Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ultrapar Participacoes SA (UGP, Financial) maintained robustness and continuity of good results despite a volatile scenario in the quarter.
- The company highlighted strong performance in the first quarter of 2025 due to improved navigability conditions and advancements in management and operations.
- A new law for compliance with carbon tax collections came into effect, contributing to fairer competitive conditions and increased government tax collection.
- Ultrapar completed a BRL1.2 billion capital increase process, allowing for the continuation of its growth agenda and reduction in financial leverage.
- The company raised a total of BRL1.4 billion in debt at a low average cost, supporting capacity expansions with development banks.
Negative Points
- The fuel sector continued to be impacted by irregularities such as tax evasion and non-compliance with biodiesel mix requirements.
- Recurring EBITDA was 9% lower compared to the first quarter of 2024, reflecting one of the worst drops in the history of the north and south corridors.
- Net income for the quarter dropped by 20% year over year, partially offset by lower financial expenses.
- CapEx for the period decreased by 5% compared to the first quarter last year, mainly due to lower investments in service stations.
- Leverage increased from 1.4 to 1.7 times due to increased net debt and lower EBITDA over the last 12 months.
Q & A Highlights
Q: How will recent regulatory changes and Petrobras' pricing strategy impact LPG and Hidrovias?
A: Julia, an unidentified company representative, mentioned that while no formal regulations have been published yet, Ultrapar supports government programs like Valley Gas. The company is actively involved in regulatory reforms and hopes for improvements in the business environment. Regarding Hidrovias, the focus will be on operational efficiency and financial optimization, leveraging Ultrapar's existing strengths. (Unidentified Company Representative 1)
Q: What is the impact of open arbitration on Ipiranga's inventory prices and margins, and what are the expectations for ethanol single-phase taxation?
A: Leonardo Linden explained that open arbitration since February has affected market dynamics, with Petrobras making price adjustments. The single-phase taxation for ethanol is seen positively, expected to reduce irregularities and benefit efficient market players like Ipiranga. (Unidentified Company Representative 2)
Q: How does Ultrapar anticipate the impact of gas auctions on Ultra Gas, and what are the expectations for Ipiranga's working capital?
A: Julia noted that gas auctions are stabilizing and will represent 5-10% of Ultra Gas's sourcing. Rodrigo added that Ipiranga's working capital was affected by inventory and supplier payment terms, but expects improvement in the second quarter. (Unidentified Company Representative 1)
Q: What is Ultrapar's approach to leverage and investments, particularly regarding Hidrovias and TRR?
A: Alexandre Palhares stated that Hidrovias' consolidation will increase Ultrapar's net debt slightly, but cash generation will help deleverage. Ultrapar is exploring growth in retail and convenience stores, with potential investments in brands like Krispy Kreme. (Unidentified Company Representative 2)
Q: How does Ultrapar view the competitive dynamics in the fuel distribution market, and what are the plans for Hidrovias?
A: Leonardo Linden acknowledged both informal practices and new market dynamics affecting competition. Ultrapar is adjusting its operations to focus on key segments. For Hidrovias, the plan is to enhance efficiency and explore growth opportunities in the north region. (Unidentified Company Representative 2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
