This has a clear impact that is measurable as this will happen at the end of March the big step you should expect now for the second quarter, there will be drops, but there will be a more significant drop in the second quarter. I will give the floor to Martinez now.
Luis Martinez: Ricardo, thank you for the question. What happens at CSN is that our passion is always for results, the last line item. And we always have an enormous challenge set forth by the Chairman, growing volume, growing prices, work in a fragmented way. So you will agree with me that these are very challenging goals. What happened in the fourth quarter? Obviously, the competition did not look at CSN with their arms crossed. We grew 7% during the year. Normally, CSN drives the price in the market. That’s what we’re in the market for, to push prices, to be the best, to fragment everything, to sell less for more. But unfortunately, in the fourth quarter, we had to follow the strong trend of competition, especially in markets where we do have higher competition, like São Paulo, so as not to lose out on volume.
In our case, the beauty of all of this is that our cost and our production director, Divaldo, was also able to maintain the cost at a good level, maintaining margins at 24%. So in steel or cement, we always work with volume, margin, price, and this is part of our day-to-day work. I’m going to give the floor to Divaldo to add to the second part of your question.
Divaldo Oliveira : Ricardo, good morning, this is Divaldo, simply to add to what was said by Martinez, the Lafarge integration process. Today, we’re celebrating one year and six months and we consider the process concluded, fully executed successfully. We were able to capture more than 90% of synergies and new synergies appear day after day in all business areas. Reduction in the price of electrical energy. Production of the plants and the company gains in negotiation for supply, for raw materials, so several actions in terms of operational excellence, the reactivation of equipment, fuel mixes, and much more. Martinez has already spoken about fragmented sales, that is important in logistics. So in some several actions that we have captured that will be operating full in the year 2024, they were all captured during 2023 and this year on some that we had, and we have already seen an expressive reduction in costs.
The fourth quarter ended at 7% lower than the fourth quarter of 2022. And a scenario of increase in sales, 7% growth of sales, vis-à-vis a drop of 1.5% in the market. So we were able to somewhat recover our margins to 24% although we’re seeking more than 30%, we know that this is possible and this is what we’re aiming for.
Operator: Our next question comes from [inaudible]. He says good morning and thank you for taking my questions. How should we think about the leverage goal 2.5 in the context of transition, asking this differently. How will this change your tolerance regarding leverage? Can you offer us some details about how you’re thinking about this in terms of the balance? Would you consider injecting capital to maintain your present levels of leverage with this transaction delay and IPO for the cement plant? Thank you.
Marcelo Ribeiro: Well, thank you for the question, Declan. Now, let’s go straight to the point. The acquisition does not change our ambition of being at 2.5 times. I think this conciliation possible, based on some initiatives that were mentioned by Benjamin. They include a search for a partner in energy as well as in mining, a future IPO for cement. We’re going to pursue this regardless of the acquisition, and in the acquisition to structure the new debt in such a way that part of the indebtedness can also be transformed into equity. So this is an alternative that we’re going to have to think about if our proposal is a winning one, but it’s the only way that this would become interesting for CSN, a capital structure in the acquisition that will not increase our leverage.
This is a non-negotiable assumption. We know that if that is the path we follow, that IPO, yes, would have to wait for approval and integration. There are other initiatives that would control the leverage and would lead towards a performance we expect in 2024. It’s a performance in cash and EBITDA, recycling the CSN capital, and how to structure the acquisition. All of this will make sure that the integration will not increase our leverage.
