Afternoon. Welcome to Hapvida's second quarter 2021 earnings conference call. Joining us today are Mr. Jorge Pinheiro, CEO, Mauricio Teixeira, Chief Financial and Investor Relations Officer, and Guilherme Nahuz, Investor Relations Director and Sustainability Director. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the company's presentation. After Hapvida's remarks, there will be a Q&A session for investors and analysts only when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Today's live webcast may be accessed through the internet address at ri.hapvida.com.br/en/. Before proceeding, let me mention that forward-looking statements that may be made during this conference are based on the beliefs and assumptions of Hapvida's management, and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Hapvida and could cause results to differ materially from those expressed in such forward-looking statements. For those of you who are connecting via webcast, you control the slide deck. Use the navigation keys in order to change slides. I'll turn the conference over to Mr. Jorge, who will begin the presentation. Mr. Jorge, you may begin your conference. Hello, everyone. Thank you so much once again for joining us in our conference call. It is with great satisfaction that we share with the market Hapvida's results for the second quarter of 2021. I could not start this conference call without highlighting the efforts that were made during the second quarter by our team to fight the COVID-19 pandemic. I am thrilled, and I acknowledge all the love, dedication, care, and all professionalism put into the planning and execution of the several initiatives to fight the pandemic. We're very grateful for being able to fulfill our mission of serving, caring for, and protecting our members. To our team, my deep felt thanks. To our clients, I reaffirm our untouchable and non-negotiable commitment to serve you, giving true meaning to our existence as an institution. The second quarter was an atypical and challenging period, marked by the continuity of the second wave of the COVID-19 pandemic in Brazil. Once we were getting close to the end of the quarter, we saw the main COVID-19 pandemic indicators presenting strong reduction. Our COVID care numbers are going through a downward trend in all regions. The daily volume of admissions that once exceeded 200 in one single day dropped to about 20 recently. Yesterday, for example, August 11, we had only 12 admissions. In some cities, the volume of admissions is already stabilized at historical levels for some months now. The average length of stay also went back to levels that are close to pre-pandemic periods, with most recent values of around 3.8 days per admission. The number of beds dedicated to COVID-19 were reduced by about 90%, a bit over 100 beds today versus 1,652 beds that we had during the peak. We now have around 600 healthcare professionals dedicated to fighting the pandemic. A reduction of over 80% when compared to the 3,600 we once had. All of that added to the vaccination pace in Brazil makes us believe that we will remain in this downward trend in the number of COVID-19 cases. To the months of May and June of 2021. We'll give you further details about that later on. We added 584,000 healthcare members and 184,000 dental members, increases of 16.7% and 5% respectively. Good afternoon. Okay, continuing now. This growth came especially in the beginning of the consolidation of Promed of Belo Horizonte, an acquisition concluded in the second quarter. We also added lives organically, 130,000 lives in healthcare and 182,000 lives in dental. More recently, we've seen an active commercial pipeline with the addition of 23,700 lives in healthcare and 23,300 lives in dental in the second quarter 2021. Our consolidated MCR in the second quarter was of 66.6%, 5.5 percentage points increase compared to the first quarter of 2021 due to the service and hospitalizations related to COVID-19. There was also an impact with a greater number of COVID admissions in the center west and southeast regions, where we're still going through growing levels of verticalization. There was also an impact of the MCR of recently acquired companies, Medical, São José, and Promed. These three companies have MCRs around 85% and 95%. They're still operating at levels that are higher than Hapvida's, but they are already going through a MCR correction process. It's worth mentioning that only with the entry of the acquired companies and their weights, without the COVID effect and without the impact of the negative readjustments of individual contracts, the consolidated cash MCR would have been 67.5%, and we delivered 66.6%. We were able to serve an exceptional demand and, at the same time, deliver efficiency gains that were more than enough to absorb the one-off impacts in the quarter that we mentioned previously. Our verticalized and integrated business model enables us to go through impacts like that much more than the rest of the market. We continue excelling in claims management. Digital transformation, automation, and artificial intelligence are already part of the everyday life at Hapvida. Our operational technical center, located in Recife, the state of Pernambuco, enabled us to continue increasing the number of tests conducted in our own network in the second quarter. Another novelty in the quarter was the launch of our ECG report center that is now using artificial intelligence. With machine learning, we can now deliver 95% of test reports in up to 15 minutes. From March and July this year, we have already interpreted and delivered over 53,000 tests with this new system. The use of artificial intelligence enabled us to implement this process in a safe and agile manner, indicating to experts the tests that may have some type of abnormality. Our selling and administrative expenses level reduced by 0.5 percentage point when we exclude our long-term incentive plan, or ILP. Our SG&A level remains very well controlled with a stable index. Our ex-ILP EBITDA has reached BRL 312 million. On slide number four. We closed the quarter with 465 care units between hospitals, emergency walk-in units, clinics, and diagnostic units, 27 more than the first quarter of 2021. We opened Hospital de Maceió, replacing another hospital in the same city, two walk-in emergency units, six medical clinics, and three diagnostic units in line with the modernization and consolidation process in new and large units for higher complexity procedures that centralizes and expands the existing services. In the inorganic front, we concluded the acquisition of Promed, which became part of Hapvida in May, consolidating the results on June 1st, 2021, adding two hospitals, five clinics, and one diagnostic unit to our structure. In addition, we now have nine hospitals in different phases. Some of them still under planning and other at advanced stages of construction. We are also expanding our hospital unit in Natal, where we are doubling our capacity. Thus, we closed the quarter with 3,570 beds, 507 more than the same period the previous year. The main additions of beds happened in the following way: 103 at Hospital Sírio-Libanês, 23 at Hospital Mário Palmério, 112 at Medical, 99 in Grupo São José, and 116 at Promed. We continue engaged to find the ideal size of our own network, which will enable us to achieve gains in verticalizing medical expenses. Now on slide five, you can see the market share of the healthcare and dental segments in the second quarter of 2021, compared to the same period of 2020. In healthcare, we had a 1 percentage point increase in all regions where we operate. In dental, we grew 0.3 percentage points, fruit of our growth strategy. Another major step was given, as you can see on slide six. We are advancing at yet another stage of our business merger between Hapvida and Grupo NotreDame Intermédica, GNDI. In June, we received the official approval to take over GNDI's operator by the national regulator or ANS. The next step is to receive CADE's approval. Our process was submitted to them in June. On slide seven, you can see that we continue committed to our sustainability agenda. We published in May our second annual sustainability report. We are advancing in our strategic planning for the area. In the environmental sphere, we celebrated for the first time the Environment Week, in which we implemented actions to foster the discussion of the topic at the company. We have also announced four new hospitals in the network of green and healthy hospitals. We also have a major work front with a project called Evolve, with several social responsibility actions with our employees. We have also reserved the month of June to celebrate diversity and create a safe environment free of prejudices through programs that foster the practice of diversity in all its breadth and plurality. We published a diversity and inclusion guide at Hapvida. The launch of the document was also accompanied by corporate talks and a remote learning course with 10 videos. We understand that we are in the beginning of this journey, and we are confident that the ESG agenda advance is key for the sustainability of our business. We have also been taking all the opportunities created right now in the market for the buyback of shares in order to generate value to our shareholders, because we believe that the current price of our shares does not reflect the foundation and the opportunities of Hapvida's business. The dedication of our over 37,000 employees and 30,000 medical professionals and dental professionals reinforces our belief in our business model. I would like to turn the floor over to Mauricio Teixeira, our Financial VP and Investor Relations Director, who's going to give us further details about the numbers of the quarter. Thank you very much. Thank you, Jorge. Good afternoon, everyone. Let's move on to slide number 8. Our net revenue in the second quarter of 2021 grew by 15.7% when compared to the second quarter of 2020, boosted mainly by the organic increase of 130,000 lives in our healthcare member base, 39,000 in individual plans, and 91,000 in group plans. The organic increase of 182,000 lives in our dental member base, with 38,000 in individual plans and 144,000 in group plans. BRL 5.2 million in the quarter. The consolidated acquisitions in the second quarter of 2021 that did not exist in the second quarter of 2020 also contributed to this growth. BRL 48.8 million in Medical, BRL 43.3 million of the São José Group, and BRL 43.3 million at Promed. We also have 12,000 lives coming from Samedh and 13,000 lives coming from Plamheg. Our dental segment had a decrease of 3.1% in the average ticket value because of the participation of urgency care plans. Even with a smaller ticket, our revenue grew 11.2% because of the increase in the number of members. On slide nine, you can see how the COVID-19 landscape has been evolving at the company since the beginning of the pandemic. In the first quarter of 2020, we had the peak of the second wave, with 217 admissions in one single day. In the second quarter of 2021, our care units were impacted by almost the same volume of service and admissions related to COVID-19 compared to the first quarter of 2021. The difference is that this happened in a scenario with a downward curve. Just like in the first quarter, the second quarter led to a higher demand of elective procedures because of the flexibilization of mobility restrictions and the non-suspension of elective procedures. There was a drop of 65% compared to the average of the second quarter. In August, the rhythm indicates a drop of over 50% compared to July. We project less than 500 admissions for the whole month. The strength, together with the advances in the vaccination phase, will give us an expectation of normalizing our operations. On slide 10, you can see the MCR for the quarter and for the first half of the year. Cash MCR in the second quarter of 2021 was of 66.6%, and in the first half of 2021, it was 63.9%, increases of 14.1 percentage points and 9.8 percentage points respectively. This is mainly due to the COVID scenario that was explained previously, with an impact of BRL 153.5 million in the second quarter of 2021 alone, against an impact of BRL 47.6 million in the second quarter of 2020. There's also a higher level of MCR in the acquired companies, Medical São José and Promed, which were not present in the comparative period. We had cash MCR and the IBNR constitution, because now we have the return of elective procedures in our accredited network and the normalization of the SUS reimbursement provision with the new ABIs that are now being sent by ANS after being interrupted because of the pandemic. There was also an increase of 4 million in depreciation and amortization in the first half of the year because of the increase in care units coming from both organic and inorganic growth. The reduction of BRL 5.4 million in the second quarter 2021 is due to a reflex of the amortization and our PPA, which is actually reflecting lower amortization in the period. On slide 11, you can see the breakdown of the SUS reimbursement provision. In the second quarter of 2021, we received a new ABI lot, number 86. Because of the acceleration of the number of invoices sent in previous quarter, the historical percentage sent by ANS suffered changes. The provision of ABI has been kept stable. The speaker has been disconnected once again. Please hold while we reestablish the connections. Please hold while we reestablish the connections. Okay. Reestablishing the connection now. We can hear you. Go ahead. Ladies and gentlemen, please hold while we reestablish the connection with the speakers. Thank you very much. Okay, connections have been reestablished. On slide 12, we continue to present the percentage of representativeness of the SUS reimbursement provision value that has been dropping compared to the total claim of the company. We calculate using the ABI amount divided by the quarter to which the ABI refers. There has been a sequential drop in that level. We have received the ABIs for procedures that happened in the second quarter of 2020. The nominal value is similar to our historical levels. Since the claims of the second quarter of 2020 was much lower because the elective procedures had been suspended, which is the number that goes in the denominator, there has been a dramatic increase in this index. This should go back to normality in the next quarters. On slide 13, you can see an additional slide showing what our cash MCR would have been in the second quarter of 2021 if we disconsider the additional expenses with COVID, which were BRL 153.5 million, and the higher level of MCR in the acquired companies, Medical, São José and Promed. Our index would have been 59.7%, which is well in line with our historical MCR for second quarters. On slide 14, you can see our operating expenses. The selling expenses rate was of 8.1% in the second quarter of 2021 and 7.1% in the first half of 2021, a reduction of 0.6 percentage point and 0.9 percentage point compared to the same periods of 2020. This reduction can be explained by a lower rate of selling expenses in the acquired companies, reduction of deferred expenses of net commissions due to the cancellations of plans, and reduction in the level of delinquency in individual plans, both in the second quarter of 2021 and in the first half of 2021. Compared to the first quarter of 2021, there has been a 1.9 percentage point increase. The level of administrative expenses was of 9.9%, both in the second quarter of 2021 and year-to-date. This is stable when we deduct the long-term incentive plan effect. We had some variations that offset each other. This indicator has remained stable. On slide 15, you can see our ex ILP EBITDA of BRL 312 million in the second quarter of 2021, and BRL 778.8 million in the first half of 2021. The EBITDA margin of the second quarter of 2021 was 13%, and 16.5% in the first half of 2021. This reduction can be explained by the second wave of the pandemic, since our SG&A, as a percentage of the revenue, was practically stable. Excluding care costs coming from the COVID-19 effect, we would have had BRL 153.5 million for the second quarter, and BRL 247.1 million for the first half of 2021. Net income, a total of BRL 269.8 million in the second quarter of 2021. A reduction of 29.5% compared to the second quarter of 2020, and BRL 569.4 million the first half of 2021. A reduction of 11.8% compared to the same period the previous year, impacted by the reduction of the EBITDA because of the pandemic, as we already explained, and an improve in our net financial expenses and effective rate. Slide 16. The ex acquisition free cash flow was negative of BRL 202.4 million, impacted at BRL 420 million by the working capital variation of Promed that had in its opening balance sheet BRL 669 million of net liabilities, and that after we took over, was reduced to BRL 248 million through the payment to many suppliers. It's worth mentioning that this will be offset by the price adjustments for this transaction. The cash flow was positively affected by the lower balance in our income tax and social contribution, explained by deductible expenses that did not occur in the comparative period. There was also an impact of the EBITDA reduction that was BRL 316.1 million lower. Our cash consumption for the quarter of 2020 due to the increase in CapEx investments and the expansion of our own network. We're now available for the questions and answers session. We'll now start the questions and answer session for investors and analysts only. If you have a question, please press star one. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Questions will be taken in the order that they are received. We do ask you that when you ask your question, pick up your handset to provide optimum sound quality. Please hold while we pull for questions. There is a question from Vinicius Ribeiro from UBS. Good afternoon, everyone. Thank you for taking my question. I have actually two questions about the same topic. I apologize if you have talked about this during your presentation because we had some connection issues. First, I'd like to know about organic additions in new locations, especially in the countryside of the state of São Paulo. How is your vertical structure in those locations? I know you are planning to launch new products in these locations that needed higher level of verticalization. Considering the investments that were made during COVID, when do you expect to accelerate this in the new locations? My second question is about negotiation with clients. Last year, we had an indication that the competition was a bit more aggressive, and I wanted to have your take on that. In addition to this macro situation, is there any catalyst on your side to accelerate organic growth? Thank you very much. Hello, Vinicius. Thank you for your questions. About the infrastructure, you know that our team is very disciplined when it comes to all of the initiatives that will increase the level of verticalization and integration of operations. Even in the regions where we already have a high level of verticalization, like in the North and Northeast of Brazil, we're expanding the hospital of Natal. That's actually a duplication that is now ready. We have a pediatric hospital to be opened, and in the coming weeks, we will have a new pediatric hospital in Recife. We opened a hospital in Maceió that is twice as large as the previous one we had. We always want to offer the best to our customers, and this is very well aligned with our foundations. Now, about the recently acquired companies, we have several initiatives. For the Center West, we will deliver in the coming days, the first walk-in emergency unit in the region. We are also building a hospital in the region that might be ready by the end of the year or beginning of next year. In the countryside of the state of Minas Gerais, we just acquired a property, and we are now going through the regulatory process to build a hospital in the city of Uberlândia. In the city of Uberaba, we had already leased part of the largest hospital in that region, Hospital Mário Palmério. We're also investing in imaging clinics, emergency units, and so on. These investments have already been made and are already operating. Still in the Center West region, we are building a hospital in Campo Grande. We just opened a low complexity hospital in Rondonópolis, and there are another three walk-in emergency units for the region involving Mato Grosso and Mato Grosso do Sul. We also acquired a property in Brasília, and we'll soon start construction of that unit there. Now, for the Southeast, starting with Belo Horizonte. The whole verticalization plan of these two acquired companies, Promed and more recently, Plamheg. We are expanding the number of beds in existing hospitals. We are also building new hospitals and leasing hospital units and building an outpatient network. We have already devised the plan. This is a very robust plan that is now being executed. Our expansion area is working very hard on this. For the countryside of the state of São Paulo, we're still working on the inorganic and organic fronts. In some regions, not only in the countryside of São Paulo, we have M&A projects that will help us increase the verticalization level in the hospital segment for São Paulo and the countryside of the state of São Paulo. We're also building three hospitals there. In total, we have nine hospitals under construction. Not to mention those that will be added inorganically. There are several fronts, and this is what's going to support us because we don't focus only on verticalization, but also on complete integration of all of the services that give us a great competitive edge, sustainability, and that will help us grow in the future. About the competition. For now, there is nothing very surprising to us. For the second quarter, as we said, the company is resuming organic growth. The third quarter is even more exciting. I'm really excited about retail that has been exceeding our sales target in June, and August has started well as well. We think our product is very well fit, and we're very confident that we are on the right track. We are expanding our market share in general, and we have the possibilities to growth and expand market share at the same time. In the regions where we operate, I don't see the competition offering any new competitive edge or anything that can threaten our consolidation. Thank you for your question. Thank you for your answer, Jorge. Our next question is from Mauricio Cepeda, from Credit Suisse. Hello, Jorge. Thank you so much for your time and for taking my question. Talking about the commercial area, I have a few questions about things that have been happening in the field. Do you see any signs of economic recovery for your corporate clients? Do you think that they will increase the number of lives? Do you see willingness from other companies to change their healthcare plans? Do you think that you have the possibility of attracting new customers because of that? I would like to hear a bit more about the cancellations that you mentioned. What has been motivating those companies to cancel their contracts? Thank you very much. Thank you for your questions, Mauricio. About the inclusion of lives in existing contracts, we see that this movement is already happening, but we're not back to pre-COVID levels yet. I think that the companies are resuming activities on the one hand, but I think that the main factor here is that the companies are now reestablishing their expansion plans, but not all of them are in force yet. We have positive signs, and we believe that soon we'll go back to the level of hiring and the number of headcount that companies had before the pandemic. This is a very healthy growth for us. When we talk about companies that are already our clients, when they rehire their employees and go back to the headcount to pre-COVID levels, that's going to have a great effect for us. Yes, we see some growth there, but we're not yet back to pre-COVID levels in existing contracts. About the dynamics and the possibility of offering new corporate products. In times of COVID, it's harder to do that. Many companies started working remotely, and it's harder to get in touch with them. Thankfully, we were going through the pandemic very well. Once this is over, we think that we're going to have a great semester of growth. Based on the expectations of our commercial area, we believe we'll go back to normal levels of growth. Finally, about the cancellations. It's natural to have a bit more cancellation in periods of economic instability, but we're overcoming that. The second quarter already had net growth, and the third quarter will have an even more robust number. I think that when it comes to economic landscape, the worst is behind us. I don't see a negative outlook for that. On the contrary, our product, especially during these challenging times that we're going through, is the product that Brazilians want the most. It's a dream of all Brazilians to have a healthcare plan, and we're ready to make the most of the economic recovery and of that desire of the population to have a high-quality healthcare available to them. That was very clear. Thank you very much. Our next question is from Fred Mendes from Bank of America. Good afternoon, everyone. Thank you for your call. I have two questions. The first one is about an important topic. In the macro scenario, we are talking about almost 400,000 lives added. I don't know if organically you had some specific contract that added to that. I would say that you are now way above historical levels. Can you confirm that? About MCR, if you exclude the COVID effect, you would be within your historical MCR range as well, without a large impact of elective procedures, which we would expect to have a higher impact. The point is, I believe that from now on, we would go back to historical levels without any strong impact of the elective procedures. Well, Fred, thank you for your questions. When it comes to organic growth, in the last 12 months, provoked by us, we canceled four significant contracts, and I think we mentioned that in our last conference call. These are contracts of acquired companies that had a great presence in regions where it would not be appropriate for us to invest in verticalization. Our verticalized model would not make sense for that. These were all corporate customers with very high MCR rates, about 90%-120%, all of these contracts, and they accounted for 80,000 lives. We were the ones that wanted to cancel those contracts. Maybe some of them might make sense in the future if we implement a verticalization strategy there or a co-responsibilization, co-participation model. The way that it was, it didn't make sense for us to keep the contracts. In which we would have no remedy but to transfer the prices to our customers. We thought it would not make sense to keep these contracts. During challenging times of the pandemic, our company had relevant growth. In the end of last year, from the third to the fourth quarter, we had had a robust growth already after the first wave of the pandemic was left behind. Now the second wave is ending, and we expect to see the same growth phenomenon in the second half of the year. About MCR, that's a great question. I know that we had connection issues, so I would like to explain that to you once again. What I was saying is that if we made a simple merger of Hapvida, that has around 60% MCR, with all of the acquisitions that we made in recent months, São Francisco, Promed, Limeira, América, RN, São José, and others. The MCR of Hapvida at 60%, and all of the acquired companies that varied from 70% to almost 100%, the combined MCR would be 67.5% in a scenario without COVID-19 and without negative readjustment for individual healthcare plans. Our operational discipline to capture synergies and correct assets that were acquired only a short while ago, we were able to achieve 66.6% of cash MCR, which is lower than the simple combination of Hapvida's MCR and the acquired companies MCR ex-COVID. It's as if we're able to offset all COVID-19-related service with a balance of 1 percentage point. I reinforce, this is a spectacular result, and we kept MCR at around 60%. It's important to mention that we see the whole market struggling. It's been challenging for everyone. Our business model enabled us to keep the MCR at around 60% and to offset that major volume of admissions and COVID-19 related care provided. We absorbed all that with efficiency gains, capturing synergies as well in the acquired companies. They are now relevant considering our member base and our portfolio. Looking ahead at the third quarter, as we tried to show you in the number of care provided, admissions, number of employees dedicated to one thing or another, we'd say that the second quarter was very much affected by COVID-19, and the third quarter is now going through a strong recovery with a dramatic reduction of COVID-19 related service. July was less impacted than June, August much less than July. There is a downward trend, we believe that in September, we will have almost no COVID-19 effect considering the reduced number of hospitalizations and the demobilization that we've done. In terms of elective procedures, we haven't stopped. Of course, some procedures were not conducted in the second quarter, they will be done in the third quarter, I think that the backlog will be over in the fourth quarter. We don't think that there will be a major impact, that's because we have a very resilient business model. A surgical procedure at our network costs infinitely less than in the rest of the network, because around 70% of the cost has been prepaid, in terms of salaries, property leases, and so on. We can buffer those costs. Considering the COVID-19 landscape, our business model has proved to be very resilient, even in spite of all the challenges that we went through in the second quarter. Thank you so much, Jorge. That was very clear. There's one thing I did not understand. If we look at gross sales, only almost BRL 400,000 in the second quarter. If we look at 2019, I see that the numbers were close to that, right? Or was that lower? Well, Fred, I don't have the 2019 numbers here. What I can say is that sales targets for corporate plans and individual plans are much higher than for 2019. In the third quarter, we see great indicators of economic recovery, and the targets are now higher than those that we had for 2020 and for 2019. If you want further details about that, we can forward them to you later. Okay, Jorge, thank you so much. That was very clear. Our next question is from Leandro Bastos from Citi. Thank you. Good afternoon, everyone. I would like to talk about M&A a bit more. The first question about the recently acquired assets, Promed is the most relevant one. Can you share your first impressions there and your attempt to capture synergies with them? That was one of my first question. The second question, do you see new opportunities to acquire assets? We know that we have the COVID-19 challenges, but do you see any M&A opportunities in the industry? Thank you. Thank you, Leandro. These are great questions. About Belo Horizonte, I am very impressed with many actions. After Promed, we also received a CADE approval for PN. In Belo Horizonte, we already have a relevant portfolio, and that is really important for us because we'll be able to fully implement our business model there. As I was saying, our philosophy guides us to implement a large healthcare network present in the most important regions of the greater metropolitan area around Belo Horizonte, where we need low and medium complexity units, where we need emergency units, imaging clinics, diagnostic units. We're also expanding our hospital network. The plans have already been devised, they're ready, and we're planning to implement our systems and integrate the whole network. You know that our systems have great intelligence, standardization of operations, medical protocols, prevention programs. After all of that is implemented, we are going to have a huge competitive edge. Not only to win markets, to gain new market shares, but also to create new market segments. We'll be able to reach locations that are out of the private healthcare market. We were very well received by our customers and by the medical class. We've had over 96%, I'm not sure this number is correct, but I think it's been over 96% of the contacts with physicians from the Belo Horizonte area have been made, which reinforces a solid partnership with the medical class in Belo Horizonte to make this product a financial reality and also a reality in terms of high quality healthcare population of Belo Horizonte. We're very happy. We've been doing a lot, but the market is huge and there are many opportunities to be explored. Now, about your second question. Yes, I see that the scenarios that we're going to face in the coming months will create organic and inorganic growth opportunities. That's because many companies in the country depend on individual healthcare plans, and the negative readjustments will impact their operations strongly. Two things may happen. On the one hand, this type of company might have to transfer this readjustment through other sales channels, and this could bring us organic growth opportunities, but this could also create some fragility to those operations which could be reverted into opportunities for acquiring those companies. Our portfolio of acquisitions, our acquisition pipeline is going strong. A few weeks ago, we announced the possibility of acquiring one of the major operators in São José do Rio Preto. We also acquired a hospital in the countryside of the state of Bahia. This year we're going to see a lot of activity in the M&A area. Our team has been working really hard, and we know that this can be boosted by the regulatory scenario as well. Thank you, Jorge. That was very clear. Next question is from Gustavo Miele, from Itaú BBA. Good morning, everyone. Thank you for this conference call. I have two brief questions. First, I'd like to talk about MCR from the COVID-19 perspective. It's clear to us that there is a positive message when it comes to the drop in COVID-19 admissions in the beginning of the third quarter, as you already mentioned. But can you tell us about the unit cost of COVID-19 admissions in the beginning of the third quarter of 2021 compared to the third quarter of 2020? Is there any relevant changes here in terms of medication costs, medical costs, so that we understand what the costs are. Maybe will the lower admission rate be translated into lower costs or not? Now, another question is, I would like to understand how the selling expenses fits into this context of healthier or sounder growth sales. We've seen that selling expenses usually go through variation in recent quarters. It's now going through a positive trend, if we look at the organic portfolio of the company today, do you think that you are at risk of having more volatile selling expenses because of this higher gross sales? These are my two questions. Thank you very much. Thank you, Gustavo. Okay. I'll try to give you a bit more detail about COVID-19 costs. What items have impacted COVID costs for us? Well, first of all, the second variant causes more severe cases than the first variant we had. This led to longer lengths of stay than in the first wave of the pandemic, that affected not only the elderly and patients of risk groups as happened in the first wave, but also younger patients during the second wave. We had a higher volume of COVID-19 related admissions as our charts show, also longer lengths of stay. The excellent news that we're sharing with you is that in August we'll demobilize all COVID-19 dedicated premises we have. During the peak of the pandemic, we had medical material inflation over 30%, in the last month that number was below 8%, it was focused on some specific items. We see that this important cost indicator is already changing. Now about medical fees. There is a shortage of physicians, we have to pay up to 80% more to some specific experts. That was also a temporary inflation that has zeroed down. The month of August has just a little bit of that cost remaining, but we don't expect any more of that for September. The number of COVID-19 tests has decreased and the number of professionals needed, nurses, physical therapists, this has all been reduced by over 80%. I would like to emphasize that our team was very agile, opening units and making beds available so that we would not have any shortage of beds or services to any of our members, not even in terms of materials, PPE, drugs and beds. We were very agile to open and make the best conditions available to all of our members. We were also very quick in making demobilizations. As the numbers decrease, we demobilize those assets so that we can return to normal operations. I would like to congratulate our team. We acted according to our needs and the operations are now going back to historical care levels. I would like to turn the floor to Mauricio so that he can answer your second question. Thank you for your question. Talking about commissions, I don't see any type of volatility in commission expenses. First of all, because they are deferred by the duration of the contract. We had a benefit in the first quarter to increase the average duration of the deferral of commissions of contracts, which is a good sign. This creates customer loyalty and the customers remain with us for longer. The acquired companies have an average cost of sales that is lower than ours. Yes, there are gains of scale in selling expenses, so I don't see any volatility. We can actually gain efficiency in the part of commissions. We saw a decrease of the delinquency rates in the second quarter of 2021, and the first quarter as well. We should look into this in the long term, after the end of the pandemic. Private healthcare is now at the top of the priority of both individuals and companies. When they have to choose what to pay, the healthcare plan will be one of their priorities. I think the delinquency levels will continue to drop. For bad debt, I don't see any type of changes from now on. Thank you, Jorge and Mauricio. That was very clear. Next question by Gustavo Tiseo from Bradesco. Good afternoon, Jorge, Mauricio, and Nahuz. Thank you for taking my question. I only have one question about the merger with GNDI. We know that there is a relatively long period until we get CADE approval, like seven to nine months. Have you been working with a consultancy company? Can you capture any type of synergy in these seven to nine months that we have ahead of us? Just want some update about the merger with GNDI. Thank you. Thank you for your question, Gustavo. Well, yes, we've been advancing in everything that we can do for now, respecting all regulatory requirements. Yes, we've hired a consultancy firm. We have put teams together. These teams have been meeting very frequently. We have listed all the main gain fronts that will have larger impacts in the short and medium terms. All of this is going to become initiatives, and the teams are working to devise and define everything that will be done after the merger takes place. Up until we get the approval, none of the initiatives will be implemented. We'll only plan the activities, and other critical information, unfortunately, cannot be shared with you. We are keeping a high level of compliance in this area. Whenever our teams work, we get more excited because we see many opportunities. All of the fronts that have been identified are very solid, and there will be clear gains. On our side, we've been working the best way we can, and I'm very excited about all of the fronts, the gains, and the synergies that will happen in the future, either in the commercial area, G&A, MCR. There are many fronts for us to work on to bring gains to our members and to both companies. Great. Thank you so much, Jorge. If there are no further questions, I'd like to turn the floor over to Mr. Jorge for his closing remarks. We would like to thank you all once again for joining us today. We would like to thank our members. They are the reason we exist, and we are still committed to offering them high-quality healthcare and efficiency. I would also like to thank all of our employees for fighting so hard and to congratulate them on the results that we have achieved in fighting the pandemic. I would like to thank also the board of directors and all of our partners and our shareholders who believe in this beautiful mission of taking care of people. Thank you very much and see you next time. This concludes Hapvida's earnings conference call. We thank you all for joining and have a nice afternoon. You may disconnect your lines now.