Santos Brasil reported a R$ 9.1 million net income in Q318, reversing a net loss of R$ 1.0 million in Q317. Consolidated net revenue in the period totaled R$ 255.7 million, in a 23.3% increase. EBITDA (earnings before interest, taxes, depreciation and amortization) reached R$ 60.7 million, with a 23.8% margin and 18.1% growth. Pro forma EBITDA (R$ 40.0 million) grew 37.0%, with a 15.7% margin, and recurring pro forma EBITDA (R$ 45.9 million) increased 165.3% with a 18.0% margin*. With low leverage, Santos Brasil closed Q318 with a cash balance of R$ 247.7 million and R$ 38.9 million net cash. In the quarter, the company´s investments totaled R$ 11.5 million, of which R$ 3.2 million in Tecon Santos and R$ 7.9 million in Tecon Vila do Conde. According to Santos Brasil Economic and Financial and Investor Relations Director Daniel Pedreira Dorea, the solid income recorded in Q318 is the result of successful diversification initiatives in providing higher value-added logistics services. He also mentioned the growth and consolidation of the shipping services operating at the Company´s terminals, such as PIL´s Asian service at Tecon Santos, as well as the continuation of a strict cost and operating and administrative expense control program. ¿Santos Brasil is prepared to accelerate its operations¿ investment and expansion cycle¿, he says. Operating Income Santos Brasil reported a 21.1% growth in dockside operations at its three terminals - Santos (SP), Imbituba (SC) and Vila do Conde (PA) - in the third quarter of 2018, totaling 288,798 containers. In long-haul operations, which accounted for 72.5% of the total handled in Q318, the container import volume grew 5.2% and the export volume increased 30.0% over Q317. Coastal navigation operations grew 1.4% and accounted for 27.5% of the total volume handled. Transshipment operations (long haul + coastal navigation) accounted for 37.5% of the total operation volume, with a 32.4% growth, mainly due to the synergy between Maersk and Hamburg Sud operations at Tecon Santos. Tecon Santos handled 241,892 containers in Q318, with an 18.2% increase over Q317. Annualized capacity utilization at Tecon Santos (2 million TEU - twenty foot equivalent unit - per year) in the nine months of the year was 72%. The company´s market share in the port of Santos increased from 30.3% in Q317 to 35% in Q318. Recovery of the company´s market share in the port in 2018 mainly reflects the growth of PIL´s Asian service, which began in February 2018, and coastal navigation operations, which began operating larger ships. Tecon Imbituba handled 19,991 containers in Q318, a volume 58.9% higher than in Q317. The handling of long-haul containers, represented by the Asian ASAS service, accounted for 38.3% of the terminal¿s volume in Q318. Coastal navigation operations represented 61.7% of the total volume handled at the terminal. At Tecon Vila do Conde, the handled container volume increased 26.5% in Q318, reaching 26,915 units. In September, Tecon Vila do Conde achieved an all-time handling record of 10,602 containers. The volume of containers stored at Santos Brasil Logística increased 15.9% in Q318, at pace with the growth in imports at Tecon Santos. The Vehicle Terminal (TEV) handled 56,118 vehicles in Q318, a volume 24.2% lower than Q317, mainly reflecting the decline in exports to Argentina. *With the new accounting methodology adopted by the Company in Q118 for port terminal leasing, the Income Statement changed due to the alteration in treating the operating lease (off-balance) as financial - that is, the EBITDA of port terminals ceases to reflect lease expenses paid to the port authority, previously under the ¿Rental and Infrastructure Costs¿ caption. In order to maintain the comparative analysis with previous periods, the company calculated the ¿pro forma EBITDA¿

Santos Brasil, a reference in the country in container operations, extended its contract with PIL - Pacific International Lines. As a result, the volume handled at Tecon Santos for the shipping company on the Asia route will triple from 40,000 TEU/year to 120,000 TEU/year (one TEU is the equivalent of a 20-foot container). In January, Santos Brasil was awarded the contract for a new PIL service to Asia that includes a shipping line stopping every two weeks at Tecon Santos. Now, with the extension of the contract, the shipping company will have eight stops per month at the terminal. The extension of this contract after three months¿ operation reflects the market¿s receptiveness to the new service, and demonstrates the efficiency shown at Tecon Santos. It also reflects a resumption of the economy. ¿This growth demonstrates the client¿s awareness of our differentials, and that we can add value by giving more competitiveness to its operation¿, says Santos Brasil Commercial Director Marcos Tourinho. The first ship of the new service will call at Tecon Santos on Saturday the 12th. It is the Kota Lahir, with a 4,500 TEU capacity, coming from Buenos Aires and going to Asia. The vessel is scheduled to load 1,276 TEU at the Santos Brasil terminal. Tecon Santos is under Santos Brasil administration since 1997 and has a 2-million TEU annual handling capacity, a 596-thousand square meter total area and a 980-meter length quay. The terminal will receive R$ 1.27 billion in investments in coming years for increasing its handling capacity to 2.4 million TEU and maintaining the quality of the operation, which is now a reference in the country.

In a scenario of resumption of economic growth, Santos Brasil closed the last quarter of 2017 with indicators that underline the recovery of the Company´s financial results and the effectiveness of the organizational restructuring process. In Q417, EBITDA (earnings before interest, taxes, depreciation and amortization) was R$ 26.8 million, with a 12.7% margin. Recurrent EBITDA was R$ 30.2 million, with a 14.3% margin. Year-to-date EBITDA totaled R$ 83.8 million. The Company went back to recording accumulated net profit in the year, which reached the R$ 2.5 million level. In Q417, the financial result was R$ 20.4 million. Cash flow from operations and investments remained positive. The Company closed 2017 with a cash balance of R$ 270.7 million, net cash of R$ 37.7 million and a 0.45 negative leverage ratio, as measured by the net debt/EBITDA ratio for the last 12 months, and also amortized R$ 180.9 million (principal + interest) in the year. Consolidated net revenue totaled R$ 210.9 million in Q417, in a 0.1% increase over Q416. The organizational restructuring program conducted throughout the year reduced about R$ 45 million from the company´s fixed cost base. "In 2017, the Company underwent a challenging cycle and, in 2018, it begins a new stage of development and investment in its operations", says the Santos Brasil Investor Relations Director Daniel Pedreira Dorea. "Efforts to reduce costs will continue, as well as the strategy of improving internal processes focused on efficiency and productivity gains", he says. For 2018, the economic recovery scenario is expected to intensify and continue to drive volumes. Earlier this year, the company celebrated the closing of a new long-haul contract with the PIL shipping company¿s route to Asia, which expects to move 40,000 TEUs per year at Tecon Santos. Operational Performance Tecon Imbituba (Santa Catarina State), Logistics, Tecon Vila do Conde (Pará State) and the Vehicle Terminal (TEV) continued to show upward operational performance in recent months, in Q417, and throughout the year. Tecon Santos (São Paulo State) recorded a drop in volume, still reflecting the loss of the ESA navigation service operating on the route to Asia. In the consolidated period, total volume in the three terminals operated by the Company was 1,486,933 TEU, 3.2% lower than in 2016. In all, 968,694 containers were handled, 248,903 of which were in the last quarter of 2017. The long-haul ASAS service, which began calling in September on a weekly basis, was the main factor for the change in the volume level at Imbituba. The terminal in Santa Catarina increased the volume handled in Q417 by 97.8%, totaling 12,494 containers, about twice as many as in Q416. Handling of long-haul containers accounted for 36.2% of the total volume in Q417, compared to 7.1% in Q416. In the 2017 accumulated volume, operations grew 64.7%, totaling 40,197 units. The terminal showed an 80% growth compared to 2016, totaling 50,231 TEU. At Vila do Conde, growth indicators were equally significant. In comparison with 2016, 116,801 TEU were handled in the year, in a 12.7% increase. The increase in Q417 over the same period in 2016 was 15.6% in volume of containers handled, totaling 21,980 units. In cash, the Pará State terminal grew 18.3% over the previous year, totaling 77,823 units. Long-haul operations accounted for 74.7% of the total volume (60.6% in Q416) and grew 42.6% in Q417 compared to the same period of last year. Benefiting from the warming of the Brazilian automotive industry, TEV - the country´s largest terminal specialized in vehicles - handled 69,674 units in Q417, a 27.8% increase over Q416. Light vehicles accounted for 90.2% of the total volume in the period. In 2017, TEV operated with 96% of its capacity, handling 289,173 vehicles, which represents a historical high and represents a 60.8% growth over 2016. Exports accounted for 95.

Santos Brasil, a provider of complete port and logistics services and a reference in container operations in Brazil, opened two cold storage units for storing controlled-temperature chemicals. The air-conditioned unit that operates at 20 degrees Celsius, and the refrigerated unit, with an operating temperature of minus 18 degrees Celsius, were built at the company´s Distribution Center in São Bernardo do Campo (Greater São Paulo) to meet the requirements of Covestro, a world leader in high-technology polymers. "In seeking optimization and excellence in our supply chain after changing our business model, we found the way to strengthening it by developing our key partners for integrated results", said Tomas Becker, Head of Logistics Purchasing at Covestro. "Our Distribution Center is not only the first Santos Brasil unit to offer this kind of service, but it is also the only one in the entire ABC Paulista region in Greater São Paulo", says the Santos Brasil Logistics Operations Commercial Director Wagner Toffoli. The work we have done with Covestro for two years, which from this month will be reformulated and expanded, strengthens Santos Brasil´s expertise in storing non-flammable, flammable and refrigerated chemicals at its logistics units. "Several Covestro products require specific handling and must be stored at a refrigerated temperature for best preservation. We therefore developed a customized design for this differentiated type of cargo", Wagner Toffoli adds. With the new scope of the contract, Santos Brasil becomes Covestro´s main provider of port logistics services and, among other activities, it will be responsible for managing import container receival at Tecon Santos and Clia Santos. The storage of chemical cargo is being done at the 105-thousand square meter São Bernardo do Campo Distribution Center. "The improvement of our logistics chain with a partner with business vision and who also focuses on continuous improvement was the key element for Santos Brasil to meet our demand. Flexibility for investments in refrigerated solutions was further proof of the partnership we have built with them", Becker adds. In addition to refrigeration, the flammable products also require adequate facilities for this type of material. "We have smoke detectors, sprinklers, explosion-proof electrical installations, a trough system interconnected to a containment tank, alarm system, fire brigade and foam system for flammable liquids, as well as other items required for better serving our client", says the Santos Brasil executive.

Santos Brasil, a reference in container operations in the country, has just won the tender for a new service to Asia by PIL - Pacific International Lines. As of February 25, Tecon Santos, the largest container terminal in South America, will receive the new shipping line, which is expected to bring an initial volume of 40,000 TEU/year (one TEU is equivalent to a 20-foot container). Initially, PIL´s vessels will make bimonthly stops at the company´s main terminal. The first vessel, Kota Gunawan, left the port of Shanghai, China, last Thursday and is already on its route to the Brazilian coast. The shipping line´s vessels can transport 4,200 TEUs. "By securing this service, we can once again offer our customers a complete portfolio for all continents", says Santos Brasil Commercial Director Marcos Tourinho. "In an extremely competitive scenario in the Port of Santos, this achievement has a special meaning and demonstrates that the large shipping companies recognize the efficiency of our work", he adds. Tecon Santos is administrated by Santos Brasil since 1997. The terminal can handle 2 million TEUs annually, it has a 596 thousand square meter total area and a 980-meter long quay. The terminal will receive investments of around R$ 1.27 billion in the coming years in order to increase its capacity to 2.4 million TEU while maintaining the quality of the operation, which is now a reference in the country.

Santos Brasil has already started purchasing new equipment for modernizing its container terminal in Vila do Conde, located in the city of Barcarena (96 km from the Pará State capital Belém). The equipment is expected to arrive between the first and second quarter of this year, increasing the terminal´s operational efficiency. The equipment already purchased includes an MHC (Mobile Harbor Crane); a Reach Stacker for empty containers; two Reach Stacker type forklifts for full containers, and ten trucks for quayside operations. The acquisitions are part of Tecon Vila do Conde´s expansion and modernization project, which projects investments of R$ 37.2 million over the next two years, totaling R$ 129.04 million by 2033*. The new investments are fundamental for the terminal to be capable of meeting the growing demand for containerized cargo handling and storage in the port and ensure continuity of the quality in the services provided. The project will increase the terminal´s handling capacity to 163,000 TEU/year. Since the approval of the early extension of the term of the lease of Tecon Vila do Conde for a further 15 years, which took place on November 16, 2017, the company strived to obtain the necessary approvals from the authorities for the investments to begin as soon as possible, which took place formally on December 21. Tecon Vila do Conde has shown solid growth. It is strategically located in the Amazon River Delta, in a region of great waterway capillarity and proximity to the main international sea routes, with access to all continents directly, or through transshipment ports in the Caribbean. Santos Brasil has already invested more than R$ 133.8 million in Vila do Conde in expansion and improvement of the facilities, operational optimization, technology, workforce training and equipment since 2008, when it acquired the company that was leasing the terminal. (*2013-base)

Santos Brasil today signed an addendum to the contract of the Vila do Conde Container Terminal located in the city of Barcarena in Pará State (96 km from the state capital Belém), which provides for an early extension of the term of the lease for an additional 15 years. In consideration, the company will invest R$ 37.24 million in expanding and modernizing the terminal over the next two years, totaling R$ 129.04 invested by 2033. The project will expand Tecon Vila do Conde´s capacity to 163 thousand TEU/year. The new investments are essential for the terminal to meet the growing demand for containerized cargo handling and storage at the port of Vila do Conde. They will also ensure increased operational efficiency and continued quality in the provided services. Since 2008, when it acquired the company leasing the terminal, Santos Brasil has already invested more than R$ 133,8 million at current value in Vila do Conde for expanding and improving its facilities, optimizing operations, training the workforce, and acquiring technology and equipment. Tecon Vila do Conde has shown strong growth. It is strategically located on the Amazon River Delta, in a region with a great waterway capillarity and located close to major international sea routes, with access to all continents directly or through transshipment in Caribbean ports. In the first nine months of 2017, the terminal handled 55,843 thousand containers, 20% more than the in same period in 2016. New shipping routes to Europe and the Caribbean, as well as the development of container transportation in barges and inter-modality - goods transported seamlessly over waterways, roads and railways - have driven that growth. Santos Brasil´s new investments in the terminal are mainly intended for construction work for adjusting the yard and purchasing equipment. For the yard, the project provides for expanding the paved area and improving the drainage system; building a new entrance and exit gate; lighting; container blocks; platforms for reefer containers; electrical substations; and signaling. The project focuses on improving internal circulation, increasing efficiency, and expanding the storage area. The equipment that will be incorporated includes: 1 Mobile Harbor Crane (MHC); 3 Reach Stackers for yard operations; 5 small forklifts for warehouse operations; 2 empty container forklifts for yard operations; 6 tractor trucks; 9 semi-trailers; and 1 fixed scanner. The construction work is scheduled to begin in 2018, and will be concluded by 2019. It will done in stages and will have no direct impact on the terminal¿s daily operations. For Santos Brasil President Antonio Carlos Sepúlveda, condition improvements in the access to Vila do Conde, especially the Tocantins River waterway, the port´s connection to the North-South Railway and the conclusion of the BR-163 highway tend to emphasize the importance of the Vila do Conde port as an inducer of the Pará State´s economy. "With the new investments, we will be able to efficiently meet the increase in demand, adding competitiveness to our customers, and stimulating regional development", he said.

The digital revolution is increasingly gaining space and importance in people´s routine. Until last year, one billion homes worldwide had Internet access. A Fundação Getúlio Vargas (FGV) study shows that there are 168 million smartphones in use in Brazil, which represents 80% of the population. In line with such transformation, Santos Brasil is launching the Viva Voz APP, a new digital relationship channel with its employees. The tool can be installed on any Android or iOS operating system mobile device. The new APP enables keeping current with the main company news, asking questions, accessing policies and procedures, and also monitoring different indicators. The project is a partnership of the Communication, IT and People & Management areas, and plans to turn the application into the main interaction platform with the company´s approximately 3,100 employees in the Baixada Santista area, São Bernardo do Campo (Greater São Paulo area), Imbituba (Santa Catarina State), and Vila do Conde (Pará State). The Executive Manager for Communication and Competitive Intelligence Raquel Ogando points out that, in addition to increasing internal communication reach and agility, the application aims to stimulate the dissemination of a digital culture in the Company. "Technological advancements are driving companies around the world to review processes, products and services for adding more value for their clients or improving customer relationship. For this strategy to succeed, nothing more logical than starting the transformation in-house, introducing new habits in the team´s daily activities. This is even more effective in a company like Santos Brasil, which has innovation in its DNA", she says. In Raquel´s assessment, the application is the best way to communicate and interact with the internal audience, especially in companies with operations across the country and the size of Santos Brasil. "Nowadays, most people have a smartphone with at least basic Internet access. Everybody is connected", she concludes. The slogan adopted for the new APP´s launch campaign is "The information that you need in the palm of your hand". The Viva Voz App is administrated by TheAppBuilder, a company based in Northern Ireland and a key reference in creating applications focused on corporate users. TheAppBuilder´s SaaS (Software-as-a-Service) platform delivers enterprise applications that both entertain and enable increased operational efficiency to organizations around the world. Commenting on the launch of the Viva Voz App, TheAppBuilder CEO James Scott notes: "We are delighted to have Santos Brasil as our first major customer in Latin America. In recent months, teams from both companies worked in collaboration to prepare the application for the launch. We look forward to witnessing the benefits that the application will bring, and to collaborate with Santos Brasil in future enhancements." The IT Director Ricardo Abbruzzini Filho points out that Santos Brasil has been a pioneer in innovative information technology solutions for its businesses. "The Viva Voz APP is another tool that reflects the Company´s pioneering spirit. We look for a partner with a history of excellence in the market, and integrate our systems into a robust and user-friendly platform that will integrate even further in the next phase, benefitting the end-users", he explains. According to the Director of People & Management Alcino Therezo Junior, the new tool´s main benefit is in strengthening employee/company relationship. "New technologies, when used smartly, help shorten distances and help promote knowledge management within the company. The Viva Voz APP is aligned with this concept, and is expected to become a gateway for new human resources services, such as remote education."

Santos Brasil was selected by Allink Neutral Provider (a company recognized for its experience and tradition in LCL cargo consolidation, and now also in air cargo) as its main provider of port logistics services in the Port of Santos. The new customer strengthens the Company´s portfolio in the NVOCC (Non Vessel Operator Common Carrier) market. Cargo handling and storage, road transportation between ports (DTA), as well as consolidation and deconsolidation processes, are part of Santos Brasil´s scope of work. It took two years of negotiations to sign the partnership with Allink, one of the largest NVOCC companies in the country and in the Port of Santos. According to the Santos Brasil Commercial Director for Logistics Operations Wagner Toffoli, investments were made in technology and specialized labor for the exclusive services to be provided to the new client. In terms of technology, the highlight is in the deployment of RFID (Radio Frequency Identification), which includes smart tags. Small chips (transponders) are being placed in Allink cargo for automatic data capture, enabling real-time identification - no longer requiring manual and individual barcode scanning. "We provide agility for tracking cargo and in the operation, increasing our logistics capacity - not to mention security, which is an essential requirement for any client. In Allink´s case, when we receive cargo, in a matter of seconds, each label shows us, for example, the destination of the goods, streamlining the stuffing process", says the Santos Brasil Commercial Director for Logistics Operations. "Allink selected us because of our structure, the services offered, and essentially the similarities in both companies´ management models based on innovation, technology, and a high level of corporate governance. These factors were key to closing the contract", Toffoli explained. "When selecting a partner, we make an in-depth assessment. Our main focus for the decision is excellence in client services, the experience that we can provide when contracting our services and, above all, partnering with serious and trustworthy companies with the same philosophy and values that are rooted in our DNA", says Allink Commercial Director André Gobersztejn.

The operational reorganization process initiated in Santos Brasil at the end of last year positively impacted the third quarter of 2017, driving a significant recovery in the Company´s financial results. One recovery indicator in Q317 was the EBITDA (earnings before interest, taxes, depreciation and amortization) of R$ 29.1 million with a 13.9% margin. Recurrent EBITDA was R$ 17.3 million, with an 8.3% margin. In the first nine months of the year, recurring EBITDA totaled R$ 54.5 million, with an 8.8% margin. The Company went back to recording net income, which was R$ 1.0 million in the period, reversing net losses of R$ 1.1 million in Q316 and R$ 20.7 million in Q217. With low leverage, Santos Brasil closed the period with a cash balance of R$ 232.3 million, and its net debt was reduced from R$ 5.8 million in Q217 to R$ 2.1 million in Q317, which is equivalent to 0.03 times the EBITDA of the last 12 months, and also amortized R$ 48.7 million (principal + interest) in the quarter. Consolidated net revenue totaled R$ 209.3 million in Q317, down 6.0% over Q316. According to Santos Brasil Financial and Investor Relations Director Daniel Pedreira Dorea, the focus on process innovation and non-strategic cost elimination seeks not only to reduce fixed costs and operating expenses, but also to increase productivity and the quality of services provided. That strategy reflects in maintaining the rising operating performance recorded in recent months at Tecon Imbituba (Santa Catarina State), Logistics, Tecon Vila do Conde (Pará State) and the Vehicle Terminal (TEV). On the other hand, Tecon Santos remained stable if the volume of the navigation service ESA, which operates on the route to Asia, whose contract was terminated at the end of April this year, is not taken into account. The container terminal in Santa Catarina State increased its handled volume in Q317 by 87.0%, totaling 12,579 containers, with an 764.8% increase in long-haul and 50.4% in coastal shipping. The positive result was driven by the start of a new long-haul service to Asia (ASAS) in September. Five of this service¿s ships were operated in Q317, totaling a dockside handling volume of about 1,670 containers. At Vila do Conde, growth indicators were equally impressive. In comparison with the same period in 2016, the volume of containers handled increased by 25.5% to 21,281 units, up 21.4% and 37.8% respectively in long-haul and coastal shipping operations. Coastal shipping represented 27.7% of the total volume handled in the Pará State terminal (25.2% in Q316). The TEV still reflects the good performance of vehicle exports in the domestic scenario in Q317. TEV, the country¿s largest vehicle terminal, handled a total of 74,080 units in the quarter, in a 110% increase over Q316. Growth in exports reached 121.1%, while imports increased by 3.8% over Q316. Vehicle export operations accounted for 95.3% of the units handled at the TEV (90.5% in Q316), and light vehicles accounted for 91.3% of the volume in the period. The Company also recorded a 36.7% increase over Q316 in the volume of containers stored at Santos Brasil Logística, totaling 12,673 units. This performance was due to the greater retention of import containers and new contracts signed with cargo agents and NVOCC (Non Vessel Owning Common Carrier). Due to the termination of the service to Asia, Tecon Santos handled a total of 204,699 containers in Q317, down 18.8% over the same quarter last year. The Company´s market share in the Port of Santos, due to this scenario, decreased from 39.5% in Q316 to 30.3% in Q317. The termination of the ESA service contract also had an impact on the total consolidated volume of containers handled at the three terminals, which closed Q317 with 238,559 units, or 13.5% less than in Q316. If the ESA service were not taken into account, the total consolidated volume would have increased

Executives from Santos Brasil - a leader in providing port and logistics services for the container chain - met today with the Rio Grande do Sul business community to present the strategic advantages of the Imbituba container terminal that the Company has operated for nine years in Santa Catarina. Porto Alegre exporters and importers participated in the event, together with Santos Brasil Commercial Director Marcos Tourinho and Operations Director Marlos Tavares, and representatives of SCPar, which administrates the Santa Catarina port. Santos Brasil is headquartered in São Paulo, and wishes to attract the interest especially of companies in Porto Alegre and the North of the State, offering efficient services and significant differentials. One of them is the new long-haul navigation service to Asia, which will begin on September 1 with weekly stopovers to serve the entire market in the country´s South. There will be 13 dedicated vessels, including the Hyundai Loyalty, currently the largest container ship to operate on the Brazilian coast. "The company is focusing on developing business with exporters/importers in Rio Grande do Sul, a state that has a strong agribusiness and good possibilities in other markets, such as the petrochemical center, the metalworking center, automobiles, plastic derivatives and the tobacco industry, as well as agricultural machinery", Tourinho explains. "We want to create a new logistics alternative for cargo in the South of the country with a very attractive cost-benefit". The Imbituba container terminal is privileged for being located in an open sea, deep-water cove. This means that it can receive the largest ships already operating on the Brazilian coast. "The trend in the shipping market is for increasingly larger ships, with cost savings and economies of scale for all involved", adds the executive. Those large ships have no access restriction in Imbituba, whether in draft (depth) or in bad weather. It is a port with a low history of bar closure from bad weather. "Service reliability is critical for foreign trade", stresses Operation Director Marlos Tavares. In addition, the Port of Imbituba is the most competitive one in the region from a financial standpoint, with logistics and port costs around 30% lower than those of its competitors. Its location in southern Santa Catarina State is strategic, as it is equidistant from Porto Alegre (Rio Grande do Sul State) and Curitiba (Paraná State) by about 360 km, and is 90 km away from Florianópolis, with easy access by the BR-101 highway and the regional rail network.

Santos Brasil closed the second quarter of the year showing operational growth in most of its units in the Country: Tecon Vila do Conde (Pará State), Tecon Imbituba (Santa Catarina State), Vehicle Terminal (TEV) and Logistics. Only Tecon Santos (São Paulo State) recorded a decrease compared to the same period last year due to the termination in April of a contract with a shipping service that operates on the route to Asia, as already announced by the company. The container terminal in Santa Catarina recorded a 38.0% increase in the total volume handled: 623.8% in long haul and 21.6% in coastal shipping. It noteworthy that, from September 1st, Imbituba will receive a new long-haul service to Asia, which has the potential to add around 75 thousand TEU (a unit equivalent to a 20-foot container) per year to the terminal´s volume. Performance continued to rise at Vila do Conde in recent quarters, with a 5.1% increase in the volume of containers handled, totaling 17,204 units, and 5.0% and 5.1% growth in long-haul and coastal navigation operations, respectively. In June, ANTAQ (the Brazilian National Agency for Waterway Transportation) approved the Technical, Economic and Environmental Feasibility Study, recognizing the feasibility of an early extension of the lease on the facility. The document is now under review by the Ministry of Transport, Ports and Civil Aviation for a later signing of the additive term to the contract. The TEV continued to reflect the good performance of vehicle exports in Q217, and showed a 46.3% increase in shipment operations compared to Q216. In all, exports accounted for 94.2% of the units handled (89.8% in Q216), and light vehicles accounted for 91.2% of the volume. The Company also recorded a 16.5% increase in the volume of containers stored at Santos Brasil Logística in comparison with Q216, totaling 10,247 units. This scenario was due to a higher retention of import containers, which went from 49.2% in Q216 to 53.8% in Q217, and of new contracts signed with cargo agents and NVOCC (acronym in English for Non Vessel Owning Common Carrier). Due to the termination of the service to Asia, Tecon Santos handled a total of 204,573 containers in Q217, down 8.1% over the same quarter of last year. This result influenced the Company´s market share at the Port of Santos, which declined from 39.1% in Q216 to 32.9% in Q217. The termination of the service also impacted the total consolidated volume of containers handled at the docks of the three terminals, which closed Q217 with 229,425 units, 6.2% less than in Q216. In Santos Brasil´s services mix, coastal shipping operations increased their share in the total volume handled, which was 19.9% in Q217, as well as transshipment, which represented 37.3% in the period. Customs warehousing increased by 6.7% in the container port terminal segment. Financial indicators The Company closed Q217 with an EBITDA (earnings before interest, taxes, depreciation and amortization) of R$ 4.3 million, and a 2.3% margin. Recurring EBITDA totaled R$ 37.1 million in the half-year, 14.9% higher than in the same period last year. Consolidated net revenue totaled R$ 191.1 million in Q217, in a 5.5% decrease over Q216. The second quarter of the year recorded a net loss of R$ 20.7 million, adversely impacted by the decrease in volume of containers handled and by non-recurring costs and expenses arising from the ongoing organizational restructuring. The non-recurring impact of these expenses is due to labor terminations and indemnifications, as a result of the Company´s reorganization. With low leverage, Santos Brasil closed the period with a cash balance of R$ 270.8 million and a net debt of R$ 5.8 million, equivalent to 0.1 times the EBITDA of the last 12 months; R$ 55.3 million (principal + interest) were amortized in thhe quarter.

John Deere, one of the world´s largest agricultural and construction equipment manufacturers, is Santos Brasil´s new customer. The agreement strengthens the Company´s logistics expertise in the machinery sector, and involves all of its operations in the Baixada Santista region for both exports and imports of John Deere vehicles and parts. According to the Santos Brasil Logistics Operations Commercial Director Wagner Toffoli, the partnership - which took one year to be concluded - covers 100% of the import processes performed in the Port of Santos. ¿It is a robust contract, as it also adds other services including road transport and stowing export containers, offering the customer our full port to door concept¿, he says. John Deere´s cargo comes mostly from the United States and Europe. Those imports arrive at Tecon Santos, where they are stored in the terminal itself or at Clia Santos - a Santos Brasil logistics unit of located off the Anchieta highway to São Paulo. The process ends with the cargo being transported to the John Deere units located in Campinas and Indaiatuba (São Paulo State) and Montenegro and Horizontina (Rio Grande do Sul State), on Santos Brasil¿s own road transportation fleet. In export, Santos Brasil also stows parts of tractors, excavators, backhoes, loaders and other products in containers for later shipment. Assembled machinery is shipped on RoRo vessels from the Vehicle Terminal (TEV), which has been under the Company¿s administration since 2009 and today is the country¿s largest in this type of operation. John Deere has been in the market for more than 175 years, has business in around 160 countries, and is listed on Fortune Magazine¿s ¿50 World¿s Most Admired Companies¿ ranking released in February this year. In 2016, it was voted the most innovative company in Brazil in the ¿Vehicles and Parts¿ category of the Valor Inovação award. ¿We believe that this relationship will enable us to improve cycle times and services provided. We must also emphasize that the implementation has been very well conducted, with all risks being mitigated¿, says John Deere Logistics Manager Marcos Roncari. In June, Santos Brasil participated in one of the main Logistics events, the 2017 Worldwide Logistics Partner Conference, which takes place at the John Deere headquarters in Moline, Illinois, USA, and brings together the world´s leading logistics providers for getting to know their operational processes.

As of August 1, Santos Brasil, a reference in port container operations and a provider of complete logistics services, will handle the ASAS long-haul service to Asia at its container terminal in Imbituba (Santa Catarina State). The additional volume expected from the new line is 75 thousand TEU (TEU is a unit equivalent to a 20-foot container), with an about 70% export and 30% import cargo mix. The joint-venture service of five shipowners will call on a weekly basis, and it presents itself as the best option to serve Southern Brazil¿s import and export markets. ¿Our terminal stands out in the port scenario by offering our customers competitive advantages, such as the ability to handle large vessels, with no maneuvering limitations or weather restrictions¿, said Santos Brasil Commercial Director Marcos Tourinho. Tecon Imbituba is privileged for being in an open sea inlet with a 15.5-meter depth, and is strategically located in Southern Santa Catarina, 360 kilometers from Porto Alegre (Rio Grande do Sul) and Curitiba (Paraná), and 90 kilometers from the state capital Florianópolis, with easy access by the BR-101 highway and the regional rail network. The terminal also offers Depot services inside the operation, as well as logistics support for importers and exporters. The new service that will begin calling at the terminal has 13 dedicated vessels, including the Hyundai Loyalty, currently the largest container carrier to operate on the Brazilian coast. The vessel has a capacity for up to 8,600 TEUs, is 340 meters long, has a 45.6 meters beam, and a maximum draught of 14.5 meters. Tecon Imbituba is administrated since 2008 by Santos Brasil. It can handle 450,000 TEUs annually, and has 207,000 square meters of total area and 660 meters of mooring quays. In the same port complex, Santos Brasil operates the General Cargo Terminal (TCG), which is establishing itself in the South of the country as an important concentrating facility for differentiated and large project loads. Since 2008, the Company has invested more than R$ 520 million in expansion work, equipment acquisition, and training.

Santos Brasil clients have an exclusive performance monitoring tool. it is the first of its kind in the Port of Santos, and can now be accessed at the company¿s Client Portal (https://www.santosbrasil.com.br/tecon-santos-sistemas/Login.asp). Its purpose is to deliver gains in competitiveness for the company´s clients. The Performance Panel is available at Tecon Santos and at the Clias (Logistics and Industrial Customs Centers) in Santos and Guarujá, and will give greater autonomy to importers, exporters, document agents and freight forwarders (NVOCC), who can issue customized analytical reports from each stage of the operational process and monitor its efficiency. The tool also provides quantitative reports for containers and breakbulk cargo. ¿We are enhancing our service tools for our clients to be fully capable of evaluating their performance in real time, securely and in a totally transparent manner¿, explains the Company´s Logistics Operations Commercial Director Wagner Toffoli. The Panel is customizable according to the needs of each client, and includes information such as cargo presence, loading time, unloading time, storage, and other data. Reports can be issued in stages or in a single file and updated every six hours, enabling daily monitoring as necessary. ¿From analyzing the data, we can improve our clients¿ logistics planning, indicating, for example, where to reduce inventory costs, saving time and money¿, adds the executive. The development of the Performance Panel is a result of the partnership between Santos Brasil¿s Commercial, IT and Operations areas. According to Wagner Toffoli, all the company´s clients, including ship owners, already have several online options for monitoring their operational processes. ¿This is another exclusivity we have developed for meeting our clients¿ demand, which will directly benefit the market. Through it, we are reiterating our commitment to excellence in providing logistics and port services¿, adds the executive.