Companhia Siderurgica Nacional SA (SID) 2013 Q3 法說會逐字稿

(Interpreted) Good afternoon. Thanks for waiting, and welcome to CSN's conference call regarding results for the third quarter 2013. David (inaudible), the Executive Officer (inaudible) would like to inform you that this event is being recorded, and all participants will be in a listen-only mode during the conference presentation. (Operator instructions.)

We would like to inform you that we have simultaneous webcast, and [that] this may be accessed by www.csn.com.dr/IR, where you will also find the slide presentation. The slide presentation will be controlled by you. There will be a replay service for this call on the website. We would like to inform you that, due to the large number of participants, the Company will answer only [up to two] question per participant, with no right of reply. Therefore, we kindly ask you that all the questions be [asked] at once as soon as the line is opened by the operator.

Before proceeding, let me mention that forward-looking statements will be made under the Safe Harbor Securities Litigation Reform Act of [1996]. Forward-looking statements are based on the beliefs and assumptions of CSN management and on information currently available to the Company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that [general] economic conditions, industry conditions and other operating factors could also affect the future results of CSN and could cause results to differ materially from those expressed in such forward-looking statements.

Let me now give the floor to Mr. David Salama, CSN's Executive, Investor Relations Officer, who will present the Company's operating and financial highlights for the period. Please, Mr. Salama, you may start.

(Interpreted) Good afternoon. Thank you very much for attending CSN's conference to talk about the results of the third quarter 2013. We have with me CSN's executive officers.

Let's start with slide number three, where we see the results [for] the third quarter of 2013. CSN posted a record net revenue of BRL4.7 billion in 3Q '13, 15% up on the second quarter of 2013, mainly due to higher revenues from mining sector. [Vis a vis] the third quarter of 2013, the results are up by 23% basically due to the increase in revenues from mining and steel industry.

We must emphasize that, year-to-date, net revenue came to BRL12.4 billion, a 15% increase over the same period of 2012. Consolidated gross profit totaled BRL1.4 billion in 3Q '13, up 35% to the second quarter of 2013, with a gross margin of 30% and a net (inaudible). [Investments] in the third quarter totaled BRL838 million, [in] that BRL234 million were to the steel industry, BRL215 million to the mining industry, and BRL367 million to logistics as we continue to consolidate Transnordestina projects in the third quarter '13, and that BRL301 million was [disbursed only to] (inaudible).

Adjusted EBITDA totaled BRL1.7 billion in the third quarter of 2013, 51% up on the BRL1.1 billion reported in the second quarter of 2013. The net margin is the largest since the fourth quarter of 2011, an increase of seven percentage points compared to the second quarter of 2013.

Let's move on to slide number four, where we see the results broken down by segment. The steel segment accounted for 60% of the net revenue, and 39% of total EBITDA in the third quarter 2013. Mining, on the other hand, reached 31% of net revenue and 51% of EBITDA.

Now, let's go to slide number five, showing the detailed results for the steel segment. Let's start with the left-hand corner. 1.5 million tons of steel sold in the third quarter of 2013 was 3.5% below the second quarter of 2013. You must remember that the second quarter of 2013 was the second best quarter in steel sales in Company's history. [From] total sales, the domestic market accounted for a 77% share, 20% through our overseas subsidiaries, and 3% exports. Total steel sales in [YTD] amounted to 4.7 million tons, 8% up year-to-year results.

Still on top, now on the right-hand side, net revenue from the steel operations area reached a record amount of BRL3.2 billion third quarter of 2013, 2% up on 2Q '13, basically fueled by higher pricing this quarter. The average net revenue per ton in the third quarter of 2013 was [BRL2.043], an increase of 5% over [BRL1,844] posted in the second quarter '13. YTD, net revenue of BRL9.3 billion for the steel operations is also a record, 17% over the same period of 2012, with a highlight for the volumes sold in the period.

At the bottom part of the slide, we're talking about the EBITDA. The EBITDA adjusted for steel in the third quarter was BRL672 million, up 9% from the second quarter, whereas the adjusted EBITDA margin increased 1% and reaching 21%.

On the next slide, we have the same breakdown now focusing on mining. We once again start on the top left-hand side of the slide, where you can see that mining sales (inaudible) sales in the third quarter reached 7.7 million tons, 20% up from those seen in the second quarter, reaching a total of 4.8 tons traded by CSN and 2.9 million tons by Namisa. Also would like to highlight that the volume of iron ore shipped in Itaguai port reached a record of 8.3 million tons in the third quarter due to the startup of our new port capacity in Tecar, which ships 45 million tons a year. In addition to sales to our customers, CSN additionally consumed 1.5 million tons of iron ore in the Presidente Vargas Steelworks in the third quarter of 2013.

Still on the top side of the slide, now the right-hand side, we see that the third quarter net revenue from mining reached a record level of BRL1.6 billion, which represents 67% higher than the previous quarter, reflecting primarily higher sales volume and also higher prices. Our average price for CSN reached BRL105 per ton in the third quarter as compared to BRL89 per ton charged in the second quarter, which means an increase of 18%.

In the third quarter, EBITDA totaled BRL872 million, which was hefty, a 119% increase on the previous quarter. The adjusted EBITDA margin reached 53%, 13% up from the second quarter of this year.

Now coming to slide seven, we will present the evolution of the EBITDA, comparing the second and third quarters of 2013. The EBITDA of BRL1.7 billion in the third quarter recorded a significant growth of 51% comparing to the previous quarter. Positive impacts was a significant amount of sales of higher price [of our] mining ore, (inaudible) dollar against the real [as] higher prices of steel production. On the other hand, there was a slight decrease due to the lower sales volumes in the steel industry.

We'll now move to slide number eight, where we have our net debt. The net debt over EBITDA dropped from 3.9 at the end of the second quarter to BRL3.6 times at the end of the third quarter. Net debt at the end of the third quarter was at -- the net debt actually at the end of the quarter was at BRL17.8 billion, an increase of BRL.9 billion as compared to the end of the second quarter, with a gross debt of BRL31.1 billion and a cash position of BRL14.4 billion.

The total gross debt at the end of September, 64% share was denominated in reais and 36% in foreign currency, namely US dollars. In this position, 89% of the debt is long-term, and 11% short-term. CapEx for the third quarter totaled BRL800 million. Disbursement for the charges of BRL700 million, the payment of dividends and interest on shareholders equity of BRL400 million, and an increase in working capital of BRL500 million, in addition to other effects of BRL200 million, which contributed to the increase in net debt, which were partially offset by an EBITDA level of BRL1.7 billion.

That basically is the end of my presentation. We can now move on to the Q&A session. Thank you very much.

(Interpreted) (Operator instructions.) Marcos Assumpcao, Itau BBA.

(Interpreted) Good afternoon. First question regarding the [Transnordestina] project. Could you give us an update regarding the project, and also what do you think recent changes may impact in terms of future results? And please, if Martinez could talk a little bit about the Steelworks, the increase -- the average increase of 5%, could you please give us some color as to what is exchange rate, what is increase in price? And also, if you could tell us about the negotiations with the automotive industry regarding higher prices for the fourth quarter or for the beginning of next year.

(Interpreted) Good afternoon. I'm going to ask Martinez to answer the second question first regarding the steel market, and then I'll go back to the first question.

(Interpreted) Good afternoon, Marcos. As to the market conditions, it's important to remember that, in spite of the very good year that we've experienced in 2013 regarding steel, we have a GDP increase of 1.1% to 1.3% still way below what we consider to be something reasonable, which would be 3% to 4%. In spite of that, the expectations for next year are to work with a GDP increase of around 2% comparing to 2012, which was minus .8%.

And now, talking about the automotive industry, the [perspectives] are good. In terms of steel consumption, we project to close the year with 14.7 million tons, which would mean an increase of 4% regarding last year. As to the several different industries, starting by the automotive industry, we expect a total growth of 6%, and the expectations for next year are around 5%, with special highlight to the truck industry, which has increased 11% to 14% in 2013, and automobile sales are stable, although, at the end of the year, we saw a rise in inventories at the dealerships.

Another important highlight regard the area of agricultural machinery, which should [boast] an increase of 15%. And an industry that has not picked up yet, which is the civil construction industry, this year should grow around 2% only in spite of all the announcements regarding infrastructure construction work for the World Cup and for the Olympic games. We had an 8% increase regarding commercial and industrial work, and also the increase of steel regarding this portfolio.

As to pricing, if we compare YTD, you see 11.5% year-to-date, I mean, in the distribution area, we consider an increase of 10% to 12% for the industry as a whole. This increase has already been factored in, but there's still some deals going on regarding the automotive industry, and we should come to a conclusion by the end of this month. Part of the increase that we see in the rise in the net revenue has to do with a better mix, which was around 2% to 3% in the case of CSN. You also asked about the prices with the automobile industry. I think that was it, right, and the exchange rate.

When we talk about exchange rate, it's very important to talk about the premium that we have for imported materials vis a vis domestic. We are working with a 2% premium for the imported material.

Let's talk a little bit about the Transnordestina project. Even though those documents have been signed, they were signed on September 20 of this year, the main objective was a balance of the concession that we had, the economic balance. So, what we have now with us are documents that -- which have been signed and which will have an important impact on our numbers.

So, I'll try to summarize to you what the agreement entails. We have a proportional spin-off in TSA. What we have is the old grid, the existing grid, and the new grid, which will be built in the coming years. Basically, when we talk about the old grid, CSN's stake is basically the same. There won't be any major changes.

The big news concerns the new grid, where we will basically have a reduction in CSN's participation basically due to a conversion which will be made involving debentures, and also a natural dilution arising from the physical evolution of the works up until the end of the work. In fact, that conversion is mandatory, and will take place at the end of the construction, which is scheduled for the end of 2016. The new timeframe for conclusion is 36 months, so we should finish those works in October 2016, and there was also an extension in the [consension] timeframe for the new grid -- the new grid, which was postponed up until [2057].

The CapEx for the project has also been reviewed. As you know, the previous CapEx was BRL5.4 billion. In fact, that figure has been reviewed upwards to BRL7.5 billion. Those numbers have been updated, and they are -- may reach up to BRL8 billion in updated terms. So, basically, you can see that, starting now, this will have an interesting impact on the Company's balance sheet once CSN -- we will no longer have control of the new grid. So, this will have a sizable effect, especially when we have the spinoff, which is scheduled to happen in the last quarter of this year. So then, we'll have been able to -- we will be able to see all of the effects of all those impacts in terms of the consolidated leverage level of the Company.

(Interpreted) Ivano Westin, Credit Suisse.

(Interpreted) Good afternoon. Congratulations on the results. My first question is about tax litigation. You reported an amount of BRL2 billion [after the] year 2009. Like you to give us some color on the estimated amount for 2012. And if in your assessment, do you plan to participate in the [Recis], the fiscal recovery program?

And the second question is you have not seen returning volumes for third parties. What is the status of that negotiation? What is the level of product that you're buying in reais and the price that you're selling it in foreign currency?

(Interpreted) Thank for the question. Daniel will answer your second question, and then I will go back to the first one.

(Interpreted) Good afternoon, Ivano. As you know, we like to announce the consolidated numbers for Namisa (inaudible) in case of iron and ore. But, what is happening today here in Brazil is that, because of delays in terms of force capacity, we have managed to do our homework, but we have been facing a very favorable condition to explore the ore in the state of Minas Gerais. We have been tapping that opportunity, and it has contributed significantly for our results.

And in what concerns contingencies arising from profits reached overseas, we need to look at the broad picture. In October 2013, tax authorities in Brazil launched a program to break down fiscal debt, known as Recis, based on law 865, and that was changed by a (inaudible) measure at the beginning of this week, which basically deals with income tax on the profit achieved by controlled companies overseas. And the date for people -- for companies to adhere to the program, the deadline is the end of this month, the end of November.

So, under this new tax recovery program, debt, which matured until December last year, can be repaid now in two basic different ways - a cash payment with a deduction of 100% of penalties, and the second option is a payment in 180 monthly installments with a 20% downpayment, a reduction of 50% interest rates, 80% in penalties, and 100% in legal charges. It's important to emphasize that, in this past -- in this installment option, both penalties and up to 30% of the principal will be able to be settled through tax loss credits.

So, it is a quite complex issue. That MP was just launched, as I said, this week, this (inaudible) measure, and we are still trying to understand it. And we will submit it to the Company's Board as soon as we have a more thorough analysis of the problem. And it will be up to the Company's Board to choose which way to go. And this will also depend on Brazilian company's competitive level. So, that's basically what I can say to you right now, numbers announced -- have been announced before. We have nothing else to add in terms of those figures. But, as soon as we have new numbers or new decisions made by our Board, we will inform the market.

(Interpreted) Renato Antunes, Brasil Plural.

(Interpreted) Good afternoon. Thank you for the opportunity. The first one about mining, we see a very strong (inaudible) and the [expansion] to BRL45 million, which is scheduled for next year. So, I would like to know how the projections are if you're going to expand as there is more availability.

And the second one about Namisa, if you are reaching an agreement in terms of capacity expansion, and if you could give us some color on how these deals are going.

(Interpreted) Let me first talk about Namisa, about Namisa's issue. Basically, what I've noticed is that the parties want to reach an agreement badly, and our expectation is that this agreement will be reached by the beginning of 2014. And we're aiming for a [convergence] of proposals. So, in terms of percentages of participation -- and this is basically what we're discussing now. But, we have very positive expectations. We see that the two parties are willing to reach this agreement. And as soon as we have more news, we'll get back to you. Now, I'll give the floor to Daniel, who's going to talk about the other question.

(Interpreted) We've seen a very important recovery along the years, and this can be seen by the figures. This recovery has to do with our effort in terms of deploying this expansions project and installing the [force] capacity, which was inaugurated a little while ago and was -- been very successful in our increase in production.

And this is indeed a consequence of the extension of the works that are reaching their final phase. In the past, we decided to change strategy and have some lines in production. We had a problem with the ore [retakers], and we have three new processing areas. And we now have some leeway, so we are keeping up, and we're trying to keep the pace and recover for the time loss, and so we are already working at full capacity.

So, our change in strategy was a very positive one. This year we've worked to prepare the mines so that next year we have all the conditions required to have our installed capacity at the port. We've made lots of investments in terms of Casa de Pedre. This is a large construction shop. It's now about to finish. We are finishing an important [slot] division in Casa de Pedre, where we're going to have space and capacity to fulfill our production [throughput] long-term.

We also bought a very large set of mining equipment. We already have two new loaders working since last month and lots of assembly equipment. At the beginning of next year, we'll have the mine, the deposits, and the rejects, or the waste area, everything prepared to operate at full force capacity. We are undergoing a very important phase finishing the work, as I said the last call. We are finishing the critical processes. And next year, we're going to have a pumping line to the rail terminal, and we'll finish the extension work with the railway loading capacity. So, we're at the end of this construction of Casa de Pedre. And by the end of the year, we'll be working at full force capacity.

(Interpreted) (Inaudible), BTG Pactual.

(Interpreted) Good afternoon. Congratulations on the result. Could you please explain that number of EBITDA moving to BRL392 million in the third quarter, whereas Namisa's volume was about the same quarter-on-quarter? And the second question was about suppliers. There was a dropping BRL460 million. So, I'd like to understand why this was. And when you talked about third party mining suppliers, if you have a better condition in terms of negotiations with those third party suppliers.

(Interpreted) I will start with the second question, if you could perhaps later explain the first question a little more thoroughly.

But, basically, we had an increase in working capital of around BRL500 million basically due to a decrease in the account for suppliers in the amount of BRL1.5 billion at the end of the second quarter down to BRL1 billion at the end of the third quarter. Part of that adjustment was due to the fact that we were still consolidating Transnordestina within our balance sheet. That had a significant impact on our balance sheet on the order of BRL300 million, BRL200 million to BRL300 million, and the remainder value can be attributed to a natural adjustment arising from our purchase strategy, especially on coal. This had an additional impact of around BRL240 million. So, basically, that explains that decrease in the balance account for suppliers, which was BRL1.5 billion in the end of June, and it's now at BRL1 billion.

I'd like to, if you can today, you could perhaps forward me your first question, and then I can try and understand your question better, and then get back to you.

(Interpreted) Thiago Lofiego, Merrill Lynch.

(Interpreted) Good afternoon. I have two questions, the first concerning the port. If you could give us the average price for iron ore in the third quarter, what's the fee you're charging at the port for third parties, and if you have a separate EBITDA for Sepetiba port, I'd like to have that, too. And then second question went back to Martinez, if you could comment a little bit on the competitive environment, if you see competitors gaining market share in the short-term, or if that's not the case, and if that premium from 7% to 12% is sustainable from your standpoint.

(Interpreted) Okay, Geraldo, I'll ask -- Thiago, I'm sorry, Thiago -- I'll ask Geraldo Morais, our Commercial Officer for Mining, to answer the first question, and then the second question will be addressed by Martinez.

(Interpreted) The price for iron ore in the first quarter was BRL105 per ton, was our best price in the year. We managed in this quarter to capture a significant part of our sales, because we were exposed to a different index, but we managed, especially in August, to sell some loads on the spot market at a fixed price, and that allowed us to capture the market at the right moment.

When you look at the whole year, when you compare the first half to the second half of the year, we can see that the volatility of the price decreased significantly. The first half, the monthly average, the spread between the highest and the lowest average was BRL40. The second half, that spread is around BRL10. So, as volatility decreases, and we think that is due to a reduction in inventories in China, we've been following capacity from Australia. [This was in the] pipeline for next year.

But, as inventories are very much reduced, China keeps on buying. They are on the verge of breaking production records on an annual basis in terms of steel, so we believe ore prices should remain at the level where they are, maybe slightly lower because of other competitors coming into the market. But, we do not share the vision that is coming into market that prices will plummet. We do not share that vision. We think prices [stand] to be slightly lower than what they are today, but still very good for our operations.

(Interpreted) Thiago, good afternoon. This is Martinez speaking. I'll talk about the competitive environment a little bit, and then I'll address the premiums on imported materials.

We have five points I'd like to mention, I mean, which are important to understand the steel business of our Company. The first one is supply and demand of steel. In Brazil, you have three mills producing steel in Brazil, and they are operating at a relatively high capacity. In the case of CSN, we are at the full capacity, something close to 98% allotted to the internal markets. So, my maneuvering space is very restricted in terms of volume.

So, what does [CNN] try to do? What I've been saying throughout the last three years, company's focus is working on the domestic market, and that's our intention, to still maintain those 98% level for the internal markets, also benefit from our important product portfolio and deliver to the market a package with a high added value that brings along an interesting service package, as well.

Something which is also very important is that we are trying to -- instead of concentrating our sales on retail and on increasing our customer base, what arises from that? Even though I am at full capacity in Volta Redonda and working at a rate capacity of five million, what we did was we converted our mix of the lower added value to a higher added value mix.

So, just to give you an idea, if I'm not wrong -- I might be wrong in my numbers here, but not too much -- but basically, 45% to 47% of our output today is linked to lines product, which makes the [sense] stand out in the market. And that will allow us to seize good prices at the right moment, but it will also reflect on our average price through very interesting improvements in terms of added value mixes of products.

Something else which is important and it -- which is linked to the premium, if we think of a [BQ] today at BRL540 -- let me get the right number here -- and if I bring this ]BQ] to Brazil with a dollar at 2.30 or 2.35, we have a premium of around 7%. That premium, I believe, if we're talking about BRL540 as the [fall] price -- so I mentioned 2.35, or 2.30, actually, 2.30 -- in the case of lined materials, because it brings along a service package, we are able to have better premiums. In the case of the zinc and flat sheets, that premiums hover around 12%.

I believe that level encompassing 7% to 12%, and when you take into consideration the supply and demand situation that we have right now, the sector's competitiveness, I think those numbers are sustainable. When we analyze the foreign exchange rate, it is even more sustainable because the foreign exchange rate as is is very bad. So, bad as it is, I think it is sustainable because the market is not very sure in terms of the importing material.

Another important point, which stands to benefit CSN, the level of indirect imports, because of programs launched by the government, such as the Inovar-Auto or Inovar-Auto parts, it will decrease the level of steel in products that arrive in the country via imports. So, this might take some time to happen, but I believe that, as early as the beginning of next year, some of the products which were coming into Brazil through indirect imports will be converted into made-in-Brazil products. And I mean 100% made in Brazil, not just the assembly of imported parts.

So, the steel will be totally processed in Brazil, which is a very positive situation for our markets. So, that [theme that] I mentioned, ranging from 7% to 12% within (inaudible), is quite viable, quite feasible. And CSN will carry on its strategy of investing in higher added value products and increasing our market platform, increasing our customer base.

And on top of that, in the beginning of the year, our client base will be expanded because our long -- our new plant will be put into operation. So, client [base] of around 3,000 clients, when you compare to 10,000 clients in our cement client base, so those client the cement base will help us in that we won't have our eggs on the same basket. We'll be participating in several markets and hitting a different range of customers in different segments.

(Interpreted) Leonardo Correa, HSBC.

(Interpreted) Good afternoon. Thank you very much for the opportunity. The first question about the negotiations with (inaudible), we haven't had any news about that. Is there anything going on, any deals? Have you finished the -- or have you closed any deals? Now, the SG&A, we saw an [expressive] drop in the semester in SG&A. So, can you give us some color on what's being done, on the initiatives that are giving -- promoting this decrease in expenditures?

(Interpreted) Thank you very much for your questions. Regarding the M&A transactions, I wouldn't like to comment. We don't want to disclose any deals. You know that CSN is always evaluating operations that would add value to our shareholders.

And the only thing I'd like to make clear is that, as we have already said in the past, we won't do anything that is not economically sensible. We're always trying to add value to the shareholders, provide return to our shareholders. So, what I can tell you at the moment is that there are no binding operations, and that we are always trying to close deals that will add value to our shareholders.

Not sure whether you remembered, in the last quarter we said that we are currently holding a very extensive program to reduce costs and expenditures in the Company, and this is something that's being rolled out very strongly, more specifically in certain business segments. We are trying to gain efficiencies, and this has already translated into some results, as you've seen in the figures that we showed. This will go on being so in the next quarters. We will have more efficiency, and we also have a program for maintenance, to recover productive units. So, all these measures added will lead to better results quarter after quarter.

(Interpreted) [Javierez Gabola], (inaudible). Carlos de Alba, Morgan Stanley.

Thank you very much. Could you comment a little bit about the guidance for next year in terms of CapEx volumes of iron ore, if you can distinguish between what would be Casa de Pedra and Namisa, but if not, at least in [Tora], as well as what is your view in terms of the volumes for steel operations.

And the second question is, if you can, give us a little bit more color as to how the negotiations with the auto steel makers are going. Do you feel that, given the good growth that we are seeing in that industry, combined with a weaker currency, that we can see a price increase between 5% and 10% to the auto sector? Thank you.

(Interpreted) Thank you very much for your questions, Carlos. Regarding -- well, basically, just to summarize what you asked, first questions regards the CapEx and the projection for 2014. The second question is about the automotive market. And this second question will be answered by Martinez.

Basically, right now, we are working in 2014's budget. We're reviewing the figures for CapEx and for results projections. And the figures will be submitted to our Board. As soon as we have the approval, we'll disclose these figures, both CapEx and projections in terms of volumes, for next year. We'll disclose them as we do every year.

Now, Martinez will answer the question regarding the automotive market.

(Interpreted) When I talk about competitiveness of the productive [team], in addition to cost, exchange rates, imports, (inaudible), of course these are the factors that we are always observing how competitive steel is in the supply chain.

The automotive industry, in spite of all the discussion surrounding it, for the last two or three years, the automotive industry hasn't had any price increases in Brazil. Quite the opposite, actually. If you noticed, the reductions and the advancement in terms of IPCA in the last three years, you see that the automotive industry has had a drop of 25% to 30% in prices in the last three years.

So, [the market], especially CSN, CSN has been more than in pace with the market. It has been [solidary] with the growth of the market in Brazil, not only the light vehicles industry, but also commercial vehicles and semi-trailers, trucks. So, there comes a moment when we need to sit down to discuss pricing vis a vis what happened in the last year.

So, we are negotiating with all the automobile industries, and this is being done very professionally. We want the entire sector to be benefit. They want to sell cars. I want to sell steel. So, I believe that, by the end of this month, we should strike a deal not only with the auto makers, because there's also a second [tier] and other areas in the industry, which are part of the same package.

CSN will most certainly privilege its portfolio of products. We're talking about prepainted materials. We have a plant in Porto Real, which is really state-of-the-art, ready to meet the needs of this industry, and with the extension that we have made, we still have idle capacity. So, we have all the conditions required for a happy ending for the industry by the end of this year.

(Interpreted) (Operator instructions.) Thank you. This concludes the Q&A session. I'll give the floor back to Mr. David Salama, IR Officer, for his final remarks.

(Interpreted) I'd like to thank you all for joining us today in this audio conference. I'd like to emphasize that our IR team will be available to answer questions that may not have been answered today. Once again, thank you, and have a nice day.

(Interpreted) Thank you. CSN's results audio conference is now over. Please disconnect your lines, and have a nice afternoon.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.