Ultrapar Participaçoes SA Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Ultrapar maintained robustness despite volatile scenario. Fuel sector impacted by tax evasion issues but new laws on carbon tax and ethanol taxation implemented.
• Hidrovias had strong Q1 performance due to improved navigability, signed BRL750 million cabotage sale, completed BRL1.2 billion capital increase making Ultrapar controlling shareholder.
• Ultrapar raised BRL1.4 billion debt with low average cost. Completed leadership succession with Marcos Lutz as Chairman and Rodrigo Pizzinatto as CEO.
• CapEx for Q1 totaled BRL460 million, 5% decrease y-o-y. Operational cash generation BRL3 million, BRL576 million higher than Q1 2024.

Segment Performance

• Ipiranga: Volumes sold stable compared to Q1 2024 (2% reduction in auto cycle, 1% increase in diesel). Ended Q1 with 5,847 service stations and 1,447 AmPm stores with 12% same-store sales growth. Recurring EBITDA totaled BRL826 million, 6% higher year-over-year.
• Ultragaz: LPG volume sold 1% higher y-o-y. EBITDA totaled BRL393 million, 2% lower y-o-y. For Q2, expects recurring EBITDA marginally higher than same quarter last year.
• Ultracargo: Cubic meters sold increased by 4% y-o-y. Net revenue BRL271 million, 3% higher y-o-y. EBITDA BRL166 million, 1% higher y-o-y. Expect EBITDA similar to Q2 2024.

Guidance

• Ultragaz expects recurring EBITDA marginally higher in Q2 compared to same quarter last year.
• Ultracargo expects EBITDA similar to Q2 2024.
• Hidrovias plans to focus on operational efficiency, capital discipline, and expansion in the North region.

Risks

• Fuel sector impacted by tax evasion issues such as non-compliance with biodiesel mix and naphtha imports.
• Regulatory changes and market dynamics pose uncertainties.
• Operational factors like working capital needs and inventory management challenges.

Q: Views on informal practices and margins in São Paulo.

A: New laws like RenovaBio and ethanol taxation help reduce evasion, São Paulo shows progress but challenges remain.

Q: Hidrovias' future plans and synergies with Ultracargo.

A: Hidrovias to improve efficiency and expand in North region, no current synergies with Ultracargo.

Q: Market dynamics and Hidrovias' future.

A: Market has informal practices and new supply models, Hidrovias to gain efficiency and focus on North region growth.