Trade Accounts Receivable

12 Months Ended

Dec. 31, 2025

Trade Accounts Receivable [Abstract]

4 Trade accounts receivable

Trade accounts receivable correspond to amounts owed by customers in the ordinary course of business. If the receivable is due within one year or less the account receivable is classified as a current asset, otherwise the receivable is classified as a non-current asset. Accounts receivables are presented at amortized cost less any impairment. Accounts receivable denominated in currencies other than the entities functional currency are remeasured using the exchange rate in effect at the end of the reporting period. The age of accounts receivable along with the expected credit losses and present value adjustment are as follows:

	December 31, 2025			December 31, 2024
Current receivables
Domestic sales		2,278,321			1,994,667
Foreign sales		1,285,531			1,176,603
Subtotal		3,563,852			3,171,270
Overdue receivables:
From 1 to 30 days		577,982			444,687
From 31 to 60 days		45,695			61,314
From 61 to 90 days		19,669			20,603
Above 90 days		104,315			130,845
Expected credit losses		(76,685	)		(89,060	)
Present value adjustment ⁽¹⁾		(2,904	)		(4,119	)
Subtotal		668,072			564,270
Trade accounts receivable, net		4,231,924			3,735,540

⁽¹⁾

The receivables are adjusted to present value using the interest rates applicable to the Group contracts present value using interest rates directly related to customer credit profiles.

The weighted average discount rate used to calculate the present value of trade accounts receivable on December 31, 2025, was 5.60% p.y., and 5.52% p.y. at December 31, 2024. Realization of the present value adjustment is recognized as deduction item to sales revenue.

The Group carries out credit assignment transactions with financial institutions, which these institutions acquire credits held against certain third-party customers in the domestic and foreign markets. The assignment transactions are negotiated with a transfer of the risks and benefits to the financial institutions - described within note 8 related party transactions.

Within trade accounts receivable, the diversity of the portfolio significantly reduces overall credit risk. To further mitigate credit risk, parameters have been put in place when credit is provided to customers such as requiring minimum financial ratios, analyzing the operational health of customers, and reviewing references from credit monitoring entities. The Group does not have any customer that represents more than 10% of its trade receivables or revenues.

Expected credit losses are estimated based on an analysis of the age of the receivable balances and the client’s current credit rating status. The Group writes-off accounts receivables when it becomes apparent, based upon age or customer circumstances, that such amounts will not be collected. The resulting expected credit losses are recognized in the statement of income within “Selling Expenses”. Below are the changes in the allowance for expected credit losses:

Changes in expected credit losses:
	December 31, 2025			December 31, 2024			December 31, 2023
Balance at the beginning of the year		(89,060	)		(84,913	)		(82,636	)
Additions		(31,732	)		(17,195	)		(9,906	)
Write-offs/Reversals		49,485			7,684			9,580
Exchange rate variation		(5,379	)		5,364			(1,951	)
Balance at the end of the year		(76,686	)		(89,060	)		(84,913	)