Good morning, ladies and gentlemen. Welcome to the Conference Call related to the Results of BRF S.A. for the Second Quarter of 2022. We would like to inform you that this conference call is being broadcast over the internet at www.conferencecall.com.br/brf/t22.ham. Right now, all participants are in listen-only mode, and afterwards, we'll have the Q&A session when we will provide further instructions to the participants. We request that each participant ask just one question. Statements included in this presentation concerning the company's prospective business projections and growth potential are merely forecasts and were based on management's expectations regarding the company's future. These expectations are highly dependent on market changes and the general economic performance of the country and industry segments, and therefore are subject to change. This conference is being recorded, and it will be presented by Mr. Lorival Luz, Global CEO of the company. The other vice presidents of the company are also present. We will now hand the floor over to Mr. Lorival Luz, who will commence the conference. Good morning, everyone. Thank you for participating in this conference for the results of BRF for the 2nd quarter. I would like initially to apologize for our delay. We had a technical issue with our provider of the teleconference, so please forgive us for this delay. Moving on to the results of the 2nd quarter, I would like to say that we had a positive quarter illustrating the effects in our operations of the decisions that we took in the 1st quarter regarding adjusting our market position and adjustment of the whole chain. In this 2nd quarter, we already have an EBITDA of BRL 1.4 billion, 7.7% higher than the 2nd quarter of 2021 and also a lot higher than the 1st quarter of this year. We will look at all the other segments and regions where we had improvement in all of them. Our focus in the 2nd quarter was on the cash flow and the net results, along with the operational management with priority on more efficient operations. We'd like to reinforce that, as you can see in the financial statements, we had two non-recurring events related to the hedge of the bond issued in 2012 and also regarding the hyperinflation in Turkey that required us to perform some accounting adjustments in Turkey. We want to make it very transparent to you so that we can assess the operations result in itself, where we have a gross margin of almost 19% and 10.3% in the EBITDA, 10.6%. In the next slide, we took those decisions in the 1st quarter so that we would go back to the company's previous margins. As you can see, this has happened. The results of the 2nd quarter, we had almost 19% gross margin, almost the same as the margin for last year. We know that there is a seasonality to our sector, and this is in accordance with that, and we had a very good recovery of our operating margins. As you can see in the next slide, I'm going to talk a little bit about the business environment in Brazil and also in the international market. When we speak of Brazil, it is our main market, and what we were able to realize in the 2nd quarter is that there has been a resumption of our healthy profitability level. We had a hard 1st quarter, and we had to take a lot of measures to adjust our inventories and our supply chain. We were able to now have a positive EBITDA, but with a margin that is still below the potential of our company and the Brazilian market. With that EBITDA margin of 6.1%, that from a -7 EBITDA. We can see the effectiveness of the measures that we've taken. We've also had an adjustment and a reduction of our stocks of inputs and also finished products, allowing for more efficiency in our whole chain and also in logistics. Something that's important to highlight is the versatility of our portfolio with the brand Sadia, Perdigão, Qualy, Kidelli, and Delight that encompasses the whole market. We reach the many different social levels, and that shows the resilience of our sector and also of our product portfolio. It's a very positive scenario when compared to the 1st quarter of this year. Of course, we need to continue to be cautious with the cost scenario, but at a different level than what we saw in the previous quarters. Regarding the main costs, we would say that these costs now are practically stable. In the 2nd quarter, we may have less impact by diesel, given the measures taken by the government to reduce diesel prices in Brazil. That will have an impact on our company's costs in the 2nd half of the year, and that allowed for better performance in Brazil. Requires us to be cautious and a very austere management, paying attention to the details so that we can have operational efficiency and bottom line, with increasing profitability for the company. In the next slide, we can see that there's an also positive scenario throughout this quarter with the results. You can see an improvement in the performance. These are actions that were implemented each month, and we see the results each month here in Brazil. There's also been a recovery in the price of chicken and pork, as you can see in these charts, that reflect the market price from CEPEA. Even given the challenging scenario that we have in Brazil with a decrease in income, what we have from information from the Brazilian Supermarkets Association is that there is a strong resilience in the food sector. These we offer basic products that are always the priority of the consumers when they are making decisions to make sure that their money is being invested in food. When we look at the international scenario, we've seen improvement in margins and also advances in all sectors and areas. A very positive halal market with robust margins, robust positioning that has leveraged our local position, and showing the strength of our local brand and our local distribution, as well as our local sales team that have allowed us to have proper positioning with the best product mix. We can see the advance of processed product where we can capture better margins in this market. When we look at direct exports, we also had a very good improvement. We almost doubled the margins in the 2nd quarter, also much higher than last year's. When we look at Asia, there are still a lot of impacts by China, so which led to a lot of challenges in sales, but already with better results. When we look at direct exports and the impacts from Asia show the results of the adjustment and the advance of the structure simplification that we announced in the past quarter, we can see that it's more dynamic and agile, and that allow us to capture more volume and margin. We are starting to see the results, as you can see in the numbers that we are showing here. This is a trend that we are seeing in the month of July. Now you can see the results. When we go on to the next slide, I think it's important to mention our strategy in Saudi Arabia. We opened a plant there for processed foods. Now we can increase the production capacity of value added items in that country. We have recently had the approval to export from our plant in KIZAD to Saudi Arabia, and that reinforces our capacity of exports of processed food that have a higher added value at a very important moment in the 2nd quarter, where we will have a World Cup for the 1st time in that market, which will begin in the month of November. I think we are very well-positioned with our brands to capture this opportunity, given our local presence, not only in Qatar, but also in the other countries of the Emirates that are going to be hubs for this tourism, with an increase in religious tourism, business tourism, as well as leisure tourism, as we've been seeing in that region. We are ready to seize the opportunities that this will provide for us. Here on the right side, you can see the positive scenario of the direct exports. These are data from the Brazilian Export Chamber, SECEX, and you can see that the price is higher than what we had for 2020 and 2021. It reflects what we mentioned in the 1st quarter regarding the impact of the situation in Ukraine as it is one of the largest exporters in the world, and also the exporters that have been affected by avian flu. We see this effect here in the chart. As for pork, this scenario, we see that the 1st month it was worse than the past years, but we see improvement starting in May and also with prices that are more stable and improvement from the beginning of the year. To give a little bit more detail on this, we see the reflection of chicken in Japan, but also South Korea, with an increase in price. I think it's worth looking at China, because when you look at this chart, you can see the peak in pork that happened in the 2nd quarter of 2019 and continued until last year. The level changed, but we can see that a recovery has started, and in June, July, we've already had a price increase. When we move on to other segments, we've also seen positive results when we look at pet food. The planned integration has allowed to increasing results and margins, and we can see the effect of the synergy that we have in our product portfolio, our sales teams, operations and logistics. We see that this integration was very well-planned and is being very well-executed by our pet food team. With good market positioning, we now have a very relevant presence and are increasing all of our brands, and we can see that there's a lot of potential for growth. Given the position that BRF has in the international markets, the doors will certainly open for us to export pet food to these countries where we already have a commercial relationship. This is a very positive opportunity. In the ingredient segment, we are seeing positive results that show the strength that we have and the broad range of our products, and how we are able to better use them in our chain by adding value within our units. This work is being very well executed very efficiently, and we are seeing the results throughout the past years and also the past quarters. Within our ESG agenda, we are advancing our plans. It is a priority to work and to make decisions towards our net zero journey. BRF is working to be recognized for our social responsibility. We have the BRF Institute that was founded ten years ago and works in several different areas, such as education, citizenship in the different locations where BRF has operations. Something that is always a priority for us is EESG, because we also want to be economically sustainable. We want to work with social responsibility governance, but we need to have economic sustainability as well. Now to talk about the capital structure, I will hand the floor over to our CFO, Fabio Mariano. Thank you, Lorival. Good morning. First off, let me talk about the capital structure. I'd like to say that despite we have to live with the leverage above our objectives to run BRF, we currently have a plan that will boost the generation of free cash flow. I'm talking about working capital in the inventory line. Not only finished goods inventory, but other inventory lines, raw materials and other items that can also boost our capacity to reduce the net debt of the company. A 2nd comment I would like to make before I start, I would like to highlight that the company's debt profile remains solid. Liquidity is at about SAR 12 billion. When we consider pre-negotiated lines as allocated credit, that would be enough to cover amortizations in the years to come. There's no risk, there's no imminent risk of renegotiating it. The average profile is long. The average maturity is nine and a half years. Another clear intention on our part, the need to reduce indexations of a strong currency. A subsequent event is public. We'll be issuing CRAs, BRL 1.7 billion, and the use of these resources will be used to prepay debt in strong currencies, in hard currencies. That's our goal in the 2nd half. That will contribute to reduce the weight of the dollar in our debt. Let me now talk about the performance of free cash flow generation in the quarter. Consistently, just like we said in the 1st quarter, the FX, despite free cash flow generation is neutral, minus SAR 12 billion. It's important to say that we have that FX benefit. It's explained by these almost SAR 800 million related to derivatives and the FX in our cash. The cash generation ex FX is about BRL 770 million, and I'm referring to cash consumption. That's only natural that our debt will go up. I show you here, you have a BRL 1.7 billion increase in the net debt it has to do with the market, debt in hard currency. Despite the fact that we're receiving cash associated to derivatives, we market our debt that is pegged to the U.S. Dollar. We have to qualify what that effect is. It's about BRL 8 billion effect that also contributes to a higher debt in the quarter. I'll turn back to you, Lorival, for your final remarks. Okay, let me move on to final remarks. Let me just start by saying that I have to thank the support of our board of directors as to all the decisions and all the implementations of the measures that were necessary throughout the 1st half and the 2nd quarter. They've been always there to support us, to guide us, and we can see that reflection in the positive results we've had. Once again, we'd like to thank them and state that we are in total alignment with our board of directors. The entire company, the entire team of executives, the entire BRF team are aligned. Our margins have improved in all segments. The 2nd point, we still hope to acquire or to have even more gains with the plan we have just started. A plan we started implementing in the 2nd quarter. Some of these gains can be seen in the capturing market opportunities. Volumes and margins are on the rise, and there are other effects that will be perceived in months to come. Our 2nd half will be focused on improving our service level and execution to capture even greater volumes and results in Brazil, so that we can go beyond previous records. The focus will be on the execution of our strategies in the 2nd half. It's a very important 2nd half because of its seasonality, and it will be different. For the 1st time, we'll have a World Cup. It's important in Brazil being held in this semester and then the holiday season. Two very important campaigns that will require our focus and we are hands-on. We are obsessed with that appropriate execution so that we can get the best results possible. This has to be in alignment with marketing strategy, brand strategy, positioning, introduction of new products, a stronger positioning of Sadia brand. As you can see that positioning is going to be crucial. BRF with Sadia and Perdigão brands will be the sponsors of the broadcast of the World Cup in Qatar. BRF, Sadia, and Perdigão will be there present in broadcast TV and pay TV. Focus, led by Fabio Mariano, our CFO. We can even dare to say it's an obsession to generate cash to have better net results brought about by a series of initiatives, activities that are well thought of in order to get positive cash generation and a continuous improvement now in the 2nd half of the year. In conclusion, this 2nd half demands our caution, our attention, taking into account all variables that may impact our business. There's also that positive outlook, as I said, the World Cup and social programs that have been injecting resources in our economy. Part of it will come to the food industry, and BRF is well-positioned to capture that extra income too. We'll be working on it throughout the 2nd half of the year. We have to pay close attention to detail. There are many external and internal variables that may impact our business, and they may require immediate action on our part. Once again, thank you. We'll now start the Q&A session. Ladies and gentlemen, we'll start the Q&A session. Participants are entitled to ask just one question. Press star one. To remove your question from the queue, press star two. Isabella Simonato asks the 1st question. Thank you. Good morning. Can you all hear me? Yes. Good. Thank you, Lorival. I have two questions. What is your take on the chicken or poultry cycle, both in Brazil and abroad? Exports are on the rise in the 1st quarter or the 1st half of the year, and a drop in the accrued. As far as margins go, they may be recovering, especially in the recent decrease in prices of grains. What's the supply outlook? How can prices hold internationally? My 2nd question goes to Fabio. Your comment about cash generation actions and inventory. Inventories were going through the roof back in 2021. That impacted performance in Q1. The company's recent history indicates that the lack of inventory represents a problem too. I would like to better understand what would be an ideal inventory level, maybe number of days, what metrics do you use that can help us understand the working capital balance? Thank you. Thank you, Isabella. I'm going to talk a little bit about what we're seeing for the poultry. We don't see a lot of changes in the short term. You still have certain effects that will take time for them to be rebalanced or readjusted. When you have a producer that is an important player such as Ukraine, it takes some time for the market to adjust itself. We also have the avian flu impacting Europe and the United States, maybe not in very concerning or catastrophic levels, but it still continues. There's another situation that is related to the availability of eggs. In the whole world, we see a scarcity in the United States, Europe, and even in Brazil. I would say that impairs the growth, and also with regard to placement and production. We need to look at all these factors, and I don't think we're going to see any significant changes in the poultry market. Before I hand it over to Fabio, you said something that concerned me. You said that in the past, we had problems when we reduced inventory. I can tell you that this is not going to happen. We are not working to reduce inventories that will place any risk for the company. What we're saying here is to have a more efficient management, especially with regard to inputs. When I say inputs, that's the inputs that we produce. I slaughter the chicken and it becomes an input. That's what I'm talking about. It's not, for example, corn. It's the product that's frozen to become inputs for production later on. That's where we need to improve our efficiency within, because then we can allocate less capital, less storage costs, and less logistics from the plant to warehouse and so on. That's what we're talking about. Of course, along with an adjustment of finished products. I just want to make this very clear that we will never put at risk inputs related to feeding our animals. Yes, just to add on to what Lorival said, Isabella, you know our grain inventory, you know it's part of our hedging policy. There's the risk of price volatility and also of supply. That is something that's not under discussion. We were having interest of around 2% and 3% in Brazil, and now these capital charges can reach up to 14%-15%. The company needs to challenge these minimum inventory policies, and that's what we're working on. We have identified certain excesses in a few lines, and we want to reduce that to have them at the minimum levels, and we need to test these frontiers. The cost of service, what's the cost of placing the product at the sales point? We see that there's a lot of capital that can be demobilized, and we may risk losing sales. Once again, this year, we have a coverage about 13%-14% associated to this. We already have certain initiatives in progress, and we hope to see them effectively implemented the 2nd quarter. That was very clear. 13%-14% of coverage, that was not clear. You were breaking up. It's about the financial charges. There's a lot of margin there. Is it clear now? Yes. Yes, it is. Thank you. Our next question is from Thiago Duarte from BTG. Good morning. Good morning, Fabio. Good morning, Lorival, and everyone. Could you please elaborate on the slide that you showed the recovery in Brazil? Three months ago, during the Q1 earnings call, you explained the measures you took to reduce inventory levels throughout the chain, and it was very clear to us that this was a concentrated adjustment for Q1, and things would go back to normal in Q2. That's the impression we had then. Of course, there were major improvements on a quarter-over-quarter basis. When you look at the sequential improvement of results, when we try to make any calculations with that kind of information, we have the impression that gross profit in Brazil, when we look at May, June and July, when it's much better than April, it's still below 20%, which is way below what would be your historical performance in the Brazilian market. I'd like to have a better understanding. Is that the result of measures you took in the 1st quarter? Because the results in Q2 were below those of Q2 of last year. Can we believe that the Q3 will be normal without those effects of those measures you took in Q1? I think this is an important discussion to have. The 2nd portion of my question, let me bring the discussion to the working capital issue. I have the impression that part of those inventory reduction, more streamlined inventory may have to do with the fact that the company has reduced its slaughtering pace, its production pace. Here's my question. As the numbers of slaughtered animals go back to normal, the company still have some working capital left to consume. That's my 2nd question. The 3rd question, I think it's more directed to Lorival. Can you talk about the future? The 2030 vision. In Q3, you said it was under revision and you made many decisions to improve efficiency. You've already announced them, but I would like to hear from you. What are the adjustments that you're going to make for the 2030 vision? What are you considering implementing? Can you share some of that as far as growth is concerned, investments, and how the company will be positioning itself in the long term? Thank you. Thank you, Thiago. Regarding Brazil's recovery, when we compare it to the same quarter in 2021, we are about two percentage points below last year. As we said, that means we do have room for improvement and to reach those levels. I can say that this is sequential improvement, so April still has certain effects from the decisions and the measures taken in the 1st quarter. You know that this is a very long chain and not at all the decisions taken, you have 100% impact within that month. I can say that within this quarter you do have an advance of gross margin and also the EBITDA margin from the months of April to June. As for your question, for what we can expect after the 3rd quarter, if the scenario will be better. Well, I can't give you any proper guidance or prognosis, but what I can tell you is that we are on the right path. The results that we've been having show that we are moving towards the objective that we want to achieve. When you ask about working capital and the level of inventories, what are we looking at there? What's our focus? I look at the raw material for products. Inputs for finished product. If I'm going to slaughter more or less, that's the means to an end. The management of the finished product is what we're doing. If I'm going to slaughter more, that's because I have more market and I have more sales. I would just like to show you this management, and then I can go back and talk a little bit about strategy. I'll hand it over to Lorival now. Good morning, Thiago. What you mentioned about slaughter, it seems quite logical. We will not have an incremental increase in working capital. What we did in the 1st quarter, let me give you the example of the disposal of eggs. You've already invested those resources when you dispose of eggs, so you're eliminating your capacity of recovering that in the future. You've already had an impact on performance as well as an impact on the cash flow. You will only have an increase in working capital when you change the level of the animal, the number of animals that you're working. The relative demand for working capital is more expensive. Even though you have more efficiency in the number of days, your efficiency is higher. You're changing the level there. You have to take that into account. As Lorival said, the plan does not take into account the number of animals slaughtered. I hope I have explained that to you. Let me give you the strategic view. We'll be working on reviewing that strategic plan, our avenues for growth. Once it is consolidated, we'll be making a specific announcement about it. Let me point out that our focus today, and we are focusing all our energy in making those corrections, those that we made in the 2nd quarter to improve results, as you can see. Now the focus shifts to cash generation and the net results of the company, so that we can go back to the profitability levels we had before. This will take place at the same time, and we'll make that announcement as soon as we have concluded the plan, have it approved and in alignment with the board of directors. Short term, those corrections. Now the focus I have just mentioned for the 2nd half. Thank you. Thank you for your answers. Thank you, Thiago. Next question comes from Mr. Lucas Ferreira from J.P. Morgan. Good morning, folks. Here's my 1st question. It's about resuming exports to Europe. This is something you have been working on for quite some time. Have you made any different decisions? Are you setting your priorities elsewhere? Can you talk about maybe resuming exports to Europe? My 2nd question is about halal. What is your take for the next quarters? In the press release, you believe you can expect some cool down in margins and profitability. Could you elaborate on demands, perspectives for the 3rd quarter? Is there more competition, stronger prices? I'd like to understand the costs curve for the inventory you're selling for the 2nd half. Thank you. Thank you, Lucas. As far as Europe goes, we continue to be 100% aligned with the board of directors. We have been working towards that goal, which is to resume exports to Europe. As I stated time and time again, I don't believe that resumption will happen on a short-term basis. It's a complex environment that involves diplomacy, trade agreements between Brazil and the E.U. The environment is not conducive to that resumption in Europe. Of course, we are tirelessly working towards that goal, but I don't see that happen in the short term. As far as the halal market goes, I will turn over to Igor. He can give you more color as to that market dynamics. We have to take into account the dynamics in that region, the resumption of tourism, which is very important to that region. I'm not talking about the locals. I mean, tourists are going back to visiting these countries, as well as business and leisure tourism. Also take into account our positioning. Igor, you can take over. Thank you, Lorival. Good morning, Lucas. Thank you. Thank you for your question. When we have to think about the numbers we're looking at in that halal market, we have to understand that margins are reaching its historic records because of the Ramadan season. The campaigns we made, they were important to change the portfolio we have been trying to implement in recent years. You've seen higher added value, and that added value can bring in higher margins that are more time resilient, and we are closer to consumers. We can navigate through higher and lower times, and do better than the rest of the market. When we think about the 2nd half, there is demand for the halal market. That demand is driven by the World Cup in Qatar. The population may double. It's a 2 million inhabitants in country. They will be receiving at least another 2 million tourists. Many people will use Saudi Arabia, Dubai, and Oman for connections. There's no hotel capacity in Qatar to accommodate all these tourists. We believe that Saudi Arabia, the UAE rather, will have an increase in demand because they'll have that, new consumers. The demand is there, our margins will become will go back to normal levels. That'll take place slowly but gradually, but we are very enthusiastic about it. That's what I can share with you. I hope I have answered your question. That helped a lot. Thank you. Thank you so much. As to the costs curve, we have to take into account the commodities scenario. You know that spot prices impact our costs. That's a six month time period because the feed inventories, all the way it gets to the chicken and to the end product, there's a time lag there. Some factors have helped us improve. The grains scenario is less unfavorable as it used to be. Nonetheless, we have to remain cautious, very stringent in our management strategies at every cost line to make sure that our operation remains healthy. Next question. The next question comes from Mr. Leonardo Alencar from XP. Good morning. Good morning, Lorival. Good morning, everyone. Maybe just to follow up, just piggybacking with the comment you made in terms of genetics, that's a challenge. Every country is going through that. Production may be on the rise and be resilient because of the lack of availability of chicks. Do you believe that you can improve margins more than in your top line, especially because of the performance in the halal market, Asia recovering a little bit? Would you believe that you'd have more growth from the international markets than in Brazil? Okay, that's a very good question. He might be able to give a better vision. What's important to say is that we do this analysis for each market. What flexibility can we give to the production to adjust to each region and to make sure that we have profitability, availability, and other factors in each market. This is something that we manage daily in light of the whole international market. This may happen, and we are always adjusting to the demand, and we have this versatility of production that allows us to do that. Okay, thank you for your question. As Lorival said, this is a market with less supply and increasing demand, and we see that in the international market and also in Brazil. With our planning team, we look at each market, what's going on there. We see a positive scenario in Japan and Korea. Also in Brazil, we've had an increase in the consumption of chicken here given our economic situation. We look at this every month, every day. Of course, there are impacts from FX. We had an increase in cost. This is a work that we do in the details so that we can look at the work with the exports internal market. To have this balance, we don't want to throw everything to market, but we want to seize the opportunities that we have in each market. Let me just make sure I understood that. We've seen that the poultry industry can adapt very quickly to the demand adjustments because of shorter production cycle. In that scenario that you have a problem in production, do you believe that that can change in the short term? I think it's changing already. We would be seeing greater recovery. It hasn't been happening in a month-to-month basis. We've been seeing that placement is not taking place as fast as we would like it to be. That can be translated into better margins for the entire industry. Did I answer your question? Yes. That's very clear. Thank you. Ricardo Alves asks the next question from Morgan Stanley. Good morning, Lorival, Fabio. Thank you for your call. My question is about Turkey. Can you elaborate on the international markets, specifically in Turkey? Do you believe that there is some structural improvement in Turkey that makes you feel comfortable? Along the same lines, I would like to elaborate on the expressive market share gains you've had there. How are you managing to navigate this more unstable environment, hyperinflation, devaluation of the currency, and at the same time, you're gaining market share? That's my 1st question. The 2nd question has to do with the market share gains based on Nielsen data. I thank you. Could you please give us more color, breaking down by category, the more aggressive behavior of your competitors, boosting pricing, reducing discounts? I'd like to better understand the dynamics for that share in Brazil. Thank you. Thank you, Ricardo. I'll let Fabio and Igor answer regarding Turkey. I think they can give you an answer and this adjustment to the hyperinflation in that country, which affects our results and also a little bit of the market dynamics. Fabio, Igor? Well, let me explain this effect. It's just an accounting effect. When you have an inflation over 100%, such as this case, when we're speaking of assets and liabilities, we correct it from January to June and so on. In this table, you see all these variations reflected line by line. You can see that there's a contribution to net profit, and we try to adjust this. Of course, in this 1st half of the year, we had a very good performance in Turkey despite the hyperinflation. We were able to pass through the prices and to have a good way to uphold our margins. However, we see some challenges ahead of us, and I'm going to let Igor explain this new scenario. Thank you. Good morning, Ricardo. When we look at the hyperinflation in Turkey, there are three metrics that we try to control and accelerate. It's to gain market share, our portfolio mix, and also margin resilience and the pass-through of prices. If you look at the 2nd quarter results, you can see that we've had year-on-year market share with an increase of 4.5% in processed products. This has allowed us to keep a margin resilience so far. Our concern for the future is that the direct effect of hyperinflation is impoverishment of the population. We know that there's a direct correlation between income and protein consumption. We have seen movements in categories that increase or decrease along with other proteins. As a whole, we do see a reduction of the market as a whole, and we are paying a lot of attention to this and monitoring it. What is our strategy for the future? It is to use our global platform to have more exports. In Turkey, 30% of what we produce is related to our export. We export 30% of what we produce, and I think we gain competitiveness and need to export to that market. We export to Iraq well, and North Africa, so we need to improve that while there's this scenario of hyperinflation and make sure we keep our market share. I hope my answer has clarified your question. Yes. Thank you. Okay. Regarding what you asked about market share. Let's give you the answer. I'm Marcel Sacco. I've been responsible since April for marketing in Brazil. As for this market share adjustment, what I can tell you is that we're working to balance profitability with growth. As you mentioned, in the past 18-24 months, we've had a priority on our cost structure and always trying to protect our profitability. In the short term, we are trying to balance growth and profitability with making certain adjustments that are helping us recover market share in the short term. If you look in the past 60 days, several of our segments have started this recovery, and we are adjusting this cost structure without harming our profitability. We have a focus on value-added products and also the ones where we have higher volume. We've also rebalanced the innovation towards this direction, products that will give us better results and also more market share. I think we are still adjusting this equation without foregoing profitability, but with a stronger focus on recovering market share. We are seeing the results here. As Lorival mentioned, our priority for the 2nd half relates to execution. We see an opportunity to accelerate market share with this improvement of execution and also with these year-end investments in the holidays as well as the World Cup, which will help accelerate this market share recovery. Sadia, Perdigão, and Qualy will have a lot of presence media presence in the 2nd half. We have a combination of several factors that will help rebalance this equation of growth and profitability. Thank you for your answers. Thiago Duarte from Goldman Sachs is up next. Hello, good morning. Thank you for taking my question. My question's about costs. Lorival answered part of my question when he asked about the halal market. The cost per kilo was down 3%. It's difficult to analyze that based on the historical curves. Inventory, shorter inventories. How soon are we going to see spots reflected in your P&L? Given that accounting time frame, what's your take for the cash COGS in the 2nd half of the year? We've worked on reviewing the working capital, and it won't impact your grain strategy. I would like to understand whether these lower corn levels will impact the hedging policy as of now. Thank you. Thank you, Thiago. Before I hand it over to Fabio. Given the importance of the commodities as an input, this is daily monitoring that we do in all the regions. Where we buy and how we're buying it. Before any hedge, it's how to seize the opportunities that we have in the different markets. That's what allows us to have more coverage given the seasonality of the crops and production. This with regard to physical inventory and prices. I'll let Fabio give you the rest of the information. Well, good morning. With regard to projection, I can't give you that related to cost. That's something that's quite sensitive, but I can clarify certain things. The price of the grain commodity does not interfere in our hedge policy. As Lorival mentioned, when we believe that grain is at a good level, then we can have more inventory, whether it's physical or in the orders placed to producers. When we think of our strategy to increase cash generation by reducing inventory, then you can have a temporal difference. When you have the result of a grain derivative that can have a reflection on the COGS, because inventory, 1st you have the physical inventory, then you have the purchased balance, and then you have the derivative for coverage. You have the natural hedge that is your finished product. The more finished product you have, more time you'll have before you feel an effect from the grains in your COGS. This cycle can be reduced. We believe that will happen, and we can provide visibility of this throughout time. Okay, thank you. Gustavo Troyano from Itaú asks the next question. Good morning, Lorival and Fabio. I'd like to follow up on the profitability in the domestic market. Looking at a different time frame. Margins have grown throughout the quarter, but I would like to better size this challenge. How can you bring gross margins back to normal in Brazil? That was very transparent, but what's to come in that division? Looking at your performance and at the start of the 2nd half, do you believe that there's room for further price corrections based on the adjustments you made in the chain? Also taking into account consumption. The support, the extra, the rescue money will help you too in volumes. In alignment with that simplification strategy. In other words, how can you bridge that gross margin looking at top line cost, and what would be the main drivers for the expansion? Thank you, Gustavo. That's a very comprehensive question. I'll try to cover as much as I can. Well, what I can say to you is that the margins in Brazil, despite that improvement within this month, it's still below our own potential and where we expect to go. There's room for improvement. There are opportunities out there, and we can do better. That improvement can come from both ends. You can have a better commercial execution, having the team closer to the point of sale, increasing our distribution, our capillarity. That's the strategy that Marcel described. A better positioning strategy, talking about our brands, our products, emphasizing the quality of our products in the minds of consumers. We can, of course, work on the top line and improve the mix. At the same time, addressing the cost that we talk about, the matrix management of our expenses, all the actions we've taken, you can see those results coming up in the 2nd half of the year. This is what I've been saying time and time again. We have to be cautious. We have to be prudent with those factors that are not necessarily under our total control, our direct control. These are macroeconomic variables, geopolitics, international markets that can also impact costs and commodities. We have to be, on one hand, very efficient, but to bring costs as efficient as possible to get better margins. What I can say to you is that that improvement has been happening consistently, but again, below the potential we can achieve. That was very clear. Thank you, Lorival. Victor Serruya from Credit Suisse is up next. Good morning, folks. The better profitability in the 2nd quarter, that was very strong, one of the best in this cycle in terms of speed and the EBITDA level. When we make the calculations trying to come up with the reasons behind it, I think it comes directly from poultry, faster cycle and all that. When we talk to those folks in the pork market, they've been losing a lot of money in this 1st half, and there is some adjustment going on in the supply of pork. It takes more time, but that would improve if it in fact happens. That will improve your profitability. What's your take on what's going on as far as pork? Is it something that is actually going on? Can that be important to improve your price dynamics and profitability as a consequence, or is it not happening at all? Thank you. Thank you, Victor. I think that's a very relevant point. Chicken certainly responds faster. What we've seen is very consistent with what we've mentioned. It's this adjustment that happens in a smaller period. You have also the external market. Going back to what we've mentioned, you're correct when you say that the pork market, the local market, especially when we look at the 1st quarter, it was very, very bad. You look at the margins. The margins for producers were quite low, probably the lowest we've ever seen. Pork market certainly takes a lot longer to adjust itself, and this chain goes through certain phases. There are a number of factors that play a role and that demands more time. To speak of our perspective is we had a slight price improvement in pork prices, but it will still take more time for this adjustment to happen. We said that this would be closer to the end of the 2nd quarter or the 3rd quarter. We believe that this is something that will happen in the 2nd quarter possibly. We will see this in the last quarter. Of course, it's very dependent on China. If China starts buying more and increasing the volume, then this adjustment will happen faster when we look at the issue of profitability. Because this adjustment of the chain takes more time, and we will not see its effect in the very short term. Okay. Thank you, Lorival. I have a follow-up of that question. Do you think better profitability of processed products depends on this adjustment of the pork or is it not related? There's certainly a correlation. When you have a lot of supply of pork, of pork inputs, that brings the price down and the non-integrated producers have an excess, they have a low margin, and that pressures the profitability of processed products. But the opposite also happens, and we saw that happening in 2019, 2020, where the price of pork increased, and that made a lot of non-integrated low-cost players to continue operating in the market. I can't tell you, but it's one thing if you're buying it at BRL 5 per kilo, it's another if it's BRL 8 per kilo. That will mean whether a processed product will be feasible or not. There certainly is a correlation and that will have an impact, related to pork inputs. Okay. Thank you, Lorival. Rodrigo Almeida from Santander is up next. Good morning, Lorival, Fabio, and the entire BRF team. Let me just explore two points. In the past quarter, you talked about your plan. You touched upon it once again today, but you've had a couple of months after that initial plan. Are there any updates? What's the status? What is the status of that simplification plan? What can we expect for the 2nd half of the year, especially when we talk about costs and expenses? My 2nd question is about CapEx. I'd like to understand the remainder of the year and even 2023. You have the weight of those biological assets. The running rate was about BRL 4 billion a year. Correct me if I'm wrong. Are you considering... I'd like to understand what you're doing to optimize looking at 2023. These are the two things. Thank you, Rodrigo. As to the simplification plan and the actions we have taken, these activities or these actions were conducted in the 2nd quarter. That's why you don't see those effects concentrated there. Those results, especially those related to costs, tend to happen in the 2nd half of the year. We have to take into account expenses, costs. It's more difficult to identify those in costs because there are several variables, costs, raw materials, freight, et cetera. What I can say now is that the plan is underway. There are gains in both expenses and costs and also in speed in the way we make decisions to implement actions to capture market opportunities. That agility that takes place in the company across the board. This is aligned with the board of directors and that decision we made together. Our focus remains in the profitability of the entire operation, of course. Fabio can elaborate on the CapEx question. Good morning, Rodrigo. I failed to mention CapEx in the initiatives to generate free cash flow because, of course, the focus was on 2022. You are right in your comment as to working in that interval. It's between BRL 3.8 billion and BRL 4 billion for the year. We have transitioned several projects from 2022 to 2023, projects that had to be continued, projects that had been 2/3 concluded. We did not have a lot of leeway for the year. Since April, we've been preparing the company to invest less next year. I can assure you that it's very difficult to approve more CapEx for growth and efficiency. It has to do with the cost of capital and also with the level of uncertainty as to the payoff of a project given the world economic scenario. The company will generate more cash flow next year due to the fact that we're not investing that much. The interval that you mentioned is appropriate for the projections you made. Perfect. Thank you. Have a good day. The question from webcast. Leandro Fontanesi from Bradesco. Has production gone back to normal levels? How much would you benefit from recent cost reductions? Good morning, Leandro. We have adaptation curve. All the way to the eggs fertilization, all the way to the processing. It's going back to normal given the demand we are getting and the supply we have to offer. In actual fact. The company hasn't stated those values, and I cannot announce them, those that haven't been published by the company. I cannot give you any further detail. That concludes the question and answer session. I'll turn over to Mr. Lorival Luz for his final remarks. Thank you. Thank you, everyone. Thank you for having this open dialogue. Once again, I'd like to apologize for the delay, and I'll see you in the next earnings call. This concludes BRF's earnings call. Thank you for attending. Have a good day.