And we understand that this removed some of the volumes that we would — that we thought we would realize in March, but they were then transferred to the second half of the year. Therefore, there was some accumulation of working capital, but mostly due to the rebound of 10% revenues, and that was a significant increase in revenue, but there was also the aspect of working capital accumulation because production was slightly higher and a reduction in prices at the end of the quarter that removes some of the traction of sales that were previously planned. Now thinking about the product mix, I think you have to be a bit cautious because even though we praise all of our advances because of the recent measures by the government of quota and tariffs, we have to see the results of that.
And what will be the final outcome in the next quarters. We do not believe that there will be any impressive change coming in the next quarters. There might be some incremental changes to our mix between domestic sales and exports. But we understand that there has been an important progress between the 25% we had and the 19% that we have to date. So we are — we remain optimistic, but we are even more optimistic in the second half of the year because maybe in this half of the year, it might be too soon to say that we will see significant changes. Well, this new measure that was approved at the end of April, just to add, Lucas, to that point. That 11 NCM, it’s Mercosur Common Nomenclautre, it’s just like an idea of every product. The decision of the Minister talks about imports of several NCMs from the period of 2020 to 2022.
There was the technical standard, and that’s why they decided to focus on these 11 NCM. There are a series of other measures that are now being steady to normalize things. That quota per quarter they will divide the annual quota in four, limiting it by quarter. So what will they do to look at the NCM per escape, I would say. So you by limiting with that number of 11 NCMs and other NCM that could be a replacement to these products. So now the ministry is taking additional measures. And at the same time, we will be monitoring very closely the use of other NCMs because in our view, there should be an increase of imports into Brazil, like rebars. If you look at it, rebar is not there, but we assume that there will be an increase in imported rebars and they would come into the market in an unfair way.
And therefore, the ministry will closely monitor that. And if need be, they will introduce other measures. They will have a very detailed analysis. But all of these 11 NCMs are related to 25% of our deliveries to Brazil. So 75% is not related. So life goes on as usual. It will follow price dynamics, import premium, market, et cetera. But it is a relevant amount, 25% of everything we delivered that means that in the next few months, we will be able to see some changes in profitability and reduction in fixed costs, as I said before. And at the same time, other commercial measures are underway, like antidumping and other mechanisms that can be used. They will continue to happen normally. Brazil has no demand issues today. Demand remains sound in the civil construction industry, things are going as usual, we are constantly monitoring the member of active works, cut and band, et cetera.
So we can previously check the health of this market. I know that you talk to construction companies, but we can measure things on a day-to-day basis. The market will continue to be very sound. So demand is not an issue in Brazil. It’s clear that we will not see a significant boom. But demand will not go down. It goes through that 3 million additional tons of steel that is getting into Brazil. That 3 million means a large integrated plan. So if this the numbers change and they go back to numbers that we saw in 2018, 2019, like 11% rather than the 20% that we have today. We will be in place to resume profitability, as I said before, the profitability level that we believe is adequate for Brazil. This will allow us to continue to invest and to invest in these new investments is new things that I referred to before.
That is it.
Renata Oliva Battiferro : Next question from Carlos De Alba, sell-side analyst from Morgan Stanley. He is asking for more details about the SBQ potential investment in Mexico and whether we could give them some more color in terms of what we envision for the second half of 2024 in terms of performance based on the different BDs and also information at a consolidated level? And how do we see working capital for the coming quarters? Also, if we intend to have another buyback program?
Gustavo Werneck : Well, I think we already talked a little bit about Mexico, maybe Japur could add something. So maybe Japur, you could answer both questions about performance, working capital going forward.
Rafael Japur : Mexico, I think we gave a lot of details. We can give you a follow-up later on if you need any particular explanation. But this is a region where we’ve been before. We are familiar with the market. We — we have 10 years of experience. They are an imported market of SBQ. We are an important market in terms of exports. We export there from the U.S. and Brazil. We have a lot of our customers growing and also investing in Mexico because then considering the entire geopolitical scenario and near-shoring, we understand that it makes a lot of sense to us to invest and to analyze carefully our move in Mexico. Certainly our investment in SBQ in Mexico. In terms of our performance in the next quarter, well we do not give guidance on results, but we expect to see the recovery of the Brazil BD operations once we can optimize cost and everything else that Gustavo mentioned in previous questions, it’s important that we also look at our stocks and inventory and working capital and variable costs that will be diluted into our results throughout time.
So in our Brazil BD if everything remains constant, we should see an increase in margin throughout the year. In terms of the North American BD, it will depend on the dynamics of the economy. We are seeing sometimes opposite signs, given employment statistics, PMI statistics and architectural billing index. So it will very much depend on the level of operating leverage because as Gustavo said earlier, spreads remain very healthy. Now when we think about our working capital, we believe that this reduction in working capital that we’ve been experiencing should remain the same. We had 10 percentage points increase. That’s why there was an additional demand of working capital in order to serve our customers, especially in the North American BD. But as we keep that level of service and this order book.
And as sales go through our results, we understand that throughout the year, we see room for further release of working capital, especially in the second half of the year. Now, I think in terms of your third and last question about their buyback program. In this first quarter, we invested heavily in working capital. Our net debt did not move significantly. And as we have more visibility about our cash generation possibility throughout the year, we will evaluate not only their buyback program but also our policy of capital allocation.
Renata Oliva Battiferro: As we are running out of time and considering everyone’s busy agenda, we are ending the Q&A session. Questions that were not answered will be answered by our Investor Relations team. Now I’d like to turn the floor over to Gustavo Werneck for the company’s closing remarks. Gustavo?
Gustavo Werneck: Well on my behalf, on behalf of Japur and Renata and the whole Gerdau team, I would like to thank you once again for your participation. As always, it’s — it’s a pleasure to talk to you and debate our results. And I would like to invite you to participate in our next earnings video conference call referring to the second quarter of 2024, which will be held on August 1. Thank you very much. All the best. Have a great weekend and take care.
