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Earnings Call Analysis
Q4-2023 Analysis
B3 SA Brasil Bolsa Balcao
B3 had a challenging fourth quarter in 2023, with uncertainty surrounding global interest rates, particularly the timing of rate cuts in Brazil, which high levels likely hindered a stronger recovery in the equities market. Despite a 3% revenue decrease year-over-year and stable revenues relative to the third quarter, B3 prudently managed expenses, delivering on the lower end of their guidance and containing costs below inflation when excluding the impact from the acquisition of Neurotech.
The company's diverse business segments helped counterbalance weaker performance in the Listed segment. Revenue increased in the OTC and fixed income business, influenced by the interest rate environment; the Infrastructure for Financing Unit; and the successful integration of Neurotech positively affected the Data segment. Additionally, revenues from the Desenrola program and high growth in Treasury Direct were notable despite the effects of significant nonrecurring items during the quarter.
B3 demonstrated disciplined cost management, delivering below-inflation expense growth. This can be largely attributed to efficiency gains from an initiative at the end of 2022. Notable nonrecurring expenses in Q4 included the Desenrola program operations and advancements to support self-regulatory activities for the next two years, indicating B3's pragmatic approach to handling expenses in the face of one-time costs and investments in its future growth.
B3's quarter was marked by strategic product developments and technological advancements. The launch of a block trading platform, a collaboration with ASX for a carbon credit market platform in Brazil, the introduction of weekly options for equities and ETFs, and the start of a cloud-based FX clearing operation reflect the company's continuous efforts to innovate and enhance its business model, contributing to its resilience amid the challenging environment.
Financial results in the quarter were affected by a debenture issuance of BRL 2.5 billion that secured favorable terms for B3. Additionally, fiscal incentives lowered the effective tax rate for the quarter. The recurring EBITDA was BRL 1.5 billion with a margin of 65%, and the net profit to shareholders reached BRL 915 million. B3 distributed BRL 1.4 billion to shareholders for the quarter, maintaining a strong commitment to shareholder returns.
B3 is geared up for 2024 with a cautiously optimistic view, maintaining cost discipline as a cornerstone of their strategy. The guidance for the upcoming year foresees adjusted expenses in line with inflation and potential new opportunities for growth, supported by the company's technological capabilities and effective management of resources. B3's flexibility and responsiveness to market conditions and internal operational efficiency are at the core of its strategy for 2024 and beyond.
Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's Earnings Results for the Fourth Quarter of 2023. [Operator Instructions]. After the company's remarks are completed, there will be a Q&A session when further instructions will be given. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. I would now like to turn the conference over to Andre Milanez, B3's CFO, who will begin the conference and be joined by Fernando Campos, Investor Relations' Associate Director. Please, Andre, you may proceed.
Thank you. Good morning, and thank you, everyone, for joining our fourth quarter results. I'll start with a few remarks and then going to hand over to Fernando to go into a little bit more detail about the figures for the quarter. We will try to be brief so we can leave more room open for Q&A. We had an environment during the fourth quarter marked by uncertainty, especially around the level of interest rates in the major global economies, particularly when the interest rate cuts would begin in Brazil, although we have seen that process of rate cuts already starting the level of interest rate remained still at high levels, which I guess prevented a more meaningful recovery, particularly on the equities market. So as I said, a challenging quarter for the Listed segment, which was offset by a good performance of our other segments.
Here, some highlights for the revenue coming from the OTC and fixed income business, which was, I guess, favored by that environment of interest rates the revenues that we had during the quarter coming from the Desenrola program. The performance on the Infrastructure for Financing Unit and the consolidation of Neurotech, which also helped in the comparison to the fourth quarter of '22 and impacted our Data segment.
In comparison to the fourth quarter, we saw a decrease of 3% fourth quarter of '22 and stable revenues in relation to the third quarter. On the expense side, as we have been discussing throughout 2023, we were aiming at the lower end of our guidance. That was exactly the number that we ended up delivering. If we compare 2023 to 2022, our expenses remained below inflation, especially if we exclude the impact of Neurotech, which was not present in our numbers in 2022, which we believe was a positive result of our efficient gains initiative that was carried out at the end of 2022.
Regarding the growth during the quarter, I think it is worth highlighting and we can potentially explore that in more detail during the Q&A session, 2 main nonrecurring items that have contributed to the growth that we saw during the quarter. First, there were the expenses related to the operation and development of the platform for the Desenrola program.
As I said, that contributed on the revenue side, but also on the expenses side, and of course, this becomes given our operational leverage and the size of our expenditure becomes more relevant for the expenses than it does for the revenues. But more than the project itself I think it has been also an opportunity for us to develop a product, which is now an existing product that was reinforced and improved included in our subsidiaries, PDtec portfolio, which could bring new opportunities in the future.
And another highlight was that we saw here an opportunity to anticipate contributions to our self-regulatory activity for the following years, in our view, at least, that will be sufficient at least to fund our self-regulatory activity for the next 2 years, and that was only possible giving the exercise and the management of our budget for the year during the quarter. In comparison to the third quarter, I think it is, besides those 2 items that I had already mentioned.
We had a quarter where you have the full impact of salary adjustments, which take place in August, some project acceleration and some other seasonal expenses that typically take place between the last quarter of the year. I'm going to call Fernando to talk a little bit more about the operational performance, the revenues, and I'll come back after that.
Thank you, Andre, and good morning all. Starting with the equity segment, the ADTV of cash equities reached BRL 24.3 billion in the quarter, a drop of 25% year-on-year given the impact of the elections that we had in the fourth quarter of 2022 and the growth of 2% quarter-on-quarter which is below the recovery that we historically see in the fourth quarter when compared to the third quarter, which is seasonally weaker, a weaker quarter. We had a pretty stable market cap. So the turnover stood at 136%, pretty much in line with the last quarter.
Regarding margins and fees. The stability compared to the fourth quarter 2022 even though we had lower volumes in the 4Q '23 reflects the lower participation of foreigners and retail and which pay a higher fee compared to the local institutional investors, which had a higher participation during the quarter and they pay a lower fee. And we had more volumes traded through market making and liquidity provider programs, which are incentivized. So they also have an impact on margins.
On listed derivatives, despite the decline in revenue in low single digits, we see that the performance is good. We had some price adjustments mainly on the interest rates in BRL contracts which provided liquidity and volume for the contract. We had all-time high record in those kind of contracts for the year. So we had a good operational performance with a slight decline in revenues. In OTC continues to perform well with the current level of interest rates new issuance and the average outstanding balance of bank funding instruments grew 3% and 8% compared to the 4Q '22 and 3Q '23, respectively.
And also, it's worth highlighting the strong growth in Treasury Direct, growth in the outstanding balance of 26% and 4% in relation to the 4Q '22 and 3Q '23 and the solid performance that we have in derivatives as well with a growth of 29% and 9% year-on-year of issuance and outstanding balance, respectively. So with this, revenue of OTC grew by 15% year-on-year.
Finally, in Technology, Data and Service it's worth highlighting the growth in OTC utilization line, a growth of 8% versus 3Q -- versus 4Q '22 and 2% 3Q '23 and which grows with the fund industry in Brazil. And it's like Andre mentioned, it's also worth note that the data revenue includes Neurotech revenue for the quarter. Returning to Andre to talk about other highlights of the results and some strategic advancements.
Thank you, Fernando. I think as I was talking about revenues and expenses. On the financial results, we saw our financial results for the quarter, impacted by the debenture issuance that we carried out at the end of September, beginning of October in the amount of BRL 2.5 billion. remembering that this was a transaction where we've achieved the best rate in the company's history for that kind of term. On the tax side, we had some fiscal incentives that were recognized during the quarter, which have helped to reduce our effective tax rate for the quarter.
Our recurring EBITDA as a result of all of that, our recurring EBITDA ended up the quarter amounting to BRL 1.5 billion with a recurring margin of 65%, of course, a decrease as a result of the -- mainly the impact of the expenses that we have already addressed and our net profit to shareholders reached BRL 915 million.
Regarding our payout, we've distributed BRL 1.4 billion in relation to the quarter with close to BRL 500 million in share buybacks, BRL 600 million in dividends and BRL 330 million interest on capital for the year as a whole. Our total distribution to BRL 5 billion, which represented a payout ratio of 122% of our net income.
Regarding some strategic developments, I think it is worth mentioning the launch of our block trading platform in November, which has been operationally and working well is still gaining traction, but doing well. We have also announced in December an agreement with ASX, one of the main trading platforms for the carbon credit market in the world with the ambition to develop a platform like this in Brazil, a move that reinforces our commitment to bring new products and solutions to our clients and also in this case, to the ESG agenda.
And I think more recently, in January, as we also have been discussing after 2 important advances we launched weekly options for equities and ETFs, giving more alternatives to our clients and investors also a move that we believe could help to improve liquidity in some of these asset classes and another, highlight was that we started the operation of our FX clearing 100% cloud-based, an important move in terms of modernization of our infrastructure. One of the few perhaps in the world that is currently operating like this, which, in our view, will enable us to speed up the innovation process as well in terms of FX products. I think that's it. So staying up -- was not an easy year where, once again, the resilience of our business model was put to test where we were able to perceive some of the results of some of the initiatives that we've taken during 2022.
I guess we are more confident in terms of the scenario for 2024, and still very committed to our cost discipline. And I think with that, I'll leave the floor open for questions. Thank you.
[Operator Instructions]. Our first question comes from Silvio Doria from Safra.
I have one question about Dimensa. Could you give us more details about Dimensa performance in this quarter, especially regarding operational margins? We saw some margin deterioration in this quarter in Dimensa despite the still level change, there was something out, something related to the operational side, what could be EBITDA margin going forward in a normalized scenario for Dimensa?
Regarding Dimensa, I think the main reason for the result in the last quarter has to do with some of that, that you mentioned some nonrecurring items that affected the performance there. We, together with our partners there with TOTVS found that some changes were necessary to deliver what we believe is the ambition with that project. So there have been some changes in management. Actually, a lot of changes that took place, particularly during the last quarter and the last half of the year.
And as a result of some of those movements, the expenses there were affected. But I think we've done the changes that were necessary or low changes that were necessary to perhaps get back to that trajectory of expansion and growth of the business. So I do expect margins to gradually improve over the next few quarters. And as a result of that, Dimensa has also recently announced a bigger acquisition, expanding its offerings and services to the insurance segment. And now so we remain very, very constructive and excited about the potential of this partnership with TOTVS.
Next question comes from Kaio Prato from UBS.
I have one here on my side, please. Regarding the Desenrola Program that impact both your revenues and expenses this quarter. So first, if you could share with first how much was the impact of this program in your expenses. And moreover, despite revenues seemed to be somewhat, I would say, meaningful this quarter with the program. So I just would like to understand the net impact of the Desenrola program this quarter, which seem to be positive. And going forward, which potential new phases if your margin of this business could be even higher as the platform set up was already done?
I think, if you look at the expense side, right, and put together the 2 main impacts that we've discussed the expenditure regarding the Desenrola program and the anticipation of the future cash needs for the self-regulatory activity. Between those 2, we are talking about a total of between BRL 70 million to BRL 80 million in expenses.
Regarding the program itself, it's tricky to just look at the results for the quarter because there have also been investments prior to that, which have been recognized as CapEx. But our goal here or the result should be positive, even though it's not going to be a huge return in terms of financial return. It's going to be positive, the return of that project. But I would look at that beyond what the project itself was.
So it wasn't, I guess, important to help the government to achieve its objective, which was to take a lot of people from the delinquency list. It was a very challenging project. We put our skills and capabilities, our product and technology teams to the test. We were successful in delivering that and we have now a platform, which we believe could be used for other purposes, right? So even if not necessarily same format as the one we had on the Desenrola program, there are other business opportunities that could be pursued as a result of all the investments that we made to set up that solution that helped to deliver the program.
So I would look at that more as a potential opportunity for new products and new services rather than the initiative itself as being meaningful in terms of results generation.
Having said all of that, given that the program has been extended, we should still see some impacts, both from the revenue side as well as from the cost side affecting the first quarter of this year as well.
Our next question comes from Pedro Leduc from Itau BBA.
So on expenses, please, again, I know there's some nonrecurring effects here, but more looking into how the year ended, your guidance for 2024 implies adjusted expenses up by maybe high single digits at the midpoint related to revenue is a bit higher than that. If you can go over a little bit on what your focus areas will be, what you believe is driving these expenses? That will be the first. And then second, on the financial results side, if there's some volatility in this quarter, if it's natural, something we should see or if it recovers a little bit into the next.
Regarding the expenses, I think we've -- if you look at, let's say, what are more manageable costs or core costs, let's put it this way. If you look at the performance, I think we did pretty well. So growth in personnel expenses, if you exclude differences from a comparison basis, you will see that we have delivered well in this area, which reinforces the result of the initiative that we've taken out.
And as I mentioned, I think a lot of what we've seen during the quarter has to do with -- I want to say like nonrecurring necessarily, but things that are more of that nature. So things that not necessarily we will remain there forever, right? So the Desenrola program and some one-offs in terms of anticipation of future cash needs. As we have been saying, our goal remains to deliver a growth in terms of the expense side, much more in line with inflation going forward.
That's what we will be working towards looking at 2024 and the following years. And we do believe we have the necessary tools to deliver that. Again, we're continuously seeking to find efficiencies in areas of our business as technology advances as we keep revisiting and reimproving our processes and activities in order to support any needs for growth in other areas where we believe investments are necessary to keep pursuing new growth alternatives.
So that has not changed and that will remain an area of focus for 2024. Regarding the financial results, there is always some volatility because, as you know, part of our financial results come from balances that we do not necessarily control. So the average cash balance that is posted by our participants that generates financial income can fluctuate a little bit.
Besides that, as we discussed, we've raised slightly towards the end of the year, the level of gross debt of the company, anticipating some needs already for the beginning of this year and take advantage of a favorable market opportunity. So I think other than that, there's nothing really that is, I guess, worth highlighting. So there will still be some level of fluctuation coming from that dynamic of third-party cash balances.
Our next question comes from Yuri Fernandes from JPMorgan.
Fernando, I have everyone on the financial side also a follow-up there. When we go to your presentation here, you have the cash and financial investments, right, the PowerPoint. And when we go to the market participants, collateral and others, we saw a decrease on the cash there, like 25%, 26% quarter-over-quarter decrease. But ADTV, because I think most of this is cash collateral, right? And cash collateral in your balance sheet is mostly stable, actually up quarter-over-quarter.
So my question is, why the line dropped this 25%, like I think it was from BRL 5.4 billion of that cash from market participants going to about BRL 4 billion. So what is driving that? If not the cash collateral, what is inside the other line that drove this decrease?
And if I may, just a follow-up on expenses. Given you anticipate so much expenses. Why not revising the guidance for '24 and call it for a better year in '24, given ESM, you mentioned those 2 years of cash at this station. Thank you very much.
I'll start with the last one and now just make sure I fully understood your first question. But with the last one, as a result of that, but first, as I said, there are some one-offs, right? So if you take the Desenrola program. But as I said, we will still have some impact coming from that program coming during the last -- the first quarter. And I don't know whether government could decide still to extend further the program.
So I think it is still too early to potentially -- rather than maybe coming today and revising our guidance and then potentially having to revise it, again, upwards this time because I don't know for whatever reason the program has been extended. We preferred to maintain our current guidance. But we will definitely giving all of that we have been describing. Again, work more towards the lower range. The bottom range of our guidance than the top range as a result of that.
In relation to your first question, I'm not sure whether I fully understood, and you please correct me if I don't. But the main problem here is that looking only at the year-end balance does not necessarily reflect what was the performance throughout the quarter. So the key metric here ends up being the average cash throughout the quarter, and we can have some significant fluctuations on a daily basis on those balances. So just taking the year-end balance as an indication of that can be misleading.
Got you. Yes, it's Slide 12, like it's basically those 2. So basically, you are saying that this is aimed at appeared an average balance should not have been done should not have been decreased as much as we saw here on the end of the quarter figures, right?
Yes, that's it.
Our next question comes from [indiscernible] from Goldman Sachs.
I'm just trying to get a better idea of how expense growth could be more in line with inflation in the future. Could you give a ballpark of how much of the spike in expenses was recurring? Should we expect 65% EBITDA margins for the next couple of quarters? Just kind of more color on that.
Yes. As we have been discussing, I guess, if we take out the 2 main items that we highlighted, meaning here, the Desenrola program, and the contributions that were anticipated -- future contributions that were anticipated to our self-regulatory activity out of that. Those 2 numbers together represent between BRL 70 million to BRL 80 million of impact on the quarter. So of course, since all of that was recognized in a single quarter that what primarily explains the margin drop that we saw in the quarter. Going forward, again, reinforcing what I just mentioned, we should see our expenses growing more in line with inflation. That's what happened throughout the year, although we saw that spike in the last quarter. I think here, there is room for improvement in terms of how we manage some of those moving parts throughout the year. But you should expect a growth for '24 more in line with inflation, slightly above or slightly below. And I think that's it.
So therefore, margins should not remain at that level. If it depends on the expense side. Of course, given our operational leverage, our margins end up being much more sensitive to the top line than on the expense side, but you shouldn't expect the expenses to be a drag to the margin going forward.
Our next question comes from Carlos Lopez from HSBC.
The first one, can you reiterate your view regarding the leverage of the company? You are now at BRL 14.1 billion in debt. Last year, you were at BRL 12.2 billion. Your leverage according to your number is 2.2x EBITDA. Could you discuss whether you want to maintain that level, it was one only 3 years ago. What do you think is appropriate going forward? And second, if you could give us an update on the litigation in which you are involved. And could you please confirm that the litigation regarding the [indiscernible] is now at least BRL 41.7 billion at stake?
Regarding our leverage ratio, as we discussed during the last quarter, we saw market opportunities. As I said, we've ended up issuing releasing capital at the lowest cost for the company's history for that particular term. So we saw a window of opportunity to anticipate future to do a liability management exercise here and anticipate future needs. We have maturities coming due at the beginning -- at the first half of this year. So some of that will be used to pay down those maturities. And that's why we've indicated lower level -- target level for this year, which, if I'm not mistaken, is in our guidance at 2x gross debt to EBITDA. But you should expect us to be working around that level right around 2x, slightly above that or slightly below. I think that's a level that we view at the moment that it's appropriate for the company.
Regarding the litigations, I think we had an important development more recently, right, which I guess most of you have followed. We had -- despite all the discussions regarding the casting vote and everything that has been taking place in relation to the administrative courts, we had a positive result on our third case, the goodwill cases where we had a favorable decision to us. That means that this is going to be finally result. That exposure will no longer be there, at least for the third case.
And in our review, that's an important mark that can help also the other cases. As you know, they are individual cases. So the result -- a favorable result in one does not necessarily mean that we will have the same outcome on the others, but it does definitely help a lot. So it was an important advance in that sense. And regarding the other case, there hasn't been any significant developments so far that we could share with you, unfortunately.
On the goodwill, thank you very much and actually, I think that's an important point that you got this decision. But you have not excluded that from the list of potential liabilities in your financial statements. Is that right because it came after the year-end?
Yes, not yet because there are still some legal proceedings that have to take place for us to be able to formally consider that case dismissed, all of those would not have the ability to change the favorable result, but we will only update that when this is formerly done. But that's the only reason, okay?
Okay. But other than that, this particular case is over.
Yes.
Our next question comes via phone. [Operator Instructions].
It's Ian White. I hope you can hear me okay. Just wanted to ask for a bit more detail, if you could, please, on the performance in data and analytics. I'm looking, in particular, just at the growth you've delivered there sequentially from the third quarter into the fourth quarter, it's a ballpark BRL 19 million. Just some help understanding what's happening. Is there an element of sort of onetime revenue that has been booked here. Is there some particular traction with some of the newer products that would be useful to call out? How do you see this area kind of progressing over the next a few months in terms of the product development and the road map that you talked a bit about at the Investor Day. That would be interesting, please.
Ian, this is Fernando. So thank you for your question. So regarding data, there is the main impact here are 2 products, and I think an important part of the product development and the segment development that we've been doing in data. So there are 2 products that are mostly -- they are mostly acquired by some of our clients in the last quarter of the year. It's the first one. It's a profile for individuals that own cars or own vehicles. So they mainly look at how is the buyer or the taxpayer number profile in ownership of vehicles and this is an annual kind of consultation that the clients do. And so here, this is a product that we have for some time, but we've been doing -- we've been able to increase and do some upsell on this product for the cars. And the other one is what we call the investment profile. So it's also annual, so it's kind of a seasonal revenue that comes from it.
But this product is a new product. The last year -- in 2022 was the first year that we had revenue coming from it and that 2023, we would increase that. So this is kind of a seasonal revenue, but it's part of the agenda of product development in data. So it's a good indication for the future.
So if I could just summarize some element of seasonality here, but there are also some early signs that some of those initiatives are starting to gain more traction. I think it is still early days. But I think maybe next quarter could provide better indications for how are we in terms of gaining traction on those initiatives, but it is a positive sign.
Maybe just a short follow-up. You've talked a bit about sort of seasonality and sales that occur in 4Q, is there a sort of an annualized recurring revenue figure or anything of that sort that might help us just understand the run rate for the business versus kind of what you actually delivered in the fourth quarter? I wasn't 100% clear from what you said as to whether the seasonality reflects revenues that only occur once or whether it was more the growth happened in the fourth quarter and then that's kind of a level from which further growth might be delivered in 1Q '24, if you can sort of understand my distinction there. If it's an ARR type figure or something like that, that would be really interesting too.
I do understand your point. And it is a one -- because it is a onetime service but it tends to occur every year. So it's slightly tricky, right? So it is not a service that is performed throughout the year. It is more of a onetime sale, but which tends to occur every year. And that -- but besides that, a onetime sale that has been increasing. So we might need to go back into a little bit more diving in the numbers to perhaps give you more color on that. But in general terms, that's what it is. But we can maybe share -- try to share more details later on.
Our next question comes from Djalma Rezende from T. Rowe Price.
Two busy questions that are follow-ups to what you already talked about. So one, on the debt issuance. Can you just elaborate a little bit more on the uses of proceeds for that? I understand how maturities coming in, but I think it's nothing that meaningful compared to its what we raised at least not in the first half of this year.
And second question is a follow-up to Yuri's question on the third-party cash. I think he was referring to the slide that basically says that the third-party cash came from BRL 5.5 billion to BRL 4 billion -- roughly BRL 4 billion quarter-on-quarter. When I look at the balance sheet, there's collateral for transactions that actually went up from BRL 3.3 billion to BRL 3.6 billion. So I just want to understand what else is in that line that has dropped so dramatically to make up for actually the increase in collateral transactions?
Please let me know if I didn't get it right. But regarding the issuance of the venture, we had, if I'm not mistaken, BRL 1.2 billion, BRL 1.3 billion maturity of one of our other outstanding debentures coming due this quarter. So this quarter or beginning of next quarter, so rather than leaving that to be rolled over this year, we took the opportunity of a favorable, very favorable market condition last year and anticipated some of those needs. So part of the proceeds from that issuance that took place at the beginning of the last quarter of the year will be used to pay down that debt. That could also be other opportunities of doing some liability management, as we have been doing throughout -- probably throughout 2023.
And as a result of that, that's why we will target to arrive at the end of the year with a lower level of gross debt as indicated in our guidance for the year. But feel free to let me know if there is any points I ended up not covering in my response. And I'll pass on to Fernando to comment on a little bit about on the cash balance.
So Djalma, on the third quarter, there was some cash that was deposit on -- it was not for the trading activity. It was on our -- we have [indiscernible] chamber here [indiscernible]. So there was a cash that was there, coincidentally, just for the end of the last quarter, in the third quarter, sorry, in the third quarter '23. So that's the main difference between what we see in the balance sheet and what we had on the presentation. So that's the main difference. It was cash collateral there was deposit with us, but not for trading activity and for their chamber.
Our next question comes from Pedro Leduc from Itau BBA.
It is actually a follow-up still, sorry, on the cost side of things. I know you mentioned that a lot has been front-loaded from the government program into fourth quarter. But then there was a point that if the program is continuing, there is also costs in 1Q. Did I -- just want to make sure that I got that right. And then the second question, I want to pick your brain a little bit on margins. There's a mix effect, but I don't know how if you can comment a little bit within that mix, high frequency, any programs there that have changed? Or anyway, these are the 2 follow-ups.
So just to make sure we are on the same page. There have been investments that were made in order to improve and build that platform, and that has been recognized throughout the third quarter and some of that on the fourth quarter. And that, of course, has not impacted our P&L because it has been capitalized. We have some of the expenditure on the development side that could not be for whatever reason, capitalized, and the expenses that we have to run the operation because it's not only the technology we are providing services as well as part of that debt delivery.
We had those costs affecting primarily the -- mainly the fourth quarter, which was when the program at least the phase where we were involved really started. So some of those costs would also be affecting the first quarter of this year, and that's why I said that if you look at all of those moving parts, we do expect the project to be marginally positive, but we should not look for the project individually as a big, let's say opportunity of result generation, but more in terms of what other opportunities we have ahead of us, now that we have that platform ready and set up. That's clear. And your second question was regarding margins, right?
Trading margins.
I don't think that has -- sorry say it again?
The trading margins. Correct.
Yes. So there's no, let's say, nothing really significant in terms of our pricing schedule that should affect margins going forward. So it will be more a reflection of the mix of our participants but again, there's nothing that we believe, at least in the short term, that could change that dramatically. So we will be seeing some fluctuations month-over-month or quarter-over-quarter according to that mix. But at least not for the short term, I do not expect any material changes to those mixes coming either from market movements or from movements that we are doing in terms of our prices.
This does conclude today's Q&A session. I would like to invite Andre Milanez to proceed with his closing statements. Please, Mr. Andre, you may proceed.
Well, thank you, everyone, for your continuous support for joining our call. Thanks to all the teams that have helped to put all of that together to you guys. As I said, I think it was not an easy year, but we are constructively optimistic or in relation to the potential opportunities for 2024. Thank you, again, for your support. Have a nice Friday and a good weekend ahead of us. Thank you very much.
This does conclude B3's audio conference for today. Thank you very much for your participation and have a wonderful day.