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Operator: Welcome to WEG's Third Quarter 2025 Earnings Conference Call. I would like to highlight that simultaneous translation is available on the platform on the interpretation button via the globe icon at the bottom of the screen. We would like to inform you that this conference call is being streamed live and the audio will be available afterward on our Investor Relations website. [Operator Instructions] If we do not have time to answer all questions live, please feel free to send your questions to our email at ri@weg.net, and we will answer after completion of our conference call. We would like to emphasize that any forward-looking statements contained in this document or any statements that may be made during the conference call regarding future events, business outlook, operational and financial projections and goals and WEG's potential future growth are merely beliefs and expectations of WEG's management based on currently available information. Forward-looking statements involve risks and uncertainties and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operational factors could affect WEG's future performance and lead to results that will be materially different from those in the forward-looking statements. Joining us today from Jaraguá do Sul are Andre Luis Rodrigues, Chief Administrative and Financial Officer; Andre Menegueti Salgueiro, Finance and Investor Relations Officer; and Felipe Scopel Hoffmann, Investor Relations Manager. Please, Mr. Andre Rodrigues, you may proceed.
André Rodrigues: Good morning, everyone. It's a pleasure to be with you once again for WEG's earnings conference call. I'll begin with the highlights of the quarter on Slide 3, where net operating revenue grew 4.2% compared to the third quarter '24. In Brazil, performance was driven by solid industrial activity, continued deliveries in transmission and distribution projects and healthy demand for commercial motors and appliances. Growth was partially offset by a significant year-on-year decline in wind power generation revenue. In the external market, industrial activity remained strong in our main regions of operation, especially in Europe. In the power generation, transmission and distribution businesses, T&D operations in North America continued to show solid delivery volumes despite some fluctuations in general project deliveries. Our operating result measured by EBITDA reached BRL 2.3 billion, an increase of 2.3% compared to 3Q '24. EBITDA margin remained at a very healthy level, closing the quarter at 22.2%. Along the presentation, Andre Salgueiro will provide more details on this point. As for our return on invested capital, one of our main financial indicators remained at the high level of 32.4%, as we can see in more details on the next slide. Revenue growth and sustained high operating margins contributed to maintaining our return on invested capital at healthy levels despite the decrease compared to the same period last year. The reduction was mainly due to higher invested capital driven by investments in fixed assets and acquisitions during the period. It's important to remember that the ROIC for 3Q '25 or was positively impacted by the recognition of nonrecurring tax incentives in 4Q '23. Now I'll turn the floor over to Andre Salgueiro.
André Salgueiro: Thank you, Andre. Good morning, everyone. On Slide 5, we show the evolution of net revenue by business area. In Brazil, demand for short-cycle products remained solid, particularly for low-voltage industrial motors and gearboxes across several operating segments. We also observed positive performance in long-cycle equipment deliveries such as medium voltage electric motors, especially in the oil and gas and mining sectors despite an investment environment that remains somewhat restricted. In GTD, the T&D business continued to perform well, driven by deliveries of large transformers and substations. The decline in revenue in this area was mainly due to the absence of new wind turbine deliveries as the pipeline for 2025 had already been anticipated. There was also a reduction in solar generation revenue this quarter, mainly reflecting the completion of large centralized solar generation projects executed over the last 3 quarters. In commercial motors and appliances, we continue to deliver positive results with growth in sales to key segments such as air conditioning, water pumps and compressors. In coatings and varnishes, sales of our main products remained strong with notable demand for liquid coatings used in the oil and gas segment. In the external market, short-cycle equipment benefited from continued healthy industrial activity across multiple regions with an improvement in the European market standing out. For long-cycle equipment such as high-voltage motors and automation panels, delivery volumes contributed positively, although geopolitical uncertainty continues to weigh on new investment levels. In GTD, we maintained good delivery volumes in T&D operations in North America despite a lower volume of deliveries in another key region, South Africa. Revenue moderation in this area was mainly driven by fluctuations in generation project deliveries in Europe and in India, a typical dynamic for this type of business, even with strong performance from the marathon generator operations in the United States and China. In commercial motors and appliances, demand remained positive, particularly in China and North America, along with contributions from both electric motor operations in Turkey. In coatings and varnishes, revenue growth was supported by strong performance in Mexico and the recent acquisition of the operations of Heresite in the United States. Slide 6 show EBITDA evolution, which grew 2.3%, while EBITDA margin closed the quarter at 22.2%, although slightly lower than the same period last year, mainly due to higher costs of some raw materials EBITDA margin remains strong, supported by the current project mix. Finally, on Slide 7, we show the evolution of our investments, which totaled BRL 673 million with 72% -- in 52% in Brazil and 48% abroad. In Brazil, we continue to modernize and expand production capacity at T&D while increasing capacity and productivity at our Jaraguá do Sul and Linhares sites. Internationally, we continue investments in Mexico, particularly the progress in building the new transformer factory and in the expansion of more production capacity in China. That concludes my section. And now I'll hand it back to Andre.
André Rodrigues: On Slide 8, before moving on to the Q&A session, I would like to highlight a few points. First, during the quarter, we announced several important investments, including a BRL 1.1 billion plant in Santa Catarina to expand the energies unit's product portfolio and production capacity and also a USD 77 million investment in the special transformers plant in Washington, Missouri and BRL 160 million investment to further integrate and expand the electric motor production at the Linhares unit in Espírito Santo. In September, we also announced a target to address greenhouse gas emissions reduction in Scope 3. In addition to having our Scope 1, 2 and 3 targets for 2030 validated by the science-based targets initiative. More recently, we announced the acquisition of a controlling stake in Tupinamba Energia, a company with a strong presence in software and services for electric vehicle charging network management, aligned with our strategy presented at the last WEG Day to provide complete solutions for the e-mobility market. Finally, a few words on our outlook for the remainder of the year. Despite mitigation measures already underway, the geopolitical and macroeconomic environment requires close attention and brings short-term challenges. We remain focused on our investment plan to support growth in Brazil and abroad, both to strengthen our market mature businesses and to develop opportunities in new markets. Even amid a complex geopolitical backdrop, we continue to expect annual revenue growth and high operating margins, supported by our international presence and diversified product and solutions portfolio. This concludes our presentation, and we can now move on to the Q&A session.
Operator: [Operator Instructions] Our first question comes from Lucas Esteves from Santander.
Lucas Esteves: Congratulations on your results. I have 2 topics that I would like to approach, starting with the results acquired from Regal that you did not disclose this quarter. So I'd like you to give a bit more color on this business, how it behaved. Then I ask that because previously, you said that you were increasing capacity with generators. So I would like to understand that this is already reversing in an increasing volume and results or this is to be seen in the coming quarters? Second question, how WEG is positioning itself as a solution provider more than an equipment supplier. I ask that because when talking to stakeholders, we hear more and more that WEG is offering complete solutions, a generator instead of solar panels. So all that said, I would like to understand your strategy, if the company is going to position more and more as an OEM to product, if that can expand your market and if that somehow connects to the company's strategy to expand its footprint in the aftermarket.
André Rodrigues: Lucas, this is Andre Rodrigues speaking. Thanks for your questions. It's a long question. If we forget something, please just remind us of the main points. I will start talking a bit about the integration of Regal. It is going on. It is as expected. When we talk about Regal -- Marathon, I'm sorry, when we talk about the businesses of Marathon, we are basically talking about 2 businesses, low-voltage motors and alternators. For low-voltage motors, we saw an accommodation in the market. And I think the main focus now of the entire industrial team of WEG Motors is gains synergies in the stage where we are without many investments in terms of verticalization. So optimizations of products, opportunities to reduce costs, all following as expected. The alternators business, as we mentioned on WEG Day, is a business that is developing very well. João Paulo, right after the acquisition, focused to try and increase capacity the most. We are making investments to increase capacity. This is probably to be completed at the end of this year, beginning of next year to continue developing the business giving the markets that demand this equipment and that have contributed positively for this business. So Marathon businesses have a very strong recognized brand in the U.S. market, particularly. Integration of admin areas, we are also evolving relatively well. We did have a huge challenge in terms of the carve-out of systems. We are talking about more than 150 systems. We're able to develop all the efforts before the deadline of the CSI that we had with them and also in terms of shared services that was provided, especially in the North America region by the Regal organization Rexnord, we also were able before the deadline to migrate to our shared service model, which is called WEG Business Services. So in this migration, we had especially gains in IT and to bring the business to our model. And with this, we had already a reduction of approximately $6 million in annual costs. Consequently, with this, together with all efforts in the industrial area, the good performance of alternators, Regal's margins are improving quarter-on-quarter. And we highlight that it is an integration process that will take 4 to 5 years. But the message is positive, and it is following as scheduled.
André Salgueiro: This is Salgueiro speaking. As for your second question, WEG's model of becoming more and more focused on solutions. This is a reality. This was the main focus of our presentations on WEG Day, the last WEG Day that we held recently. And there, we brought 3 major topics: one, solutions for e-mobility. So WEG not only focusing on manufacturing powertrains or recharge stations or batteries for buses, but rather being more and more focused on following a complete solution, integrating it all. And this comes from the service center that we announced in São Bernardo do Campo for support and also the acquisition that we released -- recently announced of Tupinambá to complement the ecosystem. So we have been working to integrate more and more services and solutions. And the 3 main topics of WEG Day was e-mobility, microgrid and network reliability. That is to have more and more complete solutions for the market, not only focused on the product, but on the whole solutions and how we can help our clients on their journey.
Operator: Moving on. Our next question comes from Gabriel Rezende from Itaú BBA.
Gabriel Rezende: I have 2 questions. First, I would like to understand about the added capacity for transformers in West. I think this is going to be effected by '26, beginning of '27. And the market is more and more thinking of what '27 is going to be like for WEG. So are you selling already the additional capacity that you're going to have in transformers for '27? What is your pipeline for transformers? If you could talk about prices and volumes, that would be very good, especially about the additional capacity. And the second question, we have been monitoring yourself and the competitors and prices are going up in the U.S. because of tariffs and some inflation in the sector. I would like to know if you understand price increases in the U.S. offset loss in competitiveness or if you could have a drop in volume as price increases take place.
André Rodrigues: Gabriel, I'm going to talk a bit about transformers, okay? Well, we have been announcing for some time now, 3 years, I would say, every year, a new package of investments of the business given the demand and how the market is heated in several segments, energy efficiency, generative AI. So WEG by the end of '23 made a solution. And in the beginning of the '27, we would have double global capacity for WEG in the transformer business. We are following the investment plans unchanged. Whenever we see a new opportunity, we reinforce the plan. We had a recent announcement, the modernization and increase of capacity in the special transformers plant in Missouri, an investment of $77 million. In addition, we have the new plant in Mexico, a new plant in Colombia, increasing capacity in Gravataí in Brazil to use the opportunities in the market. And when we have visibility, as we are having now of the completion of the project, we start already to have a backlog. So the answer is, yes, we are building our backlog in all the units in where we have visibility of completion. That is going to be by the first half of '26 to the end of '26 for us to seize opportunities as of '27. Of course, perhaps enjoying opportunities in the second half of '26. As for prices in the U.S., Gabriel, I think the whole process when the tariffs started to be discussed, made it clear that inflation would happen, not only for WEG, but for the whole American market as a whole. So it's just natural in our strategy to try and mitigate impacts is to use our commercial strategy in prices in the U.S. And you did say it's not only WEGs, it is WEGs and almost all the players in the market. And so this is a movement, especially the most relevant part that happened more recently that we still cannot measure in terms of details of impacts because in practice, it came into force in October. So we have to see how the activity is going to evolve from now on. So this is something that we'll have to monitor in the coming months how the market will respond to the commercial strategy. But again, it's not only motors, transformers or other products. It is the U.S. economic activity as a whole due to tariffs and price adjustments are being made throughout the industry.
Operator: Our next question comes from Lucas Marquiori from BTG Pactual.
Lucas Marquiori: I have just one question, but perhaps with some items. Still about tariffs, I was a bit lost in terms of times. Probably you already had an impact of the tariff this quarter. You are saying that you are having an effort of repricing of products. And then you have the waiver of what was shipped until mid-October. So perhaps the full impact in cost and margins is just going to show in Q4. I would just like to see if my understanding is correct. So the full quarter is just going to be in Q4 and how far you are in terms of passing on prices. You mentioned 10% in Q2, then we said mid-teens for the next quarter. Just to understand how long the curve is. And finally, the passing on costs to balance tariffs, this is something that the whole market changed the price dynamics. If you have a decrease in tariffs, you don't necessarily have to return that to clients. You can keep it in margin. So do you think this is standing if and if tariffs are renegotiated next year? So just the question with the same topic, tariffs.
André Rodrigues: Thanks for your question, Lucas. I'll try to answer all the parts. The first point, what you mentioned is correct. We are going to have the full impact in the fourth quarter. We did have some impact in the third quarter, particularly the last month of the quarter in the month of October, we did have this impact. But throughout this moment when we had the information of tariffs, we started working on several fronts to mitigate the impact. There is not a silver bullet. You talked about recomposition or realigning prices, WEG's logistics chain to minimize that, and the company continues to work along these lines. Our expectation for the fourth quarter is to have a greater impact because of the tariffs. But again, we have lots of action plans and initiatives to mitigate the impact. In the end of the quarter, we are going to have a clearer view of whatever was possible to be mitigated and the impact. As for price realignment, well, the thing is we have to know what the market is going to be pricing. I cannot say that this is a given because if the tariffs change, if there is a change in process, a change in dynamics, we have to adjust according to the wind.
Operator: Moving on. Our next question comes from Alberto Valerio from UBS.
Alberto Valerio: A follow-up on tariffs because we are seeing lots of news on WEGs suiting its capacity in Mexico, United States, Brazil, Mexico. What is missing in Brazil for WEGs to eliminate 100% of its tariffs that is not producing anything in Brazil to be exported to the U.S. And second question, the exposure of BESS in WEG. There is an auction now in December, another larger auction for June next year. What should we expect from WEG for '26?
André Rodrigues: Alberto, thanks for your questions. Okay. One point that is very important to reinforce is the investments that WEG is making in the U.S. along the recent years, the revenue that is produced and generated in the U.S. is increasing and WEG is doing that. In transformers alone, we expanded in the last 5 years, our 2 existing plants. We had a greenfield project. We are renovating a new one and increasing capacity. So added to everything we mentioned, restructuring, logistic chains and other initiatives that we are talking about, also the increase in capacity in the U.S. will help us to minimize the impact.
André Salgueiro: Alberto, as for BESS, we did show on WEG Day our solutions for microgrid, even home use, the monogrid, industrial use, commercial agribusiness, until getting to that. So it's important to mention that WEG has a full portfolio today of products to serve the different segments, and we have been working very hard in this project of the small medium size, which is a good market demand. To give an estimate for the next year, perhaps it's too early because that depends on the development of the market from now on. And it did mention 2 important things, the auctions that are expected to happen this year and next year. And indeed, if they do happen, they may be a very interesting opportunity, much greater than we have today because today, opportunities are concentrated on mid-sized projects. We are seeing people wanting projects perhaps with a greater scale that we are having, but different from utility projects, which are the large projects that generally take place. So if the auctions happen, that can change. The market as a whole can grow, and that will depend on how much WEG is going to capture up this market along the next years.
Operator: Moving on, our next question comes from Rogério Araújo from Bank of America.
Rogério Araújo: I have 2 questions on my side. The first is the external GTD revenue. It did go down despite the favorable T&D movement. We did some accounts with transformers in North America, some assumptions considering the revenue of generation abroad. It may have dropped from 30% to 50% year-on-year. Does it make sense? Are our accounts correct? And if you could talk about the deliveries in the past until when this comparison basis is going to be kept? So this is my first question. Second, about margins. I do not recall if it was 1 or 2 quarters ago, you said if it weren't for the renewables mix, especially solar farms, margin would have gone up. And now the mix is down, especially solar farms and the margin did not really show the difference. I would like to know what hurt you. You did talk about tariffs affecting October. Was it this? Any other factors? But just for us to understand margins in the short term.
André Salgueiro: Rogério, this is Salgueiro speaking. Thanks for your question. I'll answer the first GTD in the foreign market, and then Andre is going to talk about margins. We don't break down in our releases. What I can say is that indeed, generation did have a significant drop this quarter, especially because of somewhat weaker performance in the joint venture that we have in Europe compared to last year. And that, especially for the fact that we did have some important projects and concentration of deliveries last year that were not replicated this year and also because of reduction of revenue in generation in Asia Pacific, especially for projects that are served by the Indian operation. We did mention that in our release. I don't know if it was 100% clear, but in T&D, the quarter was slightly different. T&D had been growing in all operations in the external market this quarter. We continue with positive performance in T&D. North America continued with good performance. But in Africa, it did have a drop in revenue in the quarter. because some large transformers that we delivered last year and that these projects were not replicated this year. So there is an effect of a lower growth in GTD, the external market in generation, but also a portion of T&D in Africa. So what is doing well, positive without changes is T&D, North America and Colombia, altogether in this context. And Rogério, about margins, you were right. I think it was in the first quarter that we broke down how much margin we would have consolidated excluding that movement that started in the last quarter last year about solar farms and continued in the first and second quarters. I don't recall exactly the amount, but we can talk about that later on, but we did mention that, and it is in the transcription of our last call. I think it was the first quarter. Undoubtedly, what we see in terms of margin behavior, it is according expected. We expected a first half a bit more pressured because of the product mix. As the product mix with solar went down, the margin will improve, and it is improving. If you get year-to-date margins of WEG, it is within expectation to fluctuate between what we had in '23 and '24. Remember that when we are monitoring margins, we cannot talk about one quarter. This is very complicated because we have several business dynamics and everything. For instance, we did have the impact of the tariffs this quarter, not all action plans to mitigate that in place. And what we saw this quarter, compared to what we had last year and perhaps it is a bit of the result of the margins is that there was a bit of an increase in prices of the main raw materials, especially steel and copper, which also impacted the margin of the quarter. But again, I would like to stress that margins are improving quarter-on-quarter as expected, and we want to -- we believe that it's going to be fluctuating between what we had in the last 2 years.
Operator: Our next question comes from Lucas Laghi from XP Investments.
Lucas Laghi: I have 2. Thinking about the performance, I think it was the highlight of the performance this quarter. I would like to know your dynamics for external markets, especially in the U.S. Any concentrated delivery, any anticipation of purchases because of tariffs. So anything out of the ordinary? I'm thinking of industrial activity as a whole, when I take a look at the release of your competitors, you see a backlog that is very strong in the third quarter from the U.S. So in the U.S., some segments are doing very well. Others are doing poorly. I would like to understand if you could have an acceleration of revenues driven by the U.S. So try and understand how you see industrial activity as a whole, especially the U.S. And for internal GTD and perhaps that was the downside in terms of revenues, especially because of the drop in solar, as you had mentioned. So just to understand if we are already on a normal level or if you think that you can still have a decline in solar? How are things going on in [indiscernible] residential other? And do you think that 1/3 would be in T&D? I know that things are changing with solar, but how would you consider the internal GTD? So basically, external GTD and internal GTD, that's my question.
André Salgueiro: Lucas, this is Salgueiro. Thanks for your questions. As for industrial electronic equipment, first, I would like to reinforce that we did see the market resuming. That's the upside. Brazil grew by 3.3%. And we do see also growth in the external market of 7.1% in reals and even stronger in dollars, almost 9%. So that shows a market and an industrial activity that's quite interesting. And that is reflected in our numbers. We did highlight the performance of Europe. I think it was the main highlight in terms of recovery because Europe was a region that was not doing well in recent quarters. And as of this quarter, we did see significant improvement. So that's an important point to highlight. And in the U.S. well, the U.S. has a bit of a different dynamic because of tariffs and everything that we have discussed before, but also the performance of industrial activity, especially with motors and projects is going on. It's happening, not at the same pace as before. We did mention in the call last year that the decision of new investment was on hold with the dynamics we still do not see a major change. But an important point that you did mention, and we can talk about that is that when you see orders coming, the performance is better than in the past, which shows that we might have for the future, an industrial activity in the external market with a more positive dynamics and here considering all regions and also the U.S. When we talk about GTD in the domestic market, you did mention 2 important points that justify the drop, the wind power, because we already knew that there was a lack of new projects and that continues. And the news this quarter that we tried to address to you in the comments of last call is that solar would be weaker in the second half of the year, especially for the fact that we no longer had the GC projects. So that was the main reason. And when we look into the performance of the third quarter compared to the second quarter, this is clear. When we compare the third quarter and third quarter, that's not so relevant because in the third quarter last year, we didn't have these projects. They started in the fourth quarter. And that's interesting, considering your question, when you look into the future, we do have a challenge for the fourth quarter, which is when we started centralized generation a bit stronger, and we don't have the projects this year. And another point is that the GTD market distributed generation is not heated either. So we do have projects. They are evolving, but at a pace that's slightly slower than in the past. So putting together the factors, we have a solar dynamics already reflected this quarter with a weaker performance and expectation because of the comparison base of centralized generation of last year, this movement can be even accelerated in the fourth quarter.
Operator: Our next question comes from André Mazini from Citi.
André Mazini: My question is about the competitive scenario with the acquisition of 50% of Prolec. In yesterday's call of GE Vernova, they talked about commercial synergies. Do you think that changes anything in the North American market? And also in the call, they said 20% of the orders of Prolec comes from hyperscalers and data centers. So if you would have an estimate of how much T&D orders in the foreign market comes from this type of customer? And finally, a follow-up of the last question. I don't know if you did mention that there was a prebuy. I didn't understand that. That's it.
André Rodrigues: Thanks for your question. Well, the competitive scenario, what we saw yesterday, I think does not change much. It's a competitor that has already been in the market. They are just acquiring the remainder of the business. And we know that everyone is making investments to expand capacity and to enjoy demand. WEG positioned itself in the past. We believe that we started before the competition if we compare most of the competitors. And we also understand that in '26, we are going to be one of the first in the main markets to add this new capacity. As for supply to data centers, the number that you mentioned to WEG is very close to that in the U.S. So again, we do not see major changes considering the competition. I did not understand the second part of your question. Of course, it's another topic. If there was a prebuy in the third quarter in EEI given the tariffs. If there was a pre-buy people advance their orders.
André Salgueiro: Mazini, this is Salgueiro. We cannot say that. The increase in tariffs started in the beginning of the year. The discussions and more concrete effect started with the 10%. Then we had the 50%. So it's important to reinforce that the 50% was specific to Brazil. And obviously, people know that WEG is a Brazilian company. It is based in Brazil, but it is very specific with its dynamics with local players. It can provide matters from different countries, Mexico, Asia. So we cannot say that this movement was relevant or if there was a significant effect on the third quarter.
Operator: Our next question comes from Marcelo Motta from JPMorgan.
Marcelo Motta: I have 2 questions. First, a follow-up on tariffs. We have a meeting of Trump Donald this weekend. We don't know if it's going to happen. But do you see anything, I don't know, considering information from the Ministry of Industry, what kind of a lobby is going on? Do you have backstage information for something that we should look into? And also your effective tax rate along the year, it has been going down. 15% was the top compared to the 7.5%. Do you think that this rate is going to continue to go down or it was just something that happened this quarter? So just to understand its curve because it's now below what was last year.
André Rodrigues: Thanks for your questions, Motta. We would love to have some additional information. But unfortunately, we are also following the information with the same channels that you have. But when there is an opportunity to sit down and negotiate, we see it as a good time. And we hope that when it happens, when the meeting happens, it will help all of us to try and decrease tariffs to a more reasonable level. As for the effective rate, we always say that this is a number that will continue to fluctuate quarter-on-quarter. It's natural that it happens, especially because of the mix of results that are generated in Brazil compared to what is generated in other regions. So I think that's very important to say. When we compare it to last year, there are 2 effects. One, it is a better use of interest on equity for 2 reasons. We had an increase in our profit and loss. We had a capitalization this year and also an increase of PJLP, which is the rate that we use to calculate interest on equity. And in addition to that, we had the mix of growing results in the external market compared to Brazil, which also contributed to the positive fluctuation. For the future, once again, fluctuations are part of the day-to-day. But from what we understand, considered PJLP and others, we don't think we are going to have any significant change, at least in the short term. In the mid to long term, it is hard to elaborate because there are too many variables, too many discussions going on that may change assumptions. So in the future, the scenario can change. But we do not expect major changes when we consider this year, beginning of next year, so more of the short term.
Operator: Moving on, our next question comes from Pedro Martin from Bradesco BBI.
Daniel Federle: It's Daniel Federle from Bradesco asking. My question is about I, especially long cycles. It seems that past portfolios contributed to revenues, but sales are weaker at the front end. My question is, should we expect a drop in long-cycle products for the coming quarters? And how long does it take from weaker orders to generate weaker revenues? And the second question related to that, should we see a weakness in long-cycle products as an indicator of what's going to happen in short-cycle. That is the projects that are not happening right now would generate for the future a drop in short-cycle products?
André Rodrigues: Daniel, thanks for your questions. You are correct when we look into projects, considering Brazil and also the external market. we do see an environment in which products are running at a slightly lower level than what we had in the recent past and abroad more concentrated in the U.S., because of uncertainties related to tariffs, and we did mention that in the last call, we were feeling that clients were postponing projects and in Brazil, because of higher interest rates. Some markets and remember, projects, sometimes they are connected to commodity cycles. And we had a very important cycle of investments in pulp and paper 2 or 3 years ago, and it went down. Now we are seeing some projects being resumed. But mining continues to be okay. Then we had a drop. We're seeing now some resumption. So it depends on the dynamic of each of the markets. When we talk about leading indicators, generally, the normal cycle is to see a deceleration in the demand of short cycle that will impact in long-cycle projects. And quite often when long-cycle projects is being impacted, we see a resumption in short cycle. I did mention that, that the coming of orders in short cycle gives us positive signs for Brazil and the external market. So we already see a resumption in a short cycle. Eventually, we can see a resumption of projects for the coming quarters. We cannot say that because we still do not have hard numbers on that. But perhaps the natural cycle would be like this. So let's wait and see, and we are going to give you updates as months go by to see if the demand and the long-cycle portfolio starts to respond to what we are seeing in recent quarters.
Operator: We are now closing our Q&A session. Remember, if you have any more questions, you can send your questions to our e-mail ri@weg.net. I'm going to turn to Andre Rodrigues for his final remarks. Mr. Rodrigues?
André Rodrigues: Well, once again, thank you so much for attending, and I wish you all an excellent day.
Operator: WEG conference call is now concluded. We thank you for your attendance and wish you a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]