Hello everyone, thank you for waiting. Welcome to Hapvida's 4th quarter 2023 earnings conference call. Joining us today are Mr. Jorge Pinheiro, CEO; Mr. Luccas Augusto Adib, CFO; and Mr. Guilherme Nahuz, IRO. Should you need simultaneous translation, this is available on the platform. Should you need it, just click on the interpretation button on the bottom toolbar and choose English. We would like to inform you that this conference is being recorded and will be made available on the company's IR website with the complete earnings release materials. You can download the slide deck by clicking on the icon in the chat. Please refer to the disclaimers at the end of the presentation. During the company's presentation, all participants will be in a listen-only mode. After the company's remarks, there will be a questions-and-answers session. In order to ask a question, please click on the Q&A button on the bottom of your screen and write your name, company, and language to enter the queue. Now I would like to turn the floor over to Jorge Pinheiro, CEO, who will start the presentation. Mr. Pinheiro, you have the floor. Thank you. Hello, good afternoon everyone, and thank you once again for joining us to this conference call to release the results of financial year 2023 with greater focus on the 4th quarter of 2023. First of all, I would like to publicly welcome our new CFO, Luccas Adib, who has been with us for almost five years now and has made many contributions to the financial area, leading important projects and is now taking on this new challenge for which I am sure he's fully qualified. Luccas, myself, and the IR team, Lacyane, Rafael Sobral, Candido Neto, we are all here to share with you some details about the results of the quarter and the full year. 2023 was a very challenging year, but also one in which we learned a lot and had great achievements. We consolidated important initiatives to pave the way for improving our margins, and in a firm and disciplined way, we maintain our recovery trajectory quarter after quarter. We have consistently and reliably executed our strategic plan, which we shared with you at the beginning of last year, always with the full confidence we have in our innovative business model, which has proven to be superior. Let's get started. On slide two of the presentation, you can see an overview of the year and the quarter. Our net revenue in 2023 grew by just over 10%, getting to BRL 27.4 billion. This is the result of coherent and responsible pricing in new sales and readjustments in existing contracts. We went through a period of extensive review of our portfolios, which resulted in a temporary reduction of around 3% in our healthcare membership. It's important to note that our gross sales performance was very close to historical levels, attracting 1.7 million new healthcare members over the course of 2023. In dental plans, our membership continued to grow with the addition of 71,000 lives. As a result, we ended the year with 8.9 million and 6.9 million members in healthcare and dental plans, respectively. Our average ticket grew by 11% year-over-year. This was another fundamental front in 2023. The continued implementation of our pace of readjustments in existing contracts, which was necessary for their respective financial balance, aiming for more profitable and sustainable levels for our portfolio as a whole. We're setting a good pace of average readjustments in this cycle, which began in May last year and will end now in April. One of the main highlights of the year and the quarter was the evolution of our cash MLR. We saw a significant improvement in the rate, up 3.6% points in Q4 2023 against Q4 2022 and 1.5% points against the full year of 2023. The MLR, which for the first time broke the barrier of 70%, was 69.3%, the best for a quarter since the business merger, an important milestone for the company. It's important to note that our pre-pandemic pro forma historical average for the second half of the year had an MLR that was 80 basis points lower than that of the first half of the year. In 2023, the second half of the year was 250 basis points lower than the first. That is, our MLR actually moved to a whole new level over the course of 2023. A more favorable macro scenario, a coherent and rational pricing and readjustment policy, a consistent increase in verticalization, and the continuous capture of synergies have made it possible, quarter after quarter, to maintain our trajectory of returning to our historical MLR levels. We're not there yet, but we're much closer now than we were at the beginning of 2023. With the proper management of sales and admin expenses, which also had important dilutions both in the quarter and in the year, we reached an adjusted EBITDA of BRL 2.9 billion in 2023 and BRL 950 million in Q4 2023. These are impressive increases, 47.6% against 2022 and 85.7% against the 4th quarter of 2022. Our adjusted net profit also showed significant growth, up a bit more than 38% year-on-year and over 345% in the quarter compared to Q4 2022. Turning now to capital structure. There was also a very important evolution there in 2023. Throughout the year, we took advantage of market windows to raise some funds. There were two debenture issues, which together totaled BRL 1.75 billion, with the rating of both reaching the maximum investment grade, AAA, confirming how solid the company is. In April last year, we successfully concluded our third follow-on for a total of BRL 1.1 billion, with the Pinheiro family's BRL 360 million anchor. Also in line with my family's long-term commitment, we acquired 10 of the company's hospitals for BRL 1.2 billion in a sale and leaseback operation. All of these operations were aimed at rationalizing our capital structure and optimizing our debt profile. This, together with improved operating results and solid cash generation, has led our leverage level to improve from 2.45x at the end of 2022 to 1.38x now in Q4 2023, which is a very healthy level and one of the lowest in the supplementary healthcare sector in Brazil. Finally, still on slide two, let's focus on CapEx. The improvement and increasing in our own healthcare network remains one of our main commitments to our clients. Investments totaled BRL 441 million, including 50,000 square meters either built or renovated throughout the year. We ended 2023 with a total of 796 care units, including hospitals, emergency rooms, clinics, and diagnostic units throughout the country, constituting an unparalleled structure in our own healthcare units. The amount dropped compared to 2022, in line with our goal of cash preservation and deleveraging. Talking about CapEx in 2024 overall, our goal is to complete the implementation of systems in São Paulo to renew and upgrade our asset base and to continue our verticalization journey, including some major projects. Our investment plan for the year includes four new hospitals that will expand our capacity and allow us to absorb the growth in membership, which is something we expect to see happening throughout 2024. Our pipeline includes a highly complex general hospital in Recife, state of Pernambuco, which should be opened at the end of this year or the beginning of next year and will be a reference in the city. Two other significant investments are part of the process of expanding our own network in São Paulo. We're going to reactivate one of our hospitals, Anália Franco, in Vila Formosa neighborhood, which is due to open in the second half of the year and will have around 90 beds. We should also start construction of a large and beautiful hospital in a strategic region within the São Paulo expanded downtown area, which should be designed for more than 200 beds. Both facilities will enable us to verticalize an important share of the region's insurance claims. Finally, we have another project that will see us massively expand our own network in the greater Rio de Janeiro area, a region where we see an enormous potential for growth and where we still have little presence. The Greenfield projects in São Paulo and Rio de Janeiro are preliminary and are currently in the prospecting phase for land, buildings, and assets, with openings expected for 2026. In short, we have a broad front of investments that will give us a privileged platform for local competition. It's important to mention that our investments, including these hospitals I've mentioned, will be fully funded by our operating cash flow. My whole family and I are comfortable with the company's gradual and organic deleveraging process. Moving on to slide three, we would like to highlight our permanent focus on quality of care. We are showing our IDSS, which is the official index of the National Supplementary Healthcare Agency that measures the quality of care of all healthcare operators in the country. You can see that of the five largest operators in terms of number of members, Hapvida and NDI outperformed the average of the other three operators that make up the top five. We understand that hospital quality is a very important factor, but one that is little publicized here in Brazil. As the company is verticalized and integrated, it internally monitors dozens of healthcare indicators, and here on this slide, we have chosen a few for you to follow, with comparisons with their respective benchmarks when they exist. For example, emergency room waiting times. Not only is this not measured by the emergency departments of the hospitals on the market, but there isn't even a commitment on their part to see the patient within a certain timeframe. While here at Hapvida and NDI, in all of our 87 hospitals, we have a commitment and internal targets to serve our clients in no more than 15 minutes. Our internal target is to try to have at least 75% of patients seen within this timeframe. Here, with complete transparency, you can see our performance month by month over the past year. Another important indicator is SMR, which stands for a standardized mortality rate, an indicator in intensive care units used all around the world. Here, the lower the index, the better the performance. You can see that we are consistently better than AMIB's average. AMIB is the Brazilian Association of Intensive Care Medicine. In fact, it's quite common for our indicators to perform better than their respective benchmarks. Finally, you can also see here an indicator that we're very proud of, which is that of natural childbirth. The higher the number, the better. You can see that we also consistently outperformed ANAHP's average, which represents the largest and most renowned hospitals in the country. Moving on to slide four, I want to share with you a bit more about the progress in our integration processes. In 2023, we implemented the company's proprietary systems in 82 care units, including our assets at Centro Clínico Gaúcho in Rio Grande do Sul, Clinipam in Paraná and Santa Catarina, some hospital assets in Rio de Janeiro, and at the end of the year, at the NDI operation administration. For 2024, we also have important challenges, but we are confident that we'll be able to deliver. Since successive deployments throughout 2023 have allowed the company to evolve in its systems, turnaround processes, using its learnings to continuously improve. Based on this acquired knowledge, we have decided to change our planning to smooth out the integration of São Paulo, our largest location in terms of number of units and membership. We changed the initial plan, where we would make the turnaround on a single date to a phased integration process, bringing forward some stages, such as the implementation in some care units, with gains in the standardization of protocols and procedures, control of customer journey, and full visibility of all of our care indicators. The final stage of this turnaround of the operator is expected to happen in October. Our first wave, which took place now on March 1st, covered 23 units, including five hospitals, and was very successful. At the end of this journey, which should be completed by the end of the year, we'll have a fully integrated company with apps, features, and controls that are paramount for our management. Before handing the floor over to Luccas, who will give you further details about our results, I'd like to conclude by stressing that we are prepared for 2024 of continuing the work that we started last year. In other words, we're going to work to strengthen our operations and continually recover our margins. We will remain firm in our purpose, always preserving the company's sustainability in the valley very long term. Once again, we would like to thank our staff, doctors, dentists, brokers, suppliers, as well as the board of directors, shareholders, and above all, our clients for their trust in us. Luccas, you have the floor. Thank you, Jorge. Good morning, everyone. Thank you for your participation. It's a great pleasure to be with you on my first Hapvida's earnings conference call. I'll get started on slide five, talking about net revenue. Let's focus on the chart here on the top left. You can see that consolidated net revenue grew by 10.1% from 2022 to 2023. This is the result of our successful price readjustment strategy aligned with our goal of portfolio sustainability and margin recovery. As positive drivers of net revenue, in addition to the readjustments I've just mentioned, we acquired HB in January 2023, which added BRL 334 million in revenue for the year. On the negative side, we had a shrinking membership, a consequence of higher readjustments and stricter underwriting. In addition, but less significant overall, there was a drop in revenue from the sales of medical services, which I will detail later on. Moving on to the top right-hand corner, our health plan revenue was up 8% against Q2 2022, reflecting the sequential increase in the average ticket, which was up 10.8% year on year. The 8% is less than the ticket increase due to the shrinkage of the portfolio, which fell by 2.5% year-on-year and also saw changes in product mix in view of the profile of entries and exits and the adoption or increase of co-payments. In dental here at the bottom of the slide, you can see that we had an increase in the average ticket of 7.6% year-on-year and close to 1% growth in the average number of members in the quarter. Concluding this slide, our other revenues in 2022 were made up of revenues from sales of hospital services and other activities such as San Francisco Resgate, Maida Health, and our occupational health business. This line fell in 2023 as we decided to sell the company's non-core businesses, which happened at different times of the year. These three businesses that were sold contributed around BRL 60 million-BRL 65 million in revenue per quarter. In 2024, we'll no longer have this revenue, which would be around BRL 250 million for the year, leaving only the operation of selling medical and hospital services to other operators. Looking at this revenue quarter against quarter, in addition to the seasonal slowdown in the quarter, we were also more selective and will continue to be so in credit risk while prioritizing our hospital capacity for use by our members. This trend should remain with us throughout 2024. Focusing a little bit more on changes in membership and average ticket now on slide number six, we lost 61,000 lives net, which is a smaller net loss than we have seen in previous quarters. We have been explaining the reason why we've had net losses of lives over the last few quarters, but it's worth remembering and summarizing the reasons one more time. First, the company and the industry have been going through a period of needing stronger adjustments. Second, some changes in the accredited provider network and in some products, despite being necessary to rebalance our contracts, caused additional friction. Third, there was a rationalization and optimization of the company's strategic north, causing us to lose some relevant collective contracts. Fourth, we experienced a more aggressive competitive environment than historically, notably in the second half of 2023 and in the south and southeast regions, with some competitors behaving in an anomalous way. Fifth and last, several of the company's operations stemming from acquisitions, notably in the NDI vertical, were integrated over the course of the year with full replacement of their systems and implementation of Hapvida protocols. The sum of these factors, naturally, generates some level of cancellations, and this is what we saw in the period. As a result, in the quarter, there were cancellations of 431,000 lives, almost entirely offset by our gross sales, which continue to be strong, adding 428,000 members to our base. Turnover, which reflects the net movement, that is hires, minors, terminations within existing collective contracts, is still in the negative with a loss of 58,000 lives, a natural consequence of our exposure to certain sectors. As for the average ticket, at the bottom of the slide, we saw an increase of 10.8% from Q4 2022 to Q4 2023, as I mentioned, which is the result of the 11.5% recomposition of tickets offset by minus 0.8% due to the product mix, which is the result of our commercial focus on selling more verticalized products with lower tickets at the same time as cancellations that are concentrated in contracts with higher tickets, but with greater exposure to the accredited provider network with higher MLR. All of the movements above are part of the company's strategy and the plan to recover our historical margins, which continues firm into 2024 and is being carried out with great rigor and discipline. I think that if in 2023 the watchword was resilience, in 2024 it will be discipline. On slide seven, we'll see how this connects with our main operational performance indicator, which is MLR. As you can see on the chart on the right, I apologize, we're now talking about slide seven. We had a cash MLR of 69.3% in the quarter, which is a drop compared to the previous quarter and the second quarter, and a greater drop than what seasonality would indicate for this period. If we look at the pre-pandemic history from 2017 to 2019, from the second to the fourth quarter, MLR would usually show a drop of 330 BPS on average. In 2023, as you can see, we improved by 460 BPS against the historical 330 BPS from Q2 to Q4. That means that we were able to deliver improvements beyond historical seasonality. In other words, a natural reduction in MLR, which is the result of the combination of dozens of initiatives that the company started in 2023, such as readjustments, increases in verticalization, integration, implementation of systems and protocols, in addition to the ongoing process of capturing synergies and best practices after the merger. As you can see here in the chart on the right, we have seen a consistent increase in the verticalization of inpatient admissions, appointments, and tests, representing an additional challenge since utilization volumes remain at a high level and have not decreased. On the next slide, you can see cash admin expenses, which exclude the effects of SOP, depreciation, and amortization. We can see the gradual dilution of admin expenses in relation to revenue. It's true that the stronger readjustment helps with this indicator, but we also see a nominal drop over the course of the year, more than diluting the impact of inflation. We reached a level of 8.7% in Q4 2023 due to the dilution, but also some one-off events that should not be repeated, such as a reduction in the personnel line resulting from the reversal of BRL 40 million in variable compensation that included employees who have left the company and the partial achievement of annual targets. In third-party services, there was a reduction of BRL 25 million in line with the other quarters of the year. Just as a reminder, in Q3 2023, this item was pressured by BRL 19 million in expenses with the acquisitions from previous periods, systems deployments and developments, and integration consultancies expenses that should not be repeated. We should still see some erratic and volatile behavior over the next few quarters, which is absolutely normal and to be expected since there are expenses related to integrations with system changes and deployments that involve support staff, travel, and temporary systems of legacy systems and new systems. Therefore, it's clear that we'll have room for improvement with initiatives that we must undertake as these integrations take place and stabilize. Throughout 2024, we should see this movement in relation to the integrations already carried out in 2023 in the south, Rio de Janeiro, and Minas Gerais, and in 2024 for the integration of São Paulo. We're not going to disrupt anything that could generate turbulence in these movements, which are being carried out very carefully and responsibly, as Jorge mentioned at the beginning. On slide nine, we see a slight increase quarter-on-quarter, but a small decrease year-over-year in selling expenses. As shown in the previous slide, we relocated BRL 9.6 million from personnel to sales, of which BRL 7 million was made retroactively. We also had a slight increase in PDD, mainly due to the provisioning of a client that we canceled in the middle of the year, and we reduced the expectation of receipt with the increase in aging. On slide 10, you can see our adjusted EBITDA, which was BRL 950 million in the quarter. As Jorge mentioned in the opening, this is the highest EBITDA for the combined company since the merger. It's a strong growth of 60% quarter-on-quarter, jumping from BRL 600 million in Q4 2022 to BRL 950 million now. The growth is even greater when we disregard some extraordinary effects from the previous year, such as the reimbursement and price adjustments of the acquired premium of BRL 87 million. This growth is reflected in the increasing revenue, as we mentioned, and in the reduction in cash MLR and the dilution of admin expenses. EBITDA margin for the year is up from 8% in 2022 to close to 11%, a substantial increase that is consistent with the ongoing trajectory of margin recovery. Now, moving on to slides 11 and 12, we have prepared two additional slides to help you understand the main cash movements in 2023. First, on slide 11, looking at the table on the bottom left-hand corner, we can see a BRL 2 billion increase in the company's cash flow in 2023, which comes from the following: BRL 1.2 billion of free cash flow generation, another BRL 1.2 billion from financial activities, and a consumption of BRL 405 million in M&A activities. The free cash flow for 2023 resulting from the company's activities happened because of the following reasons, and here I will break down the components that were previously grouped within the work and capital item. Consumption of BRL 456 million with leases from rental contracts, which were increased after the sale and lease-back operation. BRL 230 million in ANS regulatory deposits to cover the resource charges. BRL 115 million in tax credits on quarterly advances and tax withholdings, such as income tax on financial investments and interest on equity. These credits are recorded as assets and will be used in the 2024 financial year. BRL 215 million in IR and CS, although the current tax for 2023 was BRL 191 million due to a slight gap between calculations and actual disbursements. BRL 440 million in CapEx, significant reduction compared to previous years, consistent with the strategy of preserving cash and reducing leverage while maintaining the quality and integrity of our own network. This is consistent with our strategy, as I said earlier, to preserve cash and reduce leverage, maintaining the quality of our own network. Even at a time of deleveraging and restricted allocation, we managed to increase verticalization, as you noticed, opening three hospitals, clinical centers, and dozens of units for ASD care. As you can see, we converted just over 63% of EBITDA into operating cash, with more than BRL 1.8 billion returning to historical levels on an annualized basis. As for the M&A activities, on slide 12, you can see that we had the payment of BRL 567 million for the acquisition of HB Saúde in January and receipts of BRL 151 million from the reimbursement of Promed expenses in Q3 2023 and BRL 108 million from the sale of San Francisco Resgate in August. There was a lot of movement in financial activities this year as we raised around BRL 1 billion in April in our third and fastest follow-on, aiming to strengthen our cash position and reduce leverage, as well as BRL 1.2 billion in the sale and lease-back operation in May. We also raised BRL 2 billion, mostly in debentures, to extend the 2023 maturities, which, between interest and principal, totaled BRL 3.7 billion. Finally, we had BRL 700 million in financial revenue generated on the company's cash position, a yield of around 12%, very close to 100% of the CDI for the period, maintaining a conservative investment policy and disciplined risk management with a comprehensive surplus of collateral assets. On slide 13, you can see the company's solid cash management quarter after quarter. The fourth quarter, 2023 cash flow is in line with what we saw in previous slides, with the addition here of the payment of the 13th salary, which normally puts a bit of pressure on the conversion of EBITDA into cash in fourth quarters, as well as the effects of the December turnover of accounts receivable, with some payments slipping into January, but nothing unusual here. Without these effects, EBITDA to cash conversion would have been close to 67%. Throughout the year, we made some divestment moves from some businesses that were not core to the company, which I mentioned earlier, which helped us to deleverage and to focus on our core activities. As a result, the company has maintained its disciplined, gradual, and responsible pace of deleveraging quarter after quarter, reducing our net debt over EBITDA from 2.45x at the end of 2022 to 1.38x now in the contractual covenant of our issues. Moving on to slide 14, the last slide of this presentation before we open for questions, we highlight the strengthening of our operation, which is reflected in significant and consistent improvements throughout the year in terms of regulatory requirements. We have been sharing with you over the last few quarters that the technical provision, which is what we have to deposit in cash and cash equivalents for the purpose of ANS collateral assets, is stable at around BRL 3.1 billion. Our total cash in Q4 2023 increased by BRL 1 billion due to the latest issue of debentures that was settled in December 2023 and the cash generation of BRL 308 million, which was offset by the payment of BRL 674 million in interest and principal on the company's debt. So if we exclude the effect of the last issue, which was used to amortize a previous one that was due to mature in Q1 2024, we ended 2023 with free cash after collateral assets of almost BRL 4 billion, which is quite solid for our operation. Now, let's talk about regulatory capital, which we monitor closely. Here we compare risk-based capital with adjusted shareholders' equity in line with ANS Normative Resolution 526. We ended the year with a surplus of more than BRL 1 billion. All of the group's operators, including the smaller ones, are capitalized and have adequate regulatory capital, generating cash and increasing their respective shareholders' equity. Finally, we have released our IFRS 4 audited financial statements and are in the process of finalizing our IFRS 17 statements. We expect to release them in the coming weeks, but it's important to mention that for market comparability purposes, we'll continue to publish our IFRS 4 together with the IFRS 17 financial statements to have the greatest transparency of our financial statements until the full integration is done, just like we did previously with IFRS 16. That's it. Thank you for your patience. I hope this deep dive has been useful, and now we're going to open for questions. Jorge, myself, and Guilherme Nahuz will be here to answer your questions. Thank you again. We're now going to start the Q&A session for investors and analysts. When your name is announced, a prompt to unmute your mic will pop on your screen. You should then unmute your mic and ask your question. Please keep your questions to a maximum of two and ask all your questions at once, starting with Vinicius Figueiredo, sell-side analyst at Itaú BBA. Vinicius, please unmute. Go ahead. You have the floor. Good afternoon, everyone. Thank you for taking my question. I would like to talk about two topics. The first one is profitability. You showed us several KPIs like cash generation, solvency, which are both at a good level, but I'd like you to give us an update about your priorities. Recovery of profitability and MLR closer to pre-pandemic levels, are these still priorities for the company, or do you think that the levels that you have already achieved would make the company become a bit more aggressive, competitively speaking, to grow more from now on? Now the second question is about the branches in Rio, Minas Gerais, and in the south that add 2% points to cash MLR in the year. Can you comment on how these 2% points evolved throughout the year, quarter after quarter? Do you think this was one of the main reasons why you were able to improve your MLR throughout the year, or do you think that with systems integration, these 2% points could converge here for the medium and long run? Hi, Vinicius. Thank you for your questions. You mentioned quite a few issues, so if I forget anything, just let me know. First, about MLR. Although we have seen a very consistent trajectory of expanding margins by reducing MLR mainly, we still see a lot of room for improvement, and this room for improvement comes from different fronts. The readjustment journey, the cycle that started May last year and will end now in April, and we'll start now a new cycle of readjustments starting in May this year, which is going to be smaller than last year but still double-digit, and this is going to help us reduce MLR as well. On the other hand, we have a strong pace of verticalization and many synergies to be captured. We have already started the integration processes here in São Paulo. Twenty-something units have already been implemented, and we see many standardizations and other protocols being implemented, so we should see yet another year of MLR improvement closing the cycle in April 2025. In terms of competitiveness, the company is preparing a new sales portfolio that should be launched still in the first half of the year, and this portfolio will be much more focused on units in places where we have units with idle capacity in our own network. We have over 2,000 beds that are idle in our own network, so we are now about to launch these products that will bring efficiency because this will dilute fixed costs by using up our capacity in our own network. This is going to be with aggressive, competitively speaking, and as for the acquired companies, in all of the situations, we've been able to have operational improvement, but each one of them respects their own integration pace. In some situations, we need more verticalization. In others, the systems deployment was done recently, so there are still adjustments to be made and gains to be captured. So each integration has its own pace of synergy capture, but the good news is that we have had gains in all of them. Great. That was very clear, Jorge. Thank you. Thank you, Lucas, and thank you all very much. Our next question is by Fred Mendes, sell-side analyst at Bank of America. Fred, please unmute your mic and ask your question. Good afternoon, everyone. Thank you for your presentation. I have two questions as well. If we can go back to Vinny's question about MLR, can you give us more information about the member cost? Because year-over-year, this cost was close to zero. So with the price going up, MLR will evolve, it seems quite clear, but you're getting close to a cruise ship speed now when it comes to costs, right? Or, as Jorge said, there is still a lot of work to be done when it comes to costs. I understand what Jorge talked about, better use of assets, but I'd like you to talk a bit more about cost. Now, when it comes to taxes on gross revenue, it was from 5%-7%, and this quarter it was 4.3%. Much better. Is that efficiency coming from the integrations, or was that something specific about this quarter? Just want to understand this a bit better. Thank you. Hi, Fred. Thank you for your questions. I will answer your first question about costs. Yes, there's still a lot to be done, as I said earlier. We have a strong verticalization agenda to cover this year. When it comes to our own units, we're focusing on autism service. In Regional 1, we have exceeded 80% verticalization, and in Regional 2, we are at 40% and growing, but we want to get to the same level of verticalization as Regional 1. With the integration of companies here in São Paulo, every 30-45 days, we have new rounds of systems deployment, and this leads us to capturing more synergies. And we have other fronts in prevention programs, protocol implementation, best practices. There are many, many initiatives indeed. It's beautiful to see the number of initiatives that the company has in many different fronts which have a positive impact on MLR and improvement in the quality of care. And this helps us keep good control on cost per life, but this is also impacted by the sales mix and also copayment, franchisee, more verticalized, more corporate or more individual. There are many factors there impacting the cost mix as well as the revenue mix. And Luccas will answer your other question. Yes, Fred, you're right. Indeed, we saw an optimization of indirect tax, especially in the Hapvida vertical with the movement that we carried out last year to incorporate the only care units in the Hapvida verticals to the operator verticals. So that happened because of an optimization in our structure, and this led to indirect taxes which impacted the numbers that you mentioned. So yes, this is fruit of hard work that we carried out here at the company. Okay, great. That was very clear. Thank you very much and congratulations, Luccas, on your new position. Our next question is by Leandra Bastos, sell-side analyst at Citi. Leandra, please unmute your mic and ask your question. You have the floor. Hi, everyone. Thank you for taking my questions. I have two questions as well. Can you talk about frequency here in the beginning of the year? We've seen many cases of dengue fever, so can you talk about frequency or anything that is impacting costs now in the beginning of 2024? Now my second question. You talked about a toughest competitive environment in the south and southeast here last year. Can you give us an update about the competitive landscape now in 2024? Thank you. Hi, Leandra. Thank you for your questions. About frequency, yes. At the end of the first quarter, we see a typical and seasonal increase in frequency. You are used to hearing our reports about the rain season in Brazil that affects the north and northeast in the beginning of the year and then the midwest of the country. And then with the cold season, we have the center and the south being impacted with seasonal viral infections. So yes, we saw an increase in frequency. This should not impact the first quarter, but it's important to mention that this is within the historical volume respecting the typical seasonal curves that happen in Brazil. Dengue fever has been affecting some cities more than others, and in other cities, we see other typical viral infections of the season. The good news is that we are fully prepared in some units like in Minas Gerais or Belo Horizonte that has been hard hit by dengue fever. We set up units dedicated to this, and with telemedicine, we provide 500,000 appointments a month through our proprietary platform that was developed internally and that is fully integrated with all of our systems. So we're fully prepared to serve this higher volume, which is very typical of this season in Brazil. Now, about the competitive environment. Indeed, last year, we saw one or another player being a bit more aggressive, but today, we see all of them being very rational, requiring readjustments that are needed to recompose their margins. This is what we see in the market today, so we don't see anyone else being artificially aggressive right now. All of the players are now more focused on readjustments. The good news, on the other hand, for us is that historically, our level has always required about 30% less readjustments than our competitors in the market in general. So throughout the year, we should benefit from this. That was very clear. Thank you, Jorge. Our next question is by Samuel Alves, sell-side analyst at BTG Pactual. Samuel, you have the floor. Go ahead. Good afternoon, Jorge, Luccas, Nahuz. I have two questions here on my side. The first is about MLR. Jorge was saying that the first quarter has been seeing this seasonal pattern. Now, can you explain a bit more about the seasonality with all of the acquired companies comparing the first quarter to the fourth quarter of the year? And is the MLR level within historical levels comparing quarter to quarter? And now my second question about the numbers of the fourth quarter. We saw a reversion of tax provision in your tax risk line. Can you just explain why this provision reversion happened? That's all, and I would like to congratulate Luccas on his new position as well. Hi, Samuel. Thank you for your questions. About MLR. For the first quarter, it's well in line with the historical behavior. Well in line, indeed. Nothing here showing major reductions as compared to historical levels or increases. In the beginning of the year, January, MLR is always lower because of the holidays, but then in February and March, the volumes tend to grow in certain cities. But this is within historical patterns. Nothing that is changing the pre-pandemic seasonal behavior. Q4 and Q1 with lower volumes and Q2 and Q3 with higher volumes, usually impacted by the seasonal occurrences. Now I turn the floor over to Luccas to answer your second question. Hi, Samuel. Thank you. Some tax processes left the provision and impacted assets and liabilities. At the close of the year, we see a more intense movement in these processes. We can give you further details about that later, but this is the basic concept for the movement. Okay. Thank you, Dr. Jorge and Luccas, and have a great afternoon. Thank you. Our next question is by Ricardo Boiati, sell-side analyst at Banco Safra. Ricardo, please unmute your mic and ask your question. You have the floor. Hi, Dr. Jorge, Luccas, Guilherme, and all the IR team. My first question is about the readjustments that you expect for the next cycle, which is still at double digits, as Jorge mentioned. Can you give us further details about what you expect in terms of readjustments for the corporate plans, individual plans, affinity that would help us understand the dynamic for the coming cycle? So that's my first question. And my second question is the following. In the integration process of NDI in São Paulo, I want to understand the reason why you have phased out this integration. This is a conservative approach, which is welcome in this operation, which is extremely important for the company, but was this motivated by previous experiences in the integrations that you have already carried out, or are you being more conservative here to try and mitigate the possibility of any disruption in the service provided here? Thank you very much. Congratulations and good luck, Lucas, on your new position. Hi, Ricardo. Great questions. Thank you. So first, let's talk about readjustment. We see different dynamics happening at the company. Regional 1, North, Northeast, and the Midwest have lower readjustment rates than they had last year. They are on track to achieve historical levels of profitability. Regional 2 requires a bit more readjustment, even knowing that this readjustment is going to be lower than last year's. Of course, that will depend on the channel and the situation. This could vary 1%-2% points. We're still working on the average combined readjustment for the whole company. Now, about your question on integration. Last year, we did a lot of integration activities, starting with Rio de Janeiro in hospitals and then CCG. We closed the year with operations in Minas Gerais. So our team is fine-tuned. The best one happened in Minas Gerais with all operating indicators that we wanted to achieve. This was very, very successful. Of course, there are always many lessons learned. Integration is always challenging, but considering our operational indicators, we characterize those integrations as very successful. The experience we had last year made us customize the integration process in São Paulo. Rather than having one single date to deploy in dozens of units, which would require a lot of effort focused on one single date, we decided to phase out the process. We divided our own units into different phases, and we saved the operator for last so that we could have a more concentrated effort in that regional. The idea was to smooth out the process as much as possible so that it is not as challenging. We are very confident about this phased customized process for São Paulo. Our teams are prepared, and we have all it takes to complete the integration process very successfully. Great. Thank you so much. Our next question is by Mauricio Cepeda, sell-side analyst at Morgan Stanley. Mauricio, please unmute your mic and ask your question. Hi, Dr. Jorge, Luccas, Nahuz. Thank you for taking my question. Let's go back to MLR by member, but from a perspective of variability, we saw some variability in recent quarters, specifically on this indicator. Of course, there is seasonality and product mix factors that impact this. In Q2, it seemed like the reduction trajectory has been taking place since Q2. Do you think that we see this variability throughout time because you still have some exposure to your accredited provider network? Since part of this MLR is not under direct management, this impacts the variability. Now, can you give us an update about what's going on in the commercial environment? What is the profile of the operators from which you've been gaining contracts? Because I see that your gross addition is quite strong. So what is the profile of the operator that has been losing to you? And when you lose, what is the profile of the operator that you lose to? Thank you very much. Of course, you don't have to mention any names. Hi, Cepeda. Thank you for your questions. So about cost per life. This is quite simple. All of the initiatives, and many of which we've mentioned here, like verticalization, which is quite strong in NDI, and in the coming months, we should have more outpatient units and more diagnostic units as well as ERs, considering our level of integration of systems, protocols, area unification. All of that brings a lot of efficiency. As we verticalize, we're able to reduce costs. And this is a clear example of an initiative that reduces per capita cost. But it's always important to note that this varies according to the mix. For example, in recent months, we've been growing sales in corporate channels with a lower average ticket and lower average cost, naturally. But in recent months, we see that the retail channels are warming up, and they have a higher average cost, but they haven't yet gone back to historical sales levels. We believe that with the recovery of the economy and the new product mix that we will be launching by the end of the semester, we should see a greater weight from the retail channel that have a higher average ticket, but also higher average cost. And this mix is very important to determine average cost, as I said earlier. Finally, about competition, I cannot give you any names. We closed major contracts in Q4 and Q1, some of them already implemented and some still being implemented, and they came from different competitors. We signed major contracts, as I said, a contract of over 50,000 lives, another one of 10,000 lives, another one of 12,000 lives, most of them being implemented now in Q1, and they came from different competitors. Now, today, we don't see any operator behaving irrationally from the commercial perspective. This is a different situation from what we saw last year when one or another player was being more aggressive, commercially speaking. Today, no one is being crazy to offer prices that are not sustainable. Okay, great. Thank you, Dr. Jorge. This completes the Q&A session.