Recording in progress. Video conference call to discuss the results of the second quarter of 2022. I inform that those of you who need simultaneous interpreting, we have this tool available on the platform. To do this, simply click on the interpretation button, the globe icon at the bottom of the screen, and choose your preferred language, Portuguese or English. For those listening to the video conference in English, there is an option to mute the original audio in Portuguese by clicking on Mute Original Audio. We inform that this video conference is being recorded and will be made available on the company's IR website, ir.Gerdau.com, where the complete earnings release is available. You can also download the presentation on the chat icon. During the company's presentation, all participants will have their microphones muted. We will then start the question-and-answer session. To ask questions, click on the Q&A icon at the bottom of your screen and type your question to get in the queue. When you are announced, a prompt to activate your microphone will appear on the screen, and then you should enable your microphone to ask questions. We recommend that you ask all of your questions at once. Would like to emphasize that any forward-looking statements that might be made during this conference call related to Gerdau's business outlook, projections, and financial and operating calls are mere assumptions and beliefs based on the management's expectations related to the future of the company, as well as on information currently available. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand the general economic conditions, market conditions, and other operating factors may also affect Gerdau's future performance and lead to results that differ materially from those expressed in such forward-looking statements. Here with us today are Gerdau's CEO, Gustavo Werneck, and Gerdau's CFO and IRO, Rafael Japur. I'll now turn the floor to Gustavo Werneck to start the presentation. Well, good day to everyone. I want to start by welcoming each of you to the video conference call to discuss Gerdau's results for the second quarter of 2022. I hope you're all well and healthy. I also want to welcome Renata, who recently joined Gerdau as our new IR manager. Renata, while she's sitting next to me, I wish you a very successful and happy journey with us at Gerdau. Also participating in this presentation is our CFO, Rafael Japur. For the three of us, it is always a pleasure to talk to you about our performance and clarify possible doubts and questions that might arise during our presentation. I'll start by talking about the international scenario. I'll mention the highlights of the overall results of the company, and then I will detail the performance of our business operations in Q2. Japur will share some information about our financial performance. Lastly, I will be back to highlight some points about our ESG agenda. At the end, we'll all be available to talk with you about any points that you would like us to elaborate in more detail. However, before I go any further, allow me to give a very special thank you to our thousands of employees in the countries where we operate for having built the best half year ever in the 121-year history of Gerdau. We remain confident that with the enormous dedication of our entire team and more and more focus on delivering value to our customers, we can make 2022 an even better year than 2021 was. I'll start this video conference by talking about the macro environment in which Gerdau as a company is inserted. We saw as positive the measures announced by the Chinese government to stimulate the economy and to restrict the supply of steel in the country, which should contribute to sustaining profitability and prices in the short and medium term. In turn, we closely monitor the effect that the slowdown in China's economic growth, whose GDP rose 0.4% in Q2 in a year-on-year comparison, may have on the international scenario. The impacts of the conflict between Russia and Ukraine on the global market continue to be monitored, especially in relation to pressure on production costs due to changing prices of raw materials and energy items in general, as you have seen. I stress that our operations were not affected by restrictions in the supply of raw materials and inputs because we always work with safety inventories and diversification of our supply base. We're also following closely the uncertainties regarding the growth of the global economy and the impacts that the inflation pro-prone scenario in Brazil and in the world may have on the demand for steel. In the next two slides I briefly bring you some highlights that reflect the solid performance recorded by Gerdau in the second quarter. Later on, Japur will detail our financial performance. We ended Q2 2022 with adjusted EBITDA of BRL 6.7 billion and adjusted EBITDA margin of 29.1%, both record figures for the period between April and June. The result, as you will see in a moment, was influenced by high levels of demand for steel from the construction and industrial sectors and record results in North America. Gerdau's net income totaled BRL 4.3 billion in the second quarter of 2022, also an all-time record for the period, representing a year-on-year increase of 27%. In turn, net sales reached BRL 23 billion between April and June, up 28% over the same period of the previous year, with shipments of steel totaling 3.2 million tons. These significant results posted by Gerdau this quarter show the company's solid presence in the markets where we operate in the Americas and are also the result of the transformations experienced by the company in recent years. As a reflection of a company with businesses that are more focused, more agile, simpler, and more innovative, Gerdau has proven to be resilient in facing macroeconomic uncertainties, generating better results and even more value for our stakeholders, such as our customers and shareholders. Well, now in the next slides, I will talk about the highlights of each one of our business operations and the outlooks for the markets in which Gerdau operates. Initially, I highlighted the Adjusted EBITDA of our North America business operation doubled between April and June in a year-on-year comparison, reaching a record number for a quarter of BRL 2.8 billion with a record Adjusted EBITDA margin of 33.1%. I would also comment that the metal spread remains at a historically high level. Shipments remained at high levels in the second quarter, reflecting strong demand from the non-residential construction and manufacturing sectors. The outlook for Q3 remains positive as our order backlog in the United States continues to be above 70 days of purchases. Given this scenario, we continue to operate our plants in the region at capacity utilization levels above 90%. We're optimistic about the demand for steel in North America, especially from the construction industry. One example that reinforces this positive view is the Architecture Billings Index, which measures the activity of the non-residential construction sector in the country, and the Institute for Supply Management Index, which monitors the performance of the manufacturing sector. Both remained above 50 points in June, indicating a continuation of the sound and strong trajectory recorded since February 2021. In addition, I would like to point out that the infrastructure investment package valued at $1.2 trillion should begin to generate, starting in Q4 2022 and early 2023, an additional demand for steel of up to 5 million tons per year in the domestic market over a period of up to 8 years. In this context, we continue to invest in improving the productivity and profitability of our capabilities in North America, delivering even more value to our customers. For the next cycle, I highlight the investment of about BRL 300 million to expand the capacity of the Midlothian steel mill in Texas, our largest operation in the United States, to 2,000,000 tons. Another point of attention on our end for North America is the labor shortage, the inflation rate, and the logistics challenges, which have impacted a number of companies in the region. Moving on to the next slide, I will talk now about our special steel operation. As a financial highlight, we recorded in the second quarter an EBITDA 87% higher than the same period last year, driven by the current levels of profitability that we were able to achieve in this quarter. In the United States, the light vehicle market continues to be impacted by the shortage of chips. A regular supply of components previously expected for this year should only occur in 2023. In any case, for 2022, the production of light vehicles in the United States should reach about 14.5 million units, a volume below expected for the year, but still much higher than the numbers recorded in the last two years. The outlook for the heavy vehicle market is more positive, with the production of trucks expected to total 300,000 units in 2022, up 15.8% year-on-year. The oil and gas sector, in turn, continues to expect growth for the coming months, influenced by fuel prices in the international market, as you have been following. I would also like to highlight that with the completion of the modernization and technological upgrade of our mill in Monroe, Michigan, we are now able to deliver increasing volumes of special steel with higher added value to our North American customers through a more profitable and productive operation. As a next step, we will initiate a new cycle of investments to modernize the rolling operation of this mill in the coming years with the goal of making Monroe one of the most modern mills in the world and continuing to meet our customers' needs. The special steel market in Brazil has also been affected by the lack of chips. According to the National Association of Automotive Vehicle Manufacturers, ANFAVEA, the production of light vehicles in the country should increase by 4.1% in 2022 in yearly comparison against the previous forecast of a 9% increase. This new estimate reflects not only the issue in the supply of semiconductors, but also the scenario of rising inflation and interest rates in Brazil, and restrictions on access to credit. In terms of heavy vehicle segment remains very positive, although also affected by the shortage of chips. A point that reinforces this optimism is the signal given by the Brazilian government to implement the fleet renewal program, which will encourage replacement of trucks that are more than 30 years old. The agricultural machinery segment is expected to grow 4% this year in comparison with 2021 to about 100,000 units, according to ANFAVEA, boosted by the expectation of a record harvest. Moving on to the next slide, please. I will now talk about the scenario for long and flat steel in Brazil, whose performance in Q2 reflects a period of continued demand for steel from the different sectors in which we operate at very healthy levels. With shipments of steel from our Brazil business operation up 4% year-on-year between April and June. The demand for steel from the construction sector continues at a high level. I'd like to bring here some examples that make us confident that the scenario will be maintained this year in 2022. The sales value of real estate property launches recorded in the second quarter of almost BRL 10 billion represents an increase of 2.4% in the annual comparison. While the number of active construction sites in Brazil continues to grow and reached again its highest number in the 15-year historical series now in July. Another point I would like to comment on is that the growth forecast of the civil construction GDP for 2022 was revised up from 1.6% to 3.8% by the Brazilian Chamber of Construction Industry. Retail sales remain stable, impacted by inflation and the drop in Brazilians' average income. A positive point is that the Consumer Confidence Index went up again in June, gaining 3.5 points over May, reaching 79 points. I would also highlight the gradual resumption of investments in infrastructure, mainly industrial, for the construction of new warehouses and operational units. Investments in infrastructure are expected to total more than BRL 150 billion in 2022, according to studies by FGV. I also highlight the continued high demand for steel from the industrial sector, a reflection of the high level of activity in the agribusiness, capital goods, machinery and equipment, road equipment and energy segments. ABIMAQ, for example, revised its projections for the performance of the machinery and equipment sector, forecasting an increase in the domestic market of 5.8% for 2022 compared to the previous estimate of 3%. In the energy segment, ABEEOLICA foresees investments of BRL 100 billion in the next five years in wind farms. As for solar energy, the estimate is for investments of around BRL 50 billion in new units this year alone, according to ABSOLAR. In addition, I highlight that we are moving forward with the already announced investment of about BRL 200 million in the Riograndense mini mill in the state of Rio Grande do Sul. The investments are aimed at modernizing the melt shop facilities, implementing improvements in the digital transformation journey and Industry 4.0, and enhancing environmental and safety conditions in the steel production process. We now move on to the next slide to speak a little about South America. In Argentina, the demand for steel from the construction and agribusiness sectors remains very strong, which has boosted sales in the local market. The Argentine construction sector grew 13.6% in May year-on-year, according to the latest data released by the country's statistics institute, INDEC. For 2022, the expectation is that the construction activity will remain at a very high level. The same scenario is repeated in the steel market in Uruguay. In Peru, in turn, the demand for steel continues at good levels, stimulated by the construction industry. We continue to have a positive expectation for this business operation, in line with the Peruvian central bank's estimate that the country's GDP will grow by 2% in 2022. Now, this was just a general overview. I'll turn the floor now to Japur, who's sitting next to me, and after his presentation, I'll be back to talk about our ESG journey. After that, Japur and myself will be available to answer your questions. Japur, it's up to you. Thank you, Gustavo. Good day to all of you. It is a great pleasure to be here with you once again in our video conference to discuss our results. I take this opportunity to welcome Renata and to wish her great success in this new challenge. Well, speaking a little about the performance and the highlights of our financial performance in the quarter. On slide eleven, let's start talking a little about our operating cash flow. As Gustavo mentioned, in this quarter we had an EBIT of BRL 6.7 billion. In addition, we invested BRL 1 billion in CapEx, in line with the forecast we disclosed at the beginning of the year, and another BRL 800 million in working capital, given higher sales and higher revenues in the period. After payment of taxes and our net financial expenses. We apologize, but we are having a sound cut. Please hold. Okay. We generated a free cash flow of BRL 3.25 billion in the quarter, equivalent to about 48% of the EBITDA and 14% of net sales for the period. On the next slide, I'll detail our cash flow and working capital. As we can see on the top part, when we look at the last four quarters, we had a free cash generation of BRL 13.485 billion. This is a reflection of the resilience of our business model and our ability to generate cash along the cycle in different scenarios, as well as the consistent process of deleveraging our balance sheet. In the twelve-month period, if we analyze how we invested our free cash, even net of the effects of exchange rate variations and stock holdings in our joint ventures, we returned to our shareholders 43% of our free cash flow as dividend payouts and share buybacks, and invested another 41% of this cash flow in reducing our net debt, as we will see in more detail in a minute. Moving to the bottom graph. The graph on working capital. This quarter, working capital totaled BRL 16.3 billion. As the working capital rose 9%, in other words, proportionally less than our net sales, which grew 13% in the quarter, our cash conversion cycle was reduced to 64 days. This is the second lowest cash conversion cycle for a second quarter in the last 10 years in our historical series, showing the practical results of our culture. We are, at the same time, more and more disciplined in capital allocation, and we are more and more agile in our decision-making by our frontline team. Turning to the next slide, let's speak a little about our liquidity and indebtedness. We had a reduction of more than BRL 300 million in our gross debt in the quarter, despite the significant appreciation of the dollar against the Brazilian real, 11%, which affects the portion of our debt denominated in dollars. With this, we ended the period with a gross debt of BRL 12.445 billion. We ended the first half of the year with a robust cash position of BRL 7.755 billion. With this, we reached a net debt of 4.7 billion BRL. Our financial leverage, measured by the net debt over EBITDA ratio for the last twelve months, reached the level of 0.18x. Our debt profile has an average term of 8 years, well extended and with an amortization schedule, well distributed and harmoniously distributed over the next years, as shown in the graph below. The company continues with the goal of not only reducing the amount of our gross debt to below BRL 12 billion, but also reducing the proportion of our debt that is issued in foreign currency, in dollars. As an example, in this quarter, in line with this goal, we reduced our dollar-denominated debt by $220 million. Last but not least, let's speak about shareholders' return. As we can see on the top of the slide number 14, we can see the evolution of net income and dividend payout in recent years. In the last 12 months, we distributed almost 40% of our adjusted net income. At the bottom of the slide, the chart shows how the combination of better results with a significant reduction in our debt has had a positive effect on dividend yield. In 2018, we were at 3.6%, now to almost 12% in the last 12 months. Now, on the right of the slide, let's speak a little about our share buyback program, which was launched in May of this year. Until July 18, before the quiet period of the company, we had executed 32% of the buyback program, acquiring 17.8 million GGBR4 shares at an average price of BRL 23.88. With regard to Metallurgica Gerdau's buyback program, we carried out 24% of it, acquiring 16.9 million GOAU4 shares at an average price of BRL 10.06. Lastly, let's speak about dividend distribution relative to the second quarter. Gerdau S.A. and Metallurgica Gerdau S.A. will pay dividends respectively on August 25th and 26th of August. At Gerdau S.A., BRL 1.2 billion will be paid. In other words, BRL 0.71 per share. While at Metallurgica Gerdau, BRL 383 million will be distributed, or BRL 0.36 per share. In both cases, the position of shares held on August 15th, 2022 will be considered. Well, with that, thank you very much for your attention, and I now turn the floor back to Gustavo, who will comment on some of our ESG initiatives. Gustavo, over to you. Thank you, Japur. Now just give you an update on some important points of Gerdau's ESG agenda, pointing out the highlights and advances of our journey. We've been addressing ESG differently for many years now, but the journey since the origins. I would like to stress on this slide that as part of our diversity and inclusion journey, there was an increase in women in leadership positions from 17% in 2019 to 23.6% in 2021, in line with our commitment to reach the level of 30% by 2025. I also highlight that at the end of last year, we reached 5% women working as operators at Gerdau for the first time in 121 years. There are more than 1,000 women today working directly in production. This data is among the dozens of indicators that we publish in our annual report, where we disclose the social, environmental, and financial highlights of our journey in 2021, and which for the first time went through an external audit process, showing our evolution in the transparency and balance of Gerdau's communication with society. Our evolution in our commitment to climate change was also highlighted in this document. Gerdau's audited average greenhouse gas emissions dropped to 0.90 tons of CO2 equivalent per ton of steel in 2021, compared to 0.93 tons that we had in the previous year. This new figure reaffirms our commitment, announced at the beginning of the year, to reduce our greenhouse gas emissions to 0.83 tons of CO2 equivalent per ton of steel by 2031, helping to shape the future of such an essential sector as steel in an increasingly sustainable way. In addition, moving now to the next slide, I would like to talk about the 15% increase of Gerdau in our new business, Gerdau Next. 2 years of performance last month. We have a U.S. startup company that works with prefabricated and smart homes. This move strengthens our performance with more sustainable performance and adding solutions in search of improved productivity of the industry and construction. Lastly, I would like to say that in June, Gerdau was announced in June by Merco as the best B2B company and the first in the mining and steel making industry. We are the only steel making among the 100 Brazilian companies with the best reputation, a reflection of the work and efforts of our more than 30,000 employees. Also, as a sign of the progress of our ESG journey, Gerdau was recognized as standing out in the mining, metallurgy, and steel making category of the 2022 edition of the Best ESG Awards promoted by Exame Magazine. Well, then, I thank you all for your attention in listening to our explanations. From now on, Japur and myself will be available to answer any questions you may have. Back to you, Renata, and we count on your support for the session. Thank you, Werneck. Now we'll start the Q&A session. As a reminder, if you want to ask questions. Click on the Q&A icon at the bottom of the screen and type your question to get in the queue. When you are announced, a prompt to activate your microphone will appear on the screen. At this time, enable your microphone to ask your question. We kindly request that you ask your questions all at once. We already have questions coming in via chat box. Rodolfo from JP Morgan. He asked Werneck, with regards to the outlook for the third quarter by business, especially U.S. and Brazil, I would like to learn more about it since that's important piece of information for the market, since we are fearing global recession. He also wants to know about an update on spreads in the U.S. Rodolfo, happy to have your question. Thank you. I guess your question allows us to give a general explanation on our US business and also in Brazil, our ops. I'd like to begin by highlighting that last year we had the best year in the history of Gerdau, as you all know. The first half of this year, the first six months were even stronger compared to the first six months of last year. As you've seen before, when it comes to EBITDA, we had 22% above in BRL in the first half of the year-over-year. The outlook for the coming two quarters allow us to say right now as we speak, that we are very confident in terms of having general results for 2022, pretty similar to the earnings achieved in 2021. This is also going to be another historical year, just as 2022. We're not going to have a stronger Q3 as we had in the third quarter of last year. This quarter was really historic. But however, we're going to have Q3 and Q4, which added to the record results that we posted in the first quarter. By the end of December, we will get very similar results. Overall speaking, our US ops remain very strong and very resilient. Naturally, we have a concern in four corners of the world when it comes to severe recession, high inflation rates, and based on the signs that we've been reading and the fundamentals of our business, and also considering the infrastructure package that has not come true yet and the demand for products. Considering all that, we believe that the coming quarters will be very strong. From what we've seen so far, signs of change, like you mentioned, these fears. This is very small. When it comes to practice, what we can see is a reduction in our order backlog, a small reduction. We had a very strong level in the past, something unprecedented in previous years of entry and backlog of orders. There was a reduction, however, the backlog remains at pretty sustainable and strong levels, like I said, over 70 days. Also highlighting that no signs of entry of orders related to the infrastructure package. Another sign that we also see, particularly now in June and July, was higher supply of labor to the industrial sector. For the last 18 months, we had very open positions. We've been having a hard time to have these people in our mills. We made an effort in order not to stop any production line for the last 18 months. We realized in June and July that we've been managing to have more positions now, more jobs, which is a sign of an upturn, a sign of recovery of labor, particularly in our industry, in the industrial sector. A third move, which happened in recent months, was a deeper drop in scrap price, and it had to be followed up by a reduction in product prices because the spread would come to a level, in our opinion, that would be not sustainable if it came to a higher level. We followed it up and metal spreads are maintained and will be maintained for the coming quarters. We are very confident that the results for 2022 in North America will continue very strong and with a good outlook for 2023. Here in Brazil, when we compare figures or numbers of delivery for the first six months of this year, more specifically this quarter, compare year-over-year, we see a drop. This drop is very much related to inventory makeup that we had over year 2021, rather than a real demand problem. Demand remains very resilient. In several segments where we operate, there were some cases of more accommodation, or in some cases, we managed to deliver more material. I would say that what was more accommodated was retail in construction, self-construction, renovations, expansion, very much related to increased rates and also purchasing power in Brazil. There has been some accommodation. I remind you that the share of our steel delivery in this segment is small. On the other hand, the construction sector is very resilient. I understand your concerns when it comes to the resilience of this sector, considering interest rates are going up and all the old discussion. Anyway, this is not being reflected and won't be reflected in a lower demand in the short term. It's not by chance that our capillarity is very high when you consider digital transformation, fast readings of what's going on. Today, we have a very deep knowledge of all the construction sites, work sites open in Brazil, be it for licenses, permits, any signs that shows the solidity of open working sites. This July, in our historical 15-year series, this is a month where we had more construction sites open in Brazil. Demand in the construction industry remains very strong. We also see ongoing growth of steel demand for infrastructure, partnerships with the private sector, the energy sector, and also machinery and equipment, which considers or continues to be strong. When it comes to demand, this is very stable in Brazil, and it should remain as such. I would say that today, where we have a stronger fight is for rebar. In rebar, this is more related to distribution. If we imagine that I'm not speaking of ready, of cut-and-bend product, but rebar in our delivery today is around 18%. Out of the 18, 50% of this overall numbers go to distribution. What is affecting us most strongly in our daily operations for more challenging markets is not even 10%. Other sectors are very strong and resilient. When it comes to that, when it comes to demand, all the signs that we read now is that 2022 will continue to have a very strong demand. I would say that the striking difference that we see in the third quarter vis-à-vis the second quarter has to do with cost of coal, which were purchased in previous month and going through our cost. Unlike scrap, which is in Brazil, it's easier for us to work on purchase and cost. The coal order that were in close to $600 per ton in past months, now they're going and coming through ships and in the ocean. Particularly when it comes to coal, there's going to be a higher impact on cost. For Q4, these costs for coal from $600 for orders that are placed around $190, they'll have a positive cost impact in Q4. Overall speaking, things are very solid. We're very confident for a robust Q3 and Q4. Added to what we delivered now in the first half of the year, this will allow us to be, by the end of 2022, with a result pretty much in line with 2021. Overall speaking, Rodolfo, answering your first question, it also gives us the chance to go deeper into other points that I mentioned in this presentation. Thank you, Werneck. Concluding the questions by Rodolfo, J.P. Morgan, addressed to Japur. He also would like to have an update on investment projects and expected returns. Hello, Rodolfo. How are you? About our projects, I would like to say that we are very diligent when it comes to the approval process of our projects in line with our robust capital allocation. We have the management involved, the team, Gustavo, myself and all the team. Before we actually start any of the projects, we have everything in line. We take into account interest rates, increase in cost of capital. Sometimes it is more challenging to approve projects. What we have in the portfolio, all the projects were carefully studied, thoroughly studied, and we believe they are resilient under different scenarios, both generating more revenue, improving our product portfolio, but also supporting and leveraging our competitiveness in different scenarios of the economic cycle, cash conversion cycle, be it moments where we are right now or even in more challenging times. Thank you, Japur. The next question comes from Rafael Barcellos with Santander. Please unmute so we can revisit your question. If you want, you can also open your camera. Can you hear me? Thank you, Renata, Japur, Werneck. Thank you for taking my question. I don't think you can see me. For any reason, I cannot open my camera. Anyway, Rafael, I'm sorry to interrupt you. Would you mind starting again? We can hear you well right now. Sure. I apologize. For some reason, I cannot open my video, my camera. Thank you for taking my question. Renata, Japur and Werneck, thank you. I guess my first question is about allocation of capital and dividends. I understand the company this quarter had payout slightly above the minimum rate. When we check the position of gross debt close to the level of the limit of BRL 12 billion, and also considering the outlook of solid results like Werneck mentioned. How do you see the possibility of having extraordinary dividend payout that are more significant in the short run? Or maybe you could also tell us more about CapEx this year to add more to the question. Thank you. May I ask the second question right now? Yes, please go ahead. The second question is about the market, the Brazilian market. Just to have more color on the domestic market dynamics. You talked about civil construction, so what about retail? What is the share of Gerdau's portfolio? And is this the most important point of concern in the short term? Just to have a better understanding of this dynamics as well. Thank you. Japur? Or maybe he can talk about allocation of capital, CapEx, and then I'll come back to talk about domestic market and retail. Hello, Rafael Barcellos. We have many people with the same name, Rafael. About allocation of capital, I think it's important to say. Well, your question is very timely, allowing us to highlight different points. If we think about what we invested, not only dividend payout, but also considering our share buyback program. In addition to BRL 1.2 billion to be paid out, until day 18, we disbursed BRL 424 million, more than BRL 400 million reals as share buyback. Which is another way of very efficiently give value back to shareholders. When you put it all together, the payout, not specifically as dividends, but in terms of return to shareholders, the payout is stronger than the minimum set by our bylaws. In addition, we should know that we only performed about one-third of our share buyback program. It is an open program for Gerdau S.A. and Metalúrgica Gerdau, and we'll keep our eyes open to other opportunities in the market over the coming days and weeks. With regards to CapEx, I think I mentioned on the slide that we showed about operating cash flow. On our free cash flow, we talk about disbursement of BRL 1 billion this quarter, very much in line with what we disclosed early in the year, BRL 4.5 billion disbursed for year 2022. Our provision remains the same. It's also important to highlight that we don't have any project that is greenfield today. All our projects have existing plans. Most of the times, it is more timely considering interventions and investments to consider downtimes, both in the Northern Hemisphere and in Brazil. They happen between Q3 and Q4. In this sense, our guidance for CapEx disbursement remains unchanged for 2022. As for the question on North America, Gustavo, I think Rafael talked more. He wanted to know more about retail in Brazil. Rafael, considering our mix of products today, which has been expanded over time, retail today has a lower share, lower than 20%, so exposure of deliveries in Brazil vis-à-vis retail. Like I said, retail had a boom post-pandemic. All households needing to invest in their homes, so there was a boom, and there was a slowdown by the end of last year. I would say it became stable at a level that has remained the same in recent months. We believe it's going to be. There's going to be some volatility, possibly not growing as fast as Brazilian macroeconomics. To some extent, the drop in the market was more than offset by the demand for steel, for infrastructure. If we focus on our business, this is positive. The gauge of steel that I use in retail, to some extent, they're smaller. When we start having infrastructure projects, in theory, you use more steel because the gauge used, particularly for construction steel, tend to be larger. That's what's happening right now, and we consider it to be positive for the coming months. This upturn for infrastructure, investment, and partnerships. In practice, we've been having a lot of orders already related to parks, energy, or solar energy farms. We believe that for the coming months, the demand will continue to be very flat and stable. Retail, that's a segment where it got stable at a slightly lower level. Thank you. Thank you. Next question by Leonardo Correa with BTG. He asks two questions. He would like to understand the rationale of a very conservative dividend payout policy, considering the strong cash generation in leverage close to zero. What are the next milestones for the change in the formula? Second question regarding North America. He would like to know about the order book and expectation of metal spreads for Q3. Do you think you can sustain an EBITDA margin close to 30% in the next quarters? You start about the dividends, and then I'll answer the second question. Sure. Regarding our dividend payout policy, we don't have any short-term plan to review our policy because we understand that as our balance sheet is more and more sound and robust, and a good part of our cash generation is close to our generation of net income, things are closer together. Today, a very important part of the free cash flow generated is being effectively distributed to shareholders in the form of dividends or as a buyback. In this quarter, if we take into account adjusted net income after the constitution of reserves, when we are going to distribute dividends plus buyback, we are talking about more than 40% of payout and return to shareholders. As for our debt, there was a reduction in the indebtedness of the company this quarter. As we mentioned during the presentation, there are other effects, such as foreign exchange rate on the portion of dollar-denominated debt. That pushed our debt up despite the payment of gross debt, both in BRL and in foreign currency, i.e. dollars. We understand that we have a balance sheet which is adequate. At this moment, we have no intention to significantly or aggressively change our dividend payout policy. We understand that the combination of payouts, a system to payout with our net income and the share buyback program, all of that coupled is an efficient way of returning value to our shareholders. Well, it is a pleasure to speak with you. As Japur mentioned, I think there's another microphone open. We have been debating how to allocate our capital more efficiently at the company. So of course, all of your questions so far will be part of our internal debate. I just want to underscore that in our capital allocation, we're not thinking about great acquisitions or M&A deals, great greenfield CapEx, as has happened in the past. This is not in our discussions right now. We will continue to allocate capital in our operations in a very cautious way, smart way, focused way, in a very austere way in terms of calculating returns. I would like to take the opportunity of these questions that have been popping up since the beginning of the call to say that this is not in our agenda, it's not in our plans. There have been some recent moves in Brazil and the U.S., the way these deals were executed, the multiples and all, and we were not present in that debate. I just want to make it very clear to you that our future will be treated differently than in the past regarding the way in which we allocate our capital in the operating cash-generating assets. Let me speak a little about North America. Well, the portfolio, the order book is very healthy. In the last 12 months, it's been at a very high level. We did not imagine that this portfolio would remain at that level. I'm not talking about the slowdown or inflation rate, but it was a level that was difficult for us to serve our customers. We believe it is now at a very high level, historically high level, but it is now at a healthy level. This portfolio has been changing a little. It has fewer orders related to the construction of warehouses, and it is more changed. It is more related to the construction of semiconductor producing plants, to the nationalization of components in North America that is generating additional demand for loans, and this will continue. There was a slight reduction. It is now at a very healthy level, but it is transforming. To us, it gives us some peace of mind, I would say, to see that it is very much based on investments that will take place in the coming years in the United States, not to mention the infrastructure package. When we look at US competitors, none of them have received orders related to this package that was approved, and this will translate into orders in the future. Metal spread is at a very high level, levels that we didn't see before. The best prior result to this quarter was Q3 of 2008. Considering a very different portfolio of assets we had back then in North America. Since then, we sold wire rod and rebar assets. We have lower volumes, but in our strategy, we had sales related to higher margins, structural products. Well, we see very sustainable spreads. What we have seen is price moving up and down, but that is very much in keeping with prices paid for scrap in that market. The spread will remain at these levels in the coming months, and we believe that these margins that we have right now are sustainable. It will vary a little more, a little less. It's part of the game, but will remain at these levels. These are sustainable levels that we imagine will be captured in the coming quarters. Thank you. Next question by Mr. Ricardo with Morgan Stanley. He asks, "Rafael Japur, what is the rationale to determine the payout of approximately 30%, on the profits and net income of the second quarter and not more? Could you describe the operating or financial scenario that would make sense to have the payout in 2022 greater than 37% in 2021? The other question addressed to Werneck. "Thinking about margins, Brazil and North America, how can we think about the sequential evolution of margins in Q3 considering drop in prices, cost of raw materials and inventory of products? Is there any different factor, perhaps greater dilution of fixed costs that could help improve the margins in the quarter?" Ricardo, thank you very much for the questions. Japur, let's start with you. Hello, Ricardo. I think that we have kind of answered that. We understand that in this quarter our payout is not 30%, it's closer to 40% because we also take into account as return to shareholders the buybacks that we executed along Q2. If we add both things and a dividend of BRL 1.2 billion to distribution of BRL 1.6 billion over a base of BRL 4 billion of net income before taxes, which is close to 41% of distribution in this quarter alone. We understand that. Our possibilities in considering that our shares are extremely depreciated in their intrinsic value and their ability to generate value in the long term, we understand that this is an adequate capital allocation. We are paying more dividends, as was the case in 2021, but also leveraging our shares and maintaining a disciplined and austere execution of our share buyback program. Well, Ricardo, let me give you more detail on Q3. As I mentioned before, we envision a flat, stable scenario for our business. I would say that the two main factors that will probably set Q3 apart from Q2, they're both related to costs. There's coal that I mentioned that will have a bigger impact now in Q3. The purchase of coal at high levels in the beginning of the year, and also metal scrap of our special steel operation in the United States, considering the existing pricing mechanism. These two factors should change the configuration of our businesses overall for the second half. Now, of course, we are restless. We always want to try to find alternatives to mitigate these costs. We are looking for ways, particularly in Brazil and in North America, related to raw materials, scrap, et cetera. We are looking for alternatives to see to what extent we can mitigate these impacts. I guess that overall, what you're asking, Ricardo, and what other questions have been mentioning in recent weeks, it's all related to a reduction in the price of steel in the international market. I guess then that question gives me an opportunity to remind you of the moves we had in recent years at Gerdau. The goal was to make us less susceptible to these price impacts and variations in the international market. We created mechanisms in businesses that would be less exposed to that kind of variability. To translate this into more tangible and practical terms, regarding Turkish rebar and reduced price. The possibility of this product coming to Brazil and competing with us. This is related, like I mentioned, to the straight rebar distribution. It accounts for very little in our business. It accounts for about 8%. Well, considering rebar, the way it is delivered to construction companies in Brazil, it is almost impossible for an imported rebar to compete with the level of service that is necessary. With all of the requirements today, and construction companies are relentlessly trying to improve their efficiency and productivity. We had to develop in recent years plants near the large cities such as São Paulo. Every night, I have to assemble a kit of steel that is delivered in the agreed time. To the construction company, so that they can build floor by floor. There's a lot of logistics involved and level of service, and no competitor can compete with that. The exposure that we have, the way we've been running our business, we're not exposed to this or not very exposed to the volatility of prices in the international market. When we discuss volatility, Turkish steel, Chinese steel, possible Russian steel, this kind of discussion, to what extent can they compete with us? We believe we have the right conditions to maintain the profitability of our products. That's what we imagine will happen in the coming quarters. Demand under control, profitability under control. An internal struggle that we have to mitigate the impacts of the raw materials that will be considered, such as coal. I just like to add something, Gustavo. I believe that this applies to the Brazilian case and to the U.S. case. In the United States and Canada, about 10% of our portfolio of products includes rebar and wire rod. We have a much more premium portfolio focused on structural steel, SBQ, that gives us more resilient and greater protection from imports of Turkish material and other materials than in the past when we had a different industrial setup, configuration and different markets in which to compete. Well, Renata, back to you. Thank you. Next question, Daniel Sasson, Itaú BBA. Please go ahead. Hello, everyone. Thank you for taking my question. Gustavo Werneck, you talked about margins in the U.S. in the short term. You believe them to be sustainable at 30% with healthy spreads in the coming months. My question is more related to mid to long run. In recent years, you've been very much focused on improved efficiency projects, IT. You managed to fill the gap cost vis-à-vis US. Maybe 10% margin, which was your target, left behind. What should we expect to see margins in the US getting stable in the mid to long run? I know that every industry has cycles, ups and downs, worst and best moments. Could you please give us an average number? Japur, if I may, I'm sorry to go back to allocation of capital. Most of the discussions we've been having with investors around this. If we think about one of the parts of the maximum gross debt, there is another part which is leverage between 1.5x and 1x net debt to EBITDA ratio. When do you believe it is appropriate? What do you think about structure of capital in order to get to this level that you consider to be efficient between 1 and 1.5 times, since you are at 0.2 times net debt to EBITDA ratio? Thank you. Thank you, Daniel. Rafael Japur is going to give you more questions about allocation of capital. Your question is very good about North America. Time flies. You just reminded us of one of our first speeches ever since I joined the company 5 years, right? Of the gap we had identified in our U.S. ops. A lot of work over time, and we've closed the gap. I think there is one part missing in this puzzle, which is our Midlothian mill in Texas. It is the only one in which we still have to fill the gap. We still have some opportunities in the plan to improve our performance and at the same time to expand production in the mill, which is our big mill in the U.S. We still have this investment. Part of the investment has already been approved, and this will give us even better competitiveness once we have this program with other mills in North America. Like you said, Daniel, we cannot say if it's going to happen in 5 or 10 years' time. It's such a long time, but we have good signs. They make us believe that in the mid to long term, we're going to have margins at higher levels. Think about rebar. We have the highest penetration of imported products. Product categories with there are not less capillarity for imports. We'll be less subject to international products or prices and even the characteristic of investments that we've seen with our clients. Like I said before, it's so interesting. I think everybody in the market saw a while ago the impact that Amazon had in long steel demand in the U.S., building new sheds and warehouses and now optimizing the square meter. This demand went down. At the same time, there has been a replacement of steel demand in investments of other nature. In order not to be subject to the global supply chain. Many of our customers are investing in new plants in North America, important investments in the production of semiconductors. These investments will happen over 3-5 years. There is interesting demand for steel in these segments, not to mention infrastructure projects. Five to eight years, they will demand very strongly products that we manufacture. The third point is not so much investment from competitors in general in this market where we are. We can see announcements on investments for other greenfield plants or flat steel and competitors moving into other segments, not only steel. When we are on equal footing with three great players, we don't see a lot of capacity in North America for the coming years. We look at the scenarios, we check the numbers, we analyze, and we're very confident that we'll manage to maintain the current margins. Naturally, there will be fluctuations over time, but these are things, Daniel. They are very reassuring. We believe we've made the right decisions, and the gap that we filled about performance made us very, very prepared to compete with our competitors in the future scenario when it comes to our product categories. Japur, can you talk about allocation of capital? Yes. Hi, Daniel. How are you? Great. There is a debate about your question. Time flies, like he said. Time flies in different ways. When you think about this long process, considering our net debt to EBITDA in 2015 about four times, and now a deleverage, a gradual deleverage process which started more strongly in 2018 and 2019. We got closer to the level where we had our cash conversion cycle between 1 time and 1.5 times net debt to EBITDA ratio. Next, in 2020, we had the pandemic. It seems to be such a long time ago, but it wasn't such a long time ago. In the second half, our net debt to EBITDA was 2.8 times. It was not a decade ago, it was yesterday, quote, unquote. Naturally, things improved tremendously when it comes to margins and return in the chain in general. For us, very significantly, we also benefited from our diligence in this boom in the market and leveraged our results and expanded our ratio. We also understand that in such a cyclical industry, if you think about 2015, second quarter 2020 and now second quarter of 2022, it is very important to keep our focus not only on relative goals, because if EBITDA increases, but can also go down, but also have full focus on the amount of net debt and cash available. That's why we're so vocal about our net debt at this level of BRL billion. Great. Thank you, Japur. Thank you, Werneck. Thank you. See you soon. Question by Thiago Lofiego from Bradesco BBI. Live question. Hello, can you hear me? Hi, Thiago. How are you? Yes, we can hear you. Go ahead. Okay. I guess most of my questions have already been answered. I just want to stress one more time the reference of leverage with Japur. You mentioned BRL 12 billion. That's what you have been seeing since you took over as CFO, and you are already a little below that. Considering cash generation of the last month, most likely. I just would like to understand what is your target for cash. You talked about $1 billion. Does that continue? And having said that, if we think about foreign exchange of 5.50, we are talking about BRL 12 billion minus BRL 5.5 billion. That would give us a structural debt of BRL 6.5 billion. I think you're below that, and you should continue to deleverage the company in the next quarters. I'd like to know, does this still apply? Particularly, want to understand the cash. If you continue to generate cash, so you can get to a position of being a net cash company. Then my following question would be, does it make sense to imagine Gerdau as being a net cash company because you want to be conservative or because you have other plans? That would be my first question. My second question to Werneck, exposure to South America. Political environment has been changing a lot in recent years. In many countries where Gerdau operates, is there any possibility that Gerdau will reshuffle the assets and perhaps sell some exposures in South America. Okay, Japur. You think about your question, but this question about South America is frequently asked, so let me start with that. We love to operate in South America, okay? We have learned, as few people have, what South America is and its current disintegration. There was a time when South America was different or was all the same, but now we have countries that are very different among themselves, and we understand them very well. It is not in our plans to divest. Despite the political conditions, this is a region that brings us a lot of economic and financial return. I don't wanna get into too many details, but just look at Peru. With all of the political difficulties that the country is facing and has been facing in recent years, now with the current administration, it is an incredible country. The economy and politics are not matched. When we look at the macroeconomic fundamentals, it is a very solid country with all the revenue of the mining activity there. If there are many good projects by the government and the solid economy, and they're using a lot of steel. Over there, we have a competitor. This country, Peru, has been bringing very sound financial results for us, and the demand for steel continues to be very strong. Let's get Argentina. Different country, different problems, different characteristics. When the Argentine population looks for safety, where do they go to? The real estate market. The demand for construction in Argentina is strong. Everywhere we look, we have good economic fundamentals, despite the politics. It's a region where we like to work. We might continue to make some organic investments in things that make sense. It is not in our radar to divest in the region. I think that the quarterly balance sheet has shown that we are able to use our expertise, our closeness to customers, to go after the opportunities that present themselves. Japur? Hi, Thiago. I think in general lines, when we talked about gross debt, cash and our balance sheet. In general terms, the references you brought in terms of what we aim to have in terms of cash, gross debt, net debt, they are all right, and they are in line with what we have been telling you, the market, with the rating agencies, et cetera. Sometimes when you look at a specific point in time, when you look at one month or a different month, sometimes we generate more cash, and that's not necessarily in the place where we need it. What do I mean by that? In a quarter, sometimes we need to be close to paying a bond, so we need many dollars to pay that obligation. In generating a lot of cash in Brazil, I might privilege other allocations, such as dividend or share buyback, because I have surplus cash in Brazil. Sometimes it's the other way around. I generate more cash in North America, but my obligations are here in Brazil. Sometimes we have a mismatch in between one quarter and the next, one month and the next, between the sources of cash and how we will allocate the cash. These things are resolved over time. For example, you mentioned our net debt. In that rationale you brought, it is a little below the expected level. If we take into account dividend payout, we'll be paying out BRL 1.2 billion plus all the share buyback between the end of Q2 and the first days of July, significant part of the net debt will, quote-unquote, "go to one place." When we look along the quarters, things are equated. Another point to take into account in this whole movement of our gross and net debts are the foreign exchange variations. In this quarter, we had an 11% appreciation of the dollar from Q1 to Q2 2022. About three-quarters of our debt is dollar-denominated, so when we look at the balance sheet position, how much cash I have and what is the debt that I have, of course, there will be a change in the position in dollar. Our business model is very balanced, very sound. Our net is going the right direction, and we have operations in the US generating strong currency and operations in Brazil, in BRL, where we have obligations to pay taxes and dividends. Over time, over the quarters, this will be equated. I hope you have understood these general lines. Yes, it is very clear, Japur. I understand that without going or becoming a net cash company is not an option. I think that over time, you will aim at BRL 6.5 billion or something close to that ballpark figure. It is not our aspiration to be a net cash company. If in a specific quarter we have a lot of cash generated by a certain operation, it will be extraordinary. This is not a goal of ours to be a cash trap, a net cash company, because in terms of capital allocation and taxes, it is not efficient to have this carryover of the cash. Super clear. Thank you very much, Rafael Japur and Gustavo Werneck. Next question by Caio Ribeiro with Bank of America. He asks, "How do you see the demand for longs in North America in 2023, given that we are seeing signs of a recession coming? On the other hand, the $1.2 trillion infrastructure package has been approved. What, in your opinion, will prevail?" I think that this is very much in line with what I said before, Caio. I hope you're well, by the way. Well, I kind of answered that in Daniel's question. We've seen this as a very positive factor. People have been talking about a recession, but we have to look at this business as a whole. I have to look at the whole thing by types of business, types of company. For our business, the infrastructure package. For this onshoring that is happ ening in the United States. The fact that there are no new capabilities entering that segment, I think that this is the right moment for us to have good and stable demand. All along, not only 2023, but in the next half years. I'd like to remind you that we got prepared for that. We made decisions that perhaps are now kind of in the past, but we got prepared to win the results. Decisions of divesting, decisions to stop a product line that was not as profitable as we would like, investments we have been making in recent years in our remaining operations. We got prepared for this moment. Got ready. I think we have everything to reap the rewards of the hard work we did over time, not only in 2022, 2023, but for the coming years. Thank you. Next question, Marcio Farid with Goldman Sachs. What should we expect to see of shipment in the Brazilian market? How do you see margins in exports and freight competitiveness?" Shipment, right? Correct. Like I said before, in the domestic market, we will see very flat delivery rates for the next months. We don't expect to see any structural issue or any scenario issue that might bring a dramatic drop on demand. Quite the opposite. We came back to historical export levels around 22%. We've been maintaining our operations going on. There were no reductions. We have customers that are very loyal in the Americas. We have our subsidiaries where we export semi-finished goods. Domestic market is very stable, and we are pursuing any export opportunities, our subsidiaries and sister companies in the Americas with a very healthy level. For the coming months, well, I believe our main concern is how to find alternatives to keep on evolving in terms of being more competitive or using digital transformation more and more to fill any gaps that we see in-house and pursue in more efficient processes. I think that's the focus right now. When it comes to demand, like I said over this call, we don't have major concerns for the next months of 2022. Yuri with XP. She wants to know, "Congratulations on results. I know you highlighted inflation rates in North America. Could you give us more color on this in other locations?" Japur? Hi, Yuri. How are you doing? Inflation is an important topic in many areas. We've been maintaining our discipline, like Gustavo said during the presentation about our cultural transformation. If we think about SG&A on sales revenue, we can say that Gerdau is at an unprecedented level, lower than 2.5% SG&A over net revenue or net sales. We maintain this, but naturally, inflation pressure is going on. On the other hand, like Gustavo said in the opening remarks, some important costs like coal and other raw materials and scrap, they also had an important adjustment in recent months in the foreign market. Over time, it helps to maintain our margins at healthy levels in terms of visibility for months in the future. Well, maybe I didn't have a chance to talk to you in the past, Yuri, so just two minutes, if I may, just to give you an understanding of how my mindset is. Gerdau works as follows. We have some. We are relentlessly searching for performance in our company, and we will be there more and more. It's not by chance, but in the recent years, we reduced a very significant amount of SG&A at the company. Now we are at the lowest percentage of SG&A over net sales in the history of Gerdau. In the eighties, for the last 30 years, we think that we clearly know our current level of performance. Everybody here knows what is the benchmark, and we know that the distance between our current performance and the benchmark in the market is the gap. Daily, it's up to us to structure plans to capture this gap so that over time we'll become the benchmark player. That's how it works. After digital transformation and the possibilities we envisage to expand or to fill the gap, particularly with intensive data used to make business decisions, we identified an even greater potential to lower or to capture these gaps in order to mitigate inflation impact. Inflation, if you think about cost rising, it's trying to find alternatives so inflation does not have a strong impact on our cost. We work a lot with ZBB, zero-based budget, ZBB, and we never consider the previous year budget and just reduce it to mitigate inflation. Effectively, constantly, we design our budget in a blank sheet as if we're starting the company from scratch with the lowest level we can get we can operate the company. Inflation, for us, is always an opportunity to improve performance and lower costs. That's how we work. That's something like a policy on a daily basis. We search for alternative to fill this gap. In three minutes, that's how we work. Increasingly pursue opportunities to transform cost inflation into opportunities to improve our results. We still have a number of questions. We have at least another 15 questions to be read. Because of the time allotted, we are going to end Q2 earnings video conference call, and the IR department commits to answer all of the questions that were not able to be answered. I turn the floor back to Gustavo for the closing remarks, and thank you for joining us. Again, Renata, thank you very much for moderating this session. I am sure you're going to have a winning career here. I'd like to thank all of you once again for your participation. More and more, we want to be close to you and get more visibility regarding our business, how we operate, and how we're seeing things. So feel free to look for Renata and the IR team, myself, Japur, and all of us to answer possible questions you might have. I'd like to thank you for the opportunity that you gave us to elaborate more on our results. Now I'd like to invite you to participate in our next earnings video conference call, referring to Q3 2022, which will be held on November ninth, when we hope to show you again very consistent earnings. A good part of the opportunities are in our hands to capture. Thank you very much to all of you. Japur and I are very happy and enjoyed very much this period of time that was spent with you. Thank you very much. All the best, and take care.