Usinas Sa S/Gdr

Our conference call to discuss Uzi Minas' fourth quarter and 2023 results. I am Leonardo Karam, General Manager, Investor Relations at Uzi Minas. For those who want to follow us in English, a free translation of the webcast presentation is available on the Uzi Minas IR website. We also have an interpreter for simultaneous translation. Please select the sound channel on the icon at the bottom of your Zoom screen. All participants will be connected only as listeners and their questions can be posed in writing in the Zoom Q&A session. At the bottom of your Zoom screen, all participants listening in English will also be able to pose questions directly in this section. This call is being recorded and simultaneously broadcast on the YouTube channel. Please note that this conference call is for investors and analysts only. Please identify yourself so that your question can be answered, and for the sake of time, we request a limit of two questions per participant. We also ask that any questions from journalists be sent to Usiminas Media Relationship by imprensa at usiminas.com. Before proceeding, we would like to clarify that statements made during this conference call regarding the company's business prospects as well as forecast operational and financial targets regarding its growth potential are forecast based on the management's expectations of the future of Uzi Minas. These expectations are heavily dependent on the performance of the steel sector, the country's economic situation, and the situation of the international markets, and therefore subject to change. With us today, we have Marcel Lachat, our CEO, the Vice President of Finance and Investor Relations, Thiago Rodriguez, and Commercial Vice President Miguel Holmes. Thank you. marcelo will begin with his reflections subsequently chago will present results subsequently the questions raised will be answered now marcelo has the floor marcelo you may speak Good morning to everyone. It's a pleasure to be here once again to talk about the results and the progress of Usiminas in the past quarter and the year 2023. 2023 was an extremely challenging year and it was a transformation year for Usiminas. We are in the middle of an international political and economic situation that is complex and volatile. And the distribution of international trade, there was an exponential growth of import of steel in Brazil. And many of them under unfair competition situation, this created major distortions in the market. And the negative impact in all the value chain, less employment, lower production, adjustments of production, sales, decline in local collections, also impacting the fiscal accounts of the countries. in Roseminas throughout the second semester of 2023, which was an important year in terms of the intervention of our works as well in the decisions that we adopted regarding our industrial configuration or settings. Now the Blast Furnace 3, the work was one of the major challenges. This revamp was extremely complex. We mobilized financial capital at Dimensions. that we had never seen in Uzi Minas and we had over 9,000 people working in the peak of the work and investment of 2.7 billion BRLs and in addition we completed a number of interventions in the Iqbachinga plant with repairments In our steel mill, also another work of over 500 million and we focused on competitiveness and the improvement of industrial performance and market. Today, we can say that we are prepared to follow and drive the growth opportunities in each one of the brazilian industrial sectors with steel and services that are competitive creating formal employment and creating value in the industrial segment of the country we have to encourage the reindustrialization of brazil and we are carrying out initiatives with new ideas together with the public power to create a scenario So that the private sector can invest in order to mobilize and create green development that is sustainable in Brazil. now focusing on our specific actions regarding our management dynamic i can say that internally we have adopted adjustments in the organization and the structure focusing more on our industrial operations and we've also implemented a new management routine that is systemic to follow locally the performance and the main management matters. This new management allows us to adopt important decisions significantly swiftly and more assertively. we've decided to disconnect the coke plant number three because of the environment. With this, we were able to develop a very important reduction of cost and efficiency improvement. We discontinued blast furnace when we focus now on blast furnace two and three, that are more efficient and we can achieve a greater level of use. Therefore, after this shutdown is also connected to the high level of steel imports under unfair conditions that have arrived in Brazil throughout 2023, when we compare it to 2022, it's 50% higher. We are implementing rigorous measures measures in inventories, better evaluations that lower the amount of products that are obsolete and have lower turnaround rates. All of these improved our production costs, and during Q4, our cost production, when we compare it to Q3 of 2020, 13% inferior, and this will impact our results in the upcoming quarters. In terms of people management, we are focused on the development in our people in our teams and training and increasing knowledge within our employees strengthening our plans with more professionals we are encouraging leaders and we have a diversity and inclusion program that we are focusing on and we have given it priority We are also internally strengthening all the operational industrial culture. The need to be good neighbors in the communities where we operate security and environment are not an option. This is a condition so that our operations are legitimate. This is part of our value. We have to improve more in environmental performance, and we will provide support to the communities to develop and strengthen them. Now, regarding Usimina's migration, I would like to share that this year, 2023 was an all-time high record in terms of sales, 9.1 million tons. and samambaya also with this we've complemented we've had important works during the first stage with the extravago system now the target is is to eliminate those the we want to eliminate the we have We have the cantor. And we don't want dry stacking. Now, regarding 2024 and under, I would like to share that our vision, no doubt, is extremely challenging. As last year, we started a year with the economic and political scenarios very similar to 2023. High volatility, distortion of the international trade, and then strong pressure of imports in unfair conditions that was like last year in addition to a low expectation of growth in Brazil. Nonetheless, we do see good opportunities in the different sectors where we operate. we have carried out a very important improvement in terms of our competitiveness due to the information that I shared with you regarding the productive setting after high but the blast furnace three also investments because of the automobile industry the interest rate the brazil industrial plan announced by the government can drive agriculture, industry, all these sectors in Brazil and the investments that are necessary for the decarbonization of the economy in Brazil. We're focused on the efficiency and the competitiveness of our operations. And as a target, we are aiming at markets with higher added value, lowering the cost of production, and we want to see better results in 2024. Blast Furnace 3 continues in a ramp-up process, and we're highly reassured with what we're seeing. We will reap the results in cost and environment in these years. In 2024, we calculate investments of 1.8 billion BRLs focused on the fuel injection system of the new blast furnace 3 that will allow us to continue improving our CO2 emissions. and with the repair of our coke plant too for its recovery of the hot area. We have projects focused on improving environmental performance and more safety. We continue with our licensing projects of compact project, always considering better interaction and the care towards the environment. and the value of the energy. We have an ambitious plan of decarbonization. We clearly know what the targets are. And briefly, we will give you some announcements. We will work with Cubatong Ipatinga plant and our service center making progress in the decarbonization, improving productivity efficiency, competing with operations of worldwide reference with a great array of services and products. Thank you very much to everyone. I will hand it over to Tiago that will present the results of the year and the fourth quarter. Thank you very much. thank you very much marcelos good morning it's a pleasure to be here to present the present present the results of uzi means that would be q4 of 2023 and the year before i start i would like to say that after this presentation the results of the business area and steel transformation are consolidated in the steel unit now we report are results only of this division that we do units mining and steel. This division shows an improvement in their management in Usiminas and we do understand that it will be easier to understand the results and market projections So we can go to the highlights of 2023 in Manitou. So we ended the year of 9.1 million tons of iron ore sales. The highest volume in steel sales of 4 million. A drop of 5% vis-a-vis 2020 due to a strong impact in our imports. that are sold at subsidized prices. Now the adjusted EBITDA, which includes non-recurrent effects that you will see subsequently was that of 1.8 billion BRLs and net profit was 1.6 billion. Our capex is 3 billion in 2023, the largest in the past 14 year and we had a net cash and a leverage of minus 0.05. with an important improvement in our working capital. There's a dividend proposal of 330 million BRLs that will be taken to the general meeting in April. The blast furnace three, as Marcelo mentioned, after At StrongWorks, it's in ramp up. And Uzi Minas for the second year in a row is considered in the easy. That is the sustainability index from B3. So we continue with the consolidated results of 2023. We can see that these results are We are marked by the drop of sales, of steel sales, that was the lowest in the past five years when we disregard 2020, which was the year of the pandemic, but also because of the all-time high record of iron ore sales, but this wasn't enough. to offset the drop of the price of steel throughout the year and our net revenue dropped 32 went from 32 billion to 27 billion in 2023 and something else that impacted our results was the high cost of production especially during the refurbishment of blast furnace 3 and our consolidated ebitda went to 4.9 to 1.7 in 2023 or 1.4 without the recurrent effects so by the end we ended the year with 1.6 billion brls now here we have also the results The consolidated results broken out by quarters. So the net revenue was stable during Q3, $6.8 billion. In terms of revenue, an increase because of the increase in mining and a drop in the steel unit that we will mention, the EBIT was $625 million, a margin of 9%, but with non-recurring effect of $301 million. Without these effects, our EBITDA would be $324 million with a 5% margin. This is a growth in both business units. Now, the net profit of $975 million has the impact of net income impacted by greater recoverability of accumulated tax losses of $495 million. Now in steel, we improved 3% sales and 5% the same period last year, especially because of sales in the foreign market. Now in revenues, A drop of 4% in net revenue per ton quarter on quarter. The impact is a decline in price in the domestic market, which is offset by a better sale mix to the foreign market. Now, the EBITDA was $267 million, a 5% margin. including the non-recurrent effects of 309 million. Without these effects, the EBITDA would be minus 42, a margin of minus 1, but this still demonstrates a real improvement in our operating results. Now, regarding the non-recurrent effects of 309 million, these are accounting effects. that did not affect the cash of the country it's made up by 532 million regarding provisions of the past 10 years that were reverted after we ended a legal process and 223 million negative because of provisions for low inventory turnover Just to clarify, the $532 million positive also impacted other lines of expenses and revenue, and minus $223 million impacted the CPV line. You can see the variation of the EBITDA during Q4, clarifying the non-recurrent effects. That was a one-off effect of our operation. So here, the decline of the mixed price that affected 251 million, our EBITDA was more than offset. By the decline of cost of $289 million, the $90 million of other effects, these are tax credits, $100 million, that were offset by inventory adjustments were $69 million negative. So when you see our result statements, it seems stable nonetheless, but there is a cost of $289,000 as an effect of the $223,000 and the $67,000 of the inventory adjustment. now mining minera san jose minas we had stable sales two point four million tons i would like to highlight sales to the steel unit that are growing during q for we sold three hundred and forty one thousand Now, the net revenue was $1 billion or $101 per ton, 32%, 31% above the past quarter due to the increase in the price of iron ore during this period. Now, the EBITDA was 327,031% of margin, also impacted by the increase of price in iron ore during this period. Now the financial indicators, we will start with working capital. We had an important drop in working capital of $1 billion, mainly due to the slab inventory that were $443 million. and other drops in other raw materials of $370 million and an accounting effect of $300 million that didn't affect the cash. So we had a $3.7 billion drop in working capital in 2023, mainly due to $2.5 billion reduction in inventory. And on the right, we see steel inventory after the retrofit of Blast Furnace 3. Well, we have 93 days of ramp-up, now capex. CapEx of Q4 was 654 million. We ended the year with 3 billion BRLs, 1.2. That was the revamp of Glass Furnace 3. For 224, we have a guidance between 1.7, 1.9 billion BRLs. and all of this and with this we ended the year with a cash of six billion and a net cash of 89 million. This is higher than our debt and a leverage of minus 0.05. Our debt profile is sound and we continue following the market conditions and also to see the maturity of bonds of 2026 during the best moment This was a brief presentation of a result, and now I hand it back to Leo so we can initiate our Q&A session. So we will start our Q&A session now. Our first question for Marcelo. And it's regarding import tariffs. Caio Ribeiro from Bank of America and Artur Vizcoya from Santander want to know about the evolutions of a discussion of a possible increase of steel tariff if there is an expectation regarding the timing of this decision by the government. And Arthur says that yesterday just spoke about 12, 13% increased taxes for tubes and bars. So what is your expectation regarding the new tariff review in the upcoming months? Marcelo, you have the floor. So thank you for your questions, Thiago. And joining these two questions, I'm going to give you data regarding reality. The five areas that were impacted, you can see we have 227,700 tons. The imports of steels of 2023 were 5.7 million tons. This impact is marginal. This impact in terms of measures, we are saying that our neighbors from America, U.S., Mexico, adopted rates of 25%. This impacted 4% of the export, so they are insufficient. And here the expectation is to be able to apply rates to create a zonami balance because it is totally unfair the type of competition that we are facing. And the concern is regardless of having sectors, here we have... Here, we have to think about the country's industrial development. This affects the oil value chain. This affects the competitiveness of Brazil. We are losing industrial jobs regardless of the initiatives that are important. Now, specifically when we think about unfair competition, this has no response. The expectation is that the government will propose something that is constructive, that is different, that will allow us to balance this situation, this invasion that we are suffering of subsidized products. Thank you, Marcelo. Our next question for Miguel. Okay. Now, what about prices in the auto industry? They want to know if regarding the auto industry, what are the price negotiations during the year? What are the levels of discount in January? What to expect in April? If this readjustment from the beginning of the year represents around 20% of the volume of the industry. So everybody wants to know about price evolution for the auto industry during Q1 of 2024. Miguel, you have the floor. Well, good morning. Thank you, Leo. Good morning to everyone. Well, as a matter of fact, we entered the negotiations together with the auto industries with the contracts that update conditions as of January 1st. The discount was between 9 and 12%. The volume associated to these contracts that were updated, their conditions as of February 1st, are between 25 and 30% of our sales to the auto industry. Now, your second question was regarding to talk about the negotiations of April 1st and how this impacts the contracts that already represent 70% of our sales toward this area. Our expectation is to see a level similar to the contracts that updated the contracts. On January 1st, I'm talking about a discount between 9% and 12%. Miguel. This is about price. Caio Ribeiro from Bank of America, Ricardo Monegali-Safra, and Marcio Farigi from Goldman, they say in your release, you say that you expect the revenue per ton to be stable during the first quarter of 2024. Nonetheless, Some industry participants say that there can be an increase throughout this month in the distribution. Can we see this guidance as an expectation that there will be no price adjustments throughout this quarter? Is there a mixed effect of this distribution that should generate this effect? now regarding is they can flat steel can the price of flat steel increase during q1 of 2024 miguel well it's important number one to underscore that for the first time with the meanness is providing a price guidance for the upcoming quarter this will help you in each one of your models Now, how do we reach this stability and net revenue? In Guziminas, we can classify the sales in three segments. Automobile sector that follows contracts. Some are yearly, some are semestral. Great networks that are spot negotiations that are updated on a monthly basis. And the industry that has contracts and conditions that are renegotiated quarterly or semestrally. Now, when I say that 30% of the automobile contracts had an adjustment of 9, 12% as of January 1st. Then we have the industry sector that is stable because we are updating the conditions of the first quarter. Now the great network that represents 30% of our sales, we had a 6%. A price increase as of February 1st when we mix the conditions of the three segments. Well, this gives us an expectation of stability in our net revenue during Q1 of 2024. Our next question about prices. Carlos de Jaoba from Morgan Stanley. He wants more color regarding... Regarding the price of steel, what was the situation of December vis-a-vis the average of quarter four? That was it. Well, we generally presented the indicator of December vis-a-vis the semester, so you could see future expectation. What is the new assumption that we are based on? What kind of, we want to provide you the expectation of the net revenue of Q4, of Q1, and it loses its importance now. Now, December presented a similar price vis-a-vis Q4, especially when we see the price of sale in the domestic market. There is a follow-up here from Carlos de Alva regarding prices. He wants to know, If this increase of 6% for major networks was totally implemented, yes, it was. We adjusted our price list for grade network around 6%. This took place as of February 1st. The next question for you about demands. from Santander wants to know your feeling regarding the steel demand at the beginning of the year and what to expect throughout 2024. Well, aligned to our expectation and our guidance of sales volume during the first semester, we see a certain instability. There is a typical seasonality from the beginning of the year, that is January, February, and December, that is aligned to our expectation. Industry, well, the expectations announced by Fabia, they expect a 6% increase in production. And in 2023, there was a drop of production in 2%. And this is very positive for Uzi Minas and the country. This means a resumption in terms of this area. Activity, as Marcelo mentioned, better conditions in terms of credit. and impact in new investments because incentive programs for the industry and infrastructure, well, this can result in better conditions to consume steel in our country. Our next question. It's for Thiago. Artur Biscoia, Artur Sesson from Itaú, Bebe, and Walmart Color regarding the provisions that we launched during this quarter. Could you deep dive on the provision revision of liability of $650 million in the steel industry? in the steel unit during Q4 of last year. And Daniela also wants you to tell us if in other quarters there were impacts of stock obsolescence that you didn't pay attention to. So what has changed in the company in terms of these adjustments? Number one, 530 million of positive effects. As I already mentioned, these were provisions of the past 10 years regarding an actuarial liability because of a legal lawsuit underway. We couldn't approach this to change the conditions and to balance this liability. Once this dispute came to an end, we were able to change the conditions. to eliminate this liability and therefore and there would be no impact in new provisions in the future. Regarding 223 negative, regarding the provision for items of low turnover, yes, we had a policy for the provision of low turnover products that existed here, but anticipated a provision to a provision to materials and for materials that were over five years in inventory now we've seen good market practices and will encourage us to control our inventories we will provision all the items that have been over one year in our inventory this first change we this is called we call it non-recurring because it's one-off effect and from here on it will become a recurrent effect and this is connected to our inventory management. I apologize for interrupting. I would just like to mention something. Thiago was extremely clear We have reconverted totally the industrial dynamic of the company. We carried out a deep review. In our organizational charter, we've developed important promotions, and we have people of excellent profile to carry out the transformation. We've changed the management tools, and within this package of industrial review, we are convinced that industrial excellency is the basis To face all of these challenges, all are. This was the dynamic of stocks and tools. Hundreds. And we need a rigorous plan of all the components that are part of our inventories for our operation. And this is a strategic. We can do this because we have rectified all the tool strategic high rotation, low rotation. And there is a need of a reclassification because we changed our stock dynamic. Seeing lead times and maintenance strategies, consumption, everything that we've done is extraordinary. This is a deep review of our asset management, speaking of spare parts and materials and materials. Marcelo, for you, a number of questions regarding Blast Furnace 3, its ramp-up and the impact of this Blast Furnace 3. We have Mauro Sofarigi, Daniel Sasungar, Carlos de Alba, Gustavo from HSBC, and Rafael Barcelos from Bradesco. They want you to talk about the first month of the ramp up and how this efficiency is compared to your expectation. They also want to know what is the expectation of drop of price of slabs. When will the blast furnace 3 reach its maximum capacity? Could you give us more details regarding the cost evolution with this blast furnace and talk more about the ramp-up? Give us details about the ramp-up.

Okay.

to achieve maximum capacity is totally connected with the market situation. If imports continue coming in the way they're coming it it's very it will be very difficult to see full the productive development of our facilities this is yes under risk this is at risk this is an important component and nonetheless we are plan to use or blast furnace three at maximum capacity during this quarter. This quarter, we want to test the machine at its full capacity. But to maintain this will depend especially on the market conditions, which is extremely important. And we have to halt unloyal competition competition when you talk about cost. I mentioned cost of Q4 vis-a-vis Q3 last year, and the expectation is to continue improving our cost efficiency Our ramp-up processes needs adjustments and fine-tunings of a number of variables. Our team is learning with the best experts in the world how to use this type of technology with this new blast furnace, so we have important collaboration from a number of people that are references. There is a strong program together with our supplier, and it is making progress. in a highly satisfactory way. Of course, we run into difficulties that are normal in these processes, but our expectation is to test the full speed of the blast furnace during this corner and also continue focusing on improving efficiency and cost. We have a base, we have a foundation for this, and we are extremely reassured regarding this process. thank you marcelo the next question for miguel rafael barcelos from bradesco he wants to know about the demand he wants more color regarding the evolution of the domestic demand during q1 of 2024 well rafael we see a stable market with the typical seasonalities of the beginning of the year, January, February, and with Carnival. Therefore, our expectation is of a stability when we compare it to Q4 of 2023. Thank you, Miguel. Our next question for Thiago from Ricardo Monegagli from South Florida. He wants to know, How do we see the evolution of spread, the cost of production, and the COG? Can there be a drop of COGS per ton during Q1? Ricardo? It's difficult to give you an answer because we have a number of variables. The COGS and the CPP have the influence of the mix of what you produce and what you sell, but we see a decline trend in terms of production cost. On Q3 and Q4, the production cost dropped 13%. we continue with the blast furnace 3 ramp up that will continue dropping our cost the expectation is that we will drop the cogs during the next quarter which is difficult to comment a reference that we focus on is How long the material is in inventory until it's sold? We have 70 and 90 days between the productive cycle until it is sold in the market. So this is the average period between production and COGS. Now, Thiago, Igor Ghege from Genial. He asks about the consolidation of Uzimina's solution within the steel unit. He wants to better understand what was the rationale to incorporate the line of steel of transformation, and it had $2 billion of revenue per quarter. If it was always separated, why are you going to join it now? thank you well the main factor was how we manage our business so in uzi mean uh the steel business as a whole is seen as a unity separation between steel mill and su didn't make sense and hindered our management miguel that is is the commercial that's from the commercial side He works directly to the SU. And customers are the same. Steel mill customer and transform material customers are the same. So we understood that it would make sense to unify them. And if you see with our pairs, if I am not wrong... Other industries don't carry out this type of segregation, and I believe that this is why we did it, because it's a good way of managing business. There is an important difference. 100% of the sold volume by Usiminas Solutions comes from Usiminas. This is a relevant factor. Now, controversially, Minerasa Usiminas has an important part of its business that is related with third parties. Thank you. Our next question for you, Thiago. Regarding provision Gabriel Simoes from Goldman Sachs, just a follow-up. The difference of provision of obsolescence and rack classification of inventory, one was considered one-off and the other one wasn't. The rationale here is basically The change in the criteria of the assessment of slow moving was a change of criteria. We created provision with a criteria of five years and we changed the criteria to provision material that has been for over one year in the inventory. This was a one-off and now we can see recurrent effects of these provisions. Unlike the inventory adjustment, that is a natural adjustment and something that we see in all of our operations. When there's a topography and you verify a difference between the physical and accounting inventory, you adjust it. And we always adjust it without considering a non-recurrent effect. So this is how we were doing it. I would like to add something. Just one point. The reclassification presents additional measures because what we have launched are all the preventive measures to prevent these actions what am i talking about and i'll give you a simple example there is a spare part that is very important in the productive process that we have it's called strategic if it is there for the next 10 years it's good news you of course When you have spare parts and the same thing to products that are not strategic and that remain for a long period of time, you define obsolescence, but you have to create conditions and processes. that will avoid this purchase, this acquisition, and the production. This is the key of success in the efficient management of resources, and this is what we're doing here. And as I have more questions here that are asking about the e-interaction, we are applying the best practices. Because with this, we can be more efficient and we are using this in all our productive processes, in machines, equipment, as well as products. Because this is where competitiveness lies. Thank you. Our next question. Carlos de Alba for you, Thiago. He wants to know about idleness. When can we expect equipment expenses that incur in depreciation? Well, can they represent zero now that blast furnace three is running and what plants are included in this line? I cannot tell. I really don't know when it will go down to zero or if this will happen. These are equipments with equipment that have been shut down and don't produce. You have to maintain these equipment, although they've shut down. But you still have expenses to disassemble and to take this material somewhere else. The value will drop significantly because it is classified. During a long period of time, Blast Furnace 3 was considered as shutdown equipment. The greatest expenses are in Cuba, though. And we continue, we are demobilizing them, disassembling them, and with Coke, Plant 3, and Ipachinga, that is paralyzed. But the trend is for this expense to be marginal from here on. Now for you, Thiago. Regarding the results, Lucas Lagashispe and Carlos de Alba, well, with prices pressured downward, but when you see the net cost and the steel mill, during with the ramp up of last furnace 3k and we think about a break even ebitda or even positive results during q1 or this improvement will be seen during q2 onward and carlos de alva wants to know what to expect in terms of ebitda margin in the upcoming quarters chiago I can't talk about EBITDA margin, but the expectation already helps. Q4, that has just been reporting, eliminating non-recurrent effect. We still had a negative EBITDA of minus 40 million and a margin of minus 1%. Our expectation is an EBITDA. that will be positive as of the next quarter. I can't give you exactly what the margin is, but yes, the expectation is that the company will go back to the black. Daniel Sasson wants to know about working capital. After a strong release of working capital during the second semester, Are you at ease? How will the working capital be impacted with the ramp up of Glass Furnace 3? The delta of the slabs from third parties, have they been used already? The slab inventory is practically back to normal. Perhaps we have some slabs in our inventory already. That was for the overhaul of Blast Furnace 3. Our inventory, by and large, is normalized as we showed. Well, comfortable is a difficult word because we always try to improve. Marcelo mentioned how we're working in a number of fronts, but mainly when we think about working capital, therefore we will continue pursuing improvements. Now the expectation for the upcoming quarters, is stability because we have already reached an adequate level and we're still pursuing new opportunities but we don't expect a significant drop in working capital from here on at least not during the next quarter thank you our next question For Marcelo, Igor from wants to, what is the reposition of coke coming from the cokes? And now that the consumption of slabs is normalized in the operation and also the working capital. Igor. Well, I can say that today, During the first part of the presentation, we showed you the important decisions in our industrial configurations. We shut down one of the coke plants that has an important environmental impact. It lowers costs. And now we've focused in coke plant two. This coke plant is operating at more than 95% of its capacity. We've completely recovered its production dynamic and maintenance dynamic. We have an excellent team dealing with this. And we are initiating a hot repairment to totally recover its productive conditions and environmental performance. This is a project. that has lasted over two years. What do I mean here? So our facilities are stable. We will fully recover it. And the complement for the blast furnaces are being developed. We're doing this within an important network of cold suppliers. This is something that we have already developed. and the cost conditions of this operation are extremely competitive. We already have a plan and a clear definition for the upcoming years to operate with the mix until this coke plant goes into full production. Thank you, Marcelo. The next question, Thiago from Carlos de Alba from Morgan Stanley. He wants you to elaborate on the iron ore sales for 2024 and if could you could you explain the shutdown line and why was it deactivated? Carlos, as we also communicated, our expectation of 2024 is the drop of production of iron ore by GUSA because of the areas that we are focusing on. A number of areas, specifically one area had to be deactivated because of natural matters because love we will only initiate or other areas during the second semester of the year there will be a production drop during the first semester and greater production as of the second semester there it is not it's not connected to the processing plants but yes the other areas we those we are building roads and we are creating the necessary infrastructures to start this area these areas these plow areas There are questions from Rafael, from Carlos, and our investor relations team will answer these questions afterwards. Marcelo, from Goldman Sachs says, with almost 40 years, Tishis, TDX, and Uzi Minas, how do you see the position of the company in the upcoming years and what is the best pathway for the company? You're muted, Marcelo. Yeah, these are many years. I am extremely excited and Uzi Minas is an emblematic company. When we see Brazilian industries and there's great potential here of development, of growth, it can contribute with the industrial growth of the country, providing value to suppliers, communities, people, to shareholders, to all the stakeholders. Now the pathway There's no secret regarding the pathway you talk about. The 40 years in the company were based in fundamental principles. We have to create value to our stakeholders, to societies that we work in, communities, shareholders. This is what we will continue strengthening in office. And what we mean is we will focus on industrial excellence. the quality and development of human resources and being good neighbors and also we need to contribute toward the growth of brazil and we have to contribute with the country's industrial segment doing what is best in which one of the segments we to be a reference inside the industries like the best of world-class industries that is our target is to be better deep and of course we can achieve this with focus discipline in all our dynamics supply, commercial, industrial processes. For this, we must be perseverant. We must be consistent. We have to be transparent. We have to work with knowledge. And of course, we have to work with community, collaborators, society. We are optimistic and we're optimistic regarding Brazil. So our Q&A session has come to an end and we would like to thank all of you for your participation and I would like to remind you that all the IR team is at your disposal for any further questions and we do wish you an excellent afternoon.