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Operator: Good morning, ladies and gentlemen, and thank you for joining our First Quarter 2025 Earnings Call at Oi SA. This conference will be conducted in Portuguese with simultaneous interpretation into English. [Operator Instructions] This conference is being recorded, and the replay will be available at the company's Investor Relations website. Now, I'd like to give the floor to Marcelo Milliet, our CEO. You may begin, sir.
Marcelo Milliet: Good morning, everyone, and welcome to our earnings call. We will present our results for the first quarter 2025. With me today, we have Rodrigo Aguiar, our CFO, some members of the company's Executive Board, as well as our Investor Relations team. We'll first go through the slides, looking at Oi's performance in the quarter. We'll start with slide number 3. In the call, presenting 2024 annual results, we had said that with the conclusion of the M&As at the end of last February, Oi becomes a company with three main service components with different profiles and value generation capabilities. Oi Soluções is the group’s core component and the main source of revenue growth. And it has a significant presence in the private sector, as well as in the public sector. It is a market leader with the integration of digital solutions, combining telecommunications and IT services with important competitive advantages just to its capillarity and non-transferable technical activities. It offers a robust portfolio of technology solutions for managed network security cloud, UC&C, unified and collaboration communications, AI, big data analytics, digital applications, utility services as well as data, Internet and voice via fiber optics. Oi Solutions began in 2025 by strengthening its presence in the cloud computing segment, which is growing at an annual rate of over 30% in the last months of 2024. In the first month of 2025, the company won bids and signed contracts totaling R$53 million in new revenue. And more importantly, the opportunities for new revenue continued to grow at the end of the quarter. Revenues from our domestic subsidiaries grew by nearly 20% year-on-year, driven by the closing of the sale of ClientCo, in addition to Serede in-field operations in Tahto in call center services. Oi Services began operations. This is a shared services hub, leveraging Oi experience to expand the offering of the services to other Brazilian companies. It is currently positioned as a strategic asset of the group. Moving on to the next slide. I would like to present the main highlights of our third revenue component, Legacy. For this non-core component, we seek to reduce costs by optimizing services, gaining efficiency and completing the demobilization of the legacy network. The approval of the authorization term and the constant sequent migration of the concession to the authorization regime, allows a gain in traction for the legacy resolution budget. Projects for this purpose are progressing better than planned, with a cost saving of about R$1 billion accumulated from January 2024 to the quarter ended in March. We expect to have completed the demobilization of the legacy by the end of 2025, as well as the service via digital solutions for 100% of the company's customers, including those in locations where Oi is the only voice alternative as per our commitment to ANATEL and with this, we estimate a total accumulated saving of approximately R$2.5 billion. With the migration to digital solutions and a more efficient network topology, the company obtained significant savings in most close cost items, namely internal and external network maintenance, transmission infrastructure and telecommunications infrastructure, energy infrastructure tools, operations and real estate. From slide 5 onwards, we move on to the comments on the operational performance for the first quarter of 2025. The revenues and expenses of UPI, ClientCo and TV Co have ceased to be part of Nova Oi results, that since March, which makes it difficult to perform a quarterly and annual comparative analysis, especially in terms of OpEx? On the revenue side, results continue to be impacted by the downward trend in legacy services in addition to the maintenance of Oi Solutions selected strategy. Nova Oi reported a revenue of R$631 million in the quarter, down 27% year-on-year, mainly due to the reduction in non-core revenues. Oi Soluções revenue totaled R$271 million, representing approximately 60% of total revenue. Oi Soluções maintains a strategy focused on higher value-added segments and it will be approximately 39% of its revenue coming from information communication technology services, which have a high credential. Regarding our second component of operations, our subsidiaries revenues grew by 19% compared to the first quarter of 2024. I would like to highlight the recently created Oi Services, which began contributing to revenues to the consolidated revenue results in March. As previously mentioned, the subsidiary takes advantage of Oi's expertise to offer financial, operational and IT support services to third parties. In order to offset even partially, the impact of the decline in legacy services, the company is continuously seeking to find operational efficiency and to be more efficient in capital allocation, reinforcing a selective approach, key towards maximizing profitability and optimizing the resources used in operations. The implementation of initiatives in this regard resulted in a 19% reduction in operating expenses and investments this quarter. It is important to mention that we have additional opportunities to reduce costs in the future, mainly due to the savings generated by the recent change to the authorization regime in addition to those related to the readjustment of the company's operational structure after the recent asset sales. Moving on to slide 6. We'll now look at the greater details of the revenues. Consolidated net revenue fell 34.3% compared to the first quarter 2024. This more significant variation occurred largely due to the exit of the fiber and TV operations in February, therefore, contributing to these revenues for only two months in the quarter. To the right of the slide, we show the evolution or rather the performance of revenue from services that will remain with Oi. As already mentioned, total revenues continue to be impacted by the decline in legacy services, but they now represent only 15% of the total revenue of new Oi. Oi Soluções revenues, which already account for approximately 60% of total revenues fell by 21% quarter-on-quarter. This result also -- rather year-on-year. This result also reflected the continued reduction in demand for legacy services in addition to more selective commercial strategy, focusing on profitability and quality in new sales, aiming at healthy margins for the company. Revenues from domestic subsidiaries already -- and Oi Services showed significant performance in this quarter. As previously shown, year-on-year growth of nearly 19%. This result was mainly attributed to the start of operations of the newly created Oi Services following the sale of ClientCo. Now, on Slide 7, I'd like to highlight the performance of Oi Soluções, which has been showing continued growth and higher value-added services, emphasizing our quality and profitability centered commercial strategy. This strategy is important to offset the impact of lower demand for legacy and traditional telecom services. Telecom revenues include more commoditized connectivity services as well as other revenues, which concentrate services based on copper technologies. In the upper right-hand part of the slide, we highlight some verticals that have high growth potential in information and communication technologies. The ICT solutions, which are our main growth levers. Cloud services revenue posted a solid 8% year-on-year increase, while other UC&C revenues, Unified Collaborative and Communications grew by 30%, and the IoT revenues, Internet of Things grew by 12%. ICT revenues accounted for approximately 39% of Oi Soluções total revenue in 1Q 2025. On the next slide, you can see that our financial discipline remains a pillar in adapting Oi's new operating structure. The OpEx comparison is also affected by the asset sales that took place in the quarter. In any case, it is important to mention that we maintained the initiatives aimed at operating efficiency with reductions in almost all manageable cost lines. Routine OpEx came at BRL9 billion, a 21% year-on-year reduction. On the right-hand side of the slide, we can see that this reduction was supported by specific actions taken by the company on three main fronts. In the sales department, we adopted a strategy focused on quality and profitability management through policy changes and by strengthening our channels, resulting in greater efficiency and customer acquisition. We also intensified the use of digital media. As a result, this strategy generated reductions in expenses with billing, sales, customer relations, and advertising in addition to an improvement in delinquency levels. Additionally, as I mentioned earlier, after the migration to the authorization model, initiatives to address the legacy services gain traction. The goal is to migrate to digital solutions and to have a more efficient network topology, which generates significant savings in most cost line items. In 1Q 2025, network maintenance expenses grew on a year-on-year basis, due to the higher reimbursement of copper removal costs in 1Q 2024, which has impacted network maintenance costs since. Excluding this one-off impact, there would have been a 7.9% year-on-year reduction. Committed to achieving a leaner organizational structure that is more suited to the company's transformation process, we posted a year-on-year reduction of approximately 17% in the total number of employees, which contributed to a 5.5% reduction in personnel costs year-on-year. Finally, we continue to implement strict cost control, focusing on eliminating non-core expenses that led to significant reductions as we saw in the G&A expenses line. The company will continue to evolve its transformation projects with emphasis on accelerating the demobilization of legacy networks, which will yield even more significant savings for Oi throughout 2025. On Slide 9, we present our routine EBITDA and CapEx. Routine EBITDA continued to be impacted by the costs of legacy services, which are still high, as I mentioned earlier. Looking forward, we see significant opportunities for improving profitability whether through initiatives related to migrating customers to digital solutions or by accelerating the decommissioning of legacy networks. We also continue to scale up our operations following the sale of Oi Fibra. On the right-hand side of the slide, CapEx in the first quarter totaled $78 million of 44% year-on-year reduction, accounting for roughly 5% of our revenue. We maintained efficiency, initiatives and optimization and the allocation of investments. In the next quarter, we will have the first full quarter after the sale of the fiber and TV operations. At the bottom of the slide, you can see a pro forma result of the operations that will remain as part of Oi. A substantial part of the negative pro forma EBITDA in the quarter was due to the impact of legacy operations with Oi Soluções, the national subsidiaries already representing together a positive EBITDA. Now on Slide 10, we highlight the cash balance of BRL 1.5 billion at the end of the period with a cash burn of 18% in the quarter. We emphasized that not all this amount is available for the company with a substantial portion of this cash being released only upon the fulfillment of certain conditions precedent. And another portion, which is tied to specific obligations determined in our contract. The operational consumption was partially offset by the non-core operations. The company continues to work continuously on funding alternatives that offset the cash burn still present in the operation. In 1Q 2025, we received the advance credits related to the PIS/COFINS Texas and the NIT process with Telemar in addition to the payment for the disposal of some properties. The negative result in working capital was mainly impacted by payments to Class 1 and 3 creditors as provided for in the court revised reorganization plan. payments of interest-bearing liabilities were reduced by 70% year-on-year due to the application of the new conditions negotiated under the plan with satellites and -- satellite suppliers on a take-or-pay basis. Finally, on Slide 11, we celebrate the great process achieved by the company so far. But we must highlight that we still have important challenges to be addressed towards operating and financial sustainability. We need to consolidate the operations of the company that emerges after this restructuring process. From a revenue perspective, we need to strengthen the business of Oi Soluções and increase the revenues from the national subsidiaries. Oi services is a strategic asset with services that can be offered in a modular fashion, contributing to the operations of external clients based on our strong expertise in IT, financial services and other operating processes, which can generate new revenue streams. We need to evolve in cost rationalization, either by accelerating projects related to the demobilization of the legacy or by adapting the company's costs. We need to address the funding gap still present in 2025 and make progress on the sales of other assets as are approved in our court-supervised reorganization plan. As we always emphasize, this entire transformation process has been conducted with transparency and is part of our commitment to building an operationally viable company, focused on operating and digital services and technology solutions for the Brazilian market. Now we are ready to take your questions. And please make sure to submit your questions to our Investor Relations e-mail. Thank you very much.
End of Q&A: Thank you. This concludes Oi's 1Q 2025 Earnings Call. For more information, please access www.oi.com.br/ri. You may disconnect now. Thank you very much for your attention. Have a good day.