Ladies and gentlemen, good morning, and thank you for holding, and welcome to MRV's third quarter of 2023 results conference call. Today with us, we have the CEO of the company, Mr. Rafael Menin, and the Chief Financial and IR Officer, Mr. Ricardo Paixão. We would like to inform that all participants will be in listen-only mode during the company's presentation. After the company's remarks are completed, there will be a question-and-answer session, when further instructions will be given. Now, I would like to turn the floor over to the CEO, Mr. Rafael Menin. Mr. Menin, you may continue. Good morning, everyone. Thank you again for being with us in the earnings conference call for the third quarter of 2023. First, I'll start speaking by MRV Development Brazil. It has been a quarter with high achievements of the company. In July, we did a follow-on with the very right timing, very successful, the good pricing, the new base of new shareholders, that have continued and have betted on our project and have supported our project. So after some quarters, this is the first quarter with a net operating income. Actually speaking, if we exclude the effects of swaps, we have delivered a net income still much lower than we can deliver, but the reversal of the result makes us sure that we are on the right track and doing the right thing. It's also important to highlight that after many quarters with a cash generation that was negative and some quarters with a very negative cash generation, in this quarter, we are closer to neutral cash burn, and this path also makes us confident that soon the company will be generating cash again, and in the medium term, we'll certainly be a strong cash generator. It's also important to highlight that we have, as we did in the first quarter, or rather in the second quarter, this third quarter has strong sales. We sold BRL 2.2 billion, and, because of the right products, the right, pricing strategy, locations and cities with a good, sales force. And so our path of recovery of prices and volume has been, successful. The accounting gross margin is also being recovered for the last four or five quarters, better and better, and this is nothing more than the conversions of the accounting gross margin of the gross margin of new sales, and this trend will continue to repeat in the next quarters. As said, the gross margin for new sales has also improved. Of course, it's at a smaller level. We reached above 32 for the gross margin of new sales, and now we are absolutely certain that we'll deliver at least 33%, which was the figure we set at MRV Day in the beginning of the year. Now, speaking of MRV Day, we will exceed the main indicators or KPIs that we presented. Net revenue and gross margin of new sales are likely to be above. Maybe we won't reach a neutral cash generation or positive generation, because in the first two quarters, we were a bit lower than expected, but we expect to have a fourth quarter much better than the others, and therefore, we get closer to this KPI that is the most important for the company to—that is to, again, start generating cash. So this turnaround was made in a short period of time. If we look at the figures of the company one year ago and today's figures, we are in fact at a completely different level, and the trend continues to be for a continuous trend. This is the result of a lot of work and a lot of discipline, and I would like to thank our team that has been working as hard as ever, strongly dedicated, and the results are here. We are very focused, very optimistic, and soon, MRV Real Estate Development will be operating at a level. It will be alone in an operating class in terms of size and profitability and cash generation. We were very vocal in the follow-on about our in-house project that's called 40, 35, 15, which is basically to have 40,000 net sales per year, with a margin of 35% gross margin, and a net income of 15%. Cash generation at the same pace of the company's income. So by reaching those figures, MRV Real Estate Development will deliver the best results of its history. I think we're not very far from that, actually, although our cycle has been a bit long. When looking at operational figures, we can see how close we are to this plan, and that soon, financial and accounting indicators will converge soon for this beautiful plan that we presented. Speaking of Resia, we are very certain that is the market niche that we chose, the cities we operate, Miami, Atlanta, Houston, Dallas, are the markets and market niches that are most promising one in the U.S. market. And the U.S. is by far the largest economy worldwide. And only in these three states we operate in, they have a GDP of $3.5 trillion, maybe the fifth largest economy worldwide, in just counting three states. So we are operating in a gigantic market with the right product for the right income level. Resia is a very standardized product. What we do in these three states is exactly the same. So it's the most industrial company among those that compete in this market. So much so that the fundamentals of Resia are the right ones, so that in a scenario of lower interest rates, this company can shine in the U.S. market. We remain very sure of Resia thesis, and we believe that currently, we are experiencing a very unique moment in terms of income, rather, interest rates. We never expected interest rates in the U.S. to be so high. I mean, it was one year ago, it was zero, close to zero, and the inflation that started with COVID spread and reached 10% in developed economies, and then interest rates had to increase a lot. But since then, we've seen many inflation indicators going down, so inflation is decreasing a bit slower, but at a low speed. But it's a consensus from the market that inflation will decrease even more, and then interest rates will drop. So in a scenario of the with the right interest rates and Resia being a very competitive product, we are absolutely sure that it will be a spectacular company and growing at a level much better than now. Because now it's, it has growing at a slow pace, but Resia will be a great company very soon. And we have announced in our earnings release, this golden rule that Resia, by next year, the size of it will be defined not by non-cash burn, and if possible, some cash generation. This is it. Now, I turn the floor over to Ricardo. Thank you, Rafa, and good morning, everyone. I would like to start by going over some figures of the Brazilian real estate development operation regarding the turnaround process. Let's start talking about the net pre-sales for the quarter, reached BRL 2.2 billion for MRV, totaling BRL 6.2 billion in the first nine months of the year. This is the highest volume of net sales in the company's history for the first nine months of the year. Benefiting from the improved conditions offered by Minha Casa, Minha Vida housing program. In the third quarter, we also reported a production increase of 15% growth in production when compared to the second quarter 2023, or 5% compared to the same period in the previous year. Now, speaking about financial indicators, this operational recovery has been reflected in the company's financial results in each quarter, reaffirming the successful turnaround process. Financial indicators are in line, and at some point in time, they will reach the operational indicators. Net revenues reached a record level, combined with strong production in the quarter, and with that, MRV recorded the highest net revenue in its history in the third quarter of 2023, reaching BRL 1.9 billion in net operating revenue, which is equivalent to an increase of almost 9% compared to the second quarter of 2023, and almost 18% compared to the same period of last year. The gross margin is improving quarter-on-quarter, now reaching 23.4% after interest, and this is the fourth consecutive quarter of improvement in this indicator, accumulating 4.5 percentage points since the third quarter of 2022, one year ago.... We have also managed to increase our prices above inflation, so the gross margin for new sales continues to increase. It has increased again this quarter, reaching 32.5%, 0.8 percentage points higher than what we reported in the second quarter of 2023. Adjusted income in the nine months was BRL 102 million, with a positive variation of BRL 175 million compared to nine months of 2022. Cash generation continues in MRV to reduce operational cash burn, reaching BRL 46 million, approaching breakeven. The ongoing improvement in gross margin supported a proper product pricing above inflation and strict cost control. We reflected an increase in cash generation in each quarter. Now, talking more about the U.S. operation, it's always important to say that there's a significant demand for workforce housing in the southern states of the U.S. So sometimes we see some news on studies, regarding multifamily market, but we have to pay close attention in the location that we see these studies being made of and what class, because the results are very important. When we talk about low-income families workforce, which is the one we operate for, and higher income levels. So since there's a high demand for units offered by Resia, that has ensured excellent leasing speed and high rental prices, providing a healthy yield on cost for the development and construction. Despite seeing this multifamily opportunity as highly attractive as we see it, we are mindful of the Fed's efforts to bring inflation back to its targets. So the rise in Fed funds rates, coupled with economic uncertainties, has resulted in higher cap rates, as well as a reduced credit availability for those who are purchasing this type of asset. So in this period of extreme volatility in financial markets, we are opting for a temporary strategy to stabilize Resia's operations, as said, respecting our golden rule. I reaffirm that all of the developments currently under construction have the totality of funding needed to its completion, secured in the form of construction loans or through limited partners. Additionally, we'll continue with our strategy already adopted for several quarters of only begin new constructions when the projects have all the necessary funding secured through firm commitments, either construction loans or limited partners. Now we can move on to the Q&A session. Thank you. Then we'll now start the Q&A session. If you have a question, please press Reaction button and then click Raise Your Hand. If your question is answered, you can leave the queue by clicking on Put Your Hand Down. Our first question comes from Ygor Altero from XP. You may go ahead. Hello. Thank you for the presentation. I have two questions. First, on the zero cash generation at Resia, what is the scenario that would need to happen? And what's the cap rate that you intend to sell these projects? Well, Ygor, this is Ricardo speaking. Zero cash generation. We still have three construction projects ongoing to be finalized, and they will use $113 million up to their completion. Some of them will be ready in the beginning of the first quarter and others in the third, the second quarter. So these assets are based on areas that will sell all assets, but the golden rule is I have to sell at least at $113 million to offset the disbursement and the construction financing for next year. If we sell more, then we can start other construction projects. We have three projects to start that will only happen according to that rule. So what will dictate that is the level of sales level of the properties. So that would be BRL 400 million. If it was, you know, 1.8 or 6 or 610, that 480 can be a different figure. Okay, the second point is just to understand what do you expect in terms of launches. Last year, you accelerated in the fourth quarter. Now, we understood how you're doing for fourth quarter and next year, because the new parameters of the program are different, the program is growing. So that's, I would like to understand, what are your prospects? Since we changed the way we disclose, we're disclosing by module and not by property. So according to the former criteria, more than 40,000 units. Last year, we launched more than we sold. Now we're launching less than we will sell. Launches are not a bottleneck for us. We have lots of products to launch, so we're just waiting for the ideal moment to launch them. For next year, it should be close to 40,000 units, 37,000-43,000, that will be similar to the sale of 40,000 we have for the year. Since we have this new criteria, they converge some, at some point in time. So today, we disclose a smaller number that we have actually available to sell. In the past, we did the opposite. We put all the projects to sell, and there was only some modules that were being sold, actually. Okay, thank you, Cac`a. Thank you for the question. Next question comes from Bruno Mendonça from Bradesco BBI. Hello, and good morning. Thank you for the presentation. My question is about the earnings, about the REF margin. We've seen a clear development in the indicator of margin from new sales, close to 32 versus reported around 23, but the REF margin at 38. I would like to understand again, what should be the behavior of this gap between margin REV and margin of new sales? I have a feeling that this gap is higher than it has been in the past. Maybe it has something to do with the provisions for Pro Soluto. Is that what happens? I mean, does it have an impact? And how should that develop or behave in the future? The second question is about the loss of BRL 20 million that you had in sales of plots of land in the quarter, on the third. Is it an accounting adjustments, or did you actually sell land? Okay, Bruno, thank you. Regarding the REF margin, what we should see is a REF margin being more in line, along with the margin of new sales. The REF margin should be higher than the margin of new sales, because after that, we have to deduct provisions for maintenance, financial costs. There are a series of items that we have to deduct to really see the accounting gross margin. When we say gross margin of new sales, that's the future accounting gross margin that we will see. So REV, at 38, would still generate a gross margin that's lower than the gross margin of new sales. That's due to a mix of seasons. We still see a greater weight of previous seasons than we have now in the margin of new sales. So in the future, we'll see REV at five or six percentage points above the accounting future margin. And as for land, this is the land we bought in Curitiba. We had paid for it already, and there was a change in the zoning criteria, so it no longer makes sense for us to develop and construct there. The feasibility was bad, it was poor, so we did sell that land. We'll receive the payment during the fourth quarter of this year. The financial transaction didn't take place, but we already made the provision because we know that we'll sell for less than we had recorded in our books. Let me just clarify on the REF margin, please. So you're saying you're having new sales inside with a margin at 32. Wouldn't that improve the REF Margin more and more? Yes. And the question is, if this gap of 6 points is something we should consider reasonable to work on stability, let's say, one or two years toward the future. Should the gap stay around that level? Well, actually, Bruno, the gap varies a bit. Today, it's around 6. It could be a bit up or down, especially depending on capitalized interest rates and interest of construction funding. So as the REF margin, as the quarters go on and we include new sales with higher accounting gross margins, this is what creates the development of the REF margin. So I would say for the next two years would be 32 and among constant level. Yes. That's converging with the new sales margin of 32.5 that we reported now. Okay, thank you. The next question comes from Victor Tapia from UBS. Can you hear me now? Yes, Victor. Okay, good morning. I would like to talk more about cash generation. You said 40, 35, 15, that getting close to cash generation, closer to income, net income... Today, what still has to be done to reach that point? I imagine that MRV at the real estate development in Brazil, has some construction projects that still have a negative margin, and Pro Soluto still hasn't reached the ideal level. And I believe that with the new rules of the program, you try to decrease that. If I'm right, or if not, let me know when. What is the time, the period for these works, construction works to be digested and having Pro Soluto at an ideal level with an ideal cash generation closer to net income? Good morning. This is Rafael speaking. Basically, what are the differences between generation and net income currently? In fact, Pro Soluto is a cause of difficulties, because we went from a Pro Soluto of 15% in the beginning of 2022, we reached 20, and now are at 17. So our goal is to reach 12%-13%. This is a Pro Soluto level that causes what to have the same size from what we receive from customers. So at a stable Pro Soluto, that causes the net income and cash generation to be very close. Also, the distribution of land. Between 2014 and 2019, the company was very active in buying land. On average, we bought 70,000 units per year during four or five years. In 2022, 2023, we're paying for the land that we purchased many years ago. So today, we disburse more with the payment for land than we should for a company of 40,000 units. On the other hand, in the year of 2022 and 2023, we purchased much less land than a 40,000 unit operation per year would demand. So we are using up this inventory of land that was generated in a previous cycle. So as we start to have an adequate disbursement for land, adequate to a 40,000 units per year operation and a direct credit or Pro Soluto granting, at the right level, 13%, that would both be pari passu. That would happen probably within a year. So 40,000 net sales per year, and with an average price that's close to BRL 240,000. Next year, prices will go up a bit higher than inflation, so we expect to reach an average price slightly above BRL 250,000, which would lead the company, obviously not in 2024, because there is a time delay for the constructions. But we're talking about a net operating revenue potential of BRL 10 million per year, with a net income of 35% and cash generation around 15% of net operating income. So by reaching these indicators, the company will have reached the best cash generation, financial and operating results of its history. This is the goal we pursue, and the management team of the company has worked very hard with a lot of discipline to reach this operational and financial level. Okay, thank you. That's very clear. Just to follow up, why not be more aggressive in the strategy to reduce this Pro Soluto or direct credit granting, now that the program has more rules with more purchasing power for end users? Is there any other reason for this reduction to be so gradual and not more aggressive? Well, Victor, we have to balance several indicators. One of them is price, another important one is volume, and the Pro Soluto is also an important indicator. So we have tried to balance these three indicators according to what we believe is adequate, with the greatest competence possible. And another important point is that the product is evaluated by Caixa, the bank. And Caixa takes some time to bring the evaluation of the product according to the market reality. So you are right, the new program rules have helped. There's this last announcement we believe will happen this year maybe, that is to use future FGTS funds to increase the funding capacity of customers. So having considering all of that, with the future FGTS and the evaluations of Caixa at the market levels, we will be able to reach a Pro Soluto of 12 and/or 13%, which is the ideal level to have the metric of credit granting and receipts, the amounts received by the past. Is it clear? Yes, it is. Thank you. The next question comes from Andr`e Dibel from Itaú BBA. Thank you for the presentation and the question. Good morning. I have two questions. First, regarding the portfolio, if you could give us some more color about the behavior of the portfolio, default, and other conditions, are they still healthy? And also about portfolio, you've mentioned the reduction in the direct credit granting or Pro Soluto. I would like to understand if this reduction could compromise your strategy to sell trade receivables. And the second question is just to resume a topic from the beginning of the year, that is, Pode Entrar. What is your expectation for contracts in that area? There were some problems in implementation, so could you give us an update on that? Okay, Andr`e, starting with the Pro Soluto portfolio. We have seen the default rate is very much under control for this portfolio. All the numerical analysis, statistical modeling analysis for loan credit, housing credit, it's been very robust, so no surprise on that side. All indicators shows that our provisions are pretty much on track, and we don't see this going up when compared to what we have in the past and the provisions. We granted 21% of the property value, and we were able to lower that. At the end of the quarter, it was seventeen percent. And as Rafael said, we have to balance several variables. So to have a reduction in the portfolio is important, but continue to raise volume at the margin and new sales is also essential. So could we have room to reduce that even further? Yes. The future use of FGTS future funds is one way to do that. It is lower because the subsidy is higher, and so we start with FGTS in the future, we'll be able to migrate our volume that's currently at 35%-37% within level one. We may get up to 42%-45%, depending on the future FGTS use. That would also help in the reduction of granting a portfolio with the lower Pro Soluto. Not considering the 1% rate, that will help in the profitability of these sales. Now, talking about Pode Entrar, the schedule is a bit delayed from what we expected, but there are some projects with the development records ready. We are still very excited about the program. We intend to keep all the volume we allocated for the program to make it work, to have the contracts, and be able to deliver the units for the City Hall of São Paulo. So on our side, there's no change. We continue to win with the same plan. As for discussion of guarantees, they are the company wants to use the program, but to have a mitigated risk, which is how we intend to sign the contracts. We intend to have signed contracts until the end of this year for some projects. I don't know what is the guarantee, exactly. That is the current discussion. Okay, thank you. The next question comes from Gustavo Cambauva from BTG Pactual. Hello, good morning. I'd like to ask, it's more of a reflection on cash generation in the operation of Brazil, because looking at what you had presented in an MRV day, you probably will deliver on all the guidance in terms of leverage, revenue, margins, only cash generation that will be lower. But when you look back on what you had projected and the actual cash generation, what were the one or two reasons that caused it to be so much lower than you expected, what you expected for the year? I'd like to understand if maybe it was cost, in order to finish the works quicker, you ended up disbursing more than you thought, or maybe cash, incoming funds, were lower than expected, prices. Because I would like to understand, because when we look at the dynamics of the program, everything improved. The prices went up... Transfers are good, sales are good. So I would like to understand from your point of view, what was different from expected, what, you know, what's the missing element there? And as a follow-up from this first question is: thinking about 2024, as a consequence of the cash being worse in 2023, should we expect... that this would be pushed to 2024? So maybe it would make sense to think that your projection is conservative for 2024, or if this cash was really lost, because during 2023, you had disbursements with construction works or land that was not accounted for, and then cash was lower, and in 2024, it will continues as is. Thank you. It's great talking to you. Okay, let's answer. Cash generation 2023. We are at BRL 300 million behind the guidance, considering the lower end of the guidance. And the fourth quarter will be certainly better than the third quarter. I find it very difficult to reach the lower level of the guidance, the minimum. There are two factors that got in the way regarding what we envisaged in the beginning of the year. First, was land. We'll spend BRL 100 million more with land. We had adopted an assumption of postponing some payments. We were able to deliver on part of them, another part we did not. So there was an impact of land and BRL 100 million. And also, our performance was very good in launches. We launched several products in the first and second quarters that sold very well, and the recognition of revenue and the amounts received happens at a lower amounts than a product that has a POC that's higher. So the two metrics we didn't get right this year, we got many things right, many more things right than wrong, but the average price of sale is lower than what we had assumed, and the disbursement with land. We were not able to reach the goals we had established in the beginning of the year. As for 2024, we'll have MRV day soon to rebalance or recalibrate the expectations for 2025, 2024, 2025, 2026. But we are sure that what is there will be delivered. We'll have MRV day in January, and with the KPIs for 2024, 2025 and 2026. And we'll work to deliver at least the minimum levels of all the KPIs that we'll present to you soon. Okay. Is it clear? Yes, very much. Thank you. The sale of... So you sold more recent inventory levels? Yes. Okay. Thank you very much, and have a good day. The next question comes from Fanny Oreng from Santander. Good morning. My questions are more towards Resia. We're saying that if you sell the projects, you would have another three projects to be developed next year. How do you see the availability of banks regarding LTV? I've heard 65% LTV in constructions. Banks are more cautious regarding that. So I would like to understand, what level of bank funding rates you expect for Resia? And the second question is on funding for Resia. How do you see the funding that lenders are making to invest in Resia's project? Thank you, Fanny. First, regarding funding, we observe it's loan to cost. It's not LTV, but LTC, right? Yeah. So we see that LTC went down a bit. It's usually 65%. Today, it's now 55%, so ten percentage points drop, and therefore, we've been able to have a higher percentage of either joint venture or preferred equity for limited partners to solve that issue. So the equity that we put is on land plus approvals. So we've been able to obtain that funding to start construction. And reinforcing again, that construction only starts when all costs to be incurred in the project's capital is obtained, either with the construction loans or with partners. So the rates have increased a bit. SOFR, it used to be SOFR plus 275, today, SOFR plus 325. What's changed was not the pre, but it's SOFR that went up for 10 years. This is what's going on today, but we've been able to get funds for the construction. In this funding, the total plan is to obtain funds for 3 projects, but we are structuring it as independent projects. The fund, it's like you raise funds for the first project, and as the other project start, we'll make a follow on and raise more funds. The raising of for the first fund is doing fine. We'll be able to settle that fund shortly. So we obtained all the funds for the first project, and in order to start the project, we'll have to... We have to sell mature projects so that the golden rule that we set for ourselves is respected. Would it be a limited partner? Well, in this case, it would be with my equity. First, my equity with limited partners, and then funds from construction loans. Going back to Brazil. Could you say anything about the expectation for the judgment of today? Everything that I say could be outdated in the soon. I mean, what we see, the judgment as a final resource, especially after the government became so sensitized about this topic and made effort to talk to the Supreme Court judges to try to show the importance of funding and funds and the benefits of that, we've noticed a change in the discourse. So we still believe that something will change in terms of compensation, but that won't impact the funding capacity of the fund, either in terms of volume or increase in rates. But exactly the result, I cannot say. If it's really will be discussed today, if someone will ask to see the process, and then it will be judged and decided only later on, I really have no idea. Okay, thank you. The next question comes from Aline Caldeira from Bank of America. Can you hear me now? Yes. Good morning, Rafa, Cacá. Thank you for taking my question. I have two questions. One is a follow-up, but first, I would like to talk about the portfolio sale. We've been talking about this in every call, but now the company has reduced leverage level, has made a follow on. So how we can think about the sales of portfolio for next year? Does it make sense to really lower that pace? And if you do so, do you see a room for reduction of spread in those sales? And that's a follow-up on Ygor's question on the golden rule of Resia. So the idea is not to burn cash. You have disclosed that we'll plan to sell 1,300-1,400 units during 2024. So assuming that, $320 million, what works do you plan to start next year to be within the rule? And what do you need to see in the U.S. to resume the company's growth plan? First, regarding the sales of portfolio. The main challenge, in order for us to have a net income aligned with cash generation, the portfolio cannot grow. Our main challenge is to see it moving sideways at the most. Since we're talking about less credit granting last year and the Pro Soluto dropping as a percentage of sales, we can think about a lower sales of portfolio next year. In terms of spread, if we need to sell less, we're able to be more competitive among those who buy, and there's an opportunity to reduce spread, especially if interest rates drop. Those who purchase are recurring buyers. They can see the risk very well, so that's becoming more and more mature, even for a possible reduction in spread. As for the second question, golden rule, we have almost 400 in the portfolio able to sell, 113 to close, and the plan is to start 3 more construction projects. If we finish with 113 and only start 3, we can still having—we can begin to have cash generation in Resia. And what needs to happen to resume that, it's much more of a structural key answer. Would be a specific set of variables with the lower interest rates, in which we're able to operate and sell at better margins. That would make us comfortable to start talking about growth at Resia again. Okay, perfect. That's very clear, Cac`a. Thank you. Thank you. The next question comes from Hugo Grassi from Citi. Good morning. Thank you for the presentation. Congratulations on your results. I would like to hear from you about the new managers of Caixa Econômica. Now, the head is Carlos Antônio Vieira. They took office yesterday. So in terms of visibility, what to expect from this first line of VPs? I know it's hard to see what if anything else is going to change, but could you give us an idea about the continuity of operations in Caixa, at least with the technical staff? So actually, the question is, what is at issue? Caixa's appetite. Caixa was, you know, signaling a rollout for consigned credit. I would like to understand if Caixa, under new management, would have any influence on the operational side that has to do with the customer's affordability. A second question, involving a bit of future thinking. The technology landmark that was that passed last week and was sanctioned by the president allows people to have one more credit line that uses the same property as collateral, which makes us dream of having maybe Pro Soluto that could also be a collateral. Is it reasonable to expect that? Can we believe in that? Who has the veto power? Maybe Caixa does that. So these are the two questions. Thank you. Okay, Hugo, good morning. This is Rafael speaking. As for regarding Caixa, what we see in this many years, that Caixa is... It's a very protected institution, and naturally, the new CEO that has been chosen is aligned with the main purposes and main goals of this current administration. We know that the current administration is very positive about the program, especially for lower income people. So regarding affordability, 420 future FGTS funds, we don't believe that new management will completely change the purpose of building 2 million new homes during this administration. But what we see today is that there is a positive discussion among private companies, Abrainc, CBIC, Board from Guarantee Fund with Caixa. The new CEO is someone that Abrainc has known for a long time. He's very competent. So we're very confident, and that this dynamic of support to cause the sector to build 12 million houses in the next 4 or 5 years remains. So maybe this is the government program that's easier to be executed since it doesn't require any public funds, almost. So the issue is to provide the rules so that the market can-... Build these 2 million housing units very well, and the government is really making a strong effort to do so. I'll let Kaká give you more detail on the other question. Okay, Hugo, regarding the guarantee law, I believe that this resistance by Caixa should not exist, because it's very clear that the first guarantee, the main one, would be from Caixa, and we or the Pro Soluto, or those who use the same property as the guarantee, would be subordinated to that one. So I wouldn't see why Caixa would not agree with that. Having a Pro Soluto recorded in the deed of the purchase and sale of the property would be very helpful at the time of sale, but there is still some things to be discussed towards the future to see how it would apply to our Pro Soluto. So these conversations about Pro Soluto are happening according to this new law? Mm, specifically about Pro Soluto, no, I think this is the further step. If you allow me, a third question, a very brief one, just to give you an opportunity to comment more on the mega project of Seven Suns City. I see a huge exposure to the market of Pirituba in São Paulo. What do you feel about the depth of such demand? What do you think would be the launch phase and demand? This is Rafael speaking. Seven Suns or Sete Sóis is a project that is, has an excellent location. It's a differentiated master plan. It's a planned neighborhood with close to public transportation, roads. We created three types of products with different prices. All the products fall under Minha Casa, Minha Vida housing program, and we know that there is a huge demand for housing in São Paulo. So products that are well-located, with a good access to public transportation, with the right pricing, will be well accepted by the market. We made a very important effort. It's a nice launch. The local sales force is mobilized. We believe it will be a very successful project, a profitable one. It has several phases. The payment for land is also linked to the development of the project, so it was very well created and conceived when all its indicators... So we are certain that we'll have a higher market share in the São Paulo City, and this converges with the plan that we announced more than 1 year ago of being present in the metropolitan areas of São Paulo, of Brazil, and leave some, gradually leave some smaller markets. Today, we're focused on 100 towns, and as we grow the market share in these markets with the recurrent launches, we'll have a slightly cheaper operation and more efficient one. So everything that we planned for, we've been able to execute and deliver, and Seven Suns, Sete Sóis, is part of our strategy to become more relevant in the São Paulo market, as well as in other important metropolitan areas of Brazil. Is it clear? Yes, very clear. Thank you very much. Have a good day. Next question from Jorel Guilloty from Goldman Sachs. Jorel, you may go ahead. Good morning, everyone. I have two questions focused on Resia. I would like to have a follow-up on Fani's question. You talked about construction loans. It's pretty much the same questions: What loan to value on loan to cost do you envisage for permanent loans? Is it more significant for Resia right now? You have published the NAV of Resia, and I was curious to understand the change in the holding value, because in the second quarter 2023, BRL 148,000 for the holding, and now it's $20 million. So I would like to understand this change in quarter-on-quarter. Thank you. This is Ricardo speaking. First, regarding permanent loan, we observed that it's still available, Fannie Mae and Freddie Mac, through the agencies, and the cost has increased a bit, along with 10 years. But the permanent loan impact on Resia. On the purchaser side, those who purchase our properties have to fund in order to buy. We have not had made this type of debt. We prefer to recycle the assets, because after construction is finished, we have two years to pay the debt. So permanent loan has a bit lower cost than construction loan that we get, but the exit penalty is high if I prepay that debt. In a scenario that we want to recycle, it doesn't make sense to be on a permanent loan to stay in it for less time. The second point, the reduction of NAV erosion was due to a cap. We had assumed a lower cap, and we adjusted the exit cap, and that caused the overall figure to go down. The NAV from the holding company, we sold at the end of the second quarter, and then throughout this third quarter, it became investment. It was spent. It migrated from holding to projects. Okay, understood. Thank you. Next question from Marcelo Motta from J.P. Morgan. I have two questions. FGTS for next year, everybody sees BRL 75 billion. I know that's not ideal, so I'd like to understand what you think the budget should be from the ideal point of view? For the growth of the entire industry, there should be more competition. And how do you see the competition? Because now, My House, My Life market is more attractive. There are more people coming. So what do you see in terms of competition? Hello, Mota, this is Rafael speaking. Great talking to you again. Well, regarding funding from FGTS, this year was way higher than from the first budget. It's at BRL 90-some billion, and we expect that next year, that amount increases so that the program will remain at the same size. What's being discussed in a very sophisticated way, with a high partnership between ABRAINC, CBIC Fund, Caixa and the government: How can we have a framework that allows us to build 400,000 housing units per year, but looking at its long-term sustainability? So what, what's being discussed is what tools could we use or parameters should we change in order to have a good program that would be perennial? Recently, for example, Caixa changed the rule regarding used units. I mean, the LTV for used properties was raised to 70%, and in December, we'll go back to 50%, because the growth in used units in the market share of the market was very high. So it was understood that in order to generate jobs and new construction, the used units should have a lower share. The ceiling of the program is now BRL 350,000. Would that be discussed? Maybe. I think the priority of the government will always be lower income brackets and making 400,000 housing units per year. So this is the idea, to interact, to discuss things, you know, with other people, to have an adequate program that could also last. The government is very sensitive to that agenda, so we are confident that in 2023, as well as in 2025 and 2026, we'll have a program that will remain at the level of 440,000 units per year without compromising the guarantee fund. As for competition, that was your second question. If we look at the market as a whole, the volume of launches, volume of units built, I'd say that the market is moving sideways. In some cities, it is more active, such as São Paulo. In terms of its population, in relation to its population, São Paulo is the most active market in Brazil. But when we go to the interior of São Paulo, Midwest and Northeast, competition is lower than it used to be, and we don't see any sign of new launches. It takes time. One has to buy land, get all the permits in order to launch. So I'd say that competition is stable. Some markets are more competitive and other markets are less competitive than what we have seen in recent years. And the fact that MRV is the only domestic company or national company that operates in 100 cities gives us capacity to launch more in the markets that have more demand, and being more conservatives in the markets that are with higher competition. Although São Paulo, that it's highly competitive, would see a very, say, healthy speeds, sales supply, sales speed. The next question comes from Rafael Heller from Safra. Good morning. I'd like to have a follow-up on the average ticket. You said it's BRL 240,000, maybe reaching BRL 250,000 next year. In the projection, do you expect any change in the program? And assuming that FGTS for the future will be implemented and approved, how much do you believe the prices could increase? Maybe BRL 250,000 could go even further. How are you, Rafael? It's great talking to you. Regarding price/margin, we have reached a very good level. A level that's close to or even higher to the pre-COVID one. We believe that we have plans to grow even more. Our plan is 40, 35, 15, with a gross margin of 15%, which we believe is good to pay for capital, given that our business is cyclical and has some inherent risks. But you mentioned the future FGTS and some state programs that have been executed, and we've seen more and more state governments announcing programs to provide extra subsidies. There are 3 or 4 states already doing that, but there are at least 6 states that are preparing or about to start. These—each one has a different name. Some states give extra BRL 10,000, BRL 15,000, others give BRL 30,000 extra funds for housing. So our decision is much more related to Pro Soluto and less on price increases. Increasing price is marginally above inflation, but it's more concentrated on group one. In some levels, the limitation is group two, and group two, a smaller check. And for Pro Soluto in the future, should be on group one. So we'll use this tool of FGTS—I'm sorry, FGTS, and also this check to reach a Pro Soluto of 12%-13%. This is our main goal, and we know that having a very large portfolio is not very nice. It's not the ideal, but it's part of our business. At reaching a Pro Soluto of 12%-13%, we reach a breakeven. And all of that will allow us the cash generation to be pari passu with the net income of the company. Okay, thank you. That's very clear. This ends the Q&A session. For the final remarks, I would like to turn the floor over to Rafael Menin. Well, fine. First, I would like to thank you all for your presence. We had a call with a large number of questions, very good questions. I hope that both Rafael and myself have been able to answer your questions. And I would like to say that we are very optimistic and happy to have turned around our operating results and the financial now, reaching our goals very soon. I think that the company is on the right track, and we believe, we hope the fourth quarter is better than the third one, and that 2024, we will continue to deliver operational and financial results that are positive. We are very sure about our plan, very disciplined, and positive that MRV soon will deliver results that are in line with the company's history, but with higher revenue, net revenue. And we'll have the best indicators in the company's history. As for the US operation, we're also very positive about the choice we made in terms of type of product and market, knowing that currently, interest rates are very differently from what they have been in the last 20 years, and we're sure that interest will not remain at this high level. It will go down, causing Resia operations to be very strong for MRV&Co. So our future is well planned. Now we have to deliver. What we can do in-house, we're doing, and on Resia, we depend on external factors. And as soon as things be improved in the US, I believe both operations will deliver high quality financial and operational indicators. Thank you very much, and we'll see each other in the next release and earnings conference call. Thank you and have a good week. The conference call of MRV has now ended. We thank you all for attending, and have a good day.