B3 Sa Brasil Unsp/Adr

Good morning, ladies and gentlemen, and welcome to the audio conference call of B3's earnings result for the second quarter of 2024. We would like to inform you that all participants will be in list and only mode during the company's presentation. After the company's remarks are completed, there will be a question and answer section when further instructions will be given. As a reminder, this conference is being recorded and broadcasted live via webcast. The replay will be available after the event is concluded. I would now like to turn the conference over to André Milanes, B3 CFO, who will be joined by Fernando Campos, Investor Relations Associate Director. Please, André, you may proceed.

Thank you very much. Good morning, everyone, and thanks for joining our call for the second quarter results. A quarter that reinforces the efficiency of our business model where we saw a 10% growth in our total revenues, double-digit growth in all business lines of setting the challenging scenario that we still saw for the cash equities market. I think I'm going to start with a few highlights in terms of the performance of this quarter. The first one, the listed derivative segment, where we saw a 10% growth in revenue. reflecting a more volatile scenario in terms of interest rate curves, but also reflecting some pricing adjustments that we've introduced last year, which have helped to increase volumes, especially in the derivatives involving Brazilian interest rate contracts. Another highlight, I think, goes to the OTC market, to the good performance that we saw on the fixed income market, where we saw a 16% growth in revenues, mainly driven by the good moment that we are seeing in terms of the local DCM market in Brazil. Inequities. The 11% decrease in the average daily traded volume, as we discussed, still reflects this challenging macro scenario, even though that was partially offset by the good performance that we saw in the derivatives of indexes. I think here it is worth highlighting the good performance that we have seen on other cash instruments other than equities, such as BDRs, ETFs, and real estate investment funds, which during this quarter accounted for 13% of the ADTV. Compared to a percentage of 10% in the second quarter of 23, demonstrating the relevance of our product development agenda and its importance in helping to stabilize, to maintain the ADTV performance. around the level that we are seeing, which has been the case for the last six months. And we are seeing that ADTV almost stabilizing around that level of 24 and 26. So I think here, even though It doesn't seem that we're going to see any short-term trigger to drive these volumes much higher. At least we are starting to see these volumes stabilizing at this kind of level, even though we are still facing this more challenging scenario for equities. And I guess in other segments, the infrastructure for finance posted a 34% growth, reflecting a more positive scenario for the auto industry and for vehicle financing activity, as well as the impact of the Desenhalla program, which ended in last May. Also in technology, data and services, we saw a growth of 11% with the consolidation of Neurotech and higher revenues coming from our OTC platforms. Fernando will talk now about more the operational performance, and I'll come back later to discuss a little bit about other topics as well.

Thank you, André. Good morning, all. Starting with the cash equity segment, we saw ADTV of $24 billion in cash equities, which was an 11% decrease when you compare it to the second quarter of 2023, but it was almost stable to the first quarter of 2024, and pretty much in line with André's comment earlier. on the segment. The turnover was 135%, which was lower than the 161% that we saw in the second quarter last year, but higher than the 128 to 28 in the first quarter, 24. Regarding the fees, the increase that we saw compared to last year was due to the lower non-tariff volumes, mainly exercise of options, and less the lower participation of market makers and liquidity providers in the volumes. A highlight in the segment, as Andrea mentioned, was the 18% growth in the ADV of indexes contracts, which helped to offset the lower cash equity volumes. Going to the listed derivatives, which was the highlight of the quarter, we saw an all-time record with an ADV of 8.2 million contracts, which was a 20% growth. compared to second quarter last year, reflecting mainly the 31% growth in the BRL interest rate ADV. RPC decrease also influenced by the BRL interest rate contracts, mainly due to the higher volume and higher concentration of contracts with shorter maturities and the adjustments in price, as Andrea mentioned. OTC, we saw positive performance in all lines, starting with the fixed income. The outstanding balance of bank funding instruments grew by 26% compared to the second quarter last year. But in here, obviously, we have the T-time deposits, but it's worth noting the growth in RDB, CPR, and LCI as well. And here is worth highlighting that despite the hot corporate debt market that we are seeing recently, we had a relevant amount of leasing debentures maturing at the end of 2023, which impacted the outstanding balance in comparison of this product. In OTC derivatives, issuances grew by 20% and the outstanding balance grew by 14% compared to the second quarter of 2023. In the infrastructure for finance, the improvement in the auto industry and the credit market for this segment, it reflected on the number of finance vehicles growing by 26% compared to the second quarter of 2023. And finally, in technology data and services, I think here it's worth highlighting the growth in OTC access, a growth of 7% compared to the second quarter of 2023. And that this grows with the funding industry. And it's also worth noting that the data revenue includes Neurotech revenue, which was 32 million reais this quarter. And when compared to the 12 million reais that we saw in the second quarter last year, which was the quarter that Neurotech was incorporated only, but was co-incorporated in May. So I'm returning the call to André to talk about the other highlights and some strategic advances.

Thanks, Fernando. And I think as we have been saying, I think that has been a quarter where we have seen the positive impacts of this diversification and this diversified business model and where the other parts of the business were able to more than compensate the only segment that didn't perform that well this quarter, which was equity. So diversification finally demonstrating that it pays off and reinforcing what we have always been discussing with you, that B3 is much more than just an equities exchange. I think a few remarks in other areas before we move on to the Q&A. I think on expenses, we have been maintaining our cost discipline here. And as we said, targeting towards the lower end of our guidance for this year. And excluding some non-recurring effects that we had on the core, or at least adjusting the comparison basis, like the impacts of the consolidation of Neurotech, the Zinhala program, and the end of the amortization of intangibles from the merger between BMF, Bovesp, and CETIB, you... the company would have grown expenses below the inflation for the period. As a result of that good performance on the revenues this quarter and the cost discipline that we've seen on the expense side, our recurring EBITDA Advanced 8%. We closed the quarter with a recurring EBITDA of 1.8 billion reais and a recurring EBITDA margin of slightly above 73%. On the net income, the story was similar. The growth slightly lower than the EBITDA growth. And the main reason was the impact of higher financial expenses during this quarter as a result of the prepayment, the early repayment of debt, the liability management exercise that we've conducted during the quarter, even though debt was Positive from a net present value standpoint, we had some upfront impacts on the P&L as a result of the early repayment of the debts. In relation to our distribution to shareholders, in relation to the 2024 calendar year, we bought back shares in a total amount of 1.3 billion Reais, which combined with dividends and interest of capital declared during the period, totaled 1.7 billion Reais returned to the shareholders in the period. If we take the first six months of the year, the total distributions to shareholders amounted to 2.3 billion reais with 1.5 billion reais in shares that were bought back, which represent roughly 2% of the company's share capital. And recently, I think on that topic, Yesterday, our board of directors approved an amendment to the share buyback program, increasing the limit of shares to be acquired from 230 million shares to 340 million shares. And that's an indication in terms of our view about the current level of the share price. Finally, I think there have been some strategic developments that I would like to comment on. The first one is the Bitcoin future. So as you know, we've launched this product recently. It has been so far a very successful product. And in July, we have already exceeded the average daily volume of more than 100,000 contracts. In our agenda of improving our customers' experience and reducing friction, in this case, particularly for retail investors, we have implemented the digital portability of investments in our investor area. We also had an important event, which was the migration of trading venue from a company that was previously listed in the US to Brazil, to our venue, which I think reinforces our view and the position of our local capital markets here. And on data, I think we had some important developments during the quarter. We've announced the creation of three new indexes. They are linked to the Aibo Vespa. And I think the main highlight here goes to the Aibo Vespa B3 index. BR+, which will include Brazilian companies, BDRs. BDRs of companies that are listed abroad that will meet the methodology. And I think that's an important advancement in terms of our agenda of new products and indices for the market. And I think those were my main comments. I would like now to open the floor for questions and answers. Thank you.

Thank you. The floor is now open for questions. If you have a question, please press the raise hand button. If you are connected by a phone, dial star 9 for raise your hand. If your question has already been answered, you can leave the queue by clicking on put your hand down or dialing star 9 again. Wait while we pull for questions. Our first question comes from Mario Pierre from Bank of America. Please, Mr. Pierre, your microphone is open.

Hi, good morning, everybody. Congrats on the quarter. Andrea, I wanted to focus a little bit more on the long-term here. When we look at your CapEx, you're growing CapEx basically in line with inflation. CapEx as a percentage of revenues is running at about 3%. However, we keep hearing about potential competitive pressures that you're seeing in several products. So my question has to do With the sources of this CapEx, so basically where are you investing? How much of this is just to maintain the operations and how much do you think are you spending on growing or diversifying the business? And how do you see CapEx evolving over the next couple of years? Thank you.

Thanks, Mario, for the question. Look, I think our CapEx today, as we have been discussing with you guys, is primarily composed of hardware, so like servers, equipments, and these sort of things. A lot of our... software development for a number of reasons, uh, has been expensed. And we've discussed that, uh, particularly between 20 and 21, the transition between that, that, that, that year. So there is a lot of, let's say expenses there are affecting our, our, our P and L, which are, let's say investment, uh, in nature. So I think it is worth for you guys to understand that there is, uh, a good chunk of investments that are made in product development, in maintaining the existing products, they are not being capitalized, they are being expensed. So today, most of the capex is composed by third-party software, so softwares acquired from third parties and hardware, okay? Now, pretty much all of that investment goes towards the evolution of our platforms. So, uh, evolving the technology and ensuring that our technology is, is up to date and up to the standards. It's, it's something that we do continuously, uh, We are not seeing any need for a significant investment in terms of infrastructure over the next five years. And we have already been investing a lot in infrastructure. evolving our platform, but on a more gradual and continuously way. And a lot of the investments, as you know, has been directed towards development of new products and new initiatives, which we believe are key to ensure that we are not leaving any any gap or any space open that could be potentially explored by by a new lantern so reality is that we have already been preparing ourselves for a scenario where we would face more competitive pressure. And it was for that reason that we have already been investing in the evolution of our platforms, of our technology, and in a very robust and extensive roadmap of new products and new services that we have been offering and that we will continue to do so over the next few years. So overall message so far, I don't see any reasons for us to change that significantly for the next for the short and medium term. So we do not today identify the need of increasing significantly this level of investments as a result of this scenario.

That's very clear. Thank you. And just another, just a second question, is when you became a lot more active on buying back your shares, right? You said you bought back 1.3 billion reais. Can you disclose the average price that you bought these shares at?

I think that's already disclosed in our financials. I think it was slightly above the average price, was slightly above R$11. R$11, perfect.

Thank you very much.

Our next question comes from Thiago Binsfeld from Goldman Sachs. Please, Mr. Binsfeld, your microphone is open.

Hi, Andrea and Fernando. Thank you for taking my question and congrats for the results. A couple of questions as well. First, on your equities ADTV, you mentioned that you see a stabilization in trends. So if you could expand on that idea and a little bit of expectation from here, is this the normalized ADTV for a challenging scenario? And what could be the mid to long-term initiatives that you can undertake to improve overall liquidity in the market? And the second question is a short one. There was a reversal of provisions a bit higher, close to 50 million reais this quarter. Any reason behind this? And what is the expectation for the next quarters? Thank you.

Thanks, Tiago. I'll start with the one on the ADTV. That's always a tricky question, right? But we have seen this level of activity. It has been pretty stable over the last six months, a few months with a little bit more activity here and there, another month slightly below that. But with the average daily traded volume hovering around the 24, 26 billion mark. So we are starting to see that this could potentially be a trend. So, as I said, even though in the short term we might not see any significant trigger to move that or to increase that significantly, maybe we are starting to see that there is no much... room for further deterioration. But I think that the next few months are going to be important to confirm that trend. And I think on your question, I think what we are seeing today is already the result of some of the the answers that we have been given in order to try to increase activity and liquidity and the participation that these new products, which have different dynamics, have been playing Helping to stabilize this activity is one of the examples of things that we can do in order to try to diversify further and incentivize activity in the market. More products, and that's an agenda that we will continue to work on. in the next few months or throughout the year in launching new products and services, which we believe is an important tool for that in the market. Now, in relation to the revenues, I think there's nothing specific. I think there were a few provisions that were reversed against revenue since they relate to provisions that were made in prior years. I think one of them was the provision for profit sharing for bonuses. And the explanation is that we have estimates that are made at the end of the year and the actual payment occurs at the end of the first quarter. So there was a difference. Not all of that reversal relates to the profit sharing provision, but part of that. So an adjustment that was normal, but we do not expect anything of that nature for the following quarters.

That's clear. Thank you.

Next question comes from Yuri Fernandes from JP Morgan. Please, Mr. Fernandes, the microphone's open.

Thank you, guys. Good morning, André, Fernando, and congrats on the quarter. I have a question on the derivatives, right? It was, I think, one of the good surprises of the quarter, the revenues. We knew you changed some of the pricing stables there on the BRL, and I don't think the RPC decrease is a surprise, but the volumes, they were super strong. So my question is, how sustainable is this kind of ADV? So I'm trying to, I know it's not that easy to reply this, but I'm trying to understand how cyclical or how structural are these new derivative level going forward. And if I may, a second question on the OTC. It was a good quarter for OTC, don't get me wrong. But when I go to the derivatives part of OTC, Revenues are growing like 4% over a year, and registered volume or the outstanding balances, they are growing way more. So if you can provide some color on the OTC regarding derivatives, what are the moving parts here? What should we expect? Thank you, and again, congrats.

Thanks, Yuri. I'll start with the question on the list of derivatives, and I'll have Fernando to help me here on the OTC side. But I think, as you said, it's a tricky question. But I think we have a combination of two things this quarter, right? So some structural changes, which in our view have been heavily influenced by some of the changes that we've introduced in terms of pricing and in terms of functionalities like the EDSs and UDSs. So that has helped to improve the volume and those are, I guess, some structural changes that we believe are going to take this level of activity to a higher level than it used to be in the past. But we also had in the quarter volatility, particularly with all the, you know...

The effects, maybe.

Yeah, uncertainties. No, primarily on the interest rate. So to remember, we had a lot of discussion about rates and concerns about fiscal policy, a lot of volatility in the local interest rate curve, which also helped the volume of derivatives. So I think this quarter, we had the combination of both. reflect of some more structural changes which we believe will continue to be present in future quarters, but also some boost coming from increased volatility, which does not necessarily will repeat itself in the following months. But I think if you look at what we've already, have we already disclosed the figures for July?

Not that total, but we have until like 20 something.

But I mean, if you look at some of the preliminary figures for July, I think you get a feel for that. So we've seen during the quarter a combination of both. So part of that you could consider something to be recurring in future quarters.

So good morning, Yuri. Regarding the OTC derivatives, although one of their drivers is volatility, they have a different aspect to them since they are used for mainly large operations and you have with big banks. So you have intercompany transactions, you have... Since you have a large, the size of the transactions are pretty large. Sometimes you have discount by volumes and you see the volumes going up and the price not going up as much. So the revenue not going up as much, but it's basically that. So just in summary, same drivers, but a different kind and size of transactions and the pricing is different. So you have discounts by volume. That's mainly it.

No, super clear. So it's a more mix driven on the OTC derivatives than, I don't know, you're reducing prices. Exactly. Or anything like that. No, exactly. Okay, super clear. Both answers. Thank you, guys. Thanks.

Our next question comes from Caio Prato from UBS. Please, Mr. Prato, your microphone is open.

Hi, everyone. Good morning. Thanks for the opportunity for questions. I have two on my side, please. The first one is on expenses. We saw lower personal expenses Q1Q this quarter. And one of the things that you mentioned was a restructuring plan on Noway. So I would like to first understand what happened in Noway and if we could see more of these effects in the upcoming quarters as well. If you could provide a quick background here, it would be good. And if we can expect something similar to that related to neurotech at some point. And then linking this to your guidance, I think we are trending towards the bottom of the guidance in terms of adjusted expense. Just would like to confirm that trend with you. And if indeed we could expect this to continue throughout the year. And my second question, please, is related to competition. So we continue to see some articles, interviews, and a lot of discussions about the new entrant. But I would like to understand from you if you understand that, first, the connections with your post-trading system, custody or so, should be tested. And second, if that is the case, I would like to understand if you are already discussing the potential connection of a new player into your systems and if there are tests going on. Thank you.

Thanks, Kyle. So we'll start with the one on expenses. As we discussed, one of the key objectives that we were pursuing with Neway was, of course, to keep the business growing, but to ensure that that growth was being pursued in a sustainable way. So one of the objectives was to ensure that Neway was... would achieve a point where it was generating sufficient cash to fund its costs, its expenses. And as part of that objective, we've, together with the management team running Neway, made some adjustments to their structure to ensure that we were focusing the efforts on the areas that we believed were more important for the development, but ensuring that we were also having a careful look in terms of costs and sustainable growth. And we are seeing the result of some of those measures that have been taken this quarter. On the case of Neurotech, I think it is a different situation because Neurotech was a business that had already reached Having said that, we will continue to look not only on these recently acquired companies, but also on B3 in opportunities to improve efficiency. As we said, our main objective in terms of cost management remains sustainable. to be able to grow our costs more in line with inflation, finding additional efficiencies and opportunities to absorb the need of growth in our cost base as we keep evolving in our agenda of launching new products and new services. And I think we are still on track to deliver growth uh the the to to arrive at the lower end of our guidance this year as we as we uh have been uh already uh discussing and and and signaling to to you guys okay now on the other point uh we will uh eventually have to do those connections if they plan to launch their solution to use our depository, right? And that will definitely need to be tested at some point. But I think so far we haven't started anything in that respect. I think there might be some initial approaches that will take place over the next few months, but so far that's where we are. There's no effective... connections already in place or tests being carried out in relation to that.

Okay. Thank you very much, André.

Our next question comes from Chitrindo Singh from HSBC. What's Mr. Singh? Your microphone's open.

Hi, this is Carlos Gomez from HSBC. So I have two questions. The first one refers to your financing business, infrastructure financing business. You mentioned that it is positively boosted by the Desenrola plan. So we wanted to know what the more normal level of revenues would be after Desenrola. And the second is if you could remind us what your expected tax rate for this year would be. Thank you.

Thanks, Carlos. So you're right, I think the performance of the financing unit this quarter was affected by the Design HALA program, but we also saw a very strong performance in terms of recovery in number of vehicles being financed. I think the normalized growth this quarter, if you would exclude the growth that came from the Design HALA program, would be around 20, 20 something percent.

So there's an- Instead of 34th, right?

Yeah. Yeah. Yeah. So that's what was the performance and we are still seeing room for that level to remain at least for the following quarters in terms of activity. So there is still a healthy growth growth coming from the core activity of that unit, even though if we exclude the Desenhalla program, which is no longer in place. But as we discussed also in other calls here, now we have a business that was set up as part of that program where we have the platform already in place and we are still working in other opportunities to to make that a new business line for the company. So we already have the solution, which was very successful in the particular program, but that can also be used for a lot of different opportunities that do not necessarily exist depend on on a new dis and hola program being being launched by the government and that's an area that we have been working on uh and we'll continue to work uh over the course the course of of the year uh and you're next in your other questions on the tax rate I don't see reasons for a much different tax rate than the one we have been posting. So if a mom is taking a level of around 28, 29% of effective tax rate, that's the level that we are expecting this year in terms of effective tax rate with the main reduction in our tax rate being the tax benefit coming from the interest on on capital.

And is it fair to say that there is no discussion this year about changes to IOC?

Look, discussions, there's always discussions on the table, especially in relation to that topic, as you know. I mean, we have been seeing discussions around that for the past 15 years, at least, right? But at the moment, I'm not seeing any hot discussions about this topic. And given that we have, you know... Elections this year, municipal elections. I'm not sure this is an agenda that will get a lot of traction this year. I think there's still a lot of challenges to to in terms of concluding the VAT reform, which. Seems to be a much bigger priority nowadays. But, you know, we will have to keep monitoring any discussions. But at the moment, this is not a topic that is hot on the agenda.

Very clear. Thank you so much.

Thanks, Carlos.

Our next question comes from Pedro Leduc from Itaú BBA. Please, Mr. Leduc, your microphone is open.

Mr. LeDuc, your microphone's open. All right. I thought I was speaking my bad. So thanks for the call. Question, congrats on the quarter on expenses. It's trending well, but wondering if there's any seasonality we should pay attention for, especially in the fourth quarter, like usually happens. And then the second question, still on the financing infrastructure, a lot was discussed here on Desenrola. but there's a new product being baked, the private payroll, which could have similarities in the systems to Desenrola, to the traditional payroll. If that's something you guys are looking at, that your systems that you've built could somehow be applied here, and this would then be a product that stays. These two questions. Thank you.

Thanks, Pedro. The first one was in relation to the expenses. Yes, I mean, as you know, there is some seasonality in our expenses. And if you recall, a good chunk of our personnel expenses is adjusted by inflation at the end of August. So we tend to have a third and fourth quarter that typically are heavier as a result of those adjustments. And other than that, there are some, let's say, year-end expenses that tend to affect the fourth quarter. I think we have been working in order to try to, let's say, manage the seasonality between quarters in a better way this year. rather than having a very concentrated quarter in terms of expenditure. But you can expect some seasonality during the second half of the year, primarily as a result of the automatic adjustment of the annual bargaining adjustment of salaries, which is an important component of our expenses. But as I said before, and I think it is important to reinforce, we will continue to pay a lot of attention to our cost discipline and our target to deliver the lower end of our guidance for this year. In relation to the desenhala, I think there are a lot of opportunities that we have been exploring that could be where that technology, that platform could be applied. So there's a lot of discussions at this stage with different uses, different applications. We do believe, as I said, this could become a business. So The example that you mentioned could potentially be one example where, if not the whole platform, part of that could be used. But so far, that's as much as I can tell you. But we have the ambition and our goal is to really give other users and turn this into a business line, this platform. We are very excited with a lot of opportunities that we could have in terms of further application of the technology that was developed for this program.

I agree. Thank you so much. Congrats again. Thanks.

Our next question comes from Gustavo Schroden from Bradesco BBI. Please, Mr. Schroden, your microphone is open.

Hi, good morning, everybody. Thanks for the call and congrats for the strong results. Most of my questions were answered, but I'd like to explore a little bit about the financial results. A little bit, I mean, below of our expectations, you mentioned about the payment of the first years of debentures issuance in May. My question here is how should we expect the financial results evolving in the coming quarters, especially for this year? And also, could you remind us what is your target for a net debt to EBITDA for this year and the next year. And if you are planning some change in the funding size. Thank you.

Thanks, Gustavo. So on the financial expenses, as I said, I think the main impact that we saw this quarter was... the result of this early repayment, the liability management exercise that we did in relation to our debentures. And this should not be something that we expect to occur or the kind of impact that would affect the following quarter. So it wasn't one off as a result of this liability management exercise. As I said, we were exchanging a more expensive debt for a cheaper one, even when you consider the costs associated with both the issuance of the new debt and also the costs associated with early redemption of the existing debt. But there is some mismatch between this impact in our P&L. So you do have the the impact of the early repayment hitting the P&L first before we can capture a lower financial expense over the course of the next months and years. So that was it. without anything of that nature in the following quarters, you can expect the financial income to resume a more regular trend with, I guess, a key component, which is difficult to predict, which is the level of Cash collateral posted by third parties, which can fluctuate a little bit during the period. So that's a more tricky, let's say, variable to estimate. but you should expect a more regular trend in the following quarters in terms of our financial result. And our guidance for this year is net debt to EBITDA level of two, total debt, sorry, total debt to recurring EBITDA of two times, up to two times. And at the moment, we do not see any reasons to change that. Okay?

Okay, very clear. Thank you and congrats for the results.

Thanks, Gustavo. Our next question comes from Daniel Vaz from Safra. Please, Mr. Vaz, your microphone is open.

Thank you for the opportunity of making questions. In your release, you mentioned a migration from a privileged player listed in the US. So do you think this is a one-off? I mean, what's the context in that case? And if you guys are willing to do more or pushes for these migrations to the local market. And if you guys can also talk about potential changes with the tax reform, I think it's a bit early, but if you guys have any updates on that, we'd be good to hear about it. Thank you.

Thanks, Daniel. I think that was, as I said in my remarks, an important movement. And of course, that was primarily driven by the company, but we were there to support them on that journey and also to stimulate them on that journey. The reality is that a lot of those companies... decided to list in the past in the US with potentially some misconceptions about the advantages and disadvantages of having a listing abroad. The reality in the case of that company was that they were... It was very expensive for them and they... They didn't have a lot of liquidity on that venue. They became almost an orphan stock. So for them, it was a natural decision to pursue the listing here in Brazil. And I think there are other companies Uh, in similar situations, uh, that could potentially go, uh, pursue the, the, the, the same journey. And I think the fact that one of those companies were able to do that, I think it is an important, uh, signal for other companies. So we do expect that other companies that took a similar path in the past could also take a similar journey back this time. And I think that the other question was in relation to the tax reform. Yeah, yeah. So on tax reform, I mean, there's still a lot of discussion around that. We have been monitoring very closely all the discussions. So far, I don't think we are expecting... I'd say significant impacts from the implementation of that reform, but this is something that we will need to continue to monitor very closely, in order to assess all... The impact that could come from that reform is difficult to do that now because there is still a lot of moving parts and a lot of topics that are being discussed. But once that's finalized, we will be able to present you guys with a more, let's say, a definitive assessment of the implications that this reform could potentially have in the company. But at the moment, we are not anticipating any significant impact.

Perfect. Thank you.

This does conclude today's Q&A session. I would now like to invite André Milanes to proceed with his closing remarks. Please, Mr. André, you may proceed.

Thank you very much. I just wanted again to reinforce the good result that we saw during the quarter that, as I said, reinforces the value of our diversified business model. We do believe that this will continue to pay off over the course of the next quarters. I would like also to thank you all for joining this call with us, for your continuous support. And all the team that work in this quarter releases in the preparation of all the material, et cetera, for all the hard work. Have a lovely weekend ahead of you. And until next time, thank you.

That does conclude B3's audio conference for today. Thank you very much for your participation and have a wonderful day.