paid out in '23 because of 2022. Another relevant point. Vibra is a consistent payer of dividends. This is our background, and this is one of our main pillars.On Slide #6, I would like to refer to our station network. We continue to grow our market share in additive-enhanced and premium fuels, 44.6% compared to 41.9% in 2022 and our gross profit increases. 25.6% of the stations come from additive-enhanced and premium fuels compared to last year. If we could summarize the activities of the gas stations in 2023, it would be a focus on relationship. The EBITDA result grew 11.6% quarter-on-quarter, 200% year-on-year. And our market share for our branded network remained stable year-on-year and in the period that we are comparing.On Slide #7, we do have some growth avenues in retail, and I would like to focus on some of them. We know the size of Vibra. We have 8,198 service stations throughout the territory of Brazil. And we have the most extensive footprint in Brazil's fuel and lubricant distribution sector. We have BR Mania in November of last year after a year of discussion with our former partner. We ended the joint venture that we had. And now this is -- this company is 100% part of the Vibra family. Despite that work last year, we grew by 117 stores last year. We have grown the stores and invoicing of BR Mania, 9% growth in same-store sales and [indiscernible] growth avenue.Regarding Lubrax, we are in the 6th ranking in the Brazilian Franchising Association rising 3 positions in 2023, maintaining top 1 in the automotive sector with 1,741 units. We had a record revenue, a rise of 15% vis-a-vis 2022. One of the main events for 2024 is the opportunity for greater growth that we have for lubricants growing the capacity 50% at our lubricant plant. That should happen in the second half of this year, allowing for opportunities to grow channels and plans that we have for lubricants. We're very enthusiastic with it.In Slide #8, it does not refer to 2023, but I do want to share it. Last week, we had an event called Vem De Vibra. We were able to reconnect, strengthen our relationship with our service stations. We had over 4,000 guests, and the results were fantastic. The organization, the business there, several partners offering their products for resale and we heard both positive and negative points, complaints, suggestions for improvement. These were two very intense days with some palpable results. We have 55 franchises, signed ADA, new image for BR Mania for the retrofit and 55 Lubrax franchises signed. So not only reconnection and connection, but changing our relationship with resellers and generating new business. We're highly satisfied with the results obtained.On Slide #9, Vibra and B2B. If I could summarize the work that we had in 2022, it was a focus on profitability. Adjusted EBITDA reached BRL 2.395 billion, a growth of 2% and BRL 800-and-some million for the fourth quarter of '23. The market share we gained vis-a-vis the fourth quarter, we have a growth of 2.1 percentage points and a growth of 1.7% year-on-year.Well, B2B, of course, suffered because of competition, the Russian diesel in the second and third quarter. This is an issue that was addressed by our internal governance, the capacity we had in sourcing. All of this throughout 2023, we have nothing pending for 2024. We have more flexible sourcing and any sort of supply will be used. Of course, it did have an impact on our competitiveness vis-a-vis regional distributors, and you see a drop of share in 2023.On Slide #10, I am extremely pleased to share with you the growing results of Comerc. Comerc has proven to be an excellent acquisition, a partner for Vibra. We reached BRL 125 million for the fourth quarter. That is our stake. In truth, it made BRL 250 million in the fourth quarter '23. If we annualize that EBITDA with a run rate, Comerc represents BRL 1 billion of EBITDA this year. We're very satisfied with that. Although Comerc doesn't reflect the multiples of Vibra consistently, but it is beginning to confirm that because of on-time and on-budget projects, it will improve.Now key events in fourth quarter '23. 2000 megawatts of operational generation capacity. We serve 4,800 consumer units. We have 17% market share. We are a market leader, and we celebrated a partnership with Itau Unibanco to offer the distribution of free energy for coming years.On Slide #11, I would like to end with some topics that refer to ESG. Once again, very satisfied. We had the best result in our historical series, 0 occurrences with environmental impact. We beat the target by 6% and decrease of Scope 1 and Scope 2 emissions. In terms of social causes, we have selected one that is very important for Brazil. 0 sexual exploitation of children and adolescents. We're involving families, engaging society, and you will receive more information as we move forward.And in terms of diversity, we surpassed the targets. We have 16% black people in leadership, 23% women in senior management. Of course, we continue to do this throughout Vibra. We have sound governance, very well set up agencies, and we have a balance of the Board of Directors, the committees and the executive board that executes the strategies.With this, therefore, I would like to end my presentation, and we would like to open the floor for Q&A.
Operator Instructions] The first question is from Luiz Carvalho from UBS.
I have two questions at my end. The first, about capital allocation. I would like to better understand your mindset. You said that the company traditionally pays out good dividends and you have a relatively lower leverage this quarter. But of course, you have future commitments for Comerc, the structure that you have. So how should we think about your capital allocation? Augusto commented on the results of Comerc. Perhaps, it would make sense to anticipate payments or perhaps focus on the payout of dividends.The second question refers to Eneva. Ernesto, you gave a recent interview stating there were no negotiations. Perhaps, you could update us somewhat now. I understand that the discussion is at the level of shareholders and not the merit of the negotiation per se. Last question, if you allow me, about a comment that you made about the fair market share. You understand that the Vibra's fair market share should be above what you have here. If you could share with us, therefore, which is your understanding of the fair market share and which would be an excellent margin in that direction.
Let's begin with Eneva and thank you for that question. It is important to clarify. As you said, this is something that is being dealt with between shareholders and the Board. Of course, I have participated. And when that began, I also participated. But I would like to give you further clarity and refer to the material pack that we had in November of last year. What was presented at the time, we considered all of the opportunities that we foresee to generate value at Vibra and that are not part of the price of our shares so far.We understand that the amounts presented by Eneva could not be justified. I said the company very jealous because of our longevity and the best interest of the shareholders will remain open to hear proposals, of course, that could generate value for the longevity of Vibra and for our shareholders. I refer once again, therefore, to this. This was the main factor, the material facts that we presented in November of 2023. This is a company's official position. It is my position and that of the Board. Thank you for your question on Eneva.Regarding capital allocation, your first question on Comerc. Well, this year, we had a substantial reduction in leverage. We went from 2.7x ending the year at 1.1x. Now when you remove extraordinary gains, taxation gains, we would go back to 1.5x. Now first of all, we have to stabilize this leverage, understand where we are positioned and where we will be in the coming quarters, bring stability to the process. We do have some inorganic projects. You mentioned Comerc that is there for '26, '27, '28 or other organic projects that could appear going forward. Now throughout the quarter, if these projects do not materialize, the company will be ready to pay out these additional dividends.Now regarding your question of Comerc and anticipation, we do have a contract with our present day partner, and it refers to 2026 to 2028. Even an interesting opportunity appears for both parts that is interesting for Vibra and our partner of anticipating, we may proceed with that. What we have on the table with Comerc at present is a contract that refers to a put-call beginning in 2026 to 2028. The company will follow up closely on our deleveraging. And if the inorganic projects don't materialize, we will be ready to pay out additional dividend.The third question about market share, I will give this to Augusto.
Well, it's very simple. In truth, the order of magnitude is the share that we had in the second quarter 2023. We think this is the relevant ideal share aligned with our expectation of profitability and growth. That would be our goal, therefore, in the longer term, of course, nothing to be done the following day, the coming months in terms of market share. And it won't be done through price. It will be done through other channels and strategies.
Our next question comes from Gabriel Barra from Citi.
I have two. I would like, first of all, to get an update regarding the taxation push that Supplementary Law. You have been debating this for some time with the market. Speaking about the year and the 90-day [ substandard ] then there's still an amount that should appear in the near future. If you could refer to that amount somewhat more the outlook of monetizing this credit. At the last call, I spoke about capital allocation, how quickly this can be done and if this will be available for the company for future decisions for dividends or capital allocation in other businesses.Second point refers to market dynamic. Augusto spoke about volumes. But what is happening in terms of margin? We see a second half of the year that was very strong. We expected a market enhancement that was hampered because of the Russian diesel. We're now beginning blank page again with a more normal market in the fuel sector as we expected. As part of this normalcy and with more stable prices, as you mentioned, the issue of sourcing has been attested. What can we think in terms of margin for this year? And which is your feeling when it comes to margin for the somewhat higher inventory levels of your distributors. If you could work with a slight summary in terms of this dynamic so that we can understand 2024 in the sector.
I will begin with an update of the taxation credit. Supplementary Law 192 began last year. We had procedural changes, extra procedural changes that a lot of, I think, we could recognize this and it was done in the -- towards the end of the year. Now in terms of monetization of the credits generated sometime during 2025, we should be able to use 100% of those credits.In terms of the 194, the continuity, there was an appeal from the union. And we believe that until the first half of this year, there should be a stance regarding this issue. We don't believe it will extend further on. And of course, this has been judicialized and is being debated at the court. The probability and the capacity of monetizing the credit of 194 will depend on the law that limits once again the use of some of these taxes. And well, everything will depend on the future regarding Supplementary Law 192. In the first half of 2025 for 194, the union has appealed and we're simply waiting to see the results, and it will depend on the approval of a provisional measure or not.Thank you for the question, and I will speak about volume, share and margins. As Augusto mentioned, in 2023, our focus was on margin. We ended especially in some specific markets of the B2B, selling a considerable volume, which was detrimental to our shares, especially in terms of diesel. One of the main factors that you mentioned and Augusto mentioned as well was the Russian diesel. Vibra has put in place a robust compliance process to comply with all of the standards for the imports of Russian diesel. And this, of course, impacted our results in the second half of the year.If you work on a relative base, and I insist on this, when you speak about the fourth quarter, BRL 181 of recurrent margin, that's much higher than what we had in previous years. So we continue on with this. We have changed the Vibra level of performance. We have a very active management focused on the delivery of results. And I do not doubt that the company will change the results and change the market as a whole, taking it to another level, thanks to our role of leadership. And of course, the impact here was on our market share.We're going to recover our market share very gradually. We will not be hasty in terms of this. Market share is for the mid and long-term. We will resume that market share -- that fair market share at the end of 2023 is a figure that we're pursuing. But with a strategy focused on the growth of our branded network, growth with our B2B customers using a channel strategy that is very clear, very direct, enabling us to grow, but maintaining the margin level that we have.I'm not referring to the margins of 2024. If you look at the annual margins with the ups and downs in inventory, we ended 2023 with BRL 169 per cubic meter. Spectacular results. Augusto showed you the track record, which is always to surpass the results of the previous year. And this allows us to head to where we want to go. That was very clear.
A very quick follow-up in terms of margin. How do you see the beginning of the year with somewhat higher margins, that strategy of carrying over taxes and recurring margins? What would be a healthy level for your margins?
The first quarter is truly somewhat more difficult. But I would like to add difficult, but with a margin level that is much higher than what we saw in previous years for difficult quarter. I'm not expecting any significant surprise in terms of margin levels. I hope to have perhaps worse margins than the fourth quarter '23. Now we're coming from a change of taxation in January and another change of taxation in February. It was a high level of imports of diesel preparing for this moment. So we do have a surplus of supply, especially in diesel. And of course, this will pressure the market ever more, but we're working on pricing day-to-day, working with our customers, guaranteeing the competitiveness of our network once again working with very close management, and we will deliver consistent results based on everything that we spoke about our margin expectation for the year.
Our next question comes from Bruno Montanari from Morgan Stanley.
I do have some follow-ups. Let's go back to the discussion on margins. Margins are volatile. It's difficult to speak about outlooks. But in one of your conference calls, you mentioned BRL 40 as being a good reference. Now because of the comments in the former question, I think this figure might seem somewhat low for you. Is my interpretation correct? BRL 140, I'm sorry, not BRL 40, and is this BRL 140 something of the past.The second question. The company has taken time to set up its governance to be comfortable in the imports of Russian diesel, but the most obvious windows of opportunities seem to be something of the past. What do you see in terms of benefits in maintaining this channel open? And at other times, when other players were focusing on the Russian diesel, you had a more advantageous position in the Petrobras system in periods when there is no import windows. If you could refer to this, please.
Let's begin with the second one on sourcing. We do have availability and we have caught up in terms of processes and we are now comfortable in importing diesel even from Russia. It's our strategy now. At some point, it may be advantageous. At other points, perhaps it will not. The company will assess this. And perhaps now, this is not the case in 3 months, it could become again. What is important is to have competitiveness. Vibra has increased its volumes with Petrobras. We have higher volumes with Petrobras because of work we began last year.We have a unique position with Petrobras for moments when the local procurement mix more and because of our creative capacity, we're the first player in terms of capacity for imports that we did not use last year. Now with a well-structured sourcing, we brought in traders. We have restructured this area and no one has the import capacity that we have now. Throughout this year, we're going to see significant price at Vibra. We have the best competitive position in terms of sourcing because of the growth in our volume with Petrobras, our import capacity that is incomparable throughout Brazil, and we can import from wherever it becomes necessary at this point.This is something that was left in the past, and we're left with the best of both worlds, higher volumes from Petrobras and the capacity to import as nobody else from the most competitive source. Now regarding margin, the most important point, when I say BRL 140, BRL 140 plus that we have been mentioning. This is an annual figure and it's a recurring margin. Of course, when you look at annual figures, we have the lack of inventories here and there, and we see the company navigating ever more above those BRL 140, yes, we are quite optimistic.As I said in the opening, we have several transformation projects underway for lubricants, for additive-enhanced, fuel, for our channel strategy where we're going to focus on growing volume. And as the new volumes appear, we will further dilute our costs, which are the lowest in the industry already. I reiterate what I have been saying, BRL 140-plus is our target in terms of future margin.
Our next question comes from Bruno Amorim from Goldman Sachs.
First, a quick follow-up of the discussion of the fair share. Make sure that I have properly understood your message. You're saying that Vibra will recover market share, but this will not come from a volume increase. It will come from an increase in volume of your branded station. Simply to validate this understanding [indiscernible], I would like to know if you could give us an idea on the percentage of supplies imported in 2023 vis-a-vis previous year. Of course, giving up a bit of share as part of your strategy, you do have to find a source that will be reduced. I imagine this refers to imports last year. And this would help us understand the dynamic. The percentage of supply last year that was imported vis-a-vis prior years, the broad figures regarding this.
First of all, about imports and local source, we reduced last year our import volume vis-a-vis previous years because of the situation and the figure is somewhat away from what is normal because of what I described the Russian diesel and what happened in the second half of the year with the impacts until the fourth quarter, there was a reduction, but the figure is not relevant. When we look at the future of the company, we will import once again more relevantly throughout the year 2024.Now to go back to your fair share question, simply to make things clear, what is more relevant, the order of priority is to sell to customers that will maintain or speed up our margin that acknowledge value in the partnership and in working with Vibra. This should happen in the branded network and among the direct B2B customers. This is a very important and relevant data. We have not forgotten our direct customers in the B2B group. We may have healthy growth with good margins with some return in TRR and in the white banners.So we're not going to find the silver bullet that will resolve everything. There will be a mix. And this because of that internal problem that we have of revenue management, the management we carry out to enhance things in a structural way through this channel that we already have.
Simply a quick follow-up. If you can make this more tangible without mentioning names, of course, who is that customer who is not with you today, but will work with you at more appropriate prices? How to make all of this more tangible?
Throughout the last year, Vibra has focused on the larger customers. We have several average size customers. And gradually through the years, we no longer participated with them. We had regional groups coming in and there is a very important stream that I have referred to in agribusiness. We now have a strategy focused on the growth of agribusiness, seeking out agribusiness and we're structuring this with the hiring of specific team to focus on agribusiness. It sells to average size customers. And among those customers, a large part, of course, works with agribusiness.
Our next question comes from Thiago Duarte from BTG Pactual.
Ernesto, Augusto, it's a pleasure to speak with you. I would like to focus on 2 points. First, all of that discussion that we had today with a focus on profitability, that pursuit of fair share and, of course, the branded stations. If you could put this in context in terms of the cleaning out of some of the stations that you had in the fourth quarter. This is one of the higher cleaning out of the stations that we've ever seen. Other large players have made important adjustments in their base. But I would like to understand what we should expect and which will be the extension of this in your base.The second question also part of the discussion of the former question, perhaps for Ernesto. Since your arrival Ernesto on more than one occasion that I was able to hear, you speak a great deal about the focus on profitability and on reducing the volatility of the business in terms of margins. Now when we think of some of those channels, those customer lines, TRR or larger client customers that have lower margins most of the time at different points in time, we have seen them posing very good margins. So which is your point of view? When those margins are there, we know there are volatile in those channels. Should we expect that Vibra will attempt to participate? Or does Vibra not want to participate in this channel because of their volatility simply to understand the exercise you're working with.
I'm going to begin with the second one, Thiago. That issue of volatility, I think, we're quite effective when it comes to Vibra. We come from a fourth quarter of '22 where we were -- we had a very high inventory. We were counting on taxes that did not happen. We had a similar scenario at the end of the fourth quarter '23. We adopted a different stance. We're always looking at the long-term and not making great bets that could cause volatility. It's not our business. Our business is consistent management for a sustainable results delivery.We're adopting that macro view. Vibra does not speculate looking for opportunistic value generation in the short-term. We want something sustainable for the long-term. That's the change that we saw from December '22 to December '23. And it happened with taxation. In 1 year, we didn't have it. The second year, we did have it, but we're not betting strongly on these movements because we want to have a sustainable delivery of results for the long-term. When we speak about volatility, it refers to these macro aspects and not selling to TRR.If at some point in time, our [indiscernible] wants to work with us if we foresee interesting results, we will supply for them. I want to make this very clear, and we're also going to work with a white banner. We have no restriction whatsoever. Quite the contrary. This is not something I call volatility when there is that mutual interest of TRR or the white banners, we will sell to them. And it's very healthy to do this for both parties. So we are not leaving the TRR market or other markets. We are going to continue to service these markets, always attempting to be competitive and to service them as best we can as long as we have interesting margins based on the Vibra's vision.Regarding your first question about the reduction in the gas stations, the word that you have used of cleanliness is rather strong where we have been focusing on our branded station. We had a spectacular event last week with all of our resellers, more than 4,000 resellers present, a fully innovative event where the resellers could come closer to us. I spent 2 days there speaking to them. The entire management team participated. We had presentations in the afternoon, the business there and the proximity we have with resellers is significant.Vibra is going to set forth its best efforts to better service our Petrobras stations and we ask for something reciprocal, a partnership with Vibra so that they can work with our banner, with our products and, of course, offer our services to their customers because at the end of the day, we want to enchant the customers that come to our gas stations. We have 30 million going through our gas stations every year. So this reduction is aligned with that.Well, who is a partner with us in this journey will continue on. We will eventually see some reductions, perhaps, some increases and the figure should be around 8,000 gas stations. It is more relevant perhaps what the market looks at. And it's an important figure is that when you remove one of these former partners, they're no longer partners. Their sales are very low. This does not have an impact on the company results. I know that oftentimes, we're concerned with a lot of, but these station oftentimes were already on their way out, and we simply materialize that.And to speak about the relative importance of the stations, an extensive gas station, of course, is important, but a reduction of 100, 200 is part of the process that we're undertaking to seek out those that will be partners going forward. We're not in a cleaning out process. You will observe some reductions and the figure should end up at 8,000 gas stations.
Our next question comes from Rodrigo Almeida from Santander Bank.
Augusto, Ernesto, I would like to begin with a follow-up on capital allocation and put this together with the comment on Eneva, when we look at what is happening. I would like to better understand the following. When we look at the capital allocation on investees, on new businesses, what do you think going forward? And that decision between dividends or internal buyback or potential share buyback program? And we're focusing on fuel from now because of the size that you had in 2023.Now Vibra is a holding. You have several businesses, a portfolio of investees, although some are not maturity. And at the end of the year, you began to come closer to your investees, especially Comerc. So which are your main initiatives in the radar to map out for 2024 to understand the value of the rest of the portfolio, to work not only with B2B, but also the other businesses that are part of Vibra at present?
Difficult to respond to your question. We can be very clear. The capital allocation, the Vibra strategy is very simple, maximize return for the investor with shareholder equity payment of dividends and make the most of opportunities that appear for Vibra. In terms of dividends, we have 40%. We continue to maintain that 40% that I mentioned previously. If the net income is higher, the payout of dividends will be higher. Now these are topics that we discuss constantly at the Board. It's an option that we make. If it's going to happen and when it's going to happen and how it is going to happen will, of course, depend on the movements and the leverage of the company throughout 2024.Although we went from 2.7x to 1.1x. We hit 3x midyear. So Vibra is a company that generates a great deal of cash that's very positive, but we need stability. We have to think about profitability, stability and all of this is under construction. We're not going to be at 1.5 at a turn, that's not very probable. If our inorganic or ambitions do not materialize throughout 2024, perhaps, we will have a buyback program or a different dividend program. And we will debate this.
Rodrigo, regarding your second question about Comerc. As you have mentioned, we're coming very close to that business. As Augusto mentioned during the presentation, it's treasury that is -- it's a treasure that is hidden without Vibra with something that is now reflected in the figures of Vibra. The run rate is BRL 1 billion already in EBITDA for Comerc and we still have projects that will be delivered. So this figure will doubtlessly grow during the next 12 months. We are a company with unique capacity, while Comerc is one of the leaders in electricity management, with trading, with on-time on-budget capacity for all solar energy generators, the highly interesting asset, and it becomes ever more consolidated as one of Vibra's avenues for growth. When we look at the energy transition and the future growth of the company, we think about renewable energy as a point of interest, and we do have the right platform, the Comerc platform that has a great deal of expertise is self-sufficient with a great deal of knowledge and in which we already participate since my arrival and the arrival of Clarissa.We participate more actively in the committees and the management of the company. And we believe that doubtlessly, this will be a future platform for growth of the company with the cash generation coming from Comerc. We also have investments in other companies like ZEG Biogas. It began to operate a plant in Sao Paulo with minor volume so far. We're concluding the construction of plant in Minas Gerais based on vinasse. So ZEG Biogas is also making strides. We hope to have significant novelties regarding this business in 2024.Biogas has the challenge of raw material. But once we have access to the raw materials, we will make progress. And at the beginning of the year, we signed a memorandum of understanding with the Inpasa to understand e-methanol to substitute the bunker and ships. We're serving investments and throughout 2024. This is a possibility. And we do have other avenues that we're exploring in the energy transition.Now Vibra will always focus on an important aspect of energy transition. But above all, a return on capital, a return for shareholders, we're not going to enter into projects simply because they are in energy transition. Our hurdle here is very high to ensure we have a return on capital to deliver return for our shareholders and the management challenges to find these projects. They will allow longevity to Vibra. They will deliver the Vibra for the next 10 to 15 years. This is our role to think about the continued growth of the company with a high hurdle, which is a return on capital.
If you allow me a follow-up and perhaps you can help us in terms of your investments for distribution, they are smaller investments. What are you going to do so that the market understands these businesses correctly?
We're working arduously and throughout the first half of the year, we're going to hold the Investor Day. And without a doubt, we're going to speak about the Comerc business there, bring it inside of Vibra to show the strategic links, the strategies, the results, the connections with our business so that based on that and jointly with our IR team, we can better explain and share this because at present, Comerc is now part of the Vibra multiples, and this is something we would like to work on for 2024. Once again, at this Investor Day, we're going to focus on this issue.
Question and answer session end here. I would like to return the floor to Mr. Ernesto Pousada for the company's closing remarks. You may proceed, sir.
Well, thank you all once again and I would like to close by saying that when I entered in 2023, we focused on reducing volatility, having a better pricing management, the growth of additive-enhanced products, a growth of our partners, our retail and our direct customers in B2B. This is what we delivered in 2022. It was our focus and we delivered. We still have an extensive transformation agenda. We haven't begun to work on our lubricants area that has the possibility for extensive growth.And in terms of BR Mania, we have drafted a plan that will bring about positive results during 2024 growing not only in numbers but profitability. We're going to continue to evolve in our revenue management strategy. We still have the opportunity to improve here and continue with that focus, going back to our fair share, with the growth of volume in our network and our direct customers using artificial intelligence and data efficiency, a qualified growth that will transform our results.I would like to close with the following message. We're operating at a different margin level. Our confidence is much higher than what we had 2 or 3 years ago. We still have multiple opportunities. And as we mentioned here, Comerc isn't part of our multiples. We see significant growth avenues when it comes to generate value for our shareholders.With this, I would like to end. Wishing all of you a very good day.
The Vibra conference ends here. We would like to thank you for your attendance, and have a very good day.[Statements in English on this transcript were spoken by an interpreter present on the live call.]