Ultrapar (UGPA3) Q2 2025 earnings summary

Executive summary

• Net income reached R$1.2 billion, up 134% year-over-year, driven by operational gains and extraordinary tax credits at Ipiranga.

• Adjusted EBITDA rose 55% year-over-year to R$2.1 billion, with recurring adjusted EBITDA at R$1.5 billion, supported by Hidrovias consolidation and strong segment performance.

• Strong operating cash generation of R$1.8 billion, with R$0.9 billion used to reduce supplier-related liabilities and draft discount, reflecting disciplined capital management.

• Became controlling shareholder of Hidrovias do Brasil, consolidating results from May and contributing to record results and future growth.

• Completed major share buyback (25 million shares at R$16.64 average), raised R$1 billion at Ipiranga at below-average cost, and distributed R$326 million in dividends.

Financial highlights

• Net revenue was R$34.1 billion, up 5% year-over-year, with strong contributions from Ipiranga and Ultragaz.

• Adjusted EBITDA reached R$2.1 billion (+55% year-over-year), recurring adjusted EBITDA was R$1.5 billion (+15%), and net income was R$1.2 billion (+134%).

• CapEx for the quarter was R$544 million, up 14% year-over-year, mainly due to Hidrovias investments.

• Operating cash generation was R$1.85 billion, up 7.3% year-over-year, excluding draft discount reduction.

• Net debt/EBITDA was 1.9x at quarter-end, with net debt at R$12.6 billion.

Outlook and guidance

• Focus on operational efficiency, capital structure optimization, and integration of Hidrovias.

• Expect seasonally stronger volumes and higher recurring EBITDA in Q3 for Ipiranga, Ultragaz, and Hidrovias do Brasil.

• Ongoing review of LPG sector regulation by ANP, with potential impacts on investment and safety standards.

• Anticipate leverage to return to 2024 levels by year-end, with strong cash flow in H2 2025.

• Continued investment in network expansion, technology, and new energy solutions.