Companhia Energética de Minas Gerais

Ladies and gentlemen, thank you for waiting. Welcome to CEMIG's second quarter 2021 conference call. We inform that all participants will be in listen-only mode during the company's presentation. After that, there will be a Q&A section when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Now, I would like to turn the floor over to Mr. Antonio Carlos Velas Braga. Please, Mr. Braga, the floor is yours. Good afternoon, everyone. I am Antonio Velas, CEMIG's Investor Relations Superintendent. We now start CEMIG's second quarter 2021 earnings goal and webcast. with the following executives. Rinaldo Passanese Filho, CEO. Dimas Costa, Chief Commercial Officer. Eduardo Soares, Chief Legal and Regulatory Officer. Leonardo Jorge de Magalhães, CFO and IR Officer. Marnay Tadeus Antunes, Chief Distribution Officer. Mauricio D'Alenze, Chief State Power Participation Strategist. Environment and Innovation, and Tadeu Carneiro da Silva, Generation Transmission Officer. This broadcast can be followed via the phone numbers in Brazil, 5511-3127-4970, or in the EOS 1-516-300-1066, as well as on the links available in our RI website, ri.temig.com.br. To the initial remarks, I would like to turn the floor to our CEO, Reynaldo Passanaggi. Good afternoon. Good afternoon, everyone. It is a pleasure to be here in this conference call bringing to you the results of the second quarter of CEMIGI. I'm going to go straight to the presentation. You can turn to page three on CEMIGI highlights. Here we have our main highlights. I would say that the main message is about a consistent recovery, a very robust recovery on the company's results. These are robust figures that prove our success in this turnaround in this company's recovery in terms of financial results. You can see our final results. In this quarter, we reached an EBITDA of $2,590,038% higher than the same quarter last year, and an income of almost $2 billion. So in a single quarter, the company reached $2.6 billion in EBITDA and $2 billion of net income. Here also we have the results for the first six months, which are very significant, 4.4 billion in EBITDA and 2.4 billion of net income. Just to give you an idea and, you know, and we are here every day and sometimes we forget to make, you know, long-term comparisons. And I thought it would be nice to have this long-term comparison now. And I would like to compare that to 2018. So if we compare the results in a single semester, Semigi is delivering more than the whole year in 2018, whether in EBITDA or in a profit. In a single semester, in six months, our EBITDA was 4.4 billion rials in six months. In 2018, it was 3.7 billion rials. So we are 17% higher in six months of the results that we reached in 2018. And the same thing applies to net profit. We are saying that in six months, we had almost 2.4 billion rials of net profit. to a net profit and to an 18 of 1.7 billion. So I would say that just here you can see that consistency in the results, that very sound results that the company is delivering according to its strategic planning. And where these results come from? Well, first from a huge effort in terms of operating efficiency, which takes us to the second topic, OPEX and EBITDA for distribution. we were already delivering in the last quarters the OPEX that was within the regulatory limit. And now this is the first time in history that we were able also to deliver our EBITDA that is higher than the regulatory limit. So today we have an OPEX that is 10% in average lower than the maximum regulatory limit. maintaining quality, we are able to have lower expenses than the regulatory OPEX establishes. And at the same time, our EBITDA was over the regulatory limit. And we are increasing collection, reducing losses, increasing disconnections, and that's how we were able to get such a good EBITDA over the regulatory limit. And here we should take a look the whole picture and make a comparison. Once again, turning back to 2018, we were not within the regulatory OPEX and EBITDA. We were 5% lower, or rather 5% higher than our regulatory OPEX, and we were 22% lower than the regulatory EBITDA. So if we consider that difference, we have an adjustment of almost 250 million now over the regulatory EBITDA. If we consider the number that we had in 2018, that was lower than the regulatory EBITDA. So these are very significant results that show our effort of operating efficiency and improvement in the company's performance because EBITDA It's not only operating expenses, but also a good collection practice, low provision and low delinquency. So we are very pleased to announce that EBITDA, $119 million above the regulatory EBITDA. In 2018, it was 22% lower than the regulatory EBITDA. So this is an adjustment of almost 30% in only three years. The same thing we can say about our quality indicators. This is our all-time low for DEC, 9.46 hours. Starting the end of last year, we were able to be under 10 hours in that indicator. And obviously, this is a very positive scenario when we have a long-term vision. And we have been able to do that thanks to our legal successes. With no significant tariff impact for consumers, our tariff adjustment was only of 128%, zero for residential consumers. And this is the lowest in this industry in the second consecutive quarter because the thanks to our tax credits, PIS and COFINS, that we are reimbursing our consumers. So we have been able to do that with no impact and tariffs for end consumers. And that is the second adjustment that we don't need to adjust anything. And finally, here we have a challenge, and we want to accelerate these $122 million million in investment. They are very close to what we carried out in 2018. So here in six months, we have the same amount of 2018, and that's 20% higher than last year. But of course, for our objective, which is the largest investment program in history, we still have to accelerate, and we have this challenge. of accelerating it in the second half of the year. And Leonardo Anvelis will comment more on that. And here we are highlighting operating topics. EBITDA and profit that are records, when we do that historical comparison, we can really see that they more than double the results. And when we compare that to a few years ago, these are, Fantastic results in terms of efficiency, whether by meeting the regulatory optics or the regulatory epida in the first time in the company's history. Excellent quality indicators. Understanding the country's situation because of the pandemic and the lower tariff adjustment in the industry for two consecutive years. and generating value by investments with the largest investment program in the company's history, which are these 22.5 billion reals, for the next five years. This is on the operation point of view. I think we can move on to the next page now. And here we are bringing some non-recurring topics. First, the Buyback of Eurobonds, and Leonardo and Valis will go into that, but this was a successful conclusion. We bought back $500 million of our bonds and eliminating, therefore, a risk regarding the FX rate. That's something that the company had, and regarding those securities also. The recognition of GSF, $910 million, with the extension of the plant's rate, Right? And this is interesting because this is an immediate catch. Effectively, we gained more or less two years, two years and something in terms, in plants that were doing 24, 20, 25. And now we had a reprofiling. of RBSE and also updating of assets using our KE, and that's adding 211 million to our net profit. And here we have our strategy also, which is the acquisition of PetroLagoa's Transmissoria de Energia, 40 million reals. That shows our objective. Or going back to the market, also in terms of analyzing acquisition opportunities, if they represent synergy with the company. And this is a substation that connects two of our own lines. So exactly because of that, it has a lot of synergy, and this acquisition will generate a lot of value. And obviously, we should highlight a sound cash position. This is very important in a scenario. in which our spot price is high, we have GSF, and so there is the need of cash disbursement of CDA because this is only going to come next year in distribution adjustment, but this is a fund cash position of almost $7 billion and an EBITDA net debt ratio in the 0.91 and a minimum ratio here. So these are the main highlights that I wanted to bring to you. and we'll be available to take your questions in the Q&A session. And now I turn the floor to Leonardo and Valis. But when you see the whole picture, and I think that's what's interesting, it is really to see, in fact, how the company is improving. And I think this is our objective to keep delivering more and more within our strategic planning this recovery for CIMIGs. Thank you, Reynaldo. Good morning. Actually, good afternoon, everyone. And thank you for being with us here in this conference call for the second quarter earnings of CIMIGI. So now we are going to go into the details about the renegotiation of hydrological risk. Basically, here we have the plans where we have the concessions Reynaldo already mentioned. We highlight here Embarcason and Nova Poncho. They have cash generation. That is high, and we were able to have additional cash generation for two more years, up to 2027. It's important to have this cash generation preparing the company for renewal processing this concession and a possible payment of a concession grant fee then. Right now, this is a non-cash effect. It's only in the results. But further on, I mean, in the future, this extension will represent a very significant, cash generation for the company in 2026 and 2027. We understand that this was very important. And in the prior quarter, we mentioned that we would possibly post this in this quarter, I mean, post these effects. And here are the effects posted into our financial statements. In the next slide, we have our Eurobond buyback. We believe this is a very important highlight. In our meeting with investors in May, We mentioned that if we had an opportunity to restart the process of buying back the bonds still in 2021, if there was a window of reduction in the FX rate, we would start the process. And today, the FX rate is over 530, but there was a moment in which it was close to 5 reals, and we took the opportunity. We then allotted... the spread at 5.09 and we had the opportunity to start and conclude the bonds operation. It was successful. There was a demand of $774 million with a premium of 16.25%. This premium, considering the face value of the activity, shows how the company is improving its rating and I think the premium represents that improvement in the credit quality of the company. Therefore, the effects and this withdrawal would involve 3.107 billion in payments. We withdrew 500 million related to these bonds. And the net cash effect was 2,309,000. the operation was concluded in August. So now in this third quarter, we are going to have a non-recurring effect, which is the premium payment with an added effect for social contribution and income tax of $325 million in our financial statements. In the third quarter, that is, it's not posted yet, but at the end of the day, we believe this was a very important movement to reduce our affects exposure. And more than that, considering that we have a partial hedge, also a better debt profile. And when Valis talks about that, it's going to be very clear how the company now has a much better debt profile because we removed $1.5 million for 2024. We were $8 billion to a much less amount, we believe, this effect is better for the company in its cash management and debt profile. On the next slide, we have the effects of the bond. In the second quarter, the total effects were 617 million credit, but looking only at the hedge, we have a negative effect of 426 million because of interest rates. Considering that we switched our hedge, We changed FX variation by CDI, considering CDI was up in this last quarter. That has a negative effect on the pricing of our hedge. But, on the other hand, considering the FX rate was down, we ended the quarter close to $5 that had a positive effect of $1,043,000. So, in the quarter, we have a positive effect. and the balance sheet of the company of 617 million because of these operations that involve the updating of the principal amount of our debt, of the bond, and also how much our hedge adjusted to market value used in that pricing. Moving on, this is an important highlight, and we mentioned in prior quarters the tariffs adjustment of the company was approved on May 25th by ANL. That tariff review, considering all consumption classes, was of 1.28, but for residential consumers for the second year in a row, this was zero adjustment. That is, during the pandemic, our consumers, residential consumers, had no tariff adjustments, and we believe this is an important piece of data that helps the company to maintain the delinquency level very low, and we'll talk more about that in a few minutes. And that was thanks to the beginning of reimbursement of PSPASEP and COFIN's tax credit. And we started reimbursing those amounts. These total $4 billion, and these amounts were considered in the last two tariff adjustments, and we started already reimbursing $1.5 billion. billion in these credits. We believe this was an important event for the company. We were successful, and the company also is benefiting consumers thanks to its proactive action in 2008 when they started this lawsuit. Moving on to the solar investment program, we had $822 million invested up to June. The total amount so far is $2.9 billion. This is a great challenge for us to be able to carry out all this plan by the end of the year. This first six months was the one with the greater challenges in terms of acquiring equipment, considering effect variation, and also the price increase for steel in the international market. All of that caused this investment process in the first half of the year to be more challenging. And we hope that in the last semester, this investment program, it's accelerated. And just to give you an example, we have around 30 substations to be concluded in the second half of the year. And because of that, we understand that the second half of the year, we'll be able to have a better performance in terms of our investment execution. But even if part of this investment on the distribution, which is the highest one, $2.3 billion, if we cannot conclude all of that by the end of the year, we understand that we will have to accelerate. And, you know, at the most, it should be concluded by 2022. We are alert to that situation, and the company is really working to conclude the investment programs in 2021 and 2022. so that we can include them in our regulatory tariff review. Moving on, we talk about quality indicators and matters that involve delinquency. And now I'll turn the floor to Marnay, our distribution officer, and he worked on the mega distribution on this process, and he will comment more. Thank you, Leonardo. Good afternoon, everyone. Just stressing what Dr. Reynaldo mentioned in the beginning, that we reached the lowest level of the EEC in history. Now we are at 946, and this is a moving indicator in 12 months. So it's July of 2020 to June 2021. So the figure is much lower than the regulatory limit. I would like to highlight two things. topics here. The first one is a programmed DEC and the other one is the accidental DEC. Our program, the one could be even higher than last year's because our investments were higher. But because we are using new technologies, we have a great management there so that we do not increase the program, the DEC, which is to turn off the grid for maintenance. And the accidental DEC is worked by our investment plans. It has to do with the substations that are under construction, the 30 substations, 30 kilometers of transmission lines. All of that, because of the pandemic, we'll be able to really leverage. And now in the second half of the year, we had some bidding problems, but all the events have been taken care of, and we'll be able to move on. And all these comments also can be applied to FEC programs. 489, much lower than the regulatory limit, which is 656, also a historical result. Next slide, please. Now, turning to our delinquency and how we are fighting delinquency, I would like to mention that because of the pandemic and its consequences, when we could not make the connections in some customers' categories, the isolation and all the economic crisis that we had. We then had to develop a special plan to fight delinquency, and we developed a program for merchants. We were very successful in the results of this program, helping the merchants to go back and start working again. And we increased the number of disconnections where allowed. We added intelligence to the process to have a better return. And all of that allowed us to have a better collection index. You can see here in the first line, we had a collection index of 98.8, the highest levels in the past few years. This is collection overbilling in 49.4% in our collection activities. That is 50% higher than the same period of last year. Also, we automated protest activities, electronic protests. We implemented that. We started charging bills and a credit card in installments for the past two bills. Also, we negotiated installments via WhatsApp with disconnections. We had 201 more disconnections than the same period of last year in the categories where we could have these connections again. And also, we have new payment channels, and you can see here on the screen. But I also would like to highlight that thanks to that, if we look to the chart, the top chart, you have 98.87, which is our collection index, collection over billing end. our ADA has a very satisfactory result, thanks to the improvement in the rules, reversals that we are working on, and also all these collection actions. And I would like to add the losses. We are doing very well in delinquency, and we are doing very well in terms of the losses. Our losses today, and we just ended July at 11.92, Our target for the year is 11.09. We are very close to it, and the regulatory, we expect that by October of next year, that's our strategic planning, to reach the regulatory level for losses. So we are doing well in losses and delinquency, which proves our plan is on the right track. Thank you very much, and I'll turn the floor back to Alice. Thank you very much, Marnay. So now let's turn to slide 13. and we will start on the company's results. Here we have the main effect for the second quarter of 2021. For semi-holding, we had an operating efficiency initiative, which was, Our voluntary redundancy program, we had the enrollment of 324 employees, and the cost was of $35 million. For Tamigi distribution exclusively, we should highlight, as we already mentioned, the strong growth in the volume of distributed energy of 12.4%. Our market, captive market, that is the sale for end-consumers It grew 5.3% and transport for clients, for free clients here also had a strong growth of over 21%. And we are going to go into the details of this growth. And if it were not by distributed generation, and as you know, this is very strong and managed by growth for total consumption would have been over 14%. But we are going to go into the details shortly. As already mentioned, we had a reversal in our ADA in 8 million that was in order to better reflect that provision. But I should highlight that even without that reversal, we would have a 50% reduction in provision following the same criteria of last year, just to make clear that there is an improvement regardless And as already mentioned by our CO, the for the distributing company is within the regulatory target. For we did have the effect of the posting for GSF hydrological risk renegotiation with a positive impact in our EBITDA of 910 million. Reprofiling of RBSE was a positive 211 million. Marking to market of AeroBond, as our CFO mentioned, had a positive effect in 2021 of 717 million RELs, with a lower positive effect in the same period of 2020 of 71 million RELs. So that also caused the semi-GDTs results. and we will show you that in details when we go company by company. In equity income, for CEMIC-GT, we had a negative impact of 119 million rials in the second quarter of 21. We saw a negative effect in the 2Q, 20 of 8 million. That negative equity income was mainly because of Santo Antonio and Wingerings. Turning to slide 14, we have here the results in the first half of the year. The consolidated for CEMIGI for 2021, the first half of the year. So strong growth for EBITDA and nonprofit, whether in accounting IFRS figures or recurring numbers when we consider the period adjustments. So EBITDA, for instance, The IFRS EBITDA increased 66.9%, reaching $4,435,000,000 in the first half of the year, while the recurring figure for EBITDA reached $2,973,000,000, with a growth of 29.5%. Our net profit and IFRS EBITDA grew 133.5% from $1,014,000,000 in the first half of 2020 to $2,368,000,000 in the first half of 2021. Now, the recurring results, last year's net profit in the first half was $1,058,000,000, and it increased 45.8%, reaching $1,543,000,000. in the first six months of 2021. We do have adjustments on the bottom of the page. And as I mentioned, the highlight here is the GSF, which was the highest one, 910 million RELs. In the second quarter of 2021, the consolidated results also had growth. Anyway, you look at it. in accounting wise and recurring figures as well. And this was because of the highest energy consumption in our concession area. And also we had a growth in gas consumption from . That was very relevant of 85% in the period. And just the mega loan had a growth in its EBITDA of 94 million in the second quarter of 21, vis-a-vis the second quarter of 20. So, consolidated EBITDA and IFRS grew 38.8%, reaching 2 billion, 590 million rials. And in the second quarter of 2021, the adjusted figure was of $1,321,000,000, up 39.4% about the net profit. It was up 79.9% from $1,082,000,000 to $1,946,000,000 in IFRS, while the adjusted net profit with no effect of the FX exposure had an increase of 58.7% from 441 million rials to 700 million rials. So in recurring terms, I think we can say that net profit increased almost 80% in IFRS and we adjusted almost 60%. So these are great results for our second quarter of 2021. go into the details of semi-DT. We also grew, as you can see, and we should highlight that. Because of the adjustments in our contracts and also settlements and CCE, we had an average price. of 248.34 in the second quarter of 2021. That is energy selling price vis-a-vis 219.53 in the same period of 2020. So CEMEX GT EBITDA grew in IFRS of 112.6%, reaching 1,699,000,000 rials, while the adjusted result in the EBITDA was 430,000,000 up 34.8%. The IFRS net profit reached 1,444,000,000, up 254.8%, and the adjusted net profit was 198,000,000, increasing over 360%. Turning to slide 17. And to talk a little bit about the energy market for systemic distribution. Now, as we mentioned, energy bill to end consumers and transported energy both increased 12.4%. Out of that, transported energy for free clients increased 21.4%. And end consumers energy increased 5.3%. we should now here turn to the industrial area in our concession area which you had a strong recovery of 19.6 percent that was increasing consumption really really strong because of the recovery but also residential customers you see here that you remember last year in this period other stores were basically closed. So there was an increase of 8.8% in the commercial area. But the residential consumers, draw our attention, during the pandemic, they were consuming regularly and we did have increase in consumption in the residential segment. And even then in 2021, we still see growth in that area of 4%. So it really is a very important growth. As I mentioned, In terms of distributed generation, the total energy there increased over 90% in the second quarter of 2021 compared to 2Q20. And so in 2Q20, we had 232 gigawatt-hour injected in our system because of distributed generation. And 2Q21, we have 442 gigawatt-hour. So when we add... these figures to total distributed energy, we concluded that total consumption in concession area for CIMIC distribution actually increased 14.1%. We also had migration of captive clients to free clients. So this is what you see for our end consumers. They also had the dynamic. Therefore, we saw migration in the second quarter of 153 gigawatt hour. And so comparing total distributed energy for semi-distribution in the second quarter of 21 to the second quarter of 19, which would be a better comparison base because it was before the pandemic, there was a growth of 3.8%. So once again, growth, we see growth on average. All areas from all angles we look at it. Now on slide 18 we have the systemic distribution results. We did not have any non-recurring effects here. And that's why you only see EBITDA and net profit in IFRS. There was an increase in energy volume. And here we once again highlight industry. Only the industrial sector had an increase of 907 gigawatt hour. We had a reversal, as I mentioned, in the provision of ADA in the second quarter of 8 million vis-a-vis a provision of 103 million in second Q20. If we had done the provision in 2021 using the same criteria of last year, the provision would have been 41 million. Even then, it would be much lower, stressing what we already said regarding all our initiatives to increase collection and reduce delinquency. On slide 19, operating costs and expenses, there was an increase of 25.3% and when we remove items such as purchase of energy or energy that we purchase and then sell for commercialization. And so PMSO itself went from 856 to 919. And there was an increase specifically here in outsourced services. It was because of two main reasons. Last year, because of the pandemic, some IT expenses have been reduced because services were reduced considering the pandemic. And also, there was a migration of a data center. While we're migrating information from one data center to another, we had an overlapping of two service providers. This has been concluded already. And we have to remember that in the second quarter of 2020, basically, we didn't have any disconnections of our overdue customers. And in August, they started again. But in the second quarter of 2021, we had 332,000 connections, but we didn't have any in Q20. And this is a service that is done basically by our subcontractors. Now, turning to slide 20, we have here the comparison, both of our OPEX and EBITDA, both regulatory of systemic distribution to the real numbers. This has been already mentioned by our CEO, but just going to go into the details here. The regulatory OPEX was 1,571,000,000 RELs, and the realized OPEX was 1,443,000,000 RELs. better than the regulatory in 128 million just in the first half of the year. I should highlight here the PMSO itself is lower than the regulatory in 385 million. But because of the other expenses that we have such as profit sharing program, the post-retirement and the voluntary redundancy program and other provisions that are, you know, higher and that we bring in so that we can factor those into the comparison. and we still suffer a little bit in the way that we have this realized OPEX of 1,443,000. But as our CEO mentioned, it's important to see it as a whole picture. In 2018, the realized OPEX was 5% higher than the regulatory OPEX. In 2019, it was over 29%. And just in 2020, as you know, you're following the company, by the end of the year, the third and fourth quarters, alone that we were able to have the better performance and the OPEX and 2020 was half percent lower and now just in the first half of the year we are 8% lower than the regulatory OPEX. About EBITDA, the regulatory EBITDA in the first half was of 1,217,000,000 and the realized was 1,336,000,000. As we see, it was better than the regulatory OPEX was better as well. And just losses were a little bit lower in the 51 in this half of the year, a much lower figure than what we had last year. And as Marnay mentioned, by October of next year, we should be within the regulatory level as well in losses. Now turning to slide 21, we have here our debt profile and the consolidated debt profile. So here you see the first chart, the maturities timetable with average tenor for 3.4 years. Our net debt is of 6.3 billion. That's considered total debt minus cash and securities. we still reduce our hedge because this is an asset that we have, and we showed that this is something that we can use at any time when we're ready to settle the bond, whether at maturity date or in a prepayment. This is considered cash also because of covenant calculation effect. So by the end of the quarter, our cash was almost $7 billion or else, with this maturity timetable that we see here, plus 456 due in 2021 and 2022, 1,259,000,000, 2023, 821. So up to 2023, we have a maturity table that is fine for the company's cash generation, but in 2024, we have the maturity of this bond, and we should highlight that by June, We had it as 8 billion and 90 million rials, but since we carried out the standard operation in July and August and we settled it in August, $500 million, we are already reflecting the real maturity in 2024, which will be 5 billion, 585 million rials and much better. And we did not have a debt transference here. We used the cash that we had by the end of the quarter to be able to make this payment. So we are not rolling out debt from this year to another one. In terms of the indexers, the U.S. dollar is the most relevant. 57% of our debt is indexed by dollar. IPCA represents 30% and CDI 13%. And we have other and indexers that are not very representative even then. We have our hedge protecting our dollar denominated debt. The principal is protected between 3.45 per dollar, from 3.45 up to 5. And we have a full swap for interest rates of around 165%, and it's a very competitive cost of debt. In terms of cost of debt, nominal terms in the quarter, we reached 8%. But if we calculate the real terms, which is important, and it's important to do that. As you know, our revenues are protected against inflation, so our debt cost in real terms is still coming down, reaching 1.06% a year. And leverage is still going down. both in terms net debt over EBITDA and total net debt over equity plus net debt in 2018. Net debt over EBITDA was 3.24 times in December of 2018, and now in June is 0.91. Now, in terms of capital structure, it was 42.8 in 2018, and now it is at 20.2%. Significant reduction and this is reflected in our credit quality in the performance of our debentures and our bonds in the secondary market. Now turning to the end of the figures in our results on slide number 22, we can have a consolidated cash flow. This is what would be the reconciliation. So by the end of last year, cash and securities was $5,805,000,000. The cash generation was of $2,944,000,000. We did have cash inflow settlements of derivative instruments of $889,000,000. We reimbursed our consumers $910,000,000. regarding the tax credit of PIS and COFINS that allowed us to have a very low readjustment last year and this year. And we paid loans and finances with no further fundings. We also paid dividends. That's why we have that $734 million in financing activities. like in January, and we raised 1,366,000,000 RELs, and we invested 829,000,000 RELs in a way that our cash by the end of the quarter reached 6,998,000,000 RELs. Now I will turn the floor to Leonardo on slide 23 to talk about the management priorities. I will be very brief so that we have time for our questions. In addition to operating efficiency measures, which are part of this management's routine, in our strategic plan disclosed by May, we were very transparent and we mentioned our main initiatives in terms of value generation for the company This slide is kind of an accountability to show you how the actions are moving forward. This is our guide. A lot of the measures and a lot of the topics have been already carried out and we are working on the remaining ones and we expect that in the next quarters we will bring to you more and more of these measures already achieved. These involve restructuring our retirement benefit plans and also value generation. And we understand that considering the results we're bringing to you and by the deliveries that involve operating efficiency of the company and a better structure of capital, we understand we are on the right track to have and to carry out all these measures that we consider to be the most relevant ones. That's it, Valis. Very well, we now conclude the presentation we prepared for you for this call. And now we turn to our Q&A session. We will now start the Q&A session. To ask a question, please press star 1. To remove your question from the queue, please press star 2. Please wait while we collect the questions. Once again, we would like to remind you that to ask a question, please press star 1. To remove your question from the queue, please press star 2. If there are no further questions, we turn the floor back to Mr. Reynaldo Pasanete Filho for his final remarks. Very well. Good afternoon, everyone, and thank you very much for being with us on this call. We hope to see you within 90 days with the results of the third quarter. We expect that they are as robust and consistent as the ones we just brought to you. Thank you all very much. See you next time. The conference call with Tamigi has ended. Thank you very much for your participation and have a nice afternoon.