Good morning and thank you for standing by. Welcome to CSN Second Quarter of 2016 Earnings Conference Call. Today, we have with us the company’s executive officers. We would like to inform you that this is event is being recorded and all participants will be in listen only mode during the company’s presentation.

After the company’s remarks, we will begin a question and answer session when you will receive further instructions. [Operator Instructions] Today’s event is being simultaneously aired by webcast and can be accessed through the CSN’s Investor Relation website at www.csn.com.br/ir where you will find the slide presentation as well.

Please feel free to flip through the slides during the conference call. There will a replay service for this call right after the events close. Before proceeding, I would like to mention that forward-looking statements that are made during this conference are under the safe harbor and of the securities litigation reform acts 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 and they do not guarantee performance. Therefore, may depend on circumstances that may or may not occur.

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. Now, I will turn the conference over to Mr.

David Moise Salama, Corporate and Investor Relations Executive Officer who will present the company’s operating and financial highlights for the period. Please, Mr. Salama, you may proceed..

Good morning everyone. Thank you all for being here for CSN earnings conference call. I have here with me officers from the company as well. We will begin on slide 3. During the second quarter, we highlight EBITDA totaling R$855 million, a 17% increase over the first quarter of 2016 with an EBITDA margin of 19%.

During June, EBITDA reached R$320 million, showing a recovery in the domestic steel market and also according to the good figures in the mining segment.

In steel sales, we have reached 1,253kt, a slight expansion over the first quarter with an increased share of coated products, achieving 60% of the total sales for flat sales, a very expressive figure. In mining you have iron ore production totaling 8.5 million tons, with sales of 9.3 million tons in the same period.

The delivered iron ore costs went from 31.20 in the first quarter of this year to 28.20, a reduction of $3 resulting from the efforts we have been made of reducing cost and projections.

It is also worth noting that their working capital has been reduced and totaled $718 million during the second quarter and this is in line with our financial agenda that we have been disclosing to the market for a time of reduction, therefore in line with what we have said. Moving on we have the consolidated results in the fourth slide.

In the second quarter, net revenues of R$4.3 billion had an increase of 13%, compared to the first quarter, mainly due to a higher volumes and sales in mining and higher prices in sales. Concerning the second quarter of last quarter, net revenues totaled 18% higher.

Growth profit of 922 million in the second quarter is in line with the figure towards the first quarter and is interesting if we compare with the second quarter of 2015 we have had an increase of 10%.

For the quarter, we have loses of 42 million, which is significant when we compare to the first quarter of this year and also with the first quarter of this year and the second quarter of last year. The adjusted EBITDA totaled 855 million, 17 million higher than last quarter and because of the highest EBITDA in the mining segment.

And when we compare to last year, we have an increase of 7%. The adjusted EBITDA margin reached 19%. The net debt adjusted fell by 3%, compared to the first quarter totaling R$25.8 million, whereas the net debt flat adjusted EBITDA attained 8.3 times, which is inferior to the 8.7 times that we showed in the first quarter of this year.

Now, we are moving on to slide 5 where you can see the net results build-up. In this slide is a build-up for the second quarter, we will grow through the second quarter – the first quarter EBITDA and now reaching the loss in the first quarter of 2016. We reached R$855 million, an increase by 17% when compared to the first quarter of 2016.

To get to R$42 million in net losses, we have reached the EBITDA with the controlled companies, R$171 million with other expenses, R$110 million with taxes and social contribution in addition to the negative results of R$228 million. We have included the financial results of the jointly controlled companies and the equity results.

It is worth highlighting that the result was 95% better when compared to the previous quarter. In the next slide, you see the results per segment. You can see in the top part of this chart where you have the second quarter of 2016.

The revenue for steel totaled R$2.9 million, mining R$1.2 billion, logistics R$382 million, cement R$109 million, energy R$66 million. Net revenue consolidated totaled R$4.3 million out of which 62% comes from sales, 26% from mining, 8% from logistics, 2% from cement and 1% from energy.

On the bottom part of the chart, you have the adjusted EBITDA for the second quarter totaling $855 million, 40% of which growth through sales, mining 40%, 16% logistics, 0.8% cement and 3% energy. We will now move on to Slide 7 where we will have the results for the sales performance in the second quarter.

We see that the total sales of steel totaled 1.2 [ph] million tonnes above the first quarter and an improved sales in the domestic market totaling 53% of total sales where as the foreign market accounted for 47%.

In the top side through the right we have net revenues in sales totaling R$2.9 million, an increase of 2% compared to the first quarter of this year.

The EBITDA $369 million in the second quarter, 12% less compared to the $420 million in the first quarter where as the EBITDA margin went from 16% to 13% due to the stoppage for maintenance and also for the retake of the blast furnace #3 and therefore we had an impact with less overhead costs – fixed costs.

Now on Slide 8, for the second quarter, we see that coated steel sales totaled 60% of the flat steel market, so we have 85% in the foreign market and the rest in the domestic market.

From the total sales 37% of galvanized products, 11% for tin plates and we have hot and cold for 20% and 21% respectively, and we have 49% for distribution, 14% through the white line for home appliance and then we have 14% to automotives and 11% for construction and the rest for packaging. On the last bar chart, we have the foreign market sales.

In the second quarter, we had 219,000 tonnes sold by SWT in Germany, Lusosider in Portugal then you have 178,000 tonnes LLC in the U.S. 85,000 tonnes were sold directly, direct export. In the next slide, we have the steel cost competitiveness.

In the second quarter, the slab production cost was increased by US$280 impacted by a stoppage in the blast furnace #3 and then the retake up of the blast furnace. And this interrupted production for 22 days.

But it’s worth highlighting that as of June, the production cost went back to 280 million tonnes in line with our rate practice in the first quarter. And the stoppage was actually beneficial because of the inventory of steel products and this can be seen that we have reduced the working capital due to this event.

In the second quarter, the average net results per tonne was R$2,297 where as EBITDA per tonne was R$295 in the quarter. In the next slide, we have the performance in the mining sector. As you can see, in the biggest chart, we have an increase of 12% in iron ore sales totaling 9.3 million tonnes in the second quarter.

In the second quarter, the net sales totaled R$1 billion, 8% above than the first quarter of 2016 mainly due to the increased sales of iron ore as well as the impact of higher prices practise in exports. The EBITDA totaled R$365 million in the second quarter, 29% higher than the first quarter.

The EBITDA margin 36%, which was also above the first quarter by 3%. Now we are going to the mining cost competitiveness. Slide 11, once again, we see an efficient plan for cutting down cost, decreasing 10% in the cash cost of iron ore delivered in China, which obtained US$28 per tonne.

To the right, you can see the evolution of the EBITDA and the revenue and the EBITDA went up per tonne growing US$2 reaching US$11 in the second quarter. On slide 12, we have the cement segment performance. In the second quarter, due to the ramp up of the Arcos cement operation, we were able to increase sales by 4% to 594,000 tonnes in the quarter.

The net revenue totaled R$109 million in the second quarter and EBITDA margin at 6%. On slide 13, we have the results highlighting Sepetiba Tecon performance. In the second quarter, we had 32,000 containers in Sepetiba containers has dropped by 18% whereas the transport of steel products totaled 197,000, therefore increasing by 38%.

To the top right you have net revenues $45 million, EBITDA $11 million and a margin of 24%, therefore, 5% higher than the previous quarter. Now we go into Slide 14, where we will have the investments, consolidated investments for the quarter.

We invested R$473 million, R$271 million for the cement segment where we invested in the new clinker furnace in Arcos, which will begin producing this year’s sales. Then we have in steel, R$330 [ph] million improving the performance of the Presidente Vargas steel works and 61% in mining and R$13 million in logistics.

The next slide, which is number 15, we have the evolution of the working capital. In line with our strategy of reducing cash, we have seen the working capital totaled R$718 million, R$200 million less than the first quarter of this year due to the reduction of R$602 million in stocks and R$125 million in accounts receivables.

The inventory of finished products was reduced by 200,000 tonnes in the second quarter, which as percent 26%. Now, we are going to Slide 16. Here we have the debt for 2017, which we have seen is being closed. We are now working to postpone the payments of the following years.

On June 30, the average time was 6.4 years and the cost in Reais of 107% of the CDI in foreign currency 5.7% per year. Now, the last slide of this presentation, to the center, we have 52% of the debt is in domestic currency and 48% in foreign currency.

And you can see to the right, 44% and 48% of the EBITDA come from the domestic market where 53% and 52% respectively of revenue and EBITDA come from the foreign market. And this shows a natural hedging of the debt of CSN. Now, we will open for questions and answers..

Thank you. We will now begin the question-and-answer session for investors and analysts. [Operator Instructions] Our first question comes from Mr. Marcos Assumpcao from Itau BBA. You can start sir..

Thank you. This is Marcos Assumpcao. My first question is for the steel sector, we see an increase in the domestic market but also an improvement in coated products.

Could you tell us a little bit more about the improvement in the mix that was actually done and if the increase in cost reflects it in terms of distribution and in line with this, how do you see the premium in terms of the current levels of exchange rate for imports? And concerning tax generation, do you have a lot of liberation of working capital because of lower inventory due to the stoppage that you mentioned? Do you expect this to be partially reverted during the next quarter, and you have already increasing inventories again? Or do you think that inventories is at a more normal level now? And another thing is concerning the cost of production, I would like to have more information, you commented that slab went back to 280 in June.

Could you say a little bit more at this level? Has it stabilized in June and what will – is this the time for the third quarter or can really have some effects of the reduced fixed cost as well in the second quarter? That’s what I have to ask. Thank you..

Thank you for your questions. I’ll ask Martinez to answer all your questions..

Daniel, good morning. I’ll start answering what you asked on cost. Going back, we have that maintenance of the blast furnace #3 which was planned. It was expected to last 10 days. It was started on April 13 and finished on the 24, but went on to May 06. It was 22 day long. It was expected but it lasted more than we expected.

So what happened was that this currently took over inventory of finished products, it was 200 million tons more or less and we worked on inventory promoting a significant reduction of the company’s working capital. So today, blast furnace #3 is normal, it’s operating at four capacity.

The furnace #2 is under maintenance and we’ll be back to on operations in October, so we will have a brand new blast furnace #3, it’s totally complete and full fledged although we were delayed. And then the blast furnace #2 will be back on October 01.

So what today we said was that, we have a slab price that was normalized and it was normalized in the second quarter. Together with the increase in price, we are going to probably pick up margin in the next quarter.

So the cost is totally under control and in addition to the slab cost which is the most important that we have that had a very extra leads, we still have a target to reduce cost in other lines of the company to reduce internal cost of the other cost reduction programs that we have.

Concerning the price increase for the domestic market, going back we actually did three price increase in the domestic market in distribution, major networks and to the construction and oilfield industry excluding automakers. We had an increase in April, May and June. All these increases were implemented successfully.

With the automakers obviously we are still negotiating. CSN does not have annual agreements with automakers but the scenario is not feasible this year for another price increase in vehicle sector. So we are circling it for next year that for sure will have a two figure increase for the automaker sector.

In the distribution segment, this increase went up to the end of the line. It was integrated in the network in the chain actually and today it has mirrors in our balance sheet concerning the mix for this quarter in a very slight way. The mix was accounted for 8% and the increase is 5%. So this will still be reflected significantly in the next quarter.

Concerning the premiums, I think that’s also another important question. We must now forget that in China today the price level and China is our main competitor concerning imports. China today has maintained a B2 totalling $400, $420 per FOB ton.

If you take this price and you take this into domestic markets at 1.32, this gives a premium of 8% to 11% which is a sustainable premium in my opinion in the domestic market. So the same rationale goes to the hot rolled coil, cold rolled coil and galvanized as well because it has a level of capacity which is a bit stronger.

In case of strategy for CSN for the third quarter, we’ll still be working in diversifying products with adding value as well and to work in the niche market, that is our strategy. Concerning the inventory which was your last question is that, we should increase inventories, the inventories that we did with 540,000 tons.

If you think that we have a domestic level that’s fitting up again, this inventory only last one month if you consider all the companies outside. We can’t forget that for this inventories, we have SWT which we sell 70,000 a month, goes to 35 I would think for 70, 60 in exports that I do directly total 25.

So therefore there is no possibility of increasing inventory levels. What we want to do is to keep this level that was achieved in the second quarter..

Perfect. Thank you..

[Operator Instructions] Our next question comes from Leonardo Correa with BTG Pactual. Thank you sir, you may proceed..

Good morning everyone. Thank you for the call. My first question concerns the demand Martinez, we have seen that they are certainly leveling off not really significant, but the figures have not decreased anymore and maybe in the second half you will have more improvement.

So, at first 2017, how can one justify or, is there anything in the outlook for 2017 in the steel industry that shows although there will be a higher demand.

Because if we look in Brazil, the last 35 years the steel market products has dropped by 35%, what is the elasticity for the demand in steel? What should we expect? Should we expect a stronger demand for 27 and in terms of steel again if you can help us understand Martinez by giving your opinion because all of the protection is that we have in Brazil, the government now is analyzing an anti-dumping request of China and Russian clients, could you tell us the probability of this, especially given the global context, is there any sense what is the reason why Brazil should act in this way and another thing is the [indiscernible] diagram, what is the expectations for increase, is it around 5% and my last question is concerning the dam of the rejects products of the bioproducts.

We have been reading that there may be new legislation on this due to some adequate incident, I would like to know what are the risk that you have in your dams? What measures have been taken in order to protect and to act according to the new regulations?.

Leonardo, thank you for your questions. Before giving the floor to my colleagues I will like to announce that Benjamin Steinbruch, CEO and Chair of the Board is following our call and he is available to answer questions from the market as well.

The first question will be answered by Martinez in the steel segment and the last question concerning the dams, I will give to [indiscernible] who is our Commercial Director for mining..

Leonardo, good morning again.

You said something that was very important and I consider your opinion very clear and I have the rather same conclusion there is a potential in our country of an ample reform, therefore the demand potential would be more encouraging than the last years, the directions are positive than what we have noticed is that there are sectors that have recovered in the industry and this is clear to us.

The apparent consumption has reached the level that can’t get really worse. If you think that we are closing the year with an apparent consumption of 10 million and last year was 12 million and in 2014, it was 14 million. So, I have a view for 2017, particularly which is very optimistic.

I think that steel in 2017, first of all I think that next year’s GDP depending on the reforms that we have maybe much better than what is being expected and still may have an elasticity better than it has historically, more than 2.5% with additional figure and then the recovery of the factor may happen quickly than we think.

And I’m not, I’m being excessively optimistic. We have witnessed these kinds of moments in Brazilian economy. We have gone beyond and come back from rock bottom.

Another important issue is the level of imports that in Brazil we’ve had the import penetration that making it easier for the domestic market to adjust and to start to have the projection change, which are more aligned.

So, today you see a certain integration of projection change and today for penetration we may close the year with less than 600,000 times in import against 2 million last year. So, this is a scenario that is also very positive, the import levels and it makes it easier for us to transfer prices in the domestic market.

Concerning the dumping case, we suffered in the US as you have seen and therefore make it more difficult for us to export in our company in the U.S. We have suffered an anti-dumping of 34% and accounted heavy duty of 11%. So this process at 43%, less competitiveness in the US. This happened also in Mexico.

There are other countries smaller countries that are working against Brazil. Concerning the investigations Brazil has started a dumping case for flat steel in Russia and China. It was a law suit that we’ve started.

It was a process that we opened and we filed and this is in Russia and China and we are working to prove it and in another important issue that is having a good result is the non-automatic licensee of the imports.

The same in the treatment that the administration is giving to import and the message that Brazil has taken has put back the imports of materials.

So this has happening and has helped Brazil in a world that we are suffering in terms of exchange rates and protection is in crisis that is global today and these are my answers, now I’ll give the floor to [indiscernible] who will be answering the questions referring to the dam..

Thank you. Our dams in [indiscernible] has a license, it is safe, it has recently undergone two environmental inspections and we went through them successfully. The way the dam was built was the most safe, was the safest and now the dam is considered a reference in the sector. The work schedule for the dam is correct.

We are on schedule and there are two to three years that we have for the level of the dam that it is today. So that is the rate that we have. Now I would like to give the floor to Mr. Benjamin Steinbruch who would like to make some comments concerning the results for the second quarter of this year. Mr. Benjamin Steinbruch..

Good morning everyone. Good morning CSN personnel. I only managed to connect now. I like to participate briefly in this call to provide you with an overview of what we have been doing in the second quarter and the consequences that this may have for the effects concerning the results for the next quarter.

I like to highlight that I was not able to listen to the previous questions, but giving you some of my view concerning the prices in mining, we have been penalized because we are conservative and have opted to sell at a close price and because of the high prices in the second quarter and thoroughly in the third quarter we do not enjoy this peak in prices, but we will capture it in the next quarter.

So we will recover significantly in terms of margins and concerning the quantities we are optimistic, we are producing more than we forecast and I believe we are going to meet the [indiscernible] and would be over the [indiscernible] by 10% with quality price and margin and this we will be seeing in the third quarter concerning the steel price.

I heard the penultimate question we have had three price increases that have been effected totaling 10% each. There will be mirage in the next quarter and in terms of quantity you see that the high furnace #2 is being maintained and will be back in October first week and we believe there is demand and there is space for this production.

In the second quarter, we acquired IBQ [ph] plant to see the reduction and we are now back – we will be back with the second blast furnace in October. And we always look for added value, we prioritize the coated product and we believe that still we should have a quality lead that affects the margin.

We have operated the second quarter with an EBITDA margin of 18.7% and I expect for the next quarter a margin of 25% in terms of EBITDA. I think it is given and we are working very hard to meet at least this margin. What we have to do in terms of operations has been done. The cost control is very, very strict and of expenses.

We are negotiating everything that we can with suppliers. We have withheld investments. We have recently completed the last major investments that we have to do with the furnace of Arcos and now the investments are safe in terms of expenses and we intend that this will provide a significant improvement in working capital.

And as you have seen, the working capital rate was much better managed and we have seen a reduction in inventory and the postponement of purchases has resulted in a reduction of this working capital and we also will expect that in the third quarter those will also reflect in terms of cash.

We will have also another movement due to the first demobilization that we will having, then we have a second and this is to improve the ratio between net and EBITDA, so we can improve the capital structure of the company.

We are also working in an optimistic way in the second quarter because we believe that not only it’s no longer getting worse, but we are seeing a slight improvement in terms of domestic market across segments. And we believe that in a diversified manner, if we segment products and markets, we will be able to have a full-fledged production.

In the second quarter, we have seen that we have our increasing production from 310,000 tonnes in June to 360,000 tonnes in cement. In July and August, we are adding 375,000 tonnes. And of course, the margin is very tight because of the increase in the offer. So we are doing all we can to work hard.

And in terms of annual sales, we will beat the budget and we have seen that in the last quarter, we had 4.3 in terms of sales. The third quarter will be even better I believe.

And we will have a slight sign because we had a loss of R$42 million in the quarter compared to R$831,000 in the first quarter and this shows reserve in other situation and I’m certain that we will have positive numbers in terms of income for the third quarter.

Everything that we could have done in terms of operations as we have said we have done everything that we committed to do has also being done and we are now beginning this process to demobilize assets and it’s another thing that the market is asking for.

And after the third quarter, we will be working firmly in the financial area and that is what’s missing because we need liquidity position that is improved and a capital structure which is also needs to be improved.

We have very good assets, we are working on several fronts, not only the peripheral sides, but we are looking for sales of some of the assets -- core of our assets in order to meet this better capital structure that we are aiming at. In terms of delinquency, we are basically at a zero level. This is something I’d like to share.

The in-progress of are ones who are delinquent in the system and the [indiscernible] that was given to seller. So those who imported have 180-day period, they were penalized due to the lower exchange rates. And the former importers are now in a very critical position.

Therefore, imports decreased because what actually moved imports a lot in terms of steel was [indiscernible], the easy credit lines that those who imported had and they used this advantage to put major productions in the Brazilian market. So this is in the past now.

Most of them today have serious problem in terms of credits and therefore the market is so to speak cleaner. We are very optimistic. In terms of the second quarter, you see that iron ore is at $62. We believe this price will be between $60 and $70 for the quarter and there is steel tax there.

We also believe that the prices have reached another level and because of this limitation of imports we will be witnessing leveling off of prices. Fixed cost was a reason for that.

We have $280 for iron ore and in steel we are going back to $280 slab going now to $260, I believe, in the next month, which translates in our competitiveness being very high both in steel and iron ore and the margins will therefore pickup. We are confident.

We are sure that the third quarter will explicitly show all the efforts that we have done in operations and with the market improvement that we have seen – that has happened in the second and third quarters, we were sure that we will be having positive figures and good figures. This is what I have to say. If you have any questions I’m available.

And thank you very much for your attention..

Our next question comes from [indiscernible] Banco Credit Suisse. Sir, you may proceed..

Good morning, everyone. I’d like to make a question in terms of iron ore. What can we expect for this year and for next year? This cost of $28 per tonne in China, even though the exchange rate effect, how much – how long can you sustain this cost and can you keep it at this level if we look to the future? These are the questions. Thank you..

Thank you for the questions. Geraldo [ph] will answer both of them..

The volumes for this year will be 70 million tonnes and concerning the sustainability of the cost part, the reduction that we have seen is a result of this very, very hard that work that Mr. Benjamin trying to consult and it is grounded in structural action that was taking in the operations.

We have [indiscernible] that we have captured synergy in that operation, we have gain in productivity, we were very positive.

We also as you have mentioned and already Benjamin mentioned, we have already discussed all the contacts that we have with suppliers exhaustively because we all today is going through a moment of recovery and in order to cut down on costs, we sat down with the suppliers for services and products.

Our inner planning medium and long term has been optimized.

We have a very clear view of our results and we have optimized our planning for the mines and still with some – presenting some clients of ore that were being used as by-products, we have $70 products that should not have gone through the market – went through the market because we recovered products and we made this feasible.

Finally, our rates according to the volume that we were able to produce additionally, we export almost everything to China because the level of the market is very competitive and we saw that despite the figures of last quarter our maritime price was reduced and also these actions goes structural and I’m here to say we don’t believe that freight in the next year will be changing much and therefore these actions at a competitive level at its same level of the major mining companies that work with lower crisis, lower cost..

Our next question comes from Mr. Carlos Alba from Morgan Stanley..

Yes. Good morning. Thank you very much. Just really the company has made great efforts..

[indiscernible].

Yes, to improve the performance but your leverage remains quite high around 8 times net debt to EBITDA. And so my question is, the asset sale or longer to be realized, you realized [indiscernible]. I know the shareholders ready to inject price equity into the company much faster, the balance sheet of CSN.

And the second question has to do within the lever cash cost of iron ore at $28, how much do you freight? Thank you..

Carlos, thank you for your question. I’ll ask Zeraldo to start with the second question and then we’ll answer the first question concerning the ramp up of the company..

The $28.11 is freight. Carlos, concerning the first question that you said concerning the high leverage of your company, we have been conducting the work that has several strengths. We try to bring to a more convertible level.

Many of these actions have reduced our working capital for example we are focusing on company business, increasing profitability in terms of operations, better cost, better results and at the same time we have a deliverance program which is ongoing. The programs as you know takes a while and we want to look for a fair price for our assets.

You have excellent assets, so we cannot miss an opportunity to look for a reasonable price for these assets. This of course take some time but we are comfortable because we have already renegotiated the principal of our current debt for 2016 and 2017. So I believe we are on schedule.

We are going to announce a first sale in the next 10 days, I can’t announce it yet and then we have another sale so it is a program that it is ongoing and it will have effects in the figures that we will have for the next quarters..

[Operator Instructions] Thank you. Since there are no more questions, I like to give the floor to Mr. Moise Salama, Investor Relations, for his final remarks..

I would like to reinforce our optimistic message for the second quarter of this year. We have seen a recovery in the domestic market that has begun. The company is focused on certain niches and this leads to higher profitability. The situation at China is better than what we could have imagined in the beginning of the year.

We are working hard to reduce cost and expenses and you can now see this on the results. Our working capital has also showed the results in the work we’ve been doing and having an expressive decrease in this quarter. The commercial strategies are consistent and also we will be announcing the first sale of assets.

We have very good assets and this will happen within schedule that the company thinks appropriate. Lastly, the scenario is positive and will be reflected in the figures and this will be a gradual process from now on. I’d now like to give the floor to Mr. Benjamin Steinbruch who will also provide final remarks..

I like to thank you all for being here for this earnings conference call and to express our belief that the scenario is improving, the company’s performance is improving of the entire segment in fact and think we are better and we’ll improve more than they have improved till now.

We have the political scenario that will be solved in the short term and with this I believe that the market conditions will improve due to a return of credits and cutting down on interest which we know that is highly exaggerated and has been penalizing productions and consumption.

We believe that what has to be done in terms of reducing cost and to work on production everything has been done, everything that was on – depended on us in terms of operation so the entire company has been done.

We have started eating fruits of this in August and July, and we are certain that the task is the correct one and the EBITDA 25% rate for the third quarter is a reality.

And the company has a feature that it reacts very quickly to face those scenarios that is when we were with the projection with low cost and the possible pick up in the market that we have discussed will lead to figures for a third quarter that are most better than these ones.

As I have said, we will tackle the financial part now, the leveraging is what concerns us at this moment and it was now the increase of the debt that penalized us. The decrease in EBITDA from iron ore went from $150 to $37 and it’s now like $62, $63 but in concrete terms it was this drop in margin that penalized us in terms of the debt.

And that was in terms of what we could do, operations wise, we will show an improvement in EBITDA with consequences that will lead to a better leveraging.

And I like to stress again that we are concerned and we are acting, we will be announcing a sale of asset in the next 10 days and we would like to say that we are working even on what we think is core to sell part in order to reduce the debt of the company and those have been our focus.

So everything we can view that is within our reach we have been doing and we are doing, and after this general operations improvement is what comes next, it’s the financial aspect.

This is what we have to do to say to you, thank you very much for the questions, thank you for your participation and we will see each other in the next call which will probably bring everything that we have. Thank you..

Thank you. The earnings conference call for CSN is now closed. Please disconnect your lines and have a good day..