Good afternoon. Before we begin, for those who need translation, the tool is available on the platform. Please click on the interpretation button using the globe icon on the bottom of the screen and choose your language of preference. You may also choose to mute or unmute the original audio by clicking the Unmute Original Audio button. Good afternoon, and welcome to the Localiza Earnings Release Call, referring to the results for the second quarter of 2023. Today we have with us Mr. Rodrigo Tavares, CFO, and Ms. Nora Lanari, Investor Relations Officer. Please be advised that this webinar is being recorded and will be made available on ri.localiza.com/en, where the complete material of our earnings release is available. The presentation is also available for download on the company IR website. For the Q&A session for analysts and investors, we advise you to signal your interest in participating by the Q&A icon on the bottom button of your screens, informing your name, company, and language. When called, a request to unmute will appear on the screen. To submit your questions in writing, use the Q&A icon on the bottom of your screens and inform your name and company before your question. We inform you that the amounts of this presentation are in millions of BRL and in IFRS. We'd like to emphasize that the information contained in this presentation, and any statements that may be made during the call regarding Localiza's business prospects, operating and financial projections and goals, are the beliefs and assumptions of company management as well as information currently available. Forward-looking considerations are not guarantees of performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Now, I'll hand the floor over to Rodrigo Tavares, CFO of the company, to begin the presentation. Good afternoon, everyone. In 2Q '23, we continued to advance in the integration process and capturing synergies with engaged teams, maintaining the focus on our customers and the high NPS levels in all the company's businesses. We continue to grow with value creation, maintaining discipline and capital allocation, and we see a positive outlook for our businesses. Despite that, we had a very challenging quarter, impacted by Provisional Measure 1,175, indeed, detailed on page two, which established a discount mechanism between BRL 2,000 and BRL 8,000 for the purchase of brand-new vehicles priced up to BRL 120,000, in the total amount of BRL 500 million, which was initially intended only for individuals. The prior announcement of the publication of this provisional measure and the expectation of lower cost of cars, resulted in a slowdown in the price and pace of sales of Seminovos, in addition to the impacts on the residual value of the fleet. Therefore, we've recognized BRL 631.4 million in the accounting result before taxes, of which BRL 153.3 million in Seminovos, highlighted as an adjustment to impaired value of assets, and BRL 478.1 million in the car depreciation line. With the extension of the discounts offered under the provisional measure to legal entities at the end of June, we expedited our purchases again, having purchased around 23,000 cars at discount between the end of June and beginning of July. In the quarter, we purchased 57,110 cars, where 32,242 were in car rental and 24,868 in fleet rental, and sold 52,711 cars in Seminovos, which was also impacted by that measure. Moving on to page 3, we highlight the adjustments made to the results for better comparability of our figures. We remind you that the numbers for 2Q 2022 and first half of 2022 are pro forma and were adjusted for the effects of the business combination in order to better reflect the company's actual performance. This quarter, together with the effects related to the write-up of cars and customer portfolio that had already been highlighted in previous results, we'd like to highlight the non-recurring effects of the write-off of car rental assessments and the impacts arising from the provisional measure, which added up to a negative impact of BRL 507.8 million on the bottom line. Going to the highlights of the quarter on slide 4, we present the consolidated net revenue of BRL 6.8 billion, an increase of 34.6% in the quarterly comparison, driven by the growth of 27.4% in rental revenue and 43.4% in Seminovos revenue. In the car rental division, after the end of the high season and without the effects of summer holidays, we've realized a reduction in the volume of rates, offset by the higher average rate. In this context, net revenue remained in line with the previous quarter and increased 9.9% in the annual comparison, showing the effective price and mix management. In fleet rental, once again, we've shown strong net revenue growth, 9.9% higher in the sequential comparison and 58.1%-... year-over-year, even with the impact of the Provisional Measure, which reflected in lower purchases and deployment of cars in this division between the months of May and June, resulting in a backlog of 21,000 cars. Seminovos's revenue grows 43.4% in 2Q 2023, even in a quarter impacted by the Provisional Measure, and reflects our ability to increase sales volumes, contributing to the process of fleet rejuvenation. In the chart on the right, we show our operating results with an EBITDA that achieves BRL 2.5 billion, an increase of 27.9% year-over-year. On June 16, 2023, we announced a public offering of shares, a follow-on in the total amount of BRL 4.5 billion, with a demand multiple times greater than the size of the offering, demonstrating the confidence that our shareholders have in our ability to allocate capital and create value. As a result, we ended the second quarter at BRL 11.1 billion in cash and net debt over EBITDA, LTM and net debt over fleet value ratios at 2.78 times and 0.59 times, respectively. The proceeds from the share offering contributes to strengthening our competitive position and capturing opportunities in a market with wide room for growth, especially in the context of a reduction in the yield curve of interest, which tends to boost the car rental industry. Despite the challenges in the quarter, we believe we've reached a turning point with the beginning of the interest rate decline cycle, signs of improvement in car rental demand, and a process of resuming brand-new car prices to levels close to the pre-Provisional Measure levels. Finally, we expect an improvement in the cash generation cycle as a result of longer terms with automakers and reduction in renewal contracts. In summary, we had four major effects this quarter. Rising rental rates and Rent a Car offsetting seasonal cooling off of demand, which has already shown signs of recovery. Impacts of Provisional Measure resulting in lower growth than expected by the company in Seminovos and fleet rental. Strong demand for fleet management, resulting in increase in the backlog to approximately 21,000 cars. Capital structure that has been strengthened after the completion of the follow-on, preparing the balance sheet to support the new growth cycle. To detail our results, I hand the floor over to our IRO, Nora. Thank you, Rodrigo. Good afternoon, everyone. Now, going into the details of our results, we will begin the presentation with the Rent a Car division on page five. Net revenue from this division total BRL 1.9 billion, a growth of 9.9% in year-over-year, even with the effects of the sale of the carve-out that still impact the volume in the annual comparison. On page 6, you see the increase in the daily rate average, which was BRL 119.3 in the quarter, an increase of 16.7% year-over-year. The growth in the daily rate reflects the mix and price management, with the objective of adapting return levels to the company's historical levels. The utilization rate, despite remaining on healthy levels, showed a reduction of 1.8 percentage points year-over-year, reflecting the accommodation of demand after the peak season. Now moving on to page seven. In the fleet rental division, we continue to grow at a strong pace, with net revenue totaling BRL 1.6 billion, an increase of 58.1% when compared to 2Q22 pro forma, reflecting a growth of 29.3% in number of the daily rentals, even with the impacts of the Provisional Measure, which resulted in lower car purchases between May and June, and consequently in lower implementation of new contracts, increasing the backlog to 21,000 cars at the end of 2Q23. On page 8, we have the arid- average rate of BRL 181.6, which increased 22.5% in the quarter, reflecting the capture of higher prices in new contracts and the fleet mix. Utilization rate shows a slight reduction of 1.5 percentage points compared to 2Q 2022, but is already starting to grow in the sequential comparison. On page 9, we can see the car purchase and sale balances. After the announcement of the enactment of the Provisional Measure, the company significantly reduced the volume of cars purchased between months of May and June, going back to purchases under better conditions last week of the quarter, after the measure was extended to legal entities. We entered the quarter with 57,110 cars purchased. In Seminovos, 52,711 cars were sold. Despite the impact that was created by the announcement of the Provisional Measures on the prices and sales turnover, we still maintained the entry-level cars at a higher level of mileage. On page 10, we present the average purchase and investment price. In the car rental division, the average purchase price for the quarter was BRL 79.1 thousand, reflecting the prioritization of revenue from cars not impacted by the provisional measure, with an amount greater than BRL 120 thousand during the months of May and June. The selling price was 59,600 per car, stable compared to the previous quarter, reflecting the impact of the measure as well as the continuity of the sale of entry-level cars with higher margins, mileage. In fleet rental, we had an average purchase price of BRL 103,700, also impacted by the priorities of billing for cars worth more than BRL 120 thousand, not impacted by the measure. Furthermore, remember that the purchase mix in fleet rentals also comprise of special and heavy vehicles that have a higher purchase value, with a sale price of BRL 60,000, BRL 67.4 thousand. Flex mix comprised mainly of lightweight vehicles. On page 11, we show the advance of the fleet at the end of the period, which achieved 587,424 cars in the 2Q of the year, a growth of 10% annual comparison, despite the carve-out, mean increase of 32.4% in fleet rental division and 4.7% reduction in the car rental division. The company continues to support global fleet utilization for the 2nd consecutive quarter in the car rental division. Moving on to page 12, we can see that in the annual comparison, net revenue from rentals grew 27.4%, with a 9.9% increase in the car rental division and 58.1% in fleet rental, while Seminovos revenue grew 43.4%. As a result, net revenue totaled BRL 6.8 billion in 2Q '23, an increase of 34.6% compared to 2Q '22. On page 13, we show an EBITDA of BRL 2.499 billion in 2Q '23, an increase of 27.9% compared to the 2Q '22 pro forma figures. We affirm the quality of the company's operating result, reflecting the increase in prices in addition to an increase in efficiency with cost dilution and capturing synergies that brought on a positive impact to the margins of both divisions in the annual comparison. In the Rent a Car division, the EBITDA margin of 64.5% increased by 9.3 percentage points compared to the margin year-over-year. In fleet management division, the 69.5% margin accounts for a growth of 4.5 percentage points year-over-year. The Rent a Car and fleet rental margins continue to offset the continuation of the Seminovos margin normalization cycle in the quarter. We also show the sequential comparison of margins. Compared to 1Q 2023, the car rental margin decreased by 1.6 percentage points. We would like to remind you that in the first quarter, the EBITDA margin was positively impacted by the adherence to the Zero Litigation Program by 1 percentage point. In the sequential comparison, the fleet rental margin decreased by 6.7 percentage points. In 1Q 2023, this division's EBITDA margin was positively impacted by the effect of the accelerating tax depreciation report on cars, with a positive effect on PIS and COFINS credits, in addition to adherence to the Zero Litigation Program, which added up to around 6.5 percentage points. In 2Q 2023, new initiatives relating to mobility, international expansion, telemetry and the shops impacted the EBITDA negatively by 9.2 million BRL. Excluding the effects of new businesses, the EBITDA margin would have been 72.2%. In 2Q '23, the Seminovos margin was 3.7%, impacted by lower turnover in car prices, which resulted in a mismatch between preparation and sale in the context of the Provisional Measure, as well as a lower fixed cost dilution, considering the process that has already begun to expand our network. On page 14, we present the evolution of depreciation, excluding the effects of the Provisional Measure in both divisions. In RAC, as we signaled over the past quarters, the average annualized depreciation continues to increase sequentially at BRL 6,578 per car due to the lower proportion of fully depreciated cars following the fleet renewal process. In the fleet rental division, average annualized depreciation also increased, achieving BRL 5,661, reflecting the addition of new cars with higher depreciation. A mix also comprised of special and heavy vehicles added throughout 2022, and the effect of cars that were fully depreciated, acquired until first half 2021. We emphasize that the greater depreciation is reflected in the price of new contracts. Moving on to page 15. We see an adjusted EBIT for the write-up and effects of the provisional measure of BRL 1.575 billion in the quarter, growth of 3.6% compared to 2Q 2022. The car rental division, EBIT margin, achieved 38.6% and fleet rental 51.1%. The reduction in the EBIT margin reflects the increase in car depreciation in both divisions. On page 16, we have the net income adjusted for the write-up effects, tax loss, write-off and provisional measure, which totaled BRL 419 million. In the annual comparison, the increase of BRL 845.4 million in EBITDA was offset by the increase of BRL 491.1 million depreciation and the increase of BRL 493.2 million in financial expenses, reflecting a higher CDI and average debt balance, in addition to BRL 67.1 million of effects related to MTM. To present cash generation leverage and ROIC, I would like to hand the floor back to Rodrigo. On page 17, we have the free cash flow. In the first half of the year, cash generation from rental operations totaled BRL 2.86 billion, which were consumed by renewing 108,000 cars and by reducing BRL 1.5 billion in the balance of accounts payable with automakers. In that scenario, the company ended the quarter with a net debt of BRL 25.9 billion, as shown on page 18. On page 19, we can see the debt profile and robust cash position of BRL 11.1 billion, which is equal to 81.2% of debt maturities until 2025. Including funding and liquidations announced up to July 31, 2023, the company would have BRL 12.1 billion in cash. On slide 20, we can see our debt ratios. After the completion of the follow-on public offering shares in total amount of BRL 4.5 billion, we ended the quarter with comfortable debt ratios, of which we highlight the net debt over LTM EBITDA, which ended the quarter at 2.78 times, and net debt over fleet value, which ended the quarter at 0.59 times. On page 21, we present the annualized ROIC of 14.5% in first half of 2023, a spread of 4.5 percentage points for the cost of debt after taxes. In the second quarter of 2023, ROIC was impacted by the lower growth in net revenue from fleet rental and Seminovos, in the context of the provisional measure, and by the greater relative weight of vintage two cars, which have higher depreciation. Despite the aforementioned challenges, the company has gradually been rebalancing returns as the balance of contracts from Locamerica, with a lower ROIC spread, converges to Localiza's historical levels as it captures operational efficiency in a scenario of lower interest rates, factors that will contribute to return the ROIC spread to the levels, between 5-8 percentage points. Now we're open for your questions. We'd like to remind you that for Q&A, please inform your interest by clicking on the Q&A icon on the bottom of your screens, informing your name, company, and language. When called, a request to unmute will appear on the screen. To submit your questions in writing, click on the Q&A icon at the bottom of the screen and inform your name and company before your question. Our first question is from Rogerio Araujo. Please unmute, Rogério. Hello, good afternoon. Thank you for taking my question. I have two. The first one, if you could talk about the cost of expenses, there was a relevant increase in fleet rental, even adjusted to Zero Litigation and PIS and COFINS credits. I know it's less seasonal segment, I would imagine that these expenses would be a little less volatile. I'd like to understand if this quarter has more costs and, or less costs and any provisions or things of the sort. We found the line of others and services to third parties increasing a little quarter after quarter, but we don't exactly know what happened in those lines. What can we expect from fleet rental margins for the upcoming quarters? Would it be normal rates at 70, like this quarter, or 75 like the previous quarter? That's the first question, and the second one is pretty much related to it. Rodrigo explored the ROIC spread from Locamerica, conversion to the Localiza rate should affect it a little. I'd like to understand, if that's already expected, that the spread ROIC, the ROIC spread would be under the company target, and if the case, if it would be lower, and if you can give us some timing on that, in that recovery. Is it the timing for the entire cycle of the vehicle in fleet rental, 1 year, 1.5 years, or should we expect any recovery before that? Thank you. Thank you, Rogerio. First of all, about the cost of fleet expenses. Let me take a step back and talk about fleet, because it's a little more structured. As I've mentioned in previous quarters, what we call new businesses is under fleet. Let me give you more flavor about the new businesses, and I'll separate that into two parts: Mexico structuring and the others. The new businesses had revenues of BRL 45 million in this quarter, and they're already in break-even, except for Mexico. Even positive results. After we exclude the BRL 45 million from the revenue, you can see an impact relevant to fleet management. Structuring Mexico operations, where we started the operations in the previous month, we're already renting cars and open in some airports, had an impact of BRL 12 million in this quarter. As you can see, EBITDA was affected in BRL 9 million. Mexico alone was BRL 12 million. The other businesses are the difference that are in the break-even, but had a denominator effect. When we consider that adjustment, the margin goes to 72.2%. hope to be able to separate Mexico a little more in the next call. It would be easier for you to conduct your analysis. Considering the 72.2, let's consider the other effects now. A specific effect, which is technology effects that were discontinued, that impacted an impact of BRL 12 million. What does that mean? The former Locamerica, and even Localiza, had a practice of capitalizing on part of the technology projects. Given the merger and the combination, many of these projects were discontinued for many different reasons. The brand was sold. The telemetry side, we have our own at Localiza. There are many projects that were capitalized and projects that wouldn't no longer have continuity. The correct procedure in that sense is to write off those projects, and that was a BRL 12 million impact. Don't forget that it's an integration context. First we integrated the front office, and now it's back office, so these things might come up. In addition, you mentioned third-party services. There's still some of the integration. We're implementing SAP S/4HANA and some other consulting firms that were part of the integration process. Marginal expenses compared to what we've already spent, but it's still there. Another mention is that we had more expenses in maintenance of approximately BRL 30 million. It's important to mention that we have a mix of severely used cars that came from former Locamerica, especially from agriculture and special vehicles. In this quarter, we were focusing on corrective maintenance. In the first quarter, we were charging the extra maintenance, and that's why maintenance was a little lower. In this quarter, we had an effect of these corrective maintenance of the severely used cars. Those effects explain that. There's also the effect of an increase of bad debt. That's an impact that we've seen. We've seen that in fleet. It's not that different, but it did have an impact in that quarter. When you talk about the margin and margin of new contracts, we don't have to wait for 2, 2.5 years. You'll see gradual improvements in the fleet margin. First of all, because by separating the new businesses, that already happens. Like I mentioned, it was a heavy quarter in corrective maintenance, more heavier than usual, and that should converge into the mid-70s in the future. About your second question, about the ROIC spread, it's under expected because of the Provisional Measure. We should have had a much higher fleet growth. We had a fleet backlog of 15 days. Now, once again, we have a backlog of 2 months. In addition, the provisional measure affects Seminovos directly because we opened 9 stores in the quarter and we sold less than the previous quarter. We could have sold much more, but given the fact that we hadn't bought cars in the half of May and all of June, we only bought cars at the end of June. We had to slow down the sales in Seminovos, in addition to the fact that the prices dropped. The ROIC spread of 4.5 is under our expectations, and it's mainly affected by the provisional measure and its effects, especially in fleet and in Seminovos. Very clear. Thank you very much, Rodrigo, for your explanation. Thank you. Next question from Daniel Gasparete, Itaú BBA. You can unmute, Daniel. Good morning, everyone. Thank you for taking my question. I also have two. The first one is I'd like to know the trend in depreciation. I see here in your release that you still expect that it should go up in depreciation. I'd like to know you believe that about in terms of the Provisional Measure and the magnitude of that depreciation. Is it a bit different or close to the results? That's the first one. The second one is to understand the purchasing condition with your OEMs. Competitors have been saying that they've been buying cars. Daniel, you're mute. Well, you can interrupt me, Daniel, if you come back, but I understand that in the purchase and depreciation of cars, I can address that, and if there's something else, you can add on later. Once again, expedited depreciation coming from the Provisional Measure had an impact of 1.2%-1.3% in the value of fleet. Even though it's a very high amount, it's small to actually affect depreciation in such a big way. First of all, Rent a Car. It comes from a conversions measure, and now it should continue, but in a smoother way. We should continue to see that, but obviously it does depend on Seminovos conditions. We can see the market coming back gradually in terms of prices, but there's still cars in dealerships that have benefits, so that will be essential. We're still talking about the 7-8 level, which will be smoother in Rent a Car. In fleet, fleet is a little behind in that convergence. Obviously, we're also talking about a smoother movement going forward, but in fleet, you're adding more cars and you have a volume of older cars that are fully depreciated, so it takes longer in the convergence. We still expect some convergence, but softer looking forward. When we look at purchases, we were able to buy 23,000 cars with the benefit from the Provisional Measure. That does mitigate a bit of the impact of the Provisional Measure. In fact, the market does have vehicles available. There are already conversations going on in supplying next year and even more than a year. There are purchase opportunities, and we've been taking advantage of that, so we can converge the ROIC spread to the historical levels. To add to what Rodrigo mentioned, obviously, the purchase conditions, we consider prices and payment terms, and that won't reflect in depreciation, but in the financial result. Next question is from Guilherme Mendes, from J.P. Morgan. You can unmute, Guilherme, please. Hi, Rodrigo. Hi, Nora. Good morning. Thank you for taking my questions. Two things, to explore two segments that are a little less relevant. Going into the international expansion in Mexico, you did mention some of the figures and additional expenses that you will have and continue to have. Tell us, how has it been, the beginning of operating there, the challenges, negotiation with automakers. What are your initial thoughts on that? I imagine that you're gonna tell us the target of what you expect there. What do you think about the marginal growth outside Brazil and marginal return in the regions? The other question is about heavy vehicles. A similar question on that, how have you seen the evolution of that segment and the conditions for purchases with Euro VI? Thank you. Guilherme, thank you. We started our Mexico operations. It's not a globalization movement. We believe that Mexico has very interesting opportunities. It seems like the Brazilian market, 20 years ago, under-penetrated and very poor service levels and high prices, lower interest rate and cheaper cars. You see an interesting condition for that. It's a movement, and W e are still very disciplined in capital allocation, so we don't have any aspirations right now or definition of the volume that we want to have in Mexico. We need to go through things step by step, and the first step is servicing our customers well. You can be absolutely sure that we can buy cars at a competitive advantage, that our brand will be recognized, and with that, we will have a demand, even in a country where Localiza is not known. The first results have been positive. We've had access to airports. We've been able to rent the cars with even a surprising use- utilization rate. We should be present in the main airports still this year, and with volume. About the automakers, they've been receiving us well. There are discussions about automakers, even here in Brazil, to see how we can unify the purchases, Brazil, Mexico. It's something small that starts now. We have to win over some of the battles. Huge ambitions, like everything here in Localiza, we always start small and understand what the basic fundamentals, so then we can expedite and reach the levels that we wish. In terms of heavy vehicles, that's a bigger business. That's something that we can't really say it's a new business because we already have capital allocation of approximately BRL 2 billion, and we've sold Euro VI contracts, not just inventory. We've lowered our inventory a lot, so we have high asset efficiency and an adequate ROIC spread for Localiza levels within our parameters. We've been allocating capital in a selective manner. In fact, there is a big market to grow, mainly within our own customers, there's an appealing, there's an appeal, a credit appeal and a difference in the discount where I can buy and my customer can buy, and then we can actually add value to that. It's a segment that's been growing with good margins, and once again, in a very selective manner according to our capital allocation policies. Very clear, Rodrigo. Thank you. Have a great day. Thank you. Next question is from Bruno Amorim, Goldman Sachs. Please unmute, Bruno. Good afternoon. Thank you for taking my question. I have three questions, actually. The first one is about provision of approximately BRL 600 million, considering the government program and an ex-post, given market conditions today and some uncertainties, what is your vision today? Is the provision, does it seem to be a little conservative? Is it aggressive? Is it fair? What can you say about that? The second point is about Seminovos' margin in 2H this year. On one side, the margins of the 2Q was impacted by lower sales, as you mentioned, and there's also a normalization that was underway, so it's natural to see a gradual decrease in the margin this year. I'd like to hear from you if you believe that the 3.7% margin in the 2Q is a good reference for this 2H, or can you give us some flavor on that, up or down, based on the factors that I mentioned? About demand, it's very clear that the 2Q has lower, weaker demand. Seasonally, it's usually weaker, but can give us some direction on that. If we look at the past quarters in fleet rental, for instance, we saw an average growth of 7% per quarter, and now it's 4%. Can we say 10% for the third quarter, given there's a repressed demand? As you mentioned, the backlog is high. Can we consider that? In RAC, an area mainly affected by economic activity, can you give us more flavor on that? I believe that there's a seasonal recovery, on top of that, what do you see adjusted according to seasonality? Is the demand weak? Is it robust? Any signals on that would be great. Thank you. Bruno, thank you. First, about the Provisional Measure provision. I think it's always good to look at that. When it was published, there was a lot of uncertainty. It was announced on the 15th. Well, the rumors started. I think it was announced on the 23rd and published the beginning of June. As in past provisional measures, they said it would be 3 or 4 months, but it could be extended, and at that time, we were getting ready for the follow-on. In respect towards our current and future investors, we had to be pretty conservative. We couldn't go to market with a follow-on and then capture funding and have a negative surprise for our investors or new investors. Back then, we took the best decision, which was relatively conservative, of an impact that the provisional measure would have if it extended more than the 3 months, and in fact, it did happen. It was BRL 500 million, and then it was extended for another BRL 300 million. What we see now is that, in fact, the seminovo and new car prices dropped immediately after that Provisional Measure. Then you have the convergence. There's still a lot of cars in dealerships that have that benefit. The automakers, now that the model year is changing from '23 to '24, they hike up the '24 price but maintain the '23 prices lower. There's still an effect of the Provisional Measure right now. In fact, we were very conservative in the past. That was necessary. That effect is still not over. It's ending. That effect has impacted the sales of seminovos. About the Seminovos margins, the expectation is to be in the low 5-digit. There's still uncertainty. There's a wholesale mix, and we'll still see these cars that have higher mileage, especially in Rent a Car, and fleet cars have a higher margin, but the demobilization is mainly in Rent a Car, and with that, we expect low single digits by the end of the year. The fleet demand is still very robust. We can see that through the backlog and through the orders, not only these subscription cars, but in all business lines, we've seen a high demand. So there's an expectation of growth, a good one for this year and years to come. On a positive note, it's Rent a Car. July, we had a very positive demand, higher than our expectations, and in the second quarter, even though the demand has been higher, we were able to up the prices compared to the first quarter, and that's rare. So we've increased our marketing efforts. You can see that one of the reasons for the increase in expenses in Rent a Car in this quarter were higher expenses in marketing and advertising. You probably saw our new store in, at the Congonhas Airport. We've strengthened our new brand, and we've upped the prices, even though we didn't have the demand. In the third quarter, we see a more robust demand in Rent a Car. Still not as bullish as we would expect, but still better than what we've seen in the second quarter. In addition, and that's the main thing relating to the follow-on, it seems like the interest rate curve is dropping even faster than what we expected. That turning point, probably end of the year, beginning of the next year, maybe even earlier. Interest rates going down, demand going up, could increase the rental demand in a context where we've been getting market share. We've been growing the fleet, not much in a context of a reduction in the market. We're still taking up market share and getting ready for that turning point. Thank you. Thank you. Next question is from Luiza Mussi from Banco Safra. You can unmute, Luiza, please. Good morning, everyone. I'd like to understand a little more about the subscription cars. If you can tell us about the demand in that, and how you're capturing synergies. Thank you. Thank you for your question, Luiza. As Rodrigo mentioned, the demand in fleet management in general is very robust, and I'd like to include B2Bs. The fleet management and also subscription cars, we've seen that going well. Good brand recognition. We have new features in our app, and the NPS is at a level of excellence, so there's a high demand and a big market for that. We're very optimistic about the growth of that segment. I'd like to remind you that the second quarter was impacted, as Rodrigo mentioned, by a hiatus of purchases between May and June. We allocated less cars to that division. The backlog is 21,000 cars. We'll allocate them in the upcoming months. About synergies, they've been captured. They're being captured according to plan. The company has prioritized in the first three months of the carve-out following the integration of the front office. You see the branches and the new Seminovos stores that have been integrated, and now we're looking more at the back office. That's even the justification of the margin that Rodrigo mentioned, implementing a combined ERP and so on. We decided not to give guidance on the synergies, but they're according to plan, not only in car purchase and in maintenance. We also believe that the decommissioning of cars have given us a lot of opportunities in synergies. All right, thank you, everyone. Next question is from Alberto Valerio, from UBS. Please unmute. Alberto? Good afternoon. Can you hear me now? Sorry. Thank you, Nora. Thank you, Rodrigo, for taking my question. Looking forward, trying to sue the new level of depreciation per vehicle, we've realized that in the past eight quarters, it's a bit higher in the Seminovos line compared to before the pandemic. There's maintenance, and what can we expect from that sort of moving forward? Considering the price that you paid for that car and the price that you're selling it today, and first in, first out of the cars, so it was higher than 5% in the last eight quarters. What can we expect moving forward? Should that line be of cost of goods sold higher or the depreciation, since you had heavier maintenance, would that line be equal to the price of what you paid for that car, minus the depreciation of that car? Thank you. Thank you for your question, Alberto. Conceptually speaking, taking a step back, let's explain how the depreciation. It's the purchase sale, minus the estimate of the price of sale and minus the sale expenses. To prepare that car for a sale, we should have a gross revenue to cover the SG&A of Seminovos and have low single digit margin left over. That's the concept, we do have some moving parts in that case. We still have cars in RAC that have lower book value and lower mileage, and we decommission those cars, and by the end of the year, we should have had all of the decommissioning. You have leftover book value resulting from the beginning of the sales of the cars that were sold before the pandemic, a bit more premium. Less mileage on those cars and more high-end. That should reflect on price. Conceptually speaking, the gross profit should be enough to cover SG&A of the Seminovos, which is approximately 5%-6% today, and net margin of 2%-3% as a general rule. Just to follow up on that, can we consider that that level of depreciation that we had pre-pandemic, should we see that in the future? Approximately 4% of vehicle value, or should it be higher than the 4%? Alberto, it'll be a bit higher given some factors. We've been talking about 7%-8% because of some factors. First of all, there's the thing about the mix. That changes a lot. In 2019, we didn't have smaller SUVs. There was a smaller share of SUVs. You have an effect of car mix that depreciate more because they just devalue more. It's not necessarily a problem, provided that the tariff can handle that. You have sedans that have higher depreciation, but it has a higher return because consumers really appreciate those cars and are willing to pay that rate. First of all, there's, the mix changed a little, so you won't have that. The second is term. We've extended the terms, a part of that depreciation, you can see that in financial expenses and in accounts payable for suppliers. The 4% looking forward shouldn't come back. Thank you, Rodrigo and Nora. Next question is from Victor Mizusaki, Bradesco BBI. Go ahead, Victor, please unmute. Hi, good afternoon. I have two questions. First of all, could you talk about the working capital dynamics for the second half and accounts to suppliers and an improvement in used car sales for the second half? Do you think things can improve given that there's a comeback on that? Second question, about Mexico again. Could you tell us how you see the contribution margin in Mexico compared to Brazil? Thank you. Thank you, Victor. About working capital, we should see an improvement in the second half of the year. Given the automakers terms and expediting the sales in Seminovos, the dynamics to generate cash and cash burn should be better in the second half compared to the first half of the year, basically for three reasons: generating cash from rentals should increase with more fleet and with tariff and in rental coming back, and little by little, lower innovation CapEx, even though it's not in the very short term, that also has an effect. The drop in the interest rate burns less cash and an increase in payment terms. With the growth, there's also a positive effect in working capital, so that should happen in the second half. Better cash generation in the second half of the year. About Mexico, still early for us to compare. We're setting up a team in Mexico. We want to service our customers well. We want to have the same levels of compliance in Mexico. That's essential for us. What I can say for now is that the rates in Mexico are higher than Brazil. Cars are cheaper and interest rates are lower. There are great conditions for us to have a contribution and ROIC spread at the levels that Localiza aspires. Today we're talking about very restricted number of cars, and it's not our focus in the short term to reach the contribution level. We're testing the ground, and you can be sure that our capital allocation will be very disciplined and we will only expedite capital allocation when we are sure that the return will be achieved. Great. Thank you. Thank you, Victor. Next question is from Regis Cardoso from Credit Suisse. Please unmute, Regis. Hi, everyone. Thank you, Rodrigo and Nora, for taking my question. Follow up on the entry-level cars, then a question about the overview of the segment and capital allocation. About the entry-level cars, Rodrigo, can you mention the effects on the pace of purchase and sale? Here I'm thinking of the effects on the Seminovos' business. Did people stop buying before the program, expecting the announcement? Did they buy more during the program? Did it go down later? I'd like to understand that effect, and not just on the sale of Seminovos, but also on the purchase. You already mentioned that, that a little. A teaser on the entry-level car is that it seems to me like the program was a catalyst to drop the list price of cars. That was probably already overdue, given a deflation in the industry cost and the BRL appreciation. There's always that expectation from the automakers and a concern that it could be a detractor in vehicle depreciation compared to other automakers or competitors. The teaser is to say that maybe part of the price drop, list drop would not come back after the program. Are there any metrics or numbers for specific models that you can mention that would prove or not confirm that theory? That's about the entry-level car. Another quick question: What do you think would be this best avenues for capital allocation? In subscription cars, I remember there was a discussion about credit risk... about being a type of CDC, and on the other hand, Zarp may have a more positive dynamic. I, I mentioned those two things. Maybe not too obvious, but that would be, I don't know, part of the allocation. Perfect, Regis. Let me talk about the Provisional Measure effect. The rumors started in the second way, excuse me, second week of May, maybe the 10th. Since we didn't have much information, we immediately stopped buying. In the beginning of the second week of May, we stopped buying, because imagine an effect that would lower the car price by BRL 8,000 is more than depreciation. To expect days or months to buy a car with a benefit would make a lot of sense. On the 10th and 12th of May, we stopped buying cars, except for the car... Actually, back then, we stopped buying 100% of the cars. On May 23rd, if I'm not mistaken, the government gave us more flavor about the program without giving any details. Actually, the 25th of May, without giving the details about how the program would work. We still didn't buy cars, and then we had to make a decision: how much we could decommission and how much we would sell. The first program that the government launched way back was supposed to last three months or four months, and it lasted two years. Back then, we decided to decrease decommissioning and sales because in the event the program would last for individuals alone for a longer period of time, we would have more time to lower our purchase pipeline and sale pipeline without affecting rental. If the government extended that and left, gave that only to individuals, we would have to make a very different, difficult decision. We would have to buy cars at worse prices than individuals or decrease our fleet, and that's something that we didn't want to do. Back then, the best decision was to decrease the rate of decommissioning and sales so that we could have more time to make a decision in the future. When the Provisional Measure was published in June, for individuals alone, we decided to not buy, and then for the ones that are higher than BRL 120,000, they were okay for fleet and RAC. In the last two or three days of the month, basically, where the government extends the program another BRL 300 million, then approves it for corporates, we bought fast. We bought almost 30,000 cars from June to beginning of July, and 23,000 are within the benefits of the Provisional Measure. That really affected that balance of purchase and sale. About your other question, that's a harder question. Automaker would probably not lower their list price. We were seeing some bonuses for consumers, shy bonuses, I'd say, and we monitor that. Not too strong, but just for some specific cars. With provisional measure, they lowered car prices and some even a little more than the benefit. What happened in most part is that the automaker included the bonus that they were giving in the ad as marketing. In fact, car prices dropped, in fact, according to the provisional measure, and now automakers are bringing the prices back up. They're doing that in the context of the model year 24. They're bringing up the price in the model year 24, but they still have model year 23 at a discount and at lower prices. The perspective, even given the financial terms of the automakers, is that they should go back to that price, and we shouldn't see deflation. Unless we see the US dollars at very low rates and generalized drop in commodities, there's no expectation on the automaker side to drop their prices, at least in the short term. In regards to the avenues of allocation, especially in the short term, you're going to see fleet and the Meoo, the subscription car, with the strong growth. Fleet in the short term should have a higher allocation of capital. We already see the demand heating up in rental, starting off with the daily rent and then goes through the app and then monthly rental. That should be in that order, that we should allocate capital. Marginally, but also with growth in heavy vehicles. Mexico is still very small. Like I mentioned, BRL 12 million in a quarter. Most of it was in expenses, in cars, 1,000 and some cars. In Zarp, in the 2Q, we raised the rates a lot and the demand settled, and now we see the return on growth. As I mentioned, the corporate rental should be increased in the future, and Zarp has increased that now. Okay, thank you for your answers. Let's move on to the last question from Pedro Pimenta from EQI Research. Please unmute, Pedro. Pedro, please unmute. We can't hear you. Well, to conclude, I'd like to hand over to Rodrigo Tavares. Thank you, everyone. Thank you for your presence. Our IR team is available for any further clarification. Have a great day.