Kepler Weber SA
BOVESPA:KEPL3
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Hello, ladies and gentlemen, good morning, and welcome to Kepler Weber Earnings Video Conference for the Second Quarter of 2023.
Today, with us, we have Piero Abbondi, CEO; Paulo Polezi, CFO and Investor Relations Director; and Bernardo Nogueira, Commercial Director, who will participate exclusively in the Q&A session. Please note that the presentation is being recorded and simultaneously translated. [Operator Instructions]
We would like to clarify that forward-looking statements made during this conference call regarding Kepler Weber's business outlook, operational and financial goals are projections of the company's management that may or may not come true. Investors should understand that political, macroeconomic and other operational factors may affect the company's future and lead to results that differ materially from those expressed in such forward-looking statements.
To start the second quarter earnings video conference call, I'll now turn the floor over to Piero Abbondi.
Good morning, everyone. It is a pleasure to be here with you for Kepler's earnings call. The second quarter historically represents the period of lowest activity for Kepler in the year and 2023 is no exception. Nonetheless, our performance was quite positive, only trailing behind Q2 of 2022 and surpassing all other second quarters in Kepler's history.
The first highlight of the quarter was the net revenue of BRL 282 million. This is a drop of 22% when compared to Q2 of 2022. Amongst our 5 business segments, I highlight the significant growth in the Replacement & Services and Ports & Terminals segment. The sustainability of the revenue comes from our resiliency, which is a result of efforts made over the past years to diversify our business segments and territories. Paulo will provide further details on the performance of each segment in his presentation.
In EBITDA, we generated BRL 53.8 million with a 19% margin representing a 42% reduction vis-à-vis the same period last year. I want to draw attention to the EBITDA margin of the first half of the year. We're delivering practically 22% of profitability, a level never seen before during challenging times, especially in the agro industry.
Finally, in the quarter, there were 2 other important factors. The largest harvest plan that will offer a record amount of BRL 6.6 million (sic) [ BRL 6.6 billion ] through PCA with very attractive interest rates and terms and a significant demand for our projects where the number of new projects creators were significantly higher than the first half of 2022.
Now I give the floor to Paulo to present the performance of the business segments. Paulo, you have the floor.
Thank you, Piero, and good morning to everyone.
Moving to Slide 4. You can see the evolution of the 5 business segments. Starting with Farms, we generated BRL 82.7 million. This is a 37% decrease in the quarter and 25% decrease in the semester. The grain production in Brazil is at an all-time high, but the reduction in orders is explained by high interest rate and reduced producer remuneration leading to investment postponements. However, the excellent conditions in the new harvest plan have started to stimulate our customers.
In Agri Industries revenue reached BRL 85.2 million in the quarter and BRL 195.3 million in the semester, representing 37.5% and 47.3% reduction, respectively. This revenue drop was caused by large customers delaying their investments to the second half of 2023.
International Businesses generated BRL 25 million in revenue in the quarter and BRL 47.7 million in the semester, a drop of 38% and 39%, respectively. The lower activity level was due to decreased sales in Paraguay and Uruguay, our main export countries, due to the decline in commodity prices and severe weather issues.
Imports & Terminals, we experienced 375% growth in the quarter and nearly 900% growth in the semester with a revenue of BRL 28 million during the quarter and BRL 59.8 million in the semester. These increases are the result of strong sales performance and the possibility of sequential deliveries, better internal restructuring of the segment, and dedicated specialized team contributed to higher volumes.
Finally, Replacement & Services, there is an increase 32.7% in the quarter and 26.3% in the semester with a revenue of BRL 60.4 million during the quarter and BRL 111.4 million in the semester. We are pleased to highlight the expanded market reach with approximately 15% more customers compared to the first half of 2022. We are consolidating our revenue from Procer in Replacement & Services, which contributed BRL 9.7 million in the quarter and BRL 14.2 million in the semester.
On Slide 5, I share with you some projects delivered on Q2 2023. The Tibagi Paraná project was developed with new phases of expansion in mind and incorporating variable speed elevators and different flows within the unit. In the Rio Crespo Project in Roraima designed for corn storage, the highlight was the rapid response time of the Kepler team. The client needed the project defined quickly to start work with a narrow utilization window during the harvest season. The Capão Bonito do Sul from Rio Grande do Sul delivered to an important co-op, enabled the expansion of the clients' operating area both in terms of collection point and storage capacity, the ability to quickly and uniformly assemble the structure will enable the reception of winter cereals, especially with -- as of September of 2023.
Now on Slide 6, we have the Philadelphia works in Paraguay, located in an agricultural opening region, consolidating our presence in all the country, even in more remote locations, that conveys trust into local customers.
Lastly, we mentioned Santa Cruz de La Sierra in Bolivia, which will enable the capture of local corn production for the manufacturing of poultry feed. The project will allow our clients to establish a more efficient and sustainable production chain to meet the demands of its operation.
On Slide 7, we share part of our current portfolio book showing 17 distinct supplies that together amount to approximately BRL 200 million in new sales. As important as our ability to renew our portfolio, this slide demonstrates Kepler's excellent diversification with significant business opportunities in all segments of operations simultaneously.
On Slide 8, we present the evolution of EBITDA on Q2 of 2023. We generated BRL 53.8 million. This is a drop of 42.9% vis-à-vis BRL 93.3 million in Q2 of 2022. Despite being lower than last year, the quarter's performance was quite positive, only trailing behind the Q2 of 2022 and surpassing all the other second quarters in Kepler's history, demonstrating resiliency in a challenging period for rural -- for farmers.
Now on Slide 9. We show the evolution of our CapEx. On Q2 of 2023, investments reached BRL 9.1 million and majority. This is 57% dedicated to increase production capacity. Year-to-date, Kepler has invested BRL 36.6 million, a 102% more than the investment the first semester of 2022. Within the annual amount, we highlight the final payment of the new powder coating line, our main project in progress with an expected inauguration in September of 2023.
On Slide 10, I highlight the announcement on June 27 of the 2023-2024 harvest plan, the largest in history in which BRL 6.6 billion, 29% higher than last year, will be directed to the program for construction and expansion of warehouses, PCA, with very attractive interest rates for growers and below the Selic rate. The conditions will enable growers seeking financing to accelerate their warehouse expansion projects to increase efficiency gains in the next harvest.
On Slide 11, you can see the material prepared by the ABIMAQ Financing Department, showing the distribution of resources to financial agents separated by modality and interest rates.
On Slide 12, I highlight our cash availability, which remains at a robust level ending June with a gross balance of BRL 266.5 million and a net cash of BRL 114.1 million. It is important to note that during the quarter, we renewed one of our financing lines, totaling BRL 50 million, aiming to ensure competitive terms and cost to meet the company's growth commitments.
On Slide 13, we highlight the liquidity of our KEPL3 shares with an average daily trading volume of BRL 18 million in June, the highest historical daily average in the first half of all time.
Slide 14, we show the ROIC for Q2 of 2023, which totaled 65.7%, a drop of 35.8 percentage points compared to Q2 of 2022. Maintaining our high ROIC is one of the differentials of our business model as we achieve excellent returns even during periods of volatility.
With this, I end my part of the presentation, and I hand it back to Piero.
Thank you, Paulo. Before addressing the main messages, I would like to especially highlight Slide 15, and we can see the negative impacts agricultural commodity prices due to the deficit in storage capacity combined with a record 2022-2023 harvest. In April, we witnessed the largest negative premium on soybean since 2004, with the projected volume of shipments for the season. The estimated total losses of the year amounts to BRL 30.5 billion. These losses could have been avoided with adequate storage capacity.
On Slide 16, I provide a summary of recent achievements, and then I will comment on the outlook for the rest of 2023. Regarding recent achievements, in addition to a very positive performance in a challenging quarter, only below Q2 of 2022 and higher than the other second quarters, we demonstrated resilience with an EBITDA margin above 20% in the first half of the year. We completed the procedures for the opening of our 8 distribution centers in Sorriso, Mato Grosso, another achievement of our company, pursuing excellence technical support to our customers.
Lastly, I share the information that since July 26, Kepler shares have been traded in the Novo Mercado, representing a significant step, reinforcing our commitment to high standards of corporate governance.
As for the outlook for the second half, I highlight the combination of the high-time harvest with the new high-times harvest plan increase expectations for new businesses in all the segments, focusing on resuming projects by farmers and rural producers. The lower pressure on materials, especially steel, together with operational improvements should contribute to maintaining good profitability in the upcoming quarters. Our efforts remain intense to keep Kepler well-positioned to capture the best projects in the market, accelerating growth and bringing predictability to our results.
I bring the presentation of our results of Q2 of 2023 to an end, and I invite everyone to join us at Kepler Day 2023, which will take place on September 6 at 10:00 a.m. in Sao Paulo at the B3 Arena. You can register on the Investor Relations website. It will be a special event with essential information about our differentiators and the company's future prospects. Don't miss it.
Operator, may we proceed with the Q&A session?
[Operator Instructions] First question from Mr. André Mazini from Citibank.
Piero, Polezi, congratulations for your results, for your migration to Novo Mercado. I have two questions. Number one, would be regarding the differences between Agro Industry and Farm segments. We did expect a drop in the Farm segment because the harvest was lower and BRL 50 million per company.
And there was also -- perhaps I would like to explain why a slowdown in Agri Industry because there are other funding-wise that don't depend on the harvest plan, and the harvest plan when we see the last harvest, but not this new one, but the one 2022-2023, there was a significant difference between the resources available and what that the farmers received. The difference was they approved BRL 5 billion for '22-'23, and I believe that the farmers only received BRL 1 billion. Do you believe that we will see something similar during this year, something that was approved? And every -- do you think that we will see less bottlenecks? And perhaps last year's bottlenecks affected last year's harvest plan.
Good morning, André, and thank you for your question. A timely question. I will start talking about the revenue then Bernardo will answer. And Paulo will talk about the funds. In order to initiate my answer, we have to understand that our sales don't immediately turn into revenue the next month. We have a certain delay. So sales realized today will become a revenue between 90 and 150 days. What we see here during Q2 are sales that were realized on Q4 of 2022 and Q1 of 2023. So we must bear this dynamic in mind because Bernardo will show you that each segment has its dynamic. The Agri Industry has a different dynamic that are more business decision. Farms are more connected to the harvest and the crops.
And the PCA availability, I will hand it over to Bernardo, so he can elaborate on this matter of Farms and Agri Industry that deserve greater attention from you.
Thank you, Piero. Thank you, André, for your question. After Piero's introduction, what we see that there is a lower demand, a lower sale from the farmer vis-à-vis 2022. You have to remember that '21, '22 were the best years for the farmer in Brazil, and they were highly capitalized when we see the materialization of their businesses. But now we see a significant growth in the sales toward the Agri Industry. And I would like to show you some.
There was a drop of BRL 190 million in revenue. These were sold in 2021 that became a revenue in 2022. We did not sell major projects in 2022. This is why we don't see our revenue. Now our sales of the Agri Industry grow at double digits. And we have now 3 projects with Agri Industries, and each one surpasses the BRL 70 million, and now they will be -- so they will be affected. We will see the revenue at the end of 2023 and the beginning of 2024.
Just adding a number of points. When we talk about the Farm and the farmers, during the past months, we've seen more activity. Perhaps the Agri Industries did not close the second semester because of last year. One of them was uncertainties in the Presidential race. And now in March, people have a clear view and they felt this in sales. And in terms of Farms, in May, June, July, we've seen greater moment when they start preparing their harvest plan, their crops. They also -- they are sure regarding the PCA, and we will see greater results now because this will be delivered throughout the second semester and during the beginning of next year.
So Paulo will talk about the PCA.
André, good morning, and thank you for participating in our call. So you will hear, we have the Plano Safra, the harvest plan. So within our PCA line, BRL 6.6 billion, 30% above BRL 5.1 billion of last year. André, your point is interesting. These funds are funds that when banks release these funds, and we don't know exactly 100% of these funds will reach the farmers.
Historically, 70% of the volume -- if we see things since the first harvest plan -- well, 80% reach to the farmers, one part is not released, then sometimes the banks don't release one part. What is important to understand that most of these funds are released. And we work with this calculation. If we use the historic average if we invest 70% over 6 points, we will have BRL 4.6 billion, BRL 4.7 billion that vis-à-vis BRL 3 billion, it would be BRL 1.6 billion additional funds. So we work with this flow. And we are reassured -- we feel reassured that these funds will enable a number of projects because we have had a year of high-time records. We celebrated the harvest plan and the figures that were announced.
Our next question from [ Mr. John Y. De Silva ], that is a shareholder.
Congratulations for your resiliency and results even in an adverse period. Could you talk about the actual flow of orders via PCA funding? I believe that these funds haven't been made available by the banks. Kepler is already manufacturing its materials based on a down payment of the client or does credit have to be approved in order to start the process?
Well, John, thank you for your question. It's interesting. And here, we can explain how -- what is the MO? The funds that are granted, they reach the farmer in stages. Therefore, last year, July -- on July 28, there was a protocol of bank funds. What does this mean? It means that the banks already have the funds available or have received authorization to grant the credit. This is positive on Slide 11 of our presentation. We placed this slide to demonstrate how much each bank can fund. So on July 28, this means that the bank can already start funding because they have the volumes.
Regardless of this, we do have order portfolio within Kepler that is waiting for these funds. It takes some time until the bank authorizes and until the clients forward their documentation. But despite this part of these values, which are relevant values that are within our order book, they are released, some farmers carry out down payments because they already have their documentation ready, they've done all the analysis, and with this, we are able to start the production in the plant. The process isn't so systematic. The farmer knows that they have the documents. They know that the protocol is ready. They know that the funds will be available in a period of time, and they authorize the production, so part of this portfolio that had come to a halt is already flowing within our plant.
Our next question from [ Mr. Herbert Tavares ], that is a shareholder.
Have you felt an improvement from the demand after the announcement of the Safra plan or the harvest plan?
Herbert, thank you for your question. We talked about the harvest plan, which was positive. And the Agri Industries were strong during Q1, Q4 last year. And the farmer is improving. We're going back to a normal seasonality. While 2021-'22, we are -- I would like to highlight, just to show the situation of sales. June was strong in sales. In July, it was the highest month of sales for Kepler. This was a combination of farmers and Agri Industry. The sales will be realized. We will see these results in the last quarter of 2023 and the first quarter of 2024.
Now [ Mateo Dietrich ], investor.
Last quarter, you mentioned that there was a lower sales closing. The CRM had the highest number of potential registered businesses. How did this portfolio evolved during the second quarter?
Thank you for your question again. Our portfolio is a strong portfolio. Our order book is higher than the order -- CRM order book that we had in 2022. So in July and June, we've seen an acceleration of all of this.
Our next question from [ Lucas Kastenavas ].
Could you give us detail why you contracted gross margin? I would like to have more visibility regarding your order backlog. And what can we expect for your deliveries in terms of deliveries on the second semester of 2023?
Thank you, Lucas. There has been a decline in margins for a number of reasons. During the first semester, we went back to a normal seasonality of 40% invoicing during the first semester and 60% of revenue during the second semester. This is normal for the industry. Of course, with lower volume, there were lower fixed cost, and this -- you can see a decline in margin. And the second semester has a lower -- the first semester has a lower margin than the second semester. This is normal.
The second point was, as we mentioned, closing during the first semester were lower. So as we are in a highly competitive market, we have minimum 6 or 7 players competing with us, although they are smaller players. We're talking about highly active players. So naturally, with lower closing deals, this declines margin, although the levels are extremely sound and our concern is to maintain these margins at sound levels.
And number three as well, if we compare it to last year, last year, the steel price dynamic oscillated, the steel prices went up, our stocks were lower. We could capture additional margins then today with the stable price of steel this year, this margin goes to normal levels. When we think about the future, a number of these conditions of steel. We will have higher volumes for higher absorption, and we expect to close more deals. We will have -- we have a more active market. We have a more demanding market that will allow us to close with lower margins.
Our next question is from [ Victor Katzman, Jr. ] from Portal SmartCap.
Congratulations for your results. Does the company intend to review the dividend policy, defining more objective criteria payout or defining new periods for these payouts?
Thank you for your question. There are other questions that are connected to dividends. And I will try to approach all the questions through this question. Now when we think about dividends, we will continue business as usual. Kepler is a company that has strong cash generation. Our cash position was BRL 267 million even in a semester where we had 2 major points that consume cash. We paid out dividends of EUR 80 million in April, and we paid 50% of Procer that accounted for BRL 51 million.
So this is a company that although there was a semester with lower level of activity from our Farms, you can see that the company has a resilient cash flow. Why? Because we capture growth. We don't consume a lot of working capital. We work with our customer's down payments. And this turns our CapEx -- this allows us to have CapEx. So at the end, we work with distributing the remaining cash, eliminating consumptions of working capital and CapEx, all what remains can be offered to pay out dividends. This is within the agenda of our Board.
We are always very careful when we plan the future, when we plan our future cash flow. We work with a minimum cash policy. We take into account risk factors seriously. And within these points, we are going to submit this value for the payout of dividends. So our cash generation was positive. This means that we will pay out good dividends.
Our next question from [ Mr. Erica Cellucci ], which is an investor.
Congratulations for your result. After the buyback of shares, what are the plans of the company for the cash surplus? And now how will the company invest the net cash? Will the administration do something -- what will the administration do about this?
Well, thank you for your question. Well, I think we answered the matter of cash generation, and I will answer capital structure and indebtedness. One of our differentials, and we always highlight this, is our capital structure. This is a company that has a strong balance. We have good cash generation, low leverage levels. And all of this is due to some reasons. We are on a business of volatility. We faced high interest rates, and we were concerned with cash because our sound position, our cash position allows the company to grow and leverage as well.
So today, there are a number of opportunities within our horizon. We have the organic opportunity. You can see that we increased our CapEx invested. We increased productivity significantly, the quality of products. The coating line that we will inaugurate during the next semester and other working capital points. This cash is dedicated to these points. We're also analyzing acquisitions. An example is Procer that we saw this semester. There are other opportunities connected to post-harvest that we're interested in and other opportunities like product innovation and the launching of new products.
For all of this, we need funds. But today, the company has a great space to grow and to leverage, and we will do this the best way possible so that the company grows even more. Our net cash level today, well, perhaps with opportunities, we will consume part of the cash. And in terms of debt, we will work within sound levels because this is something that a company like Kepler demands.
[Operator Instructions] Our next question from Mr. Lucas Laghi, XP.
When we think about the high level of parity of flat steels in Brazil, do you believe that in a potential scenario of a drop of prices in inputs, would it be probable to receive pressure on the unitary revenue?
When you think about the current competitive scenario in the industry, well, steel is the main raw material of our products. Steel accounts for 50% of our cost. Yes, we do agree with you. There is a matter of parity that can generate lower cost. And Lucas, we always follow closely what takes place with prices, and we always try to incorporate the best conditions where we transfer the cost of steel to the customer when it goes up and when it goes down.
Disparity is volatile. There are months where it's more and less favorable. We are observing in this semester until the end of the year is a more stable scenario. Regarding steel prices, the stability is important. The level is highly competitive for our products. And with the stability, we will be able to better price our products, which is extremely important for us. And this price translates into margin quality. The stability represents less vulnerability in prices, which represents better margins. So the price of steel is favorable for our business and helps us in our -- for our predictability. So the steel price is favorable right now for the company.
[Operator Instructions]
Well, I am going to answer 2 similar questions. One is, [ Weber, Roger ], he asks to elaborate on our investments on new coating. And also, [ Ali, Naser ], he wants to know about the plant capacity. We projected relevant CapEx in the long -- in the short run to readapt our operation to the high demand level in the short run.
Thank you for your question. I will start by the coating. Well, this coating was an investment decision announced at the end of 2021, approved for 2022 and 2023. These are BRL 30 million. It's an update, an overhaul of our industrial complex that impacts the quality of the coating and that is modern coating, highly productive, improving the flow within the plant. It improves the product and also the productive process, but it also -- it has social impact, be it also hazardness and working also the environmental. We believe there are no residues. This is important for us in a number of areas. It is being commeasured during this month in August, and we expect to inaugurate this coating unit on September 13. And we are constantly investing throughout the last years gearing part of our cash to overhaul our plants.
We want our 2 plants to be in competitive levels in terms of competitiveness and innovation. We've invested in innovation of the automation of our AGVs, in robots that allow us to make products of better qualities, also operation facility, we know -- and welding in the mechanic industry. So we use the knowledge of our operators in the plant, and they manage more than operate. These are investment examples.
Together with our investments in capacity, so throughout the past 3 years, we've invested in cut-and-fold equipment at laser that allows us to produce more and to follow up the demand. Today, 70% of capacity -- we're working at 70% of our capacity. We are always creating an annual plan to guarantee that we have the adequate capacity the next year. We are always concerned of meeting this capacity, and we invest. This is what we've done in the past years, and we will continue doing this. Wherever it is needed, we will invest in capacity, and we will continue revamping our plant.
Just for you to see, the media has talked a lot about the industrial area. They talk about the tax framework and they say that the industry is 15 years delayed, but not us. We are a modern and competitive company because we're always in the forefront in developing new things.
[Operator Instructions]
We have 3 questions about Replacement & Services, and I will elaborate on RS business. Replacement & Services represent 2 objectives. One is to be close to our customers and one is to capture the existing opportunities in over 18,000 units in Brazil. And here, we can see the maintenance of these units and even adequation of safety measures and also updates for greater flows. When the agriculture becomes more modern, volumes increase. A dryer of 50-tonnes hour can be adapted to 100-tonnes hour. And we do this throughout all Brazil.
It is interesting to mention to [ Bruno John and Filipe ], we're strongly investing in this area, and we've seen good results. We opened during this quarter, our distribution center in Sorriso, in the state of Mato Grosso, the main agricultural state in Brazil, and we've received approval from our Board for another additional one during Q3. And it's interesting to mention that in addition to our growth in revenue, we are growing in number of service customers. There is a double-digit growth and with a significant growth, we have over -- we've trained over 100% of people in our centers. So this is the labor that works with storage, and we know that this is a challenge for our customers.
Our next question comes from [ Mr. Thiago Teramae ], Investor.
What is your view regarding the facts that we see in the gray segments between Ukraine and Russia? Which are the main -- what are the possible business impacts when we think about Kepler Weber?
Thank you, Thiago, for your question. It is always important to analyze the macro issues that can impact our market. Regarding the war in Ukraine, we -- Kepler is indirectly impacted. It is positive. Ukraine is one of the major exporters of grains. The U.S., Brazil, Russia, and Ukraine are the major grain producers. Ukraine focuses on wheat and corn.
Regarding wheat, I would say that it is irrelevant for -- because Brazil sometimes is importer or exporter, but this doesn't impact us that much. What really impacts us is corn because Ukraine is a major corn exporter, and they are the fourth worldwide world corn exporters and with the export infrastructure and the difficulty of having a harvest in Ukraine because part of the arable lands are within the area of conflict.
So probably in the future, we will see Ukraine less present in the grain market, which strengthens us as an export player, not only in soybean where we're a leader, but we are closer be a leader in corn. We have a major crop, and we also have an in-between crop. And we are benefited, and we believe that this help will reassure that we will have 400 million, 500 million tonnes during the harvest. And this is why it is important to have excellent storage facilities for this.
Our next question from [ Rodrigo Schmidt ].
About the share buyback program until the end of Q2 of 2023, you have 12% of what is projected. As this -- do you will end this -- will you end this buyback program close to what you had already scheduled?
Thank you for your question. 12% of the approved volume has already been bought. This is 1.5% of the shares in circulation. This is a program that is valid for 1 year, but it could be renewed. We do understand that a company like Kepler that has good cash generation and can pay good dividend buyback. Share buyback is a mechanism to distribute profit to our shareholders. Yes, we will continue buying back until the end and we will follow the evolution.
We do believe that the price of the share presents an opportunity. There is a discount above what it should be, and we will use a good part of this cash to continue buying. And we will go into the end. After the end of the semester, we will submit once again to the Board if they want to create another program. But I believe that the share buyback program is a mechanism for our shareholders is something that is here to stay. We will continue buying back and our cash allows us to do this.
[Operator Instructions] Your next question from [ Mr. Nathan Misalidis ], [ NFTN Consulting ].
In addition of the super harvest, do you believe that El Nino can affect even more the grain production and a possibility of a positive surprise in your order book during the second semester?
Thank you, Nathan, and thank you for your question. We had 2 years of El Nino that was what was rainy, and now there's drought in the north and northeast, neutral in Mato Grosso, and rainy in the south of Brazil. And with this, what do we expect? We expect a more driving harvest in Paraná, Mato Grosso do Sul, Rio Grande do Sul, something that we haven't seen in the past 3 years.
The expectation will, in practice, what we have seen in one of these major projects is a co-op that is strong in Mato Grosso do Sul, and they are updating 10 of their units simultaneously to reduce the bottleneck in the reception line. It's a project of over BRL 100 million that has already been sold, and we believe that the other co-ops, mainly in the State of Paraná are also scheduling intense investment programs because they expect a full harvest in the southern region. We do have good prospects, sales and revenues during the last quarter and the first quarter of next year.
[Operator Instructions] Our next questions come from [ Daniel Hansen ] from Sweden family office.
Could you talk about process synergies? If the aggregated revenue and digitalizations and new sell projects. If there is digitization in your fleet, how -- what percentage of your fleet has the Procer services? And how much do you expect for the upcoming year?
Daniel, thank you very much for the Procer question. I'm answering a number of aspects. Well, Procer was an important acquisition that is to accelerate our presence and to capture connectivity in the field. We have a major base. And here, we joined the strength of both companies. In the financial terms, it contributed with BRL 14 million during the semester. And we want to unify processes to create better synergies from the commercial areas, supply, administrative synergies, aiming at accelerating more orders from Procer.
Procer is a company. We report Procer's services with replacement and spare parts. So it's similar to RS. You know that RS had a relevant participation in result and Procer is the same. And then one side, the Agri Industry dropped its revenue, Procer increased its revenue vis-à-vis last year. So this being said, our second semester is a semester with good prospects of Procer. They work with the seasonality of Agro, 40% during the first semester, 60% the second semester. So the second semester will be stronger than the first semester. This is a macro scenario.
Bernardo, if you would like to know more about the amount of connections?
Daniel, thank you very much for this question. We are excited with digital transformation, Procer accelerating the process to connect the different units, and this connection provides value to our customer. We believe that the revenue -- we will see Procer exceed the IoT because we have over 1,500 units connected in real time. We know how much soybean, how much corn we have in these units, what is happening exactly. And 50% of the Brazilian static capacity and the value that we generate to our customers is huge. You go to a silo of a unit and now we can provide this customer real-time data regarding the management, what is the temperature in the dryer, which are the risks if they have, and proper operation.
In addition to this, we are also focusing on connecting this real-time information from the unity to sell services and spare parts. For instance, when we realize that a unit presents constantly high temperatures in the center of their units, there mean that there is an investment opportunity to improve the cleaning machine. So this type of connection is being created. So we use the data from the unit, not only the operation and grain concentration, but also the maintenance of these units. We are extremely excited with the digitalization, where we've seen results in practice.
Our Q&A session has come to an end. Mr. Piero will have the floor for his final remarks.
Excellent. It is excellent to be able to answer all your questions and happy to see how interested you are in our companies. I would like to make my final remarks and to state about our scenario. I wouldn't say that we've reached our bottom because we're far from a crisis. During the second semester of last year, the beginning of this year, we faced a challenging market due to a number of reasons that we discussed with you. Nonetheless, what we observed is that since June, we've seen an acceleration in sales.
As Bernardo mentioned, our proposal levels is high. So now we have to close these proposals, and we're observing this. We see we see this materializing itself in the Agri Industry during the second quarter. We closed important projects as Bernardo -- we already have revenues due to important projects. And during the last 2 months, we've seen that the rural growers are interested in closing because the new harvest is being defined. They already have an expectation in terms of revenue and PCA helps people to make decisions. We believe that now we are embarking in this new cycle, '23-'24. Well, we will start embarking in more normal levels, leaving behind a challenging market that was far from being a crisis.
Now we are focused on continuing capturing markets and sales and to deliver. What we are selling today, we will deliver in 150 days. Now we are focused on greater plant capacity, more demand and delivery. This -- everything ends when we deliver our works or our structures. So yes, we will focus on delivering, guaranteeing deliveries with quality.
So our view, we are very optimistic, and we believe that in the upcoming months, we will see a market full of demands, a good harvest and the long-term trend is this, our harvest projection for '23-'24 is BRL 330 million. This is the projection in growing vis-à-vis this year. And in the upcoming 10 years, we will come close to the BRL 500 million. This is a major challenge for all the Brazilian agriculture that has been dealing with these challenges in the past decade and especially for us, because there is a lack of storage units, which creates turbulence in the chain, and we are sure that in the next years, this -- the farmers will have this in their decision process. It is no longer a priority and yes, critical for Brazilian agriculture. And Kepler is here to meet those needs.
Therefore, I thank all of you for your interest. I would like to highlight our invitation to our Kepler Day. It is in our IR site, and I do wish you a very good day.
Kepler Weber's Earnings Results Conference Call has come to an end. Should you have any further questions, send your questions, re@keplerweber.com.br. And have a very good day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]