Usinas Siderurgicas de Minas Gerais SA (OTCPK:USNZY) Q2 2022 Earnings Convention Name July 29, 2022 10:00 AM ET
Firm Contributors
Leonardo Karam – Normal Supervisor, IR
Alberto Ono – CEO
Thiago Rodrigues – Vice President, Finance and IR
Miguel Properties – Business VP
Américo Ferreira – Industrial VP
Carlos Rezzonico – CEO, Mineração Usiminas
Convention Name Contributors
Operator
Leonardo Karam
Good morning girls and gents and thanks for ready. Welcome to the Usiminas Convention Name wherein we’ll focus on the Outcomes of Q2 of 2022. I’m Leonardo Karam, Usiminas’ IR Normal Supervisor.
To those that need to follow-us in English, you could find the interpretation of the presentation on the Usiminas’ IR web site. We even have an interpreter for simultaneous translation, please choose the sound channel on the icon on the underside of your Zoom display.
All members are related on listen-only mode. [Operator Instructions] This video convention name is being recorded and broadcasted concurrently by means of Usiminas’ YouTube channel. Please be aware that this convention name is unique for traders and market analysts.
Please establish your self in your query to be answered. And for the sake of time, we ask to restrict to 2 questions per participant. Now, questions from journalists needs to be forwarded to the Usiminas’ Media Relations by cellphone 31-349989-18 or electronic mail [email protected].
Earlier than continuing, we wish to make clear that forward-looking statements made throughout this convention name concerning the corporate’s enterprise prospect in addition to projections, working, and monetary targets concerning its progress potential are forecast based mostly on the administration’s expectations concerning Usiminas’ future. These expectations extremely depend upon the efficiency of the metal sector, the nation’s financial scenario, and the worldwide market scenario, and subsequently are topic to vary.
With us as we speak is Govt Administration, our CEO, Alberto Ono; Vice President of Finance and Investor Relations, Thiago Rodrigues; Industrial VP, Américo Ferreira; VP of Company Planning, Gino Ritagliati; VP of Expertise and High quality, Toshihiro Miyakoshi; Business VP, Miguel Properties; the CEO of Mineração Usiminas, Carlos Rezzonico; the Govt Director of Soluções Usiminas, Leonardo Zenóbio; The Superintended Director Usiminas Mecânica, Fernando Mazzoni.
Initially, Alberto will start with a couple of remarks quickly after Thiago will current the outcomes. Then the questions made within the Q&A bit will likely be answered.
Now, I give the ground to Mr. Alberto. Alberto, you’ve the ground.
Alberto Ono
Properly, good morning to everybody. I thank all of you for collaborating in our earnings video convention name for Q2 of 2022. I wish to spotlight from our second Q outcomes.
Primary, I wish to point out an evolution and efficiency in all our enterprise models. Our EBITDA elevated 24% this quarter vis-à-vis final quarter and all models have contributed positively. That is one thing that I wished to focus on.
What’s attention-grabbing after we see the metal unit is the gross sales quantity within the home market, which has improved regardless of all of the unstable situation all through the quarter. And as a consequence, due to the home market and the worldwide market, particularly after we see the battle between Russia and Ukraine has been affecting us within the provide of uncooked materials value, worldwide costs of metal logistics. This can be a quarter the place there was lots of volatility and difficult facets.
However I consider that we now have been profitable and we’re delivering good outcomes. I wish to spotlight throughout this quarter, we now have renegotiated our debt. We’ve got dropped our debt. The — right here we had a R$700 million of our debenture that matured in 2023. Our debt has been prolonged as nicely. That is attention-grabbing as a result of we now have a long run and with decrease prices. So, this was additionally attention-grabbing.
One other side that I wish to spotlight of the quarter was the final cost parcel concerning the dividends of the outcomes of 2021 of R$634 million. If we add all of the dividends that have been paid out concerning final yr’s outcomes, I consider we now have R$2.1 billion rise because of this, that’s the biggest dividend payout for one yr in our historical past.
So, I consider this can be a crucial level that we must always spotlight and I simply wished to focus on that this was realized over the past quarter. Through the quarter, after we additionally analyze our ESG initiatives in our sustainability report concerning 2021 was launched in April. And right here you may clearly see all of our initiatives and all the things that’s being carried out concerning sustainability in Usiminas. This can be a level that’s necessary and we now have been capable of reveal what we now have carried out all through Q2.
And eventually, earlier than handing it over to Thiago, sure, we had optimistic highlights throughout the quarter, regardless of difficult moments all through the interval. And this can be a results of the crew’s laborious work. All groups are completely centered on the efficiency on delivering outcomes and in addition centered on adapting ourselves to the situations as a result of this can be a unstable situation. That is crew work and with this, we now have been capable of ship good outcomes. Because of the crew.
Thanks very a lot. I am going to give the ground to Thiago.
Thiago Rodrigues
Thanks, Alberto. Thanks to all which can be right here. It is a pleasure to be right here in my first video convention name along with the Govt Administration. Let’s go straight to the presentation. We begin with the highlights of this quarter.
We’ll begin with the metal unit gross sales quantity. Right here there was enhance within the home market when it comes to quantity. It’s important as a result of this can be a mixture of larger added worth that brings extra margins. There was a slight drop of 4% that reveals us stability on our gross sales quantity.
Now, after we see iron ore gross sales, there was a big enhance vis-à-vis final quarter, strongly impacted by rainfalls within the southeast areas. However after we see previous quarters, these 2.3 million tonnes characterize a really important quantity which is above common after we evaluate it to previous quarters.
Now, our adjusted EBITDA, as Alberto talked about, this can be a important worth. This has been a great quarter R$1.930 billion with a margin enhance of 23%.
And in then the following slide, we’ll see a rise in absolute values in all enterprise models. Internet revenue did not comply with the rise of the EBITDA due to the trade fee variation, which affected us in our greenback — in {dollars}.
Right here we now have the changes, the EBITDA and margins per phase, right here the consolidated consequence. Right here we are able to see that the margin has normalized. Right here we begin with 2021 that was an distinctive yr due to the restoration after the worst second of the pandemic when it comes to inventory, however this margin of twenty-two% in comparison with the previous is a optimistic margin.
Now, the metal unit and EBITDA of R$ 1.400 billion with a margin round 80%. As soon as once more as we already talked about, this was positively impacted by the nice costs of the interval and a greater gross sales combine centered on the home market.
Now, mining unit in an absolute phrases, there was a rise in EBITDA as a result of quantity as we talked about up to now slide, however with a margin drop, primarily impacted due to the price of export freights.
And through Q2, we exported over 90% of our iron ore quantity and CFR. Now, resolution, in metal transformation, optimistic impact of the costs of the quarter and the gross sales combine.
Now, following to different monetary indicators. Now, we go to working capital that had a rise of 14% throughout this quarter due to the costs of uncooked materials, which affected your complete chain.
So, the worth of completed merchandise impacted accounts receivable and a small half in quantity of uncooked materials. Right here we now have homework with a view to drop our working capital within the upcoming quarters. We can not neglect that there will likely be a rise in working capital, particularly over the past quarter of the yr due to the stock of slabs for the refurbishment of Blast Furnace 3. Right here we are able to see metal inventories, the controls are managed and that is round 63 days of stock, which may be very perfect for this second.
Now, our subsequent slide, right here we now have our internet debt. Once we evaluate it to Q1 and Q2, there was a drop of R$1 billion. It is necessary to say to the era of operational money was optimistic above R$600 million offset by a CapEx that we now have already accelerated. We have seen this and it primarily impacted by the cost of the complement of the dividends of 2021, which was R$1 billion.
Our debt elevated R$500 million due to the trade fee variation as I beforehand talked about. Subsequently, we ended Q2 with a internet debt of about R$450 million. Nonetheless is a comparable lever with an indicator of internet debt over EBITDA of R$0.05.
On the decrease half, you see the profile of the debt. Right here, we rolled over our debt with the eighth dimension [ph] of debentures the place we use this worth to pay the debentures of the seventh dimension [ph] that mature in 2023. We prolonged that profile and now the maturing dates are between 2027, 2028 and this provides us extra breath with a view to fulfill our CapEx commitments for 2022 and 2023.
Now, talking of CapEx, our subsequent slide reveals the acceleration of our CapEx on Q2. This was anticipated nonetheless barely beneath what we had deliberate and we do have a steering of this yr’s CapEx of R$2 billion. And we stay with this steering, what which means that throughout the second semester, there will likely be an excellent larger enhance of the CapEx disbursement, particularly centered on the retrofit of Blast Furnace 3 plan for subsequent yr.
Now, now our ESG agenda are targets in particulars are in our press launch and we’re on the fitting path. We have achieved 10% of our targets, 80% in step with planning and 10% want extra focus with a view to fulfill our goal by the tip of the yr, however that is nothing that issues us.
And right here we now have numerous highlights. Right here Mineração Usiminas additionally obtained certificates of a de-characterization of its Central Dam. There was upstream, we now not have upstream dam and you may see how the world has been reintegrated to nature with over 12,000 plant [indiscernible] of native species.
And right here over the past quarter, we carried out the Third Range Week. This can be a program that’s already a part of the corporate’s tradition. We need to promote these years. And we mobilize your complete firm and digital and in-person actions. We speak about variety, like race, gender, variety, and different issues.
One other factor that we wish to say concerning our ESG agendas, the restructuring. So, right here now we now have a Normal Supervisor that stories on to Alberto that reveals the significance that we give to this agenda.
These are our outcomes. You already had entry to them. Now, I’ll give the ground again to Leonardo, so we are able to begin our Q&A session.
Query-and-Reply Session
A – Leonardo Karam
Thanks, Thiago. Now, we’ll go to our Q&A session. Our first query for Miguel. Concerning metal gross sales, Edgard de Souza from Itaú BBI asks about what is going to drive the drop of gross sales quantity of steels throughout the subsequent semester as a result of seasonality in seasons. The third quarter is the stronger, might you inform us which sectors are driving the demand that are weaker?
Miguel Properties
Thanks, Leo. Good morning, Carlos. I would not say that there’s going to be a drop in quantity after we analyze the sectors the place we take part. We are able to distribute it in three main markets within the home market; the car sector, industrial sector, and community distribution.
Within the case of the auto business, as was elevated by Fabia [ph], nicely, they’re nonetheless struggling with volatility and uncertainty as a result of the supply of parts and spare elements, all the things as a result of Chinese language scenario.
Now, the economic sector is a spotlight within the quarter and we consider that it’ll proceed being a spotlight within the upcoming quarters as a result of the nice interval of the agribusiness and the alternatives to export to totally different sectors like electrical home equipment after we see the introduced — the outcomes introduced over the past days of necessary prospects of Usiminas on this sector, it’s clear to see that these sectors are present process a optimistic second not solely due to the scenario of the agribusiness nationally — internationally and export alternatives of the sectors due to the trade fee.
Now, distribution, we’re seeing sure stability in distribution is what might endure due to the worldwide scenario as a result of this is a crucial turmoil with excessive volatility and excessive uncertainty due to the conflict between Russia and Ukraine, the COVID zero coverage of China, the excessive rates of interest at a world degree that may impression the power of consumption and funding, which can impression the economies and in addition using metal at a world degree.
There are sectors that carry out positively like the economic sector, the auto business nonetheless with uncertainties, however with alternative, if there’s availability of larger volumes of semiconductors and spare elements and distribution that we now have to watch due to the volatilities and uncertainties within the worldwide market. What’s optimistic is the soundness that we see within the home market when it comes to demand. Some sectors carry out higher than others as we now have already defined.
Leonardo Karam
Thanks, Miguel. Now, we now have a subsequent query for Thiago. Quite a lot of analysts need to find out about prices. We’ve got Henrique Marques from Goldman Sachs; Edgard, Itaú BBA; Isabella Vasconcelos, Bradesco BBI, they usually’re asking the next, how do you see the value strain for the second semester, primarily due to the coking crops if you should have vital pure fuel. However Edgard says, however uncooked materials like the value of slabs and iron ore have dropped.
And Isabella additionally asks concerning the outlook of CPB per tonnes on the upcoming quarters. Thiago you’ve the ground.
Thiago Rodrigues
Okay, thanks all in your query. Now, concerning the associated fee construction of the corporate, we count on it to stay just like what we had final quarter. I am speaking about Q3, the fourth quarter is distant. Subsequently, it is tough to speak about it, however concerning our construction, our consumption construction, we anticipated to stay just like the considered one of Q2, subsequently, the consequences of the coking crops will stay steady throughout the second semester and the value impact will fluctuate a little bit bit.
There are uncooked supplies which have a differentiated lead-time like slabs, we nonetheless we’ll purchase them — devour them throughout the third quarter. They have been purchased at excessive costs, we’ll solely see the drop of value considerably throughout This fall. Subsequently, so I consider that we’ll see a stability within the construction with a variable costs in slabs and coke and we’ll obtain a little bit little bit of this profit from iron ore.
Leonardo Karam
Thanks, Thiago. Our subsequent query is about our CapEx. That is for you, Thiago. Right here we now have from Edgard, Itaú and Ricardo from Morgan Stanley. Might you give us extra shade concerning the mandatory funding to retrofit the coking plant. The expectation of the corporate is a linear restoration in coking plant, or nicely one thing impression this normalization? Edgard says that concerning the CapEx, any replace concerning the R$1 billion which can be R$2 billion that’s our steering, that features the retrofit of Blast Furnace 3? They usually additionally requested concerning the coking plant, if there’s something we count on concerning CapEx? Thanks.
Thiago Rodrigues
Properly, our steering stays at R$2 billion. We — there isn’t any related CapEx enhance that has already been permitted. Now, concerning our coke and coking crops, as we talked about in our materials details, that is below examine with a view to lengthen the lifespan of coking plant. We’re doing preservation works that will be upkeep that present regularly what our blast furnaces regularly again in operation. So, we’re — we consider that the rise will likely be linear right here.
What might what might take longer to speed up the return of the blast furnace can be the shutdown of Blast Furnace 3. This will likely be linear, however with a possible of a extra important return. As of the second that Blast Furnace 3 goes — turns into operational as of the second semester of subsequent yr.
Leonardo Karam
Our subsequent query is from Lucas Yang, JPMorgan is for Américo. I would really like extra shade concerning the coking plant. He needs extra info concerning the coking crops and what do we’d like for this restoration? Américo?
Américo Ferreira
Properly, thanks in your query. Including to Thiago’s feedback, we now have two technologists that help us with these actions and there’s a third technician that’s an skilled in assembling coking crops. So, mainly these are preservation actions, the extent of waste was larger, subsequently we wanted larger interventions and we needed to cut back our coke manufacturing and as Thiago stated, we now have a plan for each coking crops.
And we would like the expansion to be linear as a result of technique that we now have, as a result of they’re carried out by means of blast furnace blocks. Now, after we take into consideration the resumption of Blast Furnace 3, we consider that all through the interval, there will likely be a greater evolution throughout the second semester of 2023.
Leonardo Karam
Thanks, Américo. Now, for me Miguel. Costs, they’re asking about value. Ricardo Monegaglia from Morgan Stanley, Isabella from BBI. She says, what could make the metal value of Usiminas evolve totally different from the costs introduced by consulting corporations.
And Isabella says if there’s strain for reductions for distributions after the granted reductions? And what concerning the premium, how will we see the premium of nationwide materials vis-à-vis imported materials. Miguel?
Miguel Properties
Thanks, Ricardo, Isabella. That is an attention-grabbing query Ricardo, as a result of in actuality, though we speak about distribution costs and let’s imagine concerning the sale of extra business product, the portfolio of our merchandise is essentially the most noble portfolio within the Brazilian metal business. And this consists of distribution as a result of after we speak about sale to Tier 3 and 4 within the chains of the totally different industrial sectors, we already embody these gross sales as distribution, as a result of there are sectors from the distribution channel which can be a part of these adjustments of various industrial sectors.
Sure, we might have a median value within the distribution sectors barely above the remainder of the market due to the combo of merchandise offered to this sector. Isabella concerning premium and reductions, after all, we’re observing nice volatility within the variables which can be a part of the premium. We’re speaking about worldwide cargo, we speak about trade fee, and worldwide costs.
At the moment, after we do our math, we are able to speak about a premium of round 15% [ph]. This can be a premium that we consider does not incentivate. Right here we see a drop — a gradual drop of imports in our home market.
There are imports from China which can be centered and coated merchandise and there are initiatives from the home market that aren’t a part of the metal business. So, we count on to proceed with the gradual — we count on a gradual drop of imports within the home market.
Properly, strain is a part of negotiation. We’ve got administration and in Usiminas, we’re liable for optimizing the profitability of our enterprise guaranteeing the competitiveness of our companions within the home market.
Leonardo Karam
Thanks, Miguel. Subsequent query from Victor Kietzmann from Small Caps Portal and that is for Thiago. Thiago, he needs to find out about working capital. What’s your expectation of evolution of working capital for Q3 discounting the refurbish of Blast Furnace 3.
Thiago Rodrigues
Thanks Victor. We’ve got not introduced a steering of working capital, however should you see the values of the principle uncooked supplies market index says, you may see that there was a drop. Nonetheless, as I discussed numerous uncooked supplies have larger lead-time.
So, as soon as once more, we’re nonetheless receiving and processing the slabs that we purchased at a really excessive value. So, I might say that based mostly on this evaluation, I consider that the primary impression is that there will likely be a drop in working capital, however there’s this element that may give extra stability to this worth.
Our prospect is, as soon as once more, as costs will drop sooner or later and subsequently, they are going to enhance due to the rise of extra slabs due to the shutdown of Blast Furnace 3.
Leonardo Karam
Now, query from Ricardo Monegaglia from Morgan Stanley. That is the inventories of Blast Furnace 3, why construct a list of slabs with the manufacturing of slab of Blast Furnace 3 as a result of most likely your price is decrease than the money price per tonne. Miguel?
Miguel Properties
Good morning, Ricardo. Now, due to the schedule and planning of the shutdown of Blast Furnace 3, our expectation is to construct the stock as of the start of the This fall of this yr. As you have been knowledgeable, the expectation — and Blast Furnace 3 as of October from right here up until the day we’ll observe the volatility and the evolution from the costs of uncooked materials which can be a part of the price of our personal manufacturing and in addition the evolution of the value of the slab.
Now, on the opposite aspect, we should perceive that the noble mixture of Usiminas particularly to function the auto sector and the economic sector the place we now have an added worth and that is mirrored on our costs and operational margin. This is the reason it is sensible to have our personal manufacturing to service these sectors that don’t purchase business slabs.
Now, business slabs are — it is simpler to search for them and discover them out there or by third-party. And that is extra associated to the indexes that you simply see within the worldwide slabs. On one aspect, we now have to see the evolution of the assumptions and the product mixture of sectors the place Usiminas participates.
Leonardo Karam
Thanks. Our subsequent query for Thiago. About — he needs to know if the corporate proposes curiosity of our personal capital concerning the outcomes of the primary semester. This may be when it comes to dividends?
Thiago Rodrigues
Thanks in your query. No, we do not have this. We do not count on this. We’ll see the outcomes of the yr with a view to see what sort of proceeds we’ll give to our shareholders.
Leonardo Karam
Our subsequent query is for Miguel from Safra. He needs to find out about imports. How do you see import penetration in galvanized merchandise? Is the corporate adopting a unique business technique that — totally different from what you’ve got had. Miguel?
Miguel Properties
Good morning, Vinícius. Thanks in your query. As a matter of truth, imports of coated that come from China have elevated considerably up to now months 2021 and the primary semester of 2022. We see excessive imports of coated merchandise, and this — and right here — and that is attributable to the incentives that the Chinese language authorities affords to export a majority of these merchandise. Right here this we think about as fierce competitors, this loyal competitors. And we would like — we’re speaking to the federal government to see what can we do from right here on.
Now, Usiminas has no share on this business phase of coated merchandise. We dedicate nice a part of our coated product to the auto and the economic sector. After all, we additionally take part in particular initiatives of energy.
In actuality, the impression of those imports for Usiminas, nicely, is low. We proceed with geared gross sales and prioritizing servicing industrial and auto sector right here in Brazil and in regional markets like Argentina.
Leonardo Karam
Thanks, Miguel. Our subsequent query for you, as nicely, Miguel, concerning the costs at [indiscernible], he is a person and he asks concerning the value readjustment that you simply count on in April of — was this carried out in April?
Miguel Properties
Sure, the rise of value was carried out. That was round 50%, 60%, however — and these have been readjustment of contracts that have been up to date in April.
Leonardo Karam
Thanks, Miguel. Subsequent query for Thiago. Thiago CapEx follow-up of Sidney [indiscernible], particular person. He needs to find out about your planning with a view to speed up the CapEx bills. Is that this concentrated throughout Q3 or This fall. Thiago?
Thiago Rodrigues
Sidney, good morning. I consider that This fall, the nearer we get to the shutdown of Blast Furnace 3 actions enhance and in addition the disbursements. So, subsequently, we’ll see a rising curve up until This fall.
Leonardo Karam
Thanks, Thiago. One other follow-up concerning metal quantity from Isabella Vasconcelos, Bradesco BBI. Might you elaborate if the steering of quantity for 3Q considers larger drop off export and as stability a slight enchancment within the home market? Miguel?
Miguel Properties
Isabella, we might speak about his stability and we don’t see main variations on this combine. Definitely, the scenario of the agribusiness sector. And there are additionally huge initiatives of energy in oil and fuel and renewable. This may very well be a great situation for heavy plates. However we perceive that we’ll not see nice variations when it comes to the gross sales combine after we evaluate it to the second semester.
Leonardo Karam
Thanks, Miguel. Subsequent query for Carlos Rezzonico from Leonardo Neratika from Financial institution of America. He needs to know the outlook of price per tonnes within the mining unit within the upcoming quarters.
Carlos Rezzonico
Thanks. Thanks, Leonardo in your query. The prices will preserve themselves on the present degree. We need to cut back prices, however the actions that will likely be carried out is not going to be carried out in a short-term. This can even depend upon the gas costs as a result of as you understand, one of many biggest prices can be gas. I am speaking about prices inside our operations. I am not speaking about different prices. However these are logistic prices inside our operations. I am not eager about main variations within the upcoming quarters or months.
Leonardo Karam
One other query, Carlos about gross sales quantity. Isabella Vasconcelos from Bradesco BBI needs you to elaborate on the outlook of iron ore quantity as a result of robust efficiency of Q3 this yr.
Carlos Rezzonico
Properly, Isabella, thanks in your query. We try to enhance the efficiency of our plant. We’ve got been capable of obtain good outcomes throughout Q2, however we didn’t obtain the efficiency that we’d like — wanted. The collapse of the plant impacted Q2 in some areas. We’re correcting many of those gaps. And in the intervening time, we’re sustaining our steering that’s between R$8.5 million and R$9 million. This after all will rely available on the market and what I imply — I am not speaking about value circumstances from China, however I additionally confer with one thing that would occur with freight, with logistic what can occur with reductions, reductions have elevated considerably within the final month.
If market circumstances preserve themselves on the present degree, our steering will likely be maintained. Now, if this adjustments, we should analyze what’s the greatest situation for our manufacturing.
Leonardo Karam
Thanks, Carlos. Our subsequent query is for Miguel concerning Soluções. Leonardo Neratika from Financial institution of America. He asks what can we count on concerning margins within the transformation phase from right here on. Miguel?
Miguel Properties
Good morning Leo. No, clearly, we have seen a super end in Soluções Usiminas along with all the things that was carried out in effectivity, productiveness, and efficiency of our crops and totally different service facilities and options. There’s a optimistic impression due to the rise of value within the home market and the impression due to the price of inventories.
Now, after the optimistic cycle of value enhance, we are able to count on the return of the normalization of the enterprise attribute that has service facilities for cars and business and one different factor geared towards distribution.
Leonardo Karam
Thanks, Miguel. Our subsequent query for you, Miguel. This comes from Arthur Biscuola from Santander. He needs to know concerning the demand. How is Usiminas’ order e-book, are there alerts of a slowdown? Miguel?
Miguel Properties
Arthur, as we already talked about, we’re seeing sure stability within the consumption and demand of the home market along with volatility uncertainties and turmoil within the worldwide market. This stability is a crucial factor within the home market due to the habits and the resiliency that we see in lots of industrial sector. We discuss concerning the auto business, we consider that there are alternatives.
If there’s an enchancment in availability of spare elements and parts, that will be optimistic for the interior demand and for Usiminas’ order e-book. Along with the sectors, we see a optimistic situation for various initiatives which can be being carried out of the second semester related to vitality initiatives.
On this sense, we do count on a optimistic situation for heavy plates throughout the second semester and this can present us alternatives of sale. So, the message is we don’t see a slowdown, we’re seeing sure stability of the consumption and demand of metal within the inside market. And sure, there are alternatives that we might leverage from right here on.
Leonardo Karam
Thanks, Miguel. Our subsequent query from Arthur Biscuola at Santander, it is for Thiago. He needs to find out about potential galvanized line should you — if the corporate think about it, even when there’s a slowdown in demand from the home market?
Thiago Rodrigues
Properly, options to enhance Usiminas’ combine, we’re at all times searching for them. And we’re at all times analyzing these factors and galvanized slab can be considered one of these choices.
Now, this — we can not resolve this based mostly on a situation of midterm prices. We’ve got to see long-term demand. Nonetheless, this being stated Usiminas at all times assesses totally different options. However in the intervening time, we now have nothing to say concerning this matter.
Leonardo Karam
Thanks, Thiago. Carlos, volumes and costs for [indiscernible] provisional quantity of iron ore was in transit between the second to the third quarter. Might you say one thing concerning the provisional value?
Carlos Rezzonico
Now, talking of volumes that remained in transit and have not been hedged or haven’t got established value, we’re speaking about 500,000 tonnes at a median value of R$118. That is the one info that I might provide you with proper now.
Leonardo Karam
Thanks, Carlos. Our final query for Miguel. Miguel, Luis [indiscernible] from Meta Asset. He needs to know extra about costs. I wish to know what’s your expectation for the common metal value traded on Q3 vis-à-vis the second quarter of 2022.
Miguel Properties
Luis, Usiminas doesn’t announce future occasions. However what I can inform you to calculate future costs, the common value of June is in step with the common value of the quarter. On the opposite aspect, after all, there have been reductions that have been carried out or given all through the final a part of the quarter due to the evolutions of the variables that impacted value. That is for distribution.
Now industrials sectors, they replace their contract, based on the attribute of every one of many contracts and sectors and the auto sector maintains mounted costs due to their contracts.
Leonardo Karam
Thanks, Miguel. Properly, our Q&A session has come to an finish. I wish to hand it over again to Alberto for his remaining remarks. Alberto, you’ve the ground.
Alberto Ono
Properly, I might identical to to thank all of you as soon as once more for collaborating in our video convention name. And we count on to see you throughout our subsequent incomes convention name. I wish to spotlight that we face a difficult situation internally and domestically, however our crew is doing its greatest to ship one of the best consequence.
Leonardo Karam
Thanks, Alberto. Properly, we thank all of you in your participation. Ought to you’ve doubts, our Investor Relations crew is at your disposal to reply any questions.
