Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Itaúsa's conference call to discuss the first half of 2018 results. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. Should you require assistance during the call, please press the star followed by zero. As a reminder, this conference is being recorded. The file will be available at the company's website at www.itausa.com.br/en at the investor relations section. During the conference call, you can send questions that will be answered after the presentation. This conference call and the slide presentation are being transmitted via internet as well. You can access the webcast by logging on to the company's website, www.itausa.com.br/en.
Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual performance could differ materially from that anticipated in any forward-looking comments as a result of macroeconomic conditions, market risks, and other factors. With us today, we have Mr. Alfredo Egydio Setubal, CEO and Investor Relations Officer at Itaúsa, Mr. Henri Penchas, Chairman of the Board of Directors at Itaúsa, Mrs. Priscila Grecco Toledo, CFO at Itaúsa, Mr. Bruno Brasil, Investor Relations Manager at Itaúsa, Mr. Geraldo Soares, Investor Relations Superintendent at Itaú Unibanco, Mr. Guilherme Setubal Souza e Silva, Investor Relations Executive Manager at Duratex, and Mr. Carlos Biel, Investor Relations Manager at Alpargatas. If you have a question, press star one on your phone to enter the waiting line. Participants connected via webcast can also send questions.
It is now my pleasure to turn the call over to Mr. Alfredo.
Thank you. Good morning for those who are in the U.S., good afternoon for those who are in Europe. We are starting our conference call. We are on page three, for those who are following through the internet. We are going to cover the highlights, very short highlights from the subsidiaries, members of Itaúsa, and then we open for our Q&A part of the section of this conference call. On page four, we see the subsidiaries, Itaú, Duratex, and Alpargatas. On page five, we highlight some points of Itaú Unibanco. The first highlight is the growth of the loan portfolio, 4.3%, mainly because of the individual's credit. The demand is better, so we are growing especially in this segment. In the case of corporations and middle market, the demand is not so high, so we continue to reduce the portfolio.
The good news are that the default indicators, the NPLs, continues to be the trend to reduce the numbers. In the digital agenda, that is very important for the future of the bank, we highlight here what we did in the mobile payment system. Itaú was the first bank to offer the Apple Pay, and we followed by offering also the Samsung Pay for our customers. Of course, there are many other initiatives during the period, especially in the apps, but we highlighted these for the mobile payment system. We now have the permanent operation of the Fiscal Council, approved by the last shareholders meeting, so now it's permanent. We have the approval of XP Investimentos by the Central Bank of Brazil. The Central Bank of Brazil changed a lot the initial deal, imposed many restrictions that was approved by CADE, the antitrust authority.
The Central Bank of Brazil imposed new restrictions for the deal. Anyway, we decided to continue with this investment, even those restrictions. In terms of highlight also, we have the net income and recurrent ROE. The ROE continued to be around the 20% annualized, that is a good number due to the conditions of the economy in Brazil, especially the low demand for credit, especially for companies. The result for the second quarter was BRL 5.8 billion in terms of recurrent net income. For the first semester, at BRL 12.1 billion in line with the first semester of last year, a little bit below of 2.1%. Just remembering that these numbers are in the international standards. These numbers differ a little of the numbers that the bank released when it showed the number for the second quarter and first semester. These numbers are in the international standard.
Another highlight is the commissions and fees, revenues from insurance, for services, pension plan premiums, that increased 5.2% in the quarter and 4.6% in the last 12 months. This is a good trend and in line with the strategy of the bank to increase non-credit revenues, a strategy that we adopt in the last years and will continue in the coming years. On page six, some highlights from Duratex. The first is the joint venture that Duratex announced with Lenzing, an Austrian company leader in the cellulose fibers. We announced to create a dissolving wood pulp plant in the state of Minas Gerais. Duratex will hold 49% of this new company, Lenzing 51%, and the total investment for the two companies in the new co will be around $1 billion.
We probably will start that in the second semester of next year, after all the studies and the final approval from both parties. Duratex also sold land and forest to Suzano. The land and forest are over what we need in terms for the production for wood panels. So we sold the excess of forest and land that we had here in the state of São Paulo to Suzano. Suzano also exercised the option to buy land in July, the second tranche of this sale. So we are going to have, in the second half of the year, a net income impact on the results of Duratex of BRL 360 million. Ceusa is the tile production company that we bought last year. It started to operate this year. We announced an investment of BRL 94 million to increase by 83% the capacity of the company.
The company was operating at full capacity, so we announced this investment that will probably be complete in the third quarter of 2019. The company, Ceusa, will have capacity to improve the production and increase its market share. Another highlight is that the antitrust authority approved the deal with Eucatex, the swap of the factory of Botucatu of hardboard. Eucatex will swap that factory with land and forest for Duratex. These are the four major announcements of the period. Duratex also increased net income and ROE, mainly impacted by the sale of the land and forest for Suzano. These sales, the final objective of those sales were used to reduce the net debt of the company. That was 2.9x at the end of June of 2017.
We expected this year to end below two, and by the next year, around one time the EBITDA and debt. The company is restructuring its debt. Going to page seven, we see Alpargatas. I think the highlight of the period, we put three here. We elected in the last shareholders meeting, two independent members for the board of directors. Also they will participate in some of the committees that we created during the last quarter of 2017. The company is analyzing alternatives. We hired external consulting to discuss more about the strategy here in Brazil and also international. The result for the second quarter was a reduction when we compare to second quarter of 2017, and the same for the first semester of 2017.
We have a non-recurrent result due to a reversion on the taxes that the company was provisioned, but we will not need to pay. The first semester of that year had this huge impact. That is the main reason when we analyze the results. The company continued to generate some good EBITDA. We continue to grow the numbers and continue its policy of quarter dividends. On page eight, we have some numbers from MGF. MGF is the gas distribution company that we have a stake. The company renegotiated the debenture. Itaúsa was a creditor of this debenture, and we received BRL 442 million. The company reduced the cost of capital under the new management to reduce the cost of the debt. Itaúsa received BRL 442 million.
The company increased a little the results by 11% on BRL 935 million. The company continues to pay most of the profits in dividends, and we received, during this period, the first semester, BRL 91 million in dividend and interest on cash. Now we go to page 10, where we can see the main events and numbers from Itaúsa itself. The highlights for the periods in terms of Itaúsa was the capital call of BRL 1.4 billion, everything subscribed by the shareholders in the private capitalization. Bonus share of 10% only in preferred shares. All the shareholders received preferred shares.
We made a buyback of 2.5 million shares in June at a price of BRL 9.07 for the shares. Important sale of Elekeiroz when we leave the chemical sector, and we sold all the shares that the company had at Elekeiroz for H.I.G. Private Equity Fund. Itaúsa will receive, we have already received BRL 30 million for that sale, and we have earn-outs according to some parameters and some metrics that the company, Elekeiroz, performed in the coming years. Itaúsa will receive a complimentary amount for this sale. On page 11, we have some numbers for Itaúsa. Always remember the numbers and the international standards accounting. Net income of the first half of the year, BRL 4.447 billion, with an increase of almost 8% when we compare to the first semester of 2017, and a recurrent net income of BRL 4.3 billion, with an increase of 1.1%.
The return on the average equity, annualized, 17.6%, a little bit superior from the 17.4% of the first half of last year. On page 12, we can see the total assets of Itaúsa, BRL 55 billion, BRL 52 billion related to the investments that we have in our subsidiaries, mainly. Of that, 9.7% is related to the participation in the financial sectors through Itaú Unibanco Holding, 8.7% from non-financial sectors, mainly Duratex and Alpargatas. On page 13, we see the dividends and interest on capital.
Itaúsa announced the complimentary dividends that we are going to pay in August, and we continue to pay the same amount for the shareholders in 2018 that we received from the Itaú Unibanco Holding. We retain the dividends from the other companies to serve the day-to-day business of Itaúsa and to recover cash position that Itaúsa has for future investment or paying dividends and for new investments. On page 14, the capital composition. Itaúsa is very well capitalized. The liability that we have is mainly dividends and interest to pay to shareholders that are already provisioned. The ventures that we issued to buy the participation in NTS, BRL 1.2 billion. You can see on the right side of the table, the amortization of these debentures will be in 2022, 2023, and 2024, the years for amortization of this debt.
Also provisions that we have for fiscal discretion that we have in justice against the tax authority here in Brazil. In terms on page 15, we have the market value of the portfolio of Itaúsa. The total portfolio of all these participations that we have amount of BRL 102 billion. The market value of Itaúsa is just BRL 77 billion. What means that the share is trading at a discount of 24.3%. As we have a good policy of buybacks and dividends, we can see that Itaúsa has a good payout for the shareholders. Going to see that in the coming slides. On page 16, we put some four competitive edges of Itaúsa. The first that we put here is in terms of financial. Itaúsa has a very solid balance sheet, very low debt, and a high dividend yield.
Itaúsa announced that it will pay this first half BRL 2 billion in dividends. We have a recurrent net income of BRL 4.3, as I said, and a total market capitalization of BRL 77 billion. It is a very solid company. In terms of human capital, Itaúsa and its subsidiaries has a very good talent attraction and retention for people. We have a very good people working for us in the level of the holding and subsidiaries. All the companies invest a lot in training and developing its personnel. In terms of reputational capital, we have a very solid corporate and governance and ethical principles and very transparency principle for all the shareholders and stakeholders of the company.
We have been in the Dow Jones Sustainability Index for the 14th year in a row, and we are listed also in the sustainability index of B3 for companies for 11 years in a row. In terms of intellectual capital, we have people to invest and analyze investments in companies, very solid companies, market leaders, companies with renewed brand and with very good cash flows. That is where we create value for our shareholders, and that is the movement that we did in the last years, changing a lot the portfolio of investments of the whole.
You see here on the base of this slide, what we expect in terms of companies to invest, and we expect a return for these new investments of 200 basis points above the cost of capital that for Itaúsa, we use the same cost of capital as the bank, Itaú Unibanco that is 14 and a half. On page 17, we see the evolution of our shares against the interest rate and the dollar and the Ibovespa. We have good numbers in general to show to the market. We have also for those who wants to or will be here in Brazil, we have the public meeting with the investors and shareholders on the 13th of September here in São Paulo at the Hotel Unique.
For those who will be in Brazil that day, it will be a pleasure to receive you from 9:30 A.M. until midday. Okay, thank you. We are now open for questions about the numbers, the figures, and the strategy of the company.
Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press the star key followed by the one key on your touchtone phone. If at any time you would like to remove yourself from the questioning queue, press star two. Please restrict your questions to two at a time. Participants connected via webcast can also send questions. This concludes today's question-and-answer session. Mr. Alfredo, at this time, you may proceed with your closing statements.
Thank you for the participation from outside Brazil. We are here open. Our team of our investor relations are here to help you if you have any doubts or any question about what we explained here today and the members of the company. The team is in place to answer all your doubts. Thank you for the participation, and I will see you for the next conference call with Itaúsa.
That does conclude our Itaúsa's first half of 2018 results conference call. Thank you very much for your participation. You may now disconnect.