Ultrapar (UGPA3) Q1 2025 earnings summary

Executive summary

• Maintained robust operating performance despite sector irregularities in biodiesel blending, naphtha imports, and tax evasion, with progress on regulatory enforcement and compliance measures.

• Hidrovias delivered strong results from improved navigability and asset management, with strategic focus sharpened by the sale of the cabotage operation for R$715 million and a R$1.2 billion capital increase, making Ultrapar the controlling shareholder.

• Leadership succession completed, with new CEO, CFO, and Chairman appointments; Krispy Kreme operations launched in Brazil via exclusive AmPm partnership.

• Recent funding of R$1.4 billion at 101% CDI supports expansion and refinancing.

• Net revenue reached R$33.3 billion in 1Q25, up 10% year-over-year, mainly driven by Ipiranga and Ultragaz.

Financial highlights

• Recurring Adjusted EBITDA was R$1,183 million, down 9% year-over-year, impacted by a R$139 million loss from Hidrovias due to severe droughts; reported EBITDA at R$1,327 million.

• Net income declined 20% year-over-year to R$363 million, mainly due to Hidrovias' negative results.

• CapEx totaled R$416 million, a 5% decrease year-over-year, mainly due to lower branding investments at Ipiranga.

• Operational cash generation was R$3 million, a significant improvement from a R$573 million outflow in 1Q24, reflecting lower working capital investment and income tax paid.

• Net revenue: R$33,329 million (+10% vs 1Q24, -6% vs 4Q24).

Outlook and guidance

• New regulations to address sector irregularities: stricter CBIOS compliance laws (April) and single-phase ethanol taxation (May) are being implemented.

• Expect similar profitability for Ipiranga in Q2, excluding inventory gains/losses.

• Ultragás recurring EBITDA anticipated to be marginally higher in Q2 despite continued cost pressures.

• Ultracargo EBITDA expected to be similar to Q2 2024.

• Continued focus on strategic asset management and financial discipline.