Good morning. Welcome to Gerdau's second quarter 2026 results presentation. I am Ariana Pereira, investor relations specialist. Joining us on this conference call are our CEO, Gustavo Werneck, and CFO, Rafael Japur. Please note that this call is being simultaneously translated into English. You can choose your preferred language by clicking on the globe icon at the bottom of your screen. During the presentation, all participants will be on listen-only mode. Then we will begin the Q&A session. Analysts and investors can join the queue by clicking on the raise hand button. It is worth noting that the forward-looking statements contained herein are based on the company's beliefs and assumptions based on information currently available. Forward-looking statements are not guarantees of future performance and are subject to circumstances that may or may not occur. I will now turn the floor to Gustavo to initiate the presentation. Thank you, Ari. Good morning. In fact, good afternoon, all of you. I hope you're doing well. I really appreciate the opportunity to join you for another earnings release presentation. We will briefly discuss the highlights of the second quarter of 2026. I will also talk about the outlook for our operations. Then we will move on to the Q&A session. In the second quarter, we recorded growth in shipments both quarter-over-quarter and year-over-year, with a 7% increase in volumes in North America when compared to the same period last year. Resilient demand in the key sectors where we operate led to a 15% increase in adjusted EBITDA in North America in the second quarter compared to the first three months of this year, 2026. This strong result also reflects solid operating performance from our plants in the region. Meanwhile, we posted a slight improvement in the results of our Brazilian operations in the second quarter, reflecting a series of initiatives focused on increasing the profitability and productivity of our operations in the country. This gradual improvement in results occurred amid continued pressure from imports, which despite having slowed down during the period, remain at high levels year to date. In this context, we await the outcome of the anti-dumping investigations into long and flat steel products, which are expected to be updated in the second half of the year. Finally, I would like to highlight the increase in our ownership stake in Dona Francisca Energética, which has raised our self-generated energy to more than 50% of Gerdau's consumption in Brazil. This move helps boost the competitiveness of our operations in Brazil. It is in line with our previously announced decarbonization strategy. I will now turn the floor over to Japur, who will detail the financial highlights and the impacts of the current environment on our results. I will come back to you after that. Japur, over to you. Thank you, Gustavo. Good afternoon, everyone. I'd like to extend a good morning to those of you who haven't yet had lunch. Good day to everyone. Let's start talking about our operating result. Our adjusted EBITDA, consolidated, was BRL 3.4 billion in this quarter, posting growth compared to both the previous quarter and the same period last year. With this, we are getting to our very best consolidated EBITDA since Q3 2023. Gerdau's adjusted net income also posted a substantial increase of 45% quarter-on-quarter, reaching BRL 1.5 billion, reinforcing the company's ability to translate operating gains of our business into returns for our shareholders. Therefore, based on these results, Gerdau S.A. will distribute dividends of BRL 0.23 per share, while Metalúrgica Gerdau will distribute BRL 0.11 per share. We also continue to make progress on our share buyback program of Gerdau S.A., which is now 31% complete at the closing of Q2. Speaking a little about our financial discipline, it is important to highlight and stress that our financial discipline remains a priority. We ended the quarter maintaining a very solid balance sheet position with low leverage, with debt over EBITDA ratio of 0.69x in the last 12 months. This quarter, we maintained a positive free cash flow of BRL 237 million. You might claim that it was just too little a timid generation, but we have to put this free cash flow generation into context considering the typical seasonality of our business. If we compare the first half of 2026 and how much free cash flow we generated comparing with the same period last year, first half of 2025, in 2026, we generated an additional BRL 2.3 billion in cash flow. This was mainly driven by both the growth in EBITDA, driven by the North American operation, as Gustavo mentioned earlier, and the reduction in our CapEx investments in accordance with the guidance that we released and communicated last year. Talking about CapEx, from a strategic perspective, we are nearing the start of operations for major projects that will enhance Gerdau's structural competitiveness, particularly in our Brazilian operation. Regarding the mining expansion at Miguel Burnier, we continue to make progress in line with the updated schedule that we released in our last earnings call, with the start of operations expected in the third quarter. We are running a lot of equipment tests, and we should start producing ore. We remain confident that we will realize the projected operational and financial benefits of the project in the range of BRL 1.1 billion per year when we are in full ramp-up. In addition to investments made in energy, mentioned by Gustavo, we are about to open our new recycling center in Pindamonhangaba. This will increase our competitiveness and reduce our exposure to volatility of this raw material in the long term. With this, I would like to conclude by reaffirming our culture of always striving for operational and financial discipline, while simultaneously strengthening our competitiveness and allocating capital to initiatives and projects that will shape our future. We understand that we continue to grow, creating value in a sustainable way to our shareholders. I will wrap up here and join you all and Gustavo for the Q&A session. Thank you, Japur. I would just like to say that in North America, we continue to see steel demand at high levels, with a strong order backlog driven by solid consumption in segments such as renewable energy and data centers. One point of attention is the formal review of the USMCA, which is the commercial agreement between the U.S., Canada, and Mexico. In Brazil, we are seeing signs of more moderate growth in some consumer sectors, such as construction and manufacturing, while still facing an excessive influx of imported steel in the local market. This unfair scenario of imports continues to affect the profitability of our operations in the country, in this regard, we continue to invest in initiatives that strengthen the competitiveness and profitability of our assets. I'll now turn the floor over to Ariana, Japur and I will be available from now on to answer your questions. Thank you, Gustavo and Japur. We will now initiate the Q&A session. Our first session comes from Rafael Barcellos with Bradesco. Good morning. Can you hear me? Thank you for this opportunity. Thank you, Ariana, Werneck, and Japur, for taking my questions. My first question is about a very hot topic with investors, which is the outlook for the next quarter in the U.S. You mentioned margin maintenance, whereas most of the market expected additional expansion, given all of the price increases we've seen in the U.S. market. Having said that, could you please give us an idea of cycles in the U.S.? How are you seeing the cycles operating in the U.S. market? On our side, we see that the beginning of structured steel in the U.S., that's something that is coming quite strong. That draws our attention towards being more stable. I just want to know whether there is something that is non-recurring. I know that you had the maintenance shutdown in Midlothian. I just want to know how relevant that is, or whether that can explain this most moderate outlook. If you allow me a second question, we are also looking at the Mexican market, and that market is very strong, especially in the last few months. I remember that in the past, you mentioned a potential investment in the Mexican market. Could you please let us know whether it would make sense to revisit that plan or not? That would be great. Thank you very much. Rafael, this is what I mean cutting to the chase. Going straight to the point. This is a discussion that Japur, Yuan, and I have had in the past few days. But let me give you a more qualitative view. Japur, the guy that deals with the numbers, he can probably add some additional information to what I'm about to say. When you look at all of the elements in a very practical way, Rafael, what we see going forward, I mean the next quarter, and also taking into account the less price increases, we see a trend of margins going upward. There is no new element or any new risk that we could anticipate that is not well mapped out by you guys. I think that we are just being more conservative on the macro side. Is there really enough room to expand the margins? Will prices continue to escalate indefinitely? Maybe we're being just more conservative or realistic, whatever name you want to give it. There will be a time when this will hit a ceiling. We can't just think about indefinite margin expansion. I think there should be a sustainable level. When you put everything on the table, you put price, you put our spread, cost equation, international scrap prices. If you look at the numbers, the raw numbers, you see that leads to margin expansion. But we are being more conservative, more down to earth. But I will allow Japur to come up with his own comments. We will have a maintenance shutdown at the Midlothian plant, but it will be in the melting part. When it comes to shipments delivered and dispatch and the way we serve the market, everything is according to plan, so we do not anticipate any drop in shipments. Before I turn the floor to Japur, the Mexican market and USMCA negotiations are moving forward more on the technical side, but nothing close to approaching a final agreement. And our teams, especially the team in Mexico, they've been talking to the people at the Ministry of Industry and the federal government in Mexico. Topics related to steel and automobiles are going on now. I don't see the expansion of Chinese products that enter the U.S. market via Mexico. When it comes to low-cost steel production in Mexico and the insurance of automobile production in Mexico, all of these topics have led the discussion rounds. There is nothing that would be a cause of concern. When I look at USMCA and the way going forward, I don't see any additional risk coming our way. I think that the way things are going will lead us to see more positive news rather than negative. As you said it yourself earlier this morning, we talked about that and Yuan and Japur and myself, we've been talking a lot about it. Now I think I'll give the floor to Japur to elaborate further. Okay. Maybe I will repeat some of the points already mentioned by Gustavo, but I will do it in bullet points. I think we will have to answer this question a lot more during this call. First of all, when we think about the market, shipments, and price, we don't see any loss in volume due to the Midlothian stoppage. We will continue to serve our customers. We are not anticipating any lack of supply to our current customers. Prices, I think we might have been a bit more conservative because there has been some price increases like on Friday and now Monday in North America. We still need to have some more visibility about prices in terms of prices being indeed put into force and half of our portfolio is earmarked to the distribution market where price changes occur more rapidly. There are other segments like industrial segment, manufacturing, and downstream. The speed of implementing prices is a bit different. The pace is different. Having said that, when we think about the Midlothian maintenance shutdown, there is an accounting figure. It doesn't have any impact in terms of cash generation. When you have some equipment in downtime for a few days, there is some idleness in our lines. We have to allocate the fixed costs directly to COGS, the results of that year, because we were not producing semi-finished or crude steel during that period. At the end, this impacts the margins a bit. This does not hamper the unit economics or the order book perspectives going forward, and the stability we see with metallic spread that was expanding. It doesn't hurt scrap prices. This quarter, there was an important downtime in our largest unit in North America. I think we have to think about the glass half full rather than half empty because we're making investments to generate higher volumes in our main plant, in our main market. I think this should be the overall conclusion when we think about this expansion in Midlothian, rather than thinking about whether this would be 1% more or less. At the end of the day, what matters is the long-term return from our investment in a market where we have the largest cash generation. Perfect. If you allow me two other very quick follow-ups. Japur, I understand that when it comes to cost, it was not necessarily Midlothian that impacted the cost, but just natural inflation coming from energy costs that we see in the market in different industries. Midlothian, it's not so heavy in terms of cost. My second follow-up would be to Werneck. I understand in terms of cycle, the sustainability of the cycle is a different story. When it comes to the peak, you probably see it getting close to the potential to increase metallic spread. Profitability is something else or sustainability is something that in fact will happen. This range is getting close to its potential. Even if you go forward to 2027, the cycle can be defined the way we want it, and the main factors that have led us to see such relevant backlog, in our point of view, this will continue to be present because if you look at data centers, for instance, even though we were there in the U.S. when the debate started in Pennsylvania, New York, when they were talking about reducing or holding on the licenses to build new data centers because this will impact energy demand and water supply. This was restricted, and there is no other robust initiative that could stop the construction of new data centers. This is a path of no return, the backlog for this sector is quite strong. With data center comes energy generation in the U.S., renewable energy, even though there was a concern whether this would be reduced in the current administration, but that was not the case. We are still producing steel for renewable energy, and this has been quite strong. Looking ahead in the next quarters, it doesn't seem to us that there is any imminent risk that could lead to a drastic reduction to our backlog or our shipments. I can even anticipate that, and I don't know whether Japur would have anything else to add. Well, yes, Rafael, we do see a very one-off impact of that downtime in Midlothian in cost in the first quarter due to idleness. Since I have no production in the melt shop for that entire period, all of the electricity costs, take or pay, gas and employees that work in the melt shop, I need to transfer that cost to our P&L. By doing so, without having production per se, on the cost point of view, it didn't change because would be there anyway, but this puts a burden on the cost for that quarter. Once again, this is just a temporary effect, non-recurring effect, and we believe it will be around BRL 100 million to BRL 150 million. Maybe we are just being a bit conservative looking at other market aspects as we referred to earlier on. We are also taking into account the impact of the costs in the overall results of the operation. There were other inflationary impacts throughout the second quarter, like freight. On average, there was about 8.5% additional freight expenses in North America when compared to the first quarter. This happened in the second quarter, mostly due to fuel issues, and this has to do with the conflicts in the Middle East, we believe that these effects will still remain going forward. It's not due to other cost inflations, but something very much related to Midlothian and the maintenance downtime. Perfect. Thank you very much. Well, we thank you. Thank you. All the best. Next question from Caio Greiner with UBS. Hello. How's everybody doing? Hi, Caio. Good afternoon. All good here. I'd like to have a quick follow-up question to Rafael's before I ask my own Japur, let me know if I understood you correct. You are not yet considering the implementation of the two latest price increase announcements that you made last week and this week. Is this correct? We could expect expansion. You are correct. Yes, you are correct. We haven't yet fully considered these two price increases in special steel and beams that happened last Friday, and we are following our competitors. It's August the 5th, we already had the month of July, we had a price increase, which is not retroactive. It has a date when it will take effect along the month of August. It will have a not full effect on the portfolio. In addition to the different channels which I referred to earlier, it's not fully captured in our outlook. Putting it differently, there is an upside risk, which is not negligible in this outlook. Okay, clear. Thank you very much. Now let me move to my two questions. One is about capital allocation and the other one about Miguel Burnier. First, capital allocation. Japur, it drew my attention that point on net debt. Net debt close to BRL 8 billion now in Q2. We remember your target of having a net debt over EBITDA ratio close to 1 time. Your EBITDA for this year, BRL 12 billion or BRL 12.5 billion, BRL 13 billion. For next year, BRL 13 billion, BRL 14 billion. It seems your net debt is at a very conservative level. I'd like to understand how you're thinking about capital allocation and indebtedness. If this target ratio of 1x should still make sense to us, if that is the case, how do you intend to re-leverage the company to reach that target? That's number one. Second question about Miguel Burnier. You mentioned the start up starting and you will start a ramp-up process. The iron ore market is more under pressure. The prices have dropped a lot. I'd like to understand the economics of Miguel Burnier for 2027. Do you have any updates on EBITDA generation and whether in 2027 we should see the operations running in full steam? Whether the account or the calculation changes? Okay, let me try to address this in parts, starting with capital allocation. A slight correction. When we talk about our net debt, our formal policy says that the limit of leverage is 1.5x. In practice, we feel uncomfortable to be above 1x net debt over EBITDA ratio. Please keep in mind that this is a limit, not a target. We are not in a hurry. We don't really have a need to say, "Oh, we are at 0.69. We have to leverage another 0.31 to reach the target." We don't have that mindset. Now, it is true that with the reduction in CapEx disbursement and with EBITDA expansion, we have a free cash flow generation to equity, which is greater than what we had before. This is translating into more dividend payout, more share buyback for our shareholders, and a reduction of the net debt. Not just because of the reduction of net debt itself, but a reduction in leverage because of the expansion of EBITDA. It's the EBITDA factor, not the net debt factor. That is our preference. As several analysts have highlighted, we have a significant consumption of working capital this quarter, both because of the price increases we had in the U.S. and also the price changes we had here. The price increases here in the Brazilian operation at a lower measure, but they happened. We expect to have a free cash flow release in Q3 and Q4, given the typical seasonality we have. Typically, these are the quarters when we release more cash flow and working capital. Also given the downtime at Midlothian, we accumulated an inventory of finished and semi-finished goods. When we finish selling these inventories, we'll have a release of working capital. We maintain our preference to continue to remunerate our shareholders via dividend payout or via execution of our share buyback program when we think about capital allocation. As for Miguel Burnier, when we had our estimates, our latest estimates that we communicated to the market, we always worked with a benchmark iron ore price close to BRL 90 per ton. Not considering 105, 106, 110 that we saw happening. There might be some adjustment. I am more concerned about executing the ramp-up well so that we can deliver the cost we proposed in the project when we designed the equipment and sized our operation about BRL 30 per ton of cash cost, delivered at the Ouro Branco unit. I think that at this point, we are more focused on the quality of our execution and on our operational discipline rather than on the international price. At this point in the call with the press, we got some questions whether we have sold the ore, whether we have been selling the ore. I would like to highlight to the analysts that we have not yet any pull through or pull forward or sale of ore. Our main focus is the ramp up. First, we have to ensure competitiveness and the cost of Ouro Branco. Later we'll sell the surplus. If everything unfolds according to our current schedule, we should be completing the ramp up by year-end, start of next year. Enjoy a full benefit for this business over 2027 if we manage to deliver the cost that we proposed. Thank you. Thank you, Caio. Next question from Caio Ribeiro with Bank of America. Hello. Good afternoon. Thank you for the opportunity. My first question would go back to capital allocation. I'd like to explore with you the analysis of new projects and what is your priority order today. What is the timing for the approval of new projects? How should we think about a CapEx trend looking forward, particularly comparing maintenance CapEx and expansion CapEx? Secondly, looking at the behavior of lead times in the U.S., they continue at very high levels despite price increases of long steel that you have been announcing and other competitors as well. This suggests that the demand is becoming more inelastic. I'd like to explore with you how significant is this data center component for you, both directly and indirectly considering related investments. What is the growth that you expect in the future? Whether the order backlog perhaps should change? If you see there is a risk of metal spread contraction given increased imports, given that the price spread in the U.S. domestic market versus the external market has been increasing. These are my questions. Thank you. Thank you. Thank you for the questions. They are great questions. Capital allocation. I'll pass that to Japur for a full answer, adding to what he has mentioned about this before. The way I see capital allocation, we have to think about CapEx. If there is no significant change in what we're expecting in the future and considering what we have been saying before, we will continue to invest over time at a CapEx level that we consider to be healthy and sound. Most likely the current levels of CapEx. What are the big themes coming? The maintenance of the blast furnace one in Ouro Branco and the coking. Perhaps we wouldn't need to have a CapEx peak to deal with that. Good news is we have had some technological and technical alternatives for us to increase the lifespan of the coke plants and the blast furnace. We have been postponing the date of the downtime. We have been acquiring a level of knowledge of operation of an integrated mill that we didn't have before. The history of Gerdau was very much based on scrap. We master scrap. Blast furnaces are more long-term operation considering a longer lifespan of the equipment. I think that we have evolved a lot in our knowledge. Also learning from JFE in Japan and other parties. Eventually, we'll have to stop Ouro Branco, we'll have to have an inventory of billets. We won't impact the market. I think that the postponement of downtime of these two important assets for us will allow us to dilute CapEx in the future. United States. I would say that what we are facing in Brazil now, we faced eight, nine years ago when we debated EBITDA margin of around 6%, 7%. We had a significant transformational process with divestiture of assets with the right investments in the right places, broadening the portfolio of our products in that concept of a one-stop shop. I think that we are now reaping the fruits of important work that we did in recent years. Of course, the current administration has created the right opportunities, but had we not prepared, we would not be able to enjoy these opportunities. Now with the Midlothian downtime, I think will end a relevant cycle for us. Now we'll have to analyze calmly what the next steps will be in the United States. We are not consolidating anything at this point. In Brazil, we'll continue to go through a transformation kind of similar to what we had in the States. The need for CapEx, the need to build new plants, to have more significant transformations or reforms. I think that this will come in the coming years, but diluted over a timeframe that will not give us an unexpected peak of CapEx needed that we will not be prepared for. We will not leverage the company more to have more CapEx because we don't want to create difficulties. Also, there's another point about this. When you want to do a lot of CapEx, you start entailing civil works, electromechanical assemblies. That investment that we mentioned earlier at Miguel Burnier. That was the maximum CapEx management. What was the problem? What was the delay reason? Electromechanical assembly and civil works. That's how difficult it is to make this kind of investment in Brazil. Now I turn the floor to Japur to say anything else about capital allocation. Japur can start talking about the lead times, and I can add to that later. Right, Caio. We had our guidance of about BRL 4 billion, 700 million. We have a pace of disbursement, which is slightly below the guidance. Everything leads us to believe, as Gustavo mentioned, that given the focus we now have on the Brazilian operations, a focus on our more competitive assets, and to seek some optimizations. Given the extension of the lifespan of our assets in Ouro Branco, we understand that we might have room actually to reduce the maintenance CapEx guidance of around BRL 3 billion per annum from now on. Having said that, we understand that an eventual reduction of the guidance of BRL 3 billion per annum for maintenance CapEx, a possible reduction of that yearly amount. If that reduction happens, the difference will not be used to reduce our net debt or remuneration of our shareholders. We understand that we will have minor maintenances, the right path would be to continue to reinforce the competitiveness of our operations here in Brazil, in Latin America, and in North America. If we think about the total CapEx disbursement guidance between BRL 4.7 billion, considering a reduction to close to BRL 4 billion in the coming years. These possible reductions, we expect that we will have to spend less in maintenance, so we will invest more to be competitive and to transform our business in the long term. I think that overall, that's the philosophy we're having right now. We understand that an investment of this order of magnitude is capable for bringing us good investments with excellent long-term returns. As regards the U.S., I think it's hard to say that demand is inelastic. I do think that there is an important component of time to execute, and in that regard, metal construction is a solution which is much superior than other constructive models, and this is seen in the U.S. There's greater demand for metal construction. If you want to build a data center in two years or in six months, and that's totally different in terms of speed for a rollout of new models on account of these hyperscalers that provide service to AI companies. I wouldn't say that demand is inelastic in that regard, but I would say that we are at a moment which is unprecedented, or we would have to go back in time a lot to see such a robust and resilient demand for metal construction in North America. Gustavo, anything to add? Well, what I can add is the issue of imported goods in the two main segments where we operate in the U.S., structural beams, merchant bars, and beams. For beams, penetration of imports is marginal, very small. It's hard for these large merchant bars to be imported in different gauges, so there are no imports. Now, we have the merchants, structural profiles, commercial profiles. They are lighter weight, and those are the ones being imported. Now, when talking with our customers, they're in such a hurry to execute things over there that they get worried to import goods and have to clear customs and delayed ships. The risk of imports is not creating a lot of momentum. Let's get a practical example. Let's get Texas. The need to build transmission towers in Texas It's creating a sense of urgency. People are getting almost desperate to get steel to build these transmission towers. The customers, in the very short term, they want to buy the steel that is ready to be delivered and shipped. The speed of this kind of business is not really encouraging a lot of imports. The system, I believe, is well-controlled. Please keep in mind that before this boom of energy and data centers, we already had a strong backlog. We already had margins which historically were high and boosted by what we talked about, the structural bill finally is translating into new projects of infrastructure. We see this happening in the U.S. Other U.S. federal government decisions like the CHIPS and Science Act, construction of new semiconductor plants, there are about 40 plants that we are supplying to. There's strong demand, more sustainable demand in the process of re-industrialization over there. All of this, it gives us some peace of mind that our backlog is solid. Not everything is positive. There is a concern in the automotive industry. Because of affordability, there's a delay in the renewal of the U.S. fleet. The U.S. fleet is aging a bit. That business is facing a little bit more difficult to take off compared to the other ones I mentioned. This will not last forever. Penetration of Chinese-imported vehicles is almost nonexistent in the U.S. I think that eventually we're going to have a higher demand for special steels because cars don't last forever. The fleet needs to be renewed. Of the segments where we operate in the U.S., this is what we are seeing, and that's where we see a little more difficulty. My expectation is that over the next quarters, the business will ramp up again. Lastly, to your question, Caio, you understand that if we continue to see overheated demand for our products, if we have any kind of slowdown of industrial production, there might be an upside risk of scrap by year-end because there's always a seasonality involved. There is less industrial production. We might have some difficulty in the scrap yards because of the individuals, they find it harder in wintertime to go and deliver scrap. That's something to be monitored. We've seen some stability in a good part of the year regarding scrap price, but this is a time of the year when typically we see some seasonality because of the weather. It is super clear. Thank you very much, Werneck and Japur. Thank you for the questions. Next question from Ehiki Marks with Goldman Sachs. Hi. Thank you for taking my questions. I would like to change gears now and focus in Brazil. In your outlook, you talked about margin expansion for Brazil, but with flat prices. Considering the cost lag that we usually see in this industry, I had understood that there was already some kind of increase coming in the third quarter. Is there any initiative to offset the higher cost of raw material that should have been already contracted? What is the main driver that will lead to margin expansion in Brazil? My second question is, looking at the long-term Brazil strategy, I believe that last time you talked about changing the way you operate in Brazil. You probably anticipated more radical changes when compared to that of the U.S. Thinking about the current demand situation in Brazil, imports still increasing. Both steel and indirect steel demand is slowing down. Some people are having a hard time to be competitive. On the other hand, you see a very strong U.S. market with very high margins, and it seems like this is here to stay. The question then is, what should we expect from all of these changes? Is there any room for you to rethink your footprint in Brazil and your industrial capacity in Brazil, or maybe to expand or increase your capacity in the U.S.? Do you have any target in terms of results target or whatever you think you need to have? What you anticipate for Brazil, structurally speaking? Well, this is a very good topic for us to discuss now, Ehiki. When you look at the number of problems we have in Brazil and things that are coming forward, you see there is the entry of imported goods, increase in energy prices, and now with this geopolitical issue between Brazil and the U.S., our customers are no longer exporting to the U.S. This is not how we work. This is now how I work or Japur works. Therefore, we are looking into a long-term landscape where internal competition and the entry of imported goods will be very similar to what we have here today. We cannot f or to design Gerdau in the future, thinking that we think that the inflow of imports will go down to 11%. If things get better, as they improve in the U.S., we may reap better results when compared to what we have now, then we will certainly overcome all of the difficulties of the Brazil cost, and we will find a way to compete in Brazil like we've never done before. We are working in that direction. Some of the things we are not expecting or anticipating, but if you look at the past few days, we made an announcement in Recife related to the readjustment of our capacity in that mill. We will no longer produce steel or road products in that geography. We will send you that macro plan. All of the shutting down of capacities to adjust to the new volume capacity, to the volume numbers, everything has been done, and now our footprint is in line with the current demand. Just like we did in the U.S., there will be a significant change in the way we operate, in the way we compete as well. I don't want to jump the gun right now, but we are working diligently, in a few months' time, when we call you again, in addition to our earnings result, we will call you up so you understand this plan more clearly. We are considering the future scenario for Brazil, which is much tougher than what we have right now. If in the short run, we have other mechanisms of trade defense, like anti-dumping, and if there's any consolidation going forward, we will probably reap the benefits. We will compete more intensively in Brazil when compared to our position in the past. This is how we see things. Miguel Burnier is a clear example of our move. Now I'll turn the floor to Japur, who can talk about the short-term initiatives. As Rafael said it earlier, the topic of this morning's debate was the U.S. outlook, but there is also the outlook for Brazil, whether there is or there is not an actual possibility of expanding or having different results. I think that we should also give a response about Brazil, just like we did for the U.S. in our outlook. Well, Ehiki, we don't see any effective improvement in unit prices. On the other hand, we see a better sales mix with some recovery on the side of heavy vehicles in Brazil. According to ANFAVEA data, heavy vehicles are quite important to our special steels division in Brazil, or segment in Brazil. From the first to the second quarter of this year, we saw a mix improvement with higher shipments in the domestic market. When we take into account the fact that in the third quarter of the year, we will possibly have in Brazil four more business days when compared to what we had in the second quarter, probably we will increase productivity, and the numbers will be better when compared to the second quarter. Since we are talking about very tight margins in Brazil, these minor things are important to help our results. As Gustavo said, this requires very diligent cost work. In the fourth quarter, we will see cost reduction effects in Ouro Branco due to the ramp-up of our expansion in Miguel Burnier. Thank you. That's great. Thank you, Ehiki. Next question from Daniel Sasson with Itaú BBA. Hi, good afternoon, and thank you, Ari, Rafa, and Gustavo. I hope everything is fine with you. Yes. My first question, everything has been quite clear when you said that you were being more conservative when it comes to your margin guidance in the U.S. because there is room for further improvement if price increases are fully implemented. Is there anything else in addition to metal spread, because it only considers two variables, price and scrap, or maybe something that could concern you going forward to the third quarter, like higher fuel prices in the U.S., freight impact, or things that sometimes are not captured in this guidance in relation to metal spread? Still speaking about the U.S., you talked a lot about the fact that you're preparing the company with inventory to accommodate for the downtime in Midlothian. Do you have any public figure or any range of figures in terms of what would be the effective cost given the idleness that we should anticipate for the third quarter? My second question refers to capital allocation and CapEx. You said that you were running slightly below the 4.7 guidance for this year. 55% of your CapEx is denominated in US dollars, that probably helps to explain it. Going forward, I know that you don't have any official guidance for 2027 and after that, but Rafael said that probably that $3 billion in maintenance should be slightly lower. The delta that you use for competitive projects, you talked about CapEx with the conclusion of important projects would be probably lower next year, probably closer to 4 to 4.5. Does it make sense to still bear that in mind, to keep that in mind, or is there any given thing that changed? Okay, I will start. Speaking about short-term and lower risks and logistics, I think this reflects the reality. If you visit one of our mills and if you talk to an operator, then you ask them, "Where does that get you?" The first answer is supermarket prices. They said, "I used to pay BRL 70, but today I'm spending BRL 100 every time I go to the market." This is impacting U.S. consumers, and this has its implications in the business world because there is pressure coming from freight costs, then energy costs. This doesn't mean that we have any managerial risk that it will be up to us to manage. When it comes the time that we would have to make increases, we will try to mitigate going towards reducing costs. We are talking about the inventory of billets related to the downtime. Our maintenance downtime in the U.S. is better than that of Brazil. The cost of downtime is much lower in Brazil than there. You know all of the reasons behind that. Even then, since every ton matters now, in the past few weeks, I was in the U.S., and every time I visit them, "Please don't lead us to any scarcity of products." Products have to be available, and any ton can really affect our customers. This risk is already managed. A few months ago, we decided to work with an inventory level slightly above what we imagined before. This is a risk that is closely monitored, and I believe that through the methodologies that we know, we manage risk, like everybody else does. I think so this issue is well managed. If I have to think, you say, do I have to think about anything that I haven't yet mapped out? I don't think so. I think everything has been laid down. Japur will talk about capital allocation, and he can also talk about anything else he bears in mind about the U.S. Sure. We believe that there is still 150 million barrels of idleness. It's not CapEx, but it's OpEx related to the Midlothian downtime and expansion. Rather than, there is nothing specific in addition to what Gustavo already mentioned. Now related to CapEx, yes, we believe that there is still room to reduce further, BRL 4.7 billion, maybe it would be BRL 4.5 billion. Something in that range. Right now, we don't believe that this number will be much lower than that because if we decide that it's not so important to have maintenance CapEx, maybe that's additional, that surplus disbursement space will be earmarked to productivity, mainly focused in costs for Brazil and North America as well. We are growing, we are also investing in downstream in the U.S. If you look at quarter-over-quarter, we posted two-digit growth in our shipments in North America, this certainly leads to higher margins when compared to what we had in the past. Perfect. Thank you very much, Rafael and Gustavo. Thank you. All the best. Ari, over to you. Next question from Gabriel Barra with Citibank. Hello, Werneck, Japur. Hi, Gabriel. How are you doing? All good here. Thank you for taking my question. I have two points. I think we've spoken about many important topics. There are two things I'd like to understand more about. The first, as you mentioned, there are a number of projects that we should see as building blocks for EBITDA. They are important building blocks for EBITDA and next year's cash generation. Three major projects that should reasonably well improve cash generation and the company's EBITDA in the coming year. One of them, perhaps the most mature of them, is Ouro Branco. When we look at volumes, we haven't seen volumes effectively impacting the earnings of the company. Looking at the future and at the other projects, what is your perception regarding Ouro Branco flat steels? How is this evolving? How is this helping EBITDA and EBITDA margin of the company so we can understand the impact next year? Second point, we spoke a lot about capital allocation in this sector that is going through more difficult times. We see Gerdau deleveraged, generating cash with a positive trend, improved margin. When we look at next year, there are two points. We'll start the year with a CapEx that will be much lower than this year. Not so many growth projects as we have seen in the last two years, in the past for that matter, and with an expectation of divestiture of assets. That's a point that we have been discussing with investors and in some past conference calls because this could lead to an additional cash generation for the company next year. When we put it all together, how should we think about cash generation considering lower CapEx, a greater cash generation, a deleveraged company? Should we expect much higher dividend payout next year? What are you thinking regarding all that, considering all of the factors involved in my question? Good, Gabriel. I'll start saying that there is a relevant building block to be resolved in the coming years, which is exactly the one you mentioned, Ouro Branco. The equation of ore is resolved. Coal, our coke plants are very stable. The assets are operating really well. There is a structural issue in Ouro Branco. We can call it a building block. It will be sorted out in the coming years, although I don't have a definitive answer in terms of the how. Which is volume produced at Ouro Branco, which historically was and is geared for exports to the international market. Ouro Branco still has a mismatch between production of crude steel and the production of rolled products because for many, many years, we used that additional capacity to produce semi-finished goods to serve other rolling mills in Brazil in moments of demand peaks. When there were no demand peak, we would export the semi-finished steel and as a rule of thumb, always with contribution margins, oftentimes with positive margins. The world has changed. Just like we have a lot of penetration of steel in Brazil, we are finding over the years fewer and fewer opportunities to export. The question that arises from it is, what are we going to do to solve the problem? The problem will be solved. I haven't got a final answer to give you. It is being considered in this transformation work that we are doing. We'll have to solve it because an integrated mill with two blast furnaces, with that production that dilutes fixed cost, I cannot be producing at that mill with a lower volume just geared to the domestic market. An integrated mill does not work that way. We will need to look for one or several alternatives over the coming years. We have been debating this internally to direct this volume, which historically was allocated to exports. We made a decision that we are no longer going to do that. We will find alternatives to allocate that volume to some other alternative that will bring us greater profitability. Hello, Gabriel. To continue Gustavo's answer, I think we have to think about our target, our objective. We had the start up of our HRC mill in Ouro Branco. It started up at a very poor timing, and we had some problems, and we talked about it in previous conference calls, and we had a lot of imported material coming to Brazil, which really lowered the prices in the domestic market of Brazil. We really have confidence in the technical work that is being done at the Ministry of Energy in terms of the claim for anti-dumping measures against hot-rolled coils coming from China. We're going to have the DECOM return in the end of August, and hopefully the investigations will be completed by year-end, and we'll have the effects of the anti-dumping measures. In terms of benefit and expecting a better result in the long term in the Brazilian operation, this will come by the replacement of volumes that were exported elsewhere in the past, and it will be geared to the domestic market with better margins. If we look at our competitors in flat steels, competitors that are listed, they are not having good margins. We envision that in the long term, with the investments made, with the expansion at Miguel Burnier, with access to more competitive raw materials, with better quality, with a state-of-the-art rolling mill operating, all of that will give us competitive gains that will lead us to the expected and desired results next year. If we think about Miguel Burnier scrap processing in Pindamonhangaba, and the Midlothian expansion project. We have a portfolio of projects that should potentially generate about BRL 1.4 billion, BRL 1.5 billion additional per annum when these projects are in full operation. That's where the results improvement will come, in our opinion. We're not focusing on price increases or market increase. We are working in-house to look for solutions to address this chronic problem we have in Brazil of low earnings. It is hard to project what you asked about potential cash generation considering possible divestiture of non-core assets of Gerdau. I think it's way too soon to talk about it. Perhaps in 2027. For the record, when we look at the proportion of free cash flow that the company has been dedicating in recent years to our shareholders via dividend payout or share buyback, I think that this speaks for itself in terms of our commitment, i.e., when we have available cash generation, we return this to our shareholders in the most efficient way possible. Super clear, Japur. Just a quick point, and please correct me if I missed something. You spoke about a one-time ratio, you feel comfortable below one time. Is there any floor of leverage that should guide us in the next year, given the cash generation to guide us in possible dividends and share buyback? Well, structurally, Gabriel, we don't aim to be a cash net company. With the interest rate environment in Brazil, this would be an excessively conservative approach for the balance sheet of the company. The fact is that today we have an objective situation in Brazil where we are accumulating losses since the second half of last year in Brazil. You could advocate, why don't you get more leveraged when actually I am not doing anything with these deductions. I am generating a loss that will be offset eventually in the future. We are not generating any tax profit in Brazil, unfortunately. I think that this leads us to be somewhat cautious when we think about changing gears and leveraging the company. Last year, we had a significant distribution to our shareholders, dividends, and share buyback, even though we generated little free cash flow over 2025. We ended up increasing our leverage to continue to remunerate our shareholders of the around BRL 2 billion that we increased in leverage, BRL 1.7 billion. Of the BRL 2 billion we distributed, BRL 1.7 billion was by increasing the leverage. We understand that we should not pursue that path. It's better to have a deleveraged balance sheet, particularly with interest rates scenario in Brazil, with real interest rates, which exceed a lot the real growth rate of the economy. Super clear, Japur. Thank you very much. Thank you, Gabriel. Last question from Leonardo Correa with BTG Pactual. Hi, everyone. Good afternoon. Werneck, Japur, Harley, all good with you? Just quick questions. I know we're getting to the end of the call. Everyone is hungry so I think I have two questions that perhaps are still pending answers. Still about the United States. USMCA, Werneck. You talked about this in the beginning. You talked about the outlook. About five, six months ago, the big risk for the U.S. Operation was an order down due to USMCA and more volume from Mexico and Canada. Negotiations have started with Canada. It seems that things were a lot more difficult and still nothing changed. In Mexico, the conversation has been to reinforce tariff barriers in Mexico to equal the 50% tariff that the U.S. has in Mexico. It seems that the conversations for steel are much better than expected. That risk that even Wang and you mentioned as the key risk, at least to me, this risk seems to be a lot lower than some months ago. I just want to confirm whether I got this right. Does this make sense, or is it too soon and we should wait? Second point f or years and for quarters, we have been discussing the zip code effect at Gerdau. By definition, you are always evaluating the operations in corporate topics and so on and so forth. I know that this topic, this kind of move to unlock value in the U.S. kind of slowed down given this significant valuation gap between two assets, Brazil and the United States. I understand that there is very little or zero being discussed at this point. Is this true, Werneck, or is this still an operation you continue to study and assess? I would just like you to elaborate on that. You don't have to give us a very long answer. All right, Leo, let me address the first one, and Rafa will answer the second. Over there in the United States, nothing is linear. We can debate for hours on USMCA. At the end, nothing can come to fruition. What's happening today? No one is calling us to discuss USMCA right now in the United States and Canada. We were involved in the Mexican part. Every week, we get invited to debate industry-related topics, particularly automotive steel in Mexico. We go there every week to participate with Mexico. The conversations are moving to a technical level, which hadn't happened before. The melting pool, steel going into the U.S., whether it should be cast in Mexico or not, this is the current debate. Regardless, I strongly believe that the possible changes to happen in the USMCA agreement will continue to benefit, can benefit us even more. I don't dedicate so many hours at this point to study this more in-depth than what we have done already. I think it's under control. I think it's kind of distant. We're very much involved with Mexico. We are always called, always invited. We're participating practically every week. I sometimes have to go there to debate, or we align it with Japur. On the U.S. and Canada sides, they haven't invited us to debate because I think that the U.S. has other biases in this negotiation as we speak. About the zip code, I'll let Rafa answer. Hi, Leo. Again, we are always actively evaluating opportunities in our corporate structure, both what the market sees and what the market does not see. We had a significant change in the past year. We changed our structure in Spain to give us more flexibility to distribute dividends, not just in December, but in other months without having withheld income tax, which is important. Effectively today, we don't have any action plan or any studies being conducted to implement an important corporate structure change or relisting, spin-offs, or carve-outs of our assets in North America. Excellent. Thank you very much, Japur and Werneck. I'd like to thank you. Ari, over to you. We just concluded the Q&A session. Questions that were not answered, our IR team will be available to answer them further on. Well, thank you all very much. Well, very briefly, as Leo said, everybody I think is hungry, so we're not going to hold you any further. But on our hand and on behalf of all of us, I would like to thank you so much for joining us, and I would like to invite you for our next earnings release presentation related to the third quarter of 2026 on October 27th. Thank you so much. I wish you the best, and take care.